Thank you operator. Good morning everyone, and welcome to Embecta's Fiscal First Quarter 2023 Earnings Conference Call. The press release and slides to accompany today's call and webcast replay details are available on the investor relations section of the company's website at www.Embecta.com. With me today are Dev Kurdikar, Embecta's Chief Executive Officer, and Jake Elguicze, our Chief Financial Officer. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties. Actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, which can be accessed on our website. We will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in our press release and conference call presentation. Starting on Slide three our agenda for today's call is as follows. Dev will begin by providing an overview of Embecta, our strategic priorities for 2023, and some remarks on the overall performance of our business during the first quarter. Jake will then provide a more in-depth review of first quarter financial results, as well as our updated financial guidance for the year. We will then open the call for questions. With that said, I would now like to turn over the call to our CEO, Dev Kurdikar. Dev? Good morning, everyone, and thank you for joining us today. A life with diabetes doesn't have to come with limitations. At Embecta, our mission is to develop and provide solutions that make life better for people living with diabetes. At every stage of the diabetes care journey, we are there by a person's side because we believe that no one should have to live with diabetes alone. We are driven by a sense of urgency to advance what's next in diabetes. For nearly 100 years, we've been accelerating the journey to better diabetes care. Whether you're newly diagnosed or transitioning to a new line of therapy, we are working to make a person's everyday experience as comfortable and convenient as possible while also advancing a new generation of solutions. During 2023, our strategic priorities are centered around three pillars as shown on Slide five. First, we will focus on continuing to strengthen our base business while maintaining our global leadership position in the category of insulin injection devices. Examples of this are our inclusion on the Express Scripts National Preferred Formulary, as well as recent pen needle and insulin syringe contract wins from the U.S. Department of Veterans Affairs. Second, as a recently spun off new public company, 2023 is a critical year for Embecta to stand up our own systems, processes and procedures so that we can achieve a timely separation from BD. During the first quarter, we continued to make progress in this area, as evidenced by the exit of several transition service agreements. Finally, we also have our eye on the future, and we intend to continue investing in R&D, most notably around a patch pump that is being developed for the Type 2 market. We are continuing to evaluate suitable M&A and partnership opportunities to add market-appropriate products to our portfolio. We remain energized about our long-term prospects as we work towards creating the preeminent diabetes-focused company in the world. Turning to our performance during the first quarter of 2023 on Slide six. During Q1, we delivered strong commercial performance despite a challenging macro operating environment, as we generated revenues of $275.7 million. This represented a decline of 4.7% on an as-reported basis, but an increase of 0.7% on a constant currency basis. Our Q1 revenue was better than we initially expected, as we exceeded our constant currency revenue expectations for both the U.S. and international markets. Foreign currency, while a headwind during the quarter, was modestly better than we had originally thought. While Jake will go through this in more detail in a few minutes, like revenue, our adjusted gross, adjusted operating and Adjusted EBITDA margins for the first quarter also exceeded our expectations as we generated adjusted gross margin of 68.5%, adjusted operating margin of 36.9%, and Adjusted EBITDA margin of 40%. This solid operating performance translated into adjusted diluted earnings per share during the first quarter of 2023 of $0.96. In addition to getting off on the right track from a financial perspective, during the first quarter, we also took steps to strengthen our base business, including holding over 50 scientific and educational events, which reached over 2,000 healthcare professionals. I'm also pleased to say that effective January 1st, Embecta's pen needles and insulin syringes are the exclusive preferred products on the Express Scripts National Preferred Formulary. By working together to achieve widespread formulary access, Embecta and its partners continue to reduce barriers for patients and prescribers in the markets it serves. We also recently won national contracts for both pen needles and insulin syringes from the U.S. Department of Veterans Affairs for a five-year term. These awards not only demonstrate our commitment to the singular focus of improving the lives of people living with diabetes, but also ensure that our nation's veterans have access to the highest quality products. Moving to separation and stand-up activities, we continue to make progress on that front as well as we exited several transition service agreements and continue to build up our own internal organization, systems, and processes. From an invest for growth perspective, our commercial teams began to execute on the strategic partnerships we announced a