Good afternoon and welcome to the Accelerate Diagnostics Incorporated Fourth Quarter 2019 Results Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be a question-and-answer session. Please note, this event is being recorded.

I would now like to turn the conference over to Laura Pierson of Accelerate Diagnostics. Please go ahead..

Before we begin, it is important to share that information presented during this call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements include projections, statements about our future and those that are not historical facts. All forward-looking statements that are made during this conference call are subject to risks, uncertainties and other factors that could cause our actual results to differ materially.

These are discussed in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2018, and other reports we file with the SEC. It is my pleasure to now introduce the Company’s President and CEO, Jack Phillips..

Thanks you, Laura. Good afternoon, and welcome to our fourth quarter and full year 2019 earnings call. We accomplished several of our operational goals in 2019, while a few specific challenges yielded valuable insights that we have used to guide our 2020 priorities.

Our strong placement trajectory continued over the course of 2019 as we doubled our global contracted instrument base by signing 304 instruments, including 137 units during the fourth quarter. -Our full-year revenue was short of expectations as multi-site customers in the U.S.

have taken longer than anticipated to go-live and begin generating consumable revenue. We accomplished several key milestones in 2019 as we significantly expanded our body of clinical outcomes data, established a solid footprint among key and influential customers, and progressed geographic and product expansion programs.

We entered 2020 with a compelling body of evidence, putting Pheno well on the path to becoming a new standard of care in the $3.7 billion global market for rapid ID/AST.

Capturing this market begins with maximizing our footprint of Pheno instruments for acute testing today, and then addressing the balance of microbiology testing with our low-cost, high-throughput, next generation platform, the Pheno 2.0. Advancing this strategy in 2020 starts with driving U.S.

commercial excellence measured by higher rates of contracted instruments and a faster, more predictable path to go-live and revenue generation. We will also continue to execute on our international expansion plans and achieve key innovation milestones on our current and next generation instrument platforms.

I would like to begin this afternoon by having Steve review our fourth quarter and full year 2019 financial results. I will then provide additional analysis of these results, key learnings and how these translate into our 2020 priorities. We will also provide our first quarter 2020 revenue forecast to further clarify our near-term expectations.

But first, on to Steve for the financial results..

Thank you, Jack, and good afternoon, everyone. Net sales were $3.5 million in the fourth quarter and $9.3 million for the year, compared to $1.8 million and $5.7 million, respectively, for the same periods in 2018. This represents year-over-year growth of 94% for the quarter and 63% for the year.

It is important to note that the majority of our fourth quarter and full year 2019 revenue growth was a result of higher consumable sales, driven by increase in the number of live customers.

Predictably, instrument revenue was not a material component of our growth, as 85% of new customer contracts in the year took advantage of our reagent rental contract. However, a number of our significant fourth quarter distributor deals in EMEA and strong U.S.

capital sales added over $1 million in capital revenue that is not anticipated to repeat in the first quarter of 2020. Cost of goods sold were $2 million in the fourth quarter and $4.9 million for the year, resulting in gross margins of 44% and 47%, respectively.

This compares to cost of goods sold of $1.3 million and $3.2 million or gross margins of 29% and 44%, respectively, from the same period in 2018. Gross margins improved over these periods as a result of higher year-over-year consumable production volumes, which decreased fixed cost per unit.

Due to slower-than-forecasted consumable production, certain long lead time, and perishable raw materials exceeded their expiration dates and require disposal. Excluding the impact of this fourth quarter charge, gross margins for the fourth quarter and for the year were 51% and 53%, respectively.

Selling, general and administrative expenses were $13.6 million for the fourth quarter and $51.9 million for the year. This compares to $13.4 million and $55.2 million from the same periods in 2018. These decreases were principally driven by lower non-cash equity-based compensation expense.

Research and development costs were $6.2 million for the fourth quarter and $25.3 million for the year. This compares to $6.9 million and $27.6 million for the same period in 2018. We expect this spend to remain relatively flat on a year-over-year basis as our R&D programs remain consistent.

Our net loss was $21.3 million for the quarter and $84.3 million for the year, resulting in a net loss per share of $0.39 and $1.55, respectively. This net loss contained $3.2 million for the quarter and $12.6 million for the year in non-cash stock-based compensation expense.

