Thank you for standing by. This is the conference operator. Welcome to the Cutera, Inc. Fourth Quarter 2023 Results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star, then zero. I will now turn the call over to Greg Barker, Vice President of Finance and Investor Relations. Please go ahead. Thank you, operator, and thank you, everyone, for joining us. With me today is Taylor Harris, Cutera's Chief Executive Officer, and Stuart Drummond, Interim CFO. Following our prepared remarks, we'll take your questions. Before we get started, I'll note that the discussion today includes forward-looking statements. These forward-looking statements reflect management's current forecast or expectation of certain aspects of the company's future business, including, but not limited to, any financial guidance provided for modeling purposes. Forward-looking statements are based on information available to us at the time those statements are made, which, by its nature, is dynamic and subject to change, or management's good faith beliefs as of that time with respect to future events. Forward-looking statements include, among others, statements regarding financial guidance, regulatory approvals, productivity improvements, and plans to introduce new products and expand into additional geographies. For words that may identify forward-looking statements, we encourage you to refer to the safe harbor statement in our press release earlier today. All forward-looking statements are subject to risks and uncertainties, including those risk factors described in the section entitled Risk Factors in our Form 10-K as filed with the Securities and Exchange Commission, and updated in our Form 10-Q, subsequently filed. Cutera also cautions you not to place undue reliance on forward-looking statements which speak only as of the date they are made. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances, or to reflect occurrence of unanticipated events. Future results may differ materially from management's current expectations. In addition, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Cutera's ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the reconciliation from GAAP to non-GAAP measures in our earnings release. These non-GAAP financial measures should be considered along with, but not as an alternative to, the operating performance measures prescribed by GAAP. With that, it is my pleasure to turn the call over to our CEO, Taylor Harris. Thank you, Greg. Good afternoon and welcome to Cutera's Fourth Quarter 2023 earnings call. I'll provide some summary comments regarding our fourth quarter financial results and then highlight our areas of focus and excitement for 2024. But first, I want to thank the whole team at Cutera, who have been performing so admirably amidst a challenging set of circumstances. Because of our team's focus and dedication, we finished 2023 with fourth quarter results that were better than we had anticipated, both for revenue and cash burn. We've also been working hard to resolve a number of time-consuming projects, including the transition of our distributed skincare line in Japan, as well as bringing our manufacturing AviClear and excel V+ back in-house, so that we can now turn our attention more fully to the future. On that note, over the past few months, we have introduced a new corporate brand, tagline, vision, mission statement, and set of core values. Our mission is to improve lives through medical aesthetic technologies that are driven by science and powered through partnership. This mission both unites us as a team and it energizes us because of the ability we have, by supporting our customers, to see the life-changing impact that our technologies and service can have on people on a daily basis. What a gift that is! We've also redefined our core values, which you can remember through an acronym that is well suited for Cutera. PICO: Passion, Innovation, Communication, and Ownership. Teams from across Cutera will be involved with each of these values to keep them visible and thriving. You can start to see how we at Cutera are bringing a new energy to aesthetics. In the fourth quarter, we saw more of a stabilization in our business than we had anticipated as part of our guidance. Our international business, in fact, improved sequentially from Q3 to Q4, while our North American business experienced a sequential decline, albeit more modest than we had expected. AviClear revenue was stable from Q3 to Q4, with some capital revenue from the limited commercial release of our enhanced product offering offsetting a continued decline in treatment revenue. The primary reason for this procedural softness has been a decrease in the number of contributing systems, which were less than 50% of the installed base during the fourth quarter. As we've mentioned, there are a number of accounts at which AviClear likely won't remain, and we've seen many of these accounts go dormant. However, and of critical importance, we're also identifying the success factors for building a healthy AviClear franchise. On average, utilization rates at dermatology practices are approximately 50% higher than other specialties, and a disproportionate percentage of our most successful accounts are dermatologists. Beyond practice type, though, key determinants for success are having a physician on-site at the practice, having the entire office staff trained on AviClear, and on how to select patients, communicate with them, and set expectations, as well as having acne patient flow and a willingness to