ELAN - NYSE

Ladies and gentlemen, thank you for standing by. Welcome to Elanco Animal Health First Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Tiffany Kanaga, Head of Investor Relations. You may begin your conference.

Good morning. Thank you for joining us for Elanco Animal Health's first quarter 2025 earnings call. I'm Tiffany Kanaga, Vice President of Investor Relations and ESG. Joining me on today's call are Jeff Simmons, our President and Chief Executive Officer; Todd Young, our Chief Financial Officer; and Beth Haney from Investor Relations. The slides referenced during this call are available on the Investor Relations section of elanco.com. Today's discussion will include forward-looking statements. These statements are based on our current assumptions and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from our forecast. For more information, see the risk factors discussed in today's earnings press release as well as in our Form 10-K and 10-Q filed with the SEC. We do not undertake any duty to update any forward-looking statements. Our remarks today will focus on our non-GAAP financial measures. Reconciliations of these non-GAAP measures are included in the appendix of today's slides and in the earnings press release. References to organic performance exclude the estimated impact of the aqua business, which was divested July 9, 2024. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Jeff.

Thanks, Tiffany. Good morning, everyone. Elanco exceeded first quarter guidance for revenue, adjusted EBITDA and adjusted EPS. Continuing our momentum from the end of 2024, we have delivered a high-quality quarter with 4% organic constant currency revenue growth, evenly driven by price and volume. This strong Q1 performance represents our seventh quarter of underlying growth. On innovation, after delivering $198 million of first quarter revenue from our new products, we are raising our full year expectations to $660 million to $740 million. We are pleased by the commercialization of our basket of six potential blockbusters with the most recently launched product, Credelio Quattro off to a great start surpassing our expectations to date. With a relentless focus on cash, we are deleveraging faster than planned, improving our net leverage target for year-end to 3.9x to 4.3x, reflecting strong working capital performance, favorable currency and the monetization of our Lotilaner U.S. Royalties stream for $295 million that we announced earlier this week. Looking ahead, we have raised our 2025 full year revenue guidance for FX, and we are maintaining our outlook for organic constant currency growth of 4% to 6%. We continue to expect accelerating quarter-on-quarter growth with Q2 up 4% to 6%. March and April trends have provided early proof points and innovation continues to ramp on top of a strong base business. We also continue to expect full year adjusted EBITDA of $830 million to $870 million and adjusted EPS of $0.80 to $0.86. The Elanco strategy is working and offsetting external uncertainty. Our prudent approach recognizes our first quarter outperformance, recent momentum and favorable FX, balanced by expected tariff impact in a dynamic macroeconomic backdrop. Our execution in our One Elanco global operating model give us the agility needed to cover various scenarios that may emerge in this external environment, including tariff and trade impacts, regulatory and policy changes and shifts in the consumer sentiment and spending. We have a dedicated team implementing a multifaceted intervention plans to allow us to deliver even during these turbulent times, and we will remain focused on growth, innovation and cash as the right priorities to expand our long-term value proposition. Let's take a moment to walk through how we're covering our expected tariff exposure on Slide 5. You'll remember that with our late February call, we outlined $3 million to $4 million of potential impact from the first 10% imposed on China. We would strongly caution against extrapolating that impact to the 145% imposed today without also considering the pharmaceutical exemption and our intervention plans already in action. Since late February, we've begun implementing several mitigating strategies, including supply chain optimization, inventory management, tactical pricing in select geographies and strategic API sourcing. We believe the total net impact in 2025 to Elanco adjusted EBITDA from tariffs as they stand as of May 5, is an estimated $16 million to $20 million, almost entirely related to the tariffs imposed by the U.S. and China. This negative impact is fully offset by our first quarter outperformance as we are maintaining our full year adjusted EBITDA and adjusted EPS guidance. We have a balanced profile of risks and further mitigating strategies, also allowing for maintained guidance. While we benefit from the pharma exemption today, if this policy is removed and a 5% to 25% tariff is imposed, we estimate our incremental exposure at $10 million to $30 million in 2025. This risk and others, including potential economic slowdown are offset by anticipated foreign exchange favorability based on April rates and a targeted value-based pricing increase. Elanco is well positioned to overcome macroeconomic challenges and uncertainty to deliver our plan. Turning to the first quarter revenue performance on Slide 6. We break down the 4% underlying organic constant currency revenue growth. This chart highlights the importance of our diverse portfolio with three of our four business areas growing. We achieved the top end of our expected growth range in Q1 despite the challenging U.S. retail backdrop in January and February. Our U.S. retail business declined 21% during that 2-month period driven by cooler weather that significantly impacted consumer spending. January was the coldest on record since 1988. Tick bites reported by the CDC, tracked at an 8-year low. Importantly, retailers have broadly observed that when the weather cooperates, consumers engage, citing better trends into the spring. Our results support this with March rebounding to a positive 13% growth and strength carrying into April as we enter the heart of the North American parasiticide season. Our leadership in the U.S. retail market has never been more relevant with the consumer under pressure. We provide a superior value proposition for pet owners with our strong OTC portfolio and broad physical availability in the U.S. vet clinic, our revenue was flat in the quarter. Importantly, as we discussed on our earnings call a year ago, we are lapping an approximate $13 million benefit related to moving certain legacy Bayer products into distribution. Excluding this impact in the comparison, our Vet clinic revenue growth would be approximately 8%. We benefited from the early and ramping contributions from Credelio Quattro and

