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InfuSystem Holdings Inc. reported its Q1 2025 earnings, revealing a beat on EPS and revenue. The company reported an EPS of -$0.01 against a forecast of -$0.03. However, revenue hit $34.7 million, exceeding the anticipated $34.07 million. Following the earnings release, InfuSystem’s stock surged by 16% in pre-market trading, reflecting investor optimism about the company’s growth trajectory and strategic initiatives. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment, with analysts maintaining a Strong Buy consensus and setting price targets between $12.50 and $15.00.
Key Takeaways
- InfuSystem’s Q1 2025 revenue rose by 8.5% year-over-year.
- Adjusted EBITDA increased by 64% compared to the previous year.
- The stock price jumped 16% in pre-market trading after the earnings release.
- The company is focused on growth in advanced wound care and chemo mouthpiece products.
- InfuSystem expects full-year revenue growth between 8% and 10%.
Company Performance
InfuSystem Holdings Inc. demonstrated robust financial performance in Q1 2025, with a notable 8.5% increase in net revenue compared to the same period last year. The company has been focusing on diversifying its business and expanding its offerings in the healthcare solutions market. With significant growth in its oncology and wound care segments, InfuSystem is well-positioned in the medical device distribution sector.
Financial Highlights
- Revenue: $34.7 million, up 8.5% year-over-year
- Gross profit: $19.2 million, a 16% increase year-over-year
- Gross margin: 55.2%, improved by 3.7 percentage points
- Adjusted EBITDA: $6.3 million, up 64% year-over-year
Earnings vs. Forecast
InfuSystem’s Q1 2025 EPS of -$0.01 beat the forecasted -$0.03. The company exceeded revenue expectations, reporting $34.7 million against a forecast of $34.07 million. This EPS and revenue beat reflects operational efficiencies and strategic growth in key segments.
Market Reaction
InfuSystem’s stock reacted positively to the earnings release, with a 16% surge in pre-market trading. This rise reflects investor confidence in the company’s strategic direction and financial health. The stock’s movement contrasts with its 52-week range, where it previously hit a low of $4.61 and a high of $9.97.
Outlook & Guidance
The company maintains a positive outlook, expecting full-year revenue growth between 8% and 10%. InfuSystem is investing in IT systems upgrades and expanding its biomed services. The focus remains on capital-efficient growth and improving profitability.
Executive Commentary
"We are using the transition as an opportunity to reevaluate each aspect of our business," said Carrie LeChance, incoming CEO. Rich DiOrio, outgoing CEO, noted, "We have more than doubled revenue since 2018 while successfully diversifying our business." LeChance also emphasized the company’s strong positioning in the home care market.
Risks and Challenges
- Slower-than-expected adoption of the Chemo Mouthpiece could impact growth.
- Potential supply chain disruptions may affect product availability.
- Macroeconomic pressures could influence healthcare spending and investment.
- Tariff changes, although minimal, could affect cost structures.
- Competitive pressures from other medical device distributors.
Q&A
During the earnings call, analysts inquired about the slower adoption of the Chemo Mouthpiece and its impact on future growth. Management addressed concerns about investment cycles and emphasized ongoing efforts to improve operational efficiency and speed up returns.
Full transcript - InfuSystem Holdings Inc (INFU) Q1 2025:
Conference Operator: Good day, and welcome to the InfuSystem Holdings, Inc. Reports First Quarter twenty twenty five Financial Results Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions.
To ask a question, you may press then 1 on your touch tone phone. To withdraw your question, please press then 2. Please note this event is being recorded. I would now like to turn the conference over to Joe Dorme, managing partner. Please go ahead.
Joe Dorme, Managing Partner, InfuSystem Holdings: Good morning and thank you for joining us today to review InfuSystem’s first quarter twenty twenty five financial results ended 03/31/2025. With us today on the call are Rich DiOrio, outgoing chief executive officer Carrie LeChance, chief operating officer and incoming CEO and Barry Steele, chief financial officer. After the conclusion of today’s prepared remarks, we will open the call for questions. Before we begin with prepared remarks, I would like to remind everyone certain statements made by the management team of the Institute System during this conference call constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for the statements of historical fact, this conference call may contain forward looking statements that involve risks and uncertainties, some of which are detailed under risk factors in documents filed by the company with the Securities and Exchange Commission, including the annual report on Form 10 ks for the year ended 12/31/2024.
