Avita (RCEL) Q1 2026 Earnings Call Transcript

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DATE

Thursday, May 14, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Cary Vance
• Chief Financial Officer — David O'Toole

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TAKEAWAYS

• Revenue -- $19.3 million, representing 4% growth year over year and approximately 10% sequential growth from the fourth quarter of 2025.
• Gross Margin -- 81.7%, compared to 84.7% in the prior year period, mainly due to inventory reserves and product mix shift with higher Cohealyx and PermeaDerm contributions.
• RECELL Gross Margin -- Maintained at approximately 85% for the period, with expectations for continued stability.
• Operating Expenses -- $24.5 million, down 11% year over year, reflecting cost optimizations implemented in 2025 and a more disciplined structure.
• Net Loss -- $10.6 million or $0.35 per basic and diluted share, compared to $13.9 million or $0.53 per share in the prior year period.
• Net Cash Used -- $9.9 million for the quarter, citing higher seasonal compensation, onetime payments, and timing of collections from later-quarter product sales.
• Cash and Marketable Securities -- $14.3 million at period end.
• Full-Year Revenue Guidance -- Reaffirmed at $80 million to $85 million, with management noting current trends and momentum, but declining to raise the guidance at this stage.
• BARDA Agreement -- New long-term deal with a $25.5 million ceiling; $3.9 million guaranteed revenue amortized over 10 years at ~$100,000 per quarter, with the remainder contingent on mass casualty response requirements.
• Medicare Reimbursement -- All seven Medicare Administrative Contractors (MACs) now publish clinician payment rates for RECELL, removing previous reimbursement uncertainty; most recent MAC adjusted rates upward to align with others.
• Cohealyx Interim Data -- Clinical study reported median time to grafting of approximately 11 days and a 20-day reduction to graft readiness relative to benchmark, with high investigator satisfaction and consistent outcomes.
• Portfolio Adoption -- The company sees early-stage repeat use and increasing account orders for Cohealyx, and a growing number (in the 20s) of centers utilizing the full AVITA portfolio (RECELL, Cohealyx, and PermeaDerm).
• Product Mix Shift -- Higher proportion of revenue from Cohealyx and PermeaDerm impacted reported gross margin, but these products are accretive to total gross profit dollars without commensurate increases in operating cost.
• Demand Cadence -- Shift away from bulk purchasing to more frequent, smaller orders, improving revenue consistency and predictability, and supported by enhanced sales forecasting processes.
• Burn and Trauma Utilization -- RECELL GO mini gaining traction for smaller burns and trauma indications, with expanded regulatory clearances in Australia and New Zealand facilitating international adoption.
• Cost Structure -- Management stated cost base is now stable and matched to current scale; future increases expected only from higher commission expenses linked to incremental revenue.
• Debt Facility -- Remains in compliance with revenue and minimum cash covenants; facility was designed for operational flexibility, and current thresholds sit meaningfully below existing revenue levels.

SUMMARY

AVITA Medical (NASDAQ:RCEL) reported sequential and year-over-year revenue growth, driven by rising demand for both RECELL and Cohealyx as reimbursement barriers receded. Cash use exceeded typical quarters due to timing factors, but management indicated these pressures had reversed entering the second quarter. A newly signed BARDA agreement adds a 10-year stream of readiness revenue with the opportunity for further funding in mass emergency events.

• Management cited "a gradual return to utilization patterns that reflect procedural demand rather than reimbursement uncertainty" following complete MAC reimbursement clarity.
• Leadership confirmed that all MACs have harmonized RECELL rates, eliminating state-level inconsistencies.
• Early Cohealyx adoption is supported by clinical evidence showing reduced time to graft readiness and high surgeon satisfaction, reinforcing value in adoption committee reviews.
• RECELL GO mini has broadened addressable market by enabling more economical use in smaller wounds and trauma, as highlighted by growing real-world clinician engagement at the American Burn Association Meeting.
• Sales ordering has shifted to smaller, more frequent transactions, enhancing predictability for both AVITA and customers and stabilizing operating cash flows.

INDUSTRY GLOSSARY

• BARDA: Biomedical Advanced Research and Development Authority, a U.S. government agency funding medical countermeasures for public health emergencies.
• MAC: Medicare Administrative Contractor, a regional organization responsible for processing Medicare claims and setting local reimbursement rates for healthcare services.
• VAC: Value Analysis Committee, a hospital-based group that evaluates the clinical and economic benefits of new products before adoption.
• Allograft: A tissue graft from a donor of the same species as the recipient but not genetically identical, often used as a temporary wound coverage.

