Cerus Corporation

Good day, ladies and gentlemen. Thank you for standing by, and welcome to CRS Corporation fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Nippur Livik, CRS Investor Relations Advisor. Ms. Livik, you may begin.

Thank you, and good afternoon. I'd like to thank everyone for joining us today. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the investor relations website at .crs.com. With me on the call are Obi Greenman, CRS's President and Chief Executive Officer, Vivek Jayaraman, CRS's Chief Operating Officer, Kevin Green, CRS's Chief Financial Officer, and Carol Moore, CRS's Senior Vice President. CRS issued a press release today announcing our financial results for the fourth quarter and year ended December 31st, 2024, and describing the company's recent business highlights. You can access a copy of this announcement on the company website at .CRS.com. I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and our forward-looking statements. Examples of forward-looking statements include those related to our future financial and operating results, including our 2025 product revenue guidance, our expectations for bottom line and non-GAAP adjusted EBITDAO performance, our operating expense and gross margin expectations, and our expectation for positive operating cash flows for 2025, expected future growth in our growth trajectory, a potential new and enhanced CE mark submission for intercept red blood cells, and other statements that are not historical facts. These forward-looking statements involve risks and uncertainties that could cause actual events, performance, and results to differ materially. They are identified and described in today's press release in our slide presentation and under risk factors in our form 10K for the year ended December 31st, 2024, which we will file in the coming days. We undertake no duty or obligation to update our forward-looking statements. On today's call, we will also be discussing non-GAAP financial measures, including non-GAAP adjusted EBITDAO. These non-GAAP measures should be considered a supplement to and not a replacement for measures presented in accordance with GAAP. For a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures, please refer to today's press release and the slide presentation available on our website. We'll begin today with opening remarks from OB, followed by Vivek to discuss recent business highlights, then Kevin to review our financial results and expectations for the rest of 2025, and lastly, closing remarks from OB. And now it's my pleasure to introduce OB Greenman, Ciricis President and Chief Executive Officer.

Thank you, Nappur, and good afternoon, everyone. I'd like to open the call by spending a few minutes reflecting on our strong performance in 2024, as well as our expectations for full year 2025 as we continue to establish our intercept blood system as a standard of care in transfusion medicine. 2024 was a milestone year for the company and its long history in that we successfully achieved positive adjusted EBITDA for the full year. Building off of this will allow us to invest in the continued growth of our business globally and our full intercept portfolio and product improvements. Our year over year double digit product revenue growth for 2024 was fueled by continued expansion in our global playlist business, along with the rising demand in our intercept vibration complex or ISC business in the US. The bank will provide further insights into the strong demand we are experiencing in the ISC market, where we are providing an important and timely intervention for patients with major bleeding complications. This momentum underscores the critical importance of intercept treated blood components and highlights the growing impact of our pathogen and activation technology across transfusion services in the US and internationally, from blood vendors that manufacture pathogen and activated components to the hospitals and clinicians who transuse them. For the fourth quarter and full year 2024, we executed our financial strategy effectively, delivering strong bottom line performance and robust operating cash flows. As Kevin will detail shortly, key year over year financial highlights include double digit growth and narrow gap net loss attributable to the company and positive non-gap adjusted EBITDA. With that strong foundation and in line with our 2025 product revenue guidance announced earlier this year, we anticipate year over year growth of eight to 11% while focusing on the forward health of our bottom line results. On the development front, in Europe we are continuing to collaborate closely with our notified body TUV-SUD on a potential new and enhanced CE mark submission for intercept red blood cells or RBCs. We plan to have a more detailed update on these developments as those plans solidify in the coming months. I would like now to turn the call over to Vivek to discuss our commercial results and progress for the fourth quarter in full year 2024 along with color on the outlook for 2025.

Thank you, Oldie and

good afternoon everyone. As we enter 2024, we've committed to a return to top line growth. While at that time we believed in our ability to deliver compelling growth, we were not without headwinds. We started the year with six months shelf life on platelet kits in the US and most of our IFC production partners had yet to receive DLA clearance to enable them to transport IFC across state lines. Thanks to the solid performance of the cross functional series team, combined with strong partnership with our blood center customers, we were able to successfully address many of these challenges and meet our commitment by delivering 15% top line growth compared to 2023. In addition, we made meaningful progress on key strategic commercial initiatives that will set the stage for compelling growth for the balance of this decade. We delivered strong results in the fourth quarter of 2024 driven primarily by growth and demand for our US ISC business as well as our global platelet franchise. In particular, we saw strong contributions from our international markets. As an example, Canadian Blood Services is now at 100% PR adoption for their platelet production.

