WGS

Operator: Good day, and thank you for standing by. Welcome to the GeneDx Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Sabrina Dunbar, Investor Relations. Please go ahead.

Sabrina Dunbar: Thank you, Operator, and thank you to everyone for joining us today. On the call, we have Katherine Stueland, President and Chief Executive Officer; and Kevin Feeley, Chief Financial Officer. Earlier today, GeneDx released financial results for the fourth quarter ended December 31, 2024 and full year 2024. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, February 18, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to our fourth quarter 2024 and full year 2024 earnings release and slides available at ir.genedx.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results. Including a discussion of factors that could cause actual results to materially differ from forward-looking statements. And with that, I'll turn the call over to Katherine.

Katherine Stueland: Thanks, Sabrina. Good morning everyone, and thank you all for joining us today. 2024 was a remarkable year for GeneDx across all metrics. We cemented and extended our position as the market leader in the exome and genome testing, expanded patient access, solidified our operating processes across all aspects of the business, and started to generate cash to fuel the next leg of growth. Our fourth quarter results surpassed expectations with revenues exceeding $95 million and gross margins expanding to 70%. While providing early and precise genetic diagnoses remains our purpose, creating a financially strong business drives our progress. We are dedicated to helping as many patients as possible, and it's not just about what we do, but how we do it in service of our customers with clinical excellence, urgency, and integrity. Our flagship exome and genome business delivered enormous growth in 2024, and we're bringing our focused operational discipline and commitment to profitable growth with us into 2025. In the coming year, we'll be layering on additional investments into growth, scale, innovation and talent to add velocity to our market development. Fueled by our 2024 and early 2025 momentum, we're setting guidance for 2025 to a range of $350 million to $360 million in revenue, with at least 30% growth in exome and genome volume and revenue. What's unique about our technology is that it enables a more efficient model, both for families and for the U.S. health care system. Broad genetic testing, like our differentiated exome and genome services are massively underutilized, causing the overutilization of other diagnostic tests that don't accurately diagnose disease. The economic burden of rare diseases is estimated to be around $1 trillion annually with delayed diagnosis contributing heavily to this cost. On average, a child with a rare disease will undergo around 16 ineffective tests and three misdiagnoses. The most recent literature tells us that on average, a child with a rare disease will go on a five year diagnostic odyssey. That's down from six years previously, which implies that we're succeeding in our mission. By enabling early earlier diagnosis with our product, GeneDx alleviates unnecessary suffering for patients and families and offers a readily available solution to reduce inefficient health care spending. There's a reason health care spend is top of mind for this administration, policymakers, insurers, and hospital systems, and GeneDx is in a unique position to help them solve this costly problem. GeneDx is proud to be helping American families have healthier kids and healthier lives, and by doing so, reducing health care costs. With a large market opportunity in hand, it's important to understand that not all exome and genome tests are created equal. There's a reason 8 out of 10 clinicians who order exome testing choose GeneDx. Fueled by more than 750,000 exomes and genomes, our rapidly growing data asset and clinical expertise differentiate our products from competitors by enabling us to identify novel gene disease connections that are not widely available and ensuring we can offer the clinical utility, accuracy, and easy to understand reports that clinicians need. As we set our sights on offering these services to pediatricians, neurologists, cardiologists, and more specialists in the future, we've recruited some of the best product talent to deliver the smoothest end to end customer experience. Throughout 2025, we'll be releasing a steady stream of new features designed to further simplify our customer experience to make it the easiest to use for all. We already made great progress in the first few months of the year, and our Epic Aura integration is just one example of this. We've launched GeneDx ordering and resulting workflows at patient's bedsides and in clinician exam rooms. While we have the first mover advantage, there's a large unmet need ahead, and we're running as fast as we can to help as many families as quickly as possible. Our position becomes more formidable and our competitive advantage strengthens with the compounding force of each additional patient that we sequence, creating a flywheel effect that makes our underlying interpretation platform smarter, faster and more scalable. We're seizing our advantage to accelerate market development by scaling utilization of rapid genome testing in the NICU and expanding our dominance in the outpatient setting. Last week, we announced our ultraRapid whole genome sequencing product, which delivers results in as soon as 48 hours. Our ability to offer an ultraRapid genome demonstrates how our lab operations continue to innovate. Throughout 2025 and beyond, we're prepared to capitalize on coupling our clinically enriched dataset with AI, machine learning, and automation to drive cost and turnaround times down in service of patients, providers and partners. In preparation for our full launch into the NICU in 2025, we've recently expanded our enterprise sales team, launched multiple genome product enhancements in Epic Aura and are bringing our ultraRapid product to market. In the outpatient setting, pediatric neurology proved successful, driving most of the growth in 2024. We've only scratched the surface of the outpatient segment's potential with a focus on patients with epilepsy, autism and intellectual and developmental delay. There are countless applications still to come in 2025. We'll be leaning into new patient populations. Cerebral palsy and hearing loss are just two such examples we'll target as we expand our footprint. Additionally, we're developing new patient access channels like our new telehealth pathway, which accelerates access to testing for parents and caregivers via a streamlined referral process. Ultimately, the first line of defense for families lies within their general pediatrician. When the American Academy of Pediatrics guidelines are updated and reimbursement pathways are clear, we are ready to deploy a commercial strategy and meaningfully expanded sales force, against this new call point. Longer-term, we will extend our market leadership to the genomic newborn screening market. In total, pediatric testing is a $25 billion market. And while we've made progress, this opportunity remains largely untapped with multiple levers for growth ahead. While rare diseases affect one in ten Americans, they also affect over 300 million people worldwide. We will strategically target opportunities outside the U.S. to meet the incredible need for testing on a broader scale. All of this is underpinned by our ability to provide valuable products and services to biopharma, leveraging our unique data asset to enable faster, cheaper and more-effective therapeutic development, all in service of expediting therapies to market for patients. We're in a privileged position to be in a market leader with the product, quality, scale, talent and commercial strategy to transform the standard-of-care and win in an ever expanding market. The opportunity ahead is ours for the taking and we're moving quickly and decisively to claim it. With that, I'll turn it over to Kevin.