Thank you, Jeff, and good morning, everyone. Today, I will focus my comments on our first quarter adjusted measures, so please refer to today's earnings press release for a detailed description of the year-over-year changes in our reported results. Starting on Slide 11. We delivered $1.193 billion of revenue, representing a decrease of 1% on a reported basis. Excluding the unfavorable impact of foreign exchange rates and the divestiture of our aqua business, we achieved organic constant currency growth of 4% compared to the first quarter of 2024. Price and volume each contributed 2% in the quarter. Relative to our Q1 guidance in February, we had an $11 million sales benefit from the weaker U.S. dollar. Slide 12 shows revenue by the four quadrants of our business. Total pet health revenue increased 1% in constant currency in the first quarter with price growth of 2%. In the U.S., Pet Health revenue declined 3% and driven by a headwind to growth from moving certain legacy Bayer products into distribution in Q1 of 2024, a challenging retail environment and soft demand for vaccines offset by sales from key innovation products. Outside the U.S., our pet health business grew 5% in constant currency, driven by continued strong demand of AdTab across Europe and Credelio in multiple geographies.

Thanks, Todd. We started the year saying 2025 is about delivering, not promising, and that's exactly what we're continuing to do. Elanco delivered a strong first quarter, outperforming our expectations across all key metrics. Growth is accelerating with revenue guidance being raised and innovation and cash are tracking ahead of expectations. We also continue to accelerate deleveraging, reducing debt while investing in launches in key markets. Our organization is engaged, energized and well equipped to navigate these dynamic market conditions. Our people share my confidence and excitement into the balance of the year. Truly, Elanco is in a position of strength. We are taking a prudent approach and executing our playbook in a dynamic external environment. We have the right teams, interventions and actions to keep progressing towards our goals to transform animal care and to deliver lasting value creation for shareholders and for society. With that, I'll turn it over to Tiffany to moderate the Q&A.

Thanks, Jeff. We'd like to take questions from as many callers as possible. So we ask that you limit yourself to one question and one follow-up. Operator, please provide the instructions for the Q&A session, and then we'll take the first caller.

Thank you. [Operator Instructions] Your first question comes from the line of Jon Block from Stifel. Your line is open.

Great. Thanks guys. Good morning, Todd. I'd love to hear just a little bit more about the 2Q guidance. I think the 2Q investments, which seem to be dampening the near term EBITDA result. I think you talked about 11% constant currency OpEx spend, but 6% for the full year. If you could just talk about the cadence there, and then maybe the leverage going forward as that spend sort of subsides looking forward?

Sure Jon. Thanks for the question and yes, we've said from the start we're going to have a no regrets launch approach on our Big 6 blockbusters. So in Q2, we're at the heart of the Northern Hemisphere parasiticide season. And so, we are investing behind Credelio Quattro. It's off to a great start as you heard in the prepared remarks. Sales from distribution to vet clinics, we took a 10% share already. The product is resonating with its tick kill quickness, the tapeworm coverage as well as heartworm coverage from month one. So overall, we're going to be putting a lot of media dollars behind that and that's increasing the spend. Also in Europe AdTab continues to have a nice run doubling year-over-year in Q1, and part of the timing in Europe is there's a lot of sales in Q1. And then the investment, to pull that sale out to consumers happens in Q2. So there is a little timing mismatch, between the revenue and the investment. But fundamentally given the importance of Northern Hemisphere parasiticide season to us, we really think of Elanco on a first half, second half basis, and we're overachieving our expectations here in the first half relative to the start of the year on the back of these investments in AdTab, Credelio Quattro and