invest in building awareness. All of these best practices, coupled with our new business model, are at the center of our efforts in 2024, which I'll speak to later. Another key item from our Q4 results that I would like to address is Gross Margin. Throughout 2023, our Gross Margin was suppressed due to reduced volume, the array of company-specific operational issues that we've highlighted previously, and a high level of inventory reserves. In the fourth quarter alone, we took approximately $8 million of excess and obsolete inventory reserves. Note that we are not scrapping this inventory and will attempt to utilize it over time, but the appropriate accounting treatment is to put reserves in place, given the excess position we have, particularly of AviClear. Adjusting for these reserves, as well as our other Non-GAAP items, our normalized gross margin was around 37% in Q4. A comparable normalized measure in Q3 would have been approximately 30%. These are well below historical levels, and we are squarely focused on efficiency initiatives that should improve our cost position and gross margin profile over time, beginning in 2024. Turning to 2024, our team is excited about this new year. We remain focused on the same three critical priorities that we've discussed on our previous quarterly calls: returning to operational excellence, building a global AviClear franchise, and driving toward long-term profitability. We are making strides in each of these areas. First, operational excellence. Our Chief Operating Officer, Jeff Jones, and his team, in just a few months, have made progress in the five key areas that we identified last year: product reliability, field service, inventory control, supply demand planning, and cost of operations. We are on track to remediate the most critical elements of these issues by the middle of 2024, with ongoing improvement opportunities beyond that point, particularly in the area of cost control. Product reliability performance improved in Q4, and we have a dedicated team in place that is methodically identifying further opportunities so that we expect a continuation of the favorable trend that we saw late last year. In the area of field service, we saw dramatic improvement in our North American service levels in the back half of last year, wiping away most of the backlog of open cases and reducing response times for new service calls. For 2024, the field service team is focused on elevating response time performance to levels above industry standard, as well as rolling out best practices across our international regions, so that we achieve the same level of service quality across the globe. This team has started to attract great engineers from across the industry when roles open, showing the power of a culture of ongoing improvement and the momentum that can build quickly. This bodes well for our plan for Cutera to be recognized as industry-leading, both in technology and through our service and support. In terms of inventory management, where we experienced significant challenges last year, we ended on a high note with our year-end physical inventory count proceeding much faster than at year-end 2022, and with no count-related issues identified in the audit. We've assembled a materials control team, which has implemented daily reviews to ensure that inventory movements are being transacted appropriately. We've also opened our own warehouse, which allows us to consolidate more expensive third-party warehouses with better control, while also providing room for the significant amount of AviClear and excel V+ inventory that we will be bringing in from Jabil. On the planning front, we've introduced a new process in Q4 to better match supply and demand. As a reminder, we've had too much inventory in certain areas, most notably AviClear, and too little in other areas. We are still building inventory in the first half of the year due to purchase commitments and the need to remediate shortages of certain key components. But after that, we should begin working down inventory, creating a cash tailwind for the company. On the cost front, we've implemented key processes for repairing and reusing components, as well as checking the quality of purchased materials and rejecting those that aren't usable. We've also reviewed vendors for certain key components in an effort to reduce scrap rates, and we're now producing all AviClear and excel V+ in-house, thereby better leveraging our fixed overhead expense, while at the same time improving quality. The operations team has also implemented new controls and processes around shipping, which has already begun to reduce freight expense. Our second key priority is growing the AviClear franchise. In international markets, we commenced a limited commercial release phase at the IMCAS meeting in February, and we have had highly favorable feedback from the first wave of new AviClear customers. In North America, during the first quarter, we broadened the availability of our enhanced AviClear offering, which provides greater flexibility and simplicity.... The new business model offers the option to purchase the device upfront, with a corresponding reduction in ongoing treatment costs to the practitioner. Along with greater business model flexibility, we are offering a hardware and software upgrade that simplifies the user experience, improves product reliability, and moves billing from a per-patient model to paying for individual treatment cycles. Our primary focus with AviClear in all geographies is on partnering with our