Good afternoon, everyone. Suraj Kalia, Senior Medical Device Analyst at Oppenheimer. Pleased to have with us this afternoon, Sunny Sanyal, CEO, Sam Maheshwari, CFO, and Chris Belfiore, IR of Varex Imaging. As you all know, Varex is one of the key providers of X-ray tubes, detectors, and key equipment to the radiology space overall. A lot of macro events going on. You know, I think this discussion is timely and would love to get perspectives from Sunny and Sam throughout this conversation. Folks, to those of you attending virtually, you know, you guys know the drill. Just ping me or any of my juniors on email, and we'd be more than happy to ask questions. Conversely, you can just put it in the chat box, and we can take it from there. Sunny, Sam, thank you so much for taking the time and joining us today. Let me start out. Sunny, obviously, one of the key topics, I mean, most of the questions, obviously, you know, as it relates to you all, are going to be macro level. On a company-specific level, you know, for the years that I've followed you guys, you guys keep doing everything that is within your control. It's the things that are out of your control, unfortunately, that cause these dislocations. That's what I'd like to spend some time. Sunny, China, right? I know one is the geopolitical noise, right? I'll get to that in a second. On anti-corruption, how should we think about, you know, your latest thoughts? Because I think GE Healthcare is also talking about things getting delayed a little bit. I'd love to get your perspective on what you're seeing, how you're seeing this play out. First, Suraj, thanks for having us. Great to be on this event. Regarding China, you know, the bulk we see as the way we see it is that the bulk of the anti-corruption-related activity is largely behind us. There are still some trailing activities that are ongoing. For us at this time, we don't see that as being an impact for us in any significant or meaningful way. Last quarter, in fact, we saw, as we mentioned, a positive inflection on the sales side. It broke the trend, the downward trend on order intake that we had seen previously. Our sentiment on the situation in China at this point is that we're seeing it improve. We're seeing demand improving. As we've said earlier, we're not expecting a snapback. Instead, we're seeing a gradual increase back towards, I'd say, more secular growth rates. Our overall belief is that we're not going to go backward from where we were in 2024. Instead, we're going to go further up from here where we are. Again, qualified with a lot of uncertainties around tariffs and everything else that's going on. At a very specific demand on the basis of what we're seeing as demand from our Chinese OEMs, we're seeing it as a more positive sentiment versus negative. There was the question about stimulus. How is the stimulus moving along? What's going on? Is it impacting us? What we're seeing is that the stimulus program is starting to make its way through the system. There's still not very good visibility to whether some of the uptick we're seeing is due to stimulus, or is it because of natural buying behavior now, now that some of the other events, such as the audit process, is behind us. What we're seeing is that what we're hearing from our customers is that the stimulus is primarily focused on upgrading existing equipment and encouraging hospitals with six to eight-year-old systems to replace those with newer systems and moving those older systems over to the rural areas. It would represent net new systems and with the installed base then growing and these older systems going over to new hospitals. That should be a positive thing for us. Again, like I said, it's gradually making its way through the system. I can't really point to any sharp inflection projections there. In terms of timing and magnitude, there's really no real good indications on what the stimulus will bring. But overall, like I said, our sentiments regarding China are largely more positive versus negative than as we've been in the past. Sunny, has your viewpoint changed in terms of the magnitude of the stimulus? I know there are some things you guys just do not have visibility. But from your feet on the ground or indirect checks, where is, you know, where is the sentiment in terms of the dollar amount? We do not have any further insights into that. Our Chinese OEMs have not been able to give us much of an indication around that other than they see it as a positive, and we see it as a positive as well. Sunny, I know the last time in 2019, you know, there was this whole tariff thing. It caused a dislocation. You guys, you know, got to work and moved manufacturing to Wuxi and just kind of buffered yourselves somewhat. This go around, are there similarities? Are there dissimilarities? How should we think about however this is going to unfold, right? It's like day to day we are living, you know. I cannot imagine being in your position trying to forecast. To the extent that you can, how should we think about what happened in 2019, the dislocation for Varex, and how we are buffered today? Yeah. As we all know, the situation is pretty fluid and dynamic. It keeps changing. As a framing comment, let me say that we're in a better place this time, we feel, than in the 2018, 2019 timeframe when the last time this happened, largely because we