Welcome to the NeoGenomics First Quarter 2024 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please note, this call is being recorded and an audio replay will be available on the company's website. Kendra Sweeney, Vice President of Investor Relations, you may begin your conference. Thank you, Holly. Good morning, everyone, and welcome to the NeoGenomics First Quarter 2024 financial results call. With me today to discuss the results are Chris Smith, Chief Executive Officer, and Jeff Sherman, Chief Financial Officer. Additional members of the management team are available for Q&A, including Warren Stone, Chief Commercial Officer, Melody Harris, Chief Operations Officer and President of Informatics, and Ali Olivo, Executive Vice President, President, General Counsel, and Business Development. This call is being simultaneously webcast. We will be referring to a slide presentation that has been posted to the Investors tab on our website at ir.neogenomics.com. Starting on slide 2, during this call, we will make forward-looking statements regarding our anticipated future performance. We caution you that such statements reflect our best judgment based on factors currently known to us, and that actual events or results could differ materially. Please refer to our most recent Forms 10-K, 10-Q, and 8-K we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements. The forward-looking statements made during this call speak only as of the original date of the call, and we undertake no obligation to update or revise any of these statements. During this call, in order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity, and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued this morning. I will now turn the call over to Chris Smith, Chief Executive Officer of NeoGenomics. Thanks, Kendra, and welcome everyone. Thanks for joining us this morning to go through our first quarter financial results. As always, I want to begin with our mission and vision statements, because it's what motivates our company and teammates on a daily basis. Our mission at Neo is to save lives by improving patient care. Before we get into the financial results, I just want to thank our teammates for everything they do every single day to make a difference in so many patients' lives. Now, let's move to slide four and get into the first quarter highlights. As you can see, we delivered another quarter of strong revenue growth, growing 14% over prior year to $156 million. Clinical Services revenue increased 17% to $135 million, primarily driven by execution of the commercial strategy and increased adoption of our NGS products. The compounding effect of volume and revenue cycle management initiatives, including an AUP lift, enabled NGS growth of over 50% and now is approaching 30% of our total clinical revenue. As growth rates accelerate and NGS becomes a larger portion of our base business, the comparables will become tougher as the year progresses. Advanced Diagnostics revenue declined by 3% over prior year, in part due to macro conditions in the pharma sector and margin optimization initiatives from 2023. As a business, adjusted gross profit was up 19% to $71 million, and adjusted EBITDA improved 149% or $11 million over Q1 of last year to a positive $3 million. Now on slide five, I'm very pleased that the first quarter continued the trend we've seen since the fourth quarter of 2022 of consistent year-over-year improvements in revenue, adjusted gross profit and adjusted EBITDA. This is especially noteworthy as we did not see the typical industry seasonality in Q1, with total revenue actually increasing sequentially from the fourth quarter. We believe that we've laid a solid foundation for growth in 2023 and expect that momentum will continue as we move forward. Let's move on to slide six. On our full year 2023 call, we laid out our strategic priorities for 2024. They included profitably growing the core business, accelerating advanced diagnostics, driving value creation, and enhancing our people and culture. Our people are our greatest asset, and we are devoting time and resources to enhance teammate development and engagement. Everything we do internally is centered around developing a customer-oriented and growth mindset, and our teammates show each day their dedication to improving patient care. This morning, though, I'm going to focus on our three financial priorities. As we continue to profitably grow our core clinical business, as we execute on our commercial strategy, which is protect, expand, acquire, this has contributed to our strong volume growth, increased AUP, and improved mix. The mix shift towards higher value modalities and tests has supported the delivery of yet another quarterly improvement in revenue per test. Even with the focus on growing NGS, we continue to see growth in clinical volumes across all modalities. To win in oncology, we have the breadth of menu and the products that deliver value in real-world clinical settings through high quality, actionable, differentiated tests that help support treatment decisions, as well as best-in-class customer focus mindset. Earlier this month, we announced senior leadership promotions as part of our ongoing efforts to optimize our operating structure. Warren Stone is now Neo's Chief Commercial Officer and will lead our clinical and pharma service commercial teams. Melody Harris is now Neo's Chief Operations Officer and President of Informatics, and will oversee data-oriented teams and continue to manage all enterprise operations. Warren and Melody have shown exceptional leadership and performance in their roles, and I'm confident their new responsibilities will strengthen the