Got it. Very helpful. Maybe just I hate to burn one here, but I just want to be really clear. So on the tariffs, if nothing were to incrementally occur from here you have what, $25 million in EBITDA from the FX moves. That's not reflected in the guidance. You'll just sort of for now keep that in your back pocket, to see how the Pharma exemption plays out. Maybe if you could just talk to that and Jeff, I'll just sort of ask an offshoot to the second part of that question. Some of your wording around

Jon, you're reading Slide 18 correctly. We've got a $25 million EBITDA tailwind from the weaker dollar. We decided not to reflect that in increasing our guidance here in May, just given the uncertainty with the pharma exemption, if everything holds as it is, then, yes, there'd be a $25 million upside from FX on our base business. That would push as close to $900 million of EBITDA behind the range or $875 million at the middle.

Yes, Jon. And on the

Thank you.

Your next question comes from a line of Michael Ryskin from Bank of America. Your line is open.

Great. Thanks for taking the question, guys, and congrats to the strong start to the year. I'm going to pick up where Jon just left off on the innovation front. You sound really positive on all the innovation updates you talked about

Yes, thank you, Michael. And I appreciate the question, because I think that's when you look to Elanco, this is what really differentiates us is in my 35 years, I've never had a slide like we just showed on six major innovations, and another one coming in IL-31. So what I think has maybe been misunderstood in the past, or last year is the basket of the six innovations overall, holistically. And so, what I would tell you is that's what's driving the growth, is what we're calling the Big 6, soon to become the big seven major products and major markets that are going to be globalizing, with really low cannibalization. We're seeing that play out more so in Q1, than any other quarter. And we continue to see it ramping going forward. We don't want to get ahead of ourselves. We're in launch mode and as Todd said, there's you know, we're in the Northern Hemisphere parasiticide season and that's key. I would note a few that I would just highlight, since the last quarter and that's Credelio Quattro to build on some of Todd's comments. I mean, we believe one, the marketplace continues to get bigger. The majority of puppy starts are in this segment, a broad spectrum in Endecto. So this is the biggest Animal Health segment growing the fastest. And we believe that this has the potential to be the best product. And, and here are the proof points that I would lean in on so, because we do think this is the biggest material driver going forward. That acceptance to Todd's point, I mean a 10% dollar share is ahead of our expectation. Two-thirds of that shift is coming from the competition and new starts. And the cannibalization is more favorable than we thought. And the second is the differentiation that Todd said, and I would highlight. I think another element of differentiation that's coming unsolicited by vets and pet owners, is the palatability of the product. So we think that is definitely, we're entering new clinics with Credelio Quattro. It's helping the total portfolio. And we have a special product in Credelio Quattro, and we're going to globalize that product as we've said. I'll point also to Experior. We highlighted Michael for the first time what we believe the size of the market can be for Experior in Canada and the U.S., and as we've highlighted 2% - 200% growth and cattle numbers more dose more days. It's a sticky product that's adding a lot of value right now, as cattle numbers are still down and ramping. And we will be bringing that product into Geo expansion into a couple new markets in the second half of this year as well. So it's the basket of innovation. It's also Credelio, the franchise overall for Credelio is another key driver. So look, we're an execution story, and we are going to lean in, and we are going to invest pretty significantly on these launches in the second quarter. As Todd mentioned, driving some of the EBITDA hole.

Okay. I mean you kind of preempted my second question talking about Quattro, but I'll still dig into that. That 10% dollar share that really stuck out to us. Given we know what Simparica TRIO reported, we've got pretty good sense of where NexGard PLUS is. That's a pretty, pretty impressive 1Q. I guess the footnote there, is it's 10% of clinic sales versus sort of sellout. Is there any reason you think that should differ dramatically? I guess I'm just trying to kind of asking, how much prestocking may there have been from vets in that first quarter, because you would think that that 10% should just grow over time, and that can get you a pretty healthy number for the full year. So just talk about the in clinic versus out clinic sales there? Thanks.

Yes, Michael, you're thinking about it correctly. It's a great start. We're getting it onto the shelves of a lot of vet clinics. That's where we're getting that 10% dollar share from distribution into the vet clinics. As we mentioned in the prepared remarks, we feel pretty good. We've got really lean inventories at the distribution. They had multiple orders during the course of the quarter. And now we're really making these investments we talked about in Q2, to have the consumer as excited as the vets are, about this great product. And so with that, we do expect to start to get that outbound sales, to be growing and taking share with consumers as well. But there is a little bit of the timing there. But we're really pleased with what Bobby Modi and his team did, executing across the U.S. to launch Credelio Quattro with a great start.