customers to build franchises with healthy utilization. We believe a few challenges limited utilization in 2023, each of which we plan to address this year. On the service front, we've already made significant progress, and we have hardware and software updates that address the majority of issues that customers have seen since launch. On the clinical front, we have strengthened our clinical protocols through a consensus white paper from leading dermatologists. This was recently published in the Dermatology Digest and serves as a basis for ongoing practice training. We've also brought on board a new medical liaison to help respond to customer questions and make connections to AviClear KOL Centers of Excellence if needed. Last, perhaps most important, we are currently finalizing our plans for Cutera Academy, a two-day university-style training program that will launch at the end of April. In addition to providing clinical education, Cutera Academy is an important component of our overall effort to help customers build and grow their AviClear practices. To this same end, we've also introduced an enhanced cooperative marketing program, which provides rising levels of rewards benefits, including matching funds for co-branded marketing programs to customers who purchase Cutera consumables. Customers can use these funds through a simple white glove service provider on digital marketing tactics that are proven the most effective at driving patient conversion. From a financial return perspective, our new business model allows customers to achieve an even higher return on their investment as utilization grows. With our new programmatic support options, coupled with our key account manager team, we're providing the tools to help achieve this growth. Lastly, on AviClear, as the pioneer of this technology, we are committed to ongoing clinical research, not only within the field of acne, but also in potential expanded indications. During 2024, in partnership with leading researchers, we plan to conduct pilot studies on the use of AviClear in both sebaceous hyperplasia and hidradenitis suppurativa, both of which are conditions associated with the sebaceous gland. These are areas of unmet clinical need, affecting meaningful numbers of individuals, and there's clear interest within the dermatology community in a novel treatment approach like AviClear. During the second quarter, we will host an investor webinar to reintroduce AviClear from its scientific foundation to its clinical data profile in the treatment of acne and to its potential extensibility into these new indications of use. We'll send a save the date in the weeks to come. Our third and final priority is the drive toward profitability. Everything we've covered regarding operational excellence and growth of the AviClear franchise should contribute meaningfully to our path to profitability. In addition, though, we need to manage our cost structure in a disciplined fashion, while also making prudent investments to drive growth. On the cost structure front, we have now almost completed the global restructuring program that we initiated in Q4 2023, which has reduced headcount by close to 25%. This reduction should lead to personnel-related savings of over $20 million on an annualized basis. Partially offsetting these savings, though, will be an increased level of incentive compensation in 2024, assuming that we hit our corporate targets, as well as some select new investments. We do, for example, plan to increase the footprint of our North American field organization with both capital reps and key account managers. We also continue to invest in new product development, and we plan to launch a refreshed product platform later this year. All of this contributes to our excitement regarding 2024 and beyond. Every team in the company has a critical role to play in achieving these objectives, and together, we're going to make it happen. I'll now turn it over to Stuart to provide more detail on Q4 and our guidance for 2024. Thank you, Taylor. This afternoon, I will discuss our Q4 GAAP results as well as some non-GAAP results. Our reconciliation of GAAP to non-GAAP gross margin and operating loss is included in our earnings release. Total revenue for the fourth quarter was $49.5 million, compared to $67.4 million for the same period in 2022, and compared to $46.5 million in Q3 of 2023. Our Q4 revenue compared favorably to Q3 2023, increasing by $3.1 million, mainly due to strong capital equipment sales in our international markets, as well as strength in skincare. The $17.8 million, or 26% decrease from the fourth quarter of 2022, was due mainly to a $14 million dollar decline in capital equipment revenue. This decrease in capital equipment revenue resulted from continued macroeconomic pressures and a challenging financing environment, particularly for our North American customers. AviClear revenue for the fourth quarter of 2023 was $3.9 million. In our 10-Q for the September quarter, we announced that we were no longer considering AviClear as a separate reporting segment, following our AviClear business model change and corporate restructuring. Accordingly, we've included AviClear lease fees and direct sales as part of systems revenue, and AviClear treatment revenue is reported in consumables revenue. Comparative periods have been adjusted accordingly. Non-GAAP gross profit for the fourth quarter of 2023 was $9.9 million, with a gross margin rate of 20%, compared to a gross margin rate of 59.4% for the fourth quarter of 2022. The primary