few months ago, and we continue to progress the development of our insulin patch pump. Based on our strong first quarter results, we're raising our financial guidance ranges for as-reported and constant currency revenues, adjusted gross, adjusted operating, and Adjusted EBITDA margins, as well as adjusted diluted earnings per share. Let's review our first quarter revenue performance in a bit more detail on Slide seven. During Q1, U.S. revenues totaled $149.3 million, which represented a decrease of 1.1% on a constant currency basis. The slight year-over-year decline in the U.S. was primarily due to unfavorable volume dynamics, the majority of which was offset by the favorable timing of certain distributor purchases that occurred late in the quarter, as well as the contract manufacturing and sale of certain non-diabetes product to BD. As we move forward, we anticipate this timing benefit associated with distributor purchasing, which is not uncommon in our business and which totaled approximately $6 million in Q1, to largely reverse itself during the second quarter. Turning to our performance outside the U.S. During Q1, international revenues totaled $126.4 million, or an increase of 2.6% on a constant currency basis. The year-over-year growth within our international business was primarily due to favorable pricing as well as favorable volumes, which were augmented by a competitor product supply shortage in certain regions. With that, let me turn the call over to Jake to discuss our Q1 financial results in a bit more detail, as well as provide our updated fiscal 2023 financial guidance and underlying assumptions. Jake. Thank you, Dev. Good morning, everyone. Before I discuss the financial results for the three-month period ending December 31st, I would like to remind the investment community that Embecta was spun off from BD on April 1st of 2022. The financial results during the pre-spin periods were based on carve-out accounting principles and do not reflect what Embecta's financial results would've been had Embecta operated as a standalone public company. The financial results for the three-month periods ending December 31st, 2022, and December 31st, 2021 are not meaningfully comparable. Turning to Embecta's financial performance for the first quarter. Given the discussion that has already occurred regarding revenue, I will start at the gross profit line. GAAP gross profit and margin for the first quarter of fiscal 2023 totaled $188.8 million and 68.5% respectively. This compares to $203.9 million and 70.5% in the prior year period. The year-over-year decline in GAAP gross profit and margin was expected and primarily driven by the negative impact of inflation, the impact of low margin contract manufacturing revenue that was not in the prior year period, and incremental stand-up and separation costs, including the markup on the purchase of cannula from BD. On an adjusted basis, gross margin for the first quarter of 2023 was also 68.5%. The adjusted gross margin performance during the first quarter was better than we initially expected, primarily due to the mix of additional revenue that we generated during the quarter. Finally, concerning gross margin, during the first quarter of 2023, both our GAAP and adjusted gross margins benefited from the revaluation of our inventory to our new 2023 standard costs, which occurs once a year, as well as from positive absorption as we manufactured additional product in advance of our planned temporary suspension of our facility in Suzhou, China, later this year. While these items were taken into consideration when we provided our initial guidance, I point them out because as we move forward during the remainder of 2023, we do not anticipate the same level of positive impact to our gross margins. As such, we currently expect our adjusted gross margins to trend downward in succeeding quarters. Turning to operating income and margin. During the first quarter, GAAP operating income and margin was $88.8 million and 32.2% respectively. This compared to operating income and margin of $116.6 million and 40.3% respectively in the prior year period. The decline in year-over-year GAAP operating income and margin is primarily due to the GAAP gross profit and margin drivers that I just mentioned, as well as an increase in operating expenses associated with separating Embecta and becoming a standalone publicly traded company. On an adjusted basis, during the first quarter of 2023, operating income and margin was $101.6 million and 36.9% respectively. This adjusted operating income and margin performance was significantly better than we initially expected, in part due to the revenue timing benefit that positively impacted our adjusted gross margin, as well as lower operating expenses in the quarter versus expectations, which we believe is also largely timing related. This operating expense timing benefit was primarily due to lower separation and standup costs, the phasing of hiring and certain project spending. As we move forward during the remainder of fiscal 2023, we anticipate that this spending will occur, and as such, we currently expect our adjusted operating margins to trend downward in succeeding quarters. Turning to the bottom line, GAAP net income and diluted earnings per share was $35.2 million and $0.61 during the first quarter of fiscal 2023. This compared to $98.8 million or $1.73 in the prior year period. As I mentioned at the outset, because our financials for pre-spin periods was done on a carve-out