GE HealthCare Technologies Inc. (GEHC) September 2026 Conference Transcript

I'm Larry Beigelson, the medical device analyst at Wells Fargo, and it's my pleasure to host this fireside chat with the management team from GE Healthcare. With us, we have Pete Arduini, president and CEO, and George Newcomb, the interim CFO. Also in attendance is Carolyn Borders, head of investor relations. Pete and George, thanks so much for being here. Thanks for having us, Larry. So let's start with the strong Q2 results, Pete. 11% order growth, booked a bill of 1.15. It looks like one of your competitors, Siemens, also saw a strong Q2 on those metrics. So what drove the strength in Q2? I know you said three-quarters of it came from service contracts. And how should we think about order growth in the second half of the year?

Yeah, look, Larry, I think Q2 was obviously a strong quarter, to your point, over 11% growth. I want to clarify something, though, is that that was all equipment and orders coming through. The backlog that grew to 2.1, the vast majority of that still doesn't come through orders. The way we recognize service is we'll capture a large contract, it will go into the backlog, and then as it's consumed, portions of that will come through. So, I mean, again, big backlog build and 11 percent orders grow through the quarter. So it was quite good. Look, I think underlying that the markets are strong. We're seeing still a lot of long waits to get scans. Some of that's driven by the need for many, many of our modalities now to be prepared for drug therapy or device therapy. And so that's been that's been driving it. And then the other aspect is we're now bringing out more and more new products, and those new products are obviously driving some of the growth. So it was obviously definitely a good one, and, you know, we feel very good about what that means now for Q3 and Q4. That's helpful.

So, you know, that leads me to my next question. The organic growth guidance this year implies an acceleration in the second half of the year on a two-year stack basis. So how much do the strong orders in Q2 contribute to that, and what are the other drivers?

Yeah, I mean, some of the Q2 orders will come through, but, you know, particularly in what was traditionally the previous ultrasound business, we'll see those come through. But some of the long cycle items will come out more so of the backlog as we take a look in the second half of the year. You know, our ramp up is the traditional setup is we typically have a stronger back half just based on hospital budgets and stuff. And so the ratios look quite good. I mean, they're relatively favorable. I mean, give you an idea coming into the third quarter, you know, we actually had a higher percentage of the actual revenue committed, which basically means the site has their site readiness. We verified it. We've got the configuration. We've made the product. And so, you know, we were pushing 80 percent coming in. So we feel quite good about what that looks like. And then because of our backlog, because of the ramp, we've got good visibility into Q4. So feel feel quite good about that ability for the acceleration and and what it means here for twenty six finish.

And just last one on twenty six. The margins are also expected to increase on a year of year basis in the second half. You know, what are the drivers of the margin increase in the second half?

George, you want to take it? Yeah, sure. Sure. So look, traditionally, right, historically, we've had about 250 basis points lift in margins, second half versus first half, right? As you think about the drivers there, you know, with the MPIs, right, so a lot of new products coming out. We've got traditional productivity that we do, right? We've got price. We've got PDX, which continues to be strong for us. And So maybe thinking about that a little bit further, you know, with the NPIs, right, each of the products that are coming out now have a better margin than their predicate product. And as they start to mix into our revenue, then our margins will go up. On our productivity, you know, we've got sourcing initiatives, we've got manufacturing initiatives. We have overall, you know, we announced earlier this year the combination of our AVS and our imaging platforms. We should get productivity from that over time. Similarly, with our commercial, we merged some of our commercial groups together. We should get synergies there. And as you think about price, we got a little bit of price in the second quarter. as we reprice the the the orders that we have are taking now we'll start to see that come through and then pdx continues to be a strong part of our business and and obviously you know it's our highest margin business and then lastly look we had a rough first half with pcs we had some supply chain issues we had some supplier issues and as we start to push that out into the second half we should see a recovery there and that should also be a margin lift so you kind of package all that together that's why we see you know the second half that's very helpful

uh pete i mean uh i heard your earlier comments and we saw the q2 results but there's a lot of concerns in the investment community about the health of hospitals because of some of these policy changes and ones that are potentially coming like 340b um what what's your view And what's your visibility into some of these hospital capital equipment budgets into next year?

