Hyperfine, Inc. (ticker unspecified), a pioneer in portable MRI technology, has reported a significant increase in revenue for both the fourth quarter and the full fiscal year of 2023. The company's revenue for the fourth quarter reached $2.7 million, marking an 89% increase from the same period in the previous year, while the full-year revenue soared to $11 million, a 62% rise compared to 2022.
Hyperfine's focus on innovation and clinical evidence has been instrumental in the adoption of its Swoop system across prestigious institutions, and it aims to further expand its reach into international markets in the coming year.
Key Takeaways
- Q4 revenue increased by 89% year-over-year (YoY) to $2.7 million; full-year revenue up 62% to $11 million.
- Gross profit for Q4 stood at $1 million, with full-year gross margin improving to 43.1%.
- Net loss for Q4 decreased by 18% YoY to $10.7 million; full-year net loss down 39.5% to $44.3 million.
- R&D expenses and SG&A expenses both saw a decrease of 20% and 35% YoY, respectively.
- Hyperfine plans to maintain its strategic focus on innovation, clinical evidence, and commercialization in 2024.
- The company anticipates 2024 revenue to be between $12 million and $15 million, with gross margins between 45% and 50%.
- Cash burn for 2024 is expected to be around $40 million, with a cash runway extending into early 2026.
Company Outlook
- Hyperfine projects 2024 revenue to be in the $12 million to $15 million range.
- Gross margins are expected to improve to 45%-50%.
- Company anticipates a cash burn of approximately $40 million for 2024, with sufficient cash into early 2026.
Bearish Highlights
- Despite revenue growth, the company reported a net loss of $10.7 million for Q4 and $44.3 million for the full year.
Bullish Highlights
- Successful implementation of Swoop system at renowned institutions like Weill Cornell and Stanford.
- Expansion into select international markets is expected to contribute to future growth.
- The company's technology is gaining recognition for its potential in neurological condition management.
Misses
- There were no specific misses discussed in the earnings call summary provided.
Q&A Highlights
- Brett Hale discussed the expected decrease in cash burn and improvement in margins for 2024.
- Maria Sainz expressed confidence in the company's guidance and international expansion strategy.
Hyperfine's Swoop system has already made its mark in various medical institutions, demonstrating a strong adoption rate in critical care and pediatrics. The company's technology has been recognized at conferences and studies, underscoring its potential in the field of neurological conditions. With a focus on expanding into select international markets, Hyperfine is leveraging third-party distributors to minimize expenses and maximize commercial success. The company's strategic pillars of innovation, clinical evidence, and commercialization remain the cornerstone of its business model as it looks to the future with optimism. Hyperfine's leadership expressed confidence in the company's guidance and its ability to drive growth and reduce spending while still investing in innovation. The company's decision to operate internationally through third-party distributors is expected to have a marginal impact on operating expenses, contributing to the company's disciplined spending approach while funding growth opportunities. Hyperfine's recent progress in the ACTION PMR study and its plans for the Care PMR study to support Alzheimer's treatment workflow indicate a commitment to enhancing clinical evidence for its technology. With a clear focus on maintaining innovation and commercialization efforts, Hyperfine, Inc. is poised to continue its trajectory of growth in the upcoming year.
InvestingPro Insights
Hyperfine, Inc.'s recent earnings report highlights a trajectory of robust revenue growth and a strategic focus on expanding its innovative technology into new markets. To further understand the company's financial health and future prospects, we can look at some key metrics and insights from InvestingPro.
InvestingPro Data:
- Market Cap (Adjusted): 80.91M USD, reflecting the company's current valuation in the market.
- Revenue Growth (Last twelve months as of Q3 2023): 67.7%, indicating a strong upward trend in sales, which aligns with the reported increases in the recent earnings report.
- Operating Income Margin (Last twelve months as of Q3 2023): -512.95%, suggesting that despite increasing revenues, the company is facing challenges in managing its operating expenses relative to its income.
InvestingPro Tips:
- Hyperfine holds more cash than debt on its balance sheet, which may provide some financial flexibility as the company continues to invest in growth and innovation.
- The company's liquid assets exceed short-term obligations, suggesting a stable short-term financial position to cover immediate liabilities.
