Kestra Medical Technologies Ltd (KMTS) 2026 Q1 法說會逐字稿

Good afternoon, and welcome to the Kestra Medical Technologies earnings conference call. This conference call is being recorded for replay purposes. We will be facilitating a question-and-answer session following prepared remarks from management. (Operator Instructions)

I would now like to turn the call over to Neil Bhalodkar, Vice President of Investor Relations for introductory comments.

Thank you. Thank you for joining this afternoon's first-quarter fiscal 2026 earnings call. With me today are Brian Webster, President and Chief Executive Officer; and Vaseem Mahboob, Chief Financial Officer.

This call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. These statements are based on Kestra's current expectations, forecasts and assumptions, which are subject to the current uncertainties, risks and assumptions that are difficult to predict.

Actual outcomes and results could differ materially from any results, performance or achievements expressed or implied by the forward-looking statements due to various factors. Please review Kestra's most recent filings with the SEC, particularly the risk factors described in our Form 10-K for additional information.

Any forward-looking statements provided during this call, including projections of future performance, are based on management's expectations as of today. Kestra undertakes no obligation to update these statements, except as required by applicable law.

With that, I'll turn the call over to Brian.

Thanks, Neil. Good afternoon, everyone, and thank you for joining us on today's conference call. We are excited to discuss the strong start we had to our fiscal and the continued progress we have made in our key operational objectives. But before we jump into that, I'd like to again highlight the purpose behind the mission that drives the Kestra team.

At the center of everything we do are the lives we protect each day and the impact we have on patients, their families and the providers who care for them. Recently, one of our territory managers or sales reps, gave an overview of the ASSURE system to a provider where they discussed how the ASSURE system tracks hurt rate trends and how this capability can provide critical insights for identifying patients with previously undiagnosed arrhythmias.

The fact that patients could trigger their own ECG recordings, with a simple push of a button on their wearable best stood out to the provider. Soon after the impact of this capability came into sharper focus when the same provider prescribed the ASSURE system for a 53-year-old patient at elevated risk of synocardiac arrest. The patient had hypertension, non-ischemic cardiomyopathy, frequent extra heart fees and a cardiac output injection fraction of just 3%.

And during the fitting, the patient, (inaudible) candidly shared her anxiety about the unpredictability of our one condition to provide reassurance the care team advised that the patient triggered heart rhythm recordings twice a day. Those recordings captured repeated irregularities in the patient's ferritin.

The Kestra representative promptly pointed out the recordings to the physician illustrating the clinical value of patient triggered rhythm recordings and the broader role of the cardiac recovery system in guiding care. The insights were significantly not that the patient was scheduled for a cardiac ablation. However, before the patient was able to undergo the cardiac procedure, lifesaving therapy was necessary. The patient laid down for a minute, after feeling unwell while sleep, they went into a dangerous rhythm that quickly progressed in the cardiac arrest.

The ASSURE system detected this and delivered a shock saving the patient's life. In the critical moments that follow, our ASSURE Assist service quickly helped connect the patient to emergency care and the patient was safely transported to the hospital. The story illustrates the full continuum of care that our cardiac recovery system provides. Equipping providers with insights to guide treatment, protecting patients with life-saving therapy when it matters most, and ensuring rapid emergency support in the vulnerable periods that follow.

And while this is just one patient's experience in the first quarter of fiscal 2026, our team and technology help facilitate many similar life-saving events. We remain humbled by this responsibility and by the trust placed in us by providers, their patients and their families.

With that, I would now like to turn to our recent performance. In the first quarter, we continue to reach more patients at risk of cardiac arrest, accepting over 4,200 prescriptions written for the ASSURE system, an increase of 51% year over year. Revenue grew 52% year over year to $19.4 million. Continued improvements in revenue per fitting from higher in-network mix and reductions in cost per fitting from volume leverage drove the seventh quarter in a row of gross margin expansion.

First-quarter gross margin was 45.7% compared to 32.9% in the prior year period. We expect continued gross margin expansion in FY26 and remain confident that Kestra is on the path to 70% plus gross margins. With the strong revenue growth that Kestra is generating, we are seeing nice operating leverage in the business. This leverage supports the investments we are making in the company's key growth drivers that we believe will yield significant long-term value for Kestra and stakeholders.