accounting basis, the comparisons of pre-spin to post-spin periods are not meaningfully comparable. One example of this is interest expense, which burdened our P&L in the current year, but was zero in the prior year period. While on an adjusted basis, net income and earnings per share was $55.4 million and $0.96 during the first quarter of fiscal 2023. Lastly, from a P&L perspective, for the first quarter of 2023, our Adjusted EBITDA and margin totaled approximately $110.2 million and 40%. This compares to $138.3 million and 47.8% in the prior year period. Like our adjusted operating margin, due to the revenue and gross margin overachievement in the quarter, coupled with the timing benefit from lower operating expense spending, our Adjusted EBITDA margin during the first quarter also significantly exceeded our original expectations. Finally, with respect to our balance sheet and financial condition at quarter end. As of December 31st, 2022, we held approximately $385 million in cash and cash equivalents, and approximately $1.64 billion in debt, which taken together with our last 12 months Adjusted EBITDA, resulted in a net leverage ratio of approximately 2.9 x. That completes my prepared remarks as it relates to Embecta's financial results for the first quarter of fiscal 2023. Next, I'd like to discuss Embecta's updated 2023 financial guidance and certain underlying assumptions. Beginning with revenue on Slide nine. Given our strong performance in the first quarter, we have increased our guidance by 50 basis points on both the low and high ends of our constant currency revenue guidance range. We are now calling for a decline of 1.5% on the low end to 50 basis points of growth on the upper end. The low end of our constant currency revenue range continues to assume that most of the potential decline will result from reduced contract manufacturing revenue of non-diabetes care products that are sold to BD, with the remainder coming from slight volume pressure within developed markets, as well as periods of uncertainty in emerging markets due to the potential for COVID-19 spikes like those we saw impact our business in China during the first quarter of fiscal 2023. The high end of our constant currency revenue range continues to assume a slightly smaller year-over-year headwind associated with contract manufacturing revenue, flattest product volumes, and the ability for us to modestly raise prices on our product offerings. While we continue to make progress in this area, our updated constant currency revenue guidance range continues to assume an immaterial amount of revenue associated with our recently announced partnership agreements. Turning to our thoughts on FX. Since we provided our initial guidance for 2023, foreign currency exchange rates have moved in a positive direction, and as such, our updated guidance now calls for a foreign currency headwind of approximately 2.5% during 2023. This compares to our original assumption, which called for a headwind of approximately 5%. Our updated FX assumptions were based on foreign exchange rates that were in existence in the early February time frame. On a combined basis, we're raising our full year as reported revenue guidance from a range which called for a decline of between 5% and 7% to a new range which calls for a decline of between 2% and 4%. In dollar terms, this equates to a revenue range of between $1,084 million and $1,107 million. Lastly, concerning revenue. During fiscal year 2022, we generated approximately 50% of our as-reported revenue dollars during the first half of the year. Consistent with our initial guidance that we had provided in December. We continue to anticipate that we will generate a slightly lower percentage of our annual revenue during the first half of 2023. Moving to margins. Due to the performance that we achieved in the first quarter, coupled with foreign exchange favorability as compared to the initial guidance, we are raising the low and high ends of our adjusted gross, adjusted operating, and Adjusted EBITDA margins by 150 basis points each, as we now anticipate that our adjusted gross margin will be approximately 63.5% for fiscal 2023, up from our original guidance of approximately 62%. That our adjusted operating margin is now expected to be approximately 26.5%, up from our original guidance of approximately 25%, while our Adjusted EBITDA margin is now projected to be approximately 31.5% for full year 2023, up from our original guidance of approximately 30%. Regarding the 150 basis point improvement in margins, we estimate that approximately half is due to an improvement in foreign currency, while half is due to an improvement in base business operations. These new guidance ranges continue to call for adjusted operating expenses to be approximately 37% for the entirety of 2023, comprised of R&D expense as a percentage of revenue reaching 7% and SG&A of approximately 30%. This assumes that the timing-related operating expense favorability we saw in Q1 reverses itself as we move throughout the remainder of the year. Continuing down the P&L, we currently expect that our net interest expense will be approximately $115 million during 2023 or closer to the low end of our previously provided range. Our assumptions regarding our non-GAAP tax rate and weighted average shares remain unchanged from our original assumptions of approximately 25% and 57.7 million shares, respectively. At the bottom line, this translates into our new full year 2023 adjusted diluted