Dan Brennan: Is there like a level, I mean, we can play with the math? Is there a level that it’s an exit year at 30%, 35%? Or is it up to us to kind of back into that?
Kevin Feeley: Yeah. I think the way we’ve always viewed it as in order to reach profitability, we’ve said that that rate needs to get closer to 40% of all tests being exome and genome, and we’re anticipating that point of breakeven early 2025. And so I think something in the mid-30s by the end of this year to exit the fourth quarter is likely the right landing spot, and we’ll evolve towards that with each passing quarter of 2024.
Dan Brennan: Great. Thanks for that. That’s helpful. And then I think the guide, right, is for greater than 50% or plus gross margin, so the 4Q underlying was 52%. Is there a reason if mix is going up, is there a reason why the fourth quarter, 52% shouldn’t be like the floor for 2024? Or is there something else going on with the mix shift that could drag gross margins down?
Kevin Feeley: No. Look, overall, the comparison is 45% for full year 2023. I think we just want to see a little bit more data come through before we rely on Q4. Historically, Q4 seasonally has been our strongest, both in terms of revenue reimbursement and therefore, gross margin. And so we want to see a little more data come through before we call Q4 and ongoing trends. Certainly, we’re optimistic that there is more room to improve average reimbursement rates and further conviction that we can continue to drive down COGS. And with each percentage point we pick up in overall test mix, it should benefit because the exome portfolio continues to operate mid-60% gross margin, but we just want to see a little bit more data come through before we call Q4 the new normal, if you will. But extremely confident we’ll end the balance of the full year at 50% or higher.
Dan Brennan: Got it. And then maybe the final one, just biomarker bills, like, is there — just how could those impact you to the extent these 15 states, you begin to see payment rates and there’s another, I think, fix states behind it. Just is it — are you already getting paid pretty universally. Just any color on the level of test today in those 15 states to the extent you were to see commercial coverage go up to 100%? What kind of impact could that have? Thank you.
Kevin Feeley: Yeah, there’s no doubt, Dan, that any improvement in underlying policy coverage is a net positive for us to the extent payers or state systems pick up exome and genome coverage. That should be a net positive to us, we expect it to be a net positive to us. At the same time, we want to make sure we’re not getting ahead of ourselves. So it’s a long way between enacting a biomarker bill or putting in place a positive coverage decision and getting paid. And so we want to make sure we have the operational experience and more so can see it translate into actual cash collections before we start to rely on improved reimbursement. But recent momentum with respect to policy and in particular, these biomarker bills it’s a great thing for patients. We believe ultimately and should be great for our business. Our expectations are built into the guide, and we’ll learn more for the year once there’s more clarity on how some of these will be enacted in practice.
Dan Brennan: Got it. Terrific. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Mark Massaro from BTIG. Your question, please.
Vidyun Bais : Okay. Hey, guys. This is Vidyun for Mark. Thanks for taking the question. So I think you’ve walked through in some detail what you’re expecting for 2024 in terms of exome conversion. Aside from that, it sounds like you might be expecting a somewhat back half way the year. I think you’ve also highlighted picking up that competitor business’ upside, just. Maybe just walk us through any other puts and takes to discuss for the 2024 guidance? Thanks.
Kevin Feeley : Yes, I’ll start. I’d say, Vidyun, the low end of the guide represents about 13% year-over-year growth. That’s consistent with what we just delivered. And we want to acknowledge that exome and genomes are still relatively new technologies for some physicians. We’re expanding markets, that takes time, and we’ve learned some lessons from 2023, and we don’t want to get over our skis with respect to the expectation on the rate of change to exome beyond what we can clearly see in our data. And I’ll just remind you that offsetting exome growth is roughly 30%, or $60 million of full year revenue today comes from non-exome tests. And so as these non-exome tests, which, as you know, were relatively low gross margin, non-core to our strategy, they will be running off in some fashion.
And so we expect to see some declines in volumes and revenue from non-exome tests, offsetting volume growth. And so try to ensure that we acknowledge that in the guide that we provided.
Katherine Stueland : Yes. And just to add a little bit of color. I think our original guide from 2023 was heavily back half of the year weighted. And what we are anticipating this year is kind of the steady growth. We really want modeling similar to what we saw in terms of actuals in 2023. As Kevin said earlier, I think seasonally, our strongest quarters are usually Q2 and Q4. But it’s, I would say, continued steady growth throughout the course of the year.
Vidyun Bais: Okay. Perfect. Thanks so much. And then just a quick follow-up. Kevin, maybe you can dig into EMR integration a little bit, just how you’re thinking about potential upsides in that opportunity. It also sounds like you guys have consolidated the menu a little bit. Just how should we be thinking about that?