Overall,

our core platelet markets stabilized and we witnessed the normalization in donor trends in 2024 which were previously headwinds in 2023. In addition, we made meaningful progress on several of our key growth initiatives. As we start 2025, we are seeing signs of strong platelet traction across our global franchise.

As

reported last quarter, we had an excellent showing at the annual AABB meeting which took place in Houston, Texas in October. As we predicted, the interest we witnessed at AABB translated into a spike in inbound inquiry both from hospitals and blood centers. During the quarter, a few of our blood center ISC production partners received BLA approvals and are in the process of ramping up manufacturing volumes to meet increased ISC demand. As real world experience with ISC grows, we are continuing to see that our assumed value proposition is being validated. Clinicians highly value earlier access to fibrinogens and hospital blood banks greatly appreciate the reduction in both product wastage as well as reduced time from orders availability. We exited 2024 with strong momentum in our ISC franchise and our acute focus is to ensure that production volumes ramp up in order to meet growing demand. As we began 2025 and as stated in our preliminary revenue guidance, we expect to continue to deliver compelling top line growth. This growth is expected to come from strength in our global platelet franchise as we anticipate share capture in the US and further expansion internationally. We exited 2024 with real momentum in our US ISC business and with line of sight into expanded manufacturing capacity, we are confident in our ability to meet the growing clinical demand we are experiencing in the ISC franchise. As we look forward in the year, we are excited to launch the new INC 200 illuminator in EMEA and reaffirm our commitment to new product innovation in this market.

This project

is a result of close collaboration with and it's from our blood center partners and we can't wait to deliver this to them. The outlook for 2025 is exciting and we look forward to updating you on our progress during future quarterly calls.

I'm grateful

to the global and commercial and operational teams of Cirrus for their strong performance in 2024. It

is great to

be back on a growth trajectory and we are poised to continue to do so moving forward. Most importantly, it's very rewarding that our efforts are helping to ensure that more patients around the world are gaining access today for blood products. I will now turn it over to Kevin to discuss our financial results and outlook in more detail.

