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Good morning, ladies and gentlemen, and welcome to the Strata Critical Medical Fiscal First Quarter 2026 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference call over to Matt Schneider, Chief Financial Officer of Clinical Services and Vice President of Finance and Investor Relations. Matt, you may begin.

Thank you for standing by, and welcome to Strata's conference call and webcast for the quarter ended March 31st, 2026. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement and safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q, each as filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences.

Any forward-looking statements provided during the conference call are made only as of the date of this call. As stated in our SEC filings, Strata disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical comparable consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the investor relations section of our website at ir.stratacritical.com. These non-GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP. Hosting today's call are our co-CEOs, Will Heyburn and Melissa Tomkiel.

I'll now turn the call over to Will.

Thank you, Matt, good morning, everyone. We're happy to report another great quarter with results ahead of our guidance for both revenue and adjusted EBITDA. Our 87% year-over-year revenue growth reflected organic growth of 32% in logistics, coupled with a particularly strong contribution from our new clinical business. The underlying strength of our transformed economic model is finally shining through as we began generating both operating cash flow and free cash flow before aircraft acquisitions this quarter. Our quality of earnings and cash conversion will only improve in the coming quarters as we clear the last remaining passenger divestiture-related outflows. We are more confident than ever, not just that the transplant ecosystem sees value in our platform, but that the capabilities we bring, captive nationwide logistics integrated with device-agnostic clinical support, are essential to solve the shortage of donor organs in this country.

Melissa will talk in more detail about some of the underlying trends driving our confidence in this area, but suffice it to say that the industry practices continue to move in our direction. On the M&A front, we're delighted to announce the acquisition of Ohio Valley Perfusion Associates. While small in size, this deal is perfectly aligned with and illustrates the potential of our M&A strategy. We operate in highly fragmented markets and can acquire businesses for mid-single-digit multiples of EBITDA that strengthen our existing business lines, position us for future growth, and provide cost efficiencies. The Ohio Valley transaction value is approximately $1 million, and we expect it to contribute approximately $100,000 of adjusted EBITDA for the remainder of this year.

As a reminder, the cardiac perfusion or other clinical vertical, as we call it, in which Ohio Valley sits, is a great complement to our transplant business, fueling our ability to hire and train the same perfusionists we utilize for NRP services while benefiting from recurring revenue through multi-year retainer contracts. Our capital deployment towards M&A is just getting started, and our pipeline remains very active. As we discussed last quarter, we have several opportunities currently under exclusivity across multiple business lines, including logistics, surgical recovery, placement, and cardiac perfusion. Some of these are smaller opportunities like Ohio, and some are larger bolt-ons that we project will generate low single-digit millions of adjusted EBITDA annually. We expect to reach the finish line on certain of these opportunities over the coming months.

We continue to find that we are the acquirer of choice for many business leaders in our area, specifically our kind of leaders, the ones that still have gas in the tank, are hungry to keep growing, but see a larger value creation opportunity by joining forces with our team, benefiting from our nationwide platform and competing at scale. We have significant balance sheet capacity to support this M&A strategy, including approximately $59 million of cash on hand, an undrawn $30 million asset-based lending facility that can be upsized to $50 million, and up to $45 million of contingent consideration from the passenger sale transaction that's payable over the next year, along with the underlying free cash flow generation of the business. With that, I'll turn the call over to Melissa.

Thanks, Will. We've made a great deal of progress this quarter building out our national footprint of aviation, ground, and clinical resources. This scale allows us to better and more efficiently service our customers and reduces costs for the transplant community. We acquired 1 new plane this quarter, providing us with a total of 10 owned aircraft and a dedicated fleet of approximately 35. We opened several new aviation bases in Q1 and now have roughly 20 logistics hubs around the country. We recently expanded into the Midwest, launching a new combined logistics and clinical base in the very strategic city of Chicago. This joint base allows us to best serve our new Chicago-based transplant center customers and creates more cost-effective options for all of our customers when recovering organs from donors throughout the Midwest.

On the broader transplant industry front, as Will mentioned earlier, the industry continues to embrace NRP and third-party surgical recovery, areas where we are a market leader, with data now showing NRP being performed on more than half of all DCD donors. Increased adoption of these practices has been a critical lifeline for the transplant community over the last several quarters, resulting in increased yields or usable organs per donor that have more than offset a reduction in the overall number of donors that began following the media and regulatory scrutiny in mid-2025. Though deceased donors were still down year-over-year in Q1 2026, we saw sequential improvement starting in Q4 2025 and larger sequential improvement in Q1 2026, putting us well above the lows of Q3 2025.

A return to growth in deceased donors is welcome news for the 100,000-plus patients on the transplant waiting list and for the broader transplant community, including service provider partners like Strata. As the industry has worked through this period of reduced donor volumes, another subtle shift has occurred. The recovery surgeon capacity that transplant centers used to keep in-house simply doesn't exist at the same levels anymore. Couple this with the increased recovery complexity associated with the industry's shift to DCD and NRP, and the old system of transplant centers using their own surgeons for recovery is maxed out. What's more, this is happening even at today's still depressed donor levels. Thankfully, we have the solution with local third-party surgical recovery. As we see continued normalization of donor volumes, this will only become a more critical and larger component of the organ transplant ecosystem.

This is good news for everyone because it is giving us an opportunity to make the process more efficient in partnership with the entire industry. Third-party recovery, like what Strata offers, enables surgeons to be dispatched from somewhere near the donor so they can spend more time recovering organs and less time sitting on airplanes. By using local surgeons, we can ensure that a DCD opportunity will actually result in viable organs before launching an airplane, significantly reducing logistics costs for dry runs, which can occur more than a quarter of the time in DCD recoveries. The evolving system driven by third-party recovery, NRP, and machine perfusion is making the whole process more efficient and fueling the next leg of growth in transplants for all that desperately need them.

Given the trends we've been discussing here, it should come as no surprise that our clinical division posted especially great results this quarter, with growth driven by continued new customer acquisitions across both NRP and surgical recovery, as well as higher volumes within our existing customer base. We started providing NRP services to a new OPO in the Pacific Northwest during Q1, and we onboarded new transplant center clinical customers, several of which are existing logistics customers, illustrating some early cross-sell wins. There is more work to do integrating our placement, clinical, and logistics service offerings, but we have multiple end-to-end customers in the pipeline, customers that will utilize our entire suite of transplant service offerings.