Full Conference Call Transcript

Cary Vance: Good afternoon in the U.S., and good morning in Australia. Thank you for joining us. Before we turn to the quarter, I want to briefly acknowledge my appointment as President and Chief Executive Officer. Over the past 6 months, I've had the opportunity to serve in this role on an interim basis, working closely with our team, our customers and the Board. I appreciate the confidence the Board has placed in me following a thorough search process and I'm excited to lead AVITA into this next phase. I'd also like to recognize our new Board Chair, Jan Stern Reed.

Jan has been deeply engaged with the company, and I look forward to working closely with her and the Board as we continue to execute on our priorities. Over the same period, I've spent time visiting the hospitals using our products, and speaking with surgeons. And what's clear to me is that this is not an abstract business. When you're in the operating room, you see firsthand the partnership we have with surgeons and the role our products play in helping patients recover and return to their lives. That is what drives our mission. Turning to the first quarter.

I'll start by briefly connecting the quarter to where we've been because the progression over the past couple of quarters is relevant to understanding what you're seeing in Q1. Over the past 2 quarters, we've been focused on 2 specific priorities: first, stabilizing the business. That meant working through the disruption to clinical reimbursement for RECELL, reengaging our core accounts and reestablishing a consistent procedure-based demand cadence. Second, improving how we operate. We simplified our focus around our highest value centers. Reenergized our sales organization and put in place a new credit agreement with terms that are better aligned to the business and our expected revenue trajectory.

Q1 has been the quarter where we have begun to see those changes translate into more consistent performance. Let me begin with the headline results. As you saw in the press release, and as reflected on this slide, revenue was approximately $19.3 million, up 4% year-over-year and approximately 10% sequentially. Building on the momentum we saw exiting Q4 and representing our highest quarterly revenue over the last year. David will walk through the full financials in more detail. But importantly, operating expenses declined year-over-year, reflecting the cost-saving actions we implemented in the second quarter of 2025, and we are reaffirming full year guidance of $80 million to $85 million.

We also saw continued progress across the business and advancement across our product portfolio. I'll speak to these during my remarks. As we think about the quarter, there are 3 points I would highlight. First, the year-over-year comparison is still influenced by prior ordering patterns. The business a year ago included more bulk purchasing behavior that we no longer see today. Second, sequential quarter-over-quarter performance is a better indicator of underlying demand. Revenue increased approximately 10% from Q4 with product demand building momentum through the quarter and continuing into April. Third and most important is how the operating cadence is improving.

We are seeing more frequent, smaller orders, better alignment between usage and purchasing and improved engagement across our core accounts. This reflects a shift away from past variability towards consistency and ultimately, predictability going forward. Let me now go through some dynamics across our portfolio. Turning first to RECELL. At this point, all 7 Medicare Administrative Contractors have published payment rates for clinician use. What we are seeing as a result is a gradual return to utilization patterns that reflect procedural demand rather than reimbursement uncertainty. That shows up in both reengagement within the most affected burn centers and sequential quarterly improvement in ordering and case activity.

We are also beginning to see expansion in use cases, particularly with RECELL GO mini and smaller burns and trauma settings. Internationally, recent regulatory clearances in Australia and New Zealand position us to expand RECELL GO in those markets. In addition, during the quarter, we announced a new long-term agreement with BARDA to support U.S. burn emergency preparedness. This builds on a long-standing partnership and reflects the role RECELL can play in a mass casualty response, where rapid treatment and scalability are critical. From a business perspective, this provides a modest level of recurring readiness revenue while also reinforcing the importance of RECELL within the broader health care system.

More broadly, it underscores the clinical relevance and reliability of the platform in high-acuity settings and the confidence of a key government partner in our ability to deliver at scale. So stepping back, RECELL remains the foundation of the business and is again a driver of utilization as we build across our accounts. Next, let me turn to Cohealyx. From a commercial standpoint, Q1 represents early stage adoption with encouraging signals. We saw, for example, an increasing number of ordering accounts as VAC approvals advance and early repeat usage by initial adopters. This is consistent with what we would expect at this stage of a product life cycle.

