Analyst here at BofA. We are excited to have Omnicell here. We have CFO, Nchacha Etta, and Kathleen Nemeth, Head of IR. Kathleen has some brief safe harbor comments, then we'll get started. Thank you, Allen, and thank you, Dev, as well, for hosting us today. We've been having a great day here in Las Vegas. Before we get started, I want to remind everyone that during our chat with Allen today, we may make forward-looking statements. There are risks associated with forward-looking statements. Please be sure and review our most recent filings with the SEC. With that, I'll turn it over to Nchacha for some opening remarks. Thank you, Kathleen. Thank you everyone for coming. I would love to begin by just saying a few words about our company, for those of you who are not familiar with Omnicell or if you haven't covered Omnicell for a while. Over the last 30 years, Omnicell's mission has been to transform the pharmacy care delivery model by providing very innovative medication management solutions, and that we believe will help us-would help our customers achieve the right outcomes. We are a global company with a strong market position in the U.S. or in North America, per se. Our solutions help address key medication management challenges around the world, and we are very excited about our multi-year innovation strategy that we've launched. We're truly dedicated to delivering products and services that we believe will provide positive outcome to our customers or patients, as well as a positive return on investment to our customers. And so we're really excited to be here and look forward to answering your questions. That's great. Thank you, Nchacha. During last quarter's earnings call, Randy made some, I guess, more optimistic comments about the state of the health system market. It seems like health system finances are stabilizing, and operating margins for hospitals are improving. Can you talk about your recent conversations with current customers, prospects? Have those conversations changed at all, the type of conversation that you're having versus three, six, 12 months ago? Yes, it's a very good question. Thank you, Allen. So, you know, in conversations that we've had with customers, I think, you know, I think it's clear that the macroeconomic environment continues to improve. And we saw some survey data that showed that the utilization trends for health systems were solid in Q1. However, the macroeconomic environment continues to be challenged because of the higher interest rates that we are aware of. And so there are still some pockets out there of customers, both medium, small and large customers, that are still challenged from a CapEx spend standpoint. We do, however, believe that, you know, we expect to see some improvements in the overall CapEx spend for health systems. And that, coupled with the macroeconomic environment that we're operating in, we're taking a very cautious approach to managing our business, and some of that was reflected in the guidance that we provided at the beginning of the year. So the guidance for 2Q implies a sequential improvement in product revenue. So it seems like you're seeing some type of benefit, and then the implied for 3Q, 4Q, would be a further ramp. I guess, can you speak to the expectations that are embedded in your guidance as it relates to product revenue? Where is that sequential growth gonna come from? How do you think about just the source of that improvement over the course of the year? Yes. So our guidance, especially in the second half of the year, is based on customer scheduling. We do have visibility to our customer schedule at least three to six months, from a forecasting standpoint, and so we do expect that our customers, you know, based on their orders or their, scheduling plans or their interest to schedule, our revenue will, ramp up in the second half of the year. Also, we're seeing a modest increase in demand for our bookings in the second half of the year. So we believe those two factors will definitely drive, our revenue increase in the second half. Got it. As you think about the revenue growth algorithm, I think the expectation for the new product, XT Amplify, is that it's not gonna be a significant contributor in 2024. Maybe can you talk about... I guess, first remind us, what is XT Amplify? What are some of the services or solutions that is embedded within that? And can you talk about what's embedded in your guidance, if anything, as it relates to that new product? Yes. So XT Amplify is a multi-year, outcome-centric innovation program that we've embarked on. Again, this is, you know, an initiative that we're looking at helping improve our overall, long-term, performance of the company. And so it has a set of services and solutions. For example, we have MedChill, which is a product with refrigerated drawers. That product comes with refrigerated drawers that will help provide safety, for some medications. We also have XTE, which is a console upgrade, which is basically going to help from an overall, you know, performance of the XT of our ADC cabinets. And we also have ServerScale, which is a product that will help most hospitals or health systems manage their servers from a cloud-based cloud standpoint. T hose are some of the key products. We have about four or five key products within the XT portfolio that we announced during the Illuminate in April of this year. From a 2024 standpoint, we expect minimal contribution to