A quick overview of the four of those growth drivers. First, we continue to expand our sales organization with the goal of further penetrating existing accounts as well as calling on new potential Assured prescribers. We are targeting geographies in which a high volume of WCD prescriptions re being written and where we also have strong in-network payer coverage.

As we noted on our last earnings call, we ended fiscal year '25 with approximately 80 sales territories. While this will not be a data point that we will be updating on a quarterly basis, I can say that our territory additions in the first quarter were in line with our hiring plan, and we continue to aggressively expand our sales coverage.

Of note, we also have an updated commercial strategy that includes an expanded clinical specialist role that will complement our sales territory managers. We expect that this strategy will support further penetration of existing accounts.

Second, we continue to make progress on improving our revenue cycle management capabilities while also bringing more payers and network. At the time of our right how 6 months ago, approximately 70% of our fittings were for patients with in-network benefits. This figure is now approaching 80%, the higher in-network mix meaningfully increases our team's efficiency and positively impacts all key RCM metrics.

It is important to note that there are over 3,000 payers in the United States. So there will be a long tail of regional and local players. We are working to bring under contract. The RCM actives increased the speed and rate of our collections are process driven, and we expect to see further improvements over time. For example, in the early days of commercialization, we have a small RCM team that was not specialized.

The same individual may have been tasked with following a claim from bidding all the way to cash. Our RCM function has grown significantly, particularly in the last 12 months with team members specializing in specific areas such as prior authorization, medical review, toll management, et cetera.

Third, as you all know, we utilize a lease business model, our substantial investment in our fleet of devices, each with the capacity for approximately three patient wares per year, enables the business to scale with our attractive unit economic profile. While our current asset pool can support our near-term business objectives, we are continuing to add to our fleet at a measured pace as we grow our field team.

Fourth, we are continuing to build the body of clinical evidence supporting the safety, efficacy and benefits of the ASSURE system. We recently achieved a major clinical milestone with the conclusion of enrollment in our FDA post-approval study. This is a really significant achievement for the Kestra team and took a ton of really hard work by our entire team. We were also recently notified that our study was chosen for a late breaker presentation of our clinical data at the American Heart Association Scientific Sessions, which will be conducted in November.

At the time that our bus approval study is presented, we expect this to be in the single largest study ever published in the WCD category. This is the biggest stage in cardiology for our exciting results. All of these growth drivers further our mission of protecting even more patients that are at risk of sudden cardiac arrest. We have previously noted that despite the overwhelming evidence that an external Afibrillation shock is effective at terminating dangerous cardiac rhythms WCD therapy remains underutilized, reaching just 14% of the eligible US patient population.

That means six out of seven patients that are indicated for WCD are not being protected by lung. Last quarter, I shared with you two examples of hospitals that transition from underutilization of WCD to significantly expanding their use of WCDs by establishing therapy protocols with the ASSURE system as their preferred solution.

I would like to share another data point that gives us confidence that the WCD market will continue to expand into a multibillion-dollar market over the coming years. The results of a large German WCD study sponsored by the incumbent competitor were recently published. The SCD PROTECT study evaluating the risk of sudden cardiac death in over 19,000 patients in the first few months after they were newly diagnosed with heart failure or post myocardial infarction or heart attack.

Despite why overall use of guideline-directed medical therapy drugs, the study found higher-than-expected sudden cardiac arrest risk in this patient population, suggesting a need for greater WCD protection in the early high-risk period of the patient's journey. Investment in this study is further evidence that the incumbent is focused on market expansion to help make up for a lost share to Kestra.

In conclusion, the simplicity of the Kestra story continues. We are competing in a large existing market that is growing consistently in both unit volume and price. We have an underserved medical condition where we offer a clearly superior solution. We have rapidly closed the gap on payer endorsement of our product and we are implementing a commercial expansion plan to rapidly grow the business. We are seeing strong execution across all elements of our business and the foundation we have built has positioned Kestra for strong growth this fiscal year and beyond.

