G ood morning, everyone. I'm Robbie Marcus, the MedTech analyst at JP Morgan. Very happy to introduce our next speaker, CEO of Bioventus, Rob Claypoole . Rob will do a presentation followed by some Q&A.
Thank you for the introduction, Robbie. G ood morning, everybody. Really nice to see you, and I appreciate you joining us today. At Bioventus, we're on a mission to help patients recover and live life to the fullest. For those of you who don't know, I joined the company one year ago. I did that because I could see that the potential of the business was enormous. I hope to convey to you today, during my presentation, why I'm even more excited and more confident today than I was a year ago about our ability to drive shareholder value creation. B efore I do that, though, the one slide that all of you are already familiar with in my deck. During the presentation today, I'll be making some forward-looking statements. I'll also be discussing some Non-GAAP metrics.
For more information on those, as well as other risk factors associated with Bioventus, please see our latest 10-K, 10-Q that are filed with SEC and also available on our website. All right, so with that behind us, let me give you a brief overview of Bioventus. We have three main businesses: Pain Treatments, Surgical Solutions, and Restorative Therapies. A quick note on Restorative Therapies before I go further. Over the past few years, we've made significant steps to streamline this portfolio. This included the decision last year in 2024 to divest our Advanced Rehabilitation business. T his is all part of our effort to continue to sharpen our focus on growth and profitability. T he reason why I mention that is because that divestiture successfully closed at the very end of last year. A fter that divestiture, Bioventus still generates over $500 million in annual revenue.
W hen you look across the product categories that we're in, it represents about a $6 billion market opportunity. Now, one of the many key strengths of Bioventus is that we have multiple paths to creating significant shareholder value. First, over the past few years, we've assembled a diverse portfolio that allows us to drive both short and long-term growth. W e'll talk a lot more about that in a minute. The categories that we're in are also large and growing markets. I n each one of those spaces, we're either a market leader or a growth leader. In addition to that, what we've shown is that we have the ability, with that portfolio, to significantly accelerate our revenue. W e have a very healthy, peer-leading gross margin that's in the mid-70s.
W hen you take that very healthy gross margin and you combine it with accelerated revenue growth, and also add the opportunity that we have to drive cost efficiencies going forward, well, it creates an excellent platform for us to continue to expand our margins while improving our profitability and our cash flow. W e saw the power of this combination in 2024 as we doubled our share price. But I can't emphasize enough that this is just the beginning of what we can achieve at Bioventus as we strive to become a $1 billion high-growth, high-margin, high-cash flow company. Let's take a closer look at the numbers. When I joined Bioventus, I said that there were three priorities that we were driving. We're going to accelerate revenue, we're going to expand margins, and we're also going to reduce our debt.
W e've made significant progress with each one of those. This is through our improved execution and financial discipline. First, as it relates to revenue, I'm very happy to say that we have brought growth back to Bioventus. While we haven't released our full 2024 results, if you look at the midpoint of our guidance, it's just over 13%. T hat compares to about 3.5% growth the prior year. W e believe that the stage is set for sustainable growth going forward. Next priority was improving our profitability. W hen you take that very healthy gross margin in the mid-70s and you combine it with the accelerated revenue growth, well, of course, that generates nice EBITDA growth. O ur EBITDA is projected to exceed $100 million for 2024. T hat represents about a 20% growth rate with our EBITDA.
W hen you take the two of those combined, well, it also creates a very healthy leveraged P&L, as our EBITDA growth is expected to exceed our revenue growth by about 50%. N ow, as we look at the lower half of this slide with cash flow and our leverage, this is an area where Bioventus was challenged in the past, but we've also made significant progress here. In fact, if you look over the past 18 months, we've paid down a significant amount of our debt. I'd like to share with all of you today that in the fourth quarter alone for 2024, we'll show a debt reduction of nearly $50 million.
W e're very excited about our progress there, and we expect an even bigger step change going forward, and also why our net leverage, we expect it to drop below three well before the end of 2025. O verall, we're encouraged by our progress with our improvement, with our execution, and our financial discipline. But again, I can't emphasize enough that this is just the beginning of our journey. We feel like we're just trotting up to the starting line as we strive to become that $1 billion high-growth, high-margin, high-cash flow company. Now, Bioventus, we're really focused on that top-line growth. W hen we analyze that growth, we look at it through a slightly different lens. A s I mentioned before, we've assembled this incredible portfolio, a diverse portfolio of both short and long-term drivers. W e categorize our growth into three buckets.
