Pinnacle Group at Oppenheimer Conference: Positive Growth Outlook

On Tuesday, 18 March 2025, Pinnacle Group (NASDAQ: PNTG) shared a promising strategic outlook at the Oppenheimer 35th Annual Health Care MedTech and Services Conference. The company reported strong financial performance in 2024, with significant growth expected to continue into 2025. However, challenges such as labor costs and regulatory uncertainties remain on the horizon.

Key Takeaways

• Pinnacle Group achieved nearly 30% top-line and over 30% bottom-line growth in 2024.
• Guidance for 2025 projects nearly 20% growth on both the top and bottom lines.
• The company is focusing on strategic acquisitions, leadership development, and M&A opportunities.
• Medicare Advantage represents a significant portion of revenue, with payer rates increasing by 2.5% in 2024.
• Senior living occupancy and price growth are expected to improve steadily throughout 2025.

Financial Results

• 2024 Performance:

- Top-line growth: Nearly 30%

- Bottom-line growth: Over 30%

• 2025 Guidance:

- Top-line growth: Nearly 20%

- Bottom-line growth: Over 20%

• Medicare Advantage:

- Accounts for approximately 13% of overall revenue

- Represents about 31% of home health revenue

- Payer rates increased by 2.5% in 2024

• Value-Based Care:

- Over 80% of home health agencies received a positive rate adjustment based on 2023 results

• Senior Living Rate Growth:

- Expected in the 5-6% range for 2025

Operational Updates

• Home Health:

- Strong organic growth in 2024, with high single-digit growth projected for 2025

• Hospice:

- Benefits from an aging population, with over 52% of eligible Medicare recipients opting for hospice

- Signature acquisition contributed over $80 million in revenue

• Senior Living:

- Occupancy is expected to increase by 0.5% to 1% each quarter in 2025

• Acquisitions:

- Focused on off-market deals with legacy-minded sellers

- Expanded capacity to manage larger acquisitions

• Leadership Pipeline:

- Record year for CEO training, with nearly 70 entrants

- 40 new entrants into the clinical leadership training program

• Labor Inflation:

- Decreased from 11% to 5% in 2024, with expectations of 4.5-5% in 2025

• Turnover:

- Positive momentum in reducing turnover in senior living and home health and hospice

Future Outlook

• Overall:

- Positioned for growth across all business lines

• Home Health:

- Focus on quality and value-based care, with opportunities for margin improvement through technology

• Hospice:

- Emphasis on disciplined deal-making and local leadership opportunities

• Senior Living:

- Prioritizing occupancy growth, revenue quality improvement, and margin expansion

- Potential for favorable real estate transactions

• Regulatory Environment:

- Anticipation of flat or modest home health rates with a legislative solution expected for the "claw back" issue

• M&A:

- Robust pipeline of deals, focusing on acquisitions in the 3-10 million revenue range for home health and 5-8x multiple for hospice

Q&A Highlights

• Regulatory Environment:

- Major cuts to Medicare are considered unlikely

- Home health rates expected to remain flat or modest

• Labor:

- Wage inflation is decreasing but not yet at pre-pandemic levels

- Improved turnover due to culture and retention initiatives

• M&A:

- Less competition due to interest rates and regulatory changes

- Focus on off-market deals and legacy-minded sellers

• AI:

- Potential to enhance manual processes and improve margins

For further details, please refer to the full conference call transcript below.

Full transcript - Oppenheimer 35th Annual Health Care MedTech and Services Conference:

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Morning. Welcome to Oppenheimer’s thirty fifth Annual Healthcare Conference. I’m Mike Wiederhorn, Healthcare Service Analyst. And it’s my pleasure to introduce The Pinnacle Group. We have Chief Executive Officer Brent Guaricelli Chief Financial Officer Lynette Wahlbaum President of Pinnacle Business Andrew Ryder and Executive Vice President and General Counsel, Kirk Cheney.

Welcome. Thanks guys for attending. Appreciate your time today. It’s gonna be a fireside, so we’ll kind of start right into it. I’ll start with the, you know, kind of, can you just kind of coming out

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: of

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Q4, how do you feel about the business and your guide going forward?