took the actions at that time to diversify our supply chain. Our China operations, the local for local operations, are much, much more robust now than it was at that time. Our ability to make detectors, which is one of our product lines that faces more stiff competition, is now broad-based. We can make detectors in the U.S. We can make them in Europe. We can make them in China. With India coming up in the near future, it adds to that operations resilience that we have now, that we will have now, then versus in 2018, 2019. What's different this time is that, you know, in 2018, 2019, when this happened, we knew what the situation was. We knew exactly what was laid out as the tariffs here. Things are changing on a daily basis. It's more broad-based. Last time, it was all about China. This time, it's more than China. That's the key difference. From that perspective, we were able to estimate the impact of our direct impact on our direct costs of purchases from the markets that are affected, like China. This time, it's a little bit more than that. We can still assess the direct impact to us fairly well because that's known to us. We know what we buy, we know who we buy from, and what the tariffs are currently. The indirect impact is slightly unknown, more unknown than it was previously because there are US suppliers who buy from others who they have sub-suppliers and sub-suppliers. That part is not known. Based on our current condition, based on the current conditions, we feel the direct cost impact is not significant at this time for this fiscal year. We're still trying to understand the impact of the indirect purchases. We have exemptions in place in China. We've been told that those exemptions will continue, which is, you know, we had a degree of uncertainty around that the last time. Fortunately, those exemptions have continued. Where we are currently, it still does not feel that different other than the indirect impact is to be determined. What we're going to do is we'll take advantage of our global supply chain. We will, where we feel that there's a stronger impact on the indirect side, move where it's possible to other suppliers from other geographies. If it's absolutely necessary, we're willing to ramp up productions in other locations, particularly for detectors, where we have the abilities. On top of that, we will do three things. We will do everything we can to lobby for exemptions if and when they come up. We've begun that process to start ferreting that out. We will mitigate with alternate sources of materials and suppliers. We're in a better place to do that this time. Third, whatever we can, the rest, as we see, if we see it in the form of either tariffs that are being passed on by our suppliers or cost increases as a result of the tariffs, we'll pass them. Our intention is to pass those on to our customers. This is, in a way, I'll say we're better prepared this time than we were in the 2019 timeframe. We are just, I think the things we've done are going to help us out this time and making us a little bit more resilient than the last time. Sunny, forgive me for belaboring this again on China, and I'll keep this as the last point. One is sourcing of materials, right? The other is the sale of the finished product and the final destination, right? Where do you think in the current environment is you sense the sensitivity is more for the current environment, specifically for Varex? Is it in terms of, especially if tariffs go ahead and all this geopolitical tension, do you think it's more on the sourcing of materials side, or you all would have to rejig, like you said, the production lines or whatever on the finished product side? No. From the retaliatory tariff, first of all, there are the tariffs that the U.S. government has put in place for materials that we buy from China. That is no different from the last time. We have a pretty good handle on what that would be. We have alternatives in many cases. On the sales side, the inbound tariffs into China are two things. One, the retaliatory tariffs have not included the types of products and materials that we import. We do not see a direct impact of that from a sales perspective. In terms of cost of materials coming into China, we have exemptions in place. We are not seeing much of a difference there. There is not much of a sensitivity on the sales side at this time, like it was last time where there had been, you know, we were exposed on the detector side. This time around, to the extent that we are selling detectors in China, those are being made locally as well. We are in a good local for local situation this time. Got it. Got it. Sam, if I could just put you on the spot, just I know you all have given guidance and outlook for gross margins and how the year will flow out. Walk us through in terms of your, you know, how many buffers are built into your guidance with everything that Sunny has discussed, buffers for, you know, any upside? How are you all thinking through as the year progresses? Thank you, Suraj. That's a pretty difficult question in this day and age in terms of buffers and the uncertainty that almost every company is dealing with. As Sunny said, I'll echo the same sentence that, you know, generally, the retaliatory tariffs by other countries that can impact the sale of final product can have a bigger impact than the cost side