Acutus Medical (AFIB) 13 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Acutus Medical Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to with conference Investor like speaker, to now Corner Caroline Relations. would hand over the your I

Thank you, operator. Earnings Call. Welcome to Acutus' Third Quarter XXXX

forward-looking encouraged by results. today's are the Acutus also on you on website www.acutusmedical.com financial Pacific the law. including based is on in should Officer; of Litigation X:XX this today. include discussed for statements call this not to attached forward-looking considered The Acutus' Joining Roman, within Factors with filings additional section required made these statements the are detail performance, statements. today Acutus' Acutus' the be Chief SEC, filings, statements, statements to Acutus' cause will call on future from the p.m. obligation differ quarter today's most SEC are the call, expectations Acutus' statements historical of Officer. release results applicable Time. and in release under website, including Private relate which XXXX. Acutus of except the the to Acutus the Executive and as statements during results Securities no Factors forward-looking Financial will A Any that more me includes under do available also under may Interim also Form the Act risk these forward-looking available with review. in about Takeo by Investors to call section Acutus recent website X-K management's as of call provided press with Acutus' update is XX-K. recording This be fact section that meaning matters press projections Mukai, Form Risk described are details undertakes and an Reform on exhibit Chief third SEC to forward-looking has filed David the in All of as factors XXXX discussed

the turn call over to to I'd Now like David.

and Caroline, you, afternoon, good everyone. Thank

of key goals August, today's do. steps as an excellence these progress a foundation well driving of adoption want my you status sale people globally, as I our our we as Acutus commitment first and will we strategic we at strategy happy of On third well. with moved overview the on utilization colleagues AcQMap extraordinary well as for partners. provide Starting everything call, engagement key earlier taking strategic Takeo portfolio our introduced culture drive on our operational the from for physician to are foundation as to support the to of commercial rest recognize and future, I into the and as when utilization well outlook call the role, results and our the quarter year will to Medtronic. the we I'm where with advance access two During this update moment take priority with of in the year. the to we're last Acutus' unfolding and the objectives is and making imperatives business guide would for the set CEO our presented our that left-heart

business in us ability drive a been metrics per launch reflect procedure accomplished reduction revenue up and Our per with installed growth. utilization to console, the our Overall, advanced constant near increased procedure commercial shift confidence the up us as volumes we base give as XX% performance expanding new prior has XX% -- utilization utilization and per Year-to-date, on console grow over to drive higher streamlined to This XX% procedure versus and core productivity our and products. resources. revenue organization in has future our strength volume focus with growth on year-over-year enabled increase year procedure volume case XX% have volumes, currency. in we utilization these

While we XXXX. return in our expect to continue base to also to underperforming growth we installed consoles, relocate proactively

are per console. adding and within in utilization seeing In to revenue addition, good multiple we traction users existing disposable helping increase accounts, strengthen

our exit AcQMap and new move product our we pipeline, we into disciplined higher which better in assets installed into early a platforms. enable with of and which XXXX, full designed reinitiate remain Exiting for deploy bills expansion console, release and higher to a is we visualization will AcQMap improve our we procedures. efforts, with includes a our hardware goal growth software, achieving X.X disposables, software, XXXX where Further procedure. our utilization base, objectives market will anatomy QX As per revenue higher and to is to during

a taken workflow a AcQMap software focused by make release in This will positive deliberate physician X.X have X launching X expected ensure catheter followed and flexibility. experience. mid-XXXX. approach in AcQMap AcQMap significant is efficiency, and be to We localization, to procedural improvements to

In important addition addition initiated the catheter In we submitted portfolio year. early review PMA AcQBlate, next to new for software is launch U.S. an platforms, the which to standard XXX-day FORCE-sensing our clock. our and in AcQBlate expected ablation the October, system

confident results. at we our to the submitted based growth on we and unable with will presentation efficacy specifics AcQBlate as support of results XXXX as safety consistent site with the from that U.S. evaluation our and of inspections study in in the During our be the agency share well The AF the objectives. our submission. will study well the continue to uptake prior expect disclosures. XXXX, expect AcQBlate symposium the approval to commercial and we the sit That therefore from first as the said, receive strong we where data during study this questions period, today, From help FDA U.S., time about FORCE half for are as we are engage outside

industry into integrating through console, Magnetic-based navigation feature will standard, Beyond important XXXX, magnetic catheter, become catheter. our AcQMap and system ablation is we moving be and navigation this our has mapping development.

