Thank you, operator. Good morning, everyone, and thank you for joining us today for iCAD's First Quarter Fiscal Year 2024 Earnings Call.

On the call today, we have Dana Brown, our President and Chief Executive Officer; and Eric Lonnqvist, our Chief Financial Officer.

Before turning the call over to Dana, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on iCAD's current expectations and are subject to uncertainty and changes in circumstances.

Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release and our filings with the U.S.

Securities and Exchange Commission. iCAD undertakes no obligation to revise or update any statements, to reflect events or circumstances after the date of this conference call.

Also, please note that management will refer to certain non-GAAP financial measures. Management believes that these measures provide meaningful information for investors and reflect the way they view the operating performance of the company.

You can find a reconciliation of our GAAP to non-GAAP measures at the end of the earnings release.

With that, I'll turn the call over to Dana.

Thank you, Jeremy, and good morning, everyone. Let's begin with our business update.

On our last call, I recap the progress we've made, executing a 3-phase transformation. We've completed Phases I and II, which were realigning our base and strengthening our foundation.

In these two phases, we were focused on stabilizing our cash burn, strengthening our leadership team and divesting the [indiscernible] business.

Phase III, investing in growth initiatives began in first quarter 2024, with the focus on expanding into key accounts and new markets with our existing solutions. This phase is focused on maximizing revenue from our sizable installed base including reengaging customers who've lapsed on annual maintenance service agreements, upgrading customers to new versions, including the transition to cloud and accelerating deployments across large national accounts.

To set us up for success, we have developed and launched targeted lead gen programs. Previously, a reliable and consistent inflow of new leads and a documented and measured pipeline management process did not exist.

We've revamped our commercial model. We've reorganized our team structure, how we target and segment our market provides messaging, pricing and account management strategies.

And as noted on a prior call, we believe U.S. sales had declined in part due to significant reduction in the sales force in fiscal year 2022.

As of Q3 2023, in the U.S., we had 6 sales reps versus 12 in Q3 2022. After a thorough analysis of [indiscernible] performance over the past 3 years and our large addressable market opportunity, we believe adding additional sales reps focused on new business, and a more orchestrated effort on account retention and expansion would result in increased revenue.

In December 2023, we announced guiding Peter Graham as Head of North American Sales. In first quarter, he added 4 new reps to the sales team.

Let's turn now to a few brief Q1 deal highlights. Dignity Health, a part of Common Spirit signed a 4-year subscription deal.

They are using our technology on their Hologic gantries. The initial deal was for a portion of their gantries so there will be room to expand as we go forward.

Raleigh Radiology, a perpetual license deal was a competitive head-to-head win against Hologic. Raleigh Radiology serves over 80,000 patients in the Raleigh market.

Northern Navajo, while a smaller deal, it's important to our strategy to serve the first nations. We will be working together to roll out continued education and support to expand the reach to native American women.

This was also a perpetual deal.

University of Chicago Medical Center is an expansion for us, with upgraded software and added exam volumes in 2024. This is a subscription deal with room to continue to expand their use over the coming years.

Avera McKennan Hospital chose iCAD because of our ability to move them closer to a total virtual platform. We're supporting their 2D mammography today via a new VM platform, with future plans to expand support to 3D and cloud.

Hancock Regional Hospital, a perpetual deal, purchased both 2D and 3D ProFound Detection solutions for use with their Hologic systems. Indiana University Health Arnett, a perpetual deal also purchased both 2D and 3D ProFound Detection solutions.

They are the largest health system in Indiana and are continuing to expand use of iCAD's AI, in a mixed gantry environment that's predominantly Hologic. There's additional room for expansion within this account as well.

University of Texas Tyler, an upgrade of an existing perpetual deal. The value add for this upgrade was to improve detection accuracy and overall, improve outcomes for their patients by adding 3D detection defined cancers earlier, reducing false positives and improving workflow efficiency.

And lastly, we expanded into 5 additional solar sites. Standardization with iCAD's ProFound AI suite across all existing and new solar sites, enable Solis to remain the industry leader that provides both state-of-the-art technology with a best-in-class patient experience.

In first quarter, we also achieved several milestones with our OUS sales channel, further expanding iCAD's global reach. In Turkey, ProFound Detection has recently been implemented in one of the largest and most important hospitals in this [ symbol ].