where we are importing things. In general, we have been more and more dual sourcing, et cetera. In terms of moving supply chains on the raw material side, we have more flexibility this time around. We've been thinking about it for some time. It is the retaliatory tariffs that can have a bigger impact. Last time, as Sunny said, it was mostly around detectors. At this time, that is largely already local for local manufacturing completed for that. The other products, generally CT tubes, which is the more bigger revenue exposure for us for China, those are exempted. They have been exempted for quite some time by the Chinese government. Our current thinking is that it'll continue to be exempted. That shifts our conversation more on the cost side here in the U.S. We have been working on duty drawback, structured implementation, free trade zone structured implementation. I would say that, you know, there can be small impact. In terms of gross margin guidance, et cetera, if anything impacts us, we would be planning to pass it down to our customers. We have been taking a number of initiatives to do that. I would say, you know, there is some planning we have done in terms of our gross margin guidance. It is difficult to fully plan it out given such a widely varying outcome on tariff situation. I would say that there is some uncertainty. The other thing I would say, this is another reason in this environment of a practice of providing quarter to quarter guidance somewhat helps us because we are not going too far out not knowing what type of a situation we are staring at. We are planning, we are planning for some buffer. We have to see how that works out. Fair point. Sunny, walk us through the state of the medical segment, you know, which is about 70% of your overall revenues. It's always one of the most exciting segments, you know, just given activity in some of the bigger players. If you could just walk us through how you're thinking about, you know, what are the stress points in the medical segment? What should we be looking for as we start going into the second half and exiting this year? Yeah. First, I'll make sure I understood your question. Stress points as in general, you mean. Growth was at a certain level, right, Sunny? And wherever it is right now relative to what you all were thinking, just try to help us understand, is it more demand oriented? Is it macro environment oriented or supply oriented? Just walk us through, you know, how should we think about the cadence of the medical segment in particular and the growth thereof? Yeah. Our medical segment historically has been pretty resilient to economic conditions with the exception that China was the blip for us, right, last year. For us, the real driver for our performance for the rest of this year will be our, you know, whether we're right about China or not. You know, if China continues, we've taken a very modest and conservative view of what we think will happen in China. It's really the demand side. The demand side and the demand side, I'd say, is largely the biggest open risk has been and continues to be the China situation. We have somewhat de-risked that with our current view that we've taken that it's not going to snap back. We are not expecting a snapback. We're also not expecting it to go backwards. To the extent that we are proven wrong on that, that's where the pressure point will be. We are not anticipating the supply side challenges, meaning to the extent that there are orders and we have order coverage, we will be able to deliver. We are not expecting a collapse in the supply chain like it happened, you know, a couple of years ago. Since we now have a much more diversified group of suppliers, there's really very, very few sole source or single source suppliers that we would be dependent on. We feel pretty good about where we are in our ability to fulfill the demand. As long as the demand, particularly on the China side, stays where it is, you know, we feel like our thought process has been right on about this year. Got it. Got Got it. Got it. Within the medical segment, Sunny, I know you guys have been very bullish on photon counting. Your larger competitors have also equally been vocal about photon counting. Talk to us about a state of affairs, you know, where you see, especially in the CT segment, right? I know there was this chatter on the industrial side. I would be very curious how you see it playing out timeline on the medical side, especially the CT side. Yeah. We are continuing to make progress with both on the product side and the sales side, both in medical and industrial. In medical, we are getting broad-based interest from OEMs. These are for new and, you know, novel new applications that would benefit from photon counting. As you mentioned, our focus has been on CT because it is the largest opportunity for us. There, we are continuing to make pretty solid progress on the product side. As we mentioned before, we are very far along with one global OEM. When I say far along, I mean they have a firm plan. There is a project plan and R&D work that is going on. We are actively engaged. There are timelines. There are milestones. The customer has a launch plan. They are marching towards that as fast as they can. That is the status we are with the key, you know, the lead OEM that we secured that we talked about in the last