Yeah, no, and I know, Larry, even here at your conference earlier, there's been some discussions on procedure volumes and such. I mean, what we do, just to kind of let you know, I mean, we obviously spend a lot of time with hospital CFOs and CEOs, not just myself, but our teams on actually scanning and taking a look at how budgets will be planned out. In many cases, they have a capital budget structure that's three years out, and part of this discussion is interrogating to understand is it changing or not. We do a survey every quarter as well where we compare notes and stuff. And then we really try to get as much procedural data, and those are the combinations of things we look at. At this point, we really don't see any kind of pullback in our specific arena. And some of that gets into, you know, what's been evolving and really we've seen a lot of this since COVID is just the need, again, for imaging for even pharmaceuticals. I mean, you go back 10 years, there weren't many drugs that said you need to have a pre-post scan. If you look now at the use of a lot of these because they're so expensive to determine efficacy, their scans are happening. The amyloid beta products, you know, well, there's actually MRI needed to see if there's any type of adverse effects. There's PET scans needed. So that has created, on top of the baby boomer window, just a longer backlog to be able to access scans. And we aren't seeing a lot of change in that. Now, you get into the current contemporary points you raised about the Medicaid changes. All of our U.S. customers knew it was coming, right? It was kind of foreshadowed. So they've been working plans. Obviously, certain jurisdictions in certain areas, the mix shift is a little more painful than others. But we're not seeing that translate into, I'm not going to spend capital. In some cases, you actually see people saying there's more of an urgency that we need to be able to get the right equipment in that can bring in more higher mix procedures into the portfolio. And then on your 340B point, you know, 340B, obviously, however your views are, how it's been used by hospitals, it has been used that way. I mean, we don't foresee something taking place that goes back to ground zero. Even if it were kind of capped off in expansion, it would still play, you know, it would still have an adequate role, obviously, in helping hospitals fund their needs. So we project at this point in time a reasonably stable environment. The number one driver of that, though, is the amount of procedure growth that's underpinning it. That's helpful.

Good to hear. China, a big part of your business. It grew low single digits in the second quarter, but you still expect China to decline slightly in 2026. So, Pete, what do you see on the ground today in China, including VBP?

Yeah, look, I mean, China's been a very, obviously, dynamics and understatement market over the last couple of years. I mean, if you think of the prior to market and all of us down double digits, it's good to see that we're starting to see some stabilization. And to your point, Larry, we're still predicting to say we're going to be slightly down. But it's definitely being more stable and more predictable, which is step one. I think the growth of VBP, it's a little bit of a double-edged sword, meaning it creates more price pressure, but it also provides transparency and visibility. Even for a company of our size and scale that's been in China making things for over 35 years and being there for over 100 years, our visibility of what was transpiring was still some of the lowest of any country you would participate in because there would be deals we just didn't see. When it becomes in VBP, you see it all. Now, you may not want to participate in all, but your visibility goes up. And there's deals we've won at acceptable margin rates that we probably wouldn't have seen without it. I think the second thing is, you know, what it does is actually elevates it to a level where the ability for certain players to maybe manipulate an outcome are pretty much eliminated. And I think that's one of the reasons the government likes the approach. So, you know, we've actually done a little bit better in VBP. We also are adjusting our go-to-market. You don't need to have the same extensive clinical structure or distribution structure. And so we will have different, you know, margin approaches at what we will pay to support that. And so I think those are all the things that say this is what means it's starting to stabilize. That being said, you know, you have to be local. We moved vast majority of our in China for China manufacturing there in the last four years. We still have last mile of another 10 percent. But that's critical because if you want to compete in China, everything you sell there, many cases, if it's going to be associated with price, has to be sourced locally. Otherwise, one of the local players is going to have an advantage over you. And that's one of the strategies that we've been going after. And so I just say last piece, Larry, as we look into the horizon, it's hard to always predict, you know, how China is playing out. But I think we're going to see, you know, continued stability. I think we've talked about this in the past. I don't think we see a big spike back up. But if we could move from, you know, negative territory to slightly positive and continue to improve that, that's the kind of expectations we would have that would, you know, help us achieve our longer term goals.

That's helpful. And so it sounds like the national tender process that came out a few months ago is something you're not sorry to put words in your mouth. But is that a net positive for you because of this visibility there, you know, or or not? Is it?