Net cash used was $13.5 million for the quarter and $58 million for the year. The Company ended the quarter and the year with cash and investments of $108.5 million. We were successful in decreasing our cash burn in 2019 and reaffirm our view that our current cash position is sufficient to execute against our strategic priorities.

I will now hand it back to Jack to further review our 2019 results in greater detail and discuss our 2020 priorities.

Jack?.

driving U.S. commercial excellence, continued focused geographic expansion, and delivering new content for our current Pheno Instrument while also materially advancing our next-generation platform. Turning first to U.S. commercial excellence.

While we will work to continuously improve our sales process and commercial team, our most important near-term initiative is to empower our dedicated team with new resources to improve the pace and predictability of closes and go-lives. This begins with mobilizing our accumulating body of economic and clinical outcomes evidence.

This month, we rolled out a powerful set of new sales tools to our entire U.S. commercial team. Starting with our new return on investment calculator, which incorporates real outcomes data, giving potential new customers increased confidence in the impact Pheno will have on their patients and institutions. We also trained our U.S.

team on how they should communicate about our new CPT code to set customers up for reimbursement success in the outpatient setting moving forward. Second, we will increasingly benefit from our growing network of enthusiastic customers. Our U.S.

customer base now spans all key segments, and we have a presence in nearly all major metropolitan areas in the U.S. To date, closing new business has been difficult, partly because we have lacked a broad and sufficiently diverse customer base to generate comparable outcomes data and service reference accounts.

In my experience, the low-hanging fruit arises when you reach a critical mass of enthusiastic customers, who armed with data begin to actually sell for you. Extending our reference customer base starts with bringing more customers to live and realizing the benefits of the system. As mentioned, we ended the year with a backlog of 255 instruments.

Bringing these instruments live as quickly as possible is essential for improving the company’s revenue generation and for contracting new customers. This month, we launched our new live product go-live process called the Pheno Implementation Experience.

In Q4, we piloted parts of the new program and received great customer feedback with reduced time to go-live results. Our current go-live average is nine months with our longer-term goal being six months, we will continue to update you on our progress. Moving now to our second area of focus, international expansion.

Under new EMEA leadership, we drove a significant expansion of the EMEA customer base in 2019. 2020 will be a building year for EMEA, and our priority is to increase the annuity for existing systems, which to date materially lacks that of the U.S. systems.

Through renewed focus and accumulation of EMEA based outcomes data, we plan to increase our EMEA annuity by broadening utilization with existing hospitals while also relocating certain instruments to higher-volume institutions. Moving on to China, China is a market with a sepsis challenge far exceeding that of the U.S.

due to rates of antibiotic resistance that are twice as high. This, combined with a large population and the government’s focus on healthcare investment, makes it a highly promising market opportunity. Our registration and trial processes continue.

However, we were recently notified that a registration has been delayed due to government resources being diverted to address the coronavirus outbreak. Once the trial process resumes, we will continue partnering with key opinion leaders throughout 2020 to conduct studies and plant the seeds for commercialization in this most important market.

Our third focus area is advancements in product innovations. Our R&D objectives for 2020 can be divided into two parts. First, delivering new content for Pheno; and second, the material advancement of our next-generation platform. In 2020, we will be adding several new antibiotics and features to our current blood test kit.

These new drugs are important de-escalation agents that further differentiate us from old-line AST providers who are often slow to add new drugs to their panels. Additionally, our respiratory test kit continues to advance as we prepare for clinical trial testing. Following this testing, we will provide more detailed guidance on the next steps.

Pheno too progressed materially in 2019 with feasibility being established on several sample types, including direct positive blood and urine. While we are on the topic of research and development, we would like to extend a warm welcome to our new head of R&D, Parampal Deol.

Parampal joined us from bioMrieux, where she was the Senior Director of Microbiology, R&D, and was responsible for all new product development related to the identification in antibiotic susceptibility testing for microbial pathogens.

She is one of the foremost experts in ID/AST, and we are absolutely thrilled to have someone of her caliber leading our research and development efforts. Parampal replaces our former head of R&D, Andrew Ghusson, who recently retired.

You can measure our progress against these 2020 priorities, first and foremost, for the year-over-year growth of our U.S. contracted and live instrument base. We will be reporting our U.S. live instrument installed base, along with our global newly contracted instruments each quarter.

Turning now to our first-quarter guidance, in the first quarter of 2020, we anticipate revenue of $2.3 million to $2.5 million. This represents a sequential decrease over the fourth quarter of 2019 due to typical year-end capital sales in quarter four that will not repeat in the first quarter of 2020.