Anadolu Medical Center. This center has a strategic relationship with John Hopkins Hospital, providing continuous access to the latest innovations and technology advancements.

This relationship provides iCAD significant exposure within this Eastern European region.

In Serbia, we secured our second sale at a large oncology site in [ Vojvodina ], expanding presence within this country. In Poland, we celebrated our first installation of ProFound Detection in one of the largest oncology sites just outside of Warsaw, [indiscernible].

In Israel, to complement the 13 licenses a ProFound Detection and risk already sold to the Clalit hospital network, one of Israel's leading medical groups, we sold the 14th license to the Clalit Research Center, where they will be conducting a research study leading to future publications.

In France, our direct sales force signed an agreement with one of the largest multisite private clinics called Oragene to facilitate implementing ProFound Detection, across their 100 clinics in France. Lastly, in the first quarter, iCAD received international television exposure featuring interviews of several radiologists using ProFound Detection from different countries.

Interviews aired on French, Belgium and Israeli television.

Turning now to marketing and clinical research, a quick review of our first quarter conference and publication activity. In January, iCAD participated in Arab Health in Dubai, the largest healthcare exhibition in the Middle East, attracting over 52,000 professionals from 176 countries.

During this event, we announced our new partnership with IMATEC Healthcare Solutions, our distributor in the UAE.

With IMATEK, we engaged in meetings with three prominent hospital groups, Prime Healthcare, EHS and Brazil and with the UAE Ministry of Health. In late February, we attended the European Society Radiology, or ECR, Vienna.

ECR is the largest and most important medical imaging conference in Europe. This year, the conference drew just under 19,000 attendees from 127 countries, including over 12,000 radiology professionals.

We hosted an event with over 40 of our European distributors and their customers coming from 13 different countries.

iCAD was also prominently featured in four clinical presentations, covering a variety of topics. A retrospective study at the Reggio Emilia breast screening program in Italy, led by Andrea Nitrosi, Ph.D.

aim to assess the efficacy of implementing iCAD's ProFound AI case scoring strategy and a breast screening program to expedite the reading process. Their study concluded that adding artificial intelligence, case scoring and a breast screening program can overcome delay and improved prioritization in most probably true positive cases.

A second retrospective study by the same group aim to assess the integration of iCAD's case malignancy scoring into a breast screening program to alleviate workload without compromising accuracy. Analyzing data from over 31,000 screening exams, including 92 proven tumors, the study simulated two integration, AI and human reading protocols.

Results showed that implementing iCAD's ProFound AI could substantially reduce the number of human readings and workload by up to 30%, with a modest improvement in recall rate and no increase in false negatives observed.

Jonas Subelack, a research associate and PhD candidate, along with others from the University of St. Gallen and [indiscernible] in Switzerland, in radiology and theater in Germany presented a retrospective evaluation of interval breast cancer, using cutting-edge advances in AI for radiological imaging, using AI to reduce the number of interval carcinomas by using AI diagnostic software.

And Dr. Chirag Parghi, Chief Medical Officer for Solis Mammography, was awarded an ECR certificate of merit for his presentation on breast arterial calcification or BAC, as a proxy for broader vessel disease.

In addition, we showcased that two GE-sponsored educational events. One focused on the adoption of artificial intelligence in breast imaging by Dr.

[indiscernible], Head of Medical Imaging Department, Institute [indiscernible] in France, and the second, on the impact of AI in clinical routines for the detection of breast cancer on mammograms by Dr. [indiscernible] of Germany.

Lastly, in March, we showcased our solutions at the National Consortium of Breast Centers, Annual Interdisciplinary Breast Center Conference in Las Vegas to over 900 attendees. This conference focus is to increase the quality of breast care provided to women across the globe, through interdisciplinary education for breast health professionals.

Many breast health care practices are not standardized, and this conference provides a learning and networking environment, enabling breast professionals to learn about genetics, risk, the latest treatments, technologies, procedures as well as become certified and sharpen their skills in detecting and treating breast cancer.

It's a very engaged audience with strong interest in risk, detection and quality programs and resulted in several strong leads for our sales pipeline. We hosted a breakfast symposium for nearly 200 of the attendees, featuring a presentation by Dr.

