Omnicell, Inc.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press the star one again. Thank you. And now I would like to turn the call over to Kathleen and Nemeth Senior Vice President, Investor Relations. Please go ahead.

Good morning and welcome to the OmniCell fourth quarter and full year 2024 financial results conference call. On the call with me today are Randall Lipps, OmniCell Chairman, President, CEO, and Founder, and Chacha Etta, Executive Vice President and Chief Financial Officer. This call will contain forward-looking statements, including statements related to financial projections or performance, or other statements regarding OmniSell's plans, strategies, objectives, goals, expectations, planned investments, opportunities, expense management, products, services, or solutions, ability to drive long-term growth and consistent gap profitability, or market or company outlook that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. For a more detailed description of the risks that impact these forward-looking statements, please refer to the information in our press release issued today in the OmniCell Annual Report on Form 10-K filed with the SEC on February 28, 2024, and in other more recent reports filed with the SEC. Please be aware that you should not place undue reliance on any forward-looking statements made today. All forward-looking statements speak only as of the date hereof, or the date specified on the call. Except as required by law, we do not assume any obligation to update or otherwise release publicly any revisions to our forward-looking statements. Our results were released this morning and are posted in the investor relations section of our website at ir.omnisvel.com. Additionally, we would like to remind you that during this call, we will discuss some non-GAAP financial measures. Reconciliation of these non-GAAP measures to the most comparable GAAP Financial measures are included in our financial results press releases posted on our Investor Relations website. With respect to forward-looking non-GAAP measures, we do not provide a reconciliation of forward-looking non-GAAP measures to the comparable GAAP measures on a forward-looking basis, as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort. As we announced on our last earnings call starting in 2025, We are changing the bookings metrics that we provide. Going forward, we will be providing a product bookings metric, which will consist of connected devices and software licenses. We will also be providing a new metric, annual recurring revenue, or ARR, which will consist of SAS and expert services, which was formerly known as advanced services, technical services, and consumables. In our earnings release issued earlier today, we provided a 2024 reconciliation utilizing the historic bookings metric, as well as an illustrative example for comparative purposes using the new bookings, product bookings, and ARR metrics. We will provide further detail on these metrics during today's call. And with that, I will now turn the call over to Randall. Randall?

Thank you, Kathleen, and good morning. And thank you all for joining us to discuss our financial results for the fourth quarter and full year 2024, as well as our outlook for 2025. Before I begin, I'd like to wish everyone a healthy and happy new year. Here at OmniCell, we are entering 2025 with a renewed sense of vigor and a vast amount of gratitude for our customers who continue to place their trust in us and demonstrate their support of our vision to transform the pharmacy care delivery model across a wide array of care and distribution settings. Let's review a few highlights from our strong finish to 2024. We exceeded our bookings guidance for the year driven by strength in connected devices. We solidified our product backlog, which assists with revenue planning and scheduling for 2025. We delivered consistent revenue performance throughout the year by aligning implementation plans with customers and continually improving processes to enable execution. We solidified our balance sheet at what we believe are favorable terms via the issuance of a new convertible senior notes, and we're also able to repurchase a majority of the principal amount of our previously outstanding convertible senior notes that are nearing maturity. And importantly, we continue to see demand for products and services launched as part of the XT Amplify program. Turning to the financials for the quarter, OmniCell delivered a solid fourth quarter, and I am pleased to note that we returned to a year-over-year revenue growth for the quarter and are on our way to meeting our objective of delivering consistent GAAP profitability. Total revenues were $307 million, an increase of $24 million over the prior quarter, and an increase of $48 million over fourth quarter 2023. Product revenues were strong, coming in at $182 million, which is an increase of $24 million over the previous quarter, and an increase of $37 million compared to fourth quarter 2023. Service revenues were 125 million, an increase of 1 million over the previous quarter, and an increase of 11 million over the fourth quarter 2023. Non-GAAP gross margin for fourth quarter 2024 was 47.4%, an increase of 290 basis points from the prior quarter, boosted by our higher product revenue volumes and a favorable product and customer mix. Our fourth quarter 2024 earnings per share in accordance with GAAP was $0.34 per share compared to $0.19 per share in the prior quarter and a loss of $0.32 per share in fourth quarter 2023. Our fourth quarter 2024 non-GAAP earnings per share were $0.60 compared with $0.56 per share in the prior quarter and $0.33 per share in the same period last year. Fourth quarter non-GAAP EBITDA was $46 million, an increase of $8 million compared to the previous quarter and an increase of $23 million when compared to the same period last year. Now let's turn to a review of the macroeconomic landscape. We are pleased to note that we see signs of favorable conditions in many of our addressable markets. Our focus on innovation and building customer awareness around our roadmap, which includes robotics and smart devices, intelligent software workflows, and data analytics seems to be resonating with the market. I'll now highlight a few of the key customer wins in the fourth quarter. Our multi-year XT Amplify Innovation Program that we announced in April of 2024 continues to gain traction, and we see exciting momentum across our portfolio. Here are a few recent highlights. NYC Health and Hospitals announced they selected OmniCell's outcome-centric solutions in an effort to improve efficiency and patient safety for one of the nation's largest municipal healthcare delivery systems. According to the healthcare system leadership, this strategic initiative is expected to transform patient care and assist staff in support of their core mission in ways they did not think previously possible. A North Carolina not-for-profit healthcare system selected OmniCell's XT automated cabinets as it seeks to enhance patient care on nursing floors and in perioperative settings. With our inventory optimization services, this system is expected to increase inventory visibility, improve insights, and optimize workflows across the system that should help to achieve optimal medication inventory outcomes. We are pleased to note this was a new market share win for OmniCell. Another East Coast healthcare organization will expand its pharmacy technology strategy with the addition of XT cabinet automation and the expansion of anesthesia dispensing automation and software in order to support care initiatives across the enterprise. We believe this is proof of the solid demand outlook for XT systems in areas such as expansion within current customers. This is an exciting win for Omnicel. One of the largest healthcare delivery systems in the nation will be implementing XT Extend, a core component of our XT Amplify offering, as they strive to future-proof their cabinet footprint and enhance their security, user experience, and value from their XT platform. 2024 was a busy year for IVCS as we increased our footprint of IVX station robot installations and expanded our early adopter customer base. We received positive feedback from our IVCS customers, particularly as the IV robot's stock solution capabilities have been instrumental to support these customers during the IV fluid shortage. The enhanced features delivered in a recent update enables a wider variety of drug vials that can now be used to compound IV bags and syringes in the IVX station robot. unlocking 60 additional NDCs that our customers have been requesting. Specialty Pharmacy Services continues to gain market traction. Our offering combines deep expertise and leading technology to help customers maximize their specialty pharmacy outcomes. We had several notable wins in the fourth quarter of 2024, including renewal, and expansion of services with a large academic medical center, a contract for a new specialty pharmacy program with a health system in the Northeast, and a new collaboration to optimize specialty pharmacy program for health system in the Southeast. The Fortune 25 health insurance provider has selected Enliven Health as their primary reconciliation and medical billing partner in preparation for their 2025 strategy. We are committed to our multi-year growth journey. I want to thank OmniCell employees for their steadfast commitment to our customer success and their embrace of our culture of innovation and fiscal discipline. Thank you for your support of OmniCell, and we look forward to updating you on our progress through 2025. At this point, I'd like to turn the call over to our Chief Financial Officer, Chacha Eta, for a more detailed review of our fourth quarter and full year 2024 financial performance, as well as our outlook for 2025. Chacha?