Forward looking statements speak only as of the date the statements were made. The company can give no assurance that such forward looking statements will prove to be correct. InfuSystem does not undertake and specifically disclaims any obligation to update any forward looking statements except as required by law. Now I’d like to turn the call over to Rich DiOrio, Chief Executive Officer of InfuSystem. Rich?
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Thank you, Joe, and good morning, everyone. Welcome to InfuSystem’s first quarter twenty twenty five earnings call. Thank you all for joining us today. This will be my last earnings call as I pass the CEO gavel to my successor and InfuSystem’s next CEO, Carrie LeChance. As I said when we announced the succession plan, I have absolute confidence in Carrie’s abilities, her knowledge of the company and our various business initiatives, and the support that she has within the ranks of the organization.
Carrie will do a great job seeing to the execution of our growth opportunities and leading the company into what I believe is a very bright future. Before my departure, I wanted to say what an honor it has been serving as InfuSystem’s Chief Executive Officer for the past seven and a half years. During my tenure, InfuSystem has faced and overcome many challenges, including COVID, each time coming back stronger than before. We have more than doubled revenue since 2018 while successfully diversifying our business and growth opportunities. This is largely due to the significant new partnerships we have created, including those with GE Healthcare, Smith and Nephew, and Sonera MedTech.
Each of these partnerships have validated the growing role InfuSystem can play in providing healthcare solutions, particularly those related to medical devices and solving complex distribution and revenue cycle challenges for our key partners. I believe the progress that the team has made over the last several years was reflected in the company’s strong twenty twenty four second half earnings results, and I am very pleased that we see a continuation of the positive trend in the first quarter of twenty twenty five. I will now pass the microphone to Carrie, who will give her overview of the quarter.
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: Thank you, Rich. I will talk briefly about the first quarter, and then Barry will provide a detailed summary of our financial results. I will then come back with some additional comments before opening the line to questions. As Rich stated, we believe the first quarter results show a strong start to the year. Revenue was up 8.5%, and this was without significant contributions from two of our current growth initiatives, Advanced Wound Care and Chemo Mouthpiece.
It was a mix of contribution from our other business activities that contributed to our growth during the quarter, with this demonstrating the robustness of our increasingly diversified business model. The revenue growth was accompanied by other positive financial measures for Q1, including a 64% year over year increase in adjusted EBITDA to $6,300,000 and improved operating cash flow, which was $1,800,000 a nearly fourfold improvement over the prior year first quarter. Among the many positive financial measures from the first quarter, ’1 thing we want to emphasize on the call is the continuing improvement in our profitability. At the beginning of last year, we put an additional focus on continuous process improvement to increase our operating margins and long term profit potential. The results we are reporting today for the first quarter of twenty twenty five are a continuation of the profitability trend that started in the second half of last year.
The 18.2% adjusted EBITDA margin is the highest first quarter result since 2021, and well above the 12.1% reported last year. This improvement is even after the nearly $500,000 expense incurred in the first quarter of twenty twenty five related to our IT systems upgrade. We will remain focused on process improvement and operational efficiencies and work hard to continue this profitability trend through the remainder of the year. Stepping back to speak on the broader context of our improving profitability, what we are seeing is the back half of an investment cycle that started when InfuSystem elected to capitalize on opportunities to diversify its business into wound care and biomed. These initiatives have resulted in the company doubling in size over the last seven years.
The company’s revenue CAGR during the period was over 10%. Profitability was materially impacted during the period as we built the infrastructure and systems necessary to support those new growth opportunities. Much of that build out work has been completed, and we will expect to complete the major technology system upgrade project in early twenty twenty six. Next (LON:NXT) year, those new systems are expected to enable greater operating efficiencies, providing payback year after year. These systems will greatly improve information flow, allowing faster and smarter decision making.
I’ll return to this idea, but first Barry will take us through the financial results in the first quarter.
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Thank you, Carrie, and thank you everyone on the call today for joining us. I’m going to focus on three topics including the main drivers of the current quarter’s results, some additional insights into our full year outlook, and finally, I’ll update you on our current financial position and how it changed during the quarter. Now let me start with our financial results for the period. During the first quarter of twenty twenty five, our net revenue totaled 34,700,000.0 representing a $2,700,000 or 8.5% increase from the prior year first quarter. That included growth in both of our operating segments, with the Patient Services segment leading the way reporting a year over year quarterly increase in net revenues totaling $2,200,000 or 11.7%, and the Device Solutions segment having increased net revenue of $538,000 or 4%.