commercial synergies and drive growth, as well as improving operating efficiencies. As a result of these changes, the legacy pharma business is now reporting to Warren. Informatics is now under Melody's leadership, and R&D will be reporting to me. We remain focused on R&D as we believe that innovation is a turbocharger for growth. Specifically, we're committed to offering an MRD product to patients and healthcare providers, and we believe we have several viable pathways to accomplish that. As we noted over the past several quarters, macro trends, as well as operational challenges, continue to impact our pharma revenue. Building on the strength and our go-to-market strategies seen in our clinical business, we are integrating the pharma commercial organization under Warren's leadership to leverage the success and the commercial execution seen in the clinical business. We are expanding our pharma sales organization as it moves under Warren's leadership and expect to see benefits from the initiative in the future. In addition, our margin optimization efforts in ADX have continued to improve adjusted gross margin performance. Informatics revenue continues to grow as we drive increased investment and look to expand product offerings. We continue to focus on the acceleration of innovation in R&D, including the launch of a new liquid biopsy comprehensive genomic profile test expected in late 2024. Additionally, building on the success of the NeoComprehensive 1.0, we are focusing on the development of our next-generation broad solid tumor panel, which is targeted to be one of the largest solid tumor CGP panels on the market, while providing industry-leading turnaround times. We believe this new, large NGS panel will provide additional growth opportunities in clinical, pharma, and the informatics space. We remain focused on driving value creation from a financial perspective. In late 2023, we kicked off our LIMS project that will consolidate fragmented systems into one end-to-end solution, which will serve as the foundation for our digital transformation strategy while enhancing operating efficiencies. We're driving gross margin expansion through investing in automation and lab and supply chain optimization. We also continue to invest in our quality programs to improve our products and services, as well as to prepare the company for increasing regulatory oversight. Yesterday, the FDA released its final ruling regarding regulation of lab-developed tests. Our initial view is that the rule is favorable to our business. The rule significantly expands LDTs that would not be required to get pre-market approval from the FDA, including tests marketed before May 6, 2024, and those approved by the New York State. This enforcement discretion is favorable to our broad test menu and should reduce the anticipated cost of compliance. We've been preparing for the increasing regulation, and we believe we're well positioned to comply with the rule. From a legal perspective, we are vigorously defending our RaDaR technology. A hearing to appeal the preliminary injunction against RaDaR was held on March 29th in the Federal Circuit Court, and we are awaiting that outcome. The North Carolina District Court case is currently in discovery, and the jury trial is scheduled for March of 2025. We have also filed IPR petitions with the U.S. Patent and Trademark Office, seeking to determine that Natera's two patents at issue are unpatentable in the view of prior art. With that, I will now turn the call over to Jeff to review our first quarter financial results in more detail. Jeff? Thanks, Chris, and good morning, everyone. I'll begin with a little more detail on our operating results for the quarter. As Chris said, we started the year with revenue experiencing double-digit growth over prior year. First quarter revenue was $156 million, a 14% increase over the prior year and higher than the fourth quarter of 2023. Revenue growth was driven by growth in clinical test volume, a continuing shift to higher value tests, and improvement in revenue per test, driven by business mix and revenue cycle improvements. Adjusted EBITDA improved 149% from prior year to positive $3 million. Q1 marks the sixth consecutive quarter that adjusted EBITDA increased from prior year, as we continue to generate significant operating leverage on our revenue growth. Looking at slide eight, clinical services revenue of $135 million was an increase of 17% over prior year, driven by an 11% improvement in revenue per test and a 5% increase in volume. The optimization of our sales force, along with the increased adoption of our NGS products, continues to drive higher volume growth. NGS growth continues to be strong and is helping to drive revenue growth and earnings. Turning to slide nine, average revenue per clinical test increased by 11% over prior year to $447, the third consecutive quarter of double-digit growth and represents an improvement for the twelfth consecutive quarter as we maintain our focus on higher-value tests and revenue cycle management initiatives. As we shared with you in the past, NGS is a strategic priority and is approaching 30% of our total clinical revenue. The focused efforts of our sales team to penetrate new and existing oncology accounts and drive adoption of our higher-value NGS portfolio accelerated NGS revenue growth. Turning to slide 10, advanced diagnostics revenue declined 3% over the prior year in Q1 as a result of macroeconomic conditions in pharma and R&D spend, as well as a continuation of 2023 decisions to rationalize our global testing sites and low-margin contracts. The focus on profitability and margin growth is driving performance in