An important development in the quarter was the interim clinical data from the Cohealyx-I study. At a high level, the data shows a significant reduction in time to graft readiness, approximately 20 days versus benchmark with consistent outcomes across patients. We also saw a median time to grafting of approximately 11 days. Early grafting achieved in some cases within the first week and high levels of investigator satisfaction. Importantly, this data set is now supporting ongoing VAC reviews, helping to reinforce the clinical value proposition as hospitals evaluate adoption. We also continue to hear positive feedback from clinicians already using Cohealyx, particularly around the consistency of outcomes, which is contributing to early repeat use.

We expect the full data set later this year, which will be an important next step in supporting broader adoption. And I would encourage you to listen to the key opinion leader webinar we hosted in April, available on our website. That session walks through the data in more detail. And importantly, illustrates how Cohealyx is being integrated into surgical workflows, including its use alongside RECELL in staged procedures. Finally, touching on PermeaDerm. From a commercial standpoint, performance is still developing. This quarter, we introduced new clinical positioning relative to cadaveric allograft, focused on its role as a more affordable biosynthetic alternative in wound coverage and healing.

We expect data from the PermeaDerm-I study later this year, early signals, including histology indicate comparable biological performance to cadaveric allograft. So similar to Cohealyx, the near-term role of PermeaDerm is to build clinical confidence, clear positioning within the treatment pathway and familiarity among surgeons. We had a strong presence at the American Burn Association Annual Meeting in April, which remains the most important clinical and commercial forum for our business. What stood out this year was the level of engagement across the portfolio. We saw broad scientific participation, meaningful clinical interaction across multiple forums and increasing discussion around how our products are used together in practice.

Importantly, this was not just awareness, it was active clinical dialogue including education, case sharing and feedback from surgeons. So the takeaway from this year's ABA Conference, we are seeing growing clinical engagement and increasing integration into clinical discussions and workflows, supported by both data and real world experience. In summary, over the past 2 quarters, we've stabilized the business and improved how we operate. What we're now seeing is a return to more consistent utilization across our accounts with early signs of growth as that foundation takes hold. At the same time, the momentum we saw at ABA, together with the Cohealyx clinical data reinforces the clinical differentiation and value of our platform.

As we look ahead to Q2, our focus is on continued sequential growth, driven by increasing utilization across our core burn and Tier 1 trauma accounts and demonstrating our progress is repeatable. With that, let me hand to David to review the financials in more detail.

David O?Toole: Thank you, Cary, and good day to everyone. As Cary outlined, the first quarter reflects continued progress as we move from stabilization into a more execution-focused phase of the business. My prepared comments today will focus on how that progress is showing up in our financial results across revenue, gross margin, operating expenses and cash. Turning first to revenue. Total revenue for the first quarter was approximately $19.3 million, representing 4% growth year-over-year and approximately 10% sequential growth from the fourth quarter of 2025. Growth in the quarter was driven by contributions from Cohealyx, RECELL GO mini and improving RECELL utilization as reimbursement dynamics continue to normalize. Importantly, we are seeing ordering patterns increasingly aligned with underlying procedural demand.

This is contributing to improved consistency in revenue with sales performance strengthening through the quarter and showing momentum as we exited March. With our Q1 results, we are reaffirming our full year 2026 net revenue guidance of $80 million to $85 million. Turning to gross margin. Gross profit margin for the quarter was 81.7% compared to 84.7% in the prior year period. The change was primarily driven by certain required inventory reserves and product mix with Cohealyx and PermeaDerm contributing a greater proportion of revenue. As we've discussed previously, while this shift in product mix impacts reported gross margin percentage, these products contribute incremental gross profit without a proportional increase in operating expenses.

As a result, they remain accretive to absolute gross dollars and supportive of operating leverage over time. Consistent with the framework we outlined with our broader portfolio coming out of 2025. RECELL gross margin remained strong at approximately 85% and we expect that to continue. Turning to operating expenses. Total operating expenses were $24.5 million, down 11% year-over-year. This reflects continued execution against the cost optimization initiative, including transformation of the sales force implemented in 2025 and reinforces that we are operating with a lower and more disciplined cost base. Importantly, this structure is now stable and aligned with the current scale of the business. As revenue grows, we expect this to support improved operating leverage.