Higher net revenue for the Patient Services segment included increased patient treatment volumes in all three therapies and higher third party payer collections. Oncology net revenue increased by nearly $1,700,000 or 10.3%. Wound care treatment revenue totaling $900,000 was up by 133%, and pain management increased by 8.8%. These increases were partially offset by a $200,000 decrease in negative pressure wound therapy equipment sales. The growth in device solutions was primarily attributable to higher rental revenues coming from new customers and was partially offset by lower biomedical services revenue related to a reduction in the number of devices on contract with GE Healthcare.
Gross profit for the first quarter of twenty twenty five was $19,200,000 which was $2,700,000 or 16% higher than the prior year first quarter. Our gross margin percentage was 55.2%, representing a 3.7% improvement over the prior year first quarter amount of 51.5%. This improvement was mainly driven by the improved third party payer collections, better revenue mix favoring higher margin revenue, and a normal amount of pumps disposal expenses as compared to the prior year when a partial reversal in our missing pump reserve created a benefit. The improved product mix included higher oncology and device solutions rental revenues and lower negative pressure wound therapy equipment sales. Selling, general and administrative expenses for the first quarter of twenty twenty five totaled 18,300,000 and was $1,200,000 or 7.2% higher than the prior year first quarter amount.
The increase included approximately $500,000 in expenses associated with our business application upgrade project, increases in revenue cycle and other personnel needed to support the higher revenue volume, and a normalized amount of bad debt expense compared to an accrual adjustment benefit recorded in 2024. Both periods also included nonrecurring expenses, which were $100,000 higher in the current quarter. For 2025, this included $1,000,000 in severance expenses for our outgoing CEO, and in 2024, they included both a one time payment of $600,000 to a former board member and $300,000 paid to our former auditor. Adjusted EBITDA during the twenty twenty five first quarter was 6,300,000 or 18.2% of net revenues, which represented an increase of $2,500,000 or 64% from the prior year first quarter. These amounts included add back adjustments for the nonrecurring expenses, including the CEO severance in 2025 and the board member payment in 2024, but not the 2024 prior auditor fees.
Turning now to the forecast. We continue to expect full year growth in our net revenues of 8% to 10% and an adjusted EBITDA margin to accompany that revenue level to be higher than the prior year amount of 18.8%. Our first quarter results with almost 8.5% revenue growth and 18.2% adjusted EBITDA margin have helped us to put us on the expected path. This is especially true with respect to the profitability measure since our first quarter is usually somewhat lower than the rest of the year. In fact, due to the year over year improvement in adjusted EBITDA, our trailing four quarter adjusted EBITDA margin was 20.2%.
As we look to the coming periods, our revenue growth expectations will become more dependent on volume increases in our new product initiatives where we see multiple growth pathways. Now a few points on our financial position and capital reserves. Our operating cash flow during the first quarter totaled $1,800,000 This amount was 1,400,000 higher than the amount for the prior year first quarter. This increase was due to the higher adjusted EBITDA offset partially by a higher increase in our working capital levels as compared to the prior year, which was attributable to higher sequential quarterly revenue growth in the current period. Our net capital expenditures were $2,600,000 during the twenty twenty five first quarter, which was higher than the $400,000 we spent during the first quarter of twenty twenty four.
The amount during the current period was focused on infusion pumps needed to support increased volume in oncology and the device solutions rental businesses and included some cash payment timing carryover from the fourth quarter of twenty twenty four. We continue to anticipate that our overall capital spending requirements will moderate as compared to amounts in prior years as the sources of our future revenue growth will continue to be more weighted towards less capital intensive revenue sources. In fact, a significant amount of our expected growth during the remainder of 2025 comes from noncapital intensive business lines. We continue to be positioned well to fund continued net revenue growth with the growing cash flow from operations backed by significant liquidity reserves available from our revolving line of credit and manageable leverage and debt service requirements. Our net debt increased by $3,800,000 during the first quarter, however, this was largely due to our purchasing of nearly 3,000,000 of our common stock during the quarter.