I would like to thank our incredible team in the field and here at the home office in Kirkland for their passion and commitment to the customer mission.

I will now turn it over to my partner, Vaseem, who will discuss first quarter financial results in more detail and provide our updated fiscal year 2016 revenue guidance. Vaseem?

Thank you, Brian, and good afternoon, everyone. Total revenue was $19.4 million in the first quarter, an increase of 52% compared to the prior year period. Revenue growth was driven by a 51% year-over-year increase in prescriptions reflecting market share gains with existing customers and activation of new accounts. Gross margin was 45.7% in the first quarter compared to 32.9% in the prior year period. As Brian mentioned, we have now expanded our gross margins sequentially for seven quarters in a row.

The continued expansion in gross margin was driven by the attractive unit economics inherent in Kestra rental model, a higher revenue per fit from more in-network patients and a lower cost per fan, driven by volume leverage and our cost improvement projects.

Cost per foot decreased approximately 20% compared to the prior year period, while adjusted revenue per pet increased approximately 20% compared to the prior year period. In the years ahead, you should expect to see steady and consistent increases in our gross margins as our rental model benefits significantly from the volume and depreciation leverage. We remain confident in our ability to achieve 70% plus margins over the next few years.

As we have discussed previously, higher in-network mix unlocks the power of the Kestra business model. You can see this in our steadily expanding year-over-year conversion rate. We ended the quarter with a conversion rate of approximately 47% compared to an adjusted conversion rate of approximately 40% in the prior year period. The higher conversion rate reflected improvements in all three key drivers of our conversion rate, prescription fund rate, our bid rig and our collections performance.

As we continue to bring more players in network and enhance our revenue cycle management processes, we will see benefits in our revenue growth, gross margins and our profitability profile.

Moving on. GAAP operating expenses were $37.7 million in the first quarter and included $2.9 million of nonrecurring new public company costs. GAAP operating expenses were $22.6 million in the prior year period. Excluding those nonrecurring costs and our stock-based compensation expense, operating expenses were $30.3 million in the first quarter of 2026.

The increase was primarily attributable to growth investments in our commercial and revenue cycle resources. GAAP net loss was $25.8 million in the first quarter compared to a GAAP net loss of $20.3 million in the prior year period.

Adjusted EBITDA loss was $19.4 million in the first quarter compared to an adjusted EBITDA loss of $15.7 million in the prior year period. Cash and cash equivalents totaled $201.2 million as of July 31, 2025. We continue to expect our existing cash balance to be sufficient for cast to reach cash flow breakeven and profitability. I would also note that based on our trailing 12-month revenue, an additional $15 million front of our existing term loan has become available to us to draw on through July 31, 2026.

At present, this tranche of $15 million remains undrawn. I will now provide an update on fiscal year 2026 guidance. We expect revenue of $88 million, an increase of 47% compared to fiscal year 2025. This compares to prior year guidance of $85 million. Underpinning this guidance is our expectation that we will continue to see strong growth in prescriptions as our market share increases with existing customers and as we activate new accounts.

We expect revenue per fit to continue to benefit from a higher mix of in-network patients and improvements in our revenue cycle management capabilities.

With that, operator, we have concluded our prepared remarks and are ready to proceed to the Q&A portion of the call.

Travis Steed, BofA Securities.

Congrats on another quarter. Maybe to start on guidance. Nice to see raised by more than the beat. Just helping us understand kind of what's driving the confidence to raise this much in beginning of the year and how to think about any cadence over the course of the year as we update our models?

Yes, Travis, thanks for the question. And I would say we certainly have a really strong Q1 and we're certainly bullish about the rest of the year. It's early in the year. So we're going to see if things play out over the next quarter or two. But right now, we're comfortable with that guidance update. And I'm excited about marching into our second quarter.

All right. Great. And I wanted to maybe double-click on some of the end network mix things you mentioned. Just kind of understanding like what you guys are doing on the ground to improve the mix, where the mix can be over the course of this year and next few years and maybe to think about the impact on gross margins as well as to go forward?