Thanks Vivek and hello to everyone listening. On today's call, I'll be discussing our financial results for the fourth quarter in full year 2024 as well as our product revenue guidance for 2025. Finally, I'll highlight some of the key success factors that we are focused on as we move forward, building off a 2024 solid base toward continued financial improvement over the long term. As pre-announced in January, full year 2024 product revenues were $180.3 million ahead of our latest 2024 product revenue guidance and representing 15% growth year over year. For the fourth quarter of 2024, we posted product revenue of $50.8 million representing year over year growth of 9%. AMIA Platelet sales as well as growth from US Platelet sales drove the bulk of our product revenue increases this quarter. While our Platelet franchise drove much of the growth, we also realized IFC sales expansion. The IFC business was up almost 30% when comparing the fourth quarter of 2024 to the prior year. Full year 2024, North American product revenues were up 23% over 2023 levels and fourth quarter 2024 product revenues exceeded prior year levels by 6%. This growth was driven largely by increased penetration at the top US blood center organizations where we continue to see significant growth opportunities for intercept uptake. In AMIA, fourth quarter product revenues were up 16% year over year. When looking at Q4 2024 over the prior year, FX rates provided a slight headwind for the AMIA business of around 80 basis points. On a full year basis, FX rates had little impact on our AMIA business and on a consolidated basis, FX provided a headwind of around 8%. We also found 20 basis points when comparing Q4 2024 to that of the prior year period and little to no impact on the full year comparative results. Beyond our Platelet and Plasma franchises, for the full year, IFC sales were up over 2023 levels by 42% to $9.2 million. For Q4 2024, we posted IFC product revenue of roughly $3 million up from $2.3 million in the prior year period, driven by more standing orders and depth within existing accounts. In addition to our product revenue and not included in our guidance, government contract revenue totaled $21.1 million for 2024 compared to $30.4 million for 2023 and $5.9 million in Q4 compared to $6.6 million for the prior year period. Consistent with dialogue in prior quarters, the completion of our US Phase III Recipe Clinical Trial was the primary driver for the decline. As we look ahead, we expect to continue delivering on our contracts with the federal government and advancing patient access to safe blood components. Turning now to our product gross profit and gross margins, for the full year, product gross profit was $99.5 million from the $86.4 million for 2023. Our fourth quarter product gross profit was $27.4 million compared to $26 million during the prior year period and the increase of .5% year over year. Product gross margins for the year as a whole were consistent at .2% within 10 basis points of 2023 levels. For the fourth quarter, product gross margins were down slightly to .9% from the .5% reported in Q4 of last year. The slight decline in gross margins was driven by a number of individually small items, including a stronger US dollar in Q4, freight costs to expedite product shipments into the US and higher than expected discard rates for certain products. As we look ahead to 2025, we expect product gross margins will generally remain in the mid-50s. There are several factors that could drive quarterly variability, including, but not limited to, foreign exchange rates, product mix, production costs to IFC to meet increasing demand, economies of scale and production volumes, and the timing of COGS reduction initiatives coming online. Moving on, for the year, operating expenses were down more than 8% to $134.8 million, compared to $146.9 million for 2023. Our fourth quarter operating expenses, which totaled $34.8 million, were up from the $31.6 million in Q4 of 2023. Q4 2024 operating expenses included $5.5 million in non-cash stock-based compensation. By specific expense type, 2024 R&D expenses were down 13% to $58.9 million from $67.6 million in the prior year. Fourth quarter R&D expenses totaled $15.4 million, compared to $14.3 million during the prior year period. The increase in our R&D expenses for the fourth quarter can be attributed to work on our LED-based illuminator, including submission for CE marking, Redis site ramp enrollment, and activities covered under our new BARDA contract. 2024 SG&A expenses were relatively flat at $75.9 million from $75.5 million. Fourth quarter SG&A expenses were $19.3 million, compared to $17.3 million during the prior year period. During the quarter, we recognized a cumulative catch-up of certain accrued expenses that had artificially distorted SG&A expenses for the quarter. As we look ahead to 2025, we expect that SG&A expenses will go up modestly from 2024 levels, primarily as a function of cost of living and inflationary impact. With that said, we are not planning on significant new investments and expect that we will continue to see compelling leverage from our SG&A spend relative to the expected revenue growth. Let's now focus on the bottom line and non-GAAP adjusted EBITDA results. On the bottom line, reported net loss attributable to CERIS for 2024 improved by 44% to $20.9 million from $37.5 million for 2023. For the three months ended December 31st, 2024, net loss attributable to CERIS was $2.5 million, or a penny per share, compared to $1.3 million, or also a penny per share for the prior year period. As a measure of the operating leverage we were generating, the net loss for Q4 and the full year was less than our non-cash stock-based compensation. Beyond the achievement of double-digit top-line growth, as Vivek mentioned, and suggestive of the leverage we are generating, we are pleased to announce the achievement of another one of our stated 2024 objectives, positive adjusted EBITDA of $5.7 million for the year. This represents a significant improvement over the negative $10.7 million for the prior year. Q4 2024 was the third straight quarter of generating positive adjusted EBITDA, which was $3.3 million, compared to a positive adjusted EBITDA of $4.7 million for the prior year period. While we are thrilled with this achievement, we plan to build off of this strong foundation and expect our positive adjusted EBITDA will be durable. Underpinning our confidence, we expect that, as suggested by our 2025 product revenue guidance, coupled with planned gross margins in the mid-50s, close management and continued leverage of operating expenses, we will maintain or improve on this measure for 2025. On the balance sheet and associated cash flows, we ended the fourth quarter with $80.5 million of cash, cash equivalents, and short-term investments on the balance sheet. Operationally, we posted our fourth consecutive quarter of positive operating cash flows. For the fourth quarter in full year 2024, we generated positive operating cash flows of $4.9 million and $11.4 million respectively, compared to cash used for the operations of $15.2 million and $43.2 million for the fourth quarter in full year 2023 respectively. Although we expect to make working capital investments in support of our growing business, namely finished goods inventory and receivables, we expect to generate continued positive operating cash flows for 2025. On that note, I'd now like to turn the call back over to Obi for some closing remarks.