the overall bookings and revenue plan. Again, like I mentioned earlier, this is a multi-year innovation program that we launched, and we expect this to contribute to our long-term growth plan and strategy. Can you talk about the price point of XT Amplify and what you expect an adoption curve could look like? If not an exact price point, maybe relative to the overall XT. Just kind of how should investors think about maybe the intermediate-term adoption curve? Are there any parallels from prior console upgrades that we can look at? Or just any way for investors to think about what the opportunity set looks like. Maybe not the growth, but the types of customers or percentage of customers that would benefit from this upgrade. Yes. So XT Amplify is really, we're leveraging our existing customer base. As you know, we're nearing the end of our upgrade cycle of our G5 cabinets, and so we're opening it up to all our customers who would love to embrace, you know, this, the product or these solutions. When we announced this in April, we got quite a significant amount of interest from our customer base. And so, again, the expectation is that this will ramp up over the long term. We don't expect any significant benefit in 2024. And from a price point standpoint, it's about a third of the price of our existing cabinet. And so we do expect that contribution to really be a key factor for our overall growth. The margins for XTA are comparatively higher than the margins for our XT cabinet. So again, it's a huge opportunity for us to really help us, you know, with our long-term growth strategy. Got it. One of the questions we are getting a lot from investors is kind of what the margin profile of Omnicell could look like. The company's obviously done a good job getting costs out of the model to help offset some of the impact from lower gross profit. But last quarter, you hired a consultant that's looking at the business. Are there opportunities for additional costs to be taken out or taken out? How are you thinking about, you know, maybe the opportunities, or are you more or less set with the OpEx line as it exists today? So I'll begin by saying this, Allen: so we're not happy with the performance of the company over the last few years, and so, you know, we know that there are opportunities to improve our margins, you know. Especially if you saw in Q1, our margins were impacted by, you know, our product mix, as well as, you know, investments that we made in advanced services. And so just looking at our overall margin for the rest of the year, of the remainder of 2024, we do expect to see an increase in our overall margin from increased product revenue. And so we will leverage, you know, the volume increases there to help—that will help improve our overall margin. Yeah. Got it. With regards to the management consultant, I know you did ask or touch on that. Yeah. Again, the goal here is really to conduct a holistic review of our business from an operational standpoint. You know, we believe that there are opportunities that we can, you know, capitalize on to improve our overall performance. As you saw, you know, late last year, we did take some actions to improve our overall profitability with from a headcount reduction standpoint. Those are quick and easy fixes, right? Those are easy solutions that you can execute to improve your profitability. But we, we felt like it was very important for us to do a holistic review of our portfolio, and hence the decision to bring in an outside consultant to give us, you know, come in with a, you know, new set of eyes and give us a very independent perspective of opportunities as they see, both from an operational standpoint, go-to-market initiative, as well as look at some of the portfolio companies or businesses that we've acquired over the last few years, that some are doing well, some are not doing as well, and some are doing exceptionally well. So, you know, we're really looking forward to the outcome of, you know, some of the recommendations or findings that will come out of the report, and we are going to look at it, review it as a management team, and make the right decisions that we believe will continue to unleash shareholder value. Yeah. Yeah. Appreciate that. I want to talk a little bit about, the business, 'cause obviously there's the core business that is catered toward, you know, 50% of the top 300 health systems, and then there's the other part of the business, I'll call it the Enliven suite, which is more focused toward a retail pharmacy. Right. As you think about those two businesses, are there any clear synergies that you've observed by having those businesses together? I'm just wondering, how do you think about the synergies of having those two businesses, you know, under the same roof? Are there specific things that you can gain scale from? Just curious kind of what you're seeing from that perspective. Yes, Enliven is a very unique business because it's really focused on the retail pharmacy space, you know. As you know, Omnicell's mission is really to transform the pharmacy care delivery model. And so we do have some products and additional solutions that we are launching, for example, as part of, you know, our XTA portfolio. And as we look at really expanding, you know, this multi-year outcome-centric innovation strategy, we do believe that there will be synergies that we can leverage from the Enliven business. But today, Enliven is really a