Masimo Corporation Price & Performance (MASI)

Also, this call will include a discussion of certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP, Generally refer to these as non GAAP financial measures. In addition to GAAP results, these non GAAP financial measures are intended to provide additional information to enable investors to assess the company's operating results in the same way management assesses such results. Management uses non GAAP measures to budget, evaluate and measure [indiscernible] and sees these results as an indicator of the company's ongoing business performance. The company believes that these non GAAP financial measures increase transparency and better reflect the underlying financial performance of the business. Therefore, the financial measures we will be covering today will be primarily on a non GAAP basis unless noted otherwise, Reconciliation of these measures to the most directly comparable GAAP financial measures are included within the earnings release and supplementary financial information on our website. Investors should consider all of our statements today together with our reports filed with the SEC, including our most recent Form 10 ks and 10 Q, order to make informed investment decisions. Addition to the earnings release issued today, we have posted a quarterly earnings presentation within the Investor Relations section of our website To supplement the content we will be covering this afternoon, I'll now pass the call to Katie Ziamond.

Thank you, Eli. I couldn't be more excited to join you today for my first earnings call as Chief Executive Officer.

As many of you know, my new role was announced in January but I only officially began on February 12, less than two weeks ago. That said, I want to touch on a few things before handing the call to Micah. First, I'd like to briefly discuss why I took the role at Masimo, and then I will give a few of my first impressions from the time I have been here. First, Massimo's mission is about patient impact. I wanted to be a part of helping Massimo continue to grow and deliver in improved outcomes for hundreds of millions of patients throughout the world.

Actually, I had a personal experience some years ago that demonstrated to me exactly how critical the products Massimo provides to patients can be. The short version of the story is that when my youngest daughter was about nine months old, contracted near fatal pneumonia. I spent four days in the hospital staring at her Massimo Pulse Ox values nonstop, praying they would go above 90 and stop alarming.

Finally, on the fourth day, her pulse ox rose above 90 inclined back to 98.99 and we got to bring her home to our family. So I know firsthand what Mattimo's mission means to patients and their families. Second, I have always respected Maximo as the technology leader. With its history of bringing meaningful innovations and products to market. The opportunity to continue the innovation focused culture at Massimo as we refocus on our core professional healthcare market in extremely exciting to me. Third, I was attracted by Masimo's talent. The leadership team and bench strength here are excellent. I really appreciate how warm we have been welcomed starting with Micah, Bilal, Shell Brennan and the entire team. There is a true family feel at Massimo and a pride in the work that I believe will be integral to us achieve achieving our financial and strategic goals in the years to come. Finally, I believe I can help Massimo further achieve its terrific I've spent thirty years in the med tech space, including ten years focused on advanced patient monitoring. I had a track record of delivering industry leading profitable growth while improving patient outcomes. And I'm excited to devote myself personally to Massimo's Masimo.

Now I'd like to briefly discuss my impression so far.

In all of my discussions, one consistent theme has been As a refocused organization, it's clear to me that there are numerous unmet market needs we are well positioned to address and that we have strong momentum behind us to do so. At Massimo, we have an opportunity to change the way patients are monitored [indiscernible] I fundamentally believe that all patients who are in the hospital should be monitored continuously all the time. And today, most are only That is simply not enough.

I also want to reiterate how impressed I have been by all of our people. Exceptional innovation requires exceptional talent. And we are in a strong position across our engineering, operations, sales and all of our teams. To cultivate our talent, I'm committed to building programs that will actively engage develop and empower our current and future leaders. These programs will enable the organization to scale and they will support our long term growth. Lastly, my initial discussions with customers have reinforced how close our relationships with them are.

We are the clear leader in our core categories for a reason. And I look forward to getting a chance to interface more with our customers and to partner with them to improve our products and services in the future. In closing, I'd like to recognize the entire team for just a fantastic quarter. And I'd especially like to thank Michelle Brennan, who has done an exceptional job as Interim CEO. I'm thrilled to be taking on the CEO role at a time when the company has such positive momentum and exciting opportunities ahead. With that, I will pass it over to Micah.