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: Yes. Mike, thanks for the question and we’re excited to spend some time with you today. We appreciate being here with Oppenheimer. In. You know, we feel really good.

I think the most basic response, we feel really good about a strong 2024. We had nearly 30% from a growth standpoint, 30% top line growth and over 30% bottom line growth. So we’re kind of executing on a lot of our initiatives to drive, continued opportunities for our leaders. And we often talk about being a leadership company and, you know, we’ve seen significant investments in leadership pipeline as well. That includes operators and clinical leaders.

And so as a result of that, we have a robust pipeline of leaders ready to go for current and more new opportunities that protect themselves. In addition to that we, we upsized our revolver up to $250,000,000 in the middle of last year and we did an equity offering. What that means as we closed out the year we essentially had full access to the entire revolver and amp and dry powder as we continue to grow. Not only that but we actually performed some really significant acquisitions in 2024. Signature, that being a primary one, represented over $80,000,000 in revenue and that was in an area of the country that, the on the Western Side in the Pacific Northwest and primarily in Washington and Oregon, that really right in our wheelhouse.

And so we’re in the process of sort of transitioning those operations, and that seems to be going well. But we’re excited about that. And then, you know, I I think the other thing is, you know, we we talked about we we guided a few weeks ago. We still expect nearly 20% growth on the top line and and over, 20% growth on the bottom line. So all that means that we’re well positioned to execute on our short, mid, and long term strategies.

We’ve got, excitement and progress in each of our our key business lines, home health, hospice, and senior living. And an expectation that will drive both the top line, bottom line growth and improve margin as well.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: That sounds great. So, why don’t we move to home health? So, can you talk a little bit more what you’re seeing on the home health side from an organic growth perspective, and how do you think the trends are going moving forward?

Unidentified speaker: When we look at it, like, on a macro level, the demand for home health obviously has has been steadily rising, really driven by that aging population and a preference to receive care in the hall. When we look at it, you know, for Pennant, we had very strong organic, really outsized growth in 2024. And as we look into twenty to twenty five, we’ve modeled again some strong growth in the high single digit range. And I think as we continue to be that provider of choice, in our local communities, we can expect to continue to see growth, year over year as we, you know, continue to provide break care for our patients and be that be that provider that is able to partner with these higher, with the the acute care settings to bring some of those that higher acuity, and chronic conditions into the home.

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: What are

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: you and when we think about payer mix, what are you seeing in terms of mix of Medicare Advantage? And how should we think about your contracting efforts going forward?

Unidentified speaker: When we look at payer mix, Medicare Advantage makes up about 13% of our overall revenue. That’s when we’re looking at home health, hospice, and senior living, and about 31% of our revenue for home health, just to kind of paint a bit of a picture of how it looks for our company. We continue to work with our Medicare Advantage payers to really drive, rate improvements based on being a quality, home health provider that provides quality outcomes and lower preventable hospitalization rates. In 2024, we were able to increase our Medicare or sorry, our MedAdvantage payer rate by about two and a half percent. And some of that’s driven by the fact that we do have about half of our Medicare Advantage, mix is episodic, while the other half is, is based on a per visit basis.

One of the other things I’d like to highlight is when we look at that payer mix, it is really driven at the local level. That’s not something that we’re driving from, you know, a corporate office. Our local, home health provide agencies are able to look at what their payer mix is in their area and, you know, look at their referral sources to really drive, the best payer mix that we can possibly have at that local level.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Let’s move over to the value based care contracting. What are you seeing there? You know, kind of how are the models performing? Give us an update there, kind of your thoughts around that.

Unidentified speaker: Yeah. On the value based care front, as we look at ’20 going into 2025, roughly 80 actually, over 80% of our home health agencies are receiving a positive rate adjustment, based on their 2023 results. And some of that is mitigated as we bring in acquisitions that may have had that lower, those lower clinical outcomes and, patient satisfaction prior to our acquisition. Some of that is, bringing that down. But we continue to really focus on driving that quality care and being able to improve the patient experience in a way that will allow us to continue to take advantage of that value based care model.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Perfect. Let’s move over to another leg of the business, the hospice. Can you kind of give us that you know, kind of discuss trends, what you’re seeing in the business and what you’re seeing in terms of short and long length of stay patients and your balance on the margins? And then, obviously, there’s some concerns around the Medicare cap. If you kind of highlight all those issues.