We remain well-positioned to provide these critical services to the transplant community, given our dedication to clinical excellence, geographic scale, and a technology and reporting platform that ensures strict compliance with national protocols and standards. On the regulatory front, we continue to see increased scrutiny around certification and qualification standards for donor surgeons, both abdominal and thoracic. This is an important and expected evolution as the field matures and scales. It is important to emphasize that in anticipation of this, we have designed our recovery service line to be forward-compatible with formal certification requirements and are actively expanding capacity to meet both current and anticipated demand. We have a growing pipeline of licensed surgeons, and we are deliberately building additional depth. In parallel, we have initiated development of a dedicated training pathway for thoracic donor recovery and NRP, drawing from a pool of already highly qualified surgeons.

As the field gains broader recognition and demand increases, we believe this structured approach to training and credentialing will be essential to ensuring quality, consistency, and scalability. We remain focused on several key value drivers, including strengthening our national organ recovery platform, acquiring new customers across all businesses, optimizing the profitability of our existing operations, and executing on our M&A strategy. As you can see from our financial performance to date, we're making excellent progress on all of these initiatives. With that, I'll turn the call back over to Will.

Thank you, Melissa. We'll now turn to the financial results for the quarter. Total revenue increased 87.4% to $67.4 million in Q1 2026 versus $35.9 million in the prior year period and increased approximately 1% sequentially versus Q4 2025. Logistics revenue, which represents the company's organic growth excluding Keystone, increased 32.4% to $47.6 million in the current quarter versus $35.9 million in the prior year period, driven primarily by higher air revenue, where both new and existing customers contributed to the strong performance in the period. Logistics revenue fell 3.3% sequentially versus Q4 2025 as customer mix drove shorter trip distances and winter storms resulted in the closure of key airports for several days during the quarter.

Clinical, which did not exist in the prior year period, saw revenue increase 12.7% sequentially to $19.8 million in Q1 2026 versus $17.6 million in Q4 2025, driven primarily by transplant clinical revenue, which rose 26.7% sequentially, driven by both NRP and surgical recovery services. As mentioned earlier, new customers in both of these areas contributed to the results in the quarter. Other clinical revenue rose 1.6% in Q1 2026 sequentially versus Q4 2025. Gross profit increased 100% to $14.1 million in Q1 2026 versus $7.1 million in the prior year period, driven by growth in logistics and the addition of our clinical business through the Keystone acquisition.

Gross margin increased approximately 140 basis points year-over-year to 21% versus 19.6% in the prior year period, driven primarily by the positive mix impact from the Keystone acquisition, partially offset by a modest decline in logistics gross margins. Logistics gross profit, which represents the company's organic growth excluding Keystone, increased 29.9% to $9.2 million in Q1 2026 versus $7.1 million in the prior year period. Logistics gross margin of 19.3% in Q1 2026 decreased 30 basis points versus 19.6% in the year ago period and decreased 220 basis points versus 21.5% in Q4 2025, both driven primarily by customer mix. As discussed earlier, we saw a customer mix shift to OPOs during the quarter that have shorter trip lengths.

This dynamic contributed to the logistics gross margin softness in the quarter as OPOs are typically lower margin versus transplant centers due to shorter trip lengths and the aircraft types that are used, small jets and turboprops. Quarter-to-quarter customer mix shifts are a normal part of the business, and we don't anticipate any structural mix shift to OPOs versus transplant centers. Clinical gross profit rose 29.2% sequentially to $5 million in Q1 2026 from $3.8 million in Q4 2025. Clinical gross margin rose to 25% in Q1 2026 versus 21.8% in Q4 2025, primarily due to margin improvement in and a mix shift towards transplant clinical revenue. Given the noise associated with last year's transactions, year-over-year comparisons of SG&A are not particularly meaningful.

Instead, looking sequentially, adjusted SG&A increased $0.3 million to $9.2 million in Q1 2026 versus $8.9 million in Q4 2025. We continue to take a disciplined approach to SG&A. The modest increase in adjusted SG&A sequentially was driven by investments in resources and infrastructure to support growth in the business. Similarly, year-over-year adjusted EBITDA comparisons are not illuminating. Looking sequentially, adjusted EBITDA fell to $6.4 million in Q1 2026 versus $7 million in Q4 2025, driven by a 90 basis point reduction in adjusted EBITDA margin to 9.5% in Q1 2026 versus 10.4% in Q4 2025, consistent with our guide for an approximate 1 point decline sequentially. The 90 basis point decline in adjusted EBITDA margin versus Q4 2025 was driven by the reduction in gross margin and slight increase in adjusted SG&A we discussed previously.

Operating cash flow was $3.9 million in Q1 2026, and the $2.5 million difference between adjusted EBITDA and operating cash flow was driven by approximately $1 million of income statement adjustments and a $1.5 million increase in working capital, which was primarily a function of incentive compensation payments that are accrued throughout the year but paid in Q1. Capital expenditures of $5.5 million in Q1 2026 were driven primarily by the $3.7 million dollar acquisition of one aircraft along with aircraft capitalized maintenance. Free cash flow before aircraft and engine acquisitions was $2.1 million in Q1 2026. We're encouraged by the cash generation in the quarter, especially considering the non-recurring cash items that burden cash flow along with the timing of annual incentive compensation payouts during the quarter.

We ended Q1 2026 with $58.8 million in cash and short-term investments. We continue to expect to receive Joby earn-out payments related to our passenger divestiture of approximately $45 million. Up to $17.5 million of this earn-out would become due at the end of August based on Blade's financial performance post-close. The balance, which would become due in March 2027, is based on the retention of former Blade employees who transfer to Joby and is largely hedged by our ability to recover stock from those employees if they do not fulfill their obligations. Note that the value of those shares is held as a liability on the balance sheet today and will be revalued based on the current share price each quarter flowing through the income statement.

Finally, as a reminder, if Joby elects to make the earn-out payments in the form of Joby stock, the number of shares will be determined at the time the earn-out is earned, not based on a historical Joby stock price. We would also like to note that the 14 million warrants issued as part of our 2021 going-public transaction are set to expire tomorrow according to their terms. The exercise price of the warrants is $11.50. Moving to the outlook, revenue is printing above the midpoint of our guidance range, partially due to higher than anticipated fuel surcharges for the remainder of the year. On logistics gross margins, there are several key drivers in a given quarter, including the mix between air capacity types, own fleet uptime, customer mix, and the timing of contractual pricing escalators or contract renewals that include cost increases.