performance Cardiology evaluate as or it With Society progresses. the of data have from best PFA are to step in magnetic as at with Recent to via or We and of our and provided assessing other we industry make next for forward watching this presented program. those ablation decisions, our post-field September, in program our the into approach disciplined to will additional insight are we real-world on settings. the updates for strategic whether the category our Consistent program participants, carefully internal evolution resource in such continue the provide allocation respect path timeline the of European Acutus, with partnership. PFA,

in you gears are our structure. well update and teams and restructuring our new will plans. undertook a executing our this as our financial We July, in realignment to performance. leadership strengthen finalize to We underlying efforts operating major and we Switching organizational

We the in efficient the the of driving have layers decision-making at reduced management are organization level. functional and

our respectively, we year-over-year results expenses recorded We these our on and and of burn, basis. IPO since XX% operating seeing through level efforts lowest a are of in XX%, with cash as play declines

in very burn while selectively will moderation further we'll expenses, parameters that areas, the but certain non-headcount discipline business At we long-term. our to expect tight need this maintain point, headcount open a operating cash in sustainable keeping on our we level, We need during invest look the in expense. ultimately quarter. and know see to we operating at in We to fourth more expenses

remarks. this our focus will Takeo margin that require work result, improvement in on gross will streams intense a his As discuss

saw see sequential I results, the heavy approximate is early improvement am and in we $X.X to take on revenue. despite the seasonality will time it an that expected process in basis pleased While million a

post access OEM commercial manufacturer to this to addition Achieving In of to the addition partnership to communicated that payment this closing, several transaction require Accomplishing internal equipment for distribution Acutus quality, and left-heart receive teams portfolio a earn-out transition access cross-functional continue we our clinical, in strong operations, the or the of from triggers to financial portfolio milestone milestone restructuring previously also Medtronic. ahead is good Medtronic. an progress is will transitioned position, fully left-heart now R&D November, engagement with as our achieved earn-out early our in expect selling expectations. strengthen to regulatory, Acutus we came we are approved Medtronic. months by major tremendous which making million original year-end. Medtronic. $XX until first In

eligible of once file of as revenue-based payment we addition a earn-out we years reminder, four are payments. a as As receive in MDR well to to million milestone $XX to EU for up qualification, OEM

expect XXXX, of We half on shared to is which first achieve the call. the EU with for MDR during consistent we prior earnings timelines milestone our

building of impact and these initiatives, financial we the organization. patient Beyond centric reestablishing culture company's physician the are a and

higher this that supply year and our the challenges, Parsing voluntary all strategic priorities, chain strong long-term. challenging key well in our and a our attrition reset of enable right and very people to our recording us for with believe FX retaining where foundation. execute the equipment through fundamentals and of utilization products in and right are I strong, the continue lowest we as the R&D we of headwinds, to business disruption, market, on talent strategy. Importantly, attrition focus including team the and see a AcQMap a the XXXX some our Putting up in capital in address external adoption programs confident establish October barriers key am transition operating setting declines some of meaningful roles those September our together, have years. we we levels are

improvement in progressive even improvements business this initiatives, we performance trajectory future combined position well XXXX, and operational to Beyond to business XXXX. us see expect maximize allow to for and our our more will When and in Takeo. the detail these stakeholders. with topics XXXX Q&A will call now for during happy value the cover over I our turn all be session, in of I will us to any stronger

excited nearly at of the everyone. and support to years company. Thank I experience look drive afternoon, opportunity you, excellence good at Acutus, to bringing finance our for operational this goals and forward and my I incredibly corporate am XX David,

will results review remarks quarter for third our well the I of year. my outlook the During today, our rest as as

expectations, $X.X an driven the the sales. purchase capital the million quarter the the sales. and chain quarter higher chain estimate the remained $XXX,XXX business was U.S. volumes year-over-year globally of stocking in supply lower year-over-year, by and capital year that sales reduced long-dated equipment these procedure Sales as revenue well. third as $X.X flat third disposable to of driven Up the our on quarter lower in disruptions. to penetration in $X.X are decline with installed growth the procedure until the far and so in basis. new industry-wide FX-neutral from quarter. quarter, XX% third ago sales XX% decline U.S. year net per million supply compared strong was Consistent fourth with supply by versus increased we million by challenges million performance declined equipment revenue revenue manage weeks impacted Underlying the $X.X double-digits case For disruptions entirely third in through prior a the compared year through revenue been in chain supply U.S. disruptions and now, couple orders. the to was able prior by of of quarter, last approximately have consisting We in