Net loss for the quarter was $10.6 million or $0.35 per basic and fully diluted share and an improvement compared to $13.9 million or $0.53 per basic and fully diluted share in the prior year period. Now turning to cash, which we recognize as a key focus. Net cash used for the quarter was approximately $9.9 million. As expected, cash use was higher in the first quarter driven by seasonal compensation and other onetime payments and was further elevated by the timing of revenue and collections. Cash receipts obviously lagged revenue and with a greater proportion of product sales occurring later in the first quarter, our cash receipts were negatively impacted, which increased our cash use.

As we move into the second quarter, these timing dynamics have reversed. Seasonal and onetime items are completed and collections from strong late first quarter revenue and early second quarter sales activity are driving higher cash receipts, combined with ongoing cost discipline, this gives us strong confidence in a significant decrease in cash used in the second quarter. We ended the quarter with approximately $14.3 million in cash and marketable securities. Regarding our debt facility, we remain in compliance with the trailing 12-month revenue and minimum cash covenants under our credit facility which are aligned with our current operating trajectory.

Importantly, this facility put in place in January with Perceptive Advisors was structured to provide greater flexibility than our prior credit agreement, with covenant thresholds set meaningfully below our expected annual revenue levels and a reduced minimum cash requirement. Given the level of headroom, we would not expect the revenue covenants under this agreement to be an area of focus going forward. For context, the second quarter trailing 12-month revenue covenant of $69 million implies a second quarter revenue requirement of only $15 million, which remains well below our recent quarterly revenue levels. The structure is interest-only and includes additional capacity subject to achieving a defined revenue milestone.

Taken together, these terms were designed to support execution rather than constrain it, providing improved visibility and headroom as we scale the business. As a result we believe our current capital structure is well aligned with our operating plan that supports our ability to manage the business for continued growth, improved cost efficiency and ultimately, financial sustainability. In summary, we are seeing sequential quarterly revenue growth with an improving demand consistency, a stable and disciplined operating cost structure and clear visibility to lower cash use as we move into the second quarter. These elements reflect continued execution against the framework we established in 2025 and reinforce our focus on delivering consistent and repeatable performance through the year.

With that, I'll hand it back to Cary.

Cary Vance: Thank you, David. So just to summarize the first quarter, we delivered a solid revenue performance in Q1, supported by improving RECELL utilization. We exited the quarter with increasingly consistent procedure-driven demand across our core accounts. We generated compelling Cohealyx clinical data reinforcing its differentiation over other dermal matrices. And we strengthened our leadership as we shift gears into this next phase of our AVITA journey. As we look ahead to Q2, the focus is clear: build sequential growth and demonstrate recurring progress across our business. With that, let's go to questions.

Operator: [Operator Instructions] And our first question comes from Frank Takkinen with Lake Street Capital Markets.

Frank Takkinen: Congrats on a solid Q1. I was hoping to start with a question more on composition. I don't know if you'll go as far as sharing the breakdown between RECELL and Cohealyx, if you would, that would be great. If not, maybe a backup question would be just speaking to maybe which 1 was a stronger driver of growth? Was it a rebound in RECELL or kind of Cohealyx coming up the curve pretty quickly.

Cary Vance: I mean, we're not going to break it out yet. But I mean, it was a combination of the 2, Frank. We grew in RECELL and we grew in Cohealyx. Those are the 2 main drivers.

Frank Takkinen: Okay. That's helpful. In the prepared remarks, I think you made a comment of Q2 sequential growth continues to be expected. Can you maybe talk to that a little bit more? And then, obviously, the quarter was a little ahead of where Street expectations were and understand the appetite to put out expectations you can achieve. But maybe talk through how you guys thought about maybe taking the guide up a little bit, just given how well it seems the recovery is going in Q1.

Cary Vance: Yes. I mean right now, we're sticking with the guidance. But I do think that this is a business that builds on itself. I think a lot of the work that we did even in the latter part of 2025 brought us the results in Q1. And I expect that work to continue. There was a lot of good work aside from bringing in orders and revenue. There were a lot of things built. There were hospitals that came out of VAC around Cohealyx. So there's a lot of progress behind the scenes, behind the revenue number.

And we expect to be able to retain that kind of progress that we had in Q1 into Q2 and capture 3 months of it as opposed to maybe a month or 2 of it when we got a new physician or new procedures on board in Q1. And so we expect that to build on itself kind of quarter-over-quarter. That's why we speak to it in that way. And so more to come in a few months.

