Greetings and welcome to The Beauty Health Company 2021 Fourth Quarter and Fiscal Year Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. Dawn Francfort, Managing Director at ICR. Thank you, Ma'am. You may begin.

Good afternoon, everyone. Thank you for joining The Beauty Health Company's conference call to discuss the Company's fourth-quarter 2021 financial results, which we released this afternoon and can be found on our website @investors.beauty Health.com, also available on our website is an investor presentation that will be referenced during this call. With me on the call is Brent Saunders, Executive Chairman and with Stanlis, President and Chief Executive Officer, and Liyuan Woo, Chief Financial Officer of The Beauty Health Company. Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause casual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC. This call will contain non-GAAP financial measures such as adjusted gross profit, adjusted gross margin, adjusted net income, adjusted EBITDA, and adjusted EBITDA margin. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website. Now, I would like to turn the call over to Brent Saunders, Executive Chairman of The Beauty Health Company.

Thank you, Dawn and good afternoon, everyone. Thank you for joining us for a discussion of our Fourth-Quarter and full-year 2021 results. I would now like to formally introduce Andrew to all of you and welcome him to the Beauty Health team. We are honored to have him join the company at such an important time in our history. Andrew's track record of success, extensive knowledge of the beauty of luxury retail industries to digital marketing expertise and international expertise are in valuable as we expand the Beauty Health category and build our platform. I will briefly turn the call over to Andrew.

Thank you, Brent. Good afternoon, everyone, and thank you for joining us today. I joined the company just over two weeks ago and I want to start by thanking all the team at Beauty Health for the warm welcome that I have received. I have spent my first two weeks on a listening tour, meeting associates and customers, and what has struck me is the palpable excitement that everyone shares regarding the tremendous opportunity ahead of us. I'm proud to have joined this talented team and excited to lead the next step of the journey in this category creating company. I joined at a pivotal moment in the company's growth trajectory. And I am fully aligned with Brent and the Board's strategic growth initiatives and thrilled for the opportunity to execute against this dynamic strategy the team has implemented. My way of introduction, I am a Beauty industry veteran, with over 25 years of experience in Beauty and Luxury retail, specializing in brand development, digital transformation, and multichannel distribution, including B2C. I am a global citizen, having lived in eight countries across four continents, including seven years in Asia. I started my career at Unilever in Sales and Marketing before spending 13 years at L'Oreal. I then spent five years leading Coache's business in Southeast Asia, Pacific, and Europe. Before joining Coty in 2017 to run its Europe business. Over the last four years, I led [Indiscernible] America consumer beauty and luxury divisions. Additionally, I served as the global CEO for [Indiscernible] joint venture with Kylie Jenner's Beauty business. And I help Kim Kardashian West oversee her K.K.W Beauty business. I am grateful and honored to be The Beauty Health CO at such an exciting time for the company; I look forward to leading the next chapter of growth as we build upon our impressive platform and global community. And with that, I will now turn the call back to Brent.

Thank you, Andrew. I would like to thank our employees, providers, and the global Beauty Health community, who remain resilient and passionate about our products and services. This community is key to our performance and we will continue to invest in and nurture its growth. During today's call, I will provide details on our fourth quarter and full-year 2021 performance. I will then turn the call to Andrew to discuss our growth strategies and 2022 guidance. Liyuan will follow with more details on the fourth quarter results and our 2022 guidance. To start, I want to spend a moment on Page 5 to highlight the key takeaways from our results. First, our significant net sales growth demonstrates the strength of our brand. We are very pleased that we exceeded our guidance, growing by a 118.3% compared to 2020 and 56.2% compared to 2019. This marks four quarters a beats, despite the pandemic. Second, our fourth quarter gross margin expansion of 1,210 basis points on a GAAP basis and 870 basis points on an adjusted basis, showcases our ability to generate fixed cost leverage on our infrastructure investments and rapid net sales growth. Third, the planned execution of our strategy remains in place. We are thrilled, Andrew, as our CEO, and he is aligned with our existing strategy, ensuring a smooth transition. He will take you through our master plan in a moment. Fourth, the growth opportunity remains significant. We remain as enthusiastic as ever about the opportunity ahead of us. Andrew and Liyuan will walk you through our outlook in more detail. Lastly, 2022 is expected to be our final investment focused year in which we build the global infrastructure needed to fully capture the opportunities in front of us. We are pleased with the progress of our build and…