For the rest of the year, we expect logistics gross margins to remain in the 20% range as we anticipate higher fuel surcharges along with the impact of customer mix that we have limited visibility into quarter-over-quarter. As we discussed, clinical gross margins were very strong in Q1 2026, and while they might not stay at 25%+ each quarter, clinical gross margins are trending above expectations given the mix shift to transplant clinical. Lastly, the contribution from Ohio Valley Perfusion is limited for the remainder of 2026, as we mentioned earlier. We are reiterating all aspects of our 2026 guidance, including revenue of $260 million-$275 million, adjusted EBITDA of $29 million-$33 million, and free cash flow before aircraft and engine purchases of $15 million-$22 million.

For the second quarter, we expect revenue to increase in the low single digits sequentially. Adjusted EBITDA margin is expected to improve to approximately 10%. In summary, we're very happy with the performance of the business and we see significant value creation potential ahead through organic growth and executing on our M&A strategy. We're participating in several investor conferences over the next few weeks, including Craig-Hallum's Institutional Investor Conference, B. Riley's Investor Conference, William Blair's Growth Conference, and a non-deal road show with Lake Street. We hope to see many of you at these upcoming events. With that, I'll turn it back to the operator for Q&A.

As a reminder, to ask a question, simply press star one one to get in the queue. To remove yourself, press star one one again. One moment for our first question. It comes from the line of Bill Bonello with Craig-Hallum. Please proceed.

Hey, guys. Thanks so much for taking my call. A couple of things real quick. You talked about onboarding some of your transplant center logistics customers as clinical customers, which was great to hear. I think last quarter you had talked about a lot of the logistics growth sequential being driven by, you know, capturing some of the Keystone customers. Is that trend still continuing?

Hey, Bill. Thanks for the question. It's Will here. Yes, we continue to get an extremely high percentage of the clinical cases where we're performing services, having those customers use our logistics. You know, I think there was an initial step-up of that after we closed the Keystone transaction. You're not gonna see a big step-up like that again because we do believe we're capturing all that, but you will continue to see that benefit the logistics business as the clinical business continues its slightly faster growth.

Yep. Okay. That's really helpful. Just one other thing. I'll hop back in the queue. Curious on Chicago. Is there anything you can sort of extrapolate from prior market expansions in terms of how adding a new base impacts growth in that area?

You know, this is a unique one for us because it is a combined clinical and logistics base. It gives us a lot of flexibility in an area where, frankly, we had more limited capabilities historically. You know, now we'll be able to have airplanes on standby for organs that are being recovered in that area. We'll be able to dispatch surgeons locally for organs that are going to be recovered in that area. Also we'll be able to fly out perfusionists and surgeons from that Chicago hub to anywhere in the area if it's not within driving distance. There's a lot of new capabilities.

You know, we've been able to do that in a number of other areas for a period of time, but it does allow us to cover a large part of the country that we haven't been able to cover very well previously.

Okay. Thank you very much. Appreciate it.

Thank you. Our next question comes from the line of Yuan Zhi with B. Riley Securities. Please proceed.

Thank you for taking our questions, and congrats on a strong quarter. Maybe a first question to Will. If the oil price stays at this high level, can you give more details about how this oil price will impact your top line and bottom line?

Yes. Hi, sure. This is Melissa. We build into our logistics contracts a fuel pass-through above a certain threshold, which most of our customers have already been at prior to these most recent increases. This happens on a trip-by-trip basis. As we incur cost for fuel, that is passed through to the customers, and we provide them with the fuel invoices for each trip. There's full visibility there. We're always trying to minimize the cost for our customers, which is why we're building out this national infrastructure to have planes strategically located throughout the U.S., which will reduce repositioning of those planes, which drives that fuel cost. It doesn't have that much of an impact on our business.

Got it. I think, maybe just to follow on the prior questions, I see you guys have a update on the regional hub chart. I'm just curious about your thinkings behind what are the required criterias or thinking behind entering a new market in the U.S.?

We are responsive to our customers' needs. Our value proposition is to be able to offer dedicated capacity with aviation assets to our customers. We picked up some new customers in Chicago, and we immediately were able to relocate, or provide additional resources in that region. Because we know that the most efficient way we can provide the service is by having those locally based surgeons and aviation assets.

I would point out that those new customers in Chicago are not yet flying. We're expecting that in the back half of the year, but we're already using that hub to support our existing customers in the region.

Got it. My last question is related to ongoing clinical trials in the transplant space. There are several clinical trials ongoing involving specialized medical device for organ transportation. I wonder, do you see logistics associated with those activities have a higher margin or higher revenue versus, you know, the routine procedures?

You know, with our agnostic philosophy, our relationship is with the customer, the transplant center or the OPO, we're not charging them anything different based on what device they may or may not be using. Our goal is to support all of our customers with any clinical decision they might make and any medical device they might wanna use, whether that's a device that's already certified or whether that's a device that's going through a clinical trial in which they're participating. You know, don't think that that'll have much impact on us one way or another, because if you recall, our contracts simply say that we're gonna do 100% of the flying that that customer is gonna do, and that would be inclusive of that kind of work.

Got it. Thanks for taking all our questions. I will hop back into the queue.

Thank you. As a reminder, to ask a question, simply press star one one to get in the queue. We have a question from Benjamin Haynor with Lake Street Capital Markets.

Good morning. Thanks for taking the questions. First off, for me, just on becoming kind of the acquirer of choice in the space, just curious on what folks are looking for in terms of structure on some of these acquisitions. I mean, is it going to be typically an upfront cash payment? Is it the guys with gas in the tank or gals with gas in the tank want sort of earn outs, equity? How broad is the structure spectrum of these acquisitions that you're looking at?

Well, it will vary on a case-by-case basis, but, you know, we are flexible. What we are seeing, with the structure, there's not just, you know, one formula. What we're seeing, though, with the, you know, the companies that we're speaking to partner with, is a lot of excitement on their end to partner with us, knowing that, you know, together we're going to have a larger footprint, and we're gonna have more resources. They, you know, they wanna participate in the upside, which is why we do tend to discuss structures that will involve some equity component. There's just a lot of excitement in the space and the belief that partnering with us as a strategic is a much better outcome for those companies.