Kevin Feeley: Thanks, Katherine, and thanks everyone for joining us. Fourth quarter 2024 revenues from continuing operations reached $95.3 million. Exome and genome revenues grew 101% year-over-year and 31% sequentially contributing $78.8 million this quarter. Both volume and reimbursement contributed to the growth. Exome and genome tests accounted for 38% of all tests in the fourth quarter, up from 27% a year ago and 33% in the previous quarter. Our team delivered over 20,000 of these flagship tests, which is up 32% year-over-year and 7% sequentially. We are driving a long-term replacement cycle of the industry's individual gene tests and panels into exome and genome and 2025 trends to date are encouraging. In addition to growing off this base, we'll be layering on a new growth curve in the NICU and new indications in the outpatient setting in 2025. Both of these initiatives are starting at near zero today and we anticipate these growth curves to ramp in the second half of 2025. Demand is strong and we balance that demand with discipline, targeting only volume with a high propensity to get paid fairly. So speaking of getting paid, average reimbursement rate have come entirely from reduced denials. In the fourth quarter, the underlying average reimbursement rate for exome and genome after all denials was approximately $3,500 excluding the discrete benefit from our large appeal win in the quarter. That's up from $3,100 last quarter and up from approximately $2,500 in the same quarter of last year. Our work to refine insurance specific workflow to minimize administrative and procedural denials and the activation of additional state Medicaid policies to cover exome and genome testing more broadly are both contributing. 32 states now cover exome and or genome outpatient and 14 cover rapid genome inpatient. We'll continuously focus on improving processes, producing clinical and health economic data, supporting patient advocates and leaning into policy work both at the state and federal level. We've built the operational strength and tools to now open the aperture of volume that we'll target to drive growth to higher levels. Adjusted gross profit from continuing operations in the fourth quarter was $66.9 million, which is up 106% compared to the prior year and up 36% sequentially from the previous quarter. That translates to an adjusted gross margin of 70% in the fourth quarter, up from 56% a year ago and 64% last quarter. Our team has exceeded expectations on COGS throughout 2024 and Q4 was no exception. And while we're pleased with how far we've come to reduce cost per test, there is still work to do. I'm excited to partner with our recently onboarded Chief Operating Officer, Bryan Dechairo. He's begun to retool resources and our approach to extract the next leg of scalability and product enhancement. Beyond that, Bryan is leading a new charge with respect to innovation and enabling a next generation customer experience to make ours the most attractive in the space. Down to the bottom line, total company adjusted net income for the fourth quarter of 2024 was $16.8 million our second consecutive quarter of profitability. Full year and fourth quarter 2024 revenues, adjusted gross margin and adjusted net income includes $6.8 million of discrete benefit in connection with a multiyear appeal win from a single payer. $5.8 million of that benefit went to exome and genome. This recovery to overturn past denials is a prime example of the quality and professionalism of the revenue cycle team we've assembled here at GDX. And on the balance sheet, cash, cash equivalents, marketable securities and restricted cash totaled $142.2 million as of December 31, 2024. Cash flow for the fourth quarter 2024 included $12.4 million in cash generated from ordinary operations, including receipts of $6.8 million in connection with the appeal recovered and $31.9 million of proceeds, net of fees from the issuance of 406,726 shares of common stock in connection with sales pursuant to our ATM program. Those inflows were partially offset by $19.6 million in scheduled payments to service previously reported liabilities of legacy Sema4. Now turning to guidance. We expect to deliver at least 30% growth in exome and genome volume and revenues and expect total revenues between $350 million to $360 million for full year 2025. We expect full year 2025 adjusted gross margin between 65% and 67%. And for comparison, full year 2024 was 65%. We expect to maintain profitability each quarter and for the full year 2025 on an adjusted net income base. You can generally define adjusted as EBITDA less share-based compensation. And in our business, adjusted net income should conform fairly closely to operating cash flow over time. As we previously shared, we will continue to optimize the test menu towards the genome-only paradigm. To that end and in order to focus all investment and investment through accelerating exome and genome growth, hereditary cancer is a non-core fit within our business we are exiting in 2025. So I'll wrap with this. GeneDx has spent two decades investing in the accumulation and expert curation of data knowhow and tools necessary to interpret a genome's worth of information most definitively and at previously unimaginable scale. And under Katherine's leadership over the past three plus years, it's now coupled that long history of clinical expertise with a strategy, commercial effectiveness and operating discipline to finally scale the promise of GeneDx. Stepping forward, we intend to address a large unmet medical need and do so, while saving an overly complex, bloated and expensive healthcare system massive dollars. In an era where cost efficiency for healthcare in the United States is top of mind for hospital executives, insurance partners, policymakers, politicians and taxpayers alike, the GDX, exome and genome are a large part of the solution. And with that, we welcome any questions asked. Operator?