Thank you, Brent. I'd like to turn to Page 6 of our presentation, which contains our master plan. We are a category creator. We deliver Beauty Health experiences, reinventing our consumer's relationship with their skin, their bodies, and their self-confidence. Our master plan is built upon five strategic growth initiatives that I will walk you through now. First, we plan to expand our footprint by selling innovative products and connect the experiences to our Beauty Health community. Syndeo means connect in Greek and this product is a milestone for us in connecting our community. The imminent launch is a significant technology upgrade from our existing HydraFacial delivery system, evolving from an analog to digital by collecting data to fully understand consumer and provider behavior. With this data we'll have meaningful opportunity to boost engagement and utilization via storytelling, branding, and gamification. Second, we are investing in our providers as we enhance the overall consumer experience. A great demonstration of this pillar is the HydraFacial connect. A unique activation and engagement program that empowers Beauty Health professionals to expand their knowledge of our products and experiences, industry, and marketing. We will continue to invest in this initiative and others to turn us providers into brand evangelists and advocates providing first-class experiences to consumers. Third, we are nurturing our relationship with consumers to build awareness and drive them to our providers. We will pursue high ROI investments within our golden triangle of sales, marketing, and training to capitalize our presence in B to C channels and expand our reach to consumers where they live, work and play. These investments to bulk drug trusted community include a focus on our growth marketing efforts, were intend to leverage my extensive network and experience to build campaigns in paid social influencer and content marketing. We…

Thank you, Andrew, and thank you, everyone, for joining us this afternoon. Before I discuss our fourth quarter full-year 2021 result, I want to officially welcome Andrew. I'm thrilled he has joined the team and know his global leadership expertise across beauty and luxury, as well as his innovative and proven digital marketing capabilities will be critical as we build Beauty Health for the next stage of growth. I also want to thank our dedicated team across the globe for their continued hard work. Our success in 2021 will not have been possible without the commitment of our employees and providers. I will discuss our fourth-quarter results, touch on our balance sheet, discuss our full-year 2021 highlights, and close with details on our 2022 guidance. Note that I will make sales comparisons to our fourth quarter of 2019, as we believe it is a more relevant comparison due to the COVID-19 related market closures in 2020. Before discussing fourth-quarter and full-year 2021 results, I wanted to take a moment to provide a brief overview of the HydraFacial business model as shown on Page 8 of our presentation. We employee a razor blade model. And we start by selling a delivery system, the razor and associate a consumable, the razor blade, to providers. As providers perform HydraFacial experiences on consumers, they exhaust their supply of consumables and reorder, driving growth in our consumables revenue segment. The purchasing decision for delivery systems generally boil down to three reasons. The most common reason is providers buying their first HydraFacial delivery system. Second, they see our existing providers return to us to purchase additional systems, so they can increase the volume of HydraFacial performed in their practices. Last, we also have providers, treaty, and other branded delivery systems will upgrade their previous generation delivery…

At this time, we'll be conducting a question and answer session. [Operator Instructions] One moment while we poll for questions. Our first question comes from the line of Oliver Chen with Cowen. You may proceed with your question.

Hi, thank you very much. Great Quarter. Hi, Brent, Andrew, Liyuan. Andrew, as we look ahead, unaided awareness is a big opportunity. What do you see as the opportunities in terms of marketing spend and investment, particularly as you think about Asia? Would love your thoughts on regions as this intersects and also longer term marketing as a percentage of sales. And then Brent, would love your thoughts on M&A. I know you -- Beauty Health Company has a special relationship with estheticians, your thoughts on what you're seeing in the marketplace now and also a framework for what might be most synergistic. And I had a follow-up for Liyuan. Thank you.

Oliver. Thank you. It's Andrew. I'll kick that off and then hand off to Leanne and Brent. If we break your question down. I think firstly, you're absolutely right, one of my key observations on my listening towards during this first two weeks is that actually that the team have a great strength in terms of sales and education. And I would argue, in my experience, it's best in class also, I've seen a real capability in that event marketing as we've seen with the GLOWvolution. But the opportunity to grow awareness is significant and I think that's where I see the biggest opportunity. And we'll be building up our capability in terms of digital marketing, the team and capability. And in terms of investment, I think we're happy with the investment we have. I think we're going to looking to allocate that in different areas, which really drive the awareness I sensed coming into this. And I said this to Brent in the Board during the interview process. I feel with HydraFacial we're set on the biggest secret, the best kept secret in the beauty and wellness industry. During my interview process, I did a lot of due diligence, spoke to many people and like me, I've been in the industry or my life. And many of us had not heard about this fantastic brand, but when you experience it, you really great it -- get it, and our conversion rate is very high, so obviously it's a major opportunity. I think I'll hand over to Leanne to talk in more detail about the rest of the question.