I think, you know, we do have a little bit of an advantage when we're, you know, being considered versus a private equity acquirer because it's just a simpler structure that we can offer relative to maybe a less transparent incentive plan structure. You know, it's publicly traded equity. They can see what it's worth. You know, they have a little more confidence that it could lead to liquidity down the line. I think that's been a nice benefit for us and also just our strategic approach. You know, really what we see as an advantage with these acquisitions is building on our platform and our capabilities versus, you know, the financial arbitrage of it is secondary to the strategic benefit that we see. I think that entrepreneurs really appreciate that mindset.

Strategic benefit in saying alignment will match up and/or thoughts from both of you. Got it. Then on the organ recovery hubs getting up to 13, I guess over time, where do you see that ultimately going? You know, is that something that you wanna get more of them sooner rather than later? How do you see that kind of tracking over time?

As Melissa said, it's really driven by our customers. You know, if we have a customer that can support a new hub, that is usually the first step in us feeling like we have enough demand for flight hours that we can justify the presence of an airplane there. It's also a tremendous benefit to that customer because again, as Melissa pointed out, you know, the best way we can make their costs more efficient and reduce things like fuel costs is to not fly unnecessary repositioning flights. That's why our strategy, which I think our customers has have appreciated, is always to put airplanes either at the home airport that they're going to depart from or as close to there as possible.

Yeah. Specifically on the clinical side, there's, you know, there is opportunity there. You know, there are very strategic regions that we have not yet expanded into, you know, that we're looking to do so, you know, over the next, yeah, several quarters.

Ben, this is Matt. I would just encourage you to look at our investor presentation that has an updated map of all the hubs. There's a lot of white space still out there, particularly in the West and Southwest. I think that's important just to think about geographically. We have a very strong footprint on the East Coast and, you know, we're kind of filling that in over time. We're doing so, you know, based on demand and where we see, you know, customers looking to expand their relationship with us. It, it's really contingent. It's paced by that, but there's a lot of opportunity to grow from here.

Yes, that makes sense. Excellent. Well, that's all I had. Congrats on the quarter and the progress.

Thanks, Ben.

Thank you.

Thank you. One moment for our next question. It comes from Bill Bonello with Craig-Hallum. Please proceed.

Hey, guys. Thanks for allowing me to follow up with one more. The donor metrics, as you discussed, all look, you know, really strong. One item that did stand out to us, you know, as maybe a little bit less positive, was, you know, a modest reduction in average transport distance. Just curious if you have any thoughts on, you know, if there's anything structural or what might be driving that or if it's just normal variability. I'm pretty sure you said this, but I just wanna confirm that the logistics mix shift to OPOs is just normal quarter-to-quarter variability.

Hey, Bill, this is Matt again. You know, I think quite the opposite in terms of our view, and we talked about this at Investor Day and the last few times, we all got together, you know, about a continued increase in the distance organs are traveling over time, driven by several factors, including regulatory change in terms of organ allocation policies. Over the last five years, you've seen about a 60% increase in the distance organs are traveling. Any given quarter, it could move around depending on our customer mix. We don't have great visibility into a particular mix of customers in a given month or quarter, but we are confident over time in the distance increasing.

Okay. Even at the macro level, what we saw most recently, just think of that as kinda normal variability.

I think what we saw in the quarter was really our customer mix. I think that's the way to think about it.

Although I think the industry saw the same thing.

Well, yeah, industry saw the same thing. Thanks, but thanks, Will. That's okay. We can follow up offline.

Great. Thanks, Bill.

Thank you. Our last question comes from the line of John Hickman with Ladenburg Thalmann. Please proceed.

Hi. Could you, Will, could you elaborate a little bit on the weather, the effects of the weather during Q1?

Yeah. Really, this was pretty unusual in that we had particularly Teterboro, where we have a number of airplanes based, the airport was actually closed for several days.

Yeah

during the quarter. You know, I don't wanna overemphasize the impact of that because transplant centers are nimble. You know, they'll try to reschedule cases. They'll push things back. They'll pull things up. I do think a lot of cases still get done. You know, certainly if you have multiple days in a quarter where you can't fly the airplanes, there's some impact there.

Okay

wouldn't say it was a determinative impact.

Okay. Could you elaborate a little bit on your comments about SG&A going forward? You said, like, the adjusted SG&A was $9.5 million. Can you give us some idea of what you expect growth going, you know, the rest of the year?

Yes. The adjusted SG&A, this is Matt, it was $9.2 million in the quarter. You know, I think you really have to look at just given all the changes, the divestiture, the acquisition of Keystone, our clinical business, really look at the last two quarters as the baseline. You saw a modest increase, about $300K sequentially. That's the base. Our guidance implies a modest increase from these levels throughout the rest of the year, really just to support growth in the business, so adding some staff and infrastructure across the businesses to really support that growth. I think you, we should look at it.

It makes sense to look at it sequentially versus the fourth quarter, first quarter going forward throughout the rest of the year.

Yeah. Okay. Modest growth. Okay. Thank you. Congratulations on the quarter.

Thanks, John.

Thank you. This concludes my Q&A session. I will pass it back to Matt for any additional comments.

We would like to take 1 question we got from retail investors that we ask what they're thinking about each quarter. We got a question on the transplant industry growth and if we expect it to improve this year. I think the important thing to think about here is we've seen an improvement in deceased donor activity over the last few months. Deceased donors slowed down really in the second half of the year, they picked up a bit in the fourth quarter more meaningfully in the first quarter, following some regulatory media scrutiny in the first half of 2025. Transplant growth has also re-accelerated from a low single-digit rate to the mid-single digits in the first quarter.

This is really in line with our guidance. If you recall, we assumed transplant industry growth would moderate towards this mid-single digit level, in line with what we saw last year as a result of the slowdown in deceased donors. It's very much in line with our guidance. If we do see a continued recovery of deceased donors, we think there's upside to the number of transplants, which is great for the community, for everyone on the transplant waiting list, but we're not underwriting that in our guidance.

Thank you. Ladies and gentlemen, this concludes our conference. Thank you for participating, and you may now disconnect.

Good morning, ladies and gentlemen. And welcome to the Strata Critical Medical, Inc. Fiscal Fourth Quarter 2025 Earnings Release Conference Call. At this time, participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference call over to Matthew Schneider, CFO of Clinical Services and Vice President of Finance and Investor Relations. Matthew, you may begin.

Thank you for standing by, and welcome to Strata Critical Medical, Inc.'s conference call and webcast for the quarter ended 12/31/2025. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement and safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q, each as filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are made only as of the date of this call. As stated in our SEC filings, Strata Critical Medical, Inc. disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. Reconciliation of the most directly historical comparable consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the Investor Relations section of our website at ir.serratacritical.com. These non-GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP. Hosting today's call are our Co-CEOs, Melissa M. Tomkiel and William A. Heyburn. I will now turn the call over to Melissa.