Our available liquidity continues to be strong and totaled more than $47,600,000 as of 03/31/2025. At that time, our ratio of net debt to adjusted EBITDA was a modest 0.98 times. Our debt consists of borrowings on our revolving line of credit with no term payment requirements, just under three years of remaining term, and with $20,000,000 of the outstanding balance locked in at a below market rate of 3.8% by an interest rate swap having the same expiration. I will now turn the call back over to Carrie.
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: Thanks, Barry. During the recent weeks as I have been preparing to step into the CEO role, I’ve had many conversations with shareholders, members of the NP System team, and other important stakeholders. The most common question presented to me in these discussions is what will be different going forward? While I will share more specifics in the future, today I am focused on the potential for improving the profitability profile of the company going forward as we affect the succession plan. We are using the transition as an opportunity to reevaluate each aspect of our business to ensure we are executing against our growth opportunities in the most capital efficient manner, while focusing the team on the most promising opportunities and particularly those that are expected to drive our near and long term growth.
Our business is strong. We are growing in a steady and sustainable way, while delivering increased margins and profitability. Within our growing list of partnerships with major medical device companies, we are known for solving complex problems faced by our manufacturer partners and healthcare providers in facilitating continuity and quality of care involving medical devices. Right now, we are focused on wound care and biomed. Going forward, particularly when our new IT systems are up and running, we will be able to more precisely align cost with current opportunities.
Our incremental efforts will go to specific projects that are working and will benefit quickly from additional resources. We expect to see smaller and faster investment cycles and quicker returns on our investments. Moving to guidance. We are expecting revenue growth for the full year of 2025 to come in around 8% to 10%, and our adjusted EBITDA margin to be above the 18.8% delivered in 2024. This improved adjusted EBITDA is after the impact of costs related to our ongoing technology systems upgrade, for which expenses are expected to be approximately $2,500,000 in 2025, with an expected completion date in early twenty twenty six.
Operator, we are ready for the Q and A portion of the call.
Conference Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, you may withdraw your question, by pressing star, then two. At this time, we will pause momentarily to assemble our roster.
The first question comes from Brooks O’Neil with Lake Street Capital Markets. Please go ahead.
Brooks O’Neil, Analyst, Lake Street Capital Markets: Thank you. Good morning. Is it too early to assume that these excellent results are the result of Carrie taking over?
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: I waiting for that one, Brooks. No, it’s it’s the result of a of a lot of years of Carrie’s work behind the scenes on the operational side, getting us to profitability and improve profitability. So, it’s not a surprise.
Jim Sidoti, Analyst, Sidoti and Company: It shouldn’t be.
Brooks O’Neil, Analyst, Lake Street Capital Markets: Great. You know that we’re going to miss you, but we’re gonna come visit you in New Hampshire pretty soon.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Sounds good. I’m looking forward to it.
Brooks O’Neil, Analyst, Lake Street Capital Markets: All right. All right. Good. Now, Gary, do you have any thoughts or Barry, do you have any thoughts about tariff impact?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Yes, sure, absolutely. So as I think we may have mentioned before to a few people, the good thing about tariffs for InfuSystem is that we don’t buy a significant amount of things generally. A lot of our cost structure is people or depreciation buying pumps and that sort of thing. So you can see that in our financial statements that we have a limited amount of actual purchasing of materials and cost of sales last year is about $34,000,000 As we see it right now, we do have a little bit of direct exposure to the foreign markets, but it’s not a very large number. We do have our other suppliers in the supply chain that are making things in Mexico, South America and other places.
We’ve had only a few conversations with a few suppliers about price increases. There’s not been a very large number so far. The good thing is that most of what we see potentially happening, we do have the ability to mitigate it through price increases to our customers. So, so far so good. We have some small increases, but we don’t see a very significant impact to our P and L or profitability going forward.
Brooks O’Neil, Analyst, Lake Street Capital Markets: Great. That’s very helpful. And then I’m just curious, I know, Kerry, you said you want to defer significant comments about future opportunities for down the road. But one of the areas I’ve always thought offered great opportunities for you guys is biomed services with your infrastructure that’s largely been focused on GE. Do you think there’s opportunities to add additional customers in that business and leverage your fixed costs and really grow the operation there?
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: Hey, good morning Brooks. Yes, I think that’s a focus for us for sure. What we have is a great network, certainly from a regional perspective as well. Technicians that really aren’t traveling as much, they’re in specific locations. There’s opportunity for additional work, even outside of GE, hopefully some additional work there.