unique business within our portfolio. And we had a good Q1, you know, Enliven, and we expect it to continue to perform well over the next few years. Great. I want to talk about the specialty pharmacy business. I think on the last call, you talked about 400 hospitals and clinics using the product. What's driving Omnicell's success there? And, you know, I asked the question to Randy last year, you know, is how material of a revenue contributor is this specialty pharmacy business? And I believe it's it seems to me like that is pretty core, as it's is your health system customer- Right. Is the one that's leveraging this. So I'm just curious, is this a material revenue contributor for the business? And what type of growth are you seeing there? So the specialty business is a very strategic business for Omnicell because, again, it's very similar to our core business. We have almost the same cohort of customers. So the business from a growth standpoint has a significant amount of growth potential. The business has been growing double digit over the last few years, and we expect the business to continue to grow. However, the margins of the business have not been as, you know, attractive because, again, it's a business model that requires investments upfront, and as you scale, you scale the business, then you start benefiting from improved margins. So today, it's not a significant contributor to our overall revenue. But, you know, over the near term and long term, we expect the business to continue to grow. Like I said, it's growing double digit, and so it's, you know, we expect it to be a key contributor to our overall growth strategy over the near term. Yeah. Going back to the core cabinets business, have you seen any change in industry churn over the past few years? It seems like it's a relatively stable market, but I'm just curious if there's any dynamics there that are evolving in either direction. The overall market is very stable. Like I mentioned earlier, you know, there have been some headwinds in our segment or in the industry that have impacted, you know, hospitals' ability to expand. But there are very few healthcare systems that are expanding from a number of beds standpoint today. So things have been kind of stable, but we do anticipate that as the macroeconomic environment continues to improve, you know, I'm sure some of the larger healthcare systems will invest in, you know, will expand, and that will create opportunities for the key players in the industry. Great. Yeah. Can you provide a quick update on the regulatory review of IVX? Any updates there? Yeah. Do you wanna? Yeah. Sure. So what we've seen... I'll wait till my mic is live. Thank you. So we are seeing instances of where customers are beginning to adapt to some of these new regulations, particularly at the state level. We announced a win last quarter on our conference call with IV, and that was at, at a customer in a state where they had incorporated the regulations into their workflows. That's good news because, as we know in healthcare, once we've got one use case, that helps other customers look at that use case, look at the compliance, look at the regulation. So we're seeing customers adapt there. At the same time, IVCS is still in limited customer release for Omnicell. So it's at a handful of customers. There's good, strong interest from the customer side, but it is still in limited customer release. Got it. I want to ask about kind of the compounding environment more broadly. GLP-1s are. There are companies that are compounding GLP-1s, and it appears that the appetite, no pun intended, for those types of drugs is growing very, very rapidly, and compounding is the way that some companies are going about dispensing those drugs. Does Omnicell have an opportunity to play in that specific growth market? I'm not sure if they are, but I'm just curious if you've heard anything around that. That's a great question, and we're always thinking about the future and long term and where we could add value, and that's certainly something that I'm sure our engineering team and our marketing team is looking at in terms of future potential opportunities. Right now, our IVCS is focused on sterile compounding of non-hazardous types of medications. So that's our current focus, but that is something that we and others are probably looking at in the future. Got it. Very helpful. Thank you for that. One more housekeeping question on... Did you see any impact from Change Healthcare's disruption in the quarter? And is there any impact in the guide around that? We did not see any impact with our key customers. I know it was a very unfortunate situation in the healthcare systems, but we did not see any major impact with some of our customers. We do expect this to... This cyberattack has created some unpredictability in the healthcare systems. And so, and I believe it will create some near-term headwinds that, you know, we do expect to occur. Got it. And then, can you talk a little bit about recent trends you've seen in the 340B business? I guess, first, can you explain what that business does, the value it provides to your customer, and, you know, what is the outlook for that business? So from an outlook standpoint, and I'll make a comment, and let Kathleen address. From an outlook standpoint, the 340B business has been stable over the last year. You know, and we do continue—we do expect the business to continue to perform well as we're