couple of quarters. Besides that, there are a couple more that are in the pipeline, you know, one of which is further along than the others. It is very difficult for us to give any more visibility than that. As you can imagine, the OEMs are very sensitive about what they are doing in this space. We will keep you posted on this type of progress as we make progress, at least at some macro level, we will give you guidance. All I can say at this point is that the interest is there. Our product and our specifications of our products and the outputs that we are able to share with the OEMs are being received well. You know, people are, even the ones that have photon counting technology of their own that they're trying out, they're keeping a pulse on us and also working with us in parallel because this technology is new. People start out with a certain approach. No one wants to shut down any avenue. We feel this is a, you know, we feel like this is a good thing for us. It's just frustrating that it takes so long to bring something to market. As we've said, we are still holding on to the plan that we have and anticipating that we'll see this become a $150 million type of a contribution, contributing revenue, contributing, generating a product line for us by 2029. You know, we should start to see an inflection in revenues on this, you know, in our fiscal 2026, late fiscal 2026 or 2027 time frame. Got it. Got it. On the same token, Sunny, on the industrial side, right, recently you all have been talking about the cargo segment picking up. Help us understand, you know, what are you all seeing that, you know, your commentary, at least from past years now, suddenly on cargo has been, at least we think, has been a little more bullish. The markets, you know, as you all have indicated, it's like a billion dollar plus and healthy growth. Where are you all in this whole dynamic? What are you all seeing that is driving optimism? By the same token, right, the tariffs and geopolitical tension, do you think there is any stress in the system right now for the cargo segment? Yeah. The cargo segment tends to become very active whenever there is any security-related upheaval. Right now, there's a lot of that. We saw a period of two to three years post-COVID where the visibility to demand just dropped, right? There wasn't much activity. The tenders started coming. We saw that. Now that we are in it ourselves directly from a systems perspective and we're participating in tenders, we're getting very good visibility to what is going on out there and what's out there. The estimate that it's over $1 billion in our serviceable, addressable market for the hardware and equipment, we can see that, right? For us, the opportunity is for, so number one, we're seeing activity. There's tender activity. There are tenders happening that are being put out. We are bidding in them. This is giving us confidence on the continued fact that this is a vibrant space. Both from a security perspective and with the increase in activity around tariffs, there's a need for automation in this space to understand whether what's being transported matches what's being said on the manifests. We're seeing tenders starting to indicate those kinds of needs and requirements. For us, this is, we're a small player in the system side of this. We've been a pretty substantive player on the component side of it. When I say components, I mean we've been the major provider of linear accelerators, detectors for cargo systems, software, image acquisition software for these systems, and with a very large footprint. For us, the entry made sense provided we could see our way to a $100 million plus type of sales traction in this space. In general, for us to get into any new area, we've said that about photon counting. We've said that about radiographic detectors. Same with cargo. We see this as a billion dollar per year type of a space resulting in a $100 million-plus type of sales for us over the next three to five years. To that point, we have been winning deals. Last time we gave an indication that we were installing several systems. We've completed installations of several systems. We also won, you know, a new deal that we indicated last time. There are several others that we're in the middle of. All this gives us, and the reception, all this gives us confidence in the space. Also, the reception that we've been receiving from the prospects, the customers, then customers that have been putting out these tenders has been very positive. We're a very well-known brand with deep domain knowledge. We have a footprint. Virtually everyone out there has experienced our technologies or services, anyone that's putting out tenders and bids. We have deep domain knowledge. The reputation for service and services is very, very strong. We're starting on a good foot here. Plus, I'd also highlight, other than Nuctech, we're the only vertically integrated player here in this space with end-to-end capabilities for both, which is good from an implementation and service perspective, but also great for making the changes that are needed to the products to differentiate ourselves. At this point, this continues to be an exciting business area for us. We are bullish. Got it. Gentlemen, we are almost up on time. Sam, if I could ask you one question, right? I remember when you had joined, right, your