Operator: [Operator Instructions] Our first question comes from Dan Brennan with TD Cowen.

Dan Brennan: Great. Thank you. Thanks for the questions. Congrats on the quarter. Maybe to start-off, Kevin, could you just give some color on the implied price assumption for '25, obviously, you're saying 30% plus rev and volume. So I guess the implication is maybe pricing can be flat or so. Obviously, great progress in the quarter on price, but we understand, it's still decently below the institutional and Medicaid rates and the commercial list price. So just wondering how we're thinking about pricing in 2025?

Kevin Feeley: Yes. The way I look at it, Dan, is the $3,500 in the fourth quarter was very much improved and outpaced expectations. And I would say, at this point, we consider rates to be stable and have room to go much higher. We're still at a point, where nearly half of all tests are being denied and the team continually is refining processes to avoid those denials. We're certainly optimistic that, we can get that rate higher than what we just posted in the fourth quarter. And our guidance philosophy tends to be very much data dependent and we look forward to updating you as we move throughout the year.

Dan Brennan: Got it. Okay. And then can you speak a little bit to like what's implied? You talked about being adjusted net income positive and adjusted EBITDA positive in 2025, which is I think consensus has you guys to that level at a low level. But can you just speak to how we should think about OpEx leverage and kind of what the magnitude of kind of EBITDA and cash flow could be in 2025?

Kevin Feeley: Yes. There'll be a step up in OpEx, as we for ways to accelerate growth and reduce costs. I think EPIC is a prime example of that. That'll be about $5 million annual to add to the current OpEx base. And so, we certainly see areas to invest. Katherine spoke about some across the commercial teams and ways to drive further automation. I think we built the discipline within the company at large to look at the multitude of bets that we can place and ensure a high level of probability of success. The way I would think about it is, you've got the revenue and gross margin guide. OpEx will step up and but only in a way in which we're committed to keep profitability positive each quarter and for the full year.