thinking about combining it with our specialty pharmacy business. But we do believe that that will contribute to this multi-year growth strategy that we are looking at from a long-term standpoint. But Kathleen? No, I think you said it well. Yeah. I think we do have it combined now with specialty. As you know, many 340B medications are specialty meds, so it's important when we are working with those health systems, that we have that expertise and the ability to help them administrate that. So that's our area of focus right now. Got it. And I guess going back again to the core cabinets business, as we think about where interest rates are and we think about kind of where your average health system customer is, obviously, the upgrade that you announced seems to be bringing prospective customers that may have pushed off getting an upgrade kind of back to the table. When you're having conversations with those prospects, is financing a key sort of problem for these customers, where if interest rates went down, maybe they'd be more amenable to upgrading? Or is it just there are other higher priority expenditures that are driving sort of that issue? In the conversations that we have with customers, I think it depends on the customer, right? Each customer has their own capital budget approval process and capital investment or CapEx investment decisions that they have to make. And so, as we speak to customers, I think there's a diversity of reasons or factors that go into the decision-making process to either, you know, invest in our product or a different product or a high-priority product. So I think it just depends on the individual customers. But to your point about the interest rate environment. Yeah. I do believe it does have an impact on, you know, the cost, some customers' ability to make those capital investment decisions because, I mean, the, you know, the rates are pretty high. But again, I believe it depends on the customers. Some of the smaller customers, I don't think it's that big of an issue, but the midsize to the larger, some of the larger healthcare systems, of course, they look at, you know, the interest rates making their capital investment decisions. Have there been any changes in the market around pricing for, for the core offering or with some of your competitors? Just curious if anything has changed there over the past year or so. Yeah, and the past year, I mean, pricing has been. We've always looked at pricing to help us manage, you know, inflation, which, you know, has been prevalent over the last few years. Yeah. Fortunately for us, our customers have been, they've embraced the pricing action, so the price increases that we've taken, and we do anticipate or expect to continue to assess the macroeconomic environment from an inflation standpoint. And if there's a need for us to take pricing, we will, because it's been, you know, inflation has been pretty high over the last few years. Yeah. And, you know, I guess the last main question that I have around, you know... When we have this conversation a year from now, you know, what are you most excited about, where, you know, you and I can have a conversation next year, and, you know, as it relates to the investment thesis, the story of Omnicell, where you're, you know, where you're going and the opportunities ahead? Just trying to get a sense of what's the most exciting thing you're thinking about. I am excited about- or we are excited about our multi-year, innovation, strategy. We're reinvigorating our, product development program, and XTA is a good example. It's just the beginning of our focus on new products and services that we're going to launch over the next, over the long term, I would say. And so, as you know, Omnicell has been an innovation powerhouse, or innovation has been a key success factor of our company over the last 30 years. And, we do expect, that over the next, you know, 5-10 years, you will see more innovative products, that we will launch to continue to transform the pharmacy care delivery model and address, you know, the medication management challenges that we have across the continuum of care. That's great. And then one final question. As it relates to the competitive environment, you know, it seems, again, from our perspective, based on our channel checks, that it's a relatively stable market. It's really a two company, two-product market in your core business. Has anything changed from that over the past couple of years? Is there anything that you're seeing in the market that would make you think that that's not the case? And then, as an industry leader, you know, sort of how does that create opportunities for Omnicell to add new products to their current customers? So the market overall, over the last few years, has been stable, right? We haven't seen expansion or growth from our customer base, overall segment customer base standpoint. As you know, it's a duopoly between us and our competitor. I do expect over the next few years that what will really differentiate us from our competitor is how innovative we will be. We're very optimistic about our innovation plan, and we will, we expect to be competitive in the market. Yeah. Got it. I don't know if you have anything to add. Yeah. No, I think, well said. Got it. Great. Well, thank you everyone for joining us today, and thank you, Nchacha and Kathleen, for the time. We really appreciate it. Thank you. Thanks, Allen. Thank you for having us.