driver of this 39 percentage point decrease is a 19 percentage point impact from the increase in our reserve for excessive inventory, reflecting the decline in our capital equipment sales forecasts and a provision for AviClear materials and finished goods. Other contributors to this gross margin decrease include an approximate 10 percentage point impact from lower manufacturing and sales volume, as well as inventory variances identified through our annual physical count and write-offs of demo equipment and skincare product. Non-GAAP operating expenses for the third quarter of 2023 were $36 million, compared to $39.7 million for the same period last year. This $3.7 million decrease mainly reflects personnel savings resulting from the restructuring we announced in November 2023, as well as lower sales commissions. For the fourth quarter of 2023, we incurred a non-GAAP operating loss of $26.1 million, compared to an operating income of $0.2 million in the prior year period, and a loss of $28.7 million in the third quarter of 2023. Turning to our balance sheet, we ended the quarter with $143.6 million of cash and cash equivalents, compared to $179.5 million at September 30, 2023. This $36 million quarterly sequential decrease was primarily driven by a net loss, after adding back non-cash items of $28 million and other working capital changes. In our 10-Q for the September quarter, filed on March 6 of this year, we disclosed that a change in our AviClear strategy from a lease model to a direct sales model would result in the reclassification from property, plant, and equipment to inventories of all AviClear devices that had not been leased, as well as AviClear parts. Accordingly, the AviClear inventory materials, net of reserves, has been recorded as long-term inventories at December 31, 2023. Before we open the call for questions, I would like to provide you with our outlook for 2024. We are issuing revenue guidance of $160 million-$170 million, including $4 million of skincare revenue earned through the transition in the first quarter. We expect to continue to consume cash more heavily weighted towards the first half of 2024 as we close out certain supply chain obligations, primarily related to AviClear. Our expected cash and cash equivalents balance at December 31, 2024, is in the range of $55 million-$60 million. Operator, we are now ready to begin the question and answer session. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Our first question comes from George Sellers of Stephens. Please go ahead. Hey, good afternoon, and thanks for taking the question. Maybe just to start on guidance, could you just parse out what that revenue guidance assumes from systems, consumables, and then also AviClear contribution throughout the year? Thank you. Sure. Hey, George, good to hear from you. So just a couple thoughts on our revenue guidance. As we looked at 2024, we were assuming that we have a similar macroeconomic backdrop as what we faced in the second half, and particularly the fourth quarter of last year. And as you saw in our results in the second half of last year, we did have more of, more pressure on the capital equipment portion of our business than in other parts. And so we've assumed that where we were exiting 2023 is where things pick up in 2024 on capital. For a couple specifics, for skincare, we're assuming $4 million of revenue. That's what's embedded in our range, and that's what we recorded in the months of January and February, and we've now transitioned that business so there's no more skincare revenue. In aggregate, we would have our systems and our consumables slightly down year-over-year on a full year basis from 2023 to 2024, and that's because we have tough comps in the first half of the year. We are assuming, as we move through the year, that we perform better and that as we disseminate more best practices with AviClear and training, that we're gonna start to see a pickup sequentially in our AviClear business. Okay, that's really helpful. I appreciate that color. And then maybe on the cash burn piece of it, you mentioned a few puts and takes with inventory building in the first half of the year, but there's also some cost saves. How should we think about just the cadence and the progression of cash burn? Is there sort of a step function improvement we should expect in the second half of this year? Or how should we be thinking about that cash position specifically? Yeah, you're, you're absolutely right, George. So of the burn that we're anticipating in 2024, about 70% of it should be incurred in the first half of the year, and that'll be more heavily weighted toward the first quarter. And the reason for that, as we've talked about in the back half of last year, is we still had purchase commitments related to inventory, particularly with AviClear, and we, we've gotten a fair amount of that behind us with by wrapping up our agreement with Jabil. So in the first quarter, a lot of that is occurring. In fact, Q1 burn will probably be a little higher than we had in, in Q4. These are working capital movements, and we'll still have some of that in the second quarter, but by the second half of the year, we should be in a much more favorable position with respect to our burn profile. And in fact, we should have inventory at a level that we're able to start working it down and having that become a source of cash for us, offsetting some of the other elements of burn. Okay, great. That's really helpful. Thank you all for the time. Our next question comes from John