Actually, I think, Andrew, you have addressed it, and the only thing I'll add, Oliver, is as you know, even for 2021, we said we were going to double down on marketing. Historically, we invest about 6% -- we were committing a 12%. Given the pandemic, we're really downing Q1 and without downing Q4 because when you have a variant, it just doesn't make that much sense. We actually did spend less than that 12%, that's still a really good target. So to Andrew's point, it's really a matter of reallocating the capital. Brent I'll hand it to you -- other -- Oliver's question.

Would you -- will you manage just to repeat what else -- question?

Yes, Brent. Curious about M&A and the market environment, and also key synergies and a framework for how you're approaching what's ahead with that journey as Beauty Health as a platform. Thanks.

So we've been pretty active evaluating targets. We were up last year and we continue to do that this year. I think what's starting to change is frankly, the reason we haven't done one yet, which is valuations. So last year, we were seeing very high expectations on valuations, and in many cases, outlandish. And as you know, we are very disciplined team. We are starting to see some green shoots of people recognizing that the markets probably aren't what they used to be, and valuations are starting to come in line. The IPO alternative is not as attractive as it used to be. So I think that's good. We have a couple of things that we're evaluating as we always are and Andrew's starting to get deep into it as well. And so it's great to have another strong mind looking at these things, but we're going to stay disciplined. We're going to continue to follow our criteria of looking for things that have a high NPS score that allow us to leverage our current distribution capabilities, i.e. the estheticians in large part, and something that would be accretive to our financials and our growth. So those are our criteria and we have lots of opportunities and we're going to continue to stay very focused and disciplined.

Thank you very much. And Liyuan, just a follow-up on modeling. How should we think about consumables relative to delivery system growth? And as we think about your forecast, what about the number of units relative to ASP, and what's embedded, roughly, in terms of how many people may upgrade to Syndeo? Thanks a lot for any detail.

Yeah, no, absolutely, Oliver. So this is a really important year, obviously, as we launch Syndeo. Directionally speaking, as we have shared, I have mentioned -- we always thought the consumable should be running ahead of delivery systems but as you see our number one strategy is actually profitable land grab. So you can see even for 2021, despite the pandemic, we delivered over 6,000 versus historical 3,500 to 4,000 systems. So with that in mind, that remains to be number one priority of ours. So for our all modeling purposes we're still assuming that 50-50 split. In terms of ASP, directionally speaking, what we have mentioned is a high single-digit rate for both of the delivery systems and the consumable. So that would be a safe number to use as we model out the ASP. I think the final question that you had raised in terms of, how do we think about the upgrade cycle. So this was why we're trying to emphasize the fact that when it comes to trade-offs, it will be accretive to both of the top line and the bottom line. And we were really pleased to see how many of our key customers that purchased the last 12 to 18 months choose to upgrade with us. So really the way we think about is, depends on the percentage of penetration of the upgrade. Let's say if as a low single-digit historical, then you're talking maybe a low-single-digit impact to gross margin percentage or ASP, but really it's accretive again to EBITDA. But let's say if a quarter of the delivery system that we sell are actually trade ups. Then -- and they're really recent purchase trade-ups. Then you might have a risk running into a 5% impact to the gross margin percent, but it's all accretive, it's above and beyond what we assume in our guidance and model.

Thank you very much. Best regards.

Thanks.

[Indiscernible]

Our next question comes from the line of Bruce Jackson with The Benchmark Company. You may proceed with your question.

Hi. Thanks for taking my question. It's a nice quarter. I just have one question on the manufacturing side. Similar other industries are experiencing chip shortages. I'm wondering if you can get an adequate supply of parts for the new delivery system and are you going to be able to meet demand?

Hey, Bruce. Great to hear your voice. So we actually tried to address this previous [Indiscernible] as well. Because we're a growth company because the fact that we're launching a brand new system, our approach has being just purchasing ahead. So we have been buying ahead. Use our capital to secure all the parts that will be required as we launched the system this year.

Okay, great. And actually I might sneak in one more question on capital deployment. Obviously you've got an active M&A program going right now. What are the other potential uses for capital deployment and then how would you prioritize those?