Thanks. That'll be good to bet.

Your next question comes from a line of Andrea Alfonso from UBS. Your line is open.

Thanks so much everyone, for taking the question. I really appreciate all the color that you've provided so far in

Yes, I'll take the first one, Todd. You can grab the second one. Thank you, Andrea, for the question. Look, as we look at

Andrea, on your question of what's driving the raise on innovation, it's really the complete portfolio. I mean, I think we've talked a lot here on AdTab and the strength we're seeing in Europe, the growth of Credelio Plus outside the U.S. You throw in Experior continuing adding more and more cow on Bovaer, Quattro and

Your next question comes from a line of Brandon Vazquez from William Blair. Your line is open.

Hi everyone. Thanks for taking the question. Maybe I want to hit on the innovation guidance again and maybe I can appreciate you typically don't give kind of the revenue buckets, which is fine, but maybe can you just talk to us about like what are the top three? I'll take another stab at asking this question and put like what are the top three revenue contributors to that innovation bucket in 2025 just to give investors kind of a little bit of a snippet of what we should be focusing on as the real growth drivers within that segment? And then I had a follow up.

Yes, as a reminder, Experior went over $100 million last year. It got Heifer clearance in November. And so if you want the biggest dollar driver, I will give and that's Experior Jose Simos and the team here and U.S. Cattle and the team in Canada are really making inroads and we're winning in U.S. farm animal. You can see it, 17% growth in Q1. It continues to have great growth. Last year it's adding Bovaer to the dairy portfolio. That team is really executing well and is the big driver. So the number one product, Brandon, from a dollar perspective is Experior. And then again we're not going to get into each individual ones. But again with the start that Credelio Quattro has had, it is capturing more than we expected and that is going to be a big play. Just given it is the best product on the market. It just kills everything and it kills it fast and it has sustainability. So we believe that's going to be the differentiator and really excited for customers to keep getting Credelio Quattro in their dogs. Every dog wants to be a Quattro dog.

I would also just say another note that I know we had investor questions a year and a half ago about the base business, and I would point to a couple things that I like to see. I've been a lot in the field the last three months is innovations in each portfolio are making the base stronger. So we had a good quarter in Europe with Seresto and AdTab or excuse me, Seresto and the A family because of AdTab. Rumensin continues to do very well because of Bovaer and Experior, both in dairy and beef. And Credelio Quattro as I mentioned, has taken 500 clinics and are buying additional Elanco products like Galliprant and other products that they've never purchased before. So what excites me too is our base is as strong as it's been because our portfolios are getting better because of the innovation. I would point to that because that was a common question. We got a lot last year and even earlier than that.

Great, that's super helpful. And one follow up here quickly is just this has just been hard to gauge and other competitors have been talking about it as well. But just spend a minute on the macro environment. I know you had a little bit of volatility in Q1 in retail. Again, others had seen that too, so not overly surprising. But expectations on how things are holding up so far on the consumer side of things and expectations on how that's trending into the rest of the year? Thanks guys.

Yes, I'll make a couple comments. Todd, if there's anything else I think I want to emphasize the headline is, Elanco is an execution story. We're not a pet visit dependent story. And I really point to yes, we need to be continuing to look at this is a durable market, but we do need to continue to monitor consumers and spend in the economy. And we're doing that. But I would say that given where we stand today with our Omnichannel capabilities that we've set up, our innovation that we're launching, all the stuff that's happening with compliance and drop shipping and all of our expertise that we got from Bayer and her company and the globalization we're taking, those are the things that will drive Elanco going forward. And we're quite insulated from a worry of a 1% or 2% change in a pet visit. And we think that all of this leads to our ability to take price where we can and make vets and farmers more money and continue to have compliance growth. I will also highlight one other key trend that I think is important that doesn't get talked about enough, just as Todd mentioned on Experior. But as leaders in farm animal, animal protein and this whole making America and really making the world healthy, animal protein is on the uptake. And we've seen some initial statistics here as we look at '24 going into '25 and we're spending a lot of time in the boardrooms of our major protein companies around the world because we see a big opportunity. The dairy industry has just announced a $10 billion U.S. investment in dairy products because of protein. Last year they had a record of $104 billion in animal protein here in the U.S., while plant based meat saw a 20% decline. And on average Americans ate nearly 7% more meat last year than before the pandemic. So helping our customers with regulatory, with pathways for more use, with innovation and ultimately what we do, making protein more valuable and healthy and more abundant and affordable for consumers, that's a trend that I don't think we pointed to. And what excites us about our farm animal business as we go forward.