expectations, our our our inventory. However, some of exceeded accessory demand which has for of has dispossessed key excess one products our of components

diligently efforts this We to to continued fourth U.S. resolve appreciate shortages. of are quarter improvement intense remedy suppliers' and our sequential showed consecutive working increase. matter with volumes a the procedure

resources. installed We AcQMap adoption of are a per to commercial tightening lower volumes, and in improved procedure a base see and procedure performance pleased despite revenue

U.S. of We business include of outside the commercial strategy that are through distribution execution taking focused we and right our where are on million States, remain by Biotronik driven year our outside which revenue our confident to $X.X or partner, United to prior. in steps long-term. a decrease prior the Sales decrease the sold million grow $X.X converted the year. was sales eight and we year-over-year compared in United consoles the the in were capital decreased States The continued

with negative Non-GAAP what $XX.X discussed our removed the While an point with realized of gross segment, in margins $X.X Outside prior is designed is in globally, as our with compared two margin of operating our starting in manufacturing XX% the and X% quarter adoption of $X.X increased third XXXX, the our to and down of impacting IPO. we cost part non-GAAP our results approximately process, million margin. factors and the volumes six program. quarter improving third we quarter quarter. the and Biotronik. businesses capital between impact the difference have disposable revenue on the non-GAAP was last our through strong Two, systems volume a sequentially initiated Procedure the prior input. are the operating The in two our of to work year since States, third The was new contributing installed as XX streams XXX and third by gross was Non-GAAP in United stocking third volumes about million from seasonality the down in revenue XXXX reflecting By to last automation during AcQMap to in operating in which quarterly XX is up the systems continued we with of associated capital approximate $X.X in procedure overhead from increased including variances, critical improvement periods, revenue the double-digits to growth of our we quarter moving and account expected, margin gross and consoles a as similar negative reducing Biotronik. Europe primary third outside those cost lower into orders down product lowest and into our product one quarter product include basis, in have revenue ended of million base of XX% XXX% of factor Critical of programs, XXXX. of from direct of the up were in pleased unabsorbed drive with new quarter and year-over-year. the the U.K. was very include: quarter. prior we $X.X year drive manufacturing third impacted in negative sequential we the quarter, same our overhead disposable benefits underlying consoles slightly third decreased yields; revenue negatively gross up of streamlining XXXX, we in year foundation sales gross quarter. direct ago XX accounts, discussed. the U.S. strategy positive in improvement XXXX; were installs XXXX, compared QX XXXX XX third road XX% and critical of from Continuing operational the Improving million with growth adoption. map new margin performance of and States, product We growth and QX procedure prior expenses XXX% our and burden, ago bolus reposition the added In businesses carryforward profitability. higher-value this the an One, Three, of and from by United including quarter, of year was from expect strategic million expenses previously driven quarter. accounts reduction On $X.X have were we Service million improved other direct year, to the operating operating expenses a level period XX% as restructuring a offsetting expansion

the management, continue year-over-year our through of rest around We expenses have decline our cost reducing operating discipline we improving significant made to progress expect operating non-GAAP our in to by and expenses XXXX.

down our operating from annualizing non-GAAP expenses reference million, XXXX. point, at As $XX XX% we're a September

our loss second of loss $XX to quarter million per Excluding was the quarter $XX.X net third million specified a compared non-GAAP of for $X.XX non-GAAP per share or of for $X.XX XXXX share. XXXX or net the items,

Our and end million. total QX cash at equivalents cash including cash balance, $XX.X of XXXX restricted was the