So maybe I will take a step at that. But look at capital allocation is a critical part of how we think about our business and our responsibilities. Clearly, we're in growth mode and we have an amazing platform in HydraFacial. And we have, from day one, been very open with our investors that we plan to do M&A to take advantage of this distribution capability that we have, and this great brand and capability of our team. That being said, we evaluate that against all other alternatives and those alternatives include things like a buyback. And so, anything that we look at in the M&A category has to be evaluated against buying our own stock as well.

That being said, the preference is for growth and the preference is to invest in M&A, but the standard and benchmark has to be looking at the alternatives and seeing what's the right thing for all of our shareholders.

Super. Thank you very much.

Our next question comes from the line of Korinne Wolfmeyer with Piper Sandler. You may proceed with your question.

Hi, thanks for taking the question. Congrats on the quarter and welcome, Andrew. I'm looking forward to working with you more. First I wanted to touch on what you've been seeing throughout the early parts of the first quarter here. I know you did mention a little bit on typical seasonality trends, but have you seen anything specific in terms of traffic's low related to Omicron. We haven't heard much impact from that in our checks, but just curious what you've been seeing.

Hey, Korinne, it’s Liyuan here. So I would say, when you look at our regions, we continue to see the similar trend with high demand when it comes to personal care, especially for Americas and EMEA regions. When it comes to APAC, I think we emphasize that. As the only market, we've been sharing with you guys since Q2, it's the approach that the governments take are different compared to Americas and EMEA. So that trend continues, especially when it comes to China, the government continues to take a stand of being very disciplined about shutting down cities, so that's the only thing that we've truly observed that's continued being impacted by COVID.

I still think we're going to start to see China open up a bit more. Obviously, they're opening up to foreigners and others, so we'll take it as it comes, but it's completely baked into how we think about the year. And we've been pretty flexible and nimble and just trying to manage through that. We've gotten quite good at it unfortunately. It's not something we ever wanted to, but we're we're quite good at it.

Awesome. Thank you. That's really helpful. And maybe this one for Andrew. I know we've talked a lot about the marketing strategies for the year, but can you just provide any further detail on what you plan to implement once these start hitting the ground running here in the next couple of months. You have a lot of good experience with influencers and stuff like that. So just any further detail on what you plan to implement over the next couple of months -- couple of quarters.

It's great to speak to you. I'm, just two weeks in and as I mentioned earlier to Oliver, I think we've got really strong capability in product innovation distribution, education and in the events. I think where I'm working with the team now to pivot is in terms of how we're using our digital influence marketing to really drive brand awareness. And it's really focused on our critical launch, which is the launch of Syndeo, which is our new delivery system, which we are. imminently about the launch and I'm really impressed with that technology in these first few weeks, it's new, better, different than anything else in the market. It's a real leap forward and experience on technology. I describe, it goes from analogue to real digital experience. And of course, that's going to give us so much more data. It connects the consumer, the provider, the efficient of growth, the company, which will enable us to be a lot more nimble and agile in the way we market and drive awareness and engage with our consumers in future. And also measure consumption, it's going to give us a proximity to measure in the business, which we've never had before. So it's really exciting, but my key, back to your original question, my key objective is really raising the awareness, because we are so confident in the technology, and we're so confident the education and the skills of the efficient community that we can convert the user. We just got to get them crossing that threshold and coming into the experience.

Thank you.

Thank you.

Our next question comes from the line of Amid Hassan with Goldman Sachs. You may proceed with your question.

Hi, this is Phil [Indiscernible]. Thanks for taking the question. I wanted to dig back in a little bit more on guidance and the split between delivery systems and consumables. Liyuan, you've emphasized the 4000 systems annually a couple of times during this call. But very clearly, Lou through that number this year and the guidance from our standpoint looks pretty similar, 6000 plus systems next year to be able to get to the numbers. I'm just wondering if you want to update that and provide a different outlook with this much stronger infrastructure that's been built over the last few years, guidance going forward for system placements as we move ahead.

Absolutely. I think when we think about the number one strategy initiative is truly rolling out as many systems as possible by the fact that we're actually hiring more folks around the globe, truly also have that in mind. So a great point in a sense, we are sequentially improving in production every quarter, a number of systems being rolled out, and we fully expect that trend or the push to continue.