focus was on optimizing the balance sheet. And one of them was inventory, you know, just kind of making sure. And inventory, I think it's the last quarter, you know, our days of inventory picked up. Help us understand where you are in the process of optimizing the balance sheet. My subliminal question really is trying to understand, I remember the glory days of 40% gross margins, right? We are right now in what, 34%, give or take? I know it's a longer-term outlook. Just set the stage of how we should start thinking beyond your guidance and going into next fiscal year. Yeah, sure. We continue to keep working on our inventory to bring it down. You know, if you look at the longer-term trend, we have brought inventory down. From quarter to quarter, there can be perturbations because of cyclicality and where the stuff lands, et cetera. Our efforts to keep on bringing inventory down continue. However, where we are right now, as we look forward, our order rates have been improving. As of now, given the order rates improvements, that would mean that we should be looking at sales growth. Whenever there is a sales growth environment, it kind of puts a negative pressure on the inventory because we need to bring in inventory to meet more of the sales growth or sales-related needs. That is the current situation that we are in. Our efforts on inventory are ongoing and continuing. In terms of the dollar demonstration of that on balance sheet, it might be muted. We would rather try to maintain inventory but enable higher sales. Right now, order rates are picking up, and we are seeing, we are forecasting growth as we go forward here. The second question related to gross margin, you know, we have been making gross margin-related improvements. The volumes have been low in the last few quarters. As volumes pick up, they should provide us support for improving our gross margin. At the same time, I want to remind you we are doing, we've been working on a number of initiatives, including setting up our India factory. There definitely is friction because of it right now as we speak, because there is no production there, but there is a lot of cost. That is there in gross margin. At the same time, in the last one year or so, we've been also trying to ramp up our initiatives on the cargo inspection side. There's been a lot of investments in enabling these growth initiatives, which are at very, very nascent stage. P&L is funding for those investments also. When all of these initiatives are completely done, you know, and I would say that'll be at least 18 months, you are beginning to see revenues from cargo. We would be releasing our plants to production in India towards the end of fiscal 2025, and then the second plan towards the end of fiscal 2026. As these plants go into production, India plants go into production, cargo inspection picks up volume. It becomes more steady state and growing. Photon counting also begins to happen, say, towards the second half of FY 2026. All of these should help us on our gross margin compared to where we are. Photon counting, we are expecting it to be significantly above the current corporate gross margin. It should have a net creative effect. The other two would become just more efficient and provide a scale as well as benefit of our gross margin. That is kind of like the longer-term vision for our gross margin for, say, FY 2026 and FY 2027 and beyond. Hopefully, I kind of answered your question, Suraj. Fair enough. All fair points. Gentlemen, we are up on time. Thank you so much for taking the time this afternoon and walk us through some of the key points that come up in client conversations. We do appreciate your help. I hope you have a productive day. Thank you so much. Thanks. Thank Thank you, Suraj. Thank you, Suraj. Take care. Good afternoon, everyone. Suraj. IR of Varex Imaging. As you all know, Varex is one of the key providers of X-ray tubes, detectors, and key equipment to the radiology space overall. And a lot of macro events going on. You know, I think this discussion is timely. Would love to get perspectives from Sunny and Sam throughout this conversation. Folks, to those of you attending virtually, you know, you guys know the drill. Just ping me or any of my juniors on email. We'd be more than happy to ask questions. Conversely, you can just put it in the chat box. We can take it from there. Sunny, Sam, thank you so much for taking the time and joining us today. Let me start out. Sunny, obviously, one of the key topics, I mean, most of the questions, obviously, you know, as it relates to you all, are going to be macro level. On a company-specific level, you know, for the years that I've followed you guys, you guys keep doing everything that is within your control. It's the things that are out of your control, unfortunately, that cause these dislocations. That's what I'd like to spend some time. Sunny, China, right? I know one is the geopolitical noise, right? I'll get to that in a second. On anti-corruption, how should we think about, you know, your latest thoughts? Because I think GE Healthcare is also talking about things getting delayed a little bit. I'd love to get your perspective on what you're seeing, how you're seeing this play out. First, Suraj, thanks for having us. Great to be on this event. Regarding China, you know, the bulk we see as the way we see it is that