Thank you, Matt, and good morning, everyone. This was a fantastic quarter for Strata Critical Medical, Inc. Delivering excellent results and supporting our strong confidence in the future. In Q4 specifically, our organic growth of 35% was well ahead of our expectations, and led us to a full-year result that beat the high end of our guidance on all fronts. Given the strength we saw in Q4, strong volumes have continued into 2026 and additional new customer wins, we are also raising our guidance for the full year 2026 on both revenue and adjusted EBITDA. Continued acquisitions of smaller businesses operating directly in our areas of expertise are a key part of our strategy to accelerate growth and geographically expand our network while they seamlessly integrate into our existing business platform. We have multiple additional active opportunities and believe that our continued successful execution of this M&A strategy will accelerate our annualized adjusted EBITDA growth at least 30% throughout the coming years. This period marks our first full quarter with a singular focus on medical and our first full quarter with Keystone, and I am happy to report that we are off to a great start. Importantly, we are capturing a larger share of logistics services for transplant clinical cases, and this contributed to the logistics strength in the quarter. More than 40% of our sequential logistics revenue growth in Q4 versus Q3 was generated from Keystone's legacy customers, demonstrating the value of our full-stack one-call offering. Operationally, the teams are working very well together and also taking on broader responsibility across the Strata Critical Medical, Inc. organization. To that end, we are excited to announce an expanded role for Dr. Scott Silvestri, who was Keystone's Surgical Director, as Strata Critical Medical, Inc.'s new Chief Medical. Dr. Silvestri brings decades of experience leading transplant and cardiac surgery programs and is an industry leader in the area normothermic regional perfusion. We are very lucky to have Scott on the Strata Critical Medical, Inc. team, and under his surgical leadership, we have already begun rolling out new capabilities to our customers, most importantly, our expanded abdominal organ recovery platform. On the regulatory front, we are encouraged by the actions taken by government agencies over the last few months. It is clear that our approach is aligned with the regulators' goals of restoring trust in the transplant system, improving patient safety, and increasing the number of transplants in the most efficient manner possible. Strata Critical Medical, Inc. is incredibly well positioned to help the industry accomplish these goals. For example, in proposed rules from the Centers for Medicare and Medicaid Services, OPOs would now be incentivized to pursue medically complex organs, particularly those resulting from DCD donors. Historically, only some OPOs have been hyper-focused on utilizing technology to increase yields and pursue DCD or marginal organs. Others have been slower to embrace these new opportunities. Rules designed to incentivize more DCD donors are a clear positive for Strata Critical Medical, Inc., given our reputation as a leader in the recovery and transportation of all organ types and our unique expertise in DCD recovery. We are also very well positioned from a regulatory perspective in terms of our customer base, which is over-indexed to larger, more sophisticated transplant centers and Tier 1 OPOs that are being held up as the gold standard under new and proposed regulations. Approximately 20% of Strata Critical Medical, Inc.'s revenue is generated from OPOs, with Tier 3 OPOs, the lowest ranked, which could potentially be absorbed by larger OPOs under proposed regulations, representing less than 5% of our revenue, while our Tier 1 OPO customers represent 2.4 times the revenue of our Tier 3 OPOs. In the past quarter, these regulations directly resulted in new business for us when an underperforming OPO was decertified and absorbed by one of our existing OPO customers. Importantly, the cost intensity of organ transplant is rising, as the transplant community has innovated to identify, recover, and transport organs from DCD donors, which naturally have a higher cost profile compared to organs from DBD donors. Strata Critical Medical, Inc. is incredibly well positioned to help the transplant community reduce costs in DCD donation via the utilization of our expanding regional network of logistics bases and organ recovery hubs, and through the use of normothermic regional perfusion, which offers substantial cost savings versus alternative recovery methods. NRP delivered locally, exactly the way we do, is the best answer to pursue DCD organs more aggressively and reduce costs. Before I hand it over to Will, I wanted to touch on our aircraft fleet. We ended the year with a fleet of approximately 30 dedicated or owned aircraft. During the quarter, we discovered corrosion on one of our owned aircraft and made the decision to part out the aircraft and utilize the engines to reduce future engine overhaul costs rather than invest in costly repairs. While the book loss on the aircraft was $1.7 million, we estimate the economic loss at approximately $400,000. We have completed comprehensive G inspections on two-thirds of the remaining owned fleet over the last two years and have not identified any similar issues. Looking forward, we are excited to report that we have won customers in some new geographies, which we expect to begin servicing in 2026. We expect to add around two new owned aircraft to our fleet this year to better support these new regions, both for the new accounts and for existing customers that might be flying in those areas. We already acquired one aircraft during the first quarter, which is now in the conformity process. We continue to believe that we have struck the right balance with regards to our asset-light strategy. The vast majority of our flying is on third-party aircraft and will remain that way. At the same time, owning a small portion of our capacity has unlocked new business, provided important leverage in negotiations for third-party aircraft, and enhanced margins. It also allows us to strategically build out our national footprint. With that, I will turn the call over to Will. Thank you, Melissa.