Unidentified speaker: Sure. As we look at, you know, hospice, you know, more on that macro level, we see, you know, there’s so many are the baby boomer population is aging into that service. And, you know, in addition to that, we’ve had some other acquisitions. On the hospice front, the acquisitions that we just did, with Signature included some hospice. You know?

So we’ll see some growth there, on the non organic front. But when we look at the population, those that are eligible for hospice services, we’re seeing more and more people electing into being able to receive that hospice care at end of life, with over fifty two percent of the Medicare, those that are a electing they’re they’re they’re able to elect, this hospice benefit. You know, and I think that we will continue to see that growth across, you know, all of our agencies and, being able to grow that patients and residents on what the benefits of hospice care are and we’ve seen the benefit of that of being able to provide care along the continuum.

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: Okay. And, Mike, I know you you asked a little bit about yeah. I can I can spend a similar one on that too? I think, the cap is one of those things that is sort of variable every year and it’s hard to project. And we sort of have ups and downs and this is a year where in particular there were a couple of operations in California that sort of breached that cap number.

But we feel really good about, the way that we track, measure and respond to any issues related to cap. And so on an ongoing basis, we don’t really see this as a major issue. It did sort of produce at the end of twenty twenty four. But the other thing to keep in mind is the majority of those are in California. California is a high reimbursement state.

So just because of the nature of the reimbursement and the fact the cap is sort of universal across states regardless of the wage index, those higher reimbursing markets tend to be effective. But we have local teams that respond pretty quickly. And in years past, when we’ve had issues like this, we’ve been able to make changes pretty quickly. So we don’t anticipate nearly the same level of impact in 2025. Certainly, going into 2026, we would expect to have more normalized historical rates around cap adjustments.

And so, not a ton of impact there.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Perfect. And now let’s move to the third leg, senior living. Can you give us an update of where it’s at? And then we can touch on what are you seeing in terms of occupancy and kind of where do you see same store occupancy heading over the next twelve months and then we’ll move over to the prices pricing?

Andrew Ryder, President of Pinnacle Business, The Pinnacle Group: Yeah. Appreciate the question, Mike. I think overall, we’re we’re pleased. We continue to see recovery and strength building on a lot of our core initiatives from our leadership pipeline and really training and and building out a a strong leadership force that will provide the foundation for us to build on going forward. We see acquisition opportunities that are attractive both on the value creation front and also a handful of of attractive deals where we can step into, businesses that are operating fairly well.

So overall, I think we are well positioned to continue to take advantage of of good tailwinds that are that are moving us forward. On the occupancy front, you know, we on the same store side, I think we’ve modeled a pretty steady increase of about a half to a percent over 2025, kind of building quarter over quarter. But, you know, seasonally, Q1’s generally a kind of our low point, and we build through the year hitting our high in Q3 and then tapering a little in Q4. And so, you know, that’s kind of reflected in our modeling as well. So that that’s kind of what we’re expecting on that front.

And then on the on the rate side, you know, 5% to 6%, you know, somewhere in that mid single digit range, in terms of rate growth. In prior years, we’ve been able to outperform that a little bit, and and I think we’ll continue to find that balance between rate growth and occupancy growth and make sure that our revenue is growing appropriately.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Perfect. Alright. Let’s go to, obviously, the kind of the big picture question on the regulatory environment. That’s been obviously the market’s been focused on you know, Trump two point zero. You know, it seems like, you know, Medicare, it looks like it’s going to largely steer clear of any major cuts in the reconciliation bill.

But can you kind of speak broadly to the regulatory and reimbursement environment and how we should view this at this point in time?

Kirk Cheney, Executive Vice President and General Counsel, The Pinnacle Group: Sure. You know, it’s obviously dynamic right now. It’s like the old joke, if you don’t like the weather, wait fifteen minutes. I mean, it’s kind of you have to check every day what’s happening. But generally, when we look at the trends we’ve seen with this administration, you know, in the past, the Trump one point o, there are parts of their focus that have been helpful to us.