So, yeah, it's I'd say it's it's net equal. We were expecting all like when this came out, there's a lot of people say, oh, VBP is only going to be 15, 20 percent of the market. I mean, we had modeled that ultimately over time it's going to be over half of the market. And we had looked at what are the pros and cons in a very stark way to say that, which then gets you into a mode of saying if this is where it's going to be, how will that play out? There's no doubt in the last quarter or so we had some benefits and we did a little bit better in VBP. If you follow it, which I know you have in some of the other disposable areas, sometimes the price starts in the first rounds out more challenging, and then it starts moderating back because customers want quality. Customers want service. You know, in a disposable world, you can say company A wins, company B's out, you know, all of B's out, and it's just A. In our world, you have an installed base. So there might be one new product. If you have eight of these other products and you put a different one in, it works differently, it's serviced differently, it causes more challenges. And so I would say we have a few more opportunities to kind of have the right type of discussion why you'd want to buy us other than just price. And if we get in early enough, we have those right discussions, I think we can win. And so that's what we've been seeing. But again, it's still a challenging market, but it's a stabilizing market. and that really is what we want in our forward plans.

Okay, good to hear. Switching gears to PCS, I guess two-part question. One is, based on what George said earlier, it sounds like you expect some improvement in the second half. I just want to make sure I'm hearing that correctly. And second, you know, what needs to happen before you kind of conclude the strategic review?

Well, I think to George's point, you know, again, the first half, we had some fixable events that took place. Some of it was related to supply chain. Some of it was related to manufacturing. And most of it was associated with some older products that we just have had either end-of-life components, things of that nature that we've converted out. And so that challenged some of the supply chain. Most of that has been behind us, And we've been really focused on this quarter. I think Jeanette and her team have done a nice job of really focusing on moving from, you know, what would normally be monthly, weekly execution into weekly, daily. And that rhythm to make sure that the teams are on track. Because as George said, when you look at the profitability of that business, there's a reasonable amount of fixed costs. Filling the plants makes a huge difference for the conversion of profit. And we're on track. I feel good about the direction that we're going. And so the first step to any type of strategic look is, well, let's get the business back to what it should be able to do. And I think as we exit this year, I think we're going to be able to see that with improvement in Q3 and continued on in Q4. So that's step one. And then, look, broadly on the analysis, it's a really good portfolio of products. The question for us, it's a capital allocation. I mean, if you think about monitoring, one of the top two monitoring businesses, top anesthesia business, diagnostic cardiology, one of the top two diagnostic cardiology businesses, a top three infant care business, and a top three kind of disposable cuffs business. It's a diverse one. So the question is, do all those things need to be together? That's one of the discussions. And are there pieces that would make sense someplace else versus keeping those together? And then there's a fundamental question of the whole business. Do we keep it? with the improvements we're making, or is it better someplace else? And part of that discussion, Larry, will be less about, is this a good or bad business? It's a good business. Could we put more capital to work in PDX or the new AIS and be able to drive that? And I think by as we get through the end of this year, starting in next year, we'll have a really clear view of that. But make no mistake, job one is get it back on track, and I think we're off to the right start.

So it sounds like we can get an update on the strategic review conclusions. Maybe I'm thinking like the Q4 call by then.

I think we'll be in a window to tell more, talk more about it at that point in time in February.

That's helpful. PDX, really strong Q2, almost 15% growth. Great work there. So what drove the strength? How are you thinking about the rest of the year? It does seem like, you know, a supply issue, one of your competitors contributed to some degree.

Yeah. Do you want to start off on PDX and then I'll.

Yeah. Yeah. Yeah. So I think, look, obviously, we did see strong growth. I mean, on our core contrast media product, right, where as we see it out in the in the market. Right. The supply is is just about keeping up with demand so that from our perspective, that continues to be strong for us. our radiopharmaceuticals continues to do well and is ramping as as as we would like and and then i think as as we look out into the rest of the year you know again with the procedures that that pete talked about we don't see a subsiding of demand on that um so i think that that's that from that perspective that's how we think about you know pdx yeah and it's it's a it's It's a really cool business, and it's kind of entering into a renaissance window.