And if I can just add, and thanks for the question. I think -- I'm a new CEO, we're a relatively new team and public company, we take the commitments we give on guidance quite seriously to our investors, so we're absolutely laser-focused on delivering on those commitments. And I think you can expect us to be very straightforward and clear going forward. Thank you.

Yeah, that's a great follow-up, Andrew. Thanks for that color. If we flip over the consumable side, I think it's the opposite, which still seems like treatments per system were a little bit repressed due to movement restrictions and the other things going on from a broader macro landscape. So it looks like this year your consumables are likely to exceed the revenue that's going to be generated from delivery systems even in an upside scenario. So just interested what's embedded from a treatment per system standpoint in your model moving forward. Is that something that you expect to exceed what we saw in 2019 before the pandemic hit? Thanks so much for the questions.

Yeah absolutely. The team is focused really driving that utilization and that engagement to your point from a performance point of view, those are all the key element of the strategy we're focusing on. we anticipate driving at a minimum the similar level of the utilization, barring any of the pandemic impact.

Okay. Thanks all for the question.

Thank you.

Our next question comes from the line of Olivia Tong with Raymond James. You may proceed with your question.

Great. Thanks. Good afternoon and congrats, Andrew, it's nice to speak with you again. Perhaps really start just talking about what you think are perhaps the greatest immediate opportunities for the Beauty Health Company in your view. And then, with respect to the Syndeo launch, are you -- are there new third-party relationships you are bringing to help leverage the data you will now be collecting. How do you work that into a potential digital social media enhancement strategy? Just put up a little bit more detail in terms of the benefits that 2.0 offers, and how you plan on leveraging that. Thank you.

Hi, Olivia. Thank you, and it is great to speak to you again. Look, it's been a great and intense first two weeks. And first of all, I'm really focused on and full alignment with the existing strategy the team had in place. So I think the focus now, of course, is on accelerating that and executing it flawlessly. And I think me picking up the reins is a continuation of that strategy. I think in terms of priorities, the number one priority for me and the team is really ensuring a flawless launch of the new Syndeo delivery system. Syndeo, as I mentioned earlier, means connected in Greek and it's our top priority. And we're going to really focus on expanding our footprint to more doors. And obviously that system gives us a level of connectivity and visibility through its connectedness with consumers, providers, and aestheticians, which will really help, drive those aspects of our business I think. Secondly, the other key opportunity I see -- and the The company has real at bumped competitive launches here is with the training and education that is a really key lever in developing our trusted at petition community and signing them into brand evangelist and advocates influences per say. I think there's much more we can do to really amplify their voice. The third one is really expansion the U.S.. but also geographic expansion. I feel we're really underpenetrated. When you look, if you take just the U.S.. market for one example, and in just one channel of the U.S.., which is the medical channel. Today, a brand like Botox, we estimate to be at about 40,000 points of distribution. When you consider today that globally, globally, HydraFacial is only in 20,000 points of distribution. Just in that channel alone, we…

Thanks. That's helpful. And then, the focus on growing the systems is clearly paying dividends, but as a few have touched on already, the consumables growth hasn't quite accelerated to the same extent. So what gives you guys the confidence to price on consumables? And then just broadly, your thoughts in terms of the mix of product going forward, the range of product in office versus in retail versus in-home. As you clearly -- the focus in the near to medium-term is on Syndeo, but clearly there's other products that you're looking to diversify or at least enhance, excuse me, the product portfolio with. I'd love a little bit more detail there.

Absolutely. So why don't I kick off on that one. In terms of the consumable trends, look, based on my experience and I recently, of course, left the big beauty company we are really sure from the conversations we've had with provided petitions is that the trend and sell-out on nice productivity is predominant, just impacted by the impact of COVID and Omicron, and as we see markets opening up, we see those trends improving. So we're quite confident in the trend, which we spoke to earlier and embedded in the guidance. And of course, as we go forward, if we just focus on consumables, again, using my experience I see a major opportunity to expand our offering in this area. There's a number of gestures and treatments, which we could bring in to complement the really strong portfolio we have. Then we'll widely -- and I spent time in the first two weeks working with the R&D team, and we have a very impressive facility here in Long Beach, R&D and production. by the way, we love it to host you here, but I think when we look at the portfolio and the innovation pipeline, I think it's a couple of things, which really spring to mind. Of course, we've got HydraFacial, we can offer there. But we've all seen and you've seen that with the growth of peer companies, the major opportunity with hair and sculpt care, post COVID, that's become a major part of people's self-care regime. We have a fabulous product, I really believe it's new, better different with Keravive. As much more we can do to really grow that based In the U.S.. and globally, especially in Asia with sculpt treatment is so key. Our focus now is Syndeo, but absolutely that will be something, which we really get behind in the coming months ahead. Also, we continue the Glow and Go Mobile, the take-home product which we've been piloting, and we continue to review that carefully, that's another opportunity. Plus some other things in the pipeline which I'm not ready to talk about today, but the portfolio is strong.

