Kestra Medical Technologies, Ltd.

Good afternoon and welcome to Kestra Medical Technologies' fourth quarter fiscal 2026 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 a listen-only mode. I would now like to turn the call over to Neil Bhalodkar, Vice President of Investor Relations, for introductory comments.

Thank you, Carmen. Good afternoon. Thank you for joining Tesco's fourth quarter fiscal 2026 earnings call. With me today are Brian Webster, President and Chief Executive Officer, and Vaseem Mahboob, Chief Financial Officer. This call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements are 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. During today's call, we will also discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and are not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Please refer to our earnings release for a reconciliation of these measures to their most directly comparable GAAP financial measures. With that, I will turn the call over to Brian.

Thanks, Neil. Good afternoon, and thank you for joining us on today's conference call. We are excited to discuss the details of our strong performance in the fourth quarter and the significant progress KESPER made in fiscal 2026. As always, I'd like to begin the call by focusing on what truly differentiates Kestra. That is the lives we protect each day and the patients, families, and clinicians we serve. The reality of cardiac recovery is that risk doesn't always resolve when a patient leaves the hospital. For some patients, the journey to recovery is far more complex than anyone anticipates. Every patient is prescribed a sure with the hope That is, protection will never be needed. Unfortunately, cardiac recovery doesn't always unfold that way. One patient recently reminded us of that in a very profound way. The patient was a 43-year-old woman recovering from a recent heart attack and living with advanced heart disease. Like many patients beginning recovery, she was prescribed Assure while her care team monitored her progress and evaluated long-term treatment options. 72 days after her initial prescription, the system detected a life-threatening arrhythmia and delivered life-saving therapy. For many patients, that would have marked the end of the event. For her, it was only the beginning. As she was rushed to the hospital, the arrhythmias didn't stop. Through ambulance transport, hospitalization, and every subsequent cardiac episode, Assure remained with her, delivering therapy each time it was needed. By the time physicians could provide stabilizing treatment, the system had delivered 12 successful therapies, protecting her through a prolonged and unpredictable period of instability. Every patient's recovery is different and some emergencies are far more complex than anyone could predict. In this case, the patient required 12 separate interventions before she could be stabilized. That level of sustained protection isn't simply a feature It reflects a deliberate design philosophy centered on supporting patients through even the most demanding clinical scenarios. This is just one patient story. In fiscal 2026, our cardiac recovery system was used to protect 18,000 patients at risk of sudden cardiac arrest. We remain thankful and humbled by this responsibility entrusted to us by prescribers their patients and their families. Now, turning to our financial performance, we concluded fiscal 2026 with another strong quarter. We continue to reach more patients at risk of cardiac arrest, accepting over 6,300 prescriptions written for the Assure system. Revenue was $28.6 million with growth of 66% compared to the prior year period. For the year, Kestra generated $95 million of revenue, resulting in growth of 59% compared to FY25. Gross margin of 54.8% expanded by over 10 points year-over-year and 200 basis points sequentially, reflecting the attractive unit economics of our rental model. This was our 10th quarter in a row of sequential gross margin expansion. Our full year gross margin of 51.4% increased by approximately 11 points compared to FY25. We remain confident that Kestra is on a path to 70% plus gross margins over the next few years. Although FY26 was a year of investment, with the strong revenue growth that Kestra is generating, we continue to see improving operating leverage in our business. This growing leverage supports the investments we are making in the company's key growth drivers to take advantage of the large and attractive market opportunity we see. The investments that we believe will drive significant near and long-term value for Kestrick include expanding our commercial team, enhancing our revenue cycle management capabilities, growing our fleet of devices, innovating to extend our product advantages, and growing the body of clinical evidence supporting the Assure system. One such example was the investment we made at the start of FY26 to meaningfully enhance our commercial training and onboarding capability. This has reduced how long it takes a new territory manager to reach a key sales ramp productivity milestone. This accelerated Salesforce productivity strengthens operating leverage and positions us to more effectively capture the significant growth opportunity in the WCD market. We continue to expand our sales organization with the goal of further penetrating existing accounts as well as calling on new potential Assure prescribers. As we had discussed previously, 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 planned, we ended fiscal 26 with approximately 130 active sales territories up from about 80 at the end of fiscal 25. The impact of this is clear. Our commercial team is winning in the marketplace with the number of new prescribers for Assure growing by 55% in fiscal 26, while the number of ordering facilities grew by 65%. It's exciting to see that some of these new Assure customers are in fact new prescribers of WCDs as a category. Turning to the WCD market, we have previously noted that despite the overwhelming evidence that an external defibrillation shock is effective at terminating dangerous cardiac rhythms, WCD therapy remains underutilized with six out of seven patients that are indicated for WCD not being protected by one. We believe the innovation and clinical evidence we have brought to the category started to change this in fiscal 2026. Based on our financials and that of the incumbent, we estimate the WCD market grew in the low to mid teens. We are still in the early innings of market expansion, and we see this category growing into a multi-billion dollar market in the years ahead. I wanted to illustrate this last point with a few examples of strategies we are employing across various geographies. The first case study is a leading academic medical center in the Southwest that demonstrates how our commercial model drives sustained account expansion. When Tessera entered the institution in March of 2025, it had never prescribed the Assure system. Fifteen months later, utilization has grown to more than 60 prescriptions, with 40 unique prescribers activated across multiple specialties. That growth has been driven not only by commercial execution, but by repeated clinical validation in our service delivery model. A recent example of this institution highlights that dynamic. Patient experienced ventricular fibrillation while wearing Assure, a system delivered a lifesaving therapy and our