These InvestingPro Tips, along with 5 additional tips available on InvestingPro, can offer a deeper insight into Hyperfine's financials and help investors make more informed decisions. For those interested in exploring these further, consider subscribing to InvestingPro using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - HealthCor Catalio Acquisition (HYPR) Q4 2023:
Operator: Thank you for standing by, and welcome to the Hyperfine Fourth Quarter 2023 and Fiscal Year 2023 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] As a reminder, today's program is being recorded. And now, I would like to introduce your host for today's program, Marissa Bych from the Gilmartin Group. Please go ahead.
Marissa Bych: Thank you for joining today's call. Earlier today, Hyperfine, Inc. released financial results for the quarter and year ended December 31, 2023. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of Federal Securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring, training, and adoption, growth in our organization, market opportunities, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filings with the Securities and Exchange Commission. This conference call contains time-sensitive information, and is accurate only as of the live broadcast today, March 21, 2024. Hyperfine, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events, or otherwise. And with that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.
Maria Sainz: Good afternoon, and thank you all for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hale. In the fourth quarter, we achieved revenue of $2.7 million, up 89% compared to the same period last year. For the full-year 2023, we achieved revenue of $11 million, up 62% compared to 2022. I am pleased with the growth we delivered as we continue to lead the development of this new category of ultra-low field grade MRI with our unique portable Swoop system. We drove adoption in our beachhead markets inside the hospital, which are critical care and pediatrics. And we have made significant progress to expand our use cases through clinical evidence and innovation. In the fourth quarter, we sold seven Swoop systems, predominantly U.S. direct sales and once again, recognized a record average selling price. As we have highlighted in previous calls, our deals require alignment with multiple constituents, and can often demand long and variable sales cycle. I am pleased with the deal traction we have seen so far in 2024, many of [which] (ph) started and were cultivated in 2023. We're exiting 2023 with many commercial accomplishments. We have now sold Swoop systems into flagship institutions such as Weill Cornell in New York, Stanford, and Children's Hospital of Philadelphia. Further, our Swoop implementation programs run by our clinical support team are yielding strong user advocates and champions across different departments inside the hospital setting. We now have two pioneers across multiple settings inside the hospital, such as the operating room, critical care unit, neurology clinic, emergency department, and pediatric wards. We entered 2024 with a stable of reference sites and a deeper understanding of how to target and build strong Swoop programs which positions us well for further expansion. Overall, the past year has been transformative to how we managed our business. We have exercised strong spending discipline, and we are doing more with less across our operating [key] (ph) expense lines without compromising investment in our three strategic pillars: innovation, clinical evidence, and commercialization, with the outmost focus on execution and operating team. I'm proud of the execution of the team, the transformation of our financial profile, and the strong foundation we have established for the future of our business. This brings me to our priorities for the year ahead. In 2024, we remain committed to our three pillars, and plan to maintain a robust cadence of innovation to augment clinical evidence, supporting the use of Swoop, especially evidence focused on stroke and in Alzheimer's, and to grow commercially, including through our strategy to expand to select international markets. Before I cover each of these in greater detail, let me highlight the opportunity for our technology in Alzheimer's. One of the greatest catalysts I see for the adoption of our technology is using Swoop in the Alzheimer's treatment workflow. There is a strong potential fit for Swoop to assist in reducing barriers to accessible and equitable Alzheimer's care. As many of you know, there are currently over 50 million people suffering from Alzheimer's disease globally, and the cost and burden to patients and healthcare systems is enormous. 