ADX, with adjusted gross profit and gross margins increasing versus the prior year. Looking at the income statement on slide 11, adjusted gross profit increased by 18.6% over prior year, and adjusted gross margin was 45.3%, an improvement of 182 basis points over the first quarter of last year. Regarding operating expenses, sales and marketing expense was $20 million as we continue to increase our commercial investment, and R&D expense was $7.6 million. G&A expense increased by $4.2 million over prior year, primarily driven by legal costs associated with the ongoing Natera litigation and costs related to the closure of the lab in La Jolla, California. The ongoing costs for this litigation, as well as the costs related to the lab closure, are being added back to adjusted EBITDA as non-recurring items in the quarter. Turning to the balance sheet on slide 12, we ended the first quarter with cash and marketable securities of $385 million. Cash flow from operations decreased by $13 million in Q1 over prior year. The first quarter is typically the largest use of cash quarter when annual bonuses are paid. In addition, cash collections were impacted by approximately $5 million in the quarter due to the Change Healthcare data breach, as our hospital and payer clients struggled to manage their claims, adjudication, and payments. We have started to recover some of this collection shortfall in the second quarter. Our strong cash position gives us the financial flexibility to address our 2025 convertible notes, with the principal balance of $201 million maturing in May 2025. These notes will become current liabilities on our balance sheet in the second quarter. Given our liquidity profile, our current expectation is to use our existing cash and marketable securities to retire the 2025 convertible notes when they mature. However, we are starting to evaluate strategic M&A opportunities, which could ultimately impact our capital structure decisions. Now turning to our 2024 financial expectations on slide 13. We are reiterating full-year revenue guidance of $650 million-$660 million, representing 10%-12% growth, and expect to be at the high end of the adjusted EBITDA range of $21 million-$24 million. In summary, Q1 continues the revenue, margin improvement, and earnings growth from 2023 and positions us well to achieve our goals for the year. I will now turn it back to Chris for his closing remarks. Thanks, Jeff. I'm very proud of our team's first quarter progress, including strong revenue growth and significant improvement in adjusted EBITDA. In addition, we saw meaningful progress in the execution on our strategic priorities. We believe we're well on our way to becoming the leading cancer testing, information, and decision support company. The investments we have made in our teammates, labs, commercial organization, and R&D position us well to execute through the next stage of our growth. And while it's still early days, we believe the initial read on the FDA final rule is favorable to our business. I'm excited for our teammates and our customers, but most of all, for the patients we serve on a daily basis. Thanks for your time, and we'll now open up for questions. At this point, we will open up the line for questions. The company asks that each person limit their questions to one so that we may hear from everyone within the hour allotted for this call. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Mark Massaro with BTIG. Hey, Mark. Hey, guys. Hey, Chris. Congrats on a strong quarter in Q1. So, I heard some interesting commentary about I think that you're starting to evaluate M&A opportunities, and then I heard that you're planning to, you know, participate in the MRD market one way or another. If those are my words, not yours. But can you just give us a sense for maybe your confidence about RaDaR litigation? And then can you speak to maybe the types of things you're looking at? Are you looking at partnerships or potential all-out acquisitions? And just give us a sense for what you're seeing in the marketplace. It appears to me that valuations are pretty depressed, so maybe an outright acquisition could make some sense. Yeah, Mark, I'm going to hit it high level, and then I'll let Ali kind of take it, because she is our general counsel, but also leads BD, so she can hit it. But look, I think all along we talked about that the first 12-18 months, we're going to be very internally focused on getting the house back in order and starting to put wins on the board. And that to us is really delivering double-digit growth and improving the operating earnings at a faster rate, and that's gone incredibly well. I think that now being said, we believe there's some interesting opportunities that we think strategically would help our mission and kind of the vision for the company to grow. And so, Ali took on the role of BD, beginning of the year. We've brought on, you know, built out a team there to start to explore those. So I think we definitely see that as an opportunity because we really think we're very uniquely positioned to kind of lead this oncology diagnostics testing business, right, from a reference perspective. But, Ali, do you want to talk a little bit more about BD and then just touch on how we're feeling about the legal- Sure. Commitment to RaDaR? I guess we'll start backwards. So there's three pathways that we kind of alluded to in our prepared remarks. One is obviously the litigation, and we see that via the district court matter, as well as our IPRs that were filed against both patents that are asserted by Natera. The other is certainly with our R&D activity and our continued development of tests, including MRD