Nikki Gidwaney, a breast radiologist with Stoney Brook University Hospital. Dr.

Gidwaney discussed how breast imaging centers are staying at the forefront with best-in-class AI solutions. She shared her personal journey with Breast AI solutions, and the power of iCAD's newest algorithm and helping imaging centers meet key clinical, operational, quality and financial business objectives.

We were proud to announce a philanthropic Global Health collaboration with RAD-AID International. RAD-AID, a nonprofit, charitable organization dedicated to improving radiology healthcare in medically underserved regions is collaborating with iCAD to introduce mammography AI-based decision support, starting with an implementation in Guyana using iCAD's ProFound Detection.

The partnership's primary goal is to improve the speed, efficiency and accuracy of breast imaging and breast cancer detection, by providing low resource medical institutions with access to technology, education, clinical support and hands-on training.

We've recently installed our solutions in Guyana, where implementation of our ProFound AI Detection solution, coupled with RAD-AID's educational and capacity-building initiatives, aims to increase and improve breast cancer detection for patients in need. Such collaboration endeavors to build AI-supported models, for globally reducing healthcare disparities and increasing health equity by widening access to earlier cancer diagnostics.

Breast cancer remains a significant global health challenge, particularly in regions where trained clinical personnel and technological resources are scarce, and drive deep disparities in breast cancer outcomes.

Dedicated to our mission of creating a world where cancer can't hide, we're honored to partner with RAD-AID on this transformative program, to ensure advances in early cancer detection are available globally. Our deployment of ProFound AI Detection in Guyana represents a significant step forward in the fight against breast cancer in low-resource settings.

Together with RAD-AID, we can revolutionize breast cancer detection accuracy and efficiency, ensuring medical professionals have the training and the tools they need to work smarter.

When it comes to cancer diagnosis, we believe where you live should not determine whether you live. From a clinical data perspective, a paper published in the land set in February 2024 shows that the performance of ProFound risk with 2D mammography pulls up in 5 European screening populations, that were not used for the development of ProFound risk for 2D.

This paper is an external validation of ProFound risk for 2D, that shows this performance generalizes across the 5 screening populations with AUCs greater than 0.7. The results also show that profound risk for 2D can predict later stage breast cancers as high risk, among women who are currently sent home with a negative mammogram, when ProFound risk for 2D isn't used clinically.

This means that ProFound risk for 2D could help with earlier identification of women, that may carry elevated mortality and morbidity risk, associated with late-stage breast cancer, and thus, could potentially save lives if additional personalized screening strategies are implemented for these women, rather than if they just follow the typical average screening regimens. Let's turn now to updates on our technology.

In mid-March, we released new advanced workstation features for our flagship solution ProFound Detection, for both 2D and 3D mammography. Aimed at further improving and facilitating radiologists' interpretation of mammograms within their workstation.

The new features for the ProFound Detection solutions are designed to improve the readability of iCAD results, through a configuration option to limit to 3 lesion marks visible on a workstation view displaying 3D images. This refinement ensures that radiologists can interpret the most critical information, thereby streamlining the diagnostic process for more efficient decision-making.

The introduction of color-coated lesion marks and case scores on the ProFound scorecard provides an intuitive visual aid, allowing radiologists to discern the suspicion level of detected abnormalities quickly. This color-coated system based on cancer occurrence per screening population, offers a concise, comprehensive representation of the severity of detected lesions and the overall case, further aiding in accurate diagnoses and prioritization of cases.

And lastly, the support for fine-tuning score ranges based on the facility's own real-world data, enables users to customize the detection system according to their specific clinical needs, enhancing performance and adaptability to varying patient populations. The progression of iCAD's leading breast health AI for over 20 years, represents our continuous improvement in technology and functionality, demonstrating our unwavering commitment to advancing cancer detection capabilities and improving patient outcomes.

From the inception of iCAD's 2D detection in 2002 to the launch of 3D Detection Version 1 in 2016, followed by 3D version 2 detection in 2018 and version 3 in 2021, each version has pushed the boundaries of cancer detection solutions. Now in 2024, the release of Version 3 Detection Service Pack marks another milestone, representing a commitment to ongoing enhancement and ensuring that ProFound detection remains at the forefront of early cancer detection solutions.

