It really follows — I’m not going to forecast similarly to Resolve. But it really follows the same operating process, right, where we spent time and diligence validating everything that we think is important as we go forward. And once we put something into our sales channel, we’re confident that it can drive revenue growth. And this, particularly the last comment I’ll make here, is that it really fits into our diagnostic pathway at multiple points. So when you look now, as a patient has taken through elevated PSA, all the way through to high-grade intervention, active surveillance, our menu really is a clinically actionable guide at each step in that process. And we think that the germline, and that was my comment on the understanding of risk for patients, really makes sense for us to add that to our offer.
Jason Bednar: All right. Excellent. And just one more for me. Ron, as you were running through some of the kind of the overview on the debt terms. I think you mentioned those two additional tranches, they have maybe some conditions or terms. I don’t know if you’re willing to go into any of those today or if they’re even relevant. But just are those revenue- or EBITDA-dependent? Or any other financial or operational bars that you need to clear in order to tap those additional term loans?
Michael McGarrity: Yes, maybe — go ahead, Ron.
Ron Kalfus: There are certain conditions, Jason. And if you look at our filings with the SEC, we’ve — the agreement has been disclosed. So if you look there, you’ll see, to the extent that we could disclose, the conditions are there.
Operator: Your next question comes from the line of Mark Massaro from BTIG.
Mark Massaro: Congrats on a strong quarter. I guess I wanted to ask, it’s great to see the 35% growth in the quarter. And the raise to the guidance, it sounds like the rate of the guidance is not on the germline. So is it safe to say that you’re feeling good about the breadth of the portfolio throughout the course of the year? And then are you willing to provide any qualitative comments on some of the product lines, whether it’s Confirm or Select? Just give us a sense for how the overall portfolio did in Q1.
Michael McGarrity: Yes, Mark. I get the question. We do feel good. The guidance move is not based on germline. So your assumption is correct there. And if you go back a number of quarters when we made the GPS acquisition, we clearly stated that our focus was on — well, two things. One, the integration, transformation of our sales organization. And the complexity of that, candidly, I may have underestimated that. I thought it would take a quarter or two, it probably took two to three. But at the midyear of last year, we really felt like we had that in place with the right team, and we had focused very strongly on that other side of the initial biopsy, right? Because we’re the only company that has an answer whether that initial biopsy is negative or positive.
And those are tissue-based tests that clearly carry the highest reimbursement and average sell price. So it was critical that we really cemented that piece of our business and that position in our urology customer base. And we feel like that effort is coming through and we’re seeing that. So we’re very confident in the trend in our GPS and Confirm business. We did take some focus on Select through that process, but we’re now back to the full diagnostic pathway offering. And that’s where my comment on pathology becomes so important, because we really have a pretty good system and I guess recipe for driving sustainable adoption of our pathway into these practices, and it’s critical that you have urology and pathology on board. So that’s a material development, I think, in our focus and our strategy.
And we expect germline to fit into that. And clearly, our Resolve opportunity has been validated as far as that diligence process as well as the strength of our channel. We’re not knocking on doors to sell Resolve or germline. We bring that right into, and actually comes from, to my previous comment, our current customer base.
Mark Massaro: Yes. And then probably not everyone on the call has gone through the terms of the OrbiMed deal. This is five years interest only, and this is debt. Is there — are there any other terms you can call out in terms of the financing over time? And why you chose that over other alternative forms of financing?
Michael McGarrity: Well, a couple of things there. Number one, we don’t think there’s a higher-quality partner in our space than OrbiMed. And as you can imagine, their diligence was quite rigorous on our business and our view forward. We think this structure gives us flexibility and optionality as we go forward, and also the time with that interest-only period. So we think it’s the ideal structure for where we are today, and still allows us all the flexibility to continue to operate and execute with the business. So I think there was a number of criteria from our side. And clearly, we really value the commitment. And we think that all of the different aspects of our business now give us that flexibility and really clear the path for our business all the way through.
Mark Massaro: Excellent. Last one for me. As we’re updating our models later today, is it reasonable to think that revenue could grow? It looks like revenue was up a little bit sequentially. But is there any reason to believe that, as we think about any seasonality to the business, typically Q1 is I think lighter, Q2 is typically higher. Is it reasonable for us to put in a slight increase sequentially in revenue throughout the course of the year?
Michael McGarrity: I think that is a reasonable assumption.
Operator: Your next question comes from the line of Daniel Brennan from TD Cowen.
Daniel Brennan: Maybe the first one, I know you talked about adjusted EBITDA profitability in the first half ’25. So was that — can you remind us, is that consistent with free cash flow positivity then?
Michael McGarrity: It is not. It’s adjusted EBITDA.
Daniel Brennan: And in terms of free cash flow positivity? Ron or Mike, excuse me, like when would you guys…
Michael McGarrity: We’ll be generating operating cash at that point. So it depends on how you define it. I guess from a P&L perspective, we would still have, below the EBITDA line, our debt service and earnout to Exact, which we believe this facility solves for. And that’s why we think, in combination, our operating leverage, coupled with the facility that we have in place now, gives us that, coupled with the Exact equity earn-out option, sets us up very well for free cash flow.
Daniel Brennan: Perfect. Okay. And then on the guide, I know you didn’t provide explicit guidance for 1Q previously, but I think you talked about revenues would decline quarter-to-quarter seasonally. And obviously, they didn’t, they grew 2%. So did 1Q come in better than you anticipated? And if so, what came in better?