Yes. As we mentioned, at the point of IPO, we were about we have over 90% covered lives in the US, which just means that the total number of insurance covered lives in the US. We have about 90% of those under contract, but when you look at the actual patients that we're taking, that's the real -- that's where we get the real revenue from.

And so we've seen that number go from 70% at the IPO to, as we mentioned here, about 80%. We think that will continue a slow incline as we add more payers. There is a long tail, as I mentioned in my comments, of some 3,000 payers. So it takes a while to engage with the local and regional players. And quite frankly, there are some payers that we're just not going to get there on price. And so we're going to continue to work those.

But you'll see those gradually go up as we engage more players. And I think it's important to reinforce our strategy around when we are having sales territories, we're doing it, where we have known WCD demand and we have good payer coverage. So we're trying to be very efficient about territory expansion when it comes to that.

But I think what you can expect is continuing gradual contribution from the in-network payers as we increase that. And then you'll see that impacting, overall, our revenue per fitting or per patient will continue to grow with that.

Rick Wise, Stifel.

Two things I'd like to follow up on a little bit. One, actually, you just touched on in your response to Travis, Brian, this notion, and you've said it from the beginning, this notion of expanding into areas where there's greater in-network opportunity or however, I should phrase the words, I know you know what I mean. Where are you in that process?

And I mean, is there any way to quantify or give us a more granular understanding of like what happened in the last few months and what's going to happen now this year in terms of that kind of move, so just so we better understand where you are?

Yes. Thanks for the question, Rick. It's obviously important to our business model. I don't think you can think of the payer additions in a straight linear line over time. You have to think of it more as sort of the sawtooth curve because in one period, we may add a good-sized regional payer in the next period it may be some smaller regional payers that we're trying to add to support specific territories where we have a lot of demand.

So I think it will continue to go up and to the right, as we get more coverage and that will continue to benefit the business model, benefit our ability to go after these territories. It's really impactful when you're in a territory and you're a territory manager trying to sell your product and the competitor has insurance coverage, and you don't.

That puts you at a disadvantage. And so what we're trying to do with that strategy is we're trying to make sure that when we make the investment to add new reps, we're giving them all the tools that they need, including insurance coverage so that they can be successful.

And if I can add one more comment to that. I think -- and we've kind of talked about it in the past and one of the big things that we want to remind everyone is, when you think about the impact on the conversion rate as a result of the in-network mix we have said it that we don't have to go to 80%, 90%. What's baked into our financial model is for us to go from the high 40s that we are today to getting to the 50s here over the next couple of years.

So to Brian's point, as you provide coverage and conversions on that 3,000 towards a higher mix it will lend itself automatically to get to that higher conversion rate. But again, we don't have to get to all 3,000 immediately. There's just going to be a gradual process, and that's already factored into the messaging that we have had in the past.

Great. And Vaseem, I just wanted to touch on the -- as we reflect on the quarterly flow, I mean, obviously, this is a good quarter. You had a solid raise, very encouraging setting the stage as I think about the rest of the year. But help us think about the quarterly flow and I mean, with these extra wonderful few million we're adding to our model, is -- do we take our current models and -- is it more back-end loaded? Does it change the quarterly cadence? Just help us make sure our models are in the right place, if you would.

Yes, that's a great question, Rick. I think, again, what's really great about this quarter is now we've taken our guidance from being 42% year over growth to a 47% growth year over year. And as you guys have heard us communicated in the past, we are in a ramp. We are adding new territory managers, as Brian talked about. That's where most of the OpEx investment is going.

So as we have said in the past, there is a start and that ramp that needs to happen. So we should expect not to be back-end loaded, but we see a really nice steady increase in our top line as we go through the remaining of the quarters for the rest of the year. But really, really excited about having to raise the guidance by the levels that we have and just based on, as Brian said, the comfort that we take in the performance of the business in the first quarter.

Matthew O'Brien, Piper Sandler.

Would love to talk about the prescription number in the quarter because that was really strong. up about 300 sequentially. This time last year, we were roughly flat. So I would just love to hear about the improvements that we're seeing on the prescription side of the business. And I think I think you're now roughly annualizing to about 14% of all cases that you're going after right now. So just where can we think about the company kind of exiting the year in terms of percentage of all prescriptions being written for sure.