We also recently announced commercial availability at ProFound Cloud, built on the Google Cloud Platform.

Our innovative Software-as-a-Service or SaaS platform provide medical providers with a cost-effective, secure and scalable means to access and deploy the latest ProFound Breast Health suite of AI solutions. With the commercial launch of ProFound Cloud, iCAD is enabling interoperability and access to breast AI solutions at enterprise scale, revolutionizing global access to cutting-edge AI solutions in Breast Health.

Powered by Google Cloud Architecture and Google's health AI innovation, ProFound cloud integrates a lightweight edge client and cloud-based components.

Together, they securely transport and process mammography screening data between imaging sources, such as imaging modalities and picture archiving communication systems or patch, and the cloud-based AI. The process data is seamlessly delivered to systems that utilize AI output, including mammography review workstations, packs and image and data storage systems.

The healthcare landscape is shifting towards technology as a service model, avoiding the pitfalls of investing in rapidly outdated hardware and software.

As AI relies heavily on specialized hardware like graphical processing units or GPUs, setting up and upgrading both software and hardware becomes increasingly complex. Cloud-based solutions like ProFound Cloud address this challenge by providing Software as a Service, to ensure that all customers access the latest technology, without the initial hardware investments, support contracts and constant updates.

Moreover, ProFound Cloud provides facility administrators the ability to access the administration site, enabling them to update configurations and perform administrative tasks in multiple languages. ProFound Cloud is designed to support patients, providers and partners, while facilitating the management of diverse data types critical for comprehensive healthcare analysis.

This includes 2D and 3D mammography images alongside all cancer images in parallel, it stores limited images of benign, recall and normal cases.

ProFound Cloud also manages profound risk and density assessment results. Radiology and pathology reports and detection results, while ensuring seamless access to critical diagnostic information.

Importantly, ProFound Cloud securely handles de-identified patient information and provider data, adhering to strict privacy and compliance standards. The comprehensive approach enables robust analytics for informed decision-making.

Before turning the call over to Eric, in case you missed the announcement earlier in the first quarter, I also want to note the addition of two new Board members. We are pleased to welcome Dr.

Hedvig Hricak to our Board of Directors. Dr.

Hricak is a renowned radiologist and researcher with over 40 years of experience in the field. For more than 20 years, she was Chair of the Department of Radiology at Memorial Sloan Kettering Cancer Center in New York City, a position from which she stepped down in January 2023.

In addition to her many prestigious roles, she is actively engaged in global health initiatives, promoting international education and collaboration to improve access to oncological imaging and cancer care. Dr.

Hricak has published over 380 peer-reviewed original research articles, more than 300 review articles, editorials, book chapters and 18 books. She served as President of multiple prominent medical societies, a member of multiple Board of Directors and advisory boards and Board of Trustees.

In recognition of her scientific accomplishments and tireless global outreach, she has received numerous awards, including honorary doctorates from the Ludwig Maximilian University in Munich, Germany, and the University of Toulouse III, Paul Sabatier, and Toulouse France. Dr.

Hricak's extensive experience and clinical expertise in radiology, research and the development of novel imaging applications will be invaluable as we continue to develop and deploy innovative AI-powered solutions, that improve patient outcomes around the world.

We also announced the appointment of Mike Doyle to our Board of Directors. Mr.

Doyle is a seasoned technology and healthcare executive with over 35 years of experience. He is currently the CEO of Spire Health, a leading health care technology company focused on improving health outcomes for cardiorespiratory patients through continuous virtual patient monitoring.

Spire, along with Mr. Doyle's recent companies, all achieved measurable patient and health outcomes improvement by harnessing the power of AI and machine learning.

He has been the CEO and Director of 7 healthcare companies. Mr.

Doyle has also been appointed to numerous private, not-for-profit and public company boards, and brings a wealth of experience in health care technology and business strategy to the iCAD Board of Directors.

I'll now turn the call over to Eric for a detailed review of our Q1 2024 financials.

Good morning, everyone, and thank you, Dana. I'll now summarize our financial results for the first quarter ended March 31, 2024.

Revenue for the quarter was $5 million, an increase of $0.6 million or 14% over the first quarter of 2023. The increase is attributable to some of the key deals that Dana noted earlier in the call as well as some early traction from our expanded sales force.