tests. And then the third being in M&A, and that could take many forms. It can... You're right, valuations are depressed. It could take full acquisition, it could also be tech transfer, licensing, you know, all of these things. So all of these pathways are viable, and we're evaluating all of them. Okay, great. I'll keep my question to one. Thanks, Mark. Your next question is from Puneet Souda with Leerink Partners. Hey, Chris. Hey, Chris. Hey, thanks for taking my questions. So, first one, on the clinical beat that you had, it's really great to see AUP continues to work, so congrats there. But, you know, you came in $7 million ahead of us and, the street number, I believe, as well, but you're not raising the full year guide. So just wondering, you know, where's the moderation? Is it on the pharma business or on the clinical side? I know you talked about a weaker pharma environment. Obviously, we're seeing that on the pharma side, but just wondering if, what are, some things that we ought to consider? Yeah, I'm going to let Jeff kind of hit it, getting into detail. But look, high level, you did hear me talk about not only kind of the macro issues in pharma, but also kind of some operational challenges in that business. And look, I would say from a strategic perspective, bringing Warren over to lead that business, and I think some of the strategies that we've implemented in clinical around sales force optimization and our go-to-market have worked significantly well. And, you know, Warren grew up a lot in the pharma business, you know, with key roles at Millipore and being able to call on that. And so we think that's going to make a difference in the back half of the year. But as far as specific guidance, let me let Jeff kind of comment. Yeah, sure. Thanks, Chris. Yeah, so Puneet, I think as we looked at guidance, you know, we're only a couple of months out from giving our annual guidance. You know, I would remind everyone, when we started the year, you know, our initial guidance was over $20 million higher than consensus when we started the year. And as we looked at our Q1 performance, you know, we're about $6 million ahead of consensus in Q1, so we had a strong Q1 from execution standpoint. We did not see the typical seasonal slowdown in clinical that we've seen in prior years, so I think that's a testament to our commercial teams and the execution we've seen, particularly on the NGS growth side. We also have just put the pharma commercial sales team under Warren, so we do want to give Warren a little time to get his arms around it and, and look at the business. We have been adding, you know, sales reps there as well. So I think more of our, our expectation is ADX, it has been a challenge over the last couple of quarters, as well as what's happened in the overall macro situation. So we want to give Warren time to get his arms around the business, and we'll look how performance happens in Q2, and we'll reevaluate guidance as we exit the second quarter. Got it. That's helpful. And then just a quick follow-up on the FDA LDT rule. I mean, thanks for your comments, and it's great to see the majority of the portfolios is protected here, despite the rule. When you-- Chris, when you think about the next round of tests and the products yet to be launched, for those to go through the FDA approval process, how are you thinking about the cost? Do you think it raises the cost for those, even though that process is over the next, you know, three to four years? And maybe just talk to us a high level, how do you see this FDA LDT rule regulation with implementation playing out? Yeah. So look, I think it's. The ruling was very favorable. I'll start by saying that. I think also just to say that, look, you know, we're a board member at ACLA, and we're kind of aligned that we don't believe it's medical devices, and so we'll see how that unfolds. But as far as cost and the impact of the business, one of the things that we did as a leadership team is everybody that we brought on has come from a regulated FDA environment. So the person that runs QRC grew up in only FDA-regulated. So we started probably 18 months ago of putting the systems in place, including design control and new products. And so we've been going through that process. We've got two key products that are under development now that are kind of running through that process. And so while there's definitely going to be costs associated with it, we believe we can manage it in the day-to-day business. There won't be a significant change to our outlook or our forecast to be able to manage that business. Got it. Super. Okay, thank you. Thanks. Your next question for today is from Dan Brennan with TD Cowen. Hey, Dan. Hey, thanks for the question. Sorry about that. Hey, guys, can you speak a little bit just to the core clinical business? Just wondering, you know, ex NGS, kind of, you know, what you guys saw in the quarter. It looks like the results are okay there, and kind of how you're thinking about the progression of maybe volume and price as we look out into Q2 and beyond. Yeah, look, I mean, I did mention in our prepared remarks that we did grow in all modalities, but Warren's here, so maybe I can let Warren kind of give you the high level piece of it, and then maybe Jeff, kind of around more specifics in the detail. Do you want to? Yeah, certainly. Thanks. Thanks, Chris. Dan, good morning. Q1 was a strong quarter across all modalities, as Chris said. You know, and from, from our data, we feel that we continue to grow from a volume perspective above markets, across all modalities, and that really speaks to our sort of account penetration strategy that we have from a