Dan Brennan: Okay. And maybe just a final one. You talked about new opportunities you're kind of baking into the guide in the second half. I think you mentioned the NICU, but you've already launched there. So I'm just wondering, could you speak to kind of what these new opportunities are? And can you frame like relatively how meaningful they are in the ‘25 guide?

Kevin Feeley: Yeah. So the NICU is one, we did deliver the Epic Aura integration ahead of schedule, still expect the second half of your ramp in the NICU, maybe pulling that forward a couple of months into the second quarter. What's also built in that we're excited about is turning on new indications and use cases for exome and genome. The growth to date or at least over the last year plus has been on that focus of epilepsy, autism, intellectual delay, developmental delay across the [neuro] call point. Maybe just a couple examples and then just a couple. So stepping into use cases like cerebral palsy is an example, hearing loss maybe another one. So use cases to drive further same store sales within call points we've already launched into will be a focus of the second half of the year.

Operator: Next question comes from William Bonello with Craig-Hallum Capital Group.

William Bonello: Hey, thanks a lot guys. Just wanted to follow-up a little bit more on the comments on the earnings guidance and profitability and the incremental investment. Maybe two things in particular. One, you mentioned expanding the sales team. I'm wondering if you can give us any sense of magnitude of that expansion and maybe the corresponding cost. And then I'll ask the next one.

Katherine Stueland : Certainly. So, and thanks, Bill. A couple of things on sales force. So, we have expanded our enterprise team from about 5 to 10, and that's something that we have our eye on as we get Epic off the ground, as we start really getting more experience. We're going to keep an eye on that, and we're prepared to continue to add reps, as we make progress on the plan on the NICU side of things. We also have, hired inside sales reps for the team that's been focusing on the outpatient opportunity. I think we've talked about the fact that, that that sales force has been, that they've been out there focused on new accounts, on same-store sales, but they're also doing a lot of administrative work. So, we've hired a team of about 25, people to focus on inside sales that are really helping to offload the administrative burden and ensure that our sales reps can be focused on, bringing in new accounts and looking for additional opportunities within existing accounts. I would say our sales force is by far an order of magnitude three times larger than the next sales force in our space. So, our focus is on continuing to get greater productivity out of that team. The customer experience that we're investing in is also intended to create a really intuitive experience that will also offload some of the more manual work. And so we think that, the investments that we're making on customer experience are going to pay off in terms of stickiness and same-store sales as well in the future.

William Bonello: Sure. In terms of cost, that sounds like maybe $1 million to $2 million or something like that?

Kevin Feeley: Yes. It's certainly, I don't know if I'd give you the exact number, but say, it's order of magnitude is not that large with -- I'd say, the epic investment that I cited being the single largest investment year-over-year. And the way I think about cadence on the bottom line is Q1 being near breakeven slightly positive and then ramping in the latter three quarters.

William Bonello: Okay. And then, that was the follow-up on profitability. Is your goal to just ensure that, you stay profitable or I mean you were meaningfully profitable in the fourth quarter? How are you thinking about growing profits in addition to revenue this year and maybe next year?

Kevin Feeley: Yes, I think so. We've stated, it is a commitment of ours to keep the company profitable from this point forward. That said, we're excited about a way to accelerate growth, as we enter into new call points and new indications. We want to see, what it takes to really dominate and win those markets and have some latitude to tackle accordingly.

Operator: Our next question comes from Tycho Peterson with Jefferies.

Matt Stanton: Thanks. This is Matt on for Tycho. Maybe first one going back to some of the new product innovation on the ultraRapid whole genome sequencing product you recently launched. Could you just remind us the immediate opportunity that opens up for you? Like, what size of the market or kind of TAM does this still let you address now? And then, what are your kind of expectations for penetration of that opportunity? It sounds like it's more maybe back half of the year and beyond, but just trying to get a better understanding of the potential impact from this launch on volumes, as we move through 2025 and beyond.