First quarter 2024 product revenue was $3.1 million, up 26% over the prior year. Service revenue was $1.9 million, in line with the prior year.

Moving on to gross profit. On a percentage of revenue basis, gross profit was 83% for the first quarter of 2024, which was up from 82% in the first quarter of 2023.

On a pure dollar basis, gross profit for the quarter was $4.1 million as compared to $3.5 million last year.

Total operating expenses for the first quarter of 2024 were $5.6 million, a $1.2 million or 18% decrease year-over-year. This improved run rate reflects the implemented cost-cutting measures previously announced.

GAAP net loss for the first quarter of 2024 was $1.2 million or $0.05 per diluted share, compared with a GAAP net loss of $3.1 million or $0.12 per diluted share for the first quarter of 2023. This year-over-year decrease in GAAP loss per share is primarily due to a combination of operating expense reductions and sales growth, driven by some of the deals noted earlier in the call.

Non-GAAP adjusted EBITDA loss decreased $1.3 million to $1.1 million in the quarter ended March 31, 2024, from the same period in 2023. Moving on to the balance sheet.

As of March 31, 2024, the company had cash and cash equivalents of $20.3 million, compared to cash and cash equivalents of $21.7 million as of December 31, 2023. Net cash used for operating activities for the quarter ended March 31, 2024, was $1.2 million, compared to $1.5 million in the first quarter of 2023.

This improvement of 23% year-over-year is due primarily to cost savings initiatives implemented during the first quarter of 2023. We believe we have sufficient cash resources to fund our planned current operations with no need to raise additional funding.

As noted in prior earnings calls, the steady shift to a recurring revenue model from a perpetual model has numerous benefits including better business visibility, more efficient expense management and an improved ability to predict future cash flow. It also has risks, including short-term lower GAAP revenue, and negative cash flow impact for the next 3 years.

To help illustrate our progress in this transition, we began reporting the following annual recurring revenue or ARR metrics in Q3 '23.

Total ARR, our key ARR represents the annualized value of subscription license, maintenance, contracts and active cloud services at the end of a reporting period. Maintenance Services ARR, or MARR represents the annualized value of active perpetual license maintenance service contracts at the end of the reporting period.

Subscription ARR, SARR represents the annualized value of active subscription or term licenses at the end of a reporting period. Cloud ARR, or CARR represents the annualized value of active cloud services contracts at the end of a reporting period.

Total ARR or TAR was $9 million as of March 31, 2024, up from $8.7 million as of December 31, 2023. Maintenance Services ARR, or MARR, was $7 million, in line with $7 million at the end of the prior fiscal quarter.

Subscription ARR or SARR was $1.9 million, up from $1.7 million at the end of the prior fiscal quarter. With our commercial cloud platform now released, we will begin tracking cloud ARR in upcoming quarters.

In addition to the recurring revenue metrics noted above, we also began disclosing the total number of orders relating to perpetual product, subscription and cloud deals. The intent of this metric is to illustrate the pure volume of sales without the complexity of multiple GAAP revenue streams.

We are pleased to report that in the first quarter of 2024, we closed 76 perpetual and 16 subscription orders.

This concludes the financial highlights of our presentation. I would now like to turn the call back over to the operator to lead the Q&A.

Dana and Eric. Congratulations on the quarter.

I have to say I was pleasantly surprised by the results. I want to start with revisiting the key growth initiatives because, obviously, the growth in the quarter was, I think, stellar and a little bit -- certainly a little bit ahead of model.

So you cited, Dana, in your prepared remarks, a handful of things, and I was fairly quick in writing some of that, I missed some of it as well. Start with the sales team.

I know you talked about it being -- having gone from 12 down to 6 in the U.S. as of 3Q last year.

You bring in Peter Graham at the end of the year and then four additions here in the first quarter. Are there more to come there?

Or do you think that kind of refilling the team to the extent you have, is sufficient for where you want to be at this point?

Yes. Thanks for the thanks on the quarter.

I think from the sales team perspective, we're stable. We might switch some players around, as we begin to see who's gaining better traction in winning new business versus what we call kind of expanding land, right in terms of existing accounts.

So there may be some shifting roles going forward. But I think from a quantity perspective, we're good for the rest of this calendar year.