commercial perspective. Yes, we overindex on NGS because of the relative importance of that, but, you know, the overarching sales strategy does target on sort of account ownership, and, and we're seeing the benefits of that through to all of our modalities. We feel based on the fact that it's sort of broad-based, across multiple customers, and across the geography of the United States, that it should be sustainable. Yeah, and I think, you know, I would expect a similar kind of flow of revenue, Dan, from a quarterly perspective. You know, Q1 is generally our softest quarter, tends to ramp in Q2, and Q3 are in a similar range, and then we finish the year stronger in Q4. So I would expect a similar, a similar, sequencing of clinical performance this year. Yeah, and I guess the last thing on that, Dan, remember we went through a field expansion where probably over an 18-month period, we doubled the size of our field organization. And so I think what you see in this business, it really does take six to nine months of time and grade to get flowing from a sales perspective, whether it's, you know, new products, new processes, new customers, you know, new business. And so I think we're starting to see the benefit of that, and, and to a point where I think it's something we've got to continue to evaluate, is kind of what we call feet on the street, and, and making sure that we have, you know, the right amount of coverage, 'cause we believe the opportunity is significant, and so it's about capturing it. Then just one follow-up, just on the sequencing side. So the liquid test, so is anything baked into the guide for that? I know you said it's later in 2023. Like, is that a fourth quarter event? Is it just any, any more color on kind of what the impact of that being from a timing perspective? Thank you. Not expecting any, any material revenue from that in this year, Dan. Yeah, it's late in the year. Okay. All right. Great, guys. Thank you. Thanks. Take care. The next question is from Andrew Brackman, with William Blair. Hi, guys. Good morning. Thanks for taking the question. Hey, Andrew. Maybe on NeoComprehensive, I think it's been just over a year since you launched that product. Can you maybe just give us a sense of the scale for that business and that product line? And I guess just related to that, any color you can provide on sort of success rate with cross-selling initiatives or sort of with what accounts you're really seeing a lot of uptake in? Thanks. Yeah, Andrew, I'll take it high level, then I'm gonna let Warren kind of get into the detail to it. But, you know, remember, we've talked a lot about this, that from a heme perspective, we're a market leader in NGS, but from a solid tumor, we would have very low double-digit share. So, you know, we knew that when we launched kind of that product, but let me maybe have Warren give more. Yeah, just, just the correction there for Chris. We have low single-digit share in solid tumor. That's what I said. You said double digits. I am so sorry. We have single digits- No, that's what I meant to say. Thank you. So, yeah, and, you know, one of the reasons why we had low single-digit share in solid tumor is the fact that we didn't have this broad CGP panel. As you correctly pointed out, we launched this in late March of last year, and we've done an upgrade on the product as well. Our penetration continues to evolve very, very favorably. We see it coming across in two areas. Obviously, our area of strength lies within the hospitals, and we're tapping into that opportunity. We estimate sort of 20% of the market potential comes from the hospital side of things, and the balance of the opportunity is in the community oncologist. Sometimes they're independent, sometimes they're affiliated. But that's where we, you know, we have a lot of opportunity to grow in, in the community oncology space because we are largely underpenetrated for lack of a portfolio. We see a robust growth quarter-over-quarter in terms of volume within that, that space as well. And ultimately, this is one of the leading drivers as to the 50% growth in NGS we spoke about earlier today. Great. Thanks, guys. Your next question for today is from Tejas Savant, with Morgan Stanley. Hey, guys, good morning. So maybe just to kick things off, Chris, you know, you raised your long-term targets to north of 10%, you know, on the last earnings call. Three years out, where do you expect NGS test mix to be in terms of your clinical revenue? It's about 25% today. Just given the growth you're seeing here, is there a scenario in your mind where over the course of those long-term targets, you know, NGS mix could essentially be approaching 50% on an xMRD basis? Well, look, I think when you think of it, Tejas, and you talk about it over the, a timeline that you mentioned, we will be launching other products along the way. So for example, we're really excited about this liquid product that we're gonna be launching. So there'll be new products that will come in, but without question, we believe we have a ton of runway on NGS. I mean, I think, you know, all the data that we see is that NGS market is probably only penetrated 30%-40% and growing in, you know, in the 20%-25% per year. And so we think that we will get our, you know, share of that growth. Then I think as we bring out even our next large panel, we think that that will be a product that will make a significant impact in the market. So it's hard to say percentage-wise, but I will tell you, we're starting from a low base, especially compared to our competitors. If you look at Foundation, you look at Tempus, you look, you know, at Caris, I mean, these are companies that are