Block of Stifel. Please go ahead. Hey, guys, this is Joe Federico on for John. Thanks, thanks for taking the questions. I guess just to start maybe on AviClear, revenue stable sequentially, but it included that lower procedural revenue. I was just curious maybe what the thought was for the recurring revenue aspect to kind of turn the corner. Are some of those unproductive accounts that you mentioned that are already dormant, is there more to come? And then I also just wanted to ask if there were any learnings maybe from the early international launch of AviClear so far. Sure. Thanks, Joe. So yeah, let's start with AviClear procedures. You're, you're absolutely right that the primary factor affecting our procedure base with AviClear has just been that we went through a large number of accounts early in the launch. It was well over 1,200, and many of those, they may have tried AviClear, but have decided that it's probably not gonna be a, an ongoing part of their their practice, or they're still evaluating. So by the fourth quarter, we had approximately 55% of the account base that, that did not do a procedure. So that's what caused the procedure slowdown as we moved from the initial launch phase into the second half of last year, Q3 and Q4. So what we're doing right now, we're in a period as we're going back out to market and having conversations with these accounts who have AviClear, of really helping diagnose, well, what some of the learnings and what some of the challenges are. And I think the good news is that we're not hearing anything that's surprising to us. And in fact, we hear from a lot of accounts that they wanna be in the business of treating acne, and they wanna make AviClear work, but they need our help in that. So that's exactly what we're doing. And a lot of what I talked about in my prepared remarks is what are our initiatives that we're kicking off here? We've already kicked much of it off in Q1, some to come in Q2. What are we doing to help support growth of utilization across the AviClear account base? So I think there are a number of accounts who are taking some time to try to make that work, and that's the good news. But it will take some time for us to work with the account base to help identify the ones that are going to commit to AviClear and then start rebuilding that procedure base. International learnings are that it's great to start a launch in markets in a disciplined, methodical way, and that's exactly what we're doing internationally. So we're now in approximately 10 markets outside of the US or outside of North America, and we are in most of these markets, one, maybe two KOL centers, and there's been a lot of enthusiasm for the technology. There are other offices, other practices who have absolutely expressed interest in becoming an AviClear site, but we're taking our time, and we're making sure we support this initial wave of customers so that they can get great outcomes and they can become champions for the product. So I think the learnings internationally are that so far, and it is early, it's just showing us that when we do it right and partner with great AviClear accounts, we can build successful AviClear practices. Okay, great. That's, that's really helpful. And then maybe just a quick follow-up. I know you had mentioned the expanded indications for AviClear. I wanted to ask maybe about just new products in the core business. Are there any introductions planned for this year? I think, you know, a while back, we had heard about maybe some existing system refreshers. Could, could we see that this year, or is that more of a 2025 event? Thank you. Sure. Yes, we are planning on a new product introduction. It is a refresh of one of our successful product lines, and so we're excited about that. We're not ready to talk specifics, but we are currently on track around and maybe even before the midyear timeframe, to bring that to market. So that'll be first, and our product development team is working on other initiatives in the background, but those are not 2024 events. Okay, great. Thank you. Our next question comes from Margaret Kaczor of William Blair. Please go ahead. Hey, guys. Good afternoon. Thanks for taking the questions. I wanted to maybe start with the cash burn and cash position at year-end. You know, and I'm just trying to do the math on my end, and even if I assume kinda 30% of the burn is in the second half of 2024, I think it still gets me maybe to kind of the $26 million burn in the second half. So, you know, I annualize that, I'm at $52 million, you know, I push that into 2025, and, you know, there still seems like there's a bit of a cash dynamic there. So how do we think about that? And, you know, as we think about 2025 inventory being maybe a tailwind and a cash generator, you know, could that be $10 + million? You know, just give me some sense of how 25 should look like as well. Thank you. Sure. Thanks, Margaret. So, yeah, we're obviously not ready to give specific 2025 guidance, but you're in the ballpark as we get into the second half of 2024, and that's obviously a much favorable position from a cash burn perspective to what we experienced in 2023 and to where we'll be in the first half of 2024. And then, as you think about launching off point into 2025 and beyond, what we're working on is building an AviClear franchise that would have a higher margin consumable stream associated with it. And so to the extent that we're successful with our initiatives as we build momentum through 2024, that should help us as we go into 