Thank you, Katie. I'm excited to partner with you as we embark on the next chapter for Massimo. With a relentless focus on our core healthcare business, to drive continued innovation, profitable growth and long term shareholder value. We finished the year with solid performance across both business segments as the healthcare and consumer teams were laser focused on delivering strong results within their end markets. For the fourth quarter of twenty twenty four, our consolidated revenues were $6.00 $1,000,000 representing 9% growth on a constant currency basis. Healthcare revenues grew 9% reach $368,000,000 and we shipped 65,000 technology boards and monitors during the quarter.

Which is at the high end of our expected range non healthcare revenues grew 11% to reach $232,000,000 For the third quarter, our consolidated gross margin was 52% which included gross margins of 63% for healthcare, and 35% for non healthcare. Healthcare gross margins improved 190 basis points year over year as we continue to realize the benefits of manufacturing our high volume sensors in Malaysia In combination with increased operational efficiencies and a favorable product mix related to more cells coming from consumables versus equipment For our consolidated business, operating profit was $134,000,000 representing 46% growth versus the prior year period. Our operating margin of 22.4% improved five seventy basis basis points year over year and rose six forty basis points sequentially. These improvements were directly attributable to the additional leverage we realized from our seasonally strongest period as well as the actions we've taken to optimize our cost structure with a greater focus on our core healthcare business.

Our non GAAP net earnings per share was $1.8 representing 44% growth versus the prior year quarter On a GAAP basis, we incurred a net loss of $6.52 per share included a non cash impairment charge to goodwill and intangibles for Sound United in combination with other non cash asset write downs. For the healthcare business related to the actions we've completed in the fourth quarter to improve our cost structure. As I mentioned on our last earnings call, the management team in partnership with the Board went through a very thorough process to review our R and D projects and product portfolio addition to the actions we have taken to optimize the cost structure. A result of our project portfolio review, we will be focusing on fewer projects and allocating resources to those areas that will drive the greatest return. With regards to optimizing our cost structure, we have rightsized corporate overhead costs reduced marketing expenses associated with products that were not generating meaningful revenue rationalized our facility footprint and reduced costs in other areas unrelated to our top line growth. Although we will continue to explore new opportunities to optimize our healthcare business moving forward, the large asset write downs associated with our strategic realignment efforts in the fourth quarter are now behind us.

And we expect to see increased earnings and cash flow in 2025 and beyond To summarize our fourth quarter performance, we delivered healthcare revenue growth of 9%, consolidated operating margin improvement of five seventy basis points and non GAAP earnings per share growth of 44%. As a result of our strong earnings performance, we generated $50,000,000 in operating cash flow for the quarter. Fiscal twenty twenty four, our consolidated revenues were $2,940,000,000 which included healthcare revenues of $1,000,000,003.09 $5,000,000,000 and non healthcare revenues of $699,000,000 On a consolidated basis, our gross margins were 53% operating margins were 17%, were $4.4 For the healthcare business, revenues grew 10% for the year as we realized substantial growth in our consumable and service revenues, partially offset by a decline in capital equipment and other revenues. Within our consumable and service revenues, we delivered strong performance across our major product platforms with pulse oximetry, co oximetry and hemodynamics, Captography and gas and brain monitoring all exceeding their respective growth targets. Within our capital equipment and other revenues, a large part of the decline was due to a change in accounting rules that started in fiscal twenty twenty two and has progressively shifted a portion of our contract equipment revenue from capital leases to operating leases.

As a result, this equipment revenue is no longer accelerated upon shipment and is now being recognized over the term of the contract. We expect this to be less of a headwind in 2025 and beyond. We also shipped nearly 235,000 technology boards and monitors which exceeded our expectations coming into the year. More importantly, we had a record year in terms of gaining share through customer contracts as our incremental value of new contracts was dollars As a reminder, we believe incremental new contracts are the best leading indicator for our revenue growth. To summarize, our full year performance, we delivered healthcare revenue growth of 10%, consolidated operating margin improvement of 170 basis points and non GAAP earnings per share growth of 16%. As a result of our strong earnings performance, we generated $196,000,000 in operating cash flow for the year. Now I want to lay out the initial framework for our fiscal 2025 financial guidance. First, starting in 2025, Sound United business will be classified as held for sale and moved into discontinued operations.