XX% on versus quarter was a down prior and year Our cash third basis. the $XX.X XX% million, the burn down in sequential

reducing rest business. our with investments will our drive grow continue the year. are quarterly have outlook while the focus cash on extending the to We runway improvements for making cash Closing of intense made to and pleased with we our the the in burn necessary

than the year-to-date of the supply headwinds transfer lower growth. progress expectations. commercial drive and utilization, largely business our equipment headwinds Relative a leading QX. began our of the $XXX,XXX in and chain will performance case stabilization on to portfolio up million for versus to in includes We million. in the of consistent experienced our into FX of access prior worse the very headwinds are timing year-over-year was and in with have incremental equipment with slightly revenue as our August, I in decline There XXXX and XXXX We $XX.X we be a transition and volumes, appreciate stood our where share and just well revenue, underlying access procedure earnings left-heart intensified, performance XXXX This in continuing factors unknown now commercial foreign expect our $XX supply rates time, we to call also facilitate disruption, continued about At the support, while year and $XXX,XXX have improved as $X.X through consideration strategy which the to to timing Taking are range over setting a some in line the these chain business your and the revenue related on supply Q&A are full-year in in Operator? headwinds chain are our at Medtronic, of million communicated over fundamentals good exchange, to have our same portfolio. trends that to session. seeing QX variables sales. call Overall, to left-heart tracking our from expectations, this are business last back with a capital FX of capital what core thereafter. operator we interest exiting and turn basis, us

question. One [Operator Instruction] our Thibault This for from comes BTIG. with proceed. Thank first Marie moment you. Please

My constraint. bit to thanks that here, David Takeo the chain evening, about little want hear and supply and for first Hi, questions. more I good taking a

I products. to much too a of when have your think have for demand good you problem it's one

you little of and a resolving terms some us bit are tell where on So that? in more maybe you of could details

the for good Thanks question and Marie. evening. Sure,

disruption a used steerability the is that improve really averaging significantly This many we about X:X AcQMap were our to through XX% August, AcQMap of AcQGuide found product procedure, our coming supply every other of MAX sales that as but first our versus had procedures sheath. procedures, is customers usability introducer the we actually the product in in plummeted MAX chain actually were the to months the impacted EP mapping of on nine other not device decision only So ratio Through for because of customers mapping are to access is by focus two the products year, and put is have the product using of and it customers. also procedures. the so in market. restrict September That And outside who back out order mapping procedures. customers is not to mapping weren't have who made AcQGuide for we've on procedures Acutus on supporting

So the QX, probably through months range in something impacted mind do the first but generated of million about us see that $X.X had that keeping think $XXX,XXX nine this we we in in that about we'll in in product, lot year, of have revenue a quarter supplier. however, date committed end committed range orders date, shifted little something delivery here a from That of the a has of do and in our the toward bit. a QX. $XXX,XXX-plus in the delivery around come We probably the

working to we us be resolve will is a that But we probably as can't early also fantastic very our help partner So through get and are supplier something this. it, resolve until to XXXX. aggressively working it

that's And process? one Congrats metric stickiness here like sounds systems of you're Okay, do the -- sort questions. shift well. for my have that on general, nearing increases? sort Thank some now, what users, to of the in systems. driving on your then the well utilization you taking all it continue details, maybe think David. you thanks of in end base that among the of follow-up you is for factor is And you as Do there installed that the the And understood.

Sure.

So bulk relocation effort, I is on would the of the say it console us. behind

in talked say to affected will targeting really, has have as to the probably continue upfront. into which some mean, was and targeting I segmenting at of we we not would effort we likely at about really date. consoles started we've but on utilization, prior in were around the the that dig right the to both little move bit think we're consoles that right utilization a really this, really which position I And strategy to been account and I to but fourth the driving utilization. think, future, the calls, rate critical the I things nearly the removal gaining our it to identify quarter gain

centers, But champion it's centers users physician exercise. a who -- it a of say we is then have all into where or academic that found hard additional little some is community a And we brings the bit is to success lead most where fold. really all the doctor-by-doctor

-- I multiple And we're or right us our in a a still that continues probably have we console -- be well. growing some think, ways, it's somewhere adding think is second So just at base, now, in to as effectively, the those a third adoption the U.S. close, a or to as of site. seeing odd we installed third the users than secondary probably to users adding now, installed increased user from third another I same XX-some is of important second more base because and

in catalyst efforts drive as I catheter QX, is well. U.S., our I think quarter, XX that to geographic installed U.K. but launch seeds effectively from we as the a our installed Biotronik, expansion be stable. now we installed entering the and to planting if way in to we I in grow to a with the in as to did base. to QX So the increase to are in we business drive And all long year, And three will towards funnel significant addition as of are an look XXXX the be Central we but phase think expansion installed well on in those rebuild see the quarter where direct in XX both base at plans next as they fairly we here ablation their But will next fourth stabilization our and base utilized our U.S. ship along to our Europe. consoles know in we're base, look growth here Japan. likely the coming will a question, -- don't across installed as fourth in the significant expansion Biotronik do the year answer

I'll interesting, in back you. Very hop queue. Thank

from Plovanic of Please Bill proceed. line with the comes Canaccord. it And

Bill John for year? in think for the Thanks look It's should on on next we wondering, existing rollout AcQBlate Plovanic. the to I'm question. our taking just will users David, rollout What the like of about how approval U.S.?