probably, you know, doing high, high double digits of their business in NGS and solid, and we just haven't been. So we think there continues to be a lot of runway there. Got it. And a quick follow-up on informatics, actually. Chris or Melody, perhaps, I'm just curious as to your, you know, your updated thoughts there on better monetizing your informatics offering. And on a somewhat related note, you've talked in the past of, you know, your, your product sort of moving towards more data-intensive formats, whole genome sequencing, whole exome, et cetera. As you trend in that direction, do you envision an additional level of investment that's needed to build the infrastructure to support those, you know, back-end analytics and so forth for those kinds of tests? Yeah, I'm gonna let Melody kind of get into the detail with you. But now, remember, she's only had it officially, I think, for, like, two weeks. But look, I think high level, we believe that there's opportunities, especially in these markets that are growing double digits, we need to invest in them. You know, I think, you know, our view is that we think that the business in entirety, we talk about it being portfolio, has the ability to grow, you know, double digits. And so I think Informatics is no different than our other businesses, where we think if we invest the right amount, we can drive growth. But some of that has to do with product and strategy, and that- on that, let me kind of throw it to Melody to give you kind of some more color around that. Yeah, so, two weeks I've been here, Tejas, on this project. So, just looking at it and learning, but I do feel we have quite a bit of opportunity. We are only now, with our LIMS system, really transforming the underlying system such that we have the data structure for the back-end analytics that you mentioned. And as we get into new product offerings with whole genome sequencing, with liquid biopsy, a lot of the magic of those products is in the back-end pipeline. We're already building that infrastructure for that, which then also lays the foundation for us for purposes of monetizing that in a meaningful way. And so if you think about data being the new oil, this means that we're gonna have more oil production coming from whole genome sequencing and liquid biopsy. The team's very excited about those new product offerings and what then that means for their product, down the road from that. I think from an investment perspective, you know, we are continuing to capture gross margin savings and efficiencies throughout the company and have several different work streams going towards that. So part of those savings, we can reinvest into things like informatics and R&D as well. So there'll be profit growth from that, but there'll also be some reinvestment from some of those operational efficiencies that we garner over the next couple quarters and years. Yeah, and speaking of the LIMS, you know, obviously, that's gonna be a big cost savings to move multiple systems onto one platform, and we've talked a lot about the LIMS. But that really is the turbocharger for informatics growth. It's been very hard from us, from an informatics perspective, on multiple LIMS systems, to aggregate all that data and be able to have data scientists create the things that we needed. So the LIMS project, think about it almost as an R&D campaign for informatics. It's gonna create that. Got it. Appreciate the color, guys. Thank you. Thanks. Your next question is from Mike Matson with Needham and Company. Hey, Mike. Hey, guys. Just one on the patent litigation. So, with this hearing on March 29th, I guess, what is the next step? And is it just the decision on your appeal? And, you know, what's the expected timing of that decision? I'll let Ali take that. Sure. So yes, the... What was appealed was the preliminary injunction, and typically, divisions take one to four months, depending on various factors, including if there's a dissenting opinion, you know, sort of who the judges are, whether it's precedential in nature. And so we're about 1 month out, and so we don't really have greater visibility into the timing other than generally one to four months, with the four months being, you know, if it's precedential or has a dissent. Okay, thanks. And then with this, the new liquid biopsy test that you mentioned, I mean, how does that fit with, with the, you know, prior RaDaR? Is this RaDaR kind of 2.0? Is this something that, you know, would you sell both versions of the test, assuming, you know, you get the preliminary injunction overturned? The liquid that we're looking to launch in the latter part of this year doesn't relate to MRD. It's really a liquid test. It's a CGP pan-cancer liquid test that we're launching so that we're able to offer sort of concurrent testing opportunities with solid tumor and liquid biopsy. Ah, got it. Okay, thank you. Thanks. Your next question is from Michael Ryskin with Bank of America. Hi, good morning. Good morning. This is John Kim on for Mike. You mentioned that you'd actually be looking at the higher end of the adjusted EBITDA guidance. So I wanted to ask on the price and the mix. I think you've previously talked about the NGS contributing more than 60% of the increase in AUP last quarter. I'm wondering what that was this quarter, and looking at the 2024 guide and looking at that adjusted EBITDA, if you had any change in your AUP expectations. And I guess related to that note and how much improvement you're seeing in the revenue cycle, and I know you talked about that it's a multi-year opportunity, but what sort of upside is left this year? Yeah, and so in terms of the pricing question, NGS continues to drive