We continue to demonstrate our ability to achieve and exceed the ambitious goals we set for ourselves, both for organic growth, which at 35.3% this quarter was well ahead of our targets, as well as for our M&A platform. And we are just getting started. We are working diligently towards closing several additional opportunities currently under exclusivity that are operating directly in our core competency areas and are actionable at mid-single-digit multiples of adjusted EBITDA. We expect that our successful continued execution on these acquisition opportunities will significantly accelerate our growth trajectory, enabling us to maintain an average annualized adjusted EBITDA growth rate of at least 30% over the coming years. This is a significant increase from the organic-only high-teens midterm adjusted EBITDA growth that we discussed at Investor Day, demonstrating our increasing confidence in our ability to deploy capital. To support this M&A platform, in February, we announced closing of a $30 million asset-based credit facility with J.P. Morgan, with the ability to upsize to $50 million. Importantly, our aircraft remain unencumbered, creating additional future financing opportunities as needed. This facility remains undrawn but provides important flexibility for future acquisitions. We also expect to support the acquisition strategy with Joby earn-out payments of up to $45 million related to the sale of Blade, our former passenger business. Up to a $17.5 million portion of the earn-out will become due in August, which is based on Blade's financial performance post-close, and we are encouraged by the results Joby has released to date. The balance, which will become due in March 2027, is based on the retention of former Blade employees who transferred to Joby and is largely hedged by our ability to recover stock from those employees if they do not fulfill their obligations. Finally, as a reminder, if Joby elects to pay in Joby stock, the number of shares will be determined at the time the earn-out is earned, not based on a historical Joby stock price. On the strategic partnership front, our device-agnostic strategy is working, and it is resonating with both current and prospective customers. Our willingness and ability to always support our customers' clinical decisions regarding device usage as well as our capability to fly these devices when possible has helped to attract new customers to the Strata Critical Medical, Inc. platform, and we are encouraged by the recent approval of yet another new machine perfusion device and the long pipeline of devices that are currently in clinical trials. As we like to say around here, we still believe that the customer is always right. We also continue to explore opportunities to leverage our existing assets and infrastructure to expand into adjacent offerings. While not material to the overall business at this point, we are now flying radiopharmaceuticals nearly every week as part of a pilot program. We have utilized existing personnel and resources for this program to date and will continue to monitor progress to determine if it makes sense to invest further, but we are encouraged at the positive reaction we have received in the market to date. We will turn to the financial results now. But before we dive in, let us review a few reporting changes we have introduced this quarter. Starting at the top of the income statement, we will now disaggregate revenue across three business lines. Logistics revenue is comparable to the medical revenue we disclosed before the Keystone acquisition and represents Strata Critical Medical, Inc.'s organic growth. Note that logistics revenue includes air and ground logistics along with our organ placement business, which we market as TOPS. Transplant clinical revenue includes clinical revenue generated from transplant customers, including NRP, surgical organ recovery, product sales, and other related services. Other clinical revenue includes clinical revenue generated from cardiac surgery departments within hospitals, including perfusion services, autotransfusion, ECMO, product sales, and other related services. Moving down the income statement, we will now report two segments: Logistics and Clinical, which represents the sum of transplant clinical and other clinical, all businesses that we acquired with Keystone. We have shifted away from the non-GAAP flight profit metric utilized by our divested passenger business and have migrated to the more traditional measure of GAAP gross profit as our segment profitability metric. As a result of this change, we shifted some costs from SG&A to cost of sales in our logistics business, which has no impact on adjusted EBITDA but results in logistics gross margins that are approximately 200–250 basis points below the previously reported medical flight margin metric. We will now report both logistics and clinical gross profit to provide insight into fundamental trends of the business. As we previously discussed, given our now consolidated corporate structure focused entirely on medical, we will no longer report SG&A by segment or unallocated corporate expenses. Instead, we will break out our SG&A into seven categories available in the MD&A, which we expect will be more helpful in understanding the cost drivers of the business. Finally, as a reminder, our P&L reflects continuing operations only, as the results of the passenger business that we divested in August 2025 have been reclassified as discontinued operations for all periods. The cash flow statement and balance sheet, however, continue to include discontinued operations in historical periods, the impact of which is highlighted. Moving now to the financial highlights from the quarter. Full-year 2025 revenue and adjusted EBITDA of $197.1 million and $14.1 million, respectively, both beat the high end of our guidance range, driven by a strong Q4 that was ahead of expectations. Q4 2025 revenue of $66.8 million was driven by logistics growth, which is organic, of 35.3% to $49.2 million in the quarter versus $36.4 million in the prior year. Air logistics strength was supported by new customers, existing customers, and a higher logistics attachment rate for our transplant clinical customers. Clinical revenue was $17.6 million in the current quarter versus $2.8 million in Q3 2025, which reflects the mid-September 2025 close of the Keystone acquisition. Compared to historical unaudited financial results in prior periods before the Keystone acquisition closed, clinical revenue grew strongly in the mid-double digits year over year, and mid-single digits quarter over quarter. Within clinical, transplant clinical revenue was $7.8 million in Q4 2025, and other clinical revenue was $9.8 million in Q4 2025. Compared to historical unaudited financial results in the prior year, before the Keystone acquisition closed, we saw significantly faster growth in the transplant clinical business line. This strong clinical growth continued despite industry regulatory and media scrutiny in 2025, which resulted in a flattening of U.S. organ donors and NRP donors. As Melissa mentioned earlier, we are encouraged by recent regulatory updates. While we have not yet seen a pickup in industry data for overall donors, we have seen a recovery in NRP donors in recent months. New customer acquisitions continue to drive growth in other clinical revenue, and there is a significant opportunity to continue to acquire new cardiac perfusion customers given our strong value proposition and relatively low market share. Gross profit increased 90% to $14.4 million in the quarter, versus $7.6 million in the prior-year period, driven by organic growth and the Keystone acquisition. Gross margin increased approximately 80 basis points year over year to 21.6% versus 20.8% in the prior-year period, driven by higher logistics gross margins and the positive mix impact from the Keystone acquisition. Logistics gross profit, which represents Strata Critical Medical, Inc.'s organic growth, increased 39.5% to $10.6 million in Q4 2025 versus $7.6 million in the prior-year period, driven by strong revenue growth and an approximate 70-basis-point increase in gross margin to 21.5% versus 20.8% in the year-ago period. Clinical gross profit was $3.8 million in Q4 2025. Adjusted SG&A rose to $8.9 million in the quarter, versus $7.5 million in Q3 2025, which largely reflects a full quarter of Keystone SG&A. Adjusted EBITDA rose to $7.0 million in Q4 2025, up from $1.1 million in the year-ago period and $4.2 million last quarter. Adjusted EBITDA margin rose to 10.4% in Q4 2025. Note that the year-over-year adjusted EBITDA comparison will not be particularly meaningful until we lap the passenger divestiture in Q3 of this year, given significant cost savings realized during the sale that are not reflected in the prior-year results. Operating cash flow was negative $8.3 million in Q4 2025. The $15.3 million difference between adjusted EBITDA and operating cash flow was driven by $9.6 million of nonrecurring items, including a legacy legal settlement which we disclosed last quarter, residual transaction costs, and other nonrecurring items, along with approximately $5.7 million in working capital, which was driven in part by delays in collections during our back-office integration, which we expect to normalize in the coming quarters. Additionally, the logistics business saw significant growth into year-end, contributing to the working capital build. Capital expenditures, inclusive of capitalized software development costs, were $2.0 million in the quarter, driven primarily by capitalized aircraft maintenance and ground vehicle purchases. We ended the quarter with no debt and approximately $61.0 million of cash and short-term investments. Moving to the outlook. Given the stronger-than-expected volume growth in Q4 that has persisted into 2026, along with the expected onboarding of new customer wins in the second half of the year, we are raising our 2026 revenue guidance range to $260–$275 million from $255–$270 million previously. We are also raising our adjusted EBITDA guidance range to $29–$33 million versus $28–$32 million previously. We are reiterating our free cash flow before aircraft and engine purchases guidance of $15–$22 million. For comparison purposes, assuming we closed the Keystone acquisition at the 2025, the company would have generated revenue of $243 million, while we estimate our adjusted EBITDA was consistent with the pro forma range we provided at the time of the acquisition. In the first quarter to date, we have seen continued strength in daily logistics trips as well as clinical cases despite a soft January for the industry. However, we have seen a slight mix shift to shorter air trips so far this quarter, and separately, we did have several days where our Northeast fleet was grounded due to winter storms. We put this in the category of normal ebbs and flows of both the industry as well as our specific subset of customers. As such, we expect a modest sequential revenue decline in Q1 2026 versus Q4 2025. On the profitability front, we expect adjusted EBITDA margins to decline approximately 100 basis points sequentially in the first quarter driven by this lower revenue. We do expect to see a sequential improvement in revenue and margin in the second quarter as well as in the back half of the year, boosted in part by expected new customer additions. In summary, we are thrilled with our progress after our first full quarter operating the now fully integrated organ transplant platform. We are getting great feedback from customers. Our financial results are exceeding expectations. We are even seeing smaller competitors proactively reaching out, hoping to join forces and thus enhancing our already strong acquisition pipeline. The best is yet to come, and we look forward to continuing to achieve and exceed our goals in the months and years ahead. With that, I will turn it back to the operator for Q&A.