They’re generally a deregulatory approach. Some parts of the DOGE approach that are, you know, finding inefficiencies and reducing bureaucracy are consistent with that. And, you know, immediately when this administration took over, we saw a cancellation of the hospice special focus program, which was consistent with that general theme. Of course, there’s also the fine savings part of their mission, which like you said Medicare has been, not really in the crosshairs there. There’s a statement on the White House website today that says we’re not cutting Medicare, Medicaid, or Social Security.

But, obviously, there is the there are the threats from, some of the bills, the reconciliation bill. There are, you know, it’s I would say on that, it’s easy to say an aspirational number in a in a budget resolution and it’s a lot harder to get down to the nitty gritty and take away benefits from seniors. So when you think about that 880,000,000,000 number that’s in the House resolution on Medicaid, there’s a lot of ways that they can get to that. And I would say that, you know, cutting Medicaid for elderly is low on the list. Most of the proposals we’ve seen have focused on creating work requirements and attacking fraud, waste, and abuse as opposed to just withdrawing entitlements.

On the home health side with Medicare, obviously, that since the 2018, Balanced Budget Act, there has been this, you know, generally flat to slightly negative reimbursement trend. And I would say similar similarly on that, there’s this building back overhang. And it is also something that, you know, at this point, it’s gonna be very politically difficult to, to try to do some kind of draconian enforcement of that all at once. So far, CMS has recognized that they have time and manner discretion about when and if to apply that. And we expect that the trend kind of continues with with, pretty flat or modest home health rates this year.

And we just don’t see when it comes down to actually having to go back and face your constituents, it’s a lot harder to, to take a draconian measure that really impacts rural communities, which is a big part of the Republican base. Because if home health and hospice are not available in those communities, I think the representatives will feel it and will hear about it.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Do you think they claw back, they’re gonna kick the can down the field again? Or do you think they can even just act is there a way to actually just get rid of it or, you know, erase it from, you know, potentially occurring? Kind of what’s your, you know, more specific thoughts around that?

Kirk Cheney, Executive Vice President and General Counsel, The Pinnacle Group: I think, you know, obviously, a matter of opinion and speculation, but I think they’ll kick the can this year, because they have that discretion to 2026. And I think there will be a legislative solution eventually because of those access concerns. We we are working on that with our industry partners. There’s not discretion to just cancel it out right under the current bill, but there are political ways to approach that legislatively or otherwise.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Great. That’s good color. Let’s talk about labor. Labor’s obviously been a big concern around the industry and the environment over the last few years. Are we back to prebank pandemic levels in terms of the trends going there?

And, you know, what should we be thinking about, you know, wage inflation going forward as well across the different lines of businesses here?

Unidentified speaker: Yeah. Great question. Is we’ve looked at labor over the last few years, right? We were at 11%, you know, down to about 8% this year ending at, roughly 5% in wage inflation in ’4 this year over over the prior year. So as we look into 2025, while we’re not down to pre pandemic levels, we see, that labor inflation be roughly in that four and a half to 5% range for the year.

And then looking more long term, you know, I do think that we will still see a little bit more tightening where we’re able to get potentially down to that 4% range, but I do think that that’s more of a, long term wage inflation number. I would love to get down to that pre pandemic level, but I’m not sure if we’ll get there in the near term.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: And how is turnover trending, you know, at this point in time?

Unidentified speaker: Turnover is actually we’ve had some really positive momentum on, improving our turnover in both the senior living and home health and hospice sides of the business. We’ve really focused on becoming that employer of choice. Something that we’re we’ve always been dedicated to is driving that culture, that really makes us the place where people want to come work and where they wanna stay. We’ve done a lot of initiatives to drive, and enhance our ninety day retention. We found that when you can keep people past that ninety days, they really are able to become immersed in that culture.

And that’s being done on a couple of different fronts. We’ve talked about our leadership programs and, you know, we’ve built out our leadership, you know, programs on both the, executive director side, but also on the clinical side. And I think that that’s, really helping to improve, some of that turnover just by having, you know, these leaders in these organizations that people are really wanting to come in and and work work with Pennant and our our agencies and senior living communities.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Okay. And overall, how do you think capacity is positioned relative to demand in the marketplace?