Operator: And the next question will come from Ryan Zimmerman with BTIG.

Ryan Zimmerman: Cary, David, congrats on the progress. Just to put this behind us, Cary, on the MAC dynamics. I appreciate you sharing that the 7 MACs are now publishing rates. I just want to confirm though, beyond the published rates, the seventh MAC that you were waiting on, everyone is now fully reimbursing for RECELL at this point, correct?

Cary Vance: That's correct. Thank you, Ryan. So they've all published and there was 1 MAC that the rates were -- the rate was below the others that they've brought that rate up in line with everyone else.

Ryan Zimmerman: Okay. That's very helpful and really good to hear. As far as -- and this is just a part of this question, and I follow up on BARDA. But just you made some comments about utilization and really smaller burns seeing some adoption. And so I'm wondering if you could elaborate on what's driving that? Are you explicitly targeting lower TBSA burns because they're more frequent? And it would suggest that doctors are becoming more comfortable certainly with the RECELL device, if that's the case. I'm wondering if you could kind of speak to that. And like I said, I just have one quick one on BARDA.

Cary Vance: So I mean, obviously, we're pushing for them to use it on every wound and every size burn. The question is always with clinicians, is it worth it? So is it worth it economically? Is it worth it in terms of the time and the workflow. So I think it's a combination of things. I think clinically, we're showing and convincing more that the impact on healing, on pigmentation is worth it for the patient.

I think having an offering of RECELL GO mini for -- that's less expensive, that's really made for smaller wounds and then the economic impact of length of stay or the advantage to the patient and to the hospital and to really everyone involved for healing faster, I think it's just starting to resonate, and we're trying to basically cover all our bases in terms of objections or reasons why they may not use it. We're trying to address all of those through technology, through data, both economic and clinical.

Ryan Zimmerman: Okay. Last one, maybe more for David, but the BARDA contract, I think it's up to $25.5 million in revenue -- potential revenue. I think $3.5 million, if I'm not mistaken, is guaranteed. So David, how are you thinking about that coming through when it comes through? Any guidance would certainly be helpful there? Appreciate it.

David O?Toole: Sure, Ryan. Good to hear from you. And thanks for the question. What's guaranteed is around $3.9 million over 10 years. And that is basically amortized per month over those 10 years. So you can pretty much assume that it's going to be about $100,000 per quarter, $30,000 or so thousand per month. And it is billed on a monthly basis. So that cash comes in during that 10-year period. The rest of it is only if there's a mass casualty. And what we're required to do is to have safety stock. We're required to have stock on hand, but it basically equates to our safety stock anyway.

So it's not an increase, and I've been asked this question before, and I'll just tell you, it's not an increase in cost to have that safety stock that fulfills our requirements for BARDA.

Operator: The next question is going to come from Chris Kallos with MST Financial.

Chris Kallos: Just a quick question. Regarding the guidance, in terms of the multiple moving parts now with the product mix, what would be the drivers that you'd be looking forward to maybe for us to expect the company coming at the high end of guidance for the year. What -- in light of the Cohealyx data and the rest, what should we be aware of?

Cary Vance: I mean I think we have -- thank you, Chris. Good to hear from you. I think we've got 1 quarter under us, right? And so I think while I and the team have a good sense of confidence, me 6 months into the role, where we stand, what we know, how, what we're doing is impacting the market and the number, it's still just a quarter. And I think for us, it's a matter of seeing the progress throughout the course of the year. That will give us a better level of kind of confidence and sight into where we would expect to finish the year.

And my expectation is we're going to be as transparent as we can be about how we're progressing and what we expect and that we'll report out accordingly.

Chris Kallos: Great. And just a follow-up question regarding the smaller purchases that are coming through at the moment, can you maybe relate that to -- has that been a result of a change in strategy in the sales team and/or headcount? Maybe a comment on that.

Cary Vance: Sure. I think we want customers to order in a way that is convenient for them in terms of how much they stock, in terms of how often they use it. We're responding to them. I think we want to make sure we're not pushing any of our own agenda about wanting any larger orders or that doesn't really help us even things out. What I like from the AVITA side of this is it becomes very consistent and very predictable. And I think as we go through weekly regular forecasting exercises, we're becoming very good at understanding how our customers buy and predicting how they will buy in the coming weeks and months of the quarter.

