So, the good news for us is we have incredibly visible strong organic growth, right? So, we talked about net dollar retention being 130% for the year. So, that gives us a very nice base with which to sort of model our forward growth. And so, with this sort of continued gross margin expansion, we talk about this year and again we haven’t updated our long-term target or medium-term target, but we’re obviously increasingly confident in our ability to drive margin expansion. With those strong incrementals off of the net revenue growth, we expect to drop down a very high portion of that incremental gross profit to the EBIT line. And so, with that, that will materially help our path to profitability. So again, at JPMorgan, we already spoke about two-plus years and our sort of sufficient capital base.
So, you can sort of back into — you now know at least a range for this year in terms of loss. And now you can see that with continued improvement in ’25 and into ’26, that should be a pretty visible, I would say, trajectory with some of those assumptions to cross over to cash flow breakeven.
Dan Brennan: Great. Thanks, Ross.
Operator: The next question comes from Tejas Savant with Morgan Stanley. Please go ahead.
Tejas Savant: Hey, Ross, good morning. And best wishes to Jurgi here. Just a couple of quick cleanups there on some of the comments you just made on the guide and the path to breakeven. So, I guess my question is really, you’ve been well north of 70% for a while now, as you mentioned, really good progress in GMs in the fourth quarter as well, even adjusted for the Microsoft dynamic. So, what’s holding you back from perhaps bumping that target to, let’s say, 75%-plus on the margin line? And then, as a related follow-up, you talked about the — I want to go — focus on the plus — in the two-plus years to operating profit breakeven. So, is that just to preserve a degree of optionality? Should there be opportunities to really lean in and invest more than you currently anticipate over the next couple of years? Or is there something else that we should be reading into in terms of that sort of phrasing?
Ross Muken: Good morning, Tejas, and thanks for the question. So, I would say, I’ll take your second one first. So, on the plus, yeah, I think, the way you characterized it, ultimately, it does give us a bit of degree of freedom. But frankly, I think as a public company, we’re obviously incredibly focused, right, on this initiative given sort of the end market environment. But the practical reality is, as a business that’s primarily a headcount, right, we have a high degree of control of where we land. But we also want to balance to make sure that we hit our growth objectives, right? As I mentioned before, so much of the dropdown that comes is relative to that top-line momentum. And so, I think from that standpoint, it’s really crucial that we don’t lose sight that we still need to invest for the future, right, and we need to be able to drive really good operating leverage, but we also need to contain or sustain our revenue momentum within our targeted range.
So again, I think it’s always the balance. We’re trying to delicately balance that and maximize shareholder value creation. And so, I think, again, we’ve done a relatively good job of that so far and we’re maniacally focused on continuing to execute and deliver on that in the future.
Tejas Savant: Got it.
Ross Muken: In — yeah, go ahead. Sorry.
Tejas Savant: No, go ahead.
Ross Muken: No. And I was just going to say, overall, right, as we just take a step back, I think the business has very good momentum on the gross margin side. We’ve done a fantastic job in terms of compute in store, which is a majority of our COGS. We’ve had very good labor absorption. I think there, the only sort of question for us is as well mix over time. There are elements of our business, right, we are somewhat focused — we haven’t talked about it a ton, but we have, I would say, started to really push on our professional services effort. With our size and scale and with the number of laboratories we touch, there are, I would say, really nice opportunities to further engrain ourselves within our customers and help them on a number of items.
So, if you think about today, like the LDT legislation, for example, this will be an area where I think we potentially can help. Additionally, I would say on the pharma side, there could be some elements of that business over time that have service components. And so, I would say, given those moving parts, we have waited to sort of better understand where those pieces will fit in, in terms of overall mix. But frankly, overall, we feel quite confident on our continued ability to drive GM expansion. You can see that in the guide this year. And certainly, over time, maximize gross profit dollars, which again at the end of the day, it’s going to be, I would say, crucial to that path to profitability being closer to that two figure versus the sort of two-plus.