Thank you, Kevin. With the first two months of 2025 almost behind us, we remain positive about the rest of the year ahead of us. Our growth reflects the confidence and trust our customers place in Cirrus and the Intercept technology, which addresses a significant unmet need in blood safety and availability with a total addressable market estimated to exceed $7 billion annually. While we have realized strong revenue growth for both our Playlit and IFC products, we are sub 10% penetrated in those markets globally, meaning there is a lot of runway for continued revenue growth for our existing licensed Intercept product portfolio. With our first mover advantage, superior technology and strong barriers to entry, we are setting a new standard in transfusion medicine. Our concentrated and expanding customer base allows us to drive significant leverage from our SG&A, generating a strong recurring revenue stream. With a solid financial profile and a mature pipeline, I believe Cirrus is well positioned for continued success. Thank you for your continued interest in Cirrus. I will now turn the call over to the operator for questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Joshua Jennings with TD Cowan, your line is now open.

Hi, good afternoon and thanks for taking the questions. Congratulations on the strong performance in 2024. I was hoping to just start on IFC, the foundation for that franchise continues to build. Seems like it's on the cusp where it's beginning to inflect just in terms of adoption and utilization, just customer demand. Hoping you could just walk us through the steps that are left before kind of full US market access is unlocked and then kind of secondary to that, just your state of optimism that that Saris can capture up to 50% of the multi-hundred million dollar US market opportunity in front of you with IFC.

Thanks a lot, Josh, for the question. Viveka, would you like to cover that question?

Sure, I'd be happy to. Good to hear from you, Josh. Thanks for the question. I think you categorized the state of the market well. We were excited about the increase in demand, the validation we received coming out of ABB, both on the podium and in peer to peer discussions was certainly a strong boost and added to the momentum we saw at the end of the year and entering into 2025. In parallel, as we mentioned, we received BLAs at a couple of our production partner sites, which will enable them to transport product across state lines that'll unlock demand in states where there wasn't previously an in-state manufacturer. So in terms of thinking about how we unlock the market and continue to drive forward progress, the key things are making sure we constantly balance demand and supply. So as we're seeing demand spiking, it's nice to have avenues with which supply can grow and I think as we add that with continued real world experience, maturing clinical evidence, those are the factors that are going to continue to allow us to penetrate this market. And certainly the user experience from what we're seeing where hospitals may bring it in into one clinical category and then it fairly quickly diffuses across the institution, that gives us confidence that the broad market opportunity that ISC presents is

in fact, realizable.

Excellent, and maybe one just follow up on just the China opportunity. I know you have a JV, I think we talked a little bit about this earlier in January. But the next steps to unlocking that China TAM, which is a meaningful piece of that $7 billion global TAM that you referenced and you have prepared remarks, it will be just the outlook there and when Sarah could start seeing the China franchise and the Chinese market, I think that's a good way to contribute revenues. Thank you. Yeah, thanks Josh

for the question. Yeah, we are expecting an NNPA approval sometime this year and subsequent to that Chinese approval, there will be sort of a provincial reimbursement process that we estimate will take about a year to complete. So we are actively discussing with various provincial blood centers in China, their interest and that'll continue on until the NNPA approval happens. And that's really just sort of, how do we sequence the rollout once we have that provincial reimbursement in place? So it's not gonna contribute meaningfully to revenue this year, but once that provincial reimbursement's in place, once we have the approval and then the provincial reimbursement's in place, we do see that being a very meaningful market opportunity for the company and allows us to continue to penetrate the planet market that we mentioned in the prepared remarks is we're still sub 10% globally. So there's a lot of continued opportunity for the planet business. Thanks Josh.

Thanks Aoravie.

Thank you. Our next question comes from the line of Jacob Johnson with Stevens, your line is now open.

Hey, thanks. Good afternoon everybody. This one's probably for Vivek. Just like you mentioned on IFC, bringing on additional supply to meet demand. Can you just talk about that dynamic? And then as we think about the outlook for 12 to 15 million of IFC revenue this year, how much of that's predicated on additional supply coming online and do we need to, is there any timing to that that we need to think about as we think about IFC revenues playing out throughout the year? Thanks.