Our first-quarter guidance reflects continued strong sequential growth in consumable revenue and a more normalized mix of capital equipment sales and puts us on track to achieve our expected full-year guidance of $16 million to $18 million. We also expect year-over-year progress in U.S.

sales productivity measured by our number of new contracted Pheno Instruments. However, we are anticipating a lower number of new signings in the first quarter compared to the first quarter of 2019.

And as a reminder, the first quarter last year included a bolus of closes that carried over from the fourth quarter of 2018 when we rolled out our reagent rental program more widely in the U.S.

Despite this material year-over-year growth, we have identified leverage and efficiencies that will allow us to reduce our net cash burn for the year to $49 million, a 15% reduction without impacting our investment in R&D and sales. In summary, 2019 was a productive year and it set the stage for an even more productive 2020.

Changing the practice of medicine in a largely unreimbursed market does not happen overnight, but we continue to make steady progress. We are constantly reminded of how important this change to a rapid standard of care is for patients and society in general.

Just last month, NPR reported on a study that found previous estimates of global subsystems were understated by almost half, making it by far the number one cause of death and healthcare expense facing the world today.

With antibiotic resistance accelerating and new drugs not coming quickly enough, our best option is to change the way antibiotics are used through rapid diagnostics like the Pheno.

Our team is steadfast in our mission to deliver life-saving answers for patients with serious infections, and thank our employees, customers, and shareholders for their continued support. And with that, I would be happy to answer questions from our analysts.

Should others on the call have questions not addressed, we would welcome you to send these questions or request a follow-up meeting to investors@axdx.com. Thank you..

[Operator Instructions] And the first question comes from Tycho Peterson with JP Morgan. Please go ahead..

Hi. This is Eleni on for Tycho. So, first off, you’ve noted that a big bottleneck remains time to go-live, which averaged just under nine months last year. With individual hospitals going live more rapidly and multi-hospital implementations particularly in the U.S. taking longer.

Wondering what steps you’re taking to shorten time to go-live, particularly in the multi-hospital implementation setting?.

Yes. Great, thanks for the question. Sorry, just getting over a cold. Clearly, this has been a big area of focus for us. And since I’ve been on board now, in the role in the company for about five months from pretty much day one, this has been one of my personal priorities to really fix the go-live process overall.

And so what we’ve done up to this point is pretty dramatic. We’ve deconstructed the entire process.

We’ve implemented several new processes in Q4, and then we brought an entirely new process together by the end of Q4, it’s actually called the Pheno Implementation Experience that we’ve launched, not only internally but externally to our customers as well. And so that it starts with that.

It starts with basically a whole new program and a process that we’re going on how we’re approaching the go-lives. I would say, so far, the signs that we’ve seen from the Q4 pieces of this program that we’ve launched are absolutely showing some good signs of helping us to be more effective and efficient at getting customers live.

We’ve had several go-lives already this year, which we’ll talk about on the next quarterly call, of course. But those newer implementations have gone extremely well. So the net-net is we continue to improve. Now I want to make sure I address the second part of your question, which is around multisite.

And the reality is, these multisite institutions are and always will be much more complex. Because there are so many more decision-makers, having alignment of testing across 5 to 10 institutions is much more complicated than one single site institution.

And so what we’re doing there is we’re continuing to apply the Pheno Implementation Experience that I spoke about. But in addition to that, we’ve enabled more resources in these sites, specifically project managers that are going on-site specifically to help with the pre-implementation planning, which we call the customer readiness.

And then, also additional resources internally for clinical go-lives, which is the validation and verification. And so with that, really by being much more organized by preparing much more in advance for the go-lives and then executing as an aligned team, I think, is really helping. And like I said, we’re starting to see more and more results.

And as I’ve indicated, while we finished the year-end 2019 at about nine months or so, our goal is continuous improvement through 2020. And ultimately, I see us getting to a go-live average of around six months. When that will actually happen is yet to be seen.

But I think the real important metrics for me here is that we continue to make good progress every day and week and month, and that’s what we’re seeing right now. Thank you for the question..

In terms of improving year-on-year average annuity, can you update us on the evaluation you’re undergoing of the EMEA reagent rental installed base and progress with reallocating instruments to more productive sites?.