earnings per share range of between $2.20 and $2.35, which is an increase from our previous range of between $1.75 and $2.00, or a raise of approximately $0.40 at the midpoint. Like the increase in our margin guidance, we estimate that approximately half of the increase at the midpoint of our guidance range is attributed to FX, while half is due to an improvement in our base business. In closing, during the first quarter, Embecta made good progress in each of our three major strategic priorities, including strengthening our base business, separating and standing ourselves up as an independent entity, and investing in growth. We generated solid financial performance during Q1, and we're pleased to be able to raise several of our financial metrics after only one quarter. As we look ahead, we still have some important separation activities in front of us, including the implementation of our ERP system, as well as managing through the anticipated temporary suspension of manufacturing operations associated with the regulatory approvals and transitions, including for inspections at our facility in China. Our teams remain highly focused on these and other separation-related activities. That completes my prepared remarks, and at this time, I'd like to now turn the call over to the operator for questions. Operator? Thank you. If you'd like to ask a question, please signal by pressing star one one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We do ask that you limit yourself to one question and one follow-up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star one one. Our first question comes from Cecilia Furlong with Morgan Stanley. Your line is open. Great. Good morning, and thank thank you for taking the questions. I wanted to start on the gross margin performance in the quarter, just well ahead of our expectations. If you could walk through just the bridge 4Q to 1Q. You talked about some of the China planned manufacturing closure, that impact. If you could speak to that, geographic sales mix, other drivers that really supported the sequential step-up, and then how we should be thinking about gross margin beyond fiscal 2023, kind of toward your 62% or so, longer range plan. Thanks, Cecilia. Thanks for the question. Let me begin by saying that as we provided our initial financial guidance for fiscal 2023, we always anticipated that our adjusted gross, our adjusted operating, and our Adjusted EBITDA margin profile would be strongest during the first quarter of the year. The 400 basis point sequential improvement in adjusted gross margin from our fiscal fourth quarter of 2022 to the first quarter, it's primarily due to two things. First, during fiscal year 2022, we saw really an unprecedented increase in the cost of raw materials, labor, and overhead. As we moved into fiscal year 2023, we need to revalue the inventory that existed on our balance sheet to our new standard costs for 2023, which include the impact of those higher raw material, labor, and overhead costs. This is something that occurs once a year, at the beginning of every new fiscal year. It essentially resulted in Embecta needing to increase the value of the inventory that was on our balance sheet, with the offset being a credit to the income statement. As such, the revaluation of that inventory drove a sequential gross margin benefit of approximately 300 basis points from the fourth quarter of fiscal 2022 to the first quarter of fiscal 2023. Since that inventory is now on our balance sheet at a higher cost, as we move forward into future quarters and then sell that inventory into the channel, we should then actually see a decline in our adjusted gross margins moving forward because now that inventory is valued at a higher cost. The inventory revaluation is something that caused a benefit from the fourth quarter of 2022 to the first quarter of 2021, but will then cause adjusted gross margin to go down from the first quarter of 2023 through the remainder of the year. In addition to the impact that we saw from, I would say, revaluing the inventory, we also saw a sequential benefit stemming from favorable absorption. That's because we continue to manufacture inventory to service our business in China ahead of the temporary shutdown at that facility, which we would anticipate occurring later this fiscal year. We built additional inventory as safety stock during the first quarter, and that led to about 100 basis points sequential improvement in gross margin from the fourth quarter to the first quarter. Then again, like the positive impact that we, that we saw in Q1 related to the inventory revaluation, as we move forward during the remainder of fiscal 2023, we're not going to be manufacturing or do not anticipate to be manufacturing the same, levels or amounts of inventory. Eventually, we may incur negative variances in the second half of 2023 as we temporarily shut down production in our facility in China. We would expect Adjusted gross margin to go down from the first quarter through the remainder of the year because of this as well. All that said, our Adjusted gross margin performance in Q1 did exceed our expectations. Because of that, as well as just an expectation that raw material costs for quarters two through four are actually trending better than we initially anticipated, we're increasing our full year guidance range from the original guidance, which called for approximately 62% adjusted gross margin to a new range of 63.5%. I think you might have had another question