Kestra Medical Technologies, Ltd.

Good afternoon and welcome to the Kestra Medical Technologies Earnings Conference Call. This conference call is being recorded for replay purposes. We will be facilitating a question and answer session following prepared remarks from management. At this time, all participants are in listen-only mode. I would now like to turn the call over to Neel Baladkar, Vice President of Investor Relations, for introductory comments.

Thank you. Thank you for joining this afternoon's first quarter fiscal 2026 earnings call. With me today are Brian Webster, President and Chief Executive Officer, and Vasim Mehboob, Chief Financial Officer. This call includes forward-looking statements within the meaning of the Private Securities Litigational Form Act of 1995. Statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. These statements are based on Kestra's current expectations, forecasts and assumptions, which are subject to inherent uncertainties, risks, and assumptions that are difficult to predict. Actual outcomes and results could differ materially from any results, performance, or achievements expressed or implied by the forward-looking statements due to various factors. Please review Kestra's most recent filings with the SEC, particularly the risk factors described in our Form 10-K for additional information. Any forward-looking statements provided during this call, including projections of future performance, are based on management's expectations as of today. Kestra undertakes no obligation to update these statements except as required by applicable law. With that, I'll turn the call over to Brian.

Thanks, Neil. Good afternoon, everyone, and thank you for joining us on today's conference call. We are excited to discuss the strong start we had to our fiscal 26 and the continued progress we have made in our key operational objectives. But before we jump into that, I'd like to again highlight the purpose behind the mission that drives the KESPA team. At the center of everything we do are the lives we protect each day and the impact we have on patients, their families, and the providers who care for them. Recently, one of our territory managers or sales reps gave an overview of the Assure system to a provider where they discussed how the Assure system tracks heart rate trends and how this capability can provide critical insights for identifying patients with previously undiagnosed arrhythmias. The fact that patients could trigger their own ECG recordings with a simple push of a button on their wearable vest stood out to the provider. Soon after, the impact of this capability came into sharper focus when the same provider prescribed the Assure system for a 53-year-old patient at elevated risk of sudden cardiac arrest. The patient had hypertension, non-ischemic cardiomyopathy, frequent extra heartbeats, and a cardiac output ejection fraction of just 34%. During the fitting, the patient's fiancé candidly shared her anxiety about the unpredictability of her loved one's condition. To provide reassurance, the care team advised that the patient trigger heart rhythm recordings twice a day. Those recordings captured repeated irregularities in the patient's heart rhythm. The Kessler representative promptly pointed out the recordings to the physician, illustrating the clinical value of patient-triggered rhythm recordings, and the broader role of the cardiac recovery system in guiding care. The insights were significant enough that the patient was scheduled for a cardiac ablation. However, before the patient was able to undergo the cardiac procedure, lifesaving therapy was necessary. The patient lay down for a nap after feeling unwell. While asleep, they went into a dangerous rhythm that quickly progressed into cardiac arrest. The Assure system detected this and delivered a shock, saving the patient's life. In the critical moments that followed, our Assure Assist service quickly helped connect the patient to emergency care, and the patient was safely transported to the hospital. This story illustrates the full continuum of care that our cardiac recovery system provides, equipping providers with insights to guide treatment, protecting patients with lifesaving therapy when it matters most, and ensuring rapid emergency support in the vulnerable periods that follow. And while this is just one patient's experience, in the first quarter of fiscal 2026, our team and technology helped facilitate many similar lifesaving events. We remain humbled by this responsibility and by the trust placed in us by providers, their patients, and their families. With that, I would now like to turn to our recent performance. In the first quarter, we continued to reach more patients at risk of cardiac arrest, accepting over 4,200 prescriptions written for the Assure system, an increase of 51% year over year. Revenue grew 52 percent year-over-year to $19.4 million. Continued improvements in revenue profiting from higher in-network mix and reductions in cost profiting from volume leverage drove the seventh quarter in a row of gross margin expansion. First quarter gross margin was 45.7 percent compared to 32.9 percent in the prior year period. We expect continued gross margin expansion in FY26 and remain confident that Kestra is on the path to 70% plus gross margins. With the strong revenue growth that Kestra is generating, we are seeing nice operating leverage in the business. This leverage supports the investments we are making in the company's key growth drivers that we believe will yield significant long-term value for Kestra and stakeholders. quick overview of four of those growth