It's interesting, contrast business has been around for 35 years. It's been generic for the last 18 to 20, yet it's still growing, and a lot of that's underlying, Larry, when you talk to all the device guys that need CT imaging to support it, or anything that's happening in the vascular lab, neurovascular, peripheral vascular, or cardiovascular, there's contrast agencies. And you know, in the outpatient world, there's growth there. That's driving it. And to George's point, between us and the other key suppliers, I mean, supply and demand is just matching up. And so, you know, to this point about other entrants coming in, you know, there's been over the years, eight, 10 different entrants that come in or come out. It's not the easiest generic market, meaning it's not, you know, you put a replacement vial on the shelf and it gets a script. You got to be in the hospitals, you got to be working with injector companies and those things. But I think, you know, we view there's probably some room for expansion just based on this market is projected to double over the next 10 years. And we're already seeing that linearity and that ramp matching that. So I think, you know, our business, we feel good about where it is and what we are able to do to protect that and grow it based on our differentiators, which supply continuity, the amount of features, the alignment with injectors. And then on the radiopharma side, this is, you know, it's continuing to ramp, but not just in Forkado, which is the myocardial perfusion product, you know Larry, but also Suriana for breast cancer. We're starting to see Vizimel ramp up quite a bit. These are all double-digit growth products, and I think we're going to continue to see that as you see the efficacy of the diagnostics and then and also how that works with therapy. So a big part of our play is to continue to build out that business to be more robust across the value chain. I think of this NMP acquisition we did in Japan is both CMO-type distribution, but it's also new molecules. And the CMO area is also quite a profitable area. The ability to develop your own molecules and leverage them in different geographies, all those things give you differentiation that's hard to duplicate. And then obviously, if you align that with what we do in PET, what we do in spec, and have the equipment, you know, we're one of the few companies that actually can kind of bring these solutions together for customers in a really exciting area, but can be a complex area if you don't have someone like GE Healthcare to kind of simplify it for you. So I'm quite bullish on where we're headed there. And I think, you know, what you saw is emblematic of both of those businesses continuing to do well.

That's helpful. A couple of follow-ups. The one short term, is Grabe still having supply issues in Q3?

So I don't want to comment specific about any other player, but let's just say in our space there's still some supply disruptions that are happening, yeah.

And then on the generic OmniPake, you know what your competitor is saying publicly in terms of their kind of aspirations. I guess one question is, initially, they're going to go after the spot market. How big is the spot market relative to the contracted market, which is probably a little more protected?

Well, it plays back to your previous question about what are some of the other shorts out there. But, you know, spot market could be 20 percent of the business, depending on where people are at different points of time with availability and such. But again, the demand around the world is growing. I think because of our global footprint, we also have the opportunities to move from one country to another based on demand, also based on how we take a look at profitability or where we want to supply it. So I think from that standpoint, we're actually in pretty good shape, what we contract, how we think about it. And again, just to remind everyone, sometimes we get in these discussions, people think this is $1,000 a dose drug. I mean, we're talking about maybe $15 to do a full-body CT study, and, you know, the cost of goods on these products when you start getting down into the single digits based on iodine and stuff make these challenging to make profit. And so we're not talking about huge numbers. The other aspect is when you do an ANDA and you come out, you pick one product to go out, you know, to follow, right, their NDA. But these products are fundamentally interchangeable. And so I think as spot market opportunities come up, there's still room for a player out there to do reasonably well and all of us still to continue to grow.

And I think your LRP calls for PDX growing high single digits. No change to that?

Not at this point in time. I mean, obviously, we're doing better than that. We'll update when we update. But obviously, it's good to see that it's outperforming what we said it would do.

But it sounds like you think you can do at least high single digits.

I think we have good opportunity to overperform, and obviously we're doing that right now, and so it's step-by-step here. Let's see how we do in the next couple quarters, but I'm optimistic about what we've got going in PDX.

And Flercato, you've been giving very helpful kind of dosing numbers up each quarter. We can do the math. Now, based on what you told us on the Q2 call, it does seem like a pretty steep ramp to get to the 500 million goal in 2028. I guess the question is, simple question is, how do you get there?