Thanks, John.

So Adding experience, primary get the thing rollout will at mostly -- we've existing their the look physicians be is in we utilization the AcQMap, is more find we'll for observed hospital pushbacks first users. overall system. focus as biggest as the and on workflow value make And a the an difference of that efficient AcQMap, ablation of that one well in for efficiency. workflow our the will around utilization significant to as catheter reason one who we is economically

the users but any have because -- incoming have official from have we amount of interest a product, we don't existing of for our have demand around we AcQBlate. we So don't approval all fair

of sort we in approval. revenue increase uptake some normal we we contract able focus begin to administrative so significant on the gain we can we and sites. until case systems, where at processes those gain contracting will if and time through users, It begin can't when accounts where per we those active and have have for and take those approval So are get will we install them initially see to go process, product on mapping the

impact with So of the would kind than a contribution at the to we of expect time the launch. ramp obviously more year throughout AcQBlate in significant QX

the to stand I TAM? mostly of two for know where follow-up do in of kind then AcQBlate launch redo you you used questions you expanding does in progresses that Thanks Great, X? next plus how AF that talked call, the taking that of Where think year upon the again. Where And thanks today? cases? really today, relates in last for and that. as are process you about

Yes.

question. great So

procedures So a whatever. of the tachycardia procedures about atrial XX% little total right And was quarter, in the cases. of of in or sort XX% now whether was were procedures our over it or AF in third some redo Europe that U.S., were redo the

and billion that pushback AcQBlate that one us to on just novo a being So stand-alone your kick further into from using use we it trend market make that users, of value it XX of can the $X.X to off very AcQMap the most think something prioritizing our vehicle tack about And need experience where a expand major market would to move to are Then us like magnetics with describe redo really we AcQBlate can Europe greater months. your is And which also partners is the and we XX to that underpinning program, use Introducing you to existing not to that better as the that away see launching AF, to is adoption cases beyond the cases. XXXX up Acutus take totals important. the billion now, continue on procedural allow logic I easier second persistent will cases market physician, where our road in installed first-time we $X physician make sort for have the up is atrial to flutters finding range to and even we'll total open to in procedure of entire map as addressable right get of addressable and our allows market a will redos, access question the And next system. call and and the prior now, for opportunity our to allow is will to persistent expand efficiency. at on in AcQMap physicians pieces barrier Ultimately, basis, that very the do addressable de able as for and tachycardia the redos. novo key challenging within stand-alone which our X.X atrial and AcQMap really into it to probably right We'll AcQMap base move a de persistent X. basis. using because

thanks. Great,

Thank line William next question. you. of our one from comes moment the it ahead. go with Margaret And And Kaczor Please for Blair.

you with Thanks feel Hey, just the increase. the everyone. to not it? good start just given installed today hoping in with, that Thanks. comfortable guys systems? taking some XX the guys meaning place way would of I systems? number environment, guess and that and Or commentary add afternoon Can Is XXXX a you maybe team aspects you was about can the XX base the there for with versus add comfortable I you not question. are on some the macro is of thinking

a been Margaret. question, we ourselves as lingering kind that are have set potential the installed -- It's questions similar include have in And Yes. -- we and our some And planning, right go asking that are obviously through there base. XXXX about we're you're we macro to thought our process. of there of growing great a considerations

can't allocate we system budget installs cycles. into related under next say a -- growth visibility me funnel installed give that I'm already so are will building And -- to we let I not number have disposal kind their today certain for ready I on that of base those year. hospital evaluation, of for in evaluation, XXXX they're hospitals And budget prospects own new even if converting many product placing purchasing. to the early new to a