Yes, absolutely. So the latter part of your point around really assessing our current customer base. We’ve done that. We’ve already completed that. That was, again, something that I implemented with our general manager of Europe last year. And we’ve already gone through an assessment of our current customer base and scrub those effectively.

Where we had too many instruments, we’ve already started to relocate those instruments into other sites. So that’s already well under way. And then the other piece that’s, frankly, the more important piece, which is realizing annuity-like we see in the U.S.

And as we indicated, today in the U.S., we very consistently see an annuity stream per Pheno Instrument of $45,000. We naturally hope to continue to improve on that, but that’s something we’re consistently seeing. In Europe, that is our ambition, as well as to continue to improve the annuity.

And to do that, it’s mostly about taking a few pages from our U.S. playbook and implementing those in EMEA. And more specifically, delivering on evidence around clinical outcomes by utilizing Pheno in a much broader setting than just today.

It’s largely used in an as-needed or what they call in Europe a sepsis code setting, which is the sickest of the sick patients.

And so what we’re doing is working with KOLs in individual countries, embarking on studies with them to really prove out where Pheno can have a much broader impact in not just that narrow set of patients, but a much broader set of patients, and so more to come on that. It’s an important priority for us relative to our geographic expansion.

And I will continue to update on that throughout the year..

Great. And if I can squeeze one more question in.

When we think about your 2020 guidance framework, wondering where, in particular, you’ve decided to maybe assume a more conservative approach? And which are the areas where there may be more room for upside?.

Yes. I’ll let Steve Reichling, our CFO, take that one..

Yes. I mean, the principal driver of our year-over-year growth in the U.S. annuity. And that’s principally a function of the annuity that we see in the U.S. times many more sites going live. I wouldn’t say that we’ve been overly conservative in any of our measures.

But with that said, we have carefully considered all of the various metrics that add up to those revenue results. And so we feel it’s at the right level based on our 16 to 18, with the majority of that growth coming from the U.S. annuity. The other major component is the capital mix, but we don’t think that will be a material driver of growth.

We consider that the, call it, 15% of capital deals that we had in the U.S. or globally will likely persist into 2020..

The next question is from Bill Quirk with Piper Sandler. Please go ahead..

Hi. This is Rachel on for Bill. So, you’ve talked about the changes that you’ve made to the sales team structure and selling process.

So how is the sales team responding to those new approaches? And is the entire team trained on that new approach?.

Rachel, thanks for the question. I really appreciate it. So a couple of things. From day one, the commercial U.S. strategy has been a priority of mine and one I’ve been working on with the team. A couple of things I would highlight. So our strategy and what we’re doing in this U.S. sales organization specifically breaks down into a couple of areas.

First of all, building expertise in our organization. So we’ve continued to do that. We’ve made some very strong significant hires in the past quarter that are coming up to speed now. In addition to that, we are investing. We identified some key areas, let’s call them specialist areas where we made decisions to invest.

For example, PharmDs and some other important areas so we can more effectively address our stakeholders and work with the multiple stakeholders that are part of the decision. That’s well under way, and that’s going very well.

The other two areas that we’re focused on, and I’ve continually talked about is empowering our data that’s been coming in from our customers and being published. And also taking that data and then coupling that with economic outcomes evidence.

And so utilizing an ROI tool, for example, coupled with the actual outcomes that we’re seeing from our customers. That is an entire program in and of itself that we’ve been working on throughout quarter four. We’ve made changes. We’ve modified it, and it’s an outstanding tool that we’ve already implemented.

You asked me if everybody has been trained in this. And the answer is absolutely yes. The U.S. sales organization was together actually last week. And all of these tools have been brought out to them over the past quarter and then further training is ongoing. The final thing I would mention about our U.S.

commercial strategy is around building customer advocates. And I got to say this is the most fun part of the strategy because we’re just starting to deal more and more with so many happy customers that are in different areas of the segments of healthcare, from the academic centers to community centers, the IHNs and then the various stakeholders.

So that continues to grow for us as well, and with those advocates, they’re talking about Pheno and the impact Pheno is having on their institutions and the patients that they serve. And that has been a major benefit to the overall strategy and will be a big part of our momentum in 2020..

Great. Thank you. And then we appreciate the comments on the new go-live process and how that’s reduced the time for you to go-live. Could you just give us some more color on how much that has actually reduced the time? I know it’s early on, but any comment on that or any feedback you received from customers about the new process would be great..