Thank you. Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Yuan Ju with B. Riley. Your line is now open.

Good morning. Congratulations on a strong quarter. My first question is around regulatory policy. Can you please remind us or give us an update on the continuous distribution policy? Who are the stakeholders opposing this continuous distribution policy and why? And then why lungs are approved earlier than other organs?

Thanks for being on the call, and I appreciate the question. So continuous distribution is still the goal for all organs. As you pointed out, lungs have already transferred over to that, and we are seeing a lot of positive results, both for the number of organs that can successfully match to the people who need them the most and also, as it relates to our business, we are uniquely able to handle those longer trips for our customers. As it relates to the transition for hearts and livers, we did see at the beginning of this year a deprioritization of that process as regulatory agencies focus on some of the more pressing issues that were raised by the media over the last six to twelve months. We have seen a lot of progress on those fronts with new proposed rules coming out of CMS and coming out of OPTN. But we do not have a certain timeline as to when they will move that continuous distribution transfer back to the front burner again. We do know that that is the end goal. And once things get started, we would expect to see at least a six-month comment period, and OPTN has been very clear that they would like to gradually transition from the current acuity circles model to continuous distribution over a period of about a year once that rule is set up. In terms of stakeholders that are opposed to it, I do not know if I would characterize it as opposition, but there are certainly folks that want to make sure everybody is ready for what will be a more logistically challenging process when you move to a true national organ allocation program. We are very well positioned to help the entire industry support what is a more efficient way to get organs to the people that need them. Of course, we want to proceed carefully because some transplant centers and OPOs might not have the right partners like Strata Critical Medical, Inc. to enable them to hit the ground running with a new policy like this.

Got it. Thanks for the helpful color. If we break down this transplant value chain which part of the service has the highest value and margin and what is the percentage of your customers using your full-service portfolio?

You know, we gave gross profit by segment, both logistics and clinical, this quarter, and you will see that on a blended basis, the profit margins are very similar. You do tend to see in the transplant clinical business slightly higher profit margins than the non-transplant clinical business. We are already seeing a lot more of those legacy Keystone customers, our clinical customers today, see the value in an integrated offering and start to use logistics. We talked about how about 40% of our sequential growth in logistics this quarter was driven by more business from those clinical customers. And oftentimes, it is not just a convenience decision for the customer. We are able to harmonize the departure location where our aircraft assets are located and where the clinicians and equipment are located that are performing that clinical procedure. It will save the customer money to use those integrated solutions together. So the next phase for us is to try to convert more of those clinical customers to contracted logistical customers and vice versa. We have already added a lot of our logistics customers onto rate cards that enable them to use our clinical services. But as we have talked about a lot, clinical services when purchased by transplant centers tend to be a little more ad hoc. So we are going to give it a few quarters to see what the uptick is, but we are really happy that many of our customers have reached out to get the contracts in place to be able to use both sets of services.

Got it. Thanks for taking our questions. I will jump back to the queue.

Thank you. Our next question comes from the line of Benjamin Haynor with Lake Street Capital Markets. Your line is now open.

Good morning, folks. Thanks for taking the questions. First off for me, just on the acquisition pipeline, as these opportunities become available, do you expect to be announcing them as they occur? And then as it applies to kind of the adjacent offerings, I would imagine there are also some acquisition candidates that you would have there. Or is that more something that you would think about doing de novo, like with the radiopharmaceuticals?

Well, our first and foremost focus as far as our acquisition pipeline is on the product service that we currently offer. And we are doing that because we want to increase our scale and national footprint because that provides a more cost-efficient and time-efficient solution for our customers. So we do plan on announcing as we close on acquisitions. Hopefully, there is some news in the coming months. As we have mentioned, we do have a robust pipeline that we are working through. And we are very excited about all the opportunities that are out there that we are seeking through partners, like with Keystone in the past and Trinity before them, who are trusted and have credibility and enhance our service offering. As well as, you know, Will mentioned earlier, we are being approached by a lot of small competitors. It is still pretty fragmented. And a lot of smaller players realize that this cannot be done the right way without scale. So they want to join forces with us and share the same strategic vision.

And, Ben, to your question on the radiopharma side, we know we can do this. We know we can do it well. The question is whether relative to the other opportunities we have in front of us, which we are really very excited about, is that where we want to be investing time and resources? And so what we like to do is we like to first get some experience actually performing a service, which we are doing almost every week. But we are not at a place right now where you would see us make an acquisition in that space in the near term. As Melissa said, we are focused on our core business lines right now. We are going to keep learning on the radiopharma side.

Okay. Got it. That is helpful. And on the folks that are approaching you, is part of the reason why, beyond just the scale, some of the regulatory scrutiny and such that the industry is seeing as well? Or is that too much of a stretch?