So it is something that we’re focused on and driving the team to take a look at and see what else we can bring in.
Brooks O’Neil, Analyst, Lake Street Capital Markets: Great. Thank you for taking my questions.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Thank you, Brooke. Thanks, Brooke.
Conference Operator: The next question is from Matt Hewitt with Craig Hallum Capital Group. Please go ahead.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Hello. This is Tal, phone for Matt. And one question from us. So with the jump in gross margins, how should we estimate it for the rest of the year? Thanks.
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Yes. So what would say this is maybe a little bit of a high watermark from that perspective. As we look at some of the new products coming in, there’ll be a little bit lower gross margin. We’ll have some SG and A as well, but it’s still it should be good on the EBITDA line. So I wouldn’t see that the gross margin would necessarily go up from this point, but it should stabilize.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: All right. Thank you.
Conference Operator: The next question is from Jim Sidoti with Sidoti and Company. Please go ahead.
Jim Sidoti, Analyst, Sidoti and Company: Hi, good morning, Barry, Rich and Carrie. And Rich, I just want to say good luck in whatever you do. And then I’m actually pretty jealous of you right now.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Thanks, Jim. I appreciate it.
Jim Sidoti, Analyst, Sidoti and Company: You know, on the last call, I pointed out that the oncology business has been growing high single digits and been doing really well. And you said, well, don’t expect that to continue. And then you just reported 10% growth for that business in the quarter. So what’s going on there? And why do you think of the slowdown?
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: So I think it grew in the first quarter with a good combination of some volume and on revenue cycle side, the collections. So it’s a combination of both. We’re always going to expect volume growth, and we’ve never expected a huge number, Jim, right? It’s always low to mid single digits there. I think the extra bump we saw in the first quarter, and we’ve actually seen it now for a year or two, comes on the revenue cycle side and our ability to collect.
It’s just improved processes, improved teams, leadership. There’s a lot of reasons why. It’s hard to expect that to continue. At some point, you squeeze everything out of it you can, and that slows down. But we don’t expect the volume to necessarily slow down.
There’s still enough market share for us to go after and get on kind of a continuous, nice linear pattern. But yes, I think it was 10% for the quarter, a little over 10% for the quarter. That’s more than expected mostly to the revenue cycle side.
Barry Steele, Chief Financial Officer, InfuSystem Holdings: It was split about fifty-fifty between volume and gross to net benefit.
Jim Sidoti, Analyst, Sidoti and Company: Okay. So the volume was still roughly 5% then?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Yep. That’s correct.
Jim Sidoti, Analyst, Sidoti and Company: Is pricing stable for that business?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: It always comes in in, sort of timing by different quarters. So if you look at the comparison of the prior year, the gross to net was a little bit down, and this year’s first quarter was a little bit up. So it can go up and down a little bit as we go from quarter to quarter.
Jim Sidoti, Analyst, Sidoti and Company: Okay. And then on the Device Solutions, the gross margin business there really had a nice pop. What was was responsible for that?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: The most important part of the growth there is the rental business where when we buy rentals we have a nice price that comes in. We do depreciate the pumps over seven years. So that is a little bit lower cost as we buy pumps to support that growth.
Jim Sidoti, Analyst, Sidoti and Company: Okay. So what do you anticipate just for that component? Do think that this was kind of like a one time thing or do you think you stay close to that No,
Barry Steele, Chief Financial Officer, InfuSystem Holdings: I think that I think this is a I would I would be a little bit more bullish on the margin for device solutions. It probably can go up a little bit, but certainly does. We don’t see it going down necessarily.
Jim Sidoti, Analyst, Sidoti and Company: Okay. All right. Then you commented on tariffs. What about the other budget cuts that have been proposed by the new administration? Do you see any risk as a result of those cuts?
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: I don’t, thanks Jim. We don’t, we’re in a really good space in the home care market, right? Hospitals are looking to cut costs all the time. And we live in a good world from a cost perspective for payers, etcetera. So we’re not seeing any cuts to our reimbursements or anything.
So we’re pretty stable there.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Yeah, big piece is in 2016 CMS cut our reimbursement to zero, if you remember going through that. Once that happened, we have very little exposure to the government cuts.