Okay. Very good.

So then the other couple of things that you cited in the -- in the release and your remarks about the growth initiatives. So you know that the lead generation -- targeted lead generation effort, kind of felt like there wasn't really one in place there before.

Where is that at kind of an implementation? Is there any color around what that entails?

And then when you talk about a revamped commercial model, I think you alluded to a couple of things there in the press release or in your comments as well, but just wondering if you can circle back to that a little bit and discuss what you're doing there?

Yes. So you heard correctly, there was not what I call like a structured and repeatable and even trackable lead generation process before.

I mean part of a good sales team, especially when you're thinking about those winning new business, is they need to be great at cold calling, at working their Rolodex, right, or their network, and that's a big part of the equation. But you always want to supplement the sales team with qualified leads.

So in the business we're in, that's a B2B lead gen strategy. So we've been leveraging platforms like LinkedIn, making a more concerted effort around the trade shows, conference seminars that we attend at really working that audience.

I think this sales team in particular, we think about attending a trade show, they have just been knocking it out of the [indiscernible], with regard to scheduled and organized meetings like with agendas with desired outcomes when they attend those trade shows. And so walking away with either very qualified leads are actually making progress, right, on a deal.

So and we're just beginning to move into the phase of more truly, I call it even hovering above the funnel type of lead gen activity. So part of the leadership additions we brought in last year was the new VP of Marketing; and then Michelle Strong, who's our COO, has a really strong lead gen digital marketing-type background in B2B, actually both B2B and B2C.

So the combination of those areas of expertise, as well as just more organization right is helping there. So it is exciting to see when we kick off the lead gen campaigns and then tracking right, the results in terms of winning new leads and having a bulk conversations.

In terms of like overall, like the restructure for the commercial model, what we did. So first of all, I would say this is all pretty much focused on the U.S.

We've done a little bit of upgrading and expanding of OUS distributors, but most of these changes have come in the U.S. market.

So first was building these lead generation programs, because we wanted to see what type of pipeline we could develop and then use that to model how many sales reps would be optimal to add.

When we added the sales reps, we also structured focus. So instead of having everyone do everything and then consequently maybe not doing things well or people gravitating towards areas that are naturally most comfortable, we did structure them into more segmented role.

So there's more focused on new business, there's more focused on retention and expansion of existing business. We did revamp our pricing models.

One, cloud introduced a whole new cost structure for us, and way to deliver the solution. So that then kind of drove changes across the board all the way back into perpetual.

You've seen us reporting our ARR now, so that's based upon a subscription pricing model.

So getting those pricing models tighter and I would say well documented and communicated right, among our sales teams. So they know the price book and how to use it.

And then last but not least is just even within our existing accounts, doing a better job of internally marketing the solution. iCAD is fortunate and then we have some really large customers.

We -- I talked about that today trying to give some more color just because we win a deal doesn't mean we're done with that deal, right? There's room to expand.

So oftentimes, we need to be more involved in even the internal marketing within that account, to enable radiologists and others to understand the solution and why it's going to make a difference, right, in their practice.

That's great color, Dana. As far as -- let's go to the numbers specifically for a second, because I think normally, the first quarter is a step back sequentially from the fourth quarter.

And then the fourth quarter, I think, ran a little hot with a couple of deals sliding out in Q3. So we already had a pretty good foundation from Q4.

I would have thought we would see a step back, and we clearly didn't. We saw a step forward.

And I think the deal count in first quarter in aggregate was a little over 90, and it was right around 90 in Q4. So did anything pull forward here in the first quarter?

Or was this really just some of those initial efforts for all the new sales folks, probably lead gen from the commercial model shift that you're talking about?

Yes, I can answer that. So we had a couple of big drivers this quarter.

So there was one deal in particular, Dana mentioned rally radiology that the team has been working on for over a year that came in that was over $300,000 of revenue in itself. And then Dana also mentioned this whole expansion.

So there's another 4 or 5 sites that came in there, that we expanded. So between those two kind of drivers, that was close to $500,000 of revenue this quarter.

So that caused the bump, really. So Q4, you're right.

There was some sliding from Q3 into Q4, causing that 4.9 we had last quarter. So this quarter, I think it's part of our model is a little bit lumpy because of the perpetual nature of it.