Yeah, and I think, Larry, you appreciate this. You follow more than MedTech. I think on the pharma side of things, the big part is getting adoption into some of these centers, even if they're low rate of users to start. and then the ramp can go up multiple hundred doses very quickly so you know what we we've spent time on is obviously the dose number is helpful for you guys to model last quarter i also mentioned you know that we had close to i think 30 new folks that came on that's the number ultimately that i keep a close eye on because they start you know we originally were like 90 days to get them up to having moderate dose use. Now it's about 60 days as we've got the rhythm going. But you bring on, you know, 30, then you bring on another 30, 60, 90. Those guys go from one to two doses a day to start going to 8, 10, 12. And ultimately, that's how you get a solid base of users that have that patient flow. So I would expect to see, you know, by the time we exit the back end of this year that we're on track to the right cohort of users to get us over half of the way there here in 27. I mean, that's kind of how we look at the volume, but I feel quite good about the ramp. And again, one of the things that sometimes gets lost in all this is what's the customer feedback? Hands down, best product out there for myocardial perfusion, the easy use of it, the quality of what it does relative to false negative, false positive kind of elimination versus predicates. So all those things are holding up, which is the most important aspect to determine how well it will do long term.

So just one follow up on that, Pete, so maybe to make sure I understand you correctly, you said about more than halfway there or something to that effect in 27, are you saying basically 250 million in 27? Because 500 million is going in 28.

I'm not saying actual doses, Larry. I'm talking about the users set up, which we don't give that full number, that we'll be able to ramp to it. That's the important part. Whether we have the actual dose translates to the dollars is less important to me than the amount of users that can easily ramp up to that. You weren't saying 250 next year. I didn't say 250 here, but we'll give some more clarity, obviously, when we give updates for 27.

But you reiterate, you still feel good about the 500?

Yeah, no, look, I think the 528, I think, long-term, billion-dollar molecule, all that 100% in line. What the actual numbers for 27, we'll give when we get to the beginning of 27, how we're thinking about it.

Turning to the innovation cycle, you know, you have a lot going on. Yeah, in a good way, right? No, I see fresh releases coming out, you know, almost on a daily basis on new product flow. um you know uh but you said on the q2 call these new products are still under 20 percent of the value of order growth um photonova spectra um and was also a minimal you know order contributor um you know and i think you just got ce mark is that right correct um so how are you thinking about the contribution from new products including photonova spectra going forward yeah i mean just to be clear i mean we we have new products that are in our growth number driving it but these what we call kind of lighthouse products, the one like Photonova Spectra, Total Body Pet, Vascular Room, those are the ones that are still small contributors to the overall number.

And so that's, again, that's the, if you think of the number one reason we feel good about being a mid-single-digit grower out into the future, it's because we're getting our chin to the bar there now where we have struggled in the past, and we're just starting to get to this phase of this new wave of innovation. So, you know, I think Photonova Spectra, we feel quite good about getting CE mark. We have the 510K, you know, orders will start coming in at a higher pace here in the second half. We'll be ready to start more of our shipments in the beginning of 27. So that's in line with what we had planned. MR is actually doing quite well. I think the Cigna Bolt, our 3D platform, our whole new UI interface, which is AI driven, is getting a ton of great reviews. It's helped really drive our growth at a level of where we're picking up share for the first time in quite some time, which is great to see in that business, as well as platforming it. And we'll talk more about this in the future, but the platforming, it's also bringing the profitability up within that business, which is super important. And then our Total Body Pet, I think we've got the most interesting platform out in the marketplace, what that can do, not only now with its sensitivity, but longer term about more procedures that move further upstream into the process. As well as we just announced to the, I think it was our C mark on our 12 head spec camera and some of the early work that's coming out there for some of these new molecules like actinium, as well as the beta molecules, the only product in the world that can And actually the same product could image and spec for Theranostics. So some really good stuff that's got its back as well in the top eyes of a lot of the luminaries around the world discussing about the GE products. And then, you know, ultrasound and vascular are hypercritical. I think if you look at the growth that's happening in outpatients, everybody's talking about vascular labs or C-arms or ultrasound products there. And I would argue right now we probably have the best lineup of anybody out there. In vascular, for sure, this is the best lineup GE Healthcare has ever had, period. And what that means is now you're competing in a really growing space in an area that typically has higher margins and higher growth rates than some of the other modalities we're in. So we're set up well.

Okay, that's helpful. Any early feedback from customers on Photonova Spectra? Your technology is a little bit different from your competitors. Any early feedback?