concerning drivers for the rest of the year. Is that correct? It is. Just also how you're thinking about the long-term outlook, kind of tied in with your LRP that you previously provided. Maybe I'll start again, you know, by saying I think that we had very strong margins throughout the P&L during the first quarter, again, exceeding our initial expectations. Part of that Q1 overperformance is something that we anticipate remaining for all of 2023, hence the raise of about 150 basis points compared to our initial expectations. Part of that margin performance in Q1 is something that we do attribute to timing. Because of that, we expect that timing benefit to reverse itself during the remainder of 2023. Let me just try and address that throughout the different line items of the P&L. From a gross margin standpoint, I would tell you that we would expect our adjusted gross margins to first trend into the mid-60s during the second quarter of this fiscal year, really for two reasons. First, we don't anticipate that same level of distributor purchasing that positively impacted our U.S. revenues during the first quarter. As a result, we may see some decline sequentially from Q1 to Q2 gross margin. Second, during Q2, we anticipate that we'll begin to see that negative impact roll through our gross margin from the revaluation of our inventory at those higher costs. Now, as we move throughout the second half of 2023, we would expect that to see that our adjusted gross margins could actually trend into the low 60s, as we currently expect to see the negative impact of the higher cost inventory continue to impact us. We also then would anticipate seeing the potential negative impact from no longer manufacturing at the same levels in our facility in China and not generating those same positive impacts from absorption. That's sort of the thoughts on kind of gross margin trending to the mid-60s for Q2 and then trending into the low 60s for the second half of the year. Now, turning to operating margin, I would say we expect them to trend to the mid-20s, beginning in the second quarter and then sort of remaining at that level for the remainder of the year. Part of that sequential decline in adjusted operating margin is because of the gross margin drivers that I just mentioned. We also do right now anticipate seeing a sequential increase in both R&D and SG&A as we move forward through the year. During the first quarter, Q1 operating expenses were below our initial expectations, primarily because of the timing of certain separation and stand-up expenses. As we move forward throughout the year, we would expect to see an increase in that beginning as early as the second quarter. That I would say, you know, from a trending standpoint, this increased level of OpEx, it's expected to really last through kind of the third quarter of the year and then trend down in the fourth quarter as a percentage of revenue as we anticipate, you know, further exiting even more TSAs. Then I'll just say lastly, just from an EBITDA standpoint, we expect it to largely follow our adjusted operating margin trends and for it to remain, you know, at or around that approximately 30% level for the remaining quarters of the year. Obviously, all of these assumptions are somewhat based on sort of the level and pace of recurring standup P&L, we're certainly going to do our best as we move forward throughout the year to try and manage OpEx down as low as we can. Cecilia, this is Dev. Good morning. With respect to your question about the long-term outlook, I mean, obviously we'll give formal 2024 guidance at the right time once 2023 is done. Certainly we are pleased with the strong start to the year, you know, and certainly what the outlook for 2023 looks like. No real change from what we've discussed before, but we'll provide more updated guidance certainly at the end of the year. At this point, we are pleased with where we stand today. Great. Thank you. If I could follow up to, just your OUS constant currency performance in the quarter, if you could speak to what you saw out of China versus other markets, the impact from pricing, positive impact from pricing that you saw, and then also just the competitor shortage, if you could walk through the benefit you saw in the quarter and also include it in your updated outlook. Thank you for taking the questions. Yeah, sure, Cecilia. You know, several parts to this question here, right? Overall international performance, you know, was strong, right? I mean, we saw favorable price and volume in several markets. In China in particular, you know, our performance by our team in China has been quite resilient because you remember through the calendar year of 2022, fourth quarter, calendar year 2022, there was a rise in spikes. We certainly had a rise in infections as well, but our team has managed through it. You know, what we see in China certainly is that the situation is certainly improving, you know, as we went from zero COVID to now open, and like I said, our team has fought through those infections that occurred. You know, our outlook on China, you know, obviously remains uncertain. It all depends upon the path that COVID takes and the resulting government policies that are put into place. In terms of our guidance, we certainly are anticipating a modest improvement in performance in China and some other markets in Asia where COVID has taken a toll, and that's all included in the guidance that we provided for 2023. I think with respect to the competitor