the bulk of the anti-corruption-related activity is largely behind us. There are still some trailing activities that are ongoing. For us at this time, we don't see that as being an impact for us in any significant or meaningful way. Last quarter, in fact, we saw, as we mentioned, a positive inflection on the sales side. It broke the trend, the downward trend on order intake that we had seen previously. Our sentiment on the situation in China at this point is that we're seeing it improve. We're seeing demand improving. As we've said earlier, we're not expecting a snapback. Instead, we're seeing a gradual increase back towards, I'd say, more secular growth rates. Our overall belief is that we're not going to go backwards from where we were in 2024. Instead, we're going to go further up from here where we are. Again, qualified, there are a lot of uncertainties around tariffs and everything else that's going on. At a very specific demand on the basis of what we're seeing as demand from our Chinese OEMs, we're seeing it as a more positive sentiment versus negative. There was the question about stimulus. How's the stimulus moving along? What's going on? Is it impacting us? What we're seeing is that the stimulus program, it's starting to make its way through the system. There's still not very good visibility to whether some of the uptick we're seeing is due to stimulus. Is it because of natural buying behavior now, now that some of the other events, such as the audit process, is behind us? What we're seeing is that what we're hearing from our customers is that the stimulus is primarily focused on upgrading existing equipment and encouraging hospitals with six- to eight-year-old systems to replace those with newer systems and moving those older systems over to the rural areas. It would represent net new systems. With the installed base then growing and these older systems going over to new hospitals, that should be a positive thing for us. Like I said, it's gradually making its way through the system. I can't really point to any sharp inflection projections there. In terms of timing and magnitude, there's really no real good indications on what the stimulus will bring. Overall, like I said, our sentiments regarding China are largely more positive versus negative than as we've been in the past. Sunny, has your viewpoint changed in terms of the magnitude of the stimulus? I know there are some things you guys just do not have visibility. But from your feet on the ground or indirect checks, where is, you know, where is the sentiment in terms of the dollar amount? We do not have any further insights into that. Our Chinese OEMs have not been able to give us much of an indication around that other than they see it as a positive. We see it as a positive as well. Sunny, I know the last time in 2019, you know, there was this whole tariff thing. It caused a dislocation. You guys, you know, got to work and moved manufacturing to Wuxi and just kind of buffered yourselves somewhat. This go around, are there similarities? Are there dissimilarities? How should we think about however this is going to unfold, right? It's like day to day we are living, you know. I cannot imagine being in your position trying to forecast. To the extent that you can, how should we think about what happened in 2019, the dislocation for Varex, and how we are buffered today? Yeah. As we all know, the situation is pretty fluid and dynamic. It keeps changing. As a framing comment, let me say that we're in a bit of a better place this time, we feel, than in the 2018, 2019 time frame when the last time this happened, largely because we took the actions at that time to diversify our supply chain. Our China operations, the local for local operations, are much, much more robust now than it was at that time. Our ability to make detectors, which is one of our product lines that faces more stiff competition, is now broad-based. We can make detectors in the US. We can make them in Europe. We can make them in China. With India coming up in the near future, it adds to that operations resilience that we have now, that we will have now, than versus in 2018, 2019. What is different this time is that, you know, in 2018, 2019, when this happened, we knew what the situation was. We knew exactly what was laid out as the tariffs here. Things are changing on a daily basis. It is more broad-based. Last time, it was all about China. This time, it is more than China. That is the key difference. From that perspective, we were able to estimate the impact of our direct impact on our direct costs of purchases from the markets that are affected, like China. This time, it is a little bit more than that. We can still assess the direct impact to us fairly well because that is known to us. We know what we buy. We know who we buy from and what the tariffs are currently. The indirect impact is slightly unknown, more unknown than it was previously because there are U.S. suppliers who buy from others who they have sub-suppliers and sub-suppliers. That part is not known. Based on our current condition, based on the current conditions, we feel the direct cost impact is not significant at this time for this fiscal year. We're still trying to understand the impact of the indirect purchases. We have exemptions in place in China. We've been told that those exemptions will continue, which