over 60, 60+% of the AUP increase, and so that trend has continued. In terms of revenue cycle, I mean, we have kind of a lot of initiatives under that umbrella. We have what you would consider your historical kind of billing and collections, denials, management piece. You know, we're having success there. There is kind of conversion of tests from single panel to larger panel tests that kind of falls under what we would consider revenue cycle initiatives as well. And then we have payer policy movements as well. So as state biomarker legislation continues to get passed, that's long-term favorable for us. That's gonna take time to kind of matriculate through our performance and getting payers to pay. So... And then finally, there's the rate aspect, where, you know, we're seeing, you know, rate increases. And so I would say we continue to have, you know, success across all of those. They don't really start or end in any one particular quarter, so I continue to see kind of a multi-year opportunity of seeing improvements there. And that's really, you know, where the focus is on getting paid for the work that we're doing, making sure we're getting... You know, we're capturing the value of the service we're delivering to our clients and their patients. And I think that the progress has been good, and we still see a lot of opportunity to improve more going forward. Understood. And sort of related to it, I, you know, you've doubled the sales force, and now as that team transitions to be under Warren, talked about expanding it further. How should we think about this additional investment in the commercial team? Is that gonna be? What sort of impact is that gonna have on the financial statements? Yeah, I would say, look, all of our strategies are kind of built into our guide. Anything that we would do investing this year are already built into the guide. Noted. Thank you. Thanks. Your next question for today is from Mason Carrico with Stephens. Hey, Mason. Hey, guys. You gave some color on this in a previous question, but to ask it more directly: for the ADX business overall, is this still a business that you believe can consistently grow double digits? And if so, what needs to happen to get there, and how do you think about the timeline to return to that level of growth? Yeah, look, a couple things on that. I mean, I think we do believe that business can grow double digits. But that being said, I think we've got to make sure from a commercial optimization perspective, that we have the right strategies in place. And I think also some of the newer tests that we're bringing to market, I think are going to help us significantly. So while NeoComprehensive 1.0 is a broad panel, I think getting this, our next gen big panel out there, that's gonna be one of the largest, if not the largest on the market, is gonna have a big impact as well as liquid biopsy. So I think one of the things with the pharma is taking these new products and presenting them as new products. I think the other piece is, look, when we came in and we talked a lot about the clinical business, bringing in Warren, we talked about, you know, sales force optimization. And when you look at the clinical group, you know, we were below, you know, a best-in-class optimized sales force or effective sales force is probably scoring about 60 on the Gartner scale, and we were well below 20. And I would say we've done a lot of things to lift that on the clinical side. You've seen those financial results. I would say we did not go through that process on the pharma side, and we're just beginning that now. So I think kind of the same thing with allowing Warren to get his arms around this business and understand it, but the market's there. The question is not whether the market's there, the question is for us to put in the right strategies and execute to do it. But to be fair, it's gonna take quarters to get it going. I think we did make some good strategy moves on looking at optimizing the financials around that, especially around the gross margin and closing some of those out of the country or global sites and cutting loose some underperforming profitable customers. But now it's about the growth and getting it back to that growth mode. I think the other point is we have a relatively new sales force that has come on over the last couple of quarters. And so I think there's also the component of this, of just the natural ramp there. And then I think we have built, you know, a comprehensive sales structure, support structure under Warren on the clinical side that will now be really available for the pharma side as well. Got it. I'll keep it to one. Thanks, guys. Thanks. Your next question for today is from Matt Sykes with Goldman Sachs. Hey, guys. Hey, Matt. Thanks for taking the question. This is Prashant on for Matt. Lots been covered already, but despite the increase sequentially in clinical revenues for this quarter, how much erosion of clinical testing volumes could have been attributed to winter seasonality? And then how are you thinking about investments into digital pathology across your business? So that's two questions. So you want to talk a little bit about- Yeah, I think as- Then I'll give Melody the second one. Yeah. I think as Jeff mentioned in his commentary, we didn't necessarily see a meaningful change in our demand patterns in quarter one. And actually, just from a weather perspective, maybe there was marginally more weather phenomenon in this year versus last year, but wasn't materially different. And as a result, we didn't necessarily see as large a dip as what we have seasonally seen in quarter one. So, we saw what I would define as fairly robust volume