As a result, we will be removing this business from our non GAAP financials and no longer providing guidance for the non healthcare segment. Second, our guidance does not include any use of proceeds from a self signed United. Any potential benefits from new tax policies, and any potential impact of new tariffs on our business, which could be material. For example, our products sourced for represent approximately 25% of our healthcare cost of goods sold. While the implementation of tariffs remains a dynamic and uncertain situation, and it is worth noting that medical devices have historically received exemptions from increased tariffs, we have taken the necessary steps to have appropriate contingency plans in place, and we'll continue to reassess and modify our plans as the situation merits. Third, our guidance incorporates the financial impact of one additional calendar week for the healthcare business. Which occurs every five or six years based on our fiscal calendar. The incremental revenue from the one additional week is mostly offset by product line removals, the impacts of ASC eight forty two lease accounting Based on our 2025 guidance framework, we are projecting healthcare revenue of $1,500,000,000 to $1,530,000,000 dollars representing approximately 8% to 10% reported growth and 8% to 11% constant currency growth.

We expect to ship 240,000 to 260,000 technology boards and instruments this year. As a result of our strong fourth quarter performance combined with the benefits we're seeing from our cost improvement initiatives We are increasing our non GAAP operating profit range to $413,000,004 28,000,000 representing 27.5% to 28% operating margins In turn, we are also increasing our non GAAP EPS guidance to a range of $5.1 to $5.4 representing approximately 22% to 29% growth compared to our fiscal twenty twenty four results excluding Sound United. With regards to divesting Sound United, we are in the later stages of the process We will not be commenting further on it during this call. But we do reiterate that we remain pleased with the level of interest and our general expectations around timing remain unchanged. In closing, 2024 was a great year for Massimo Masimo. As we achieved a record level for incremental new contracts, and realized a substantial increase in our unrecognized contract revenues which provides good visibility for growth as we continue to ship products to our hospital I'm also excited about the actions we've taken to improve our cost structure. And refocus on our core healthcare business. Which produced stronger than expected earnings and cash flow performance in the fourth quarter and has set the stage to optimize earnings power in 2025 and beyond.

With that, we'll open the call to questions. Operator? Thank you.

We will now begin the question and answer session. Please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Marie Thibault with BTIG. Your line is open. Hi, good evening. Thanks for taking the question. I wanted to start here and ask a little bit about the operating margin guidance, in particular that definitely stood out to us. It's higher than the 26.5 that you talked about earlier this year. And I just want to understand what's changed? What has become incrementally more positive? Have you been able to find new cost savings Any more detail you can give us on that certainly very impressive. Thanks, Marie.

Yes, let me comment on the margin expansion. So as you know from earlier this year, and late last year, we talked about operating margins about 26.5%. We're now taking those at 27.5%, they have 28% for the range for 2025. So what's really behind that is we started a we were still going through some of the project R and D project and portfolio review late last year.

As you saw, we had very strong fourth quarter results and we started seeing some of those margin improvement initiatives taking hold even earlier than expected. And we exited very strong with with some of the cost structure improvement we've made. And we completed those that rationalization of those projects. So that gave us the confidence to come into this new guidance and update the guidance to reflect increased margins. If you look at where that's coming from, it's year over year you kind of normalize for where we landed with the healthcare business, we landed around 23.7% operating margins in 2024 when you exclude Sound United. And that's about a 400 basis point improvement and about half of that improvement is coming from the project and portfolio rationalization. About a third of that is coming from corporate costs and facilities consolidation that we've done. And then the remainder is really due to the consumer health marketing spend that was reduced as well. So that's the key drivers behind that going into 2025.

Okay, very helpful. Maybe I can ask a follow-up here about hospital census flu activity, some of the market share take commentary you gave us. What's being assumed in 2025 guidance in terms of hospital census? What are you seeing so far with flu activity and what's being assumed in terms of market share gains? Thanks for taking the questions.

Absolutely. Yes. So in terms of we'll start out with Census and how we're thinking about that and inpatient admissions growth. For the year. We're assuming in our guidance, it's a range of on a constant currency growth, 8% to 11% for the year. And really the range is really due to how we're thinking about our consumables growth consumable and service growth for the year. And it's, of course, dependent on how well Census performs on both ends of that range. So if you look at that we're implying in our guidance about low single digit growth in terms of census and inpatient mission growth. And that's what gets you that range. In terms of our contracting, as you know, we've had two really strong years. Last several years have been very strong in terms of contracting and gaining share on those contracts. And that sets us up well for growth as we move into 2025 and it's given us that confidence as we're thinking about the range that we provided. And we tend to to see that carry into 2025 from 2024 as we're installing under those contracts. And that starts to build revenues throughout the year. And your next question comes from the line of Jason Bednar with Piper Sandler.