proprietary Assure Assist feature alerted emergency medical services even before the patient's spouse completed a 911 call. Within minutes, the treating physician had been notified, enabling rapid coordination of care as the patient was airlifted for advanced treatment. The event reinforced the value of the entire Assure platform, not just the therapy, but the speed of emergency response Clinical Communication, and Continuity of Care. That experience translated directly into broader physician adoption. Within one week, four additional Assure systems were ordered by physicians who had never previously prescribed our platform. Adoption in this system has since expanded beyond the initial heart failure service line, with electrophysiologists beginning to prescribe Assure after observing its clinical performance, patient experience and integrated support. This account reflects a pattern we're seeing repeat across the country. While clinical outcomes accelerate adoption within an institution, physician education creates robust prescribing networks that continue to expand long after the initial engagement. The second case study is a territory in the Midwest that illustrates the long-term impact of that strategy. When the Kestra territory was established, the hospital had previously generated about 20 WCD prescriptions annually. Through focused engagement with the Heart Failure Program, fellow education, and ongoing clinical support, utilization more than doubled to 50 prescriptions during FY26. Growth accelerated through a combination of physician champions and clinical education, expanding the sure adoption among both existing and new prescribers. A key driver was the team's investment in fellowship education. Six of the program's eight fellows became active Assure prescribers during training. As those physicians entered independent practice, they carried that experience with them, prescribing Assure at other hospitals. Rather than expanding a single account, Our team is building a growing network of experienced Assure prescribers that continue to drive adoption beyond the original institution. Our strategy also extends to enterprise health systems where we're working to integrate Assure directly into standardized care pathways. The third case study is one of the nation's largest independent cardiovascular organizations in the Southeast that is working with our team to integrate Assure into standardized heart failure care pathways across its physician network. Working alongside physician leadership, advanced practice providers, and clinical operations teams, we're embedding Assure into workflows that support patients from hospital discharge through outpatient recovery. This collaboration began shortly after presentation of the Assured Post-Approval Study data at AHA last November. Since that time, prescribing within the organization has increased by approximately 40%, reflecting growing adoption supported by both clinical evidence and operational integration. Today, that organization includes approximately 120 cardiovascular providers. creating an opportunity to expand this care pathway model across multiple affiliated practices in regional markets. This represents another important driver of sustainable long-term growth as we partner to embed the SURE into standardized clinical workflows. These examples demonstrate how clinical evidence, physician education, and enterprise partnerships are working together to accelerate market adoption. Turning to clinical evidence, on prior earnings calls, we discussed the results of our ACE-PASS, the largest real-world prospective WCD study to date, with over 21,000 patients enrolled and protected. The study's findings corroborated what patients experience every day with the Assure system. Low false alarm rates, comfort that drives higher wear time compliance, and 100% successful conversion of Dangerous Arrhythmias. I'm pleased to highlight a newly published paper focused on the future of sudden cardiac death prevention that cites the ACE-PAS study as contemporary evidence demonstrating persistent ventricular arrhythmia risk among patients with ischemic and non-ischemic cardiomyopathy. The paper was published in the journal Heart Rhythm, which is a Heart Rhythm Society publication specifically highlights observed ventricular arrhythmia event rates. The HRS recommendations state that clinicians should consider WCT use after myocardial infarction or a new heart failure diagnosis while guideline-directed medical therapy is being optimized and better risk stratification tools are being developed. The paper further identifies WCDs as potential strategy to reduce sudden cardiac death in patients not yet eligible for an ICD. From a strategic perspective, this is a meaningful endorsement. The paper was developed through an HRS-led think tank that included many of the field's leading experts. The inclusion of ACE-PASS demonstrates that our data is being incorporated into the broader scientific dialogue around risk stratification Sudden Death Prevention, and the Rule of Temporary Protection for High-Risk Patients, areas that may ultimately influence guideline development. Regarding our clinical evidence strategy, we plan to publish multiple abstracts and manuscripts over the next 12 months, highlighting compelling data from ACE-PASS, our new enhanced algorithm, and new innovation in our pipeline. We believe this growing body of evidence will support increased share capture and expanded WCD adoption. On the product development front, we continue to pursue innovation that benefits patients and clinicians. In mid-January, we announced a strategic collaboration with BioBeat Technologies to expand diagnostic insight for hypertensive patients prescribed the Assured WCD. That co-development project is progressing as planned. In April, we released an enhanced Assure detection algorithm, which we project will further reduce our already low false alarm rate. This new algorithm is now shipping to all patients. Our team has some other exciting projects in progress intended to further extend our clinical advantage with the performance of the Assure system and also bring new first in category capabilities to the market. Over time, we believe this will help us accelerate market growth and win additional market share by further differentiating our product from the incumbent. And more importantly, by providing additional clinical value and diagnostic insights to physicians, we believe it will result in them prescribing WCDs to more of their patients that heretofore had gone unprotected. In conclusion, the fundamentals of the Kestra story and business remain strong. The clinical evidence of the Assure system is compelling. We like our competitive product position in an expanding WCD market. Kestra is delivering premium revenue growth while significantly expanding gross margin. And we have fortified our balance sheet to facilitate investment in that growth. Our execution has been crisp across all elements of the business and the foundation we have built positions Kestra for strong and durable growth for years to come. I'd like to thank our incredible team in the field and also here at the home office in Kirkland for their passion and commitment to the Kestra mission. Now I'll turn it over to Vaseem who will discuss fourth quarter financial results in more detail and provide our fiscal year 2027 revenue guidance.