2025. And I'd say similarly, on the Gross Margin front, that's an area of high focus for us. We're planning on improvements in 2024, but we still won't be back to levels that the company had achieved in previous years. And so we're not stopping with where we're gonna be in 2024, even in the second half of 2024. And then the last comment I would make in terms of trajectory, we're obviously not assuming any improvement in the macro backdrop here in 2024. We're hopeful on that front, but we're not gonna plan for it. But you know, the further into the future that we get, we would assume that conditions can start to normalize, and we can have a more favorable environment. That's, of course, speculative. Like I said, it's not built into the way we're planning for this year. So those are just a few thoughts on that kinda give us optimism in the overall trajectory. Okay, perfect. I appreciate that. And then, you know, I guess a different way of looking at guidance, and, you know, those seem like the guidance is achievable based on, you know, historical sequential progressions and so on, off of the depressed numbers out of the second half of 2023. But maybe a different way of looking at it is also kind of looking at estimated rep productivity. So, you know, we don't have those numbers, but we know there was a reduction in force from a rep perspective last year. You know, what are you seeing, you know, in terms of reps since then and productivity metrics since then? If you can, you know, just give us some context for what's baked in, excuse me, for 2024 guidance on rep productivity versus either last year or, you know, whatever you'd like to look at. Thank you. So we, we have seen relatively consistent over time rep productivity, and that -- I would make that comment for last year. Now, we obviously had we did do a reduction in force because we were seeing that it was just a more challenging environment. So I think if we had kept the same number of reps, we would not have seen the same level of rep productivity. So we've tried to right-size the organization based on the conditions on the ground. As we've looked at 2024, though, we, we're entering the year with. Or we're currently here in the first quarter in the low 40s in terms of our capital field organization, and we're in the mid- to upper teens in terms of our CAM organization. And we do have plans to increase those numbers, that field team force, both on the capital and the CAM front. So our budget and guidance do assume that we're adding reps. We've factored in the operating expense associated with that, so we've got room to add 15 or more reps on the capital equipment front, and we're planning on getting to about 25 in our CAM organization. And so that's part of the guidance, and it is also part of the reason that we would expect sequentially to be stronger as we get to the back half of the year relative to the first half of the year. And that also gives us confidence in what we were talking about previously, to your question, Margaret, about trajectory as we're heading out of 2024. Then the last comment I'd say is, especially on the CAM front, we think that number getting into the mid-20s based on where we're at right now or where we expect our AviClear installed base to be this year, we think that's a good coverage level that's gonna allow us to support well the AviClear customers who commit to growing their overall utilization. Okay, perfect. Really appreciate it, Taylor. Thanks, guys. Sure. Our next question comes from Anthony Vendetti of Maxim Group. Please go ahead. Thanks. Yeah, so I was just wondering, Taylor, if you could just talk about the transition from from Jabil over to your in-house. How long is that gonna take to transition? Are you set up, to you know, start manufacturing, excel V and AviClear, or is that gonna be a couple month process or so? Thanks, Anthony. Yes, so good news is we have already made that transition from a manufacturing perspective. In fact, we never fully shut down our capability with those product lines, so we were, although the plan had been to fully transition, but we retained capability, and we've been able to ramp that back up. So the main transition now is simply going to be bringing back the inventory that Jabil had purchased. So we had to purchase that, and then we're gonna restock our warehouses. That's gonna be a, it's a big project for our distribution organization, but from a production line perspective, we're in good shape already. Okay. And then, just looking at international sales, obviously it's always been, you know, a big portion, mostly in most cases, a majority of your revenues. Is it going to be, as you move into 2024, as far as you can tell, about 55% or so of your revenue? And if it's gonna change, you know, how come? Or how do you look at it for 2024? So for 2024, the big change is that our skincare business, which was Japan exclusively, is now gone. That was a distributed, lower margin distributed product line, and so we will only have $4 million of skincare revenue this year, compared to something in the mid-30s in 2023. So that will bring down the percent contribution from international. And then otherwise, we have similar dynamics in North America and international in terms of the market backdrop. We are launching AviClear for the first time in international, and so that's creating some new enthusiasm, which is great for the organization. But I think if you adjust for the skincare, you'll get to the right ballpark. Okay. And then just in terms of internationally, direct