2023 was a breakthrough year for advancements in the fight against Alzheimer's. With the FDA approval and CMS reimbursement of Biogen (NASDAQ:BIIB) Eisai LEQEMBI and Amyloid Targeting Therapy, or ATT, as well as advancements in blood testing for the diagnosis of Alzheimer's and separately milestones related to additional coverage of PET scans to enable Alzheimer's diagnosis. Lilly's Donanemab, another ATT is also expected to be FDA approved later this year. These approvals are opening a new category for therapy, which shows significant promise to delay the progression of the disease, and potentially offer patients and their families' additional years of independent living. The developments have also brought two issues to the forefront. The first one is associated with the FDA labeling for amyloid targeting therapy, which requires at least three monitoring MRI during a patient's initial year on this medication. The monitored MRIs must be conducted at prescribed intervals to screen for amyloid related imaging abnormalities also known as ARIA. As a result of these scanning requirements, the industry is seeing significantly greater demand for brain MRI technology against what is already backlog, burdensome and time consuming imaging workflow that patients experience. This scanning requirement also creates significant care navigation challenges for patients on these drugs who must add imaging to their already complex monitoring and infusion schedule. The second issue is one of access and equity for patients in low resource settings globally. By 2050, it is estimated that over 70% of the people suffering from dementia will live in low and middle income countries. We believe that our portable Swoop system can play a significant role in addressing the pragmatic hurdles to getting treatment to patients in these low resource settings and care for them appropriately. Together, these advancements to address Alzheimer's disease offer an enormous incremental opportunity for brain imaging. Our portable Swoop system is highly differentiated for this use case and the ideal technology for patients taking APP, providing a versatile, convenient and streamlined alternative to conventional MRI. We're positioned to offer a unique solution by placing a portable MRI in an easy location to support patients through their treatment. At a global scale, an affordable and portable brain MRI tool is highly desirable to improve equity in Alzheimer's care and increase access to the latest treatments available in low resource settings. Given the vast and compelling opportunity this represents for Hyperfine, we have mobilized to build a robust and comprehensive Alzheimer's program quickly which is a key focus for us in 2024. Before I discuss the aspects of the program, I want to remind everyone that scanning brains of Alzheimer's patients of any age is already covered under our current FDA labeling. Therefore, we do not need any additional regulatory clearances to access these new business verticals. Our work on Alzheimer's is focused specifically on the opportunity to simplify and streamline the imaging workflow for patients who receive LEQEMBI and soon Donanemab, making portable Swoop brain MR available in a convenient and less burdensome location for patients and care partners. Our Alzheimer's programs has several components, including data generation, market building and optimizing workflow. For the most part, clinicians caring for Alzheimer's patients are not familiar with portable brain MRI as these clinicians have not been within our initial commercial targets. Today, we're most focused on the data generation and clinical evidence element of our program. On that front, we're excited to share that we have initiated a new study called Care PMR. Care PMR is a utility study led by Dr. Benzinger at Washington University School of Medicine in connection with BJC Healthcare. In this study, clinicians have placed Swoop systems at local infusion centers and are comparing high-field MRI and portable ultra-low field MRI to assess the ability of Swoops to detect ARIA complications. By bringing imaging closer to the patient than a conventional MRI system, we hope to significantly optimize workflow and ultimately open up the opportunity for more patients to be treated safely and efficiently. We expect to see a readout of Care PMR data before the end of the year. Alongside our investment in Alzheimer's, we remain committed towards three strategic pillars, which I will provide an update on right now. Starting with innovation in the fourth quarter, we received FDA clearance for our latest AI power software update and launched it in the past few months across our installed base. Systems now have our updated DWI sequence and additional ease-of-use features designed to aid users with patient positioning and faster image upload properties. This is our eighth FDA clearance since our initial system launch in 2020. It includes proprietary AI and deep learning algorithms in the DWI sequence and expands our AI denoising capabilities by incorporating advanced image post-processing into the DWI sequence. The system's other sequences, which are the T1, the T2, and FLAIR, already incorporated this AI feature. Denoising enables a CRISPR image that potentially helps clinicians more accurately diagnosed and make clinical decisions for their patients undergoing brain imaging. As we move forward, we will continuously invest in improving our AI-powered image quality and system usability, leveraging each image-focused software release to further improve the performance of our suit systems. In 2024, we have a strong cadence of technology iterations across hardware and AI-powered software planned to further advance the image quality, the speed of image acquisition, clinical utility, ease of use, and clinical applications of ultra-low-field MRI. I look forward to sharing updates here throughout the year. Turning to clinical evidence, starting with a stroke, we have now enrolled over 100 patients in our ACTION PMR study, a multi-center evaluation to assess the use of the Swoop System in detecting acute skin stroke. We remain bullish about this opportunity, which will