drivers. First, we continue to expand our sales organization with the goal of further penetrating existing accounts as well as calling on new potential Assure prescribers. We are targeting geographies in which a high volume of WCD prescriptions are being written and where we also have strong in-network payer coverage. As we noted on our last earnings call, we ended fiscal year 25 with approximately 80 sales territories. While this will not be a data point that we will be updating on a quarterly basis, I can say that our territory additions in the first quarter were in line with our hiring plan, and we continue to aggressively expand our sales coverage. Of note, we also have an updated commercial strategy That includes an expanded clinical specialist role that will complement our sales territory managers. We expect that this strategy will support further penetration of existing accounts. Second, we continue to make progress on improving our revenue cycle management capabilities while also bringing more payers in network. At the time of our IPO six months ago, approximately 70% of our fittings were for patients with in-network benefits. This figure is now approaching 80%. The higher in-network mix meaningfully increases our team's efficiency and positively impacts all key RCM metrics. It is important to note that there are over 3,000 payers in the United States, so there will be a long tail of regional and local payers we are working to bring under contract. The RCM activities that increase the speed and rate of our collections are process driven and we expect to see further improvements over time. For example, in the early days of commercialization, we have a small RCM team that was not specialized. The same individual may have been tasked with following a claim from bidding all the way to cash. RCM function has grown significantly, particularly in the last 12 months. with team members specializing in specific areas such as prior authorization, medical review, home management, et cetera. Third, as you all know, we utilize a lease business model. Our substantial investment in our fleet of devices, each with a capacity for approximately three patient wares per year, enables the business to scale with our attractive unit economic profile. While our current asset pool can support our near-term business objectives, we are continuing to add to our fleet at a measured pace as we grow our field team. Fourth, we are continuing to build the body of clinical evidence supporting the safety, efficacy, and benefits of the Assure system. We recently achieved a major clinical milestone with the conclusion of enrollment in our FDA post-approval study. This is a really significant achievement for the Kestrel team and took a ton of really hard work by our entire team. We were also recently notified that our study was chosen for a late breaker presentation of our clinical data at the American Heart Association Scientific Sessions, which will be conducted in November. At the time that our post-approval study is presented, we expect this to be the single largest study ever published in the WCD category. This is the biggest stage in cardiology for our exciting results. All of these growth drivers further our mission of protecting even more patients that are at risk of sudden cardiac arrest. We have previously noted that despite the overwhelming evidence that an external fibrillation shock is effective at terminating dangerous cardiac rhythms, WCD therapy remains underutilized. reaching just 14% of the eligible U.S. patient population. That means six out of seven patients that are indicated for a WCD are not being protected by one. Last quarter, I shared with you two examples of hospitals that transition from underutilization of WCDs to significantly expanding their use of WCDs by establishing therapy protocols with the Assure system as their preferred solution. I would like to share another data point that gives us confidence that the WCD market will continue to expand into a multibillion-dollar market over the coming years. The results of a large German WCD study sponsored by the incumbent competitor were recently published. The SCD PROTECT study evaluated the risk of sudden cardiac death in over 19,000 patients in the first few months after they were newly diagnosed with heart failure or post-myocardial infarction or heart attack. Despite wide overall use of guideline-directed medical therapy drugs, the study found higher than expected sudden cardiac arrest risk in this patient population, suggesting a need for greater WCD protection in the early high-risk period of the patient's journey. Investment in this study is further evidence that the incumbent is focused on market expansion to help make up for lost share to Kestra. In conclusion, the simplicity of the Kestra story continues. We are competing in a large existing market that is growing consistently in both unit volume and price. We have an underserved medical condition where we offer a clearly superior solution. We have rapidly closed the gap on payer endorsement of our product and we are implementing a commercial expansion plan to rapidly grow the business. We are seeing strong execution across all elements of our business and the foundation we have built has positioned Kestra for strong growth this fiscal year and beyond. I would like to thank our incredible team in the field and here at the home office in Kirkland for their passion, and commitment to the KESTRA mission. I will now turn it over to my partner, Basim, who will discuss first quarter financial results in more detail and provide our updated fiscal year 26 revenue notes.