demand across all of our modalities in the first quarter. You want to take this? Yeah. On digital pathology, we do have a couple internal initiatives. We do, to some extent, employ a level of digital H&E and other circling methodologies today. But to really do it at our full production scale, we're not seeing digital path AI vendors in the marketplace that have the breadth of our menu. So we're trying to figure out ways that we would piece that together in a full-scale production method. So today, we've done it opportunistically in taking some of the higher pain points and digitized that. But as far as across the board digital pathology solutions, we don't see that they're quite out there yet today. Thanks. Thank you. Your next question is from Andrew Cooper with Raymond James. Hey, Andrew. Hey, everybody. Good morning. Thanks for the questions here. Lots already been asked, but maybe one more on MRD and the mention of sort of the various different pathways you could go down. Just would love kind of the high-level thoughts of how you think about the value of time from that perspective. And, you know, with the trial, you know, potentially starting in 2025, with the IPRs underway, you know, the timeline of seeing those through to the end versus potentially going another route where you could do something faster, even if it maybe costs a little bit more. Just help us think about how you balance those things as you think about what the next step should be to add MRD to the portfolio. Yeah, look, I think it's a good question. Look, we do have a lot of confidence in the legal strategy because I think especially the IPRs, and I think that's gone kind of under the radar through all of this, because we're going through the natural steps, but those are now filed to see if we can get those patents overturned. And so, look, I think from a radar perspective, we like that technology a lot, and the team had already started working on the next gen, you know, radar product. So I think we're not abandoning that path. But I think that being said, look, we're a company that sells over 600 cancer tests, and we know that MRD will be a product that needs to be there. But our ability... You know, we have multiple NGS tests, so I think our ability to evaluate other options is just prudent on our part. And it's one of the big projects that Ali and her team are looking at. There's a lot of interesting, innovative, early-stage companies out there from a technology perspective. So look, I think we would do that. It— As far as timing, look, I think at the end of the day, you've got to remember, a lot of that product is still not getting reimbursed. I think they're, you know, I think Natera has done a good job with MolDX and getting coverage, but if you still look at the whole industry, it's pretty deep in colorectal, but not a lot of other cases. There are some very good companies that are bringing those products to market in the next year or two, which we think will only grow the market at a faster rate and help adoption, especially from a payer perspective. But this is still so—It's such early days from MRD. I think it's almost like if you would go back with NGS 10 years ago, and today, NGS is only, what? 30%-35% penetrated. So we think that this is gonna be a long game with MRD, and we believe that with being the leading cancer company, that's gonna be important to us, but it's also about being prudent and making sure that we have multiple opportunities. Awesome. That's super helpful. Maybe just one more. In terms of some of the sales force commentary, can you just remind us from a numbers perspective, sort of where you sit in that precision oncology versus the traditional sort of call points, and then as well in ADX, and maybe versus those numbers where you'd like to be, you know, end of year or long term, to the degree there's material change there? Yeah. So, as Chris said earlier, we've sort of doubled our sales force in the last 18 months, which ultimately means we now have an organization that's, that's north of 100 on the clinical side. And if you think of allocation of time, etc., that we apply, roughly 40% of the sales force time is now focused on the community oncology setting, with the remaining roughly 60% focused on our more traditional core point with the pathology in the hospital. So that's really the breakdown with regards to the clinical side of things. On the pharma side of things, just getting my arms around it. Today, we have less than 10 people within our commercial organization targeting our pharma customers, and I think there is a real opportunity for us to make investments here, but not necessarily what I want to call traditional investments. I think there is opportunities to drive a much more sophisticated sales commercial strategy and sales deployment to support that. So I wouldn't just think about this as scaling the number of BDs. I would think about this in a much more transformational manner and different solutions that will drive better efficiency and reduce cost to serve. So I think investment's there, but with two weeks under the belt, probably a little early for me to comment. Great. I'll leave it there. Thank you so much. Thanks, Andrew. We have reached the end of the question and answer session, and I will now turn the call over to management for closing remarks. Okay. Thanks so much, Holly, and everybody, thanks for taking the time to catch up with us today. As we talked about, it was a strong quarter, and we're pleased with the progress that we continue to make, and we'll look forward to catching up with you, next quarter. Thanks, and take care. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.