Jim Sidoti, Analyst, Sidoti and Company: Okay. All right. Then two more. The $2,500,000 in cost for the IT upgrade, Is that essentially gonna be gone by 2026?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: I think you’ll see a little bit in the first quarter twenty twenty six as we wrap up the project, but that’s a very important point. It should drop off very rapidly after the first quarter according to our current plans.
Jim Sidoti, Analyst, Sidoti and Company: Okay, and then the tax rate. You reported income before taxes roughly $250,000 So you would have had a breakeven quarter if it hadn’t been for the income tax rate. So one, was any of that tax paid in cash? And when do you think that rate comes to something more realistic?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: So if you remember from the last quarter, the two main drivers or the main driver really is the fact that we have our stock option, sorry, our equity plans that have unfavorable or a shortfall and we’re taking we don’t get to deduct the expense associated with the plan. So that causes the rate to go, especially when we’re close to breakeven. Also the CEO severance was not tax deductible because of the limitations on officer compensation. So it’s a very unusual amount last quarter and this quarter even especially. Our sort of underlying natural tax rate is in the 30 range.
It’s not cash, we are paying a little bit to the states now, but most of the tax provision is deferred tax impact, so it’s not cash. We have tax attributes that from at least from a federal perspective will keep us being from being a significant cash taxpayer, excuse me, for a while.
Jim Sidoti, Analyst, Sidoti and Company: All right, thank you.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: The
Conference Operator: next question is from Anderson Shock with B. Riley. Please go ahead.
Anderson Shock, Analyst, B. Riley: Hi, good morning. Thank you for taking our questions and congrats on the great first quarter. So first, could you provide a little more color on gross margins? So you had a nice improvement on the device solutions side, but this is partially or I guess this offset the decline on the patient services side. Could you talk about what drove the decline there and how we should think about that going forward?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Sure. In the patient services side, some of the new business that we have is a little bit lower margin. It’s still good at the gross margin sorry, the EBITDA margin level, but it’s a little bit lower on the gross margin level. Wound care in particular, it’s a little bit lower.
Anderson Shock, Analyst, B. Riley: Okay, got it. And then on chemo mouthpiece, could you discuss the reimbursement here and how do you expect adoption to play out through the year? Do you expect meaningful revenue in 2025? Or is this going to take a little more time to build momentum?
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: Well, can say we’re seeing a lot of interest and excitement for our customers for sure. A lot of traffic and interest from our customers and nursing staff. I do think it’s going to take a little more time. What we’re seeing is definitely some delays in the sales cycle, getting it onto formulary, clinics taking some time building orders in the system, figuring out the logistics of the product. So while we see a lot of interest, we are seeing a little bit of a delay or it’s just taking some time for the customers to get those orders in, get the products into the system.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Yeah, on the reimbursement side, it’s until they start ordering and start going after reimbursement to the payers and get that experience to kind of help us understand that, we won’t understand it. I mean, expectation is that it should get reimbursed. There’s a code there from CMS that’s approved. It shouldn’t be a big issue, but we need that experience, which really comes after they start ordering product billing patients insurance companies, which could take a while to get that feedback back.
Anderson Shock, Analyst, B. Riley: Okay, got it. And then on the IT upgrade, this is gonna conclude in early twenty twenty six. Is that 2.5 across like until then or is this just for 2025? And I guess, we expect to see this or I guess should we expect this continue about 500,000 per quarter through 2020 or first quarter twenty twenty six or February total then or how should we think about this?
Barry Steele, Chief Financial Officer, InfuSystem Holdings: Yes, we were a little bit lower than we expected for the first quarter. I think we expected about $600,000 So we’ll probably catch back up to 2,500,000.0 for 2025. And that rate will start to drop off, I think pretty significantly in the first quarter of twenty twenty six and then should be minuscule going forward from that point. So 22,500,000.0 is our budget, our plan for the current year. We’re 500,000 or a little bit less than 500,000 into it in the first quarter.
Anderson Shock, Analyst, B. Riley: Okay. Got it. Thank you for taking our questions.
Rich DiOrio, Outgoing Chief Executive Officer, InfuSystem Holdings: Debbie?
Conference Operator: I’m sorry, I was still on mute. This does conclude the question and answer session. I would like to turn the conference over to Carrie LaChance for any closing remarks.
Carrie LeChance, Chief Operating Officer/Incoming CEO, InfuSystem Holdings: Thanks, Debbie. I want to thank everyone for participating on today’s call. We look forward to our second quarter call when we can update on our results and further progress.
Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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