open up the placement of Swoop units in ED and heart and stroke networks and look forward to sharing updates in the coming quarters. Additionally, our technology was highlighted in four abstracts at the recent International Stroke Conference in February. The abstract spoke to the depth and breadth of research into the clinical utility and applications of portable ultra-low field brain MR imaging. Now, relevant to the B-TECH use case today inside the hospital, imaging patients in critical care, three studies highlighting ultra-low field imaging data were presented at the RSNA meeting in November. These studies analyze how portable MR brain imaging may assist physicians in the diagnosis and management of neurological conditions in critical care settings. This is in addition to data from the SAFE MRI ECMO study that was presented at the APELSO meeting in Seoul, South Korea, and has now been accepted for publication. These studies further underscore the role of MR-based neuroimaging in acute brain injury detection and the potential for enabling improvement in neurological outcomes. And turning to our final pillar, commercialization. With a more tenured and experienced commercial team in the U.S., our deal pipeline is definitely growing. As I mentioned earlier, our recent Swoop sales include system additions within several flagship U.S. institutions. We're very pleased that we are continuing to build traction with new U.S. institutions. This year, we're also expanding our commercial focus to select international markets. We have strong track record of international clearances, including CE and UKCA approval of our latest AI power software. And we have now begun building up commercial infrastructure and relationships in certain countries where we see immense opportunity. I am very encouraged by the level of interest and activity we're seeing for the Swoop System internationally, and I remain excited about global expansion as a growth opportunity this year and beyond. Before I turn the line over to Brett, I would like to reflect on the strong progress we have made over the past year, and the fact that we have demonstrated our ability to drive meaningful progress on our three strategic pillars while significantly reducing spending. These have translated into strong growth, gross margin improvement, and cash flow reduction. I will now turn the call over to Brett to review our recent performance and discuss our 2024 financial outlook in detail.
Brett Hale: Thank you, Maria. Turning to our financial results for the fourth quarter 2023, revenue for the quarter ended on December 31, 2023, with $2.7 million, up 89% compared to the fourth quarter of 2022. For the full-year 2023, we generated $11.0 million in revenue, up 62% from the prior year. Gross profit for the fourth quarter of 2023 was $1.0 million, compared to $0.3 million in the fourth quarter of 2022. For the full-year, we generated $4.8 million in gross profit, compared to $0.9 million in the prior year 2022. For the full-year, gross margin was 43.1%, up 30 percentage points from the prior year. R&D expenses for the fourth quarter of 2023 were $6.0 million compared to $5.2 million in the fourth quarter of 2022. Sales, general, and administrative expenses for the fourth quarter of 2023 were $4.2 million compared to $5.8 million in the fourth quarter of 2022. For the full-year, R&D expenses were $22.5 million, down from $28.2 million in the prior year, representing a 20% reduction. For the full-year, SG&A expenses were $20.3 million, down from $32.4 million in the prior year, representing a 35% reduction. Net loss for the fourth quarter was $10.7 million, equating to a net loss of $0.15 per share as compared to a net loss of $13.1 million or a net loss of $0.19 per share for the same period of the prior year. For the full-year net loss of $44.3 million is down 39.5% from $73.2 million in the prior year. Our cash burn in the fourth quarter was $10.2 million, and as of December 31, 2023, we have $75.2 million in cash and cash equivalents on our balance sheet. Our full-year cash burn of $42 million is down 40% from $71 million in 2022. Now turning to our financial guidance, beginning with our 2024 revenue outlook, we are initiating guidance for the full-year in the range of $12 million to $15 million. Although we do not typically provide quarterly guidance and do not intend to do so on a regular basis, we want to provide you some visibility into our first quarter performance given where we stand in the quarter. For the first quarter of 2024, we expect revenue to be over $3 million. Looking at growth margins, we are initiating a range of 45% to 50% for the year as we grow, continue our commercial sales traction, and realize strong, smooth system pricing. We are very pleased to be driving healthy gross margins in our business, even at small scale. Lastly, we are initiating total cash burn expectations of approximately $40 million for the full-year 2024. We expect our cash burn to be below our 2023 levels, and we will execute this plan while sustaining investments in our three pillars, including our robust Alzheimer's program. We see a cash runway for the business into early 2026. We are excited about the catalyst for our business in 2024 and we are pleased to have the cash and flexibility and to invest in the right areas for continued Swoop System adoption. At this point, I'd like to turn the call back to Maria for closing comments.