Yes. Thanks for the question, Matt. I think the good news in from my perspective in the prescription number is we -- because we are ramping the commercial team, we look at the metrics broken into a couple of different buckets. One bucket is what we call a base rep or a fully onboarded fully productive rep. And we look at the month-over-month, week-over-week, month-over-month, quarter-over-quarter metrics for those reps.

And the good news there is the folks that have been here been in the seat for a while. The metrics continue to improve with those reps. Now that's not the full story, of course, because we're hiring a bunch of new reps. And so the question is, can you get those reps on boarded? Can they get up to some productivity levels in a reasonable amount of time. And so we really aggressively track those numbers as well. And what we're seeing there is a similar story, which is they're coming up the curve.

They're hitting the kind of productivity numbers weekly, monthly kind of numbers that we're expecting. And so that bodes well. And that gives us confidence, which is why we continue to expand the commercial footprint. So the math you're seeing on the sequential growth is the impact of both of those effects on prescriptions.

Okay. That's helpful. And then just kind of staying on that topic, Brian. Just the reps are coming in, are they really focusing on the low-hanging fruit, which is really just converting existing accounts over to ASSURE from the competitor? Or are some of the more legacy reps really being more successful in kind of doing both, which is converting market share but also expanding the market because your commentary about the competitor and the clinical trial, I thought was interesting too, just given how underpenetrated the whole category is.

Yes. We -- I think that study is important because it's it's all us rise on the time, right? And that's going to really shine a light on ongoing need, especially in these heart failure patients. But Matt, when it comes to -- when it comes to getting these reps on board, we're really trying to be focused on getting them -- if you're a new rep, you're coming in and literally the day you open up your Salesforce.com instance, you've got all the appraisal of all the high prescribers and you know exactly what your initial targets are, and they are absolutely going to go there first.

Now the only caveat to that is some of these reps that we're hiring, they come in with preexisting relationships and they'll go to those relationships first. And some of those may not be the high prescribers. But I think in general, the strategy with the new reps is let's go where the business is and then go sideways from there and start to expand the market.

As I said previously, with the pre-existing reps or the already ramped reps, they have already done that. And so they're focused on further penetrating those accounts. But what they're also doing is they're going into new accounts and they're opening up new accounts that have not been big WCD prescribers in the past. And so that's part of how we're growing the market.

Lawrence Biegelsen, Wells Fargo.

Two for me. One, on the conversion rate, one back on market share. So Vaseem, what is the guidance assume for the year-over-year increase in the conversion rate? It looks relatively small, a relatively small increase is assumed for the fiscal year versus the first quarter, which looks like about 700 basis points. And secondly, if I heard correctly, in network is now almost 80%, which is relatively high what are the drivers to get you to that best-in-class conversion rate that I think you said on the Q4 call was 76% from 47% today?

No, that's a great question. Thanks, Larry. So we've seen a consistent year-over-year increase in our cordon rate, and I'm happy to report that -- and as we've indicated here, we continue to make progress on all three elements of our conversion rate, and they're all trending in the right direction. Obviously, the biggest contributor of that converted rate is the improvement in the in-network patient mix, and that has gone up 10 points since the IPO, which is really positive.

And as Brian said, we'll continue to move that in the right direction. So our strategy is working. And I think the main focus areas for us on the conversion rate continues to be, as Brian mentioned, deploying the therapy managers into these high prescription and high bar regions. And that will organically happen as the commercial team expands and that will continue to that positive growth in the conversion rate.

Secondly, we are focused heavily on, as Brian mentioned, again, on these Tier 2 for example, we signed Oscar Health last week, which is a nice small program. It's regional. And so there will be a lot of those that are in the queue and the market access team is working on those.

Finally, not the least as we continue to invest in the RCM team and has the capability to have on people and process on systems, so we do all of that, what's reflected in the guidance here is about a 2.5, 3-point increase in our conversion rate. And we think it's very achievable. And obviously, we've got a lot of game to play here in the remainder of the year.