Good afternoon. Thanks for taking the questions. Katie, I'll echo the comments. I'm looking forward to working with you You do have the unique position where you're coming in here to Massimo and inheriting both 25 guidance and an LRP that was set before you arrived versus like having a hand in influencing that outlook. So maybe can you talk about how you envision applying your skill set and the resources to execute against or better than that financial framework and if you could add on just how you see things like Massimo's product pipeline, just your experience for critical care, and continuing to drive sustainable above market growth here at Massimo.

Sorry, Jason. Thanks for the question. Excuse me. So first of all, related to the guidance and kind of the plan that's already in place, I mean, Michelle and Micah and Bilal and the team did just a fantastic job. If you look at the last quarter, in executing and really focusing the company back to healthcare and really to true patient monitoring, which is what I think is really the most exciting space for us. And you think in the big two weeks that I've been here, that honestly, Micah and Belal know this business really well and they're the ones that put together the plan. So I have a lot of confidence in the plan that was put together and the ability to drive profitable growth going forward. I think the area that I'm going to be focused on for the next quarter is really trying to understand better how to expand our leadership position and in our core markets we just this company has great technology great innovation. And now that we've narrowed it down to the healthcare space, I'll be working with the teams to just build out like how do we actually execute commercial excellence on so many of the great innovations that we have.

Then finally, just the team here is just amazing. And so getting a chance to build on the strong talent, understand what they see as the future opportunities is really where I'm going to be working. Coming from my background in patient monitoring, to be honest, I think really every patient that goes into a hospital should be monitored and right now they're not. And so I just see us trying to work together to figure out how to expand especially non invasive monitoring to more and more areas throughout the hospital. So really excited to partner with the team on that and confident that the plan that they put together is going to be doable even in the context of trying to expand the growth.

Excellent. Very helpful. Mike, I wanted to come back to the tariff comments you were making. I think you mentioned some contingency plans that you have in place. Can you elaborate here a little bit? Are you able to flex manufacturing even higher in Malaysia if tariffs were to go into place in Mexico?

Or can you service a disproportionate amount of your U. S. Business from Malaysia [indiscernible] sorry, if there aren't exemptions that are possible, do you have any contractual ability to pass through higher costs that would arise from tariffs Yes. Thanks, Jason. So as I mentioned before, it's a dynamic situation. We've seen things move around and shift in the plans that have been discussed already this year. And and it's going to depend on which which products that government the terms that are subject tariffs, what those rates will be, the timing. But the one thing that's good for us is we've expanded our global manufacturing footprint and which now includes Malaysia and as you alluded to, that gives us more flexibility shift more and more products over to Malaysia. As I mentioned before, we're manufacturing high volume sensors there. But we still in Mexico, we still have our instruments, our our cables, accessories, lower volume sensors that we have an opportunity to evaluate and continue to move over and those are some of the contingency plans been working through case we need to execute some of those plans. Still early, to determine the magnitude of what we can move, but that gives us much more flexibility than we had several years ago before we entered into Malaysia.

In terms of pricing, we're always we're going to continue to evaluate and exciting to have Katie come on board too to also bring her background with pricing in this space. So So that will be part of the things that we consider in those contingency plans moving forward. But it's still pretty early. Okay, understood. Thank you. And your next question comes from the line of Rick Wise with Stifel.

Hi, Katie. Hi, Micah.

I'm thrilled to have you on board, Katie.

Let me start off with a question for you and I know it's early to ask a question like this, but as given your unique perspective and knowledge, of the hemodynamic monitoring product technology space. I'm just curious how you're viewing that particular area for Massimo, Bilal and Micah spoke of it and very the Massimo project and very excited terms a couple of months ago at the Stifel Healthcare Conference.

Is this a big opportunity? Are you it's early to ask, but are you intrigued, excited? Are they on some new path that could be a new opportunity for Massimo Masimo?