We look at our high-growth drivers, our market leaders, and our emerging growth engines. W hat I'll do is I'll give you a brief overview of those on this slide, and then we'll go into more detail. First, for the highest growth drivers. H ere we're talking about ultrasonics and bone graft substitutes. A s you can see on the right-hand side of the slide, the end market growth is in the mid-single digits. We're driving very strong double-digit growth. W e expect that trend to continue through aggressive market development with our ultrasonics technology, as well as we continue to take share with bone graft substitutes. The next are our market leaders. Now, these are the products that our company was founded on nearly two decades ago. I t's where we have a strong market leadership. T oday, they still make up about two-thirds of our revenue.
We'll take them individually. First, hyaluronic acid for knee osteoarthritis. We've demonstrated our ability to drive very strong double-digit growth here, and we expect that to continue based on our clinical differentiation. For the above-market growth to continue, we leverage our clinical differentiation and also our improved commercial execution. The next is with Exogen. We'll go into more detail on this, but this is a business that until recently was declining for Bioventus. Now we've completely turned the business around, and we're looking at low single-digit to mid-single-digit growth going forward. All right, now let's take the emerging growth engine. For this, we're talking about peripheral nerve stimulation. It's an exciting space; it's a small contributor to Bioventus today.
We expect this to turn into a major growth driver for the company, starting with our Talisman technology that's awaiting FDA approval, as well as the other innovation that we have in the pipeline. L et's go into each one of these in a bit more detail. First, with our ultrasonics technology. It's a $1 billion market. Today, we're focused mostly on spinal surgery for bone cutting. T hat's a market where it's dominated mostly by traditional drills and hand instruments. We're driving very strong double-digit growth. T hat's because of our value proposition. First, our technology provides surgeons with exceptional precision and control during surgery. Second, it provides the surgeon with substantial time savings. W e're not talking about it saves two minutes per case. I f you add up those minutes across the course of a year, it means something.
One surgeon recently told me that it's saving him 45 minutes in every case. W hat that means, of course, is that it drives much higher operating room productivity for a hospital. In addition to this, our technology helps reduce blood loss during the procedure, which improves patient results. W hat we hear often from surgeons is that it's much easier on their hands. One surgeon that I was with recently in Texas said it's so much gentler on his hands that it's allowing him to extend his career. But perhaps the comment that I liked the most was actually while I was with Mark, our CFO. We were visiting a surgeon, and he said, "Guys, your technology is truly revolutionary." T hat type of change doesn't come along very often. W e agree.
T hat's why we're going to invest in and drive this business aggressively over the coming years by broadening our marketing, increasing and improving our commercial execution, expanding internationally. W e have the opportunity to expand into general and neurosurgery by leveraging the same generator that you see on the left-hand side with different disposables for tumor removal. Let's go to our next growth generator, which is bone graft substitutes. W e target just the premium segment within bone graft substitutes. This is another billion-dollar market. W e're focused on spinal surgery here. W e've been driving very strong double-digit growth with our OsteoAMP product. T hat's for a few different reasons, both clinically and economically. Our product provides similar results as the market leader across a large number of procedures, but with potential material savings to the hospital.
W e have both a clinical and a health economic value proposition in this space. Going forward, we expect to continue to drive very strong growth. F irst and foremost, that's by raising awareness of that value proposition that we have while also expanding internationally. Now let's move to our market leaders. W e'll start off with HA, hyaluronic acid, to help patients who are suffering from pain associated with knee osteoarthritis. It's a big market. We're driving very strong growth, 3x the market nearly in 2024. T hat's led by our single injection therapy, Durolane. T hat's for a few different reasons. The first reason is because of our clinical differentiation with our Durolane therapy. The second is that we have the largest dedicated sales force in this space. This is really important. When our HA team gets up each day, they're focused on selling HA.
They're not distracted by five other products that are in their bag, and another one I'll touch on is that we have a very strong and stable private payer contract base, and that gives us broad access to the market, so going forward, we expect to continue to drive above-market growth, and that's not only for the reasons that I just mentioned, but it's also because we have a very disciplined expansion plan for this business to continue to raise awareness about our clinical differentiation and also to target large untapped revenue pools that we had ahead of us. We also have the opportunity to expand internationally with this business, and given the overall health of this business and Bioventus, we're in a great position to start exploring potential portfolio expansion opportunities. Now I'll go to our other market leader, Exogen.