Maria Sainz: Thank you, Brett. I'm proud of the progress the Hyperfine team made in 2023 and I remain very optimistic as to what we see can deliver. I look forward to seeing many of you at upcoming industry as well as investor conferences, providing updates across our three pillars and the Alzheimer's program. Given the immense excitement we have and the potential we see for our system in the use case of Alzheimer's, I would also like to share that we are working to plan an analyst and investor webinar with a spotlight on this topic. We intend to host this webinar mid-year. We look forward to sharing more details with you over the coming months and accepting more of your questions at that time. With that, I want to thank you for your time and we'll open up the line for questions.
Operator: Certainly. One moment for our first question. And our first question comes from the line of Larry Biegelsen from Wells Fargo. Your question please.
Unidentified Analyst: Hi, Maria. Hi, Brett. This is [Simran] (ph) on for Larry. Thanks for taking the questions here. Maybe just starting off with Q4, it's usually the strongest quarter for capital businesses, but you did come in a little bit below at least on the revenue side, the low-end of your guidance range. So, could you talk a little bit more about the trends you saw in Q4, and what led you to deliver at the low-end of the revenue guide? And just following up there, I appreciate the Q1 color, so maybe just talk about some of the trends that you've specifically seen on the systems side in Q1 thus far?
Maria Sainz: Sure. So, I'll start by addressing the Q4 question and then talk a little bit about the early 2024 traction. We do not fall exactly under the traditional capital budget, where you do see a little bit of that bolus at the end of the year. More often than not, given our price point in that $400,000 range for MSRP, we are funded through strategic funds, donor funds, or some other mechanism that has more variability throughout the year, but also more availability throughout the year. I still believe that we have to continue to work towards higher predictability and less variability in our deal flow. So, I'm very confident in telling you that we do not lose deals, that we end up with a very strong and predictable process to what we call the clinical yes from the initial pitch, but we do go into a relatively variable phase still in the administrative section of deals all the way to closing, which sometimes goes into quiet mode for a bit and coming back up. So, it was more around the variability on deal closure that hurt us a little bit, and coming a little shy on Q4, and that is why we were also stating here in our prepared remarks that some of those deals have taken a little longer, but now have come to fruition, and that's why we were confident in providing more color than we usually do, and that you should expect going forward around where we're tracking in the Q1 time frame.
Unidentified Analyst: Understood. That's very helpful. And then, maybe just looking at the 2024 guidance, $12 million to $15 million, I think the Street was modeling around $18 million adding into the print. So, maybe help us to bridge the gap there. Can you just walk through key puts and takes to consider, what gets you to the low-end versus the high-end of the guide? And Brett, it appears that you should continue to see OpEx growth step down nicely to get to that burn rate in 2024. So, is that the right way to think about it?
Maria Sainz: Okay. So, maybe I'll lead and turn it over to Brett. I like to think ourselves a little bit as a hybrid stage company with one half of our activity around what I would call, the early commercial stage kind of company, but the other half of our activity being more of a late-stage field developmental company. There's only 130 of us. So, we're trying to be balanced in how we're allocating our bandwidth to continue to make steady progress on our today's business. But definitely invest in what we believe are incredibly compelling and very large, near-term, not very future, but near-term new opportunities, Alzheimer's and stroke being two really big ones. So, when I think about our priorities, there is a steady progress on adoption and commercialization, which continues to drive very healthy growth, but that's not the only thing on our board to do. We are heavily investing in R&D and clinical evidence, and we are also investing in programs really to flush out these brand-new opportunities, which are likely going to take us into customer targets, sites of service, potentially business models that might be different and incremental for where we are today. So, I'd rather be balanced and moderate in our expectations, so that we can keep doing all of the above, which I think is the right way of thinking about the kind of business we want to build.
Brett Hale: Yes, on the question regarding cash burn, as commented in the earlier remarks, we are giving guidance of approximately $40 million, which is down from 2023. We continue to be very laser focused in our spending discipline. In terms of the mechanics of getting to that number, as I highlighted, we have a margin guidance of 45 to 50, so an improvement from where we have been in 2023 and we'll be continued to be very laser disciplined in our spending, but continue to fund the innovation and growth opportunities that we see going forward.