Katherine Stueland: Yes. One, I would say, ultimately down the road, we want to be delivering the best, fastest, and, most cost-effective genome across the board. So we ultimately want to move to just being able to run, highly-accurate, fast, clinically actionable genome for everyone. But in the meantime, that product is indeed focused in the NICU setting. So we think being able to have the five day turnaround time and now the ultraRapid, for patients, who may be in most need really unlocks what is roughly considered to be about $1 billion market opportunity in in that NICU inpatient setting. Fewer than 5% of babies in the NICU get a genetic test today. And so, we think there's just -- it's massively underutilized in that setting. So this gives us the ability to provide either that five day turnaround time or for super dire cases, the ultraRapid as well.

Matt Stanton: And maybe one on capital allocation. I think you talked about in the prepared remarks kind of fueling the next leg of growth. Just talk about what your priorities are today, how that might differ between organic and inorganic? And if there are items on the inorganic side, just remind us kind of types of assets you might consider looking at either on size or kind of where it fits relative to your existing portfolio today?

Katherine Stueland: So in terms of priorities of investment, continuing to invest in growth is obviously critically important. So product, having best in class products, having the best in class customer experience, we think this is a prime opportunity to really be able to deploy AI machine learning and other automation, technologies to help smooth out that overall customer experience. As I mentioned, we've hired, in particular, one of the leading industry customer experience product designers who has tremendous experience in terms of making it a really sticky experience for everyone. Continuing to automate as much of the lab as possible, the interpretation platform, those are the major areas as we think about prioritization of investments, all of that, of course to fuel a fast growing market. We want to make sure, as I said, that we've got the best, fastest, and most competitive in terms of pricing. We've invested a lot in scale. So, I think we're really pleased about our ability to have the highest level of clinical excellence, but also be able to do it more cost effectively than anyone else in the space.

Matt Stanton: Thanks. And maybe just one more I could sneak in for Kevin. On the hereditary cancer, exit in ‘25, can you just, spike at what's in or out of the guide for that? And then any more color on timing when we could expect or the type of exit we could expect in ‘25 for that hereditary business?

Kevin Feeley: It assumes in 2025 losing the vast majority, nearly all of the hereditary cancer contribution that we saw in 2024.

Operator: Our next question comes from Matt Sykes with Goldman Sachs.

Matt Sykes: Hi. Thanks for taking my question this morning. Kevin, maybe just two quick ones for you and then I have a follow-up, Katherine, for you, a more bigger picture. But just Kevin, can you talk a little bit about what your expectations are for true ups within that guide for 2025? I know that Q4 was more of a one off appeal, but how should we think about true ups as we move through this year as a portion of that revenue? And then secondly, just given the exit rate of gross margins in Q4 and then your guide for 65% to 67%, how should we think about phasing for gross margin improvement over the course of this year on a quarterly basis?

Kevin Feeley : Yeah, thanks. So on the true ups, I think fair to say that the order of magnitude subsequent quarter true ups may come down some naturally as we're getting to a more mature spot. Although I will say we're still a far way off from what we think is a theoretical max on payment rate, which is probably likely around 80%. And so still a lot of room to go, but would expect that every quarter, we're on the positive side of those true ups. Frankly, it's an estimate that is meant to align to expected cash collection and there's always some slippage up or down on that. And it's our hope that we're being appropriately conservative and coming back with positive true ups in that regard. And then on gross margin, we're certainly excited about the ability to unlock further efficiency and cost savings in the dry side of the lab. I would think most of the impact to come in the second half of the year, but not really in a large step down function more so pretty smooth. Frankly, there's a lot of manual steps we think right for automation. And so, we'll have a bit of a rolling launch of automation throughout those steps rather than one big bang really.

Matt Sykes: Got it. And then Katherine, just when you think about sort of the moat you're trying to build around this business, you've mentioned a few things in this call, product development and design, investment in commercial sales force, turnaround time, et cetera. How do you think about protecting sort of the market share you've got, while also expanding the business, keeping in mind some of the competitors might not have the resources you have, but others might get into this business over the course of the next few years. How do you think about building that moat and protecting that? And what types of investments will you make to do that?