shortage, you know, we certainly did have some benefit in our Q1 numbers of a competitor shortage. It was in, you know, several markets around the world. It is difficult for us to forecast how long that shortage would last, but certainly we've taken our sort of best thinking into account when we provided our guidance, including the raising of the constant currency top end of the range for 2023. Great. Thank you for taking the questions. Thanks, Cecilia. Thank you. Our next question comes from Marie Thibault with BTIG. Your line is open. Good morning, Dev. Good morning, Jake. Congrats on a great quarter here. Wanted to start here with a question here on the constant currency revenue growth guidance. If I look at what you did this quarter, the fiscal first quarter, constant currency revenue growth was actually about 0.7%. When I look at what you're guiding for this year, it looks like the top end of your new range is 0.5%, just a little below what you already accomplished in Q1. Curious how you arrived at that guidance. I know you've given us some details on the various markets, but just curious, why not go a little bit higher? Yeah. Yeah, thanks for the question, Marie. I'm really pleased to say that we got off to a really strong start in the first quarter. You know, quite frankly, we exceeded our internal estimates, I would say by approximately $14 million on an as-reported basis. Now, about $2 million of that was due to the positive impact from FX, as compared to what we, you know, had originally expected it to be. On a constant currency basis, we exceeded, I would say, our internal estimates by almost $12 million. Now, about $6 million of that additional constant currency revenue beat was driven by the strength within our international business that Dev just mentioned. This was very broad-based, covered several countries, and it's something that we expect will remain for the entirety of fiscal year 2023. We increased both the low and high ends of our constant currency revenue range by about 50 basis points. The other $6 million of, I would say, overachievement in comparison to our initial expectations that occurred in the quarter, was really largely due to the timing of distributor orders, and it positively impacted our U.S. business. That occurred, I would say, very late in the month of December, and it's something that could happen from time to time. During the course of an entire year, it does tend to even itself out. As we look forward, you know, really beginning as early as the second quarter of the year, we would anticipate that positive benefit that we saw in the first quarter from those distributor orders to reverse itself. We've taken that into consideration when we updated our guidance range. Okay, that makes a lot of sense. Thank you, Jake. I wonder if I could get a little bit more detail on some of the transition service agreements. You know, I know you still have the ERP transition ahead, but I'm curious if you can tell us, you know, which of these agreements have been exited. Is this process ahead of schedule? Is it on schedule? Maybe you can give us a sense of that as well. Yeah. Look, you know, broadly speaking, Marie, it's on schedule. Many of our transition services agreements that have yet to be exited are obviously tied to the implementation of the ERP, and that's obviously a longer schedule project, just given the number of countries we are operating in and the complexities of installing or implementing a new ERP. The ones that we've exited so far, I would put them in the sort of the more minor category as compared to certainly the ones that are associated with ERP or our distribution network and so on and so forth. Jake, can you... Okay. Fair enough. Yeah. I mean, I would say again, you know, to your point, I think we've continued to make progress there. Just from maybe from a cost standpoint, you know, we currently estimate that we would incur, you know, around $60 million worth of TSA expense, you know, for the full year. For that to certainly be more heavily weighted in the first half of the year as compared to the second half of the year. Okay. Thank you for that. I guess last question here. I did wanna it sounded to me like you were confirming that your pre-spin fiscal 2024 outlook hasn't changed. I believe that was low 60s gross margin, about 30% Adjusted EBITDA margin. I did wanna just confirm that there's no change to that outlook. If there's any way that you can start to help us think about fiscal 2025, kind of after this transition is completed, how we should be thinking about Embecta as a standalone company at that point. Thank you for taking the question. Yeah. Marie, you know, with respect to 2024, you know, nothing that we've seen so far would say we should change our outlook on 2024. Obviously, you know, we'll give, you know, more formal guidance when 2023 is done. Just given the number of activities we still have to complete as we exit the TSAs and the implementations we've talked about, I'm gonna refrain from talking about 2025. We are focused on, you know, getting and executing all these separation-related activities and getting FY 2023 done before we start talking about FY 2025. Okay. Understood. Thank you. Thank you. As a reminder, if you'd like to ask a question, please press star one one. Our next question comes from Travis Steed with Bank of America. Your line is open. Hey, guys. Thanks for taking the question. I did wanna follow up a little bit. I know we talked a lot about margins