Our next question comes from the line of Chris Scott from JPMorgan. Your line is open.

Hi, this is Ekaterina on for Chris. Thank you so much for taking your questions. So first question is just around tariffs, as you think about mitigating impact, you know, kind of in the medium term, do you think there's an ability to offset some of the potential tariff pressure via price increases? And do you think that's something that the market can absorb or do expect any price action to meaningfully impact demand, particularly I guess on the pet side? And then second question is just on

Sure. Katharine, with your question on tariffs, we already are taking some price in certain markets. As we said, China has been one where we are looking at those inbound tariffs and offsetting some of impact with price. Certainly in the U.S. market we're looking at that and considering. The right way to do that in a value based manner that we remain competitive. And again, lots of uncertainty in the world with respect to the tariffs, what retaliatory tariffs might look like. We do have a global manufacturing footprint and with that it puts in some positives in certain markets and negatives in other markets. But overall that's the benefit of our global diversified portfolio again across both farm and pet. So it is something we'll pay attention to. And right now we're not -- consumers are continuing to take care of their pets as they always do and we fully expect that. Again something we're very focused on as a company.

Thank you.

Your next question comes from the line of Navann Ty from BNP Paribas. Your line is open.

Hi, good morning. I had a question on the strong, sorry, on the U.S. retail environment. We know that the latest indicated a strong U.S. retail environment. Can you discuss the drivers in addition to the cold weather of that challenging U.S. retail environment for Elanco in January, February, and also if you can discuss what you're seeing in terms of positive trends in March and April for your key franchises? Thank you

Yes, Navann, I think the key difference there is

I build on too. There's a lot of buzz about Amazon and just to highlight our strategy doesn't change. We're centered on physical availability. We picked up in the first quarter 48,000 more distribution points which we brought this capability in from Bayer. We built on it with a lot of new expertise. We've got Blair Snyder out in California, many others that we brought in from the CPG industry. And Amazon has and is one of the largest customers for Elanco because of our pet retail business. So as they get into Rx, it is a platform that requires unique capabilities and we're familiar with those, we work with them every day and we look forward to expanding into the Rx business with Amazon. Ultimately this is all about serving veterinarians and pet owners, giving them the products they want, where they want to shop, at the price points that they want to shop at. And we've got the best portfolio and global pet to do that.

Thank you. That's very helpful. And maybe a follow up on pricing, if you could discuss your pricing expectations for the year?

Yes, we continue to expect about 2% price for the full year. That's across the total global business and obviously varies between different areas of the business globally.

Thank you.

Your next question comes from the line of Michael DiFiore from Evercore ISI. Your line is open.

Hi guys, thanks so much for taking my question, and congrats on such a strong launch to the year. It's two from me. Just want to revisit the

Yes, Michael. So just very for clarity, nothing's changed. We've had a two stream approach with a CVM and working with them. One is on the language, changes that are maybe, more moderate to the label today, which we believe is important. We've submitted the data that that's on an ADUFA type timeline, and those timelines, we started doing that immediately as soon as we got the response on the first label. And that work stream is all progressing. And again we should have an answer to that in the second half of the year. The other one is we've started dogs on a larger trial that, would be more of a full, bigger label change and that's going to take much longer. That's going to be, as we've said, beyond definitely one-year, maybe closer to two years. But what we're seeing with the product, it is a good investment to do for the longevity of the product overall.

And Mike, just one of the reasons it takes longer. Cause I know, we got this discussion at your conference is we have to have one-year old puppies that are unvaccinated and healthy to do the trial. And so, you can't do it in a year, because you don't have one-year old puppies until you've gone at least a year. And so that's why it takes a longer time to do the clinical work on the unvaccinated dogs.

That's good. And then your second question. Absolutely, we're seeing a nice ramp. As I mentioned, there's more veterinarians every month that are getting comfortable to bring

Got it. And just my quick follow up just on Experior just noticed that based on the USDA ag data, cattle on feed seems to be below last year's levels. But again, Experior seems to be a significant growth driver. Could you maybe explain this discrepancy and add any color on less cattle on feed, but Experior performing so strongly?