Katherine Stueland: Certainly. I mean, a couple of things come to mind. As the first mover, we have an advantage so long as we run fast. I think we have proven over the past several years we're running fast. If there's a message we want to make sure everyone understands coming out of this call, we're going to continue to run fast and hard this year too. I think continuing to diversify our customer base and really cementing the GeneDx brand in settings like the NICU and continuing to cement our brand, with health systems, we think is critically important. As I said on the call, there's a reason eight out of 10 genetics experts use us, and, we intend to ensure that, we can continue to leverage that as we introduce our services to new call points as well. We think that's going to pay dividends once we move into the general pediatric segment. The endorsement by the genetic experts is going to go a long way for us. But at the end of the day, the reason why we have prevailed, not just over one year or two years, but over a decade where competitors have entered our space and have failed to catch up to us is, because our data asset is indeed truly valuable. It sets apart our interpretation platform. It ensures that, clinicians can trust the answers that we're providing them. We deliver fewer variants of unknown significance. Our diagnostic yield is higher. It's a better product, and that's the reason that, we have the stickiness with the most discerning genetics experts out there. So, we're going to continue to build that data moat rapidly. We're going to build, as I said, a customer experience that we think will be an amazing complement to that data moat, just making it super intuitive and easy to order, easy to understand. I think the rate at which we're onboarding new customers and continuing to see same-store sales is exactly the reason that we'll continue to win in the space.

Operator: Our next question comes from Mark Massaro with BTIG.

Mark Massaro: Hey, guys. Thanks for taking the questions and congrats for a strong 2024. Katherine, the first one I wanted to ask of you is the ultraRapid whole genome, which I think you're targeting turnaround time in about 48 hours. Can you just remind us how that compares to the turnaround time of your legacy exome or genome that you have in the market today? And is there a potential for going back to payers and looking for more payment as a result of potentially higher clinical utility or is this more of a feature that you want to ensure that it's best in class?

Katherine Stueland : Yeah. Those are all spot on questions. So a couple of things. Just zooming out, it wasn't that long ago that the turnaround times for an exome or genome were six months. So I think that, part of the reason why exome and genome are now and part of the reason why multi-gene panels will become obsolete in time is for exactly the point that you're making, Mark. We can now do this, not just in weeks, not just in days, but in hours. And we want to continue to be the driver and the innovator that ensures that we can get turnaround times as quickly as possible. So whereas a few years ago, genomes were six months, last year, our genome was 14 days. We were able to get that down to five days. And then the 48 hour ultraRapid just gives us, an additional boost in terms of making sure that we can provide the most rapid results as necessary. We will have a higher price point for that ultraRapid test. That is in the NICU. So, again, that is institutional pay, and so it's not contemplated in our contracts with payers. But, we think that it ensures that for the most dire cases where it may be warranted that we can provide that. But there is a higher price point on that.

Kevin Feeley : Although I will add a more confident market that that higher price point, though we will be in a position to be the most competitive priced in the marketplace. And then in terms of that institutional price for hospital systems in the NICU or down the road as we just effectively eradicate the terms rapid and not rapid and make all as possible. It's always our intention to ensure we're bringing to payers the data that shows the value add, not just clinically, but from a health economic standpoint of getting these answers into the hands of providers as soon as possible.

Mark Massaro: Okay, great. This is actually an investor question. Can you walk us through the phasing of the first and second half of revenue? And do you think in Q1 we should expect volumes to grow sequentially off of Q4? Or do you expect any impacts related to lingering holidays or any new product rollouts that might impact Q1 volume?

Kevin Feeley : Yeah. I'd expect Q1 to be slightly above Q4, which does show tremendous underlying growth. There is a seasonal effect in our business and across the industry. Typically, Q1, the seasonally weakest, Q4, the seasonally highest as patients are trying to get into physician offices before copays and deductibles reset. So there is a fairly habitual Q1 lag, not just for us, but across the industry. We expect to grow beyond that to keep volumes at or above Q4 levels and then ramp-up significantly around the same pacing, as you saw in 2024 in terms of cadence for each of the quarters. But Q1, the lowest in Q4, the strongest data to date through Q1 is very encouraging despite the fact that much of the country had a rough January and February in terms of weather, and in terms of the wildfires, but very encouraged and happy with the data that we're seeing to date. Last one, Mark, I would though expect a larger proportional second half of the year solely as a function of us activating the NICU opportunity and those new indications we talked about. Both of those hitting at best late in the first half, but really ramping up in the second half of the year.