Yes. So two things. One is we are receiving excellent feedback from our customers because this new process is a joint process between us and our customers. And our customers are giving us really good feedback as we work with them differently than we were before.

To your point about what we’re seeing and how is this playing out relative to the average go-live, and we are definitely seeing in pieces where this is having a dramatic impact.

Not to get too much into the weeds on the results that we’re seeing already, but I will say, in the first part of this year already, the average of go-lives that we’ve had this year is actually less than nine months already. Again, it’s a small end, because we’re just getting through February.

But what we’ve seen in some of the accounts we’ve gone live with here, more recently, I’m really happy with the results that we’re seeing as it relates to the average time to get them live..

That’s great, and then last question. So Jack, you’ve talked about your playbook for successful commercialization.

Can you talk about some examples of early success that you’ve had with that playbook?.

Yes. Sure. I mean, there are several. But I guess, more specifically, over the past, I guess, recent close that we’ve had up in the Northeast, we just closed over the past month, a major IHN that is a five-hospital system. It has five different distinct microbiology laboratories.

And with that, as I’ve indicated in my comments consistently, these are very complex sites and the strategic selling process is extremely complex as well. And so we’ve been working on this particular site over the past, well, for a while now, really in 2019. But where we really started to gain traction was in quarter four.

And then, we actually brought it to close over the past 60 days. I’ll probably wait ‘til next quarter to talk more specifically about the name of the site. But tying that back to how has our new commercial strategy played a part in this.

And more specifically, the way we ended up winning this opportunity is to deliver clinical outcome evidence that was directly related or like their institution from other sites that have experienced Pheno.

And then, we work with them on financial modeling with our ROI tool to clearly justify how Pheno will have an outcomes impact for their patients and also a financial impact for their institution. And over the past quarter, we hope to close this by the way, in quarter four, but we did get it in January.

By utilizing these tools that I’m talking about, we were able to close this order. And like I said, that will be over the term of the contract will be over $1 million in revenue as we go to get them live..

The next question is from Alex Nowak with Craig-Hallum Capital Group. Please go ahead..

Great. Good afternoon, everyone. This is actually Will on for Alex today. Jack, we’re just curious, after being in Accelerate for about six months here.

Are there anything about the microbiology lab dynamics that you’re surprised about? Just curious to know if there’s anything around current testing methods, financial incentives, workflows that may have caught you off guard?.

And thanks for the question. I guess, my first reaction is I love being in the microbiology lab. Because of all the different laboratories in laboratory diagnostics, this is 1 that I’ve actually spent the least time in. So for me, personally, it’s been quite exciting. A couple of things that I’ve noticed right away.

But I’ll be honest, haven’t been surprises because I knew enough is, is largely microbiology, in general, many parts of microbiology hasn’t changed for like 100 years, and they’re still doing a lot of the same methods that they’ve been doing for many, many years.

And so what’s exciting is the opportunity to actually continue to evolve that, bring greater innovation, have a greater impact. And that’s what we’re doing with Pheno.

And so with that, another point to your -- another answer to your question is, the other thing I’ve observed, which is very clear and one that we’re working through is because they’ve been doing really a lot of the same testing that they’ve been doing for 100 years, it’s also very cost-effective. And so their budgets are very tight in microbiology.

And these are areas that we clearly must and we are addressing as we move forward with restating this important area. I mean, we’re making a dramatic impact on patients’ lives. We’re changing the standard of care.

And to do that, it takes an investment, and these investments are very large investments when you compare them to the overall budget of a microbiology lab. And that’s why, again, we continue to talk about our commercial strategy.

That’s why it’s so important to have a strategy that brings in real outcomes tied to return on investment and tying that to the actually economic impact as well. I hope I answered your question, Will..

You did. That makes perfect sense. Thanks for the color there. And then just one more actually on reimbursement. Okay.

Just wondering if you could expand a little bit more on the new reimbursement pathway that you’re looking at with the CPT code and then using a gap fill? We’re just curious if you could expand on how this would get paid given the inpatient environment?.

Yes. So, yes, thanks, again, for the second question here, Will. So a couple of things here. As I’ve talked about in the past, we’ve received CPT code and established reimbursement for the Pheno.

And so what we’re doing, where we’re at right now in the process of this is we’re working with the MACs, the Medicare Administrative Coordinators for the different regions to establish payment. And this is, by the way, the normal process that you go through when you establish a code.

