Cue Health Inc. (NASDAQ:HLTH) Q4 2022 Earnings Call Transcript

Ayub Khattak: Yes, great question. So, as you rightly pointed out, this is a compliment to the Cue Health monitoring system, with the Cue Health monitoring system we can deliver this really accurate molecular information at the point of care or in the home and have it integrated with EMRs and or allow for Cue Care experience to deliver treatments on the back of a diagnosis. So, really happy about that. But then being able to complement that with this 13 other tests that we rolled out, what that allows us to do is, there is a market for that that already exists, and people want different folks want different things, and they want broader panels they want, they don’t mind waiting a little bit more time. And so you really want something for both parts of the market, that’s going to lead to more engagement overall, that’s going to allow for just there to be more content for people to consume on the platform.

So we think that it’s part — it’s an important part of just expanding the product portfolio, and giving more products to people for their different needs. So, for example, nine members sexually transmitted infection panel, you can provide your sample and be able to get the information and then be able to literally get the right treatment delivered to your door. And you don’t have to — you can do all that from the privacy and convenience of your own home. So I think its a great offering on the Cue platform. And we think that over time as we expand the offering, it’s just a great compliment, and we want to drive engagement, we want to drive more products for our customers.

Mark Massaro: Excellent and awesome. Congrats on the promotion to CFO, I think I heard you say that we should expect gross margins to turn negative think in the first half of 2023. Is it right to think that, if you get approval of Flu, and other non-COVID testing revenue in the back half of the year, that gross margins could inflect positively again, is that a fair assumption?

Aasim Javed: Thanks, Mark. Pleased to be here as a CFO talking to you. Yes, as far as gross margin goes, you’re right. In the first half of the year our guide was be slightly negative. But again, that does include non-cash items such as depreciation. So on a cash basis, we do expect the first half margin to be positive. And then as we get more volume, margin would improve. So the margin does track with volume. As you get approvals and we get more volume, we’d expect margins to improve.

Mark Massaro: All right, sounds good. I’m looking forward to the launch of the Flu test later this year. But thanks for all the time.

Aasim Javed: Thank you.

Operator: Thank you. This concludes today’s conference call. Thank you all for participating. You may disconnect your lines and everyone have a great evening.