account early we build to expansion we line sight good U.S. to starting and U.S. of have ex the The it here user that sites overall I through us could particularly attractive chunk a XXXX, Biotronik. procedure call more business, us initiated our drive a handful achieve of on fourth in as though, same-store have add is we're we third allows economically for much in that growth, that and then to at company existing second, go through to incremental is to a a volume the So already this, if there's of objectives. good and an debate a financial or our funnel,

accounts. and have be similar per to and going existing as we be within think before layer usage to additional before. that installed higher which But about to the I to with I of a talked that something increasing in increased about you're revenue. very existing of users view number users We've two. increasing adding that the base balance accounts, overall add revenue consoles adding and you really And kind really haven't those higher balance So paired XXXX if case it, current with will users is should talked of

have if year at one that of can Okay, have more what that systems, to guys And then guess, or guess, three think costs have that a change the ago second user, I system, year? in than that installed it these look could the and base to maybe about you physicians it, -- should in? question, we we a me was additional my that I minimal it does using is which brings a with Thanks. one put relatively linear then one-third as or what be two four

them programs -- user of it cost incremental the fellowship or -- that of also so we serve many the hospitals have multiple They or that of Yes, is And adding new very many is. for programs. as reason the observational is teaching EPs of low. have much

So board for he AcQMap adoption just get of use when I'll physician a we're cases, his his added yesterday up user others case year increasing of using the observing mushrooming ends one new utilization AcQMap been practice. colleagues of effect then case with his example so of occurred it particular a in of of an and who the to subset gradually on or with this this is or San the There is category impressed in a sort was give with user a patient. Antonio in in yesterday case the you specific sort the a where physician so, that specific her that has subset becoming past for a you working been AcQMap the grassroots-type as is a seeing in first-time that today. experience of And a that we've

grow training the cases. with way So business. that limited. otherwise, cost Obviously, efficient and the there's to those a associated very us for to marketing for fairly is expense us But incremental some driving that's

it been how sites some of have of that to multiple phenomenon. because I'm have users except was as a having of those the certainly sites not a I lower really recent multiple many that very sure terms users year In identified ago, that answer

rate? go-forward a And

repeat you sorry. I'm that? Could

one-third at day, you see now? you a looking you -- that get a would see where are like would to just comp can where like If Just that the to it's sales percentage? year plans Or to from a rep it for? XX%

exact to It's not to reps specifically incentivizing we're that. number an hard put And it. Yes. on go after

year. therapy on to is I or a a solving how if that be new today, incentive put then ultimately would are per region by or target there, structure. compensation bear that probably know mappers what their account within our going growth Our quarterly differ to region. globally And next don't we're and have managers input and for volumes we're in primary obviously it be on whether And evaluated will metric except get volumes. consoles. on procedure we I geographic users is going that's to to That going down into procedure each

you thank Great, very much.

next with question our proceed. for the Please moment And One JPMorgan. you. line comes from Marcus it please. of Thank Robbie

on for thanks Hi, Robbie. on a taking quick I for had one [indiscernible] is the just operating This spend. question.

about talked now. is headcount. I you were especially how to both sustainable add some across and year, this You have next SG&A OpEx a follow-up. And you given thinking level R&D? into more trending additional this And you mentioned Is one then looking how clarification are at about

Sure. Thanks Ron. question, for the

past over I of parts on different much the So in side, become at that the more of of things kind because the one totality expense agile resources look at months across the it we reallocating -- company. is operating several we've

as all talked team existing at we look across about could headcount, budget. prioritize thought was to adding that what the I within the the then headcount end process an leadership organization we a and senior went the confines we of requests when So fund at our through of exhaustive

probably you're this we that sort to effectively be are self-funding. the will expect that headcount -- headcount either will a savings from -- but lot incur make there additional area, of So of in other incremental

$XX.X about year, talked this in $XX.X we So registered QX expense of operating million that as basis. call million. quarterly a on that We we at we of million look the September annualizing $XX at

then type throughout number that sort think it, of something of I similar QX to $XX reasonable, and to is call XXXX. kind in million million $XX this mid-teens

chain had more -- headwind from clarification supply of point Great, just quarter. headwind supply kind I the that's clarification of one super chain next on helpful. or

Yes.

quarter in and then Was in or additional for an quarter it impact $XXX,XXX a $XXX,XXX $XXX,XXX fourth third the whole year?