Unidentified speaker: I think that there’s, you know, we’ll still see, you know, some of that, impact is, you know, people there’s there is still somewhat of a nursing or capacity shortage, but I think that that’s becoming more normalized and we’re, we’re seeing the benefits of being that employer of choice in having that, you know, kind of tighter labor environment.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Perfect. Let’s move over to M and A. And obviously, it’s a big part of your strategy. Can you guys discuss the pipeline, what you’re seeing in terms of deals, deal sizes, geography, and competition at this point in time?

Kirk Cheney, Executive Vice President and General Counsel, The Pinnacle Group: Yeah. I can talk about home health and hospice, and I think Andy talked about senior living. It is a robust pipeline. We see a lot of good opportunities. As we zoom out, you know, we think about our disciplined approach to acquisitions.

We start with who? Do we have a leader? Then we move to, you know, where? Is it somewhere where we have existing strength in what we call clusters, which are peer operations that can support and help that operation to make sure that the transition is effective and the best practices are shared? And then what, is it a great deal?

Is it a good opportunity? And is the pricing right? And, you know, as you look back five years ago, we there was a time where we were having a hard time finding these deals with a lot of private equity competition, a lot of auctions and bidding. And we like to we like to get off market deals. We like to get good deals where the seller is more interested in the legacy, or is that’s at least one consideration as opposed to just always competing on pricing.

And we’ve been successful in finding those deals. And one of the ways we do that, you know, our sweet spot acquisition has been a three to ten million dollar revenue deal with four or seven times multiple on home health and a 5 to 8 range on hospice. And in the last couple years, there’s been a lot less competition of interest as interest rates have have affected private equity. I also think there’s a regulatory component affecting private equity. More states have introduced legislation that makes it harder for private equity deals to go through and increase and imposes a review process where private equity is usually frowned upon, which does position us well to be competitive because we are long term holders with good track record, positive quality scores.

And so we stand out in those processes. But, right now, you know, as we look at the last year, we continuously raised the bar in terms of what we could execute. We started the year with a with a joint venture with Mirror Health in California. That was a $30,000,000 range deal with more complexity than we did the signature deal in August and completed in January at an $80,000,000 purchase price roughly. And we’re able to successfully transition those, and that’s been a pretty pretty smooth process.

Not that it’s all the way done and we’ll obviously report on that at the end of q one, but that that was we view that as as a successful deal. And so we have flexed the muscle now of of being able to tackle these bigger deals. And so I would say that we see a lot of deals right now in in the pipeline in our typical sweet spot, and we also see some bigger opportunities, in our current geography where we think there’s a lot of opportunity. We could grow many times just by filling in those spaces, but we also are willing to explore new geographies for the right opportunities if we meet those three criteria that we identified earlier or we see a path.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Obviously, the CEOs and training, that’s a big, you know, ties into this, the whole effort. Kind of how is that progressing, you know, with your effort to hire more CEOs and clinical leaders and kind of where, where you at at this point in time?

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: Well, last year was a record year in terms of bringing in our CITs. We had nearly 70 CITs go through the program or enter the program. In addition to that, I mentioned it before, but we also launched our clinical leadership training program. We had 40 new entrants into that program and continue to build out that business as well. So we’ve made those investments.

We recognize the significant value creation because remember, our model is all about creating opportunities at the local level. And so if we can get opportunities to whether and and Kirk talked about it and Andy’s talked about it as well. When we go and do a deal, we’re actually looking for an opportunity for a local leader to step in and have an entrepreneurial experience. And so the more really strong leaders that we have in the pipeline coupled with really strong potential clinical partners, that combination of a strong executive director and a strong clinical leader really sets the table for us to have a lot of success to build these, generally speaking, underperforming or challenged operations that we typically have acquired. So, from that perspective, we’ve made significant investments like I mentioned.