No. It is not a stretch at all. I mean, we like what we are seeing on the regulatory front because it is raising the standard across the industry, but it is bringing the standard to the level that we have. And we have the technology, and we have protocols and processes already in place to be able to provide the services in a way that the regulators want to see. So, yes, for sure there are smaller competitors out there that do not have those and do not have the infrastructure or the high-caliber team that we have that want to join up with us.

Makes sense. And then just on the shorter trips that you have seen so far early this year, it sounds like that is more luck of the draw than anything. There is nothing to read into that?

I would not read into it. No. You know, it is a combination of mix shift to there are some customers that just generally have better luck matching closer, or there are OPOs that are flying shorter distances consistently. So we see the mix shift around from a customer basis quarter to quarter. And we also see trip lengths change. So this is the normal ebb and flow. And we are very encouraged to see those trip volumes both on the logistics and the clinical side staying very strong all the way into 2026 to date.

Okay. Got it. And then lastly, on the new customer wins, anything you can share on the profiles of those customers and how much a factor those wins were in bumping up the revenue guide?

Too soon to give specific guidance on the new customers. But what I would say is that it is really encouraging to see that this integrated model is resonating with folks. We are getting a lot of new leads from the combined customer base of the much larger organization that we have today. And also, the aircraft strategy, as Melissa talked about, is really resonating with people. We think we struck the perfect balance there. You know, as we talked about, we will invest in one or two new aircraft to support some brand-new geographies that we will be serving much more consistently. But this all adds to the power of the platform and allows us to serve not just those customers, but other customers as well. So as we get closer to the launch date, we will provide a little more detail around those new customers.

Got it. That is all I have. Thank you so much, and congrats on the progress and the outlook.

Thanks for the great questions, Ben.

Thank you. Our next question comes from the line of Jon Hickman with Ladenburg Thalmann. Your line is now open.

Hey, good quarter, Will. Could you just kind of reiterate, how many hubs are you operating out of in the United States now?

Hey, Jon. This is Matt. Are you referring to the air bases?

Yes.

Yeah. Our air bases are probably overall in the teens. We, you know, as Will just said, when we add new customers or we have density in a certain region, we consider adding a new base. Based on new customer wins this year, we are likely to add at least one or two new bases. That is our plan for the year.

But remember, we have the capability to fly from anywhere through the asset-light network. So when we talk about a base, that just means that we have either an owned or contracted aircraft that we are certain is going to be available to us in that location versus aircraft that we have safety-vetted and can use but may not be held back for our use. And then on top of that, we do have some dedicated aircraft to us that can float and move their locations around the country as needed, which gives us even more flexibility.

And then could you, maybe I missed this, but on the logistics side, I know it has been a goal kind of to increase the ground services. Were you able to do that this quarter? Kind of as a percentage of revenues?

Yes. I mean, our air business was very strong in the quarter, really in the back half of the year. So we continue to grow and scale our ground business, adding new hubs. But as a percentage of revenue, I believe it is about the same as it was in the prior-year period. And that just reflects, as I said, the strong growth in air and other revenue, including our organ placement business.

Okay. Thank you. I appreciate it.

Thank you. Our next question is from Yuan Ju with B. Riley. Your line is now open.

Yeah. Maybe a quick follow-up on radiopharmaceuticals. Are you mainly handling the radiotherapeutics or radio imaging agent? And then are you mainly supporting the commercial product versus the clinical trials?

We think we can do all of these things really well. You know, we are probably best situated with our existing fleet on the clinical trial side of things because most of the aircraft we have access to are not cargo-configured. So a smaller load is going to be easier for us to leverage the existing fleet. If this was something that we wanted to invest more resources in, we could support full loads on cargo aircraft as well. But that is not in the existing fleet today.

Got it. Thank you.

I would now like to hand the call back over to Matthew Schneider.

Great. Thank you. So we received a few investor questions that we will now take on the call. The first one is on AI. And the question is, how will AI impact the transplant market over time and our business in particular? Will, why do you not take that one?

Sure. Great question. And I think this is a great business to remain extremely durable and actually benefit from AI rather than have any risk. If you think about what we do, we are operating in the physical world, scrubbing into operating rooms, flying airplanes every day. These things cannot be accomplished without access to these specialized aviation assets and credentialed medical professionals. We are driving with lights and sirens on the ground. And so, as such, we really see the artificial intelligence opportunity to make this business more efficient. We are already starting to employ it for real-time error checking as we are coordinating communications amongst multiple different stakeholders in an organ transplant mission. And we think over time, it could have the potential to make our cost structure more efficient, allowing us to invest in those differentiated people and assets that make our business great and really defensible. The next question we received is on some of the dynamics that we talked about in the first quarter, in terms of the weather impact that we alluded to. Melissa, can you just talk about the impact of weather that we are seeing in the first quarter?

Sure. Normally, weather really does not have an impact on our operations, and that is because our flights get priority over other flights at airports. So if a cell comes in, it might cause a disruption or slowdown or air traffic delays at an airport for an hour or two. It is not going to have any significant impact. We called it out for the first quarter because it was pretty unusual circumstances as far as the severe weather in the North, which is a very important region for us. We base several aircraft in the Northeast, and we have a high customer concentration there as well. And what we saw in the first quarter was so unusual with airports actually being closed for a number of days. So that will have an impact on the number of flights. Now we do see case volumes surging on days after or following an airport closure or something like that. So that will offset or mitigate that impact. And, you know, of course, it does not affect our confidence for the year, as you can see with the guidance.

And then we received a question recently just on some of the macro events and the impact of higher oil prices on our business. Melissa, can you just take that one?

Sure. Well, a raise in fuel price is going to result in higher costs for our customers, and that is not something we ever like to see. It will not impact our cost structure. When we contract with our customers, we negotiate fuel surcharge thresholds at a certain number, and anything above that gets passed through. So if we see a surge in pricing, that is going to be passed through to the customer, and it will not turn things upside down for us.

And we are above those thresholds already today. So any increase from fuel prices today would just get passed through.

That concludes the retail investor Q&A portion of the call. I just want to point out that we are planning on participating in the Sidoti and Needham investor conferences over the next few weeks, and we are looking forward to reporting our first quarter 2026 results in early May. Thanks to everyone for joining the call today and for your continued interest and support.

This concludes today's conference. Thank you for your participation. You may now disconnect.