Mark Massaro: Okay. I got it. Maybe last one for me. It was great to meet Brian last month. I think in the press release hire, I think he might be overseeing the program management office. So I'd be curious to better understand some of the programs or initiatives you guys have rolling out in 2025 and 2026. And then specifically, I wanted to ask about the opportunity in adults. You've done a really nice job with pediatrics, but I'm curious what inning you think we're in, in adults? And maybe can you touch on some of the clinical areas that you can help to address unmet needs for in adults.

Katherine Stueland: Absolutely. Yes. So it's been fantastic having Bryan on board. He's on week six. It feels like six months in the best way possible, though. He really has immersed, and, he's responsible for operations, medical affairs, product technology, and the program management office. The PMO is really intended to ensure that, we accelerate any sort of automation efforts, coming out of the product and technology groups and into lab operation. In addition to any sort of customer experience efforts that we've mentioned that we're investing in. Customer experience is one of our biggest areas of focus for the year. So the PMO just helps us run more efficiently. We've just recruited a fantastic person to lead that organization. So, that is Bryan's focus. In addition to a new innovation team, which is looking at I think in a more forward-looking way, how we continue to make sure that, as new technologies come to bear, whether it's from sequencing companies, or otherwise, that we can be as forward leaning as possible. Those are the sorts of efforts that will and out of Bryan's organization. On the adult side of things, the way that we think about it, we're in inning, like, zero right now on that. We have a smattering of tests that come in for adults today, and, historically, that's been the case. And so, that is a massive and untapped opportunity ahead. The clinical areas that we think are most representative, so think, neurodegenerative disease for adults, Parkinson's, Alzheimer's. Think about some of the cardiac conditions, so amyloidosis, hypertrophic cardiomyopathy. So some of those areas where you're seeing biotech companies focus on, genetic based medicine. So those are areas that we think are important. And as we continue to build a biopharma pipeline, having conversations in some of those areas as well.

Operator: Our next question comes from Brandon Couillard with Wells Fargo.

Brandon Couillard: Thanks. Good morning. Kevin, not surprising to see you exit hereditary cancer. Can you just remind us what the gross margin profile of that revenue stream was? I imagine it's slightly accretive exiting hereditary cancer, probably slightly accretive overall this year. That'd be helpful.

Kevin Feeley : Yes, it's about 40%.

Brandon Couillard: Okay. And then, Katherine, on the Epic Aura rollout, so you've launched in one site right now at UNC Health. How many sites do you expect to have by the end of the year? And just certainly remind us what the process is like from kind of turning it on, kind of educating doctors until you start recognizing revenue from that?

Katherine Stueland : Yeah, absolutely. I'll kick it off and then let Kevin comment as well. So before we even made the decision to sign the Epic contract, we booked a large pipeline of business that was primed to flip when we had the Epic Aura functionality. So, we did a lot of the pre-work, and we kept those customers, warm over the course of time as we did all of the tooling required to really build the capability. UNC, is one that that we've been closed with, and they wanted to be the first. We've got, a number of others in the waiting room that are fast followers, and then we'll continue to drive our sales effort. As I said, we've got, an expanded enterprise sales team that will be focused in this area. But we're starting with UNC. We'll start adding them as we start to build that muscle in terms of how we work quickly with these health systems, not just their side of the integration, but then starting to pull through the volumes and the revenues. And so that's part of the reason why it will be a slower start in terms of the guide and then start to pick up really in the back half of the year.

Kevin Feeley : And Brandon, it was about six months of picks and shovels from the time we signed the contract to going live or launching last week. That was really to build the infrastructure. So I consider that effort of build one time. At this point though, and moving forward, it radically improves our time to deliver new integrations with willing hospital systems down to a matter of something close to two to three weeks for each additional hospital system. So a massive improvement over building customized bespoke bidirectional interfaces. So we're really excited to deliver that better experience of integrating with hospital systems. And then to your point, the end user, the real key is putting bedside ordering and result delivery on the screen in the exam room or at the patient's bedside.

Operator: And ladies and gentlemen, this does conclude the Q&A portion of today's call. I'd now like to turn it back to the Katherine for further remarks.

Katherine Stueland : Amazing. Well, we look forward to seeing you all very soon, at investor conferences. And thanks so much for your ongoing support. Have a good day.

Operator: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.