T hose of you who aren't familiar with it, this is bone stimulation for patients who suffer from non-union fractures. As I touched on before, until recently, this was a business that had been deprioritized by Bioventus. In fact, if you go back in time, this was a business that was well over $100 million in sales. I f you look at the end of 2023, it was about $70 million. I t's a business that had been declining for multiple years. The team completely turned that around in 2024, and it was through three basic steps. First, we drove renewed focus on this business at all levels of the company. T he second is we took basic steps to improve our fundamentals and execution both in the back office and commercially.
T hird, we made a series of investments in 2024, a series of small investments that have had a very quick ROI. Invest in an area, see if it works. When it works, invest more. T hat's been quite successful for us. N ow we're seeing low single-digit to mid-single-digit growth. W e're going to aim to achieve the higher end of that moving forward by continuing our renewed focus on the business and also continuing to improve the fundamentals and execution that we have both in the back office and commercially. All right, now we'll talk about the emerging growth engine, which again is peripheral nerve stimulation. Now, this is for patients who are suffering excruciating chronic peripheral pain. It's a very exciting space for everybody. We're going to be focused on knees, shoulder, and lower legs.
W e intend to turn this into a major growth driver for Bioventus. It starts with our Talisman technology. W hat this does is generate significantly more energy to target deeper and thicker nerves while still being the smallest wearable on the market. It'll be complemented by a technology called StimTrial. StimTrial helps identify patients that are best eligible for a permanent PNS solution. T hat's a requirement by many insurance providers. B oth of those products right now are awaiting FDA approval. We expect to launch them in the second half of this year. I can't wait. It's a very exciting path forward for us. We have a lot of work to do. We're going to continue to build out our marketing in this space. We're going to significantly expand our sales presence.
We're also going to continue to work and drive the innovation that we have in our pipeline beyond Talisman and StimTrial. We expect going forward that this will become a transformational long-term growth driver for Bioventus. All right, you can see from that that, again, over the past few years, Bioventus, we've assembled a portfolio that gives us the opportunity to drive both short-term and long-term growth. We're really excited about that because we're hyper-focused on growth. But as you know, driving top-line growth is not the only way to create shareholder value. As I mentioned before, we have a peer-leading, very stable gross margin in the mid-70s. When you combine that with our above-market growth, what it means is that now we're in control of our P&L.
I t also means that now we have the flexibility to consistently invest in a disciplined manner in our future growth while continuing to expand margins. I want to emphasize it again. Because we're in control of our P&L, we have the ability to consistently invest in a disciplined manner to drive our future growth while still expanding margins. T hat's exactly what we're going to do. We've communicated that we intend to increase our EBITDA margin by 100 basis points annually by dropping our gross profit to the bottom line and also by driving those operational efficiencies that I referred to earlier. B efore I start to wrap up, let me touch on one more area that might be less understood and appreciated, but that we are equally excited about in terms of driving shareholder value. T hat's enhancing our cash flow and liquidity.
W e've made meaningful progress over the past few years with our cash flow. We had negative free cash flow in 2022, positive free cash flow in 2024. But we expect an even more significant step change with it in 2025 and going forward. I t's for the four reasons that you see on the left-hand side of the slide. F irst, we expect our EBITDA to continue to increase as we drive that top-line growth. Second, we've paid down a substantial amount of our debt. A s we have a lower interest rate on our term loan, obviously, the two of those combined drive lower interest expense. We also expect a significant decrease in our one-time cash costs. W e continue to make improvements with our working capital. This year, we'll be attacking our inventory. W hat does all of this mean?
In 2025, we expect our free cash flow to double compared to 2024. We also expect our cash flow yield to exceed 60%. A s referenced before, we expect our net leverage to drop below 3 well before the end of 2025. O verall, really excited about the progress that we've made so far, both in terms of accelerating revenue on the top line, improving our profitability, and in this area, improving our cash flow and liquidity with an even bigger step change ahead of us. I'll wrap up on this slide. 2024 was a transformational year for Bioventus. W e're really encouraged by our improved execution and our financial discipline. But again, I can't emphasize enough that this is just the start to what Bioventus can achieve. We're really excited to build on our momentum.
I referenced that for 2025, growing above market, expanding our margins by 100 basis points, our EBITDA margin by 100 basis points, doubling our free cash flow. That combination, that's a rare combination for a small-cap company. W e're excited about doing all of those at the same time as we continue to march towards becoming a $1 billion high-growth, high-margin, high-cash flow company as we help patients recover and live life to the fullest. T hank you very much for your time and your interest in Bioventus. W ith that, we'll turn it over to the questions. I should have mentioned, and Mark, our CFO, will also join me up here.