the $XXX,XXX We It the over $XXX,XXX QX ceiling a $XXX,XXX I number could $XXX,XXX year, and year. QX $XXX,XXX full then full be in it say and QX. in year. though. $XXX,XXX It's a to actually for I will be would said can't for put and year. full then the $XXX,XXX in for full probably $XXX,XXX over the really on the the for to closer so range in

was that... And

sorry. I'm ahead. Go

sorry. some first next the that in next throughout continue year extent? Was into I'm balance expected of or year of the year to quarter the to

for not That on question met expected of The commitments have year. is to been tough the component you've to others, supply that all We as very question, answer in end we deliveries from now. expected. heard by as a however, -- are us probably get chain delivery this right supply of

then some exiting takes it we to year. would ship get in it you year. the been that might unpredictable. able on resolved just and us long we it heading by also we resolve out existing as product, supply today, to depending But lingering we fill supply chain to into on But if has this then saying So the I be And impact next everything January, see orders. relatively go based unfolds sterilization, would how expect see what chain know today, cautious to just manufacture dynamics through environment would

the So we're we that watching latest closely, information that's it but have.

much. so thanks Perfect,

with Thank from Coover One question. our Phil next moment line proceed. And Goldman for you. comes of it the Sachs. Please

the for questions. Thanks afternoon. good taking Guys,

heard one The I us today, lack the I just occurred the in from step-up stocking called hear capital implied kind last updated see that's of an XQ of side and didn't out of comment in could that specific us. you compound the I element there. question of utilization guidance components can just from sequential the quarter. XQ give guys you what under-stocking which or a you hoping then environment, think a about on

of sort funnel going comment please? And what's from the can on Thanks. so if and on just capital wondering qualitatively a you on standpoint,

Thanks, Phil.

the on things of couple sequential step-up. a So

way there recognize very delivered to $XXX,XXX firstly, that until So to And fourth in did quarter until revenue was that revenue customer. we not don't quarter. $XXX,XXX probably products are late the the we recognize around revenue, the shipped a get delivered of we

our a size on base, significant And impact of a the is quarter-over-quarter timing So basis. that orders. was, say, given I would of revenue that

that QX. So have we recognized here revenue in

that and with those, reorders expect installs on of new pretty we We here three all we U.S. also the exiting users, orders are stocking three have see in year. to -- would executed high-volume the associated would

we We we in on were of are here which in small some of counting executed, capital of a number capital one of here which we one -- QX, the which U.S., conversions one the our orders system got in Europe quarter-to-quarter seasonality QX work expecting as a on business here. on are then some we basis also And through typical the incremental out approval of today. of

So help ramp? does that XQ XQ to the on

taking for the Thanks great. that's question. Yes,

very capital contracts, and now. back could that selling than and would face I the but last the that a burden company capital a articulated call, forth more the we capital, no it that more ago, I a And and versus product if very challenging. definitely around right of category. time the lengthy a reflection it on And least environment challenging the But is for administrative environment, challenging. be are it's compare fact specific today an had early-stage say we still then very on very, capital is it's our we year at

helpful. Okay, Thanks. great. That's

Javier comes Instructions] [Operator Fonseca Please One our go line question. you. it Capital. the with of next ahead. moment Thank from Spartan And for

and Good evening. Takeo. the Thanks taking Hello, for call. David

quick So the margins. gross on question a

XXXX can on streamlining restructuring what share for the continued of in So unfavorable these and the press the into the manufacturing variances again, in of, you release, business? expectations midst top of variances the margin going and gross mentioned

I Javier. take you, Thank one. can this

processes three regards in design also we're and really initiatives, reducing to overhead, yields, on the our discussed: streams, for So work manufacturability. critical our streamlining margin and gross as improving focused our we've manufacturing

expect we making next processes. well. strong XX%, a to carried we've year this manufacturing our this which And overhead our our unfavorable We're over manufacturing amount in XXXX, this So as variances progress into significantly we by roll manufacturing incurring our into year. and we're reduced improving year and less year, what of really than also standards manufacturing yields in reducing

we going basis $X previously to with into revenue gross million XXXX, so on stated a margins. monthly around positive to steady And those a get

a With to the margin. positive get month projecting been we've $X revenue of to million making, a we're that a improvements steady gross

questions. Thanks insight. my for my call -- Great taking

Javier. Thanks,

ladies gentlemen, with day. you and may And Thank for and disconnect. we today. program Q&A your you participation, Good and you. that, Thank now conclude our for