Yes. So thanks a lot, Rick. I mean, first of all, I'm right now just laser focused on Massimo or Massimo and the great opportunities for growth we have here and just kind of learning the core markets that Massimo competes in. I mean, when you think about hemodynamics, there is just a huge amount of patients that are not treated today. So I don't think it's a matter of thinking about it only in terms of like how does Hemodynamics look versus other people in the space, but really just about how do we find ways to treat more patients. And so I do think broadly, monitoring more patients in all areas, but in particular, all [indiscernible] There's just an opportunity to monitor more and more patients out there. And so that's the way I'm thinking about it right now. Got you. Thanks. And Mike, maybe you could help us think through [indiscernible] quarterly flow, particularly the first quarter is to get us all set up right to start the twenty five year. Help us think through the first quarter and the flow and anything you'd have us reflect on as we reflect about your 8% to 10%, 8% to 11% guidance, is this unusually back end loaded year or fairly ratably spaced help us think through that.

Thank you. Yes. Thank you, Rick. So the best way to put it, I think the one unique item that sticks out would be is we have an extra week. We have fifty three weeks in our fiscal calendar this year, which I mentioned, that occurs every five or six years based on our calendar. So there's one extra week that's in the fourth quarter. If you kind of back that out of the fourth quarter and use normal seasonality, that's kind of how we're looking at the year. It's based on our historical seasonality. And if you kind of go back and look at that, you see the first three quarters are somewhere give or take 24.5% of revenues.

And then the fourth quarter is about 26.5%. So I think you just have to adjust out the extra week and that's contributing about one percentage point. And then to the full year, probably four points on the fourth quarter. And then you start to apply the normal seasonality. I think that's probably the most unique thing in the guidance for the year.

And the first quarter, Mike, just to make sure I'm understanding correctly, how would you frame obviously, I assume sequentially lower in dollar terms, but Can you give us any color there?

Yes. I think, like I said, if you kind of pull that extra week out of the fourth quarter and then apply about a 24.5%, which is kind of historical seasonality for the first quarter. I think that will get you somewhere in the zone And you can kind of triangulate that with even the kind of year over year growth rates as well just to make sure those are pretty consistent throughout the year.

That's great. I appreciate it. Thank you.

And your next question comes from the line of Michael Pollark with Wolfe Research. Your line is open. Good afternoon.

Welcome, Katie.

I have two. I was thrown through a little bit of a loop with your competitor announced a high single digit decline [indiscernible] recent updates respiratory has been strong of late, maybe it was a little soft year on year. Earlier in 4Q. You've posted high single digit growth How would you true that up for us? What dynamics do you think might be at play? Yes. So if you look at what we're seeing in the business, number one, our contracting over the last couple of years have been very strong in terms of gaining share on contracts. Number two, the respiratory related illnesses that are tied to hospitalizations those spiked in late December is a little later than the prior flu and respiratory season. But they've held pretty elevated through the early weeks of February. So we've seen it like I said, it's a steep ramp late in the year last year. In December and that's remained pretty strong through all the way through the first February and above the prior season. So So that's kind of what we're seeing right now. Question, a follow-up question on the the cost initiatives. Has there been any redeployment of some of the saves into Pieces of strength, I mean, understand what has been trimmed, but I guess what I'm driving to is what I see in the margin is like a net benefit Have you played offense elsewhere?

If so, where? Thank you. Yes. So I'm not sure what you're referring to on the net benefit. But Refocus on the new projects. Yes. So I think you got to keep in mind that all the initiatives we went through last year a lot of those came from reducing corporate overhead costs. We were consolidating facilities. We were eliminating spend on marketing for product lines that we're not generating meaningful revenue or returns We're laser focused back on the core business We want to drive those projects and investments going forward that are going to give us the best return on those investments. And I think that's what you're seeing is a much more refocused organization That's margin has been the output, not the input. And of those efforts. And I think you saw strong earnings power of the business in Q4 And that's where we believe that's going to continue into 2025 and it gives us a good entry point into the year.

And your next question comes from the line of Vic Chopra with Wells Fargo. Hey, good afternoon and thanks for taking the questions, Katie. Thank you be working with you. Three months and then I had a follow-up, please.

So thanks, Rick, for the question. So as I mentioned before, really where I'm focused is trying to develop more of the long term growth strategy. So as Micah mentioned, we have done a lot of planning and a lot of refocusing back on healthcare. And now what we've got to do is figure out how within the healthcare space we can build a long range plan that's going to accelerate our growth over time. So looking at the innovation projects that are in the pipeline, working with the R and D teams and trying to understand where we have opportunities and then working with the upstream marketing team. So I'm spending a lot of On that, The second thing is really working with the leaders and getting to know the team. And then the last thing and probably most importantly, getting a chance to go out and visit customers and get feedback directly from our customers, from some of our partners in the space. It's just an amazing kind of space to be able to have a chance to interact externally as well. And so my priority really for this quarter is to work with the teams, start to build that long range focus and then listen and learn as much as I can.