Unidentified Analyst: Got it. That's very helpful. And sorry, last question for me. But I know you're not giving placement guidance, but any color on device versus service split in that $12 million to $15 million?
Brett Hale: Yes, we don't provide specific guidance, but I think you have seen perhaps in the postings of our service revenue, you can think about that as kind of a steady and predictable and kind of consistently increasing over time line item in our P&L. So, I think you can think about that in 2024 very similar to the probably the trend rate you've seen in prior quarters.
Unidentified Analyst: Got it. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Yuan Zhi from B. Riley. Your question, please.
Yuan Zhi: Thank you for taking our questions. I think some of those have been addressed, but maybe we can talk about the cash flow. So, the cash flow from operation was negative $42 million in 2023 and then the current 2024 guidance of cash burn is about $40 million while we have increased revenue and potentially lower cost. Brett, can you help us reconcile this? I understand you have completed the reorganization in early 2023.
Brett Hale: Yes, thank you Yuan for the question. So, you're correct. Our guidance is increased revenue from '23 to '24. And as I highlighted in the previous question, we're improving margin from we posted 43% gross margin in 2023 and our guidance is 45% to 50% for 2024. And then, we will have continued investments in the growth drivers, but we'll be keeping our spending very laser focused and really tied to our growth initiatives. So, we feel comfortable with the approximately 40% or excuse me or $40 million of net cash burn for the year.
Yuan Zhi: Got it. I'm also curious about the visibility in 2024, given the performance in 4Q of 2023. Maybe another way to ask about this question is regarding the 2024 guidance, how confident are you guys to convert the current lease into revenue in 2024? Any pushback you are hearing from the customer right now?
Maria Sainz: Thank you, Yuan. I feel confident in the guidance we have provided. We are executing 2023 with important accomplishments that feed my confidence. They are our ability to really land deals in flagship institutions and then translate those into very powerful initial successes with their use of our device in patients that otherwise would have had a very different prognosis or outcome or time frame. Some of those have actually been public from the likes of the Weill Cornell accounts that we implemented just a few weeks ago. So, I feel really good about the kind of names that are now potentially reference sites for other sites to follow. I feel very confident in the way our customer success team is implementing programs. I'm also incredibly enthusiastic by this international expansion that we have mentioned, which is not a peanut butter approach. We are definitely selecting markets to really put in incremental effort to draw commercial success from them. We're bringing the product that we're commercializing today in the U.S. and we have a lot of inbound interest from clinicians that I think are going to contribute to the revenue profile for 2024, and that actually allowed me to feel that, that guidance is reasonable, even where we're tracking on U.S. plus the select international opportunities.
Yuan Zhi: Got it. Maybe on the last point, a follow-up question there, how are you guys standing on the direct-to-consumer approach versus distributor approach in the international footprint, considering the need to preserve the cash and invest on where it matters the most?
Maria Sainz: Excellent question. Thank you, Yuan. I would consider our international expansion to be a light investment as we are primarily going to operate international through third-party distributors. We are very fortunate that we have been in the background working to give ourselves the international optionality as we have made a lot of progress on regulatory clearances with the CE mark under NDR, not the old NDD, and the UKCA certification, which is now of course, required after Brexit. So, that gives us a bit of a readiness point in CE and UK geographies. But again we will operate through third-party distributors. You will see that affects our OpEx very marginally. However, as we go forward, we've been very proud of sort of record ASPs. We're going to be posting more of a blended ASP, where the distributor pricing is, of course, going to be a different price point than direct to the customer sales that we do in the U.S. with the two sort of pricing increases that we've had over the last couple of years.
Brett Hale: Yes, I would add to the other point is that going back to the, I guess, confidence in the guidance. So, our international expansion is included in our guidance. So, I think that's kind of further gives us confidence in the range that we provided here at the beginning of the year.
Yuan Zhi: Got it. Thanks for the additional help and color.
Maria Sainz: Thank you.
Operator: Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Maria Sainz for any further remarks.
Maria Sainz: Thank you, Operator. Thank you, everyone, for listening into our call today. I've remained incredibly optimistic about what we're building and the future of our business. I look forward to providing additional reports and updates to all of you in the coming weeks.
Operator: Thank you, ladies, and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.