Yeah, I mean, well, obviously we've had a lot of the clinical guys that have done stuff, whether it be the University of Wisconsin and such. And I think, you know, short of it is the dose characteristics are amazing. I think image quality, people have been really blown away with the spatial resolution and even the algorithm work of what that means in challenging areas where there's metal and things that you traditionally have artifacts. And then the part that folks are super, I think, enamored with is this spectral imaging capability, this multi-bin separation that allows you to understand tissue characteristics that doesn't happen on the first generation products that our competition has. And I think the last part is we've tried to kind of make it easy, meaning the certain features on the first-generation products, you have to determine, am I in high-res? Do I have to have wide field of view? I have to select these modes. Ours runs constantly in the same mode. And why that's important is as you get into these studies and you say, oh, I really wish I had this data on this cardiac patient. Well, the only way you're going to get it on a first-generation system is you've got to go back and scan them. On ours, all the data is there. So, yeah, we've got to get it out there. We've got to get more reps and all those things. But those are the things that, you know, customers tell us they like about our design.

Great. Pete, I wanted to turn to the medium term. You know, you recently, I think on the Q2 call, reiterated your commitment to the medium term targets for sales and margins. And I know you haven't provided, you know, guidance for 2027 yet. But what do you see for 2027 to get you to the target ranges? And I guess you have a CFO transition, so just to confirm that it's still intact.

So we've got George here, who's been obviously our controller and has done a fabulous job stepping in as the interim. We're super excited to have Bill Grogan join. Bill's going to join actually next week, so we'll have him in the saddle. He has a great background, has been 10 years as a CFO, primarily in industrials, but also in mixed industry. It was at IDACS where there's some life sciences businesses, and I think his fit that's super great for GE Healthcare is we do have a diversity of complex technological development. He's got experience there. Someone who's grown up in business systems. I think what's really important for us and some of the better execution you're seeing is our implementation of our business system called Heartbeat. I think Bill's gonna be someone that can really step in and understand how to even make Heartbeat better and embrace it. And then he's just had a really good track record, I think, of thinking about how to actually optimize businesses for higher performance. So we're really excited. That's all on track, and we're excited about getting him on board. You know, look, when I look at where we are with midterm, I feel quite good. I mean, if you think about the macro world for everybody, it's been a challenging last three to four years, whether it be some of the China challenges, then having the tariffs, and then, you know, as many in the tech world have said, with the cost of memory, some of the changes, these are some of the biggest changes they've seen in their whole career in 30-some years. At some point here, some of these things have to subside behind us. But even having those laid on top, which could be worth almost a couple hundred basis points of headwind, when we said we would be 17 to 20, we're still on track to that even with those headwinds. Well, why is that? Well, we are getting price. We are getting VCP and cost reductions at a better rate. Our new products are all coming out at higher gross margins than their predicate, and they're actually performing better. And then we're benefiting from some of this mix and some of the businesses we talked about that are higher. So I feel quite good about it. Obviously, we're demonstrating the mid-single-digit growth. Orders of 11%, one quarter's great. That's not something we would say you're going to perform all the time on, but in a trailing 12 months, we're now at a 5% range, which, you know, in the previous years we haven't been. So those are the key things. And then, again, we're going to be focused heavily on margin. We think we still have lots of room to go, and it's that composite of all these things together, a better solution, a better cost structure, and then ultimately better optimization of kind of how we bring all these things together.

The mid-single-digit organic growth, you're not there this year, but that is the LRP target. And you still feel good about that?

Yeah, yeah, and, you know, I think you're going to see us continually make some progress against that.

I mean, if you're not there next year, it's kind of hard to get there in the LRP, right? Okay, fair enough. Pete, I really appreciate you being here. You've got a minute left. Well, I didn't ask you about capital allocation and M&A. Anything you want to add on that?

Well, I would just say, I mean, look, first, thanks for having us here. Look, capital allocation, none of our priorities have changed. Obviously, our highest return IRR work is internal investments. Hopefully, you're seeing that with all the new products coming out. I think we're at the right level as a percentage of sales in R&D right now. We've done select the buybacks. You know, we've done some things here with our dividend. But we believe that there's some good opportunities with the right types of tuck-in M&As, things that can actually build out the girth of the company either defensive capabilities but in many ways moving us into new areas where you see more recurring revenue or higher mix I think IntelliRAD is a great example digital space we can integrate more together around growing at high single digits potential to grow faster and margins in the 30s and so those are the kind of things you're gonna see more of but look I think we're at a point right now is an inflection point for the company where you know those midterm goals are really becoming real and we feel quite good about where we are positioned perfect great thank you