It's really the market position, Mike. I mean Experior continues just to be so important to that feedlot owner and the economics for them. As a reminder, we added the Heifer clearance and so that's a big driver of the uplift that was 40% of the cattle. And so yes, we've got low cattle on feed. That's going to be a tailwind when that reverses as part of the cattle cycle in the years to come. So it really is that expanded market from Heifers that helps us offset the lower cattle on feed numbers from a year ago, while having Experior continue to ramp.

Great. Thanks so much.

And your final question comes from the line of Erin Wright from Morgan Stanley. Your line is open.

Great. Thanks for squeezing me in here. So on distributor stocking, we typically see parasiticide stocking that typically happened in the March time frame. Sometimes it looks more into equal. I guess you called out the acceleration in March and April. You have a new product with Quattro. Presumably, there was initial stocking there just, because it's a new product alone? And then I guess - can you talk through some of the moving pieces in terms of the stocking, destocking dynamics in pet health. And like was there - can you quantify any sort of initial stocking, I guess, from a Quattro perspective?

Yes. The main stocking issue was last year when we put the Bayer product into distribution. Without that, the U.S. Fed health business would have been up 8% in the quarter. I don't really think of it as a lot of stocking - when the distributors ordered multiple times. And I don't think in Q1 of next year, we're going to be calling out that we're having to cover the initial stocking. It really on the really quick in and out to that. As we said, getting 10% of sales out to vets from distribution, meant - the distributors were having to keep stocking as their initial orders weren't nearly good enough to build the demand that they were getting from the vet clinics as our reps were out there really pulling that through. So I think very little in the stocking dynamics since it will be proof this time a year from now, when we're not calling out a stocking headwind on a year-over-year basis.

Okay. Okay. Great. Just wanted to clarify that. And then on - I guess, outside of innovation drivers, like Experior, I guess, can you just speak to the underlying health of the livestock market, and how we should think about the quarterly progression from here across that business?

Yes. I think overall, if you look at - Erin, good question. I think the headlines really as we just highlighted, the cattle market that matters most to Elanco, beef confined feed, you got low supply, high demand, good economics overall. On the poultry side, the global strength continues. The global numbers from Rabo and others, as you see are 2.5% to 3% growth. We click along at that. You have poultry rotations inside of that, that can impact quarter-to-quarter -- but as a whole, we continue to take share. We continue to innovate, and the global poultry business is pretty resilient. There's talks of tariffs, but I think because it's so global, it's pretty insulated overall. And in swine, where we're really more North America, China-based there's improved pricing that is expected, balanced overall. So we see a stable market, with a portfolio that can win within that stable market. With the tailwind the buzz in the boardrooms right now in protein, is the opportunity in protein right now can be really positive. And we're supportive of the administration on how we can continue. To make animal protein in the center of this whole health movement and diet movement, which is really sustainable healthcare is that it all starts with what to eat, and I think it's a real opportunity. So those are the trends we see, overall, pretty stable.

Yes. Just specifically on Elanco and International, we had headwinds here in Q1 couple of points on international growth in farm animal from the Kexxtone recall from a year ago, as well as are exiting certain other lower-margin countries. And so that team of Ramiro Cabral, and his organization is really executing well, and I expect that will help the growth acceleration. We will see in Q2 as we go up to 4% to 6% constant currency growth from the 4% in Q1.

Good. Let me just make a couple of quick closing comments. Thank you for your time, and we're entering no question a much awaited period of sustained growth and accelerated value creation, or an execution story. The entire organization is focused on our three drivers of value: growth, innovation, cash, and Q1 was one of the highest quality quarters we've had in many years. Growth is accelerating and will continue to accelerate the base in innovation. Innovation is a whole basket, as we just talked about of innovation, and we're raising our guide because of the diversity of that innovation in major markets. And the whole company is really focused on cash and margins - we had our best quarter in a long time with manufacturing. There's a lot of momentum in our manufacturing organization driving margins and it's exciting to see our cash to debt go from $150 million to now $450 million to $500 million. And I really want to emphasize tariffs. We've taken a prudent approach on the current state and really any future scenario we see, is inside our guidance, to make that clear for you, and the positive tailwind of FX is going to be helpful. So thanks to our customers, vets, farmers and pet owners for the time, the relationship. We are all about creating value for you, and thank you to our investors. We do believe we have a compelling value proposition, and we're going to continue to execute against growth, innovation and cash and create a whole lot of value for yourselves. Thanks for your time. We look forward to engaging with you here in Q2.