Thank you. Best of luck, and look forward to seeing you.

Thank you.

Our next question comes from the line of John Block with Stifel. You may proceed with your question.

Thanks, guys. Good afternoon. Andrew, maybe on that last point, is there anything on Glow and Go that's reflected in the 2020 guidance? I wasn't just sure -- crystal clear on that, maybe you can just comment on that. And then just -- I know you're out there, you're piloting, and maybe talk to us about the learning so far on Glow and Go, anything that you want to convey on pricing in terms of feedback from the field. Thanks.

John, thanks for your question. So yes, in terms of Glow and Go, we haven't included it in our guidance. This is a true pilot, test and learn, and we will obviously continue to roll that out. I only want to launch something which we are really confident will be new, better, different than anything else on the market. And not ready yet to talk about pricing. It really is in the early stages of testing, and I saw my first review of it last week. Liyuan, anything to add on your side on this?

No. Hi John. I think that covers it.

Okay. Great. And then just to further follow up, some numbers that I'll just throw out you, but I thought the -- I don't know, I thought the 2022 adjusted EBITDA guidance is really impressive. I calc a 25% of the incremental revenue is expected to drop down to EBITDA in 2022. That seems like a really big number in light of the investments that you're still putting into this business. And then Andrew, I think in the press release you talk about growing into your historical adjusted EBITDA margins, maybe as early as 2023. So just to be clear, what did you consider historical to be and we're looking at a business that even with these investments, you might see an adjusted EBITDA margin north of 20% next year, next year being 2023. Thanks for your time, guys.

Jon,John, thank you. I will start and then hand off to Liyuan. In summary, 2021 and 2022 are big investment years, you'd expect that with the launch of the completely new delivery system and these happen every three to four years, that's the rhythm of our business. But it is, as we've said in the press release, and I think Brent talked it earlier on the call, as we get to 2023, absolutely, we expect the investment to provide that synergy and start on that journey, that multi-year journey to get back to historical levels of EBITDA. Liyuan, anything to add?

Yeah. Thank you, John. I think obviously we'll provide that guidance as we're getting closer to 2023. But if you recall John, historically speaking, obviously it's a different model under private equity where we're generating over 20, 25% EBITDA suffice to say the heavy investment there we're making a lot of that are core infrastructure and people and system costs. A lot of these will have great leverage once we sell more when it comes to raising top-line. So theoretically speaking, this is a very profitable business. So we're just head on executing.

Thank you, guys.

Thank you.

Our last question comes from the line of Margaret Kaczor with William Blair. You may proceed with your question.

Hey guys, it's Maggie Boeye on for Margaret today. Just wanted to ask you a question on the revenue guide. So you guys are assuming our first-half launch of the next-gen system. So what is assumed in this guide for the progression of the launch in terms of timing and priority of new and existing accounts on a global basis?

Hi, Maggie. I mean, I'll let Liyuan take that one.

Hey, Maggie. So for -- we have shared that U.S. will launch, followed by the rest of the market. And we have also shared that ASP direction will go up high single-digits. And those are the levers that we have used to build out our model.

Okay. Got it. Thank you. And then just one last one. Given the impact of COVID, particularly in the APAC region, does this impact your plans for international expansion during 2022 if at all? And then what's assumed in the guide here just in terms of execution on that international expansion? Thank you.

Thanks, Maggie. No, I think plans remain absolutely unchanged and I think I talked earlier on the call that we see both -- growth in the US in terms of expanding our footprint in new doors with Syndeo, increasing productivity, and thirdly, geographic expansion as three major tenants of our strategic growth plan and it's full steam ahead with those plans.

Maggie, the only other thing I would just add is we've always been very surgical in terms of how we hire, we expand in range. We usually go pretty deep in each geography, so that we continue to go with that approach as we expand internationally.

Okay. Great. Thank you.

Thank you.

Ladies and gentlemen, we have reached the end of today's question-answer session. This does conclude today's conference, you may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your day. Goodbye.