And then from there, once that payment is established, customers will begin reporting and submitting their reimbursement through this code and then receiving the reimbursement. And so that’s ongoing, and it’s going very well. We just had a very big meeting with all the MACs a few weeks ago out on the West Coast.

And then you had a question about, from a market standpoint, how do we see this? How big of an impact will this be in our market? And we estimate it’s roughly about 10% of our patients that we serve. It’s basically for those patients that are in the ER setting, that are tested from the ER setting and do not fall under the standard DRG method.

And then, I guess I would just comment as well on the second component of market access and reimbursement that’s important, which is around NTAP. I’ve mentioned before, we’ve made a successful NTAP submission. It’s CMS currently in around the April timeline.

So probably before our next call together, we expect CMS will publish a summary of our application, which will then open it up for any public comments, and there will be a public comment period as there always is with CMS. That will take us through about June, and then we expect a decision in August.

And then if the decision is if we have a successful decision there, we would look at implementing the NTAP codes on October 1. And that’s, again, something that we believe will be very helpful and it’s something that we’re quite excited about..

The next question is from Brian Weinstein with William Blair. Please go ahead..

This is actually Andrew Brackmann on for Brian. Maybe we could just go back to the line of questioning around guidance and some of the assumptions that are built into that. So on the annuity that you’re expecting there in the U.S. site, I think it was $45,000 or so.

What sort of gives you the confidence that the placements that are still in the validation phase are going to be at that level as we sort of move throughout the year?.

Yes. I mean, the good thing is for that backlog of 255 instruments. Those all represent hospitals that we have signed contracts for. And a part of that contracting process to determine the target levels of test utilization at each of those sites.

So actually, we have very good insight based on those instruments that have already been contracted to what their annuities will be and they’re in line with that $45,000. That’s what gives us confidence on that..

That’s perfect. Okay. Thanks. And then, Jack, I just wanted to go back to your comments on the NTAP opportunity here. Obviously, this is going to play out over the year.

But how should we think about how you’ll define success for that as we move throughout the year?.

Yes. First of all, just one point of clarity. With regard to our guidance for this year and really even to next year. We’ve baked nothing into our guidance relative to any kind of successful outcome relative to NTAP. And so I do see, first of all, at a broader level, or one of our broader objectives is a leader.

I mean, we are the number one leader and we’re carving a new space here in Rapid ID/AST. Our Number one objective is to really to more broadly establish value for what we’re doing, the value of diagnostics in this very important space. So all of these added up, I think none of these are necessarily game-changers.

And I don’t want to position them that way. But by getting a CPT code established is quite a big deal. With NTAP, that will be, I think, for what we’re doing and the technology we’re delivering, I think NTAP was really put in place for, specifically for innovation like Pheno.

The impact that we see, again, it will further validate the value that we’re delivering to patients in the healthcare institutions. But from an economic standpoint, this will have a nice impact relative to the customers that are already live today with Pheno. It will hopefully help generate even more customers interested in going live quicker.

And they will be immediately able to start financially taking advantage of the NTAP program. It’s about roughly 65% reimbursed of their overall cost of the diagnostic test, which is roughly what reimbursement is. So they will see an impact pretty much immediately..

Okay. That’s helpful. And then just last one from me. As you sort of work through the new instrument placements and the initiatives on the go-live process.

Can you sort of talk about how the incentives that you put in place on the sales force to keep them focused on both of those, juggling two different things there? So I just want to make sure that those incentives are in line?.

Yes. Great question. And thank you for that. We just rolled all this out over the past month. And I will say the sales organizations highly motivated and energized for a number of reasons. One is just excited about their funnels and the opportunity to close new business, but also their commission plans and really the opportunity to win in this space.

I won’t speak specifically about the comp plan, but I will say with certainty. It is calibrated appropriately to drive revenue that is clearly a big part of our guidance and an important element, clearly focused on equally weighted in driving new contracted Phenos, which is signing new customers and closing new customers.

And then it’s also the third element that you mentioned is they are very incented as well to get customers live. And then clearly, the team is motivated on delivering on results every week, every month and every quarter. And so that’s another thing we’re going to be working on is periodization of the results.

And we’ve talked about that on this call, in quarters past, and it’s something that’s important as well, to try to level out the results that we’re seeing quarter in and quarter out..

This concludes our question-and-answer session. And the conference has also now concluded. Thank you for attending today’s presentation. You may now disconnect..