And again, we would not do it that way if our customers didn't want it that way. So it's really a combination of giving them -- letting them order the way they want to order and use it and us having a mechanism and a process that helps us be very predictable.

Chris Kallos: And just 1 last question for David. David, in terms of cost-outs have we reduced the costs as much as possible. Should we sort of expect the cost line to stay stable from here on?

David O?Toole: Yes. I think you have to look at it that we've stabilized the cost structure. And I've talked about this previously. The one variable that I hope goes up is commissions because that's the one that will drive -- will be an indicator that we're having more revenue. But from a G&A and R&D and headcount perspective, our cost structure is where we want it to be.

Operator: [Operator Instructions] The next question comes from Josh Jennings of TD Cowen.

Joshua Jennings: Congratulations again, Cary, on getting the interim tag removed from your CEO title. I was hoping to just start off -- I mean, I know you had a couple of questions on MAC and you described the progress of 7 MAC publishing. Can you help us just think about this physician confidence and/or centric burn center confidence in terms of getting reimbursed for RECELL where we are there? I mean you think we're 50% to 75% VAC. I know you're banking on continued progress sequential growth over the course of this year. But maybe just help us think through where you are in that recovery on the physician and center confidence front that they'll get reimbursed.

Cary Vance: Yes. I'd say 75% probably a good number. And as we've talked over the last 3, 5 months, I've kind of said that's the way it's going to be. There's the official MAC situation and then there's an education and communication that needs to take place to make sure that we're back to where we were over a year ago. I think that some of it is that. And then some of it is right now, we're in a kind of blocking and tackling mode health care system -- by health care system or hospital by hospital where they have their own internal communication about what's getting reimbursed and how to get reimbursed.

And so we're just trying to help with the education of all of that, something we probably would have been doing more of a year ago had this MAC issue not come up, right? So now after the fact that, that is kind of officially cleared up, now we kind of go hospital by hospital with our health care access team along with our commercial teams and make sure they understand how they get paid and how to work through the process.

Joshua Jennings: And just coming out of ABA with the Cohealyx update, I was hoping -- and clearly, there's more buzz around that product. But I was hoping you could just maybe put a finer point on what you're seeing in terms of traction, still early days post ABA, but any surgeon feedback? And then also, if you could give us any just updates on the number of centers that are starting to use the entire portfolio, RECELL, Cohealyx and PermeaDerm and seeing some of the initial traction of the portfolio build-out.

Cary Vance: Sure. I'll answer the second one first. So I think we're in the 20s in terms of centers that are using all 3 products. I think, again, if you haven't had a chance on our website, there was a great webinar we did during ABA where it was me and Katie -- Dr. Katie Bush as well as 2 of our physicians, and they spoke way better than we could about the day-to-day use, utilization and workflow of Cohealyx and PermeaDerm as well as the study and some of those results because that's -- both those things matter. Obviously, data matters, but so does the day in, day out and just the credibility that they have.

And I encourage you all to go back and listen to that if you haven't already. But I think that there's a substantial amount of buzz that comes out of ABA and the study itself and the preliminary release. I think it helps us in our VAC committees with a little bit of acceleration. That's just a gut feel that feeding them better and more information as they're in the process is going to help get it out of there sooner. We just want to compete. I think that Cohealyx competes very well with other dermal matrices. I think we have some advantages as well. And we just want to get out there and do that.

But in order to do that, we -- this data will help quite a bit as well us just practically getting out of VAC and having more people use it and give us their input and be reference sites for others to understand the advantage of using Cohealyx. And so I think it's palpable, and it's exciting. And I'm looking forward to the months ahead as I would expect to see 12 to 15 VACs -- Cohealyx come out of 12 to 15 VACs every quarter. That's about what it was last quarter. That's another expectation, I have this quarter, and I expect that to continue. We still have about 55 to 60 of them in VAC.

Every time we get some of them out, some more go back in, which is great because at some point, we're going to be covered across all the burn centers and the Level 1 trauma centers, and we're going to be cleared to compete in every one of them.

Operator: Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Cary for closing remarks.

Cary Vance: Thank you, operator, and thank you to everyone for your time and support today. We look forward to continued engagement and discussions with all of you in the coming days and weeks, and we look forward to another great quarter. Thanks, everyone.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

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