G reat. Rob, you've been in the CEO seat for a year now, plus or minus. Y ou've had a great 2024 with a lot of positive trends. You turned around BGS, HA reimbursement has now lapped and stabilized, and we've seen growth in that business. I f you look back over the past year and you look forward to 2025, where are you and where you want to take the business? How much of the hard work has been done? W hat are your goals for 2025?
T hanks, Robbie. We often talk about internally that while 2024 was a great year, both with improving our execution and our financial discipline, we really feel like we've just trotted up to the start line. 2025 is when we really begin the race. I'd say we're still early in the process because we have so much potential ahead of us. The big focus will be the areas that I touched on today, which is driving that above-market growth, driving that margin enhancement, and then doubling our cash flow. It doesn't stop with 2025. Because of that portfolio that we've assembled and the mechanics of our business, I feel like we have a really long road ahead of us, an exciting path ahead of us to drive shareholder value through all three of those areas.
I t's worthwhile rehashing what you actually did when you stepped in because bone growth stimulation, T hat growth has not just stabilized but improved meaningfully. The HA business has done really well. Y ou could just walk through some of the actual changes you made, whether it was personnel or reimbursement changes or whatever, and how you were able to take a business that wasn't outperforming to outperform it.
T hank you first for the comment. F irst, Bioventus went through some challenges in the past. T hose challenges masked the amazing ingredients that the company has to driving shareholder value going forward. That's really important in terms of the past. When I joined the organization, the first thing was just to make it very clear what is our strategy to driving growth and profitability going forward. Because of what the company had gone through, that pathway wasn't clear. I t was just looking at what is the best way to grow this company profitably going forward and then making sure that everybody across the organization was clear on that plan.
Some of this gets down to boring fundamentals, which is making sure that at every level across the company, they know what our strategy is, what our priorities are for the year, what are the critical activities under that, what are the leading and lagging metrics for every priority that we have. It works, making sure that everybody's clear on that. In addition to that, we have made some personnel changes across the company and at different levels, and that's just we want to continue to invest in our existing talent, but also to upgrade our talent to really leverage the growth opportunity that we have ahead of us, and in some cases, that's bringing people who have already done this before in other organizations and know what good looks like.
The other area I'd just point out and then offer to Mark to chime in, but in the different areas, and this applies to BGS that you mentioned, but also other areas of the company, we have a really keen focus on driving focus and accountability. W hen we look at what we're doing in terms of the leadership structure, where the sales force is focused, what customers the sales force is going to, and I could keep going on from there, focus is key. Instead of getting distracted, we have so much opportunity ahead of us that we can be laser-focused on where the biggest opportunity is and still drive exciting growth. T he accountability behind that because it's the old saying, if you don't measure it, it doesn't exist.
H aving this combination, making it part of our DNA, where leading and lagging metrics are what we're looking at as a leadership team every month, so that we can see what's working, what's not working, how do we adjust when it's not working, and that holds us accountable so that we can hold the rest as an executive leadership team so that we can hold the rest of the organization accountable. Mark, anything to add?
I'd agree with Rob's comments. I'd also just comment on what Rob has brought to the company from a commercial execution perspective. You look at the experience that he's had at names like Medtronic, Covidien, J&J. He knows what good looks like from a commercially executing. He's really raised the bar within the organization to another level that, one, has benefited us in 2024, but also back to starting to get going up to the starting line that I expect to benefit us going forward.
I could pivot for a minute before we get into some of the products and the financials. We can talk about the capital structure. You had a target for less than three times net debt second half of 2025. You have some B-Class shares. You have some debt coming due in the not-too-distant future. J ust talk about how the rehab business sale played into that, where you stand, and how investors should be thinking about your leverage and your capital structure moving forward?
I'll touch on the Advanced Rehab business and then Mark can chime in as well on the capital structure moving forward. F irst, the decision last year to divest the Advanced Rehab business, and I mentioned it during my remarks, but it was really to sharpen our focus on growth and profitability. Even after that business divested, we have a very diverse portfolio for our company our size. W e're really excited about the portfolio that we have. But that was the main focus of it. T hat's because, again, that business was not accretive from both a growth and a profitability standpoint for Bioventus. T hat's strategically why we did it. I'll let Mark comment on how that impacted our debt.
Rob talked about in his presentation that we paid down debt $50 million in fourth quarter. A big part of that was the Advanced Rehab sale. T hat was $20 million paid down the revolver, another $15 million. W e had a milestone come in from our LifeNet Health sale. We are close to $50 million of payment. But really, that transaction was not about reducing leverage. It was really about focus and narrowing our ability to invest in a smaller number and really take those growth drivers that Rob talked about in his presentation and maximize those over time. To your point on our capital structure overall, that's a priority for us that we will be focused on starting in Q2. D on't really expect to have anything significantly different from what we have today.
But we've come a long way in paying down debt and doing what we said we were going to do with the street. We feel that we're in a really good position with the banks and look forward to using our track record and our ability to pay down the debt to even lowering our interest rates in the future.
I believe there was a shelf registration in third quarter, early fourth quarter. Maybe just remind us of the purpose of that?
Really just good housekeeping. That's something that we've been discussing as a management team for a while, going all the way back to when I started in 2022 and felt that that was the right time to do that, to really put that in place as really just good financial discipline and housekeeping to make sure that we have that.
I know you didn't pre-announce the quarter or guide, but any qualitative comments about how you felt about fourth quarter and maybe where consensus is for 2025?
I'll make a broad statement about it. W e continue steady progress across all of the areas that I mentioned at Bioventus. T he important thing to note is that we don't have to do something that's particularly creative or spectacular. We have this great portfolio to allow us to drive growth with the right improvements in commercial execution. We have, because of that gross margin, the ability to take advantage of that accelerated growth and drive it, drop the gross profit to the bottom line to improve our margins. A s we've mentioned, I said that in the fourth quarter alone, and Mark just mentioned again, that we'll show debt reduction of $50 million. W hat that tells you is that we're happy about 2024 overall. W e're really excited about the year ahead.
We have a really exciting pathway ahead of us, not just for 2025, but 2026, for 2027, in terms of driving our progress across all three of those areas, which, again, we think that's a pretty rare combination to drive growth, profitability, and cash flow all at the same time. But we haven't released 2025 guidance yet.
W e could touch on your peripheral nerve stimulation PNS product. This is a really interesting area that is still in its infancy and reimbursement is still being figured out. Maybe speak to how you feel about the product itself, the reimbursement environment, and the launch process and what you're doing there.
F irst, for those who aren't familiar with it, it's a very small contributor to Bioventus today in terms of revenue, inconsequential today. W e're really excited about what we consider step-change technology that we have going through FDA approval right now. F irst is our Talisman technology. I touched on it just briefly, but this is technology that's designed specifically for peripheral nerve stimulation. It's, again, patients who are suffering from excruciating chronic peripheral pain. It's not a technology that was in a different area of nerve stimulation, and then we're taking it and trying to make it work for peripheral nerve stimulation. The key to it is that it generates much more energy. W hat that allows us to do is to target deeper and thicker nerves. I t also gives more margin for error in terms of the placement of the device.
T he remarkable part of it is generating much greater energy, but also being the smallest wearable on the market. I magine this is what patients have on them at all times. They want something that's very small and discreet. H aving small, but also very powerful, is what makes it very special. But in addition to that, we have a really strong R&D team with our PNS business. This is, again, part of the portfolio that we've assembled. U nfortunately, great R&D talent came with it. W e're also developing other innovation in the pipeline. I mentioned StimTrial, which helps identify patients for the permanent solution. We have other technology that we're not going to talk about yet that's in our pipeline in this space. W e are determined to develop the most comprehensive and best portfolio in the PNS space.
R obbie, as you mentioned, this market is early in its stages. The growth opportunity is really exciting. Some of the aspects of the market in terms of reimbursement, et cetera, are still to be determined over the long term. But we expect this to turn into a very exciting long-term growth driver for us. We're not looking at this business to make a big difference for us in 2025, 2026. This is a long-term contributor to our growth.
M edium- to long-term with a building into the market in the short term.
Exactly.
Okay.
Yeah, exactly.
Y ou could touch on your bone growth stimulator business. This was something that for the longest time was just lagging or underperforming, and then it's very quickly rebounded and not just 1% growth, but much better than that, so it seems like I'm sure the answer is we didn't do a whole lot different than we should have in blocking and tackling, but what exactly did you do to implement such an impressive turnaround?
Well, again, thanks for the comments. I'm glad that you brought this up because I'm so proud of our Exogen team. First, this is a very proven technology that's been around for a long time. Years ago, the company deprioritized the business. S ome will use the term, treated it as a cash cow, okay? But the reality of that market and that business, it's not a business that you can leave alone. It's a business that requires ongoing attention. W hen we came in, we looked at the business and said, okay, first, it's a patient base that needs this technology. It's a market that we can win in. W hat are the reasons why we haven't been growing in this space? It's really because the company deprioritized and defocused the business.
T he first step to it, in line with what I mentioned before, it's almost this is an example of Bioventus overall, is we looked at it and said, what's the path to growth? A s simple as it sounds, we said, we can grow this business, and here's the strategy to do that. T hen we said, this is no longer going to be deprioritized at Bioventus. We're going to put the right amount of focus on it across all levels of the company. I t's amazing when you say to an organization, we care about this business, here's our strategy to grow it going forward, and you make sure that there's visibility to what's happening with the business, how much that drives success going forward.
We also put a leader over the business, somebody who had been with the company, but we made the focus and the accountability of that leader over the business much clearer. He's done an excellent job with it. I n combination with the strategy and the growth path going forward, what that's done is helped drive much higher retention of our employees. W e know for that business, the longer that employees are with the business, the higher their productivity. In addition to that, I'll just touch on one more, which is we started to invest in the business again.
T his is in a small way, but when it's a business that's been deprioritized and had been declining for five years, and you start to invest in it in line with the strategic growth plan, it can have a big impact both emotionally for the team, but also in terms of the return on the investment. T hat's what we saw. T hose investments in the business were across the board, including even looking at our geographic spread and noticing that there's pockets, large pockets of revenue that we weren't even going after because we didn't have proper coverage in those areas.
A dding some associate sales reps to those, seeing the progress that was made, when it works, invest a little bit more. It 's really been a combination of all of those. G lad you brought it up because it's exciting for us. It's a nice profit generator for Bioventus. We've completely turned it around from negative to low to mid-single-digit growth.
I forget the exact word you used. It was something like, "we have a broad and diverse product portfolio." I imagine you evaluate this constantly with the board. But how do you feel about the diversity of the product portfolio today? I could ask it, do you plan to add more? Bioventus has historically been an acquisitive company. Or is there more potential sales from the portfolio in the future?
T hanks. Well, we feel really good about the portfolio that we have today. W e've made some steps to streamline the portfolio over the last few years, as I mentioned. And what we have left, we think, is a really nice combination of businesses that can provide both that short, mid, and long-term growth. And we're not in any rush to do M&A because we have so much to chew on right now and to drive our growth going forward. However, w e're not going to have our head in the sand either.
If the right opportunity comes along that fits with our existing business and our call points and our channels that we can leverage, of course, we'll always be open-minded to it. A s it stands right now, we're excited about the portfolio we have. We're not seeking M&A. We want to keep driving down that debt while growing the top line and our profitability.
You touched on some of the margin expansion targets in the slides. Maybe you could run through the drivers. Obviously, you're taking profitable businesses that weren't growing as much, and they're growing more now. How do we see that playing out down the P&L? And how much more room is there for margin expansion over the short to medium term?
I t goes really to the special ingredients of the company and why we think this is such a great opportunity to invest and to create shareholder value. As one, you start with the growth capabilities that we believe the company has going forward and what we've demonstrated this year at the midpoint of our guidance of 13%. So high-growth company in 2024. T hen you take our peer-leading gross margin of 75%, and you are left with a lot of gross profit dollars to either, one, put back into high-growth assets like ultrasonics, like PNS that we talked about, and to return the margin and increase that over time. This year, we'll expand our margin significantly. R ob talked about in his presentation of 100 basis points increase year over year. That's our goal.
We really are in a special place. Really, up to myself and Rob and the management team to take that growth that converts with our high gross margin and be able to make those decisions and really feel excited about having the ability and look forward to executing on that.
Maybe below the line, again, we'll wait for the earnings call for the detailed guidance. But any color on interest and tax as we move into 2025 that investors should be thinking about?
F rom a tax perspective, no real significant changes in 2025. But back to paying down debt, a combination of lower debt, a combination of our interest rate coming down, one, with the macro environment, two, with us performing better with the banks to get that spread down, we expect to have a material change from an interest expense. T his gets back to talking about in Rob's presentation, doubling cash flow in 2025 off of 2024. A combination of all that, we expect to have a significant materially less interest expense.
EPS growth faster than OpEx growth by a good amount.
I'll say that EPS would grow faster than EBITDA, yes.
We're out of time. Thank you for a great discussion. T hank you, everybody, for attending.
Thank you.
Thank you.