and indirect or direct and distributors, any change for that in 2024? No, we're in a similar position in 2024. We have direct businesses in some of the major markets in Europe as well as in Japan and Australia, and in other areas we're working through distributors. And so by and large, that's the same as we transition from 2023 to 2024. Okay, great. Thanks so much. I'll hop back in the queue. Appreciate it. Thanks, Anthony. Our next question comes from Matthew O'Brien of Piper Sandler. Please go ahead. Hi, this is Samantha on for Matt. Thank you for taking our question. I guess to start off with, with AviClear, could you talk to us about, I guess, the progress that's happened. How many of these systems, particularly, I guess, the dormant ones, have made it back from the field? And, I guess, yeah, just more details on that. Hi, Samantha. Yeah, sure, happy to address that. So at year-end, we had an installed base of about 1,200 machines, 1,200 machines. We've been out and having conversations with our installed base about AviClear. It's been great to be out and having conversations with our installed base about AviClear. And as I referenced earlier, what's been interesting is that there are a lot of accounts that want to make AviClear work. And so even though we've had a significant number who didn't do a procedure in the fourth quarter or in the third quarter, there have only been 125 so far that have been returned. Now, we do have a list of another 175 that will be returned, so that's 300 total out of the 1,200. Others, even if they hadn't done a procedure or were very low volume, we think that many of them likely will end up returning, but some of them are taking a wait-and-see approach. And so, that's the nature of the conversations. I think that plays well for us, because we're ramping up our support initiatives for our customers through Q1 and Q2. Now, on the other hand, we've rolled out a new business model, and that involves a capital purchase of the machine. And I think people are also taking their time to assess, well, are they ready to purchase? Do they wanna purchase, or are they comfortable with the lease model, or do they wanna return the machine? So it's gonna take a few quarters for this to play out, but the key, it really all comes back to, can we, alongside our customers, identify the pathway for them to integrate AviClear successfully and make it a solid part of their business? And so, that's exactly what we're focused on here in the first half of the year, and we're feeling good about the conversations as well as our plans. I think our plans are on target with what we're hearing, the expressed need from the customer base. That's great. Thank you so much. I guess just one more follow-up. I know this year doesn't expect any improvement in the macro environment, and I guess, given that, what are you hearing from physicians on whether they do like the purchase model versus the rental model for those centers that already have AviClear? Well, I think that in general, accounts are more familiar with the purchase model, and for sure, over time, if they are able to ramp utilization, then it makes a lot of sense for them, and they get that. There are some, this is not a universal sentiment. There are some who think that actually, the rental model was innovative, and maybe that works for them. So this is. It's not all or nothing, but I'd say the majority would express a preference for the purchase model. However, the big question for them, especially for the ones who have been very low utilizers, is, "Hey, what's it gonna take for me to make this a real part of my overall practice?" And so that's why, while the business model, I'd say, is important and it's a necessary part of long-term success, it's most important right now that we're working hand-in-hand with the customers to help them figure out how to integrate AviClear and grow utilization. So that's what we're focused on primarily. Got it. Thank you so much. Our next question comes from Jennie Tsai of Gabelli Funds. Please go ahead. Hi. Thanks for taking my question. What are your thoughts or plans to address the maturities on the converts that are coming up in 2026 and beyond? Hey, Jenny, good to hear from you. So, yes, we just to speak up for a few minutes about our convertible debt, we have three tranches of convertible debt. The first one is about two years away, that's March of 2026, and then the others are 2028 and 2029. And the 2026 is the smallest. It's about $70 million of face value. So we don't have specific plans right now. We're, you know, we're focused primarily on running the business and all the priorities I talked about on the call. But we do want to address our capital structure, and we believe that we'll have options to do that. And so, yeah, I think that's something that we will be working on, especially after we get all these important AviClear initiatives well underway. Great. Thanks for the update. Thanks, Jenny. This concludes the question and answer session. I would like to turn the conference back over to Taylor Harris for closing remarks. Great. Thank you. In closing, I'll just reiterate our excitement for our mission, and for the opportunity that we have to deliver on these priorities, operational excellence, building a global franchise with AviClear, and bringing new energy to aesthetics. So thanks to the Cutera team for your passion and dedication, and thanks, everybody, for joining us today. Have a great evening. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.