So you'll continue to see that progress on the conversion rate. But again, what we have said in the past, we are -- the conversion rate is a year-over-year metric that we got to assess that, and we'll continue to drive improvements on the day.

That's helpful. Brian, on market share, the press release talked about category leadership. So I guess my question is maybe back to math 14%. Where do you think you are today? And is it prescription share, fitting share -- and what's the -- how long is it going to take to achieve category leadership?

Yes. Thanks, Larry. I think time will tell how long it takes us to get to that position. But I think there's a couple of different drivers that I would say. With regards to where we stand today, we're probably somewhere around 12% market share is my math. I would say that the key driver, now that we've got the insurance coverage in place and we've got a high percentage of our patients are coming in with coverage.

That's not as big a focus as just pure sales coverage is. And right now, we're a little over 50% of the US do we have covered in terms of actually having a rep in a territory. Now that doesn't mean we're 50% of the competitor. It means that in a city like pick a city like let's call it, Minneapolis, we might right now, we don't have a rep there.

They might have three reps there. So when we put a rent in there, we would say, at least we've got representation there. So right now, we're still just a little over 50% territory coverage in the US. So we've got a lot of room to go in terms of being able to cover the market. And we're going deep in certain territories that we know are high-producing territories now. But also, you'll see us starting to broad that out and cover some of these other territories in the future. But t

hat's going to be the biggest driver. The rate at which we do that will determine how quickly we can get to that category leadership position.

Michael Polark, Wolfe Research.

Brian, I want to follow up on one of your prepared remarks comments about the expanded clinical specialist role to complement certain territory managers to penetrate existing accounts. I guess can you just help us better understand, I was under the assumption you had specialists already. what's the expanded role look like what is this person doing that's different? And how are they incentivized?

And is this something you expect to deploy for all territories? Or is this to be focused on the biggest accounts? Any color here would be helpful.

Yes, Mike, thanks for the question. So -- and we'll start by just going back to the service model that's inherent in this category. At the point in time that we receive a prescription from a prescriber they are expecting that within 24 to 48 hours, we will have come in and fit and train that patient and allow them to then discharge the patient to go home. So there's a heavy service model that has to be deployed here, which really informs the way the rate at which we bring in new territories and open up our commercial footprint.

And so as part of that, what we recognize is as we get strong penetration into certain accounts, we can start to adopt a model where some of the account management responsibilities can be transitioned away from the sales representative over to a clinical specialist. And that allows then that sales representative to go and cultivate new prescribers and new accounts.

And so that's the strategy. It's a partnership. What we will initially be doing is putting those roles in some of our high-performing territories where we've already demonstrated the ability to go in and capture significant market share, so that we can give those rents some leverage to be able to go and expand beyond those accounts.

And then as we see the progress we make in that, then we will -- that will really determine how far down the scale we go when it comes to adding those resources. But it's a -- I think it's a strategy that's not an unusual strategy in medtech. We've seen it in other categories. It's one that I think will be successful for us, but we will start with the high performers and kind of go from there.

That's helpful. The follow-up is on the late breaker coming at AHA for your post-approval study. Can you remind us just some of the high-level specs of that post approval study size, kind of focused patient the period in which it enrolled. And then without -- if you want to preview the data, great.

But what would you hope this shows? Is this going to be a narrative changing on patient compliance? Is that the major hook? Is it simply just scale of quality data solidifies the pitch? Is it differentiated insights on the MI versus the heart failure patient, the first MI patient. What -- the solid of this presentation will you hope, be what?

Well, shall I just read the whole presentation to you now, Mike, and then we'll just come to the chase.

Obviously. You're free to do that. This is a public forum.

Yes. Yes, look, it's really a significant milestone for the company. We started the post-approval study soon after we launched the product. So we've been at it for about 3 years, and we expect that the study will have somewhere between 24,000 and 25,000 patients in it. And that's a huge body of work to be deriving clinical results from. The endpoints of the study include shock success rate or call shock success rate. That's the primary endpoint and safety end point will be inappropriate shocks.