Great, yeah, thanks for the question. With respect to the benefit of having the DLA's on impact on supply, what that enables us to do is it allows us to address demand that we have known for some time exists in states without an in-state manufacturer. So now those hospitals have an avenue to access IFC and the blood centers that have the DLA's in hands are now operationalizing that license so that they can ramp up supply and meet that hospital demand. As we contemplated guidance for the year, we went into the year with line of sight into having sufficient manufacturing supply to meet demand, but we're gonna continue to work on increasing supply because we continue to see demand increase as well. But we feel that with the progress we're making, we'll be in a good spot where supply shouldn't be a constraint on a going forward basis.

Got it, that's helpful. And then maybe Kevin, one for you, just on product gross margins, I heard kind of mid 50s for the year, obviously you called out some kind of couple of items in four queues that kind of bit you. Can you just talk about whether it's US dollar, freight costs, discard rates, IFC investments, just any of those that we should be monitoring or keeping in mind this year that could kind of repeat from four queue or any that were kind of isolated to four queues, just how should we think about gross margins this year? Thanks.

Yeah, Jacob, thanks for the question. I think most of those items that I called out for four queue were episodic, we don't expect them to last. The one watch out I would say is FX rates. If the dollar continues to strengthen relative to the euro, obviously that's gonna have an impact across our P&L. What I would say is since most of our product is sourced in euro, as the US becomes a bigger and bigger contributor to the top line in the dollar strengthening, we actually see a bottom line benefit, but it does obviously have a negative impact on our revenue line. So that's the one watch out that obviously we don't have absolute control over. As far as shipping costs, the ancillary product where we saw some discards, those are truly episodic, we don't expect those to continue.

Okay, that's helpful. I'll leave it there. Thanks for taking the questions. Thanks Jacob.

Our next question comes from the line of Ross Osborne with Cantor Fitzgerald, your line is now open.

Sorry. Hey guys, thanks for taking our questions. So maybe just one clarifying question on SG&A guidance. I believe you said slightly up and 25 relative to 24. Does slightly up include the one time item that occurred during a fourth quarter or is it slightly up versus an adjusted number?

Yeah, I think it's, oh Ross, sorry, I was gonna take that over if that's okay. Yeah, no please, sorry. Yeah, so we're really talking about 2024 as a whole. I think clearly we saw this cumulative catch up, I'd characterize it as probably roughly a $2 million impact for the quarter that was anomalous. Where we're going to see continued growth is really from inflationary pressures. We're not making significant investments, as we mentioned incremental investments, but we expect it will be able to generate continued leverage with those investments relative to the top line growth. So it's really a comment that was predicated on 2024 as a whole rather than a specific quarter.

Okay, sounds great. And then, sorry, we're jumping around a bit. I heard the comments around China, but with regards to Brazil, could we walk through that commercialization timeline, the steps you need to take there?

Yeah, Vivek, would you like to cover that?

Sure. So as you're aware, we currently are commercial in the private sector in Brazil, but that's a small portion of the market. We're in the process of applying to gain access to the public sector, and that's really a combination of health ministry, our distributor partner and us putting together a dossier and receiving approval from the government agencies to gain access to the public sector. That process is ongoing, and we would anticipate hearing from them later this year. From there, it really becomes about operationalizing of the rollout, so working with our distributor deployment organization, getting devices into the market, and kind of rolling it out there and not dissimilar from what happened in France. But the first step really is awaiting decisions from the government, which we anticipate would happen at some point later this calendar year.

Got

it.

Thanks for taking our questions. Thank you, Ross.

Our next question comes from the line of John Wilkin with Craig Hallam. Your line is now open.

Hey, guys. I just wanted to ask, it looks like platelet growth in North America started to slow down pretty meaningfully in the quarter. I was just wondering if that's, is that due to just tougher -on-year comps now after some very easy ones early in the year, or are there other reasons driving that?

Yeah, Kevin or Vic, would you guys like to take that?

