Conference Transcript - IRTC 2026-09-09

Nathan, Analyst — Wells Fargo Securities

Good morning. Welcome, everyone, to the second day of the Wells Fargo Health Care Conference. For the session, I'm pleased to have Dan Wilson, the CFO of iRhythm, and Lisa Pecora, the Senior VP of Finance. Thank you for joining us.

Dan Wilson, CFO

Thank you, Nathan. Great to be here.

Nathan, Analyst — Wells Fargo Securities

Of course, a lot of exciting things happening at iRhythm, but I thought we would start with Vital Connect, which is probably the most pressing for investors. I guess maybe just at a high level, walk us through the underlying deal strategy. Yeah.

Dan Wilson, CFO

Yeah. Thank you. Something we're very excited about added to the list of things that we're excited about. I would say simply put, the deal strategy is really combining great technology and product features, differentiated product features with our commercial engine and clinical service delivery capabilities. And if I was trying to sum it up in a few words, it would be that. In terms of their product and technology, we do see it differentiated and complementary to ZOAT and ultimately ZOMCT, which we'll likely talk about. Some of the capabilities that we see resonating in the market, four-in-one capabilities. So, you know, with a single product and platform, able to serve, you know, four different modalities seamlessly for patients, getting out to 30 days of where, particularly in the MCT segment, where we really see their technology, you know, differentiated. As you know, ZOAT does not go out to 30 days today, and we do see that is important to, you know, certain customers and patients in the market. And then some other features as well that are unique, live-looking capabilities. So at any point in time during the wear period, a clinician can look into the patient's record, see the raw ECG, and that is of value for certain customers in the market. So a lot of things that we're excited about see it very complementary to both AT and MCT, and we're excited to put the product in the back.

Nathan, Analyst — Wells Fargo Securities

Great. You know, on the earnings call, you pointed out that this product is going to let you address 50% of the MCT population that you didn't think you would be able to with ZOAT or ZOMCT. I guess, can you put a finer point on what this 50% of the market is, what type of patients are these, and why Vital Patch is the right product here?

Dan Wilson, CFO

Yeah, so, you know, we said ZOAT addresses roughly 50% of the MCT segment. We do believe with ZO-MCT coming, that opens up a bit more of the market, call it another 20% of that market or so. There's still a good part of the market that we don't believe we can address right away with both ZO-AT and ZO-MCT. Bringing Vital into the portfolio allows us to fully access that market. And it's really around those kind of features that I pointed to. there's absolutely you know customers in the market that want 30 days of monitoring and that is you know key feature of the the vital platform that it gives us those capabilities you know as soon as we add it to the bag so that's that's a big one and then there are again patient you know customers that expect downgradability you know capabilities in the platform we don't offer that with AT today and then some of the other you know kind of tangential features as well, certainly the live look and the multivitals, those are becoming more and more expected and desired by clinicians in the market. And with vital in the bag, we believe we can meet the full spectrum of the market. Unlike long-term continuous monitoring with our Xeomonitor product, the MCT segment is fragment. And we're seeing that very clearly. there's no one size fits all. And so having multiple, you know, options in a bag to offer our customers, we believe is a good strategy.

Nathan, Analyst — Wells Fargo Securities

Okay. You know, as we think about your mid-teen share of MCT today, where can this go in the next one to two years? You have well-entrenched competitors in MCT space, and I think they have integrated systems at the hospitals. I guess, what are the key factors that would enable you to take share? And, you know, if any way you could kind of frame, you know, 15%, where does it go in the next one, two years?

Dan Wilson, CFO

So we have been gaining share nicely in that MCT segment with, you know, with ZOAT. We had a great year last year with ZOAT, and in particular saw that, you know, combined with ZO Monitor, which is the work, you know, workhorse tool for, you know, hospitals and accounts combining those together in a single platform there's a lot of operational benefits for you know for customers so that's that is an important you know piece of it continuing to innovate within that MCT segment certainly you know we're committed to zoom CT looking forward to getting that cleared first half of next year and then bringing the vital platform and we believe that you know combined with everything we're doing on the commercial side clinical evidence market access strategies EHR integration that is a big component you know putting that all together we're confident we're going to be able to continue to grow our share in the MCT segment we're at 70 percent you know over 70 percent share on the long-term continuous monitoring side that is the biggest segment of the market so we believe we're in a kind of differentiated position to ultimately win share in the MCT segment we need the right products in the bag to do that. And we believe with ZUAT, then ultimately ZUMCT plus Vital gives us a really good portfolio to go grow our share in that market.

Nathan, Analyst — Wells Fargo Securities

You know, another question that we get is with Vital Patch in the bag, is it really necessary to continue to pursue ZUMCT? You know, can you explain why you're still pursuing it? What is the commercial case for launching both VitalPatch and XeoMCT.

Dan Wilson, CFO

Yeah, we do believe they're complimentary. And so, XeoMCT, it's on the same platform as XeoMonitor, as you know, and there's benefits both on our side as well as to a customer. And in situations where customers desire simplicity and patient experience where a patient can put a device on they don't have to do anything you know through that wear period 14 or 21 days there's a lot of value there and that's how we've been going to market with ZOAT that's how we've been winning in the market but again there are clear clearly customers clinicians and patients that you know want to see 30 days of monitoring we we don't offer that today with with AT and and get a bit closer with MCT out to 21 days but there's still that that gap and then some of the other you know features that I was mentioning as well so again believe they're a complimentary we're committed to ZOMCT and keeping that you know in the bag with with vital certainly you know in the near term as we think how the product and technology evolves you know platform evolves over you know five year plus period we'll see what that looks like but certainly in the near to medium term we see you know both as complimentary yeah I mean there are obviously similarities between the products.

Nathan, Analyst — Wells Fargo Securities

How do you prevent channel confusion? Which product do you lead in with? You want to make sure rep productivity stays good. I guess what will be the rule for which product you will lead in with?

Dan Wilson, CFO

Yeah, I think there it really is understanding the customer needs first. We want to offer a solution that meets the customer's needs and solves the problems that they're looking to solve for and that requires you know listening to what the customer wants and then you know now we have a product that we can you know we can address you know in a bigger set of you know problems they're looking to solve I guess so it really starts with that certainly we believe zeomonitor long-term continuous monitoring is the right kind of frontline tool the workhorse devices I was mentioning don't see that changing. But then for the MCT segment, having multiple options to serve, again, that fragmented market, you know, we're really excited about.

Nathan, Analyst — Wells Fargo Securities

Great. So you disclosed for Vital Connects, $65 million of trailing 12-month revenue or annualized revenue. Any color on the underlying growth rate and where the revenue synergies are with, you know, obviously you talked about your 70% share in LTCM, but just how are you thinking about revenue synergies and growth in that platform.

Dan Wilson, CFO

Yeah. Yeah. And they're on the 65 million that we put out, you know, figured it was important to give investors an understanding of where where Vital Connect currently is. And importantly, that is under our revenue recognition, you know, accounting policies where we, you know, recognize net revenue. Historically, they've been a very strong grower and have consistently taken share in the overall market and in particular in the MCT segment. They did see a little bit of an operational you know impact late last year as they cut over from a clinical software back into a different provider. They have grown through that now and the business is you know back above where it was prior to that that cut over. So excited about you know what that growth can mean in our commercial, you know, infrastructure. They have, you know, I think it's 30 commercial reps versus, you know, our commercial team, call it 200 people. So they've been pretty limited and focused from a geographic standpoint commercially. You know, when we close the acquisition and train up our sales force, we intend to, you know, launch this nationwide. So we're really excited about what that can mean.

Nathan, Analyst — Wells Fargo Securities

Okay and as far as the third gen algorithm, will this be ported on to the vital patch as well?

Dan Wilson, CFO

I wouldn't say right away, there is an opportunity there certainly. I mentioned their clinical back-end, they do licensed software from a third party as we think longer term. Obviously those are capabilities we built internally and you know we'll look at that opportunity.

Nathan, Analyst — Wells Fargo Securities

We related to that but we do uh we do see that as a as an opportunity we've talked about the benefit the algorithm is going to have in our own business and that would extend out uh you know vitals business um if we ultimately get there okay this is that so you know our understanding is vital connect gross margins are significantly below where your gross margins are today you know part of the opportunity with zoomct is you know similar form factor to zeo monitors so there are manufacturing efficiencies. How does bringing in a new patch, you know, presumably with new manufacturing process impact your margins? You know, you stated, I think your goal is to maintain gross margins above 70%, but, you know, I think their margins were significantly below. So how do you do that?

Dan Wilson, CFO

Yeah, we do think our scale and, you know, the operational infrastructure that we've built, you know, we can leverage that with, you know, against the vital platform as well. That 70% metric that we put out there, that doesn't assume a lot of, you know, cost synergies. I think those are real, you know, over time. The algorithm is certainly one of them. And just, you know, broadly leveraging our procurement capabilities, manufacturing capabilities, et cetera. So, and they have done a really good job over the last, you know, 12, 18 months improving that gross margin profile. It's a company we've tracked for a number of years and have always liked the technology. There were a few barriers that ultimately were there that resolved themselves, allowed us to make the acquisition at this time, and gross margin profile was kind of one of those barriers. But we're comfortable where they're at today. We see opportunity to continue to improve that and certainly maintaining 70% gross margin on the combined company.

Nathan, Analyst — Wells Fargo Securities

On your earnings call, you reiterated your goal of 15% EBITDA margin in 2027. You know, but it would be helpful to unpack, you know, with Vital Connect in that I think investors are trying to understand, is it dilutive right out of the gate? And, you know, does the 15% also assume any cost synergies from the deal?

Dan Wilson, CFO

Yeah, maybe the last part of your question first there. Very, very limited. the the intent of the acquisition is you know really around growth of course we want to do that profitably and that's been our focus and the core business profitable growth that is true for the acquisition as well but really want to you know get the product in a bag and you know grow the combined business you know as best we can and that's going to be our first our first focus so there are certainly opportunities there you know over the longer longer term but what's contemplated when we reiterated the 15% next year is a very limited amount of cost synergies. Sorry, remind me of the first part of your question.

Nathan, Analyst — Wells Fargo Securities

Just the EBITDA dilution, is it baked into that reiteration or do you feel like you could flip it to positive EBITDA right out the gate? How are you thinking about that?

Dan Wilson, CFO

Yeah, I would say it's baked into that 15%. We always try to run the business in a balanced way where we're balancing both growth and profitability and when there's upside and profitability like we've seen in the first half of this year you know we look for opportunities to reinvest back into the business you know to ultimately grow you know grow the business both in the near to long term and I would say we see the acquisition similarly we got the business to a really you know healthy spot from a profitability standpoint we're a growth oriented company we're looking for those growth opportunities, whether it be inorganic or organic. And so we saw this opportunity. We're able to, you know, absorb the acquisition while maintaining that 15% adjusted even done. Again, there's, you know, certainly opportunities for synergies over the longer term and we'll provide updated guidance, you know, post the close of the acquisition.

Nathan, Analyst — Wells Fargo Securities

Okay. You know, I just wanted to go back to MCT market share. I think in the past You guys have said in multiple events, I guess, that maybe your share could go into that 30% to 40% range over time. I think the street is modeling 30% by probably 2030, 2029. Would you say these estimates are fair for market share expansion? And I guess, you know, how much upside is there in your view?

Dan Wilson, CFO

We haven't obviously put any guidance out, you know, in that way in terms of market share. but certainly believe that we can get to you know number one in that category that is our intent that's our ambition we believe with innovation and combining that with everything we're doing on the clinical service delivery the operational capabilities and having the right product portfolio is going to allow us to you know ultimately get to that position so 30 to 40 percent is absolutely achievable we haven't put a time frame around that but importantly yeah that is our focus we want to move as quickly as we can and that's you know really the ambition of the the Vinyl Connect acquisition as well as innovation with our own Zio MCT product.

Nathan, Analyst — Wells Fargo Securities

Great, can you just remind us how quickly the MCT category is growing right now? Yeah.

Lisa Pecora, Head of Investor Relations

High single digits, eight to nine percent.

Nathan, Analyst — Wells Fargo Securities

Okay. Okay. And so if you could just talk about the implications of having a multivital patch for entry into sleep apnea and maybe even heart failure monitoring.

Dan Wilson, CFO

Yeah, we do believe there's opportunity there. That's been a strategy of ours for some time. If you recall, we licensed some technology from Biointelligence a couple of years ago, and that is on our product roadmap. We haven't put any kind of timelines around that just yet but we do believe adding multivitals to the platform both adds value to the core market we're serving today and ambulatory cardiac monitoring we're seeing that as a kind of differentiated feature of the vital platform and then ultimately starts to open up other markets like sleep like heart failure hospital to home other other markets that we're not actively serving today and that is an ambition of ours that is part of the rationale of the vital connect acquisition as well as the bio intellisense licensing and we're excited about what we have kind of in the works there from a product standpoint have been you know haven't shared a lot of those details intentionally you know for competitive reasons but looking forward to continue to innovate there and open up those mark opening up those market opportunities.

Nathan, Analyst — Wells Fargo Securities

Is there an overlap of capabilities between you know the BioIntellisense licensing and Vital Connect and maybe any areas of differentiation between the two technologies?

Dan Wilson, CFO

Yeah to a degree there's overlap where there's really differentiation is BioIntellisense's SPO2 capabilities of blood oxygen that is on their product platform. Vital Connect can integrate that into their platform but it requires a third-party sensor to pull that data into their platform whereas the biointelligence technology the technology that we licensed that can be embedded on the patch okay and and just lastly on this so the open warning letter in the 43 observations does this have any impact on vital connect manufacturing transfer or anything no we don't believe so okay Okay.

Nathan, Analyst — Wells Fargo Securities

You know, just one thing. So you have an LRP out there. It's going to end in 2027. Any plans for an analyst day?

Dan Wilson, CFO

Yeah, we're certainly thinking about that. You can expect we'll likely have something at some point next year. I haven't set timing on that, but we've been focused for five years on delivering, you know, that LRP that we set back in 2022 on pace to delivering that, which we're really excited about, and we'll certainly look to update investors with an updated long-range outlook. Certainly getting VITAL closed in the business in the combined outlook would make sense, but we'll look to do that at some point next year.

Nathan, Analyst — Wells Fargo Securities

Okay. Well, if there aren't any more questions on VITAL Connect, I think we'll just move on to other topics. So maybe just on guidance. So in the first half, you grew over 20%, but the new range basically implies second-half. growth of around 15%. I guess talk about what drives this deceleration and how much conservatism is baked into it.

Dan Wilson, CFO

Yeah, I wouldn't say conservatism. We do try to be thoughtful when we set guidance. We've been on a great trajectory, a lot of momentum in the business have grown revenue over 20%, seven quarters in a row. That obviously sets us up for difficult comps, which we start to see in the second half of the year. But like the setup, like the momentum in the business, certainly want to be thoughtful as we set guidance. And that's no change from how we've approached it historically.

Nathan, Analyst — Wells Fargo Securities

The Q3 guidance implies a sequential step down. You know, if I look last year, you actually stepped up about 3% sequentially in Q3. I guess, talk about, you know, is this conservatism? Is there something going on with the seasonality in Q3?

Dan Wilson, CFO

Yeah. Last year, I would say, was a bit unique. 2025, you know, we talked about having some big bang launches at the beginning part of the year that really grew through, you know, through all of 25. And we saw that in Q3 last year. If you look prior to that, you know, in 24 and 23, you don't see quite that same level of step up. One thing I should say about first half to second half this year, we did have price benefit, you know, call it a point or two. In the first half, we don't expect that to repeat in the second half. So that explains, you know, some of the Q2 to Q3 sequential decline. seasonality is real in our business and we've you know we talked about that at pretty much every September at this at this conference and that's you know no different you know no different this year so like the momentum in the business try to be thoughtful you know when we set guidance we've had the benefit of a number of things you know hitting and and allowing us to over deliver on guidance that we've set historically that won't obviously you know happen every single time but like our business like the momentum in the business you know try to set guidance thoughtfully and certainly don't want people running ahead of us.

Nathan, Analyst — Wells Fargo Securities

Innovative channels are mid single digits of your revenue and you called it out as the fastest growing segment in Q2. I guess talk about what you're seeing in these channels in terms of reorder rates and how sustainable is the recent growth that you've seen and I guess what is assumed in the second half for innovative channels versus the first half?

Dan Wilson, CFO

Yeah. Yeah. Really good progress there. Momentum mentioned that Innovative Channel stepped up to mid single digits as a percent of revenue in Q2. Prior to that, it was trending around the low single digits. So remains the fastest growing channel in the business. And we do believe we're still very early days against what that bigger opportunity is. A lot of encouraging signs there, you know, every partner we've gotten to a pilot has ultimately continued on to a full commercial program. That tells you the value proposition that they're looking for is, you know, is playing through. We present back to them data, you know, that shows here's how many patients you monitored, here's the diagnostic yield, here's the different arrhythmias that you found in that patient population, and that gives them the confidence that this is delivering on the value proposition. So that's very encouraging. Every partner that we have started a program with continues to monitor today. And those are all really, really positive signs. We do believe we're still early. We are working towards some economic evidence with a couple partners. We hope to see some of that evidence by the end of this year. We believe that can be a catalyst in the market as well. So really encouraged by it. We've been pretty consistent to say, you know, we want to be thoughtful around that part of our business in particular, given it's it's pretty concentrated across a small number of partners. there is real seasonality in that business too if you think about it these patients are not presenting with symptoms these are pre-identified patients and naturally you know you're probably going to see a bit more seasonality through the summer months in that part of the business versus core business where patients are presenting with symptoms and you know kind of a more urgent you know need to get them on monitoring but really excited about how that business is showing up and certainly like the outlook for that part of the business as well.

Nathan, Analyst — Wells Fargo Securities

Okay. Have you given a recent update on how many partners you have now?

Dan Wilson, CFO

We have not and that's likely not a metric we're gonna give. What we're seeing is the lines are really starting to blur between our core business and innovative channel. Oftentimes our innovative channel partners, which can be value-based care, you know, primary care groups, ACOs, in the similar, you know, they'll start sometimes with pre-identified patients and then move to their symptomatic patients. They can, you know, approach it in the reverse as well and start with symptomatic patients. So it does start to blur quite a bit with our core business. And we'll think about, you know, what the right metrics are to give investors to attract that part of our business. But number of partners isn't really the right metric.

Nathan, Analyst — Wells Fargo Securities

Okay.

Dan Wilson, CFO

Can you just subject us on on the innovative channel contracting model and I guess what is I guess the realized revenue per patient verse let's say cardiology or PCP channel yeah I would say from an ASP standpoint you know it's consistent with overall company company averages there we are billing the account directly so there's not you know we're not billing the the payer on the back end which does have some benefits just from revenue recognition, claims processing, that sort of thing. But very similar ASPs, we've talked about the one-to-many selling model in this channel. So we have a small dedicated team focused on this channel. They're selling into the really the top of these groups and when a group turns on, they're turning it on generally across their entire patient population. So we believe it's a very profitable, you know, high operating leverage part of our business. And so hopefully that answers your question.

Nathan, Analyst — Wells Fargo Securities

You previously talked about innovative channel activities becoming more consistent and repeatable. I guess, can you help to frame it relative to cardio and PCP order patterns and utilization? Any metrics you could put around that?

Dan Wilson, CFO

Starting to get there, certainly, as the base has grown from a partner standpoint, from a revenue standpoint, starting to be a little more consistent. I will reiterate my comments, though, that we want to be thoughtful on that part of the business, not get ahead of ourselves. Still a little bit of lumpiness to that part of the business, given the concentration and the number of accounts. And then every partner is unique, too. So, you know, which patients they want to target to start varies partner to partner, how quickly they ramp from pilot to full commercial program varies partner to partner. So there is a little, you know, little more unpredictability there, which we want to be thoughtful around. But again, once, you know, once they launch a program, we are seeing consistent, you know, behavior in maintaining the program.

Nathan, Analyst — Wells Fargo Securities

So your LTCM growth has been pretty strong for quite a while now. I think investors are trying to understand how much of this is iRhythm specific, how much of it is, you know, the market broadly and what is driving that. And part of that is how much of it is related to the EHR integrations that you did over the last two years or so. And, you know, just help us to understand the EHR integration. Is it, are you the sole LTCM provider on these integrated accounts, or how does that whole concept work?

Dan Wilson, CFO

So it does require, you know, if an account, a customer wants to integrate multiple vendors, they are separate integrations. So, you know, when we're working with a customer on an integration, it is specifically for Xeo. So we believe this is a strategy we have been working for several years, and we've always been focused certainly on the clinical service and the clinical superiority part of it, but also being operationally kind of seamless with our customer workflows. and EHR integration is a big part of that. It embeds Xeo directly in their native workflows. They don't have to come out of the EHR to order or interpret the results coming back from iRhythm. And we've seen pretty consistently with accounts that even accounts that have been with us for years, once we get to EHR integration, we do see a nice step up from a volume standpoint. So that clearly tells you that, you know, you're making it easier to prescribe, you're opening it up to the entire prescriber base within that account. So there's real benefits on the customer side, which is why it's been a strategy of ours for several years. Now over, you know, well over 50% of our volume is through EHR integrations, and that's something we're going to continue to push.

Nathan, Analyst — Wells Fargo Securities

Will Vital Patch and ZOMCT automatically become an ordering option on these integrated accounts?

Dan Wilson, CFO

I would say we're still evaluating that. Our ultimate goal would be to make it seamless for the customer through a single platform, through EHR integration. That'll likely take some time to build, too.

Nathan, Analyst — Wells Fargo Securities

Okay. So we're in September. Investors are starting to think about 2027. You know, your full year 2026 guidance implies about 15% growth in Q4. Is that the right jumping off point for 2027? I mean, Street is modeling 17% right now. Any framing you could put around that?

Dan Wilson, CFO

Yeah. We haven't provided 27 guidance other than the long-range target that we put out, you know, five years ago calling for over a billion in revenue. Mention that we are on pace to delivering that. I would say, you know, post the closing of the Vital Connect acquisition, we'll certainly provide updated guidance, potentially even for or give some metrics for 27 to help investors get that, you know, dialed in correctly. But we'll do that at the appropriate time.

Nathan, Analyst — Wells Fargo Securities

Okay. You know, if we could just touch on a third-gen algorithm, which, you know, the FDA recently approved, and you expect to launch in the first half of 27. So you expect $100 million of cumulative savings over five years, which would lead to 50% less technician review time. I think that's what you said. I guess, how should we think about the $100 million phasing by year, and how much of it is already kind of embedded in the 2027, 15% even dot margin?

Dan Wilson, CFO

Yeah. So we set that 15% EBITDA margin target back in 2022. We were working on our next gen algorithm and certainly that's one way to improve margins. We'll see some benefit from the algorithm next year. Initially, it will be offset by some amortization and the benefits really start to show as we scale. And so, you know, think about the need to hire additional cardiac technicians as our volume scales. We're going to reduce that meaningfully with the benefits of the algorithm. So you'll really start to see, you know, the benefits really 28 and beyond, and those benefits start to stack up as we continue to grow.

Nathan, Analyst — Wells Fargo Securities

Okay. You know, just one last Last question on Vital Connect. So will you port everything onto your IDTFs immediately or?

Dan Wilson, CFO

Not immediately, no. Again, we want to make sure we're setting ourselves up for growth.

Nathan, Analyst — Wells Fargo Securities

We don't want to disrupt anything there and believe the two will kind of operate somewhat independently, obviously outside the commercial aspect where we do want to train our entire sales force on their technology. from an operational standpoint you know not not an immediate kind of integration okay um you know q2 ebitda margin was 19.3 uh you're guiding q3 down to 12 to 13 i believe i guess talk about what's driving the sequential stuff down um you know anything to consider i mean 19 is also above your 27 lrp so just how to frame what's happening in the second half in q3 with the down margin

Lisa Pecora, Head of Investor Relations

I can take that. Q2, we're very proud of the 19-3. Definitely strong progress on the ability for us to deliver operating leverage. That said, as Dan mentioned earlier, we are very much a growth company, and we want to continue investing to ensure that long-term growth potential. So we talked a little bit during earnings around specific investments that we were making to further unlock primary care. When we talk about the 27 million, at least 27 million, undiagnosed patients out there that we want to try and reach, we do believe that primary care is the biggest way to get at that. So you'll see us increasingly investing towards initiatives with primary care, inclusive of, we talked about a direct-to-patient marketing initiative that we were kicking off, and that investment will continue through the second half of the year. this direct-to-patient marketing initiative is around creating awareness in the practices for both patients as well as the primary care physicians within it. As much as there can be increased awareness, we feel that that will increase that funnel towards the undiagnosed population. The other aspect I'd point out is adjacencies to increasingly build out that TAM and grow the market. We have talked about different adjacencies such as sleep. We're continuing investing towards the sleep market as well. And R&D and development projects will continue to step up through the balance of the year. So that 13% to 14% for the full year, 12% to 13%, and in Q3, it's really just about continuing to invest for the long-term health of the business.

Nathan, Analyst — Wells Fargo Securities

In the last 25 seconds, any update on the warning letter of 483s?

Dan Wilson, CFO

Not at the moment. We've made really good progress there and put ourselves in a position, we believe, that to ultimately get that cleared. It's really the timing will be dictated by the FDA and when they come back and do a closing inspection. But I'm really excited about the progress we've made over the last 18 months, two years, and looking forward to ultimately getting that resolved.

Nathan, Analyst — Wells Fargo Securities

Great, well we're a timed day and Lisa.

Dan Wilson, CFO

Thank you so much. Pleasure.

Nathan, Analyst — Wells Fargo Securities

Thanks so much.