I didn't come in here as like some big agenda.

Really want to take everything that I know and really get a chance to listen to all these inputs and then start to build that long range growth [indiscernible] Great. Thank you. And then maybe one for Mike.

You raised your operating margin guidance for the year from when you previously preannounced your earnings I'm just wondering if that operating margin upside is a pull forward of the future cost outs. I think you gave a long term target initially of about 30%. Is that a pull forward? Or does that change the long term operating margin target? Thank you.

Yes, Vik, I'm not going to comment really on the long term right now because we do need to work with Katie on those new plans on how we're thinking about the next three to five years. And I don't want to get ahead of that that process. But what I can tell you though is this business does have good leverage capability to it. I mean, we we do believe we can can continue to leverage and drive operating margin expansion. We've got Probably the biggest opportunity and where a lot will be focused around will be gross margin expansion from going forward because we think there's a lot of potential there in the years ahead. So don't want to get ahead of our next Investor Day, but we do see great operating leverage and earnings power in this business. And as we partner with Katy on really focus on innovation driven growth going forward. That also gives us ability to leverage and drive great earnings power in the future. So I think that's where we'll kind of leave it for today. We're ready for the next question, operator.

And your next question comes from the line of Mike Matson with Needham. Your line is open.

Thanks for taking my questions. I guess, hear a lot about hospital automation. So I was wondering if you could give us an update there. And is that still a focus or is that something that you sort of deemphasize as part of the [indiscernible] Sorry, can you repeat that? Mike? Yes. I have a question about hospital automation and whether we're still expanding in that area.

Yes. So Mike, if I didn't mention that on the list of product lines because we were talking about our some of our major product platforms. But automation has been very good growth for us. And in fact, our long range plan target there has been over 20% plus growth and we we saw that not only in the full year growth, but also in the the second half of the year as well as the fourth quarter. So we've seen strong growth in our automation category and platform, and we're going to continue to [indiscernible] got a great opportunity with one of the largest device libraries where we can connect so many different devices in hospitals and be able to manage and leverage that data that we get coming off the patients and being able to take that data and help clinicians with decision support. And I think that's a great opportunity for us as we look out in the future.

Okay. Got it.

Yes. I can just add a comment to that just coming from the outside that the investment that Massimo has made the last ten years in hospital automation and really being an integral partner with hospitals for connectivity I mean, is your to see it payoff, but it's so critical to the future of health care, right? It's almost like you can't it's almost like an A and T for poker, like you can't sort of be in the space without also having a solution there. So Okay, got it. And then just in terms of the Apple litigation, I was wondering if you could give us an update there. Is that something that you're going to continue to pursue? Is there potential for some sort of settlement there? Or is that something that would be kind of moved into the consumer health business that's separated from the company? Yes. So with regards to Apple, we're happy with the progress we've been making. Apple is right now most recently they've appealed the decision with the ITC. On the exclusion order for Apple watches with pulse oximetry and And now the second step was we're waiting on the judge's decision on the retrial of the trade secret theft case.

That was in California. And really the third piece of it is looking at the trial dates They haven't been set for the two different patent infringement trials. One in Delaware, one in California and that's where we're the plaintiffs asserting multiple patents against Apple. So that's really the status of where things sit with Apple right now. And I think we want to kind of leave it to that and not really comment further on the Apple litigations this time. [indiscernible] would reside within the [indiscernible] Massimo Healthcare business that's Yeah.

Staying as Massimo, not those parts that are being separated, right? Okay. Yes. Thank you.

All right, Mike.

Yes, that will we'll continue to to move along with that and that will be continue to be part of the healthcare business. Okay, thanks.

Thank you.

And there are no further questions at this time.

Okay. So just want to say as the new CEO and just for my first call, I want to say thank you all for joining call today And special thanks to Micah and Eli for leading the call this quarter. Doing a great job. Personally, I'm very excited about the year ahead and the opportunity we have at Masimo to improve patient outcomes by taking monitoring into new areas. I look forward to speaking to all of you guys again next quarter. And we'll see you then. Thanks, everyone. Thank you.

And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.