is, you know, we had a degree of uncertainty around that the last time. Fortunately, those exemptions have continued. Where we are currently, it still does not feel that different other than the indirect impact is to be determined. Now, what we're going to do is we'll take advantage of our global supply chain. We will, where we feel that there's a stronger impact on the indirect side, we will move where it's possible to other suppliers from other geographies. If it's absolutely necessary, we're willing to ramp up productions in other locations, particularly for detectors, where we have the abilities. On top of that, we will do three things. We will do everything we can to lobby for exemptions, see if and when they come up. We've begun that process to start ferreting that out. We will mitigate with alternate sources of materials and suppliers. We're in a better place to do that this time. Third, whatever we can, the rest, as we see, if we see it in the form of either tariffs that are being passed on by our suppliers or cost increases as a result of the tariffs, we will pass them. Our intention is to pass those on to our customers. This is, in a way, I will say we are better prepared this time than we were in the 2019 time frame. We are just, I think the things we have done are going to help us out this time and make us a little bit more resilient than the last time. Sunny, forgive me for belaboring this again on China. I'll keep this as the last point. One is sourcing of materials, right? The other is the sale of the finished product and the final destination, right? Where do you think in the current environment you sense the sensitivity is more for the current environment, specifically for Varex? Is it in terms of, especially if tariffs go ahead and all this geopolitical tension? Do you think it's more on the sourcing material side? Or you all would have to reject, like you said, the production lines or whatever on the finished product side? No. From the retaliatory tariff, first of all, there are the tariffs that the U.S. government has put in place for materials that we buy from China. That is no different from the last time. We have a pretty good handle on what that would be. We have alternatives in many cases. On the sales side, or the inbound tariffs into China, two things. One, the retaliatory tariffs have not included the types of products and materials that we import. We do not see a direct impact of that from a sales perspective. In terms of cost of materials coming into China, we have exemptions in place. We are not seeing much of a difference there. There is not much of a sensitivity on the sales side at this time, like it was last time where there had been, you know, we were exposed on the detector side. This time around, to the extent that we are selling detectors in China, those are being made locally as well. We are in a good local for local situation this time. Got it. Got it. Sam, if I could just put you on the spot, I know you all have given guidance and outlook for gross margins and how the year will flow out. Walk us through in terms of your, you know, how many buffers are built into your guidance with everything that Sunny has discussed, buffers for, you know, any upside? How are you all thinking through as the year progresses? Thank you, Suraj. That's a pretty difficult question in this day and age in terms of buffers and the uncertainty that almost every company is dealing with. As Sunny said, I'll echo the same sentence that, you know, generally, the retaliatory tariffs by other countries that can impact the sale of final product can have a bigger impact than the cost side where we are importing things. In general, we have been more and more dual sourcing, et cetera. In terms of moving supply chains on the raw material side, we have more flexibility this time around. We've been thinking about it for some time. It is the retaliatory tariffs that can have a bigger impact. Last time, as Sunny said, it was mostly around detectors. At this time, that is largely already local for local manufacturing completed for that. The other products, generally CT tubes, which is the more bigger revenue exposure for us for China, those are exempted. They have been exempted for quite some time by the Chinese government. Our current thinking is that it'll continue to be exempted. That shifts our conversation more on the cost side here in the U.S. We have been working on duty drawback, structured implementation, free trade zone structured implementation. I would say that, you know, there can be small impact. In terms of our gross margin guidance, et cetera, if anything impacts us, we would be planning to pass it down to our customers. We have been taking a number of initiatives to do that. I would say, you know, there is some planning we've done in terms of our gross margin guidance. It is difficult to fully plan it out given such a widely varying outcome on tariff situation. I would say that there is some uncertainty. The other thing I would say, this is another reason in this environment a practice of providing quarter to quarter guidance somewhat helps us because we are not going too far out not knowing what type of a situation we are staring at. We are planning, we are planning for some buffer. We have to see how that works out. Fair point. Sunny, walk us through the state of the medical.