We feel really good about the number of CATs and we call them COLTS or clinical leaders. And we continue to make those investments. I’d expect similar numbers to like we saw in 2024 and 2025. And then I think the other thing that’s really important to identify here is we are we structure the organization in portfolio companies. So we have six portfolio companies on our home health and hospice side.

And then we have another five portfolio companies on our senior living side. And those leaders and teams are essentially building in their markets. And so they’re the ones who are out recruiting the leaders. They’re the ones that are looking for deals. They’re the ones that are really driving the growth.

And so a lot of our growth is tied to finding these leaders, but also finding the right opportunities at the local levels to create a pathway for these leaders to have success. So, this has been our number one priority for the last two years and it will continue to be our number one priority because it’s you know, our two avenues for growth are leaders and access to capital. And right now, we have ample access to both.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: So just a follow on. So when you look at your portfolio, you know, your three key segments, what are the keys to unlocking the upside? And, you know, where where’s where do you think the largest opportunity exists?

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: Yeah. So the great thing is we have a ton of opportunity in all three segments. And and and you’ve seen this over over the last year or two. You know, for most of the pandemic, our investments were in home health and hospice. But as we’ve strengthened and invested in leadership on the senior living side, we’ve also started to make more and more investments on the senior living side as well.

So just to start out, we feel really, really good about where we’re at in each of those segments. On the home health side, there continues to be some rate pressure. But what we see here is because of that, you know, Kirk talked about the the available deals and and whatnot. There’s there are a lot more deals at our disposal at favorable, valuations. And so we can continue to make the right strategic investments as long as we have leaders ready to go.

The other thing is we can drive margin and margin is a significant opportunity across the board, but in particular in home health because of reimbursement rates have been relatively flat. There is opportunities to make investments in technology to drive improvement there. And then, you know, I think the other thing is just ensuring we have quality providers. We all we have significant outperformance on the quality side, across most of our operations. And so we are chosen whether it’s chosen by community, chosen by payers, because of that.

So I think that will provide continued opportunities going forward. On the hospice side, same kind of thing that the value additions are a little bit higher, but there’s still plenty of opportunity. And, you know, I think with all of these regulatory and other, you know, challenging, you know, the rate environment has been pretty steady, but not like super robust. So there continues to be opportunities to find sweet spot deals there. So on that side, it’s really just maintaining discipline around finding the right deals and creating the right opportunities for the local leaders.

And then the other thing I would say is there’s also performance measures that are being implemented in that space. And so where we’ve always really performed well on the quality side, we think that’ll just create additional opportunities for us. And then lastly, senior living, Andy talked about this. We have opportunities to grow on an occupancy standpoint. We also can continue to drive revenue quality and then ultimately it’s just driving margin there.

And then, you know, just the nice thing though is we can grow on the senior living side without really any capital outlay upfront because we can do triple net leases. But we also and we’ve done this a couple times last year and we’re looking for opportunities this year. There are some favorable real estate transactions that we can start to invest in in building out real estate portfolio as well if it it really fits into our of what we’re looking to do.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: We’re running out of time here. One last question, just, you know, kind of a high level. You know, everyone keeps asking about AI, AI. Kind of what do you think of the role of AI in your business model? Is there an opportunity here and how do you think it can be used going forward?

Kirk Cheney, Executive Vice President and General Counsel, The Pinnacle Group: There’s definitely an opportunity. We recognize that it has a lot of potential that there’s a lot of processes that are manual that could be significantly enhanced by AI. And you you have an interesting environment where, you know, some folks are scared of it. Some regulators are scared of it. If you watch the doctor Oz hearing the other day, he was all about AI.

He was talking about AI for CMS all again and again. And so we feel like the regulatory environment is opening up that there’s a bit more of a green light. It’s something that we continuously evaluate and will look to invest in and even, you know, build to some degree as we unlock our own technology here. So we think it’s a it’s an important part of the future and an important way that we can impact our margins in a positive way.

Mike Wiederhorn, Healthcare Service Analyst, Oppenheimer: Great. Well, we are out of time. I appreciate it. This is really useful, very thorough today. I appreciate your time and good luck for the rest of the day.

Thank you.

Brent Guaricelli, Chief Executive Officer, The Pinnacle Group: Thanks. Bye.

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