and EBITDA margins and stuff already, but the guidance does imply a pretty big step down sequentially from Q1. I'm not sure if you did tell me explanations for that, but anything else to call out on the EBITDA margin, operating margin side, you know, what's built in from a macro standpoint, currency inflation? Just looking at the earnings side, like you raised the guidance, you know, by $0.40 at the midpoint, but given FX has gotten a little bit better, I'm just curious why there wasn't a little bit more of a tailwind on the EPS side with FX rates. Travis, so I'll try and take that, and Dev, if feel free to jump in. I think, you know, largely our thoughts on margin, obviously, we got off to a really good start. You know, quite frankly, we expected the first quarter of the year margins to be strong. As that said, we did do a little bit better in terms of, you know, our adjusted gross margins, largely because of the additional revenue and the mix of that revenue. From an adjusted operating margin and then flow through to EBITDA margins, even more significant overperformance largely because of the timing benefit as it relates to certain OpEx spending related to separation and standup costs. Now, as we move forward during the remaining quarters of the year, you know, we would expect those gross margins to kinda trend from sort of the upper 60s, you know, first going into kind of the mid-60s in Q2, primarily because of the fact that we would expect to see some of that distributor order benefit that positively impacted our revenue in the first quarter to reverse itself in the second quarter. That tends to be, you know, in the U.S. at a higher gross margin area. You know, we're not gonna get that same positive impact, if you will, from the revaluation of our inventory. In fact, now that the inventory is actually valued at a higher cost on our balance sheet, as we sell that product through the remainder of the year, it's actually gonna result in slightly lower gross margins. The expectation from a gross margin standpoint in Q2 is to get into the mid-60s%, eventually in the second half of the year to get into the low 60s% or very consistent with what we think our gross margin profile would look like in 2024. You know, from an operating margin standpoint, you know, again, very strong operating margins in the first quarter. We are anticipating seeing a pretty large step-up in OpEx spending, both on the R&D side sequentially, as well as on the SG&A side. Certainly on the SG&A side, a lot of that is related to separation and standup costs and just the timing of hiring as well as we move throughout the year. All that said, we're certainly gonna do our best to try and manage our OpEx spending, you know, lower. We're certainly, you know, right now essentially reaffirming our full year total OpEx spending as a percentage of revenue of 37%, 7% in R&D, and 30% for SG&A, which is really unchanged from our original guidance. From an earnings standpoint, you know, I would tell you that right now we're raising about $0.40 at the midpoint. About half of that is because of updated FX rates. you know, as compared to, I would say, our initial expectations, we saw very little benefit to our adjusted earnings from FX in the first quarter. Really we would expect to see that benefit largely play out in the remainder of the year. Look, our base business performed better than we had originally anticipated, and we would expect about half of the adjusted earnings range to come from just improved base business performance. Coming back to OpEx, I would say despite OpEx coming in well below those levels in Q1, we are continuing to expect total OpEx to approximate that 37% for the entirety of the year. All said, I would say we continue to just be mindful of very large separation projects that we need to execute on during the course of 2023. You know, we're really pleased with our ability to increase our adjusted earnings so meaningfully after only one quarter of the year being done. Got it. Helpful color. You also mentioned some continued progress with the patch pump program. Curious what kind of progress you're making there. Anything additional to share? One of your, the patch pump competitors, you know, scooping up patents and shouldn't know if you had any thoughts on that, if you thought the patent landscape was about to get a bit more competitive. Yeah, Travis, good morning. This is Dev. I'll take that. You know, obviously we follow all the public announcements in the pump space and, you know, I really don't wanna comment on, you know, competitor moves on acquisition of patent products. Let me just say that our patch pump product program is progressing as we would expect in line with our internal expectations. Nothing new to share. I would say that certainly from a from a our own perspective of what that product can do for us in the market, I mean, you know, nothing has changed vis-a-vis our outlook on our product in light of all the announcements that have taken place in the marketplace. Nothing new to share with respect to milestones. As I've said in the past, when we have a meaningful milestone, Travis, we'll share it. For now, we're just focused on keeping our heads down and getting the work done. Great. Thank you. We currently have no further questions in the queue. I'd like to turn the call over to Mr. Pravesh Khandelwal. Thank you, operator, thank you everyone that joined us on the call today. This concludes Embecta's first quarter 2023 earnings conference call.