Rod MacLeod: Yes. It’s a good question. There’s a couple of factors at play. And the way you’re framing it is directionally right: One, the mix will continue to shift towards iQ. As Kevin mentioned, we finished Q1 about 58%. That was up from 53% of our mix being iQ 58% in Q1, 53% in Q4. So that mix shift will continue, especially as we’ve been able to offer a solution to the Android users out there to use our — use the app with iQ. We are picking up a little bit of a pricing premium on that product, and we expect to continue to do that. For the second half of the year, as I mentioned earlier in the call, though, we are going to have a little bit of pressure on the COGS side as we have to run some of the variances through the income statement and through COGS in the second half of the year.
But as we get into 2025 and beyond, that’s when we start to see — assuming the pricing holds that there’s some really strong opportunities to expand margins in 2025 and beyond, as the COGS are coming in right in line with really how we think that this will play out over time. As I mentioned, labor costs are solid. Material costs are in the range that we expected. So we continue to be really excited about the quality and the scale that Costa Rica is delivering for us.
Anthony Petrone: Okay.
Operator: And we’ll move next to Carolyn Huszagh at Bank of America.
Carolyn Huszagh: Hi, this is Carolyn on for Travis. Thanks for taking my questions. I wanted to follow-up SI joint training disruption in the quarter. You’ve mentioned additional training sessions in the second quarter and then continuing throughout the year. So can you put a finer point on the cadence there? What do you expect for disruption in the second quarter when it comes to SI joint training relative to first quarter? And how does that disruption in the second half compared to the first half? Thank you. And then I have one follow-up.
Kevin Thornal: Sure. Yes, most of these courses we do over the weekend, but a lot of times, physicians have to travel in on a Thursday night or maybe a Friday depending upon where they’re located to come to some of our larger trainings. We will eventually ship those out to more regional training, but right now our best effort is to be able to bring in a large number to each of these training sessions. So what’s baked in already to our guidance, we’re going to break out like what percentage. It’s just a — it’s a part of the overall. And we know it’s the right thing to do as these patients can benefit from having mechanical back pain relief on top of their neuropathic back pain relief that we have for our SCS product. And obviously, while they’re there, we have a chance to talk to them about our SCS therapy.
So we’re not missing out on a great opportunity to keep driving our superior technology and educating our physicians around it, but it does take physicians out of their office for a day or two and they’ll obviously miss some trials as a result of that. It’s not a massive number, but we just wanted to call it out as we know it had an impact within the quarter and likely a little bit in Q2 as well.
Carolyn Huszagh: Got it. Thank you. And then just putting a finer point on the source of the disruption between training Nevro sales reps versus training the doctors. Should we think about this disruption as more of a one-time impact as your reps get up to speed and then we move past it? Or is this, I guess, perpetuate a little bit more disruption than you expected previously, is your expectation that you would continue to take doctors out of the clinic for a day or two moving forward to get them up to speed on SI joint? Thanks again for taking the questions.
Kevin Thornal: Yes, so what we’re doing is we’re actually training our physicians and their sales rep at the same time. So we’re getting a 2 for 1 versus separating those trainings. And so we’re able to have the physician and their sales rep stand side by side and making sure that they’re training appropriately. So when they go back together to their practice, they can form that procedure just like they did on a model or cadavers. And so we are getting sort of 2 for 1 as we do these training sessions. And most of our sales reps right now. We’re working through getting at least one person in each territory where they’re sort of certified as we call it, to make sure that they can cover cases appropriately, and we’re well on our way to do that.
So it’s really a bolus of training right now where we have a lot of our Nevro SCS and planning physicians that wanted to be first in line to really train for SI joint and we made sure that they were sort of front of the line there and our sales reps that cover those territories were sort of the first in for training. We believe that by the end of Q2 and throughout Q3 a bit, we’ll get the majority of our sales reps up to speed where at least one person in that territory could help cover those cases.
Carolyn Huszagh: Thank you.
Operator: We’ll go next to Justin Lin at William Blair.
Justin Lin: Hi, good afternoon guys. Thanks for taking the questions. First one on HFX iQ, what’s the timing in terms of getting it available on Android like you talked about? And are there any other levers that you can kind of pull to accelerate that growth on top of the Android dynamic?
Kevin Thornal: Yes. So we just launched an opportunity for patients that had Android. It’s not on their device. It’s a locked iPhone that they’re able to utilize for the treatment. And that way, it stays consistent across all of our customer base. As a reminder, we are the only company that has AI inside of our technology with our algorithm because of the 100,000-plus patients that are in our database. And we want to make sure that, that data that we get from all of our patients, we keep learning and our algorithm keeps adapting based upon how patients are receiving their treatment and that treatment is personalized for them. So we just launched that within the quarter, and that’s being rolled out across the U.S. right now.
Justin Lin: Got you. Second follow-up question just on PDN. I know you’re no longer kind of bifurcating out the PDN business, but any qualitative color you can give there, how is the business trending relative to your expectations?
Kevin Thornal: Yes, it came in right in line with our expectations is still strong, still have a ton of interest. And again, we’re still around 1% penetrating in that market. And so we’re out there educating every day on the benefits of the therapy and ensuring those referral networks are set up. So it will continue to still be a strong part of our business moving forward. But it came in right in line with our actions and it was still strong.