So -- it's -- I'm not sure it's a structural change that we come on yet. There still could be lumpiness going forward.

No, that's entirely fair. I don't think anybody expects differently.

I was just curious to know a couple of those pieces. So I appreciate that.

Last question for me, I promise this will be it for now. We didn't really talk about things that are in front of the FDA a whole lot.

It's only been a couple of months since you last updated us on this data. But do you look at 4.0, do you look at heart health is still tracking toward late '24 type opportunities for you, where they kick in or where they get their approvals?

Yes. I mean, you never know with the FDA, but I would say it's always going to skew longer than faster.

So yes, I think best case scenario, would be into this calendar year. For example, with [ 4.0 ] detection algorithm, you heard me mention -- I mean, many prior versions.

And they usually went very smoothly, the review of the algorithm itself is going very smoothly, but there's a whole host of new cybersecurity requirements. And this is first time, right, if days rolling those out, we're going through those.

So that's taking a little bit longer, right, as they structure their questions back to us, and then we think we understand what they're asking right and respond. So that's just taking a few more iterations.

And then same thing for heart health, right? So working on firming up like the data that they need to see.

Luckily, we have a predicate device, right, that has come on to the market. So that's helping to clear some of their questions because they have something that they can refer to and help understand.

But yes, the message is that you heard about best-case scenario being end of the year is still our plan.

And my congrats to the good quarters. Maybe 2 or 3 questions here.

The first one is for the first quarter, the perpetual versus the subscription deals you have, particularly in the subscription deal, you have increased quarter-over-quarter compared to the last two quarters. Do you anticipate this trend to continue going forward?

And how would you see this dynamic?

Sure. Yale, we were up with 16 subscription deals.

It was a good quarter for subscription. It's still -- we'll have some ebbs and flows.

There's customers that prefer perpetual for one reason or another, for security or so forth. But we are trying to get more and more to a recurring revenue model organizationally.

So not only will be -- the team is pushing on the subscription side a bit, and they're comped that way to maximize our annual recurring revenue.

So the team is incented to push on subscription, as well as with our new cloud release in Q1, there'll be another opportunity for recurring revenue through the cloud model. So it will be both subscription and cloud pushed by the team.

It's hard to say exactly what the split would be going forward. But the team is incented to push on these recurring revenue deals.

Okay. Great.

And the next question is that in terms of the [indiscernible], the two-part question. First of all, first is this -- system is ready to go and then you can actually sign deals based on what you have right now or you're still improving?

And second, follow-up on that part is, that what might be the hurdles as you guys see it to evasion to get the first deal in this space closed?

So, yes, our ProFound Cloud is commercially available. So the sales team is actively selling it.

We already have our first deal on the cloud. It actually occurred in second quarter here, so it's why I didn't chat about it, but you'll hear a lot more right on our next earnings call.

Great. That's very helpful.

Congrats on that. Maybe the last question here is that I remember in the older days, and you guys are talking about seasonality in terms of the revenue quarter in the fourth -- four different quarters, some higher, some may be lower from that perspective.

Does that apply to nowadays? Or that's totally irrelevant now?

And thanks for taking the question.

So maybe I'll give my point of view, then Eric would love for you to chime in, especially if you have a different point of view. I think seasonality still applies.

And the primary driver of that is just the budget cycle. So many of our customers are on a calendar year budget.

So they tend to wait a bit until towards the end of the year, see budget remaining. I think there's also a bit of training, if you will, that's happened, especially in the software industry, where customers know the later they wait in the year, the better the deal they're going to get, right, because everybody is trying to capture as much business as possible.

So you can get into maybe better discount land, but the longer kind of you wait. So I think those two factors together just kind of drive this mindset.

So it's a little bit less about if I don't have it now, right, it is directly impacting my business, they can afford to wait a bit in their decision-making process.

Thank you, operator. In conclusion, I would just like to reiterate demand for our technology continues to be strong.

The evidence supporting it continues to grow, and our team continues to secure opportunities with some of the most prestigious and esteemed healthcare facilities worldwide.

I remain optimistic about the company and its future, and I firmly believe in the bright future of the company and our ability to generate significant shareholder value. Thank you, and hope each of you have a great day.