And then we have other endpoints that we will report on around false alarm rate and also patient compliance. So those are sort of the big four. Now as you start to peel back the onion on this incredible set of data, then you have the opportunity to report on some of the differences between the post-MI patients in the non-ischemic patients and lots of other data that we expect will be published out of this data set over the coming quarters and the next couple of years.

So the report out at HA will be -- it will be big news in that one of the biggest competitive points in our -- the incumbent competitor [Mace] about Kestra is we don't have as much published clinical data as they have. Now when we bring a 25,000 patient study to the table, it takes that argument, and it varies it really deep in the sand because we now have an incredible body of clinical data that we can point to and we're really excited about putting that objection away once and for all.

So we're excited about it. We don't have all the analytics completed yet, but we did recently get the late-breaker notification and it's a big milestone for the company, a big milestone for a lot of folks have been working incredibly hard. And I think what you're going to find is that the promise that we've made with the ASSURE system is going to come to light in the form of that clinical data coming up just in a couple of months.

David Roman, Goldman Sachs.

Key topic at last week's HRX conference was on compliance rates and that it still remains a key barrier on WCD utilization. Can you just detail a little further what you are seeing and how compliance rates are evolving across your user base as experience grows?

Yes, sure. Thank you for the question. I would say that compliance in any at home vision and any at-home category, whether it's blood pressure monitoring or drugs or wearables like ours. Compliance is the single biggest challenge and the therapies don't work if the patients aren't willing to take them, use them wear them. And so compliance has been single biggest priority for us as we designed our product. And we think about compliance in 2 different ways. We think about what is the daily average sort of the median daily rate wear time?

And then is the -- what does that wear time look like as you go from 1 month to second month to third month and beyond. In other words, do they continue to be compliant. And so I think our metrics are pretty clear -- we've published before that our daily median rate is over 23 hours a day. That answers that question. very clearly that patients are willing to wear our product.

And then the second half of that, which is what's the duration that they're willing to wear and you see a downward slope in the curve, over time can they get sick of wearing it. And the answer to that is remarkably sound that once patients -- once they get past that sort of first week of wearing our device, they will wear it through the duration of their prescription.

And that means that they can tolerate it not just for the short term, for the long term, and that gives them the protection that they need. So these are the 2 goals that we had, as I mentioned, and we feel really good about the way our data is tracking for those goals.

That's very helpful. And just the second question is just on the cadence of OpEx investments through the course of the year. Last quarter, we had talked about some of the investments the new commercial offer was making. We've discussed the new territory manager expansion today, but any color on the pace of those investments through the rest of the year and what those might be focused on? I think the name of the game is going to be steady and measured.

We are adding to our commercial footprint, as we've talked about. I think last quarter, we talked about the prior quarter, we got a little bit aggressive with some of our OpEx because we had an opportunity to really invest in the leadership team and the training capability of all these new reps, et cetera. Now as we go into our new fiscal year, we have a business plan for the year.

We're executing to it with pretty tight precision at this point. And what you're going to see is steady additions to the team so that we can consume those new territories and those new territory managers and provide them with all the support that they need to be successful. And I think that's really the strategy behind of the base.

This is not a -- this is not one of those categories where you can just say, hey, I'm going to go out and hire as many reps as I can as quickly as I can. That's not the game. We want high-quality reps that are going to come in, do a great job of serving our customers and their patients and really build a durable commercial team. That's our strategy.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Brian Webster, President and CEO, for any further remarks.

Okay. Thank you, and thank you for the great questions. I think, again, the story of Q1, we're off to a new start in a fiscal year. And it's an exciting start, but we've got a business plan. We're executing to that plan. And I'm thrilled by the level of commitment that the Kestra team has and the culture that we're building around performance and commitment, and we're looking forward to getting back with you all in 90 days or so and give you an update on Q2.

We continue to put a really bright shiny light on the focus we have around patients and the lives that we save every day, every week, we report on those to our team. Every Monday, we report on the patients' lives that we're saying by our product last week. And that continues to be the guiding line for this company and will continue to be so.

So thank you for attending today, and we look forward to updating you again in 90 days. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.