Sure, I'd be happy to jump in, and Kevin, certainly, Wayne, if you have any other thoughts. So it had a little bit to do with comps. We also, one of the things that we had talked about potentially addressing when we came towards, we knew we were gonna have a shelf life issue through the balance of this year. We knew that there was some stocking taking place at the end of last year, and so that we would seek to get to more normal inventory levels through the course of 2025. We potentially thought we might do that towards 2024, but we did not. But we continue to capture share in the North American market through the course of 2024, and anticipate doing so in 2025. So you think about underlying adoption trends and where our business is heading. That continues to be a strengthening business for us, but there was no, beyond that, there was sort of really no underlying issue within our North American playlist franchise. We certainly benefited from a full year of 100% with Canadian blood services. So you'll see that as Hama Quebec comes on board, you'll see a little bit of growth in Canada, but fundamentally, we anticipate the US market will continue to capture share.

Got it, thanks, that's helpful. And then any other updates around other specific countries or geographies that are maybe in the early stages or potentially adopting intercept in the near future?

Sure, as we've talked about previous in this call, we've got a joint venture partnership in China. There's some steps that need to walk through there, but we're encouraged by not only the progress we're making, but the caliber of our partner, as well as the level of clinical interest and enthusiasm in that marketplace. I think we've mentioned previously that early days for us in terms of progress in Germany that represents the single largest remaining market in Western Europe. And then we recently had a number of our folks at the annual Med Lab Congress in Dubai, and the market opportunity for us in the Middle East in particular in Saudi Arabia continues to be quite strong. There's quite a bit of investment in healthcare happening in the kingdom, and they tend to mirror off of AABB and FDA standards. So there's a lot of awareness of interested and enthusiasm to adopt intercept. So those would be some examples of geographies where we feel there's a reasonable path towards growth, and that could represent growth drivers to the balance of, really over the course of the next couple of years. Great, thanks guys.

Yeah, thank you, John.

Thank you, as a reminder to ask a question at this time, please press star one one on your touchtone telephone. Our next question comes from the line of Mark Massaro with BTIG, your line is now open.

Hey guys, this is Vivian on for Mark. Thanks for taking the questions and congrats on a nice quarter. Could you just discuss in terms of the major, the five major blood centers in the US? I think I heard you call out that you drove some increased penetration there. So could you just walk us through what the level of penetration stands at currently and just how you're thinking about that remaining opportunity, thanks.

Thanks, Vivian. Vivek, this is another one for you, I think.

Thanks, Oveen, thanks for the question, Vivian. There continues to be upside with US blood centers in particular with the, and as we see consolidation of markets, some of the larger blood center families. I think we, today we've provided share levels at those centers with the exception when the American Red Cross announced of their own volition and publicity their intention to move to 100% PR. So really out of respect for those centers, we sort of keep that information internal. But what I can say is if you just look at our overall penetration in the US and where the opportunities exist, as well as what we're seeing in terms of continuing maturity of our real world evidence in support of intercept is not only in the context of compliance with the bacterial guidance from the FDA, but more importantly, in terms of pandemic preparedness and other financial and operational benefits that confers the blood centers, we're seeing continued inbound inquiries from blood centers to adopt intercepts, which is why even long past the guidance compliance period, we're seeing share capture and increased PR penetration in the total market. So it was a big contributor to 2024 performance and we anticipate that being the case as well in 2025.

Perfect, thanks for the color there. And then just one on the government contract revenue. I understand you guys don't guide to this. I think it came in a little bit above our model in the quarter. Do you think that 5.9 million would be a good run rate for 2025 or were there any one timers in that? Thanks.

Thank you, Kevin, do you wanna cover this one? Yeah, sure. Yeah,

Vivian, I don't know that it's a good baseline for 2025. As you'll recall, we were awarded 2024 barter agreement late in the year. Some of those activities have started, but they're not really contributing meaningfully towards the overall government contract revenue. We do expect in 2025 that all of the awards will be running concurrently and that we'll see a bump up in the overall government contract revenue and the initiatives that we're spending on those contracts. So I wouldn't model it off of Q4. I think it's going to continue to grow as those initiatives kick way and contribute.

Okay, great. Thanks so much for taking the questions. Thank you.

Thank you. And I'm currently showing no further questions at this time. I'd like to hand the call back over to Obie Greeman for closing remarks.

Well, thank you all again for joining us today and for your interest in Cirrus. Next month, we will be participating in the 45th annual TD Cowan Healthcare Conference. And we look forward to sharing our progress with you throughout 2025, should be a great year. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect.