Good morning, everybody. Welcome to the UBS Healthcare Global Healthcare Conference. I'm Kevin Caliendo, Healthcare IT and Distribution Analyst. And with us this morning is the management of Cardinal Health, Aaron Alt, CFO, and Matt Sims, Director of Investor Relations. Before I start, Matt, you want to turn it over to you?
Yeah, of course. Thanks, Kevin, for hosting us today. It's great to be here. So just some quick housekeeping before we get started. We will be making forward-looking statements today, which are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied. For a description of these factors, please review our SEC filings, which can be found on our Investor Relations website at ir.cardinalhealth.com.
Thanks. You guys made my job a lot more difficult last night by announcing two deals because I had a whole list of questions and I had to throw them out. So maybe just for everybody, you had a conference call this morning, but maybe spend a minute or two just reviewing the two deals that you announced and the top line from those.
Sure. Good morning, Kevin. Thank you for having us. I will have you know that our deal team was motivated to get the deals done because they knew we were coming to see you. And so thank you for the opportunity to talk to Wall Street about the great strategic initiatives we've just announced. Last night late, we made three announcements. The first is that Cardinal Health will be acquiring a majority stake in GI Alliance, which is the nation's largest gastroenterology MSO platform. It is a multi-specialty platform play for us. While they are focused on GI currently, they already have elements into other therapeutic areas where we are focused. And we are looking to build on that platform both organically and inorganically, carrying forward. It's a big strategic play for us in support of our other ologies.
Secondly, we announced the acquisition of ADSG, which is in the home health space. They are a large distributor of CGM devices, which is very complementary to our existing at-home business, and it is a low CapEx, very synergistic business that we'll be able to layer right on top of our existing focus on CGM within our at-home portfolio. And we actually view it as, again, a synergistic play because on the one side of our house, we sell a lot of GLP-1s. That is a therapy. On the other side of the house with at-home, we already will and we already do, and we will with even more depth sell the monitoring devices in support of treating diabetes, so we're excited about those two transactions.
The third thing we announced last night is Matt is going to be busy and that we will have an investor day on June 12th coming up. We expect to close the two transactions that I just referenced after the start of the calendar year, after we get through regulatory approvals, but let's not forget that we actually have a third transaction already announced and out there, which is, in September, we announced the acquisition of Integrated Oncology Network, which was our more direct move into the specialty therapeutic area of oncology, and so those three deals will be layering into our overall strategic portfolio over the next couple of months.
Thanks. Thanks for that. And I know you answered a lot of questions this morning on the call, so I don't want to regurgitate a lot of that. People can access that. But I do have a few follow-ups. On the GI side, do you have the distribution for this contract already? Meaning, are you supplying on the pharmaceutical side this business? Or when you talked about the accretion from the deal, was that solely from the actual acquisition that you have?
We are not the distributor to GI Alliance currently. GI Alliance is, however, importantly, a customer of Specialty Networks, and if you go back nine or ten months, we made an acquisition of a company called Specialty Networks, which is a GPO-plus technology play using AI insights, reading the EMRs and providing insights up to manufacturers, as well as providing clinical recommendations back down to the underlying practices, and while GI Alliance is a customer of Specialty Networks, what we love about this deal is it reveals what we've been thinking about all along, which is how do we create the broader ecosystem within the medical field that we can participate in. Cardinal started as a distributor of pharmaceuticals. We've moved into more specialized services across parts of our portfolio.
And the combination of Specialty Networks and the tech and the data and the insights and the real-world insights and the studies, all the things that goes on there, when you now combine that with a national-scaled MSO platform in GI. Did I mention, by the way, it's a multi-specialty platform for us? And did I also mention that Specialty Networks is also in urology and rheumatology and other areas? You really start to see the design of what we believe the four corners of Cardinal's specialty strategy can be based on those two deals. Last plug for the deals, of course, is that there's actually also overlap between what the businesses do within GI and also what the ION and the Navista businesses do as well. And so we are really creating an ecosystem.
If you're curious what that looks like, if you look at our investor presentation from this morning, you'll get a better sense of how the constituent pieces fit together.
So if you're not the distributor, there's an opportunity in the future at some point, presumably, possibly. Would that opportunity be the same size as the MSO in terms of revenues and EBIT?
Yeah. I want to be clear. We didn't buy the business for the distribution. There have been assets out there where incumbents of the distribution have acquired to protect their spot. That's not what we're doing here. What we are interested in is the higher margin, broader service portfolio opportunity that this brings to our ecosystem and how we can create profit growth really across utilizing all of the elements of Cardinal. Now, of course, distribution is a fact of life for our broader business. If that works out down the path, that's great. But that's not why we bought the business. It's not assumed in the deal.
Okay. That's helpful. Let's go to ADS or ADSG. ADSG?
You can call it ADS.
ADS. You have both and diabetes already. So one of the questions I got repeatedly from investors last night and this morning is, are you now competing with the two DME companies that are public? How is this different? Is it adjacent to that? Are you a supplier? You said there's no CapEx. Those companies have a lot of CapEx related to this business. So maybe sort of explain how that works.
Sure. Our broader at-home business for many years was within our old medical segment, meaning Wall Street didn't have visibility to the results. Many knew it was there, but didn't really appreciate the size and scope. This past January, actually at the J.P. Morgan conference, we announced the resegmentation of our enterprise to separate our core pharma and specialty distribution business to be a reporting segment, our Global Medical Products and Distribution business to be a reporting segment, and then we took three businesses that were previously somewhat hidden in the portfolio, our nuclear precision health business, our at-home business, as well as our OptiFreight logistics business. And we elevated their priority. We elevated the investment in them. The three businesses report directly to Jason Hollar, our CEO.
But the three of them together compared to pharma or GMPD aren't yet material until they aggregate together from a financial reporting perspective into other. We call them other, but they are far from other in that we are committed to investing in those businesses. And this acquisition of ADSG is a good example of how we've been investing organically in these businesses and technology and capacity and expertise. And we also signaled that we would consider after specialty investing in those businesses from an M&A perspective. And that's exactly what we've done with the ADSG transaction. Now, here's the why. We have a strong position in CGM monitors. And CGM monitors, for those of you that aren't as familiar with the industry, it's not really DME. It's not big. It's not bulky. It doesn't take a lot to ship it.
The business is relatively CapEx light compared to some of the other business models that you operated. And what we love about the ADS business is that it broadens our scale within CGM. The business is very synergistic in that Jason this morning described the fact that we could take their entire $1 billion of revenue, put it on top of our business, and that would use about 2% of our capacity. And we have capacity to be able to do it. And so that gives you a sense of the financials, why it's attractive to us to be able to broaden our exposure, broaden our mix of contracts, get additional capabilities from a customer acquisition and other elements that they do quite well to really drive to the benefit of both of our businesses.
Okay. You said this morning, embedded within the 10% CAGR for CGMs, you cited legislative changes that impacted that. What changes occurred that are driving that?
I think what Jason was referring to is the fact that we all live and work in a rapidly evolving environment, and there's questions of medical benefit versus pharmacy benefit, et cetera, and the good news for us is we know a few things about pharmacy benefits, given our broader business indeed. We know a few things about medical benefits, and we believe that if you look at the total universe of people who have diabetes, about half of them actually have access to CGMs. About a quarter of them have actually taken advantage of that.
And so there's a need state for the product we're talking about here that we believe we can help support, and that we believe it presents us with a growth opportunity that, with the strong operations we have further enabled by the strong customer acquisition and other capabilities that ADSG has, we believe those things together will set us up for excellent revenue and profit growth within this important part of our other segment.
Okay. I'm still a little confused by the tie-in between GLP-1s and this. I understand, but for your business, meaning, is there an opportunity to, I mean, you don't bundle these products per se, right?
No, no.
I just want to understand how you view it as to mention GLP-1s a lot?
Yeah. It's a fair point. And I guess my counsel is don't overthink it. We always try to take a portfolio-wide view. If we make a choice or make a decision in one part of the portfolio, what is the knock-on consequence across the rest of our portfolio? And we're very cognizant that when we come to events like this, we often get questions about the continued rise of GLP-1s. It's a growing part of our pharmaceutical distribution business. The point we're trying to make is that is a therapy for diabetes. It's not a cure. It's a therapy for diabetes. And it continues to be a strong growing part of our revenue base. In contrast, the CGM space, this is the measurement device that those that are either in therapy or not can actually use to measure how are they doing relative to their medical position.
And so we view the two as being complementary, not being in competition with each other.
Follow-up on GLP-1s, just because I want to ask, a lot of people ask this. Lilly called out an inventory change this quarter that negatively impacted them. You guys denied it was you. I understand that. And I appreciate that you said that to us. Have the economics for GLP-1s for you changed or are they going to change in any way, shape, or form, or we should still think about them exactly the same way we have for the last several quarters?
Yeah. Look, there's no escaping the fact that the GLP-1 growth is incredible. Every quarter we see continued growth within the GLP-1 space. What's changed in recent quarters is the availability of the product. And Eli Lilly and the others, certainly into our Q4 and certainly into our Q1 as well, there was a more robust supply chain of those products. But there's also been significant demand. As a practical matter, while scale can bring efficiencies, at the same time, it's a complex product that is temperature controlled that we have to manage. And we have not gone to a place where either the contracts have changed or things have otherwise evolved such that you would hear me saying that that is a profit growth opportunity for us.
The GLP-1s, taken in isolation, tend to be low to no margin for us, not dissimilar to the rest of our branded portfolio, to be honest.
So as other branded players come to market, potentially orals and other things, could that benefit you from a margin perspective in any way, shape, or form, or just simply benefit you from the fact that it grows? You have another.
Yeah. It's difficult to predict exactly what form it will take. But what I will say is we support innovation. We support innovation, particularly where there's a therapeutic need, which there is, and where there's demand. And of course, if it were to become an oral product versus a temperature-controlled injectable product, that makes the supply chain distribution effort a lot simpler in that way. And what Jason would say if he's here is that we have proven over decades, we and our peers have proven over decades that we have to be compensated for the services that we're providing. And if there is a way for us to do better and for the manufacturers and the ultimate patients to do better, that's what we're interested in doing. And so we support that innovation.
Of course, we're having the conversations real-time with the manufacturers about what do their economics look like relative to our economics.
I mean, it's a question. And the consternation would be oral solid pills, you might not make as much money. Their margin might be lower or might even be break-even versus cold storage where you might get paid more, you might actually make more. And if the market shifts that way, does it hurt you?
Right. I guess I would observe this, though. It's hard to look at it in isolation because with the innovation pipeline that's out there, we have other demands on our temperature-controlled space. And so as we look at the basket of branded goods, as we look at the basket of goods that are moving from branded to generics, our focus is on the overall basket there and how do we continue to ensure that we're getting compensated for the services we're providing.
I moved off topic of the deals and everything else. But I want to ask a bigger picture question on the deals. Obviously, you did ION. Your peers have spent close to $10 billion on acquisitions in the last year in the provider space and oncology and other areas. You've done now a handful of deals. Why all of a sudden are the providers? I know you were asked a question in a different way, but what has changed in the marketplace that all of a sudden the distributors, are you out there? Is it defensive that you're protecting your market, or is it opportunistic in that, hey, there's biosimilar spread that we want to capture and here's a way we can do it? Is it PE firms are looking for exits and all of a sudden the valuation has gotten more attractive and you were ready to pounce?
Can you maybe talk broadly about that?
I can speak to us and why we're doing the deals we're doing. I can't speak to the others. What I would tell you is we are acting out of strategic intent. Part of what Jason and his team have done in the last couple of years is we have been very focused in ensuring that we have strategic clarity both for the senior management team as well as the operations teams of how are we simplifying what we're doing? How are we driving to clarity so that we can have a plan, tell you what it is, go get it done, report back, and then do the same thing again?
What was clear to us, and I hope you picked this up at our investor day as well, is while our core pharma business is very important to us, the higher margin, higher growth areas are in the specialty area. So we were clear that we had to double down within oncology, not to be number one because we're coming from behind relative to oncology. But when we announced the Navista investments about 18 months ago, and then following that, when we announced the ION acquisition, what you see us doing there is addressing the strategic gap intentionally that we have in oncology. But we're also very clear at our investor day that we have a much stronger position in the urologies. It's not where some of our peers have been as focused. And so we have been playing to our own strengths.
We've been playing to our own strategic playbook and being very purposeful in going and finding the assets that we want to bring into the portfolio. Specialty Networks was not a process. The business was being sold and we participated. We went and engaged in that conversation because that was the right asset for us as we were thinking about developing the ecosystem within specialty that would enable the continued value creation at Cardinal. Similarly, GI Alliance, it was not a competitive auction process because private equity wanted to exit. That was, we knew Dr. Weber and his team, but we went to them and said, we see a big idea here of how can we work better together and how can we really build the multi-specialty platform on the back of the excellent GI platform that he has built.
So we're being strategically intent in doing that. Now, bigger picture, why is that our intent? It goes back to what I said before. We see revenue growth opportunities. We see profit margin growth opportunities that are more robust than just sticking with our knitting in the core pharma distribution space of it. And as we think about the long term and how do we continue to meet or beat the long-term objectives we're giving to Wall Street, the goal there is to ensure that we've got the right mix of assets coming into the portfolio, manage the debt lightly while also preserving our core business. If I can, one question I've gotten a couple of times that I want to address upfront is I've heard some concern around, well, hold on a second. You bought Specialty Networks. You're buying ION, not yet closed. You're buying GI Alliance.
You're buying At Home. You're working all these things in the organic portfolio. Is it a little much? And the answer is, from the outside, it might appear that way. But the good news for us is that as part of our resegmentation, as part of us planning to be in a place like this, we have specific dedicated management teams that are very focused on the individual transactions. There are synergies to be driven. There are opportunities that will come together by virtue of our ownership of each of the assets. But no one deal, no one opportunity is dependent upon the success of the others. And none of them should distract from our continued execution against the simplified agenda on the core pharma and GMP business. And so we have a robust view of our ability to go get this done.
Helpful. Helpful. Last one on the deals, and we'll move on.
Sure.
We understand, I think most of the audience in your investor base understands how the oncology reimbursement model works for the clinics. ASP + 6 for a lot of drugs. And now there's some nuances where you can even make more than that. The other ologies, is there a lot of ASP + 6 in some of these markets? Is it different reimbursement? I don't want you to go through every single one. But broadly speaking, do you think about reimbursement? Or the MSO business is different too, I understand.
Yeah. Each therapeutic area has its quirks, has its different approach. And we have not spoken at any length on the differences between the key areas that we're in. So I'm not prepared to do that here today other than to observe that while oncology is known as being the higher profit margin, higher growth area because that was oncology, because oncology was more aggregated earlier on, there was better visibility to that. We see opportunity coming from the scale within the other ologies as well. They won't all look like oncology. But certainly, as we look across the ologies, there have been other opportunities that we have not pursued in other ologies. We're trying to be choiceful around which opportunities are we taking to set us up for that greater success.
Got it. Helpful. Let's move on. We just had an election, I heard, rumors, and one of the big topics coming out of this, obviously, with the Trump administration, are tariffs. I know you've addressed this a few times, but now it's actually closer to reality. How are you thinking about this? How does it impact you? What products do you have contract flexibility on? Which ones don't you have contract flexibility to be able to push prices through? Or do you have to potentially take risk on? And does it prompt you to maybe look at more OEM manufacturing that's nearshored domestic? Or strategically, what happened from Tuesday till now as you think about your Med-Surg business?
Yeah. Well, here's the good news. We are far better prepared today than we were a couple of years ago before we launched the GMPD Improvement Plan, what was then the Med Improvement Plan, in a couple of ways. First, as we have been working through the $240 million profit improvement year over year through the end of 2024 for us, a key part of that has been how do we address the mitigation of inflation? It's been how do we address the need for resiliency within our supply chain? It's how do we address the flexibility to be able to make the choices between where are we an own brand manufacturer around the world and where are we sourcing from a third party?
Importantly, what do our contracts look like both with those suppliers such that if tariffs do appear, we can quickly and adeptly move between jurisdictions of importation or even to bring something onshore that we would produce ourselves? I'll go back to where I started. We are far better positioned today than we were two years ago. Let me give you an example there. Some of you are aware that there has been recent concern around Chinese-sourced syringes. While it's not a tariff issue per se, it's a great learning for us because what we were able to do is to, okay, we identified we have an issue. Our product was being produced with a supplier, a third-party supplier in China. We quickly did the assessment because we had built the bone structure there. Then we just opened two domestic lines to produce.
That's an example of a different Cardinal GMPD today from where it was two years ago. Really, if I zoom out for a second, though, what I would tell you is none of us knows exactly what the tariff environment's going to look like. We believe there'll be tariffs. We aren't sure exactly how much or where or when. We are also in a much better place because our contracts with our customers also now recognize the fact that if as a 1% margin business, if we get hit with a tariff, we're going to have to pass it along. We're far better able to do that now than we were before. We will very proactively engage with the Trump administration. We believe we've got good relations on both sides of the aisle both with the outgoing and the incoming administration.
So our hope is to be able to influence the smart choices there. But at the end of the day, whatever the decision is, we have far more flexibility than we did.
Okay. That's helpful. And you don't think you necessarily need to change manufacturing in any way. And maybe just one follow-up to the you have more flexibility. So who ends up paying more? Do the hospitals have to pay more? Is Joe Consumer going to end up paying more?
It's a great question. I mean, it's the inevitable put and take between the manufacturer, the distributor, and the end customer. Given our place in that economic stream and not having much of a profit margin on that, we have to have that conversation in different ways.
Just a couple of follow-ups on Med-Surg. The branded portfolio, you've talked about it, pushing branded portfolio higher and higher and higher. It's a big part of the Med-Surg growth. Where are we with that? Can you maybe give us a little more progress? I'm guessing at Analyst Day you're going to provide and do a longer-term outlook. But it's such a key part of the story besides the tariffs and the noise around that. Help us understand where you are. You've made all your investments in the pharma side, really. We don't see the investments on the medical side, and I just want to sort of understand what's happening in that business world.
That's a fair question. So let me provide the situational context and then go deep on the question. For those of you that don't know our story as well, two years ago, our team launched an improvement plan, the Med Improvement Plan, now called the GMPD Improvement Plan. It really had three areas of focus. The first is how do we address the inflation that was coming from a totally disrupted supply chain? We have largely accomplished that task. We announced that we are 100% mitigation of the prior inflation at the end of our fiscal 2024, which ended in June. The second element of that plan was simplification, not just in the form of cost out, but simplification of how do we operate to drive efficiencies, to drive resiliency, to drive the business as we carry forward. And that effort continues.
And indeed, that has been part of why we are better prepared to address some of the challenges you called out before. The third part of the effort was how do we drive the growth of Cardinal Health Brand? I'm sure you all are aware that an owned brand or private label, self-manufactured or indeed manufactured by third-party owned brand product tends to be more profitable to us and for anyone for that matter. And indeed, that is the case here. And so a key part of our improvement plan is how do we drive the growth of the Cardinal Health Brand within our medical portfolio? We have disclosed in the past that that is about a third of our revenue base at the moment. And the challenge that Kevin is laying out for me is how do you drive that up from the third to north of that?
Because there are others in the industry, names that will go unspoken on this stage, no doubt, that have a higher percentage penetration of that. And we are watching how that works carefully. But we have to do it our way given the network that we've inherited, given the business we've got. And some of it is, are we making the right investments in innovation? For a branded product, you need to have the right investments in innovation. And while you all can't see it, we've actually been doing that in the background, whether it's in new categories. Enteral feeding is an area where I think we've talked in the past where we have been investing in Cardinal Health Brand, whether it is in manufacturing capabilities as well. We have been making those investments in the background.
The second way that we have to do that is we actually need to be ensuring that we are getting the benefit of the contracts that we've already got with our customers. Many of our contracts have commitments by our customers to buy a particular penetration of Cardinal Health brand products. And so we are becoming better both because we're renewing those contracts, but then certainly as we add new contracts as well, we're becoming better in ensuring that the overall economic stream, the mix between the national distribution and the Cardinal Health brand product is more supportive of the overall portfolio. And that will be an effort that will continue for the next couple of years as we push forward.
Do you think you could get to 50%? Is that a realistic number?
I think that would count as a guide, and I'm not going to provide any new guidance today, but I certainly love the aspirational objective you just laid on the table.
Fair enough. Coming out of earnings, the one question I got more than any other besides the deals and things like that, but just simply around the guidance was they just grew 16% in the fiscal first quarter. And if you.
Sorry, how much?
The last three quarters of the year, the annual growth is, if you look at the guide, low single digits in essence, much lower than what you did in the first quarter. I know there's some lumpiness to Optum and the timing of that. But help us understand why that's not a sandbag.
No. So I appreciate the question and the intent in which it's offered. And I have a couple of important points to make. The first is we have to be careful not to get ahead of ourselves, which is we had a great Q1. We had a great Q1 talking about the pharma and specialty distribution business. We had a great Q1 for a couple of reasons. First, we saw strong demand across the portfolio. Generic volume was very strong. That's where we make a lot of our money. Branded volume and mix was very strong. So we got disproportionate benefit there in the quarter as well. Our consumer health brands, it was very strong as well, whether it was the core pharma business, the specialty pharma business, or whether it was the services part of our portfolio that tend to be higher margin as well.
It was just overall a great quarter. Now, it was a great quarter in the context, of course, relative to we were working through a pretty significant transition of a customer during the quarter as well that was a cliff event on the last day of our fiscal year, and so I will tell you, we also were working really hard leading up to the first day of our Q1 to really understand what flexibility did we have, what cost optimization opportunities did we have, how were we going to address the fact that we had a hole in our portfolio, and part of why we did so well is the team did a really good job of getting ahead of that. We executed more aggressively on taking advantage of that flexibility to better service our other customers, and so when others had needs, we were there.
If there was a cost opportunity, we had taken care of it upfront versus waiting to see how it played through. And so that was certainly a contributor to the overall effort. But here's the thing. Optum was not a one-quarter event. We have a full year to work through of the impact of Optum coming out of the P&L. And so I don't want you to think that Q1 is evidence that all is going to be great going forward. The other important point that I, of course, need to address is the COVID-19 vaccines. If you look back a year for us, September 11th was when the COVID vaccines were authorized in the last year. And so the peak of the vaccine demand for us was last year's Q2. Very clear to us that this year that peak has shifted into Q1.
And so we have a timing difference where we saw a lot of benefit in this Q1 that we won't see in Q2. I'll come back to Q2 guidance in a second. But it's also the case if you zoom out and think about our full year guide for the year, we did guide that the profitability for us, the contribution of the COVID-19 vaccines would be modestly down for the year. And so again, big Q1, but the overall impact for our year is going to be down year over year as we carry forward. And so I don't want to lose sight of the fact that for those that might be expecting us to just repeat Q1 as we carry forward, that isn't going to be the case. There are a bunch of other puts and takes.
The last one I'll emphasize is as we think about our year and the original guide we gave even before we raised it after Q1. Keep in mind that we also talked about the fact that we have $10 billion of new customers coming online, but in the back half. And so we're not yet there. As we talk about those new customers coming online in the back half, we need to get there. We need to prove we can do it. They are better margin opportunities than what Optum was, but they're not yet online and not yet running. And so we think we're being pragmatic and certainly celebrating the success of Q1, being clear-eyed on what's going to happen in Q2. Keep in mind we guided Q2 to be slightly down. I think "were" our exact words versus prior year.
And then as we get into the back half of the year, there's a lot more work to do.
So let me just ask a follow-up to that. Thank you. That was a huge amount of color. It's helpful. Is there still going to be lingering costs as you offboard Optum that a lot of us thought that the first quarter was going to be down a lot because there was going to be a lot of stranded costs and those might go into Q2? You said you actually sounded like you took care of a lot of that in Q4, which at least we didn't model that. And I think a lot of the investors didn't. Is there onboarding costs for another managed care player that you say it's a higher margin business? That's great. I mean, ultimately, that might even be more profit than what you lost. Is there onboarding costs in the second half for that are going to be?
It is naturally the case that when you're bringing on the number of new customers that we are at the volume we're talking about, there is incremental cost that comes with that onboarding, everything from customer service through technology through just the things that come with that new business. We baked into our original guidance for the year that we gave on the Q4 results what we believe those costs to be. And so I don't want you to think that there is an overhang of new costs not already built into our updated guide reflective of that. But we'll see. I was purposeful during our Q1 earnings call of commenting that we were already starting to onboard some of those new customers. That was not a hint on scale. That was not a hint on that's why the dramatic profitability.
But we wanted you all to understand that we were once again doing what we said we were going to do because the new customers are coming on board. We're working hard to ramp them up, with most of the impact coming in the back half of our year.
I think it was a surprise to us. And it was, I think, a surprise to others that you said onboarding customers might be more profitable. And just viewing the two large managed care, one going off, one coming on, if the one coming on is more profitable, is it because of mix? Is it because of services?
Yeah. I want to be careful. My comment on profitability was tied to the customers in aggregate coming on board. It wasn't tied to one specific customer. And so I want to make sure that people don't misunderstand that. We are blessed to have a couple of new customers coming on board. They have very different profiles as well. But we're eager to get them up and running and to use them as great examples of why they came to us because of our great customer service and all the capabilities that we can provide to them.
Sir, I think that's a great way to wrap it up.
Thank you so much.
Sweating a little bit here. You're in the spotlight.
Thank you. Thank you, everybody, for joining us.