Nchacha Etta: Yes. Hi, this is Nchacha. I don’t think this signals that we are exiting the international market. This action that we’ve taken or that we’re considering taking is part of an ongoing plan to ensure that we – that our investments generate the right level of returns for our shareholders. And so, as you know, we did engage with an outside consultant. So this is part of the overall strategy to continue to improve our overall financial performance and ensure that we are unlocking sustainable or long term value for our shareholders.
Scott Schoenhaus: Thank you.
Kathleen Nemeth: Thanks, Scott.
Operator: The next question comes from the line of Jessica Tassan from Piper Sandler. Please go ahead.
Jessica Tassan: Hi, guys. Thanks for the question. So maybe to kick off, I was hoping you could just help us understand what some of the offerings in the XT Amplify suite are. So ServerScale, CarePlus, XTExtend, what are these solutions, and are all of them available today?
Randall Lipps: Yes, all of them are available for order today. The XTExtend is up is the centerpiece on the hardware is the console upgrade. The CarePlus allows us to go in and redesign the workflows for our customers. ServerScale allows us to not have to wait on the timing of hospital budgets to get new servers to be expanded to meet greater demands for the number of connected devices on their server, so it allows for to be able to pay it as a service so that the server pieces are included whenever they need it. And I just think MedChill is one of the very exciting pieces. We get a lot of feedback that customers want up to go to this kind of product, which really helps you singulate down to the single skew on a refrigerated product and have access and locking control to it.
So this gives you more confidence from a pharmacy standpoint of deploying refrigerated products, which can be costly or toxic and have better control out of them, instead of just an open refrigerator. So we know there’s good demand for these products and that we’ve already started to see people highly engaged about them and wanting to get access to them. I’m not quite sure all of them will be, all of them are bookable now. All of them will be delivered this year. If they’re not…
Jessica Tassan: I’m interested to know, kind of how your specialty pharmacy consulting business has helped kind of inform this product development pipeline, if at all.
Nchacha Etta: Yes, I think the nice aspect of specialty pharmacy is that it really engages with a very high level of the C suite and really on a monthly basis, which then really allows us the platform to talk about other ways to improve both revenues and cost impacts of the pharmacy operation. And as we look at, what our health systems are going through or what they need, it’s a lot of solutions that are dependent on ambulatory or outpatient clinics. And so we’re excited that Amplify in this roadmap has solutions that address those places.
Jessica Tassan: Awesome. And my last question is just can you update us on trends in 340B? So both on the contract pharmacy side and on the covered entity side, maybe like year-over-year, quarter-over-quarter, just volumes would be helpful.
Randall Lipps: Well, I think 340B is pretty much third party administrative. TPA is sort of in line with where we were last year and it continues to be. It is also a good product to combine with our specialty pharmacy services, so that when a drug is available on the outpatient or through the third party administrative side, it’s an extra benefit that we can offer instead of having to run it through the specialty pharmacy on site pharmacy. So we think it’s a good product to have and to offer in combination with our specialty pharmacy service.
Nchacha Etta: Jess, I’ll just add to that that. I remember the last time we spoke, I think we said that 340B is generating about $30 million to $35 million annually for us, and we expect that to continue.
Jessica Tassan: Got it. So no growth year-over-year in 2024. Is that on the 340B contract pharmacy split billing side?
Nchacha Etta: That’s correct. We do expect it to be flat, but we continue to. It’s part of our overall strategy. As Randall mentioned, we look forward to combining it with our inventory optimization services.
Jessica Tassan: Got it. Thank you, guys.
Nchacha Etta: Thanks, Jess.
Operator: [Operator Instructions] The next question comes from the line of David Larsen from BTIG. Please go ahead.
Jenny Shen: Hi, this is Jenny Shen on for David Larsen. Thanks for taking my questions and congrats on the quarter. I think you’ve mentioned some focus on outcomes based solutions and taking an outcome centric approach. Can you just elaborate on what that means, what your focus is on there, and highlight some of those key outcomes? Does that potentially mean that you could move to a model where, say, your clients recognize a certain amount of cost savings or reach a certain level of adherence, where you would receive a certain performance payment for that? Thanks.
Randall Lipps: Yes, I think that’s a little bit beyond where we’re thinking at the moment. But certainly medication management is such a big beta in the outcome of any patient, whether as well as the finances of any event related to a patient activity. So, I think it’s prudent upon us to make those connections between those pharmacy activities and the impact eventually to the patient, as well as to the bottom line of the facility. So they’re easier to make as you get access to more of the data and get more access and visibility to the transactions throughout a patient’s episode and we continue to see that. We probably see it most in our retail cloud based solution set, where we’re able to inform through our retail software, where we’re able to inform the pharmacy and eventually doctors and patients how well they’re adhering to their medication management regimens.
So those are the kinds of outcomes we’re looking at. We’re not quite there yet. Tying it to the actual scientific outcome, so to speak.
Kathleen Nemeth: Anything else Jenny?
Jenny Shen: A quick question on cost. You’re speaking some good cost savings initiatives over the last few quarters, just any additional levers you think you can pull there?
Nchacha Etta: Yes, Jenny, we do continue to evaluate and assess our overall cost structure and this is part of our ongoing strategy, and we will make the right decisions that we think necessary, that will continue to help us increase our overall financial performance and unlock shareholder value.
Jenny Shen: Thank you. Congrats on the quarter.
Nchacha Etta: Thanks.
Kathleen Nemeth: Thanks, Jenny.
Operator: The next question comes from the line of Stephanie Davis from Barclays. Please go ahead.
