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| And we leveraged our strength to really put together some great agreements with great partners |
| Overall, we believe we can drive additional gross margin expansion over the coming years and we remain focused on delivering efficiencies across our enterprise, including consolidating facilities, driving procurement savings, further leveraging our automation capabilities and streamlining our product portfolio |
| Non-GAAP gross margin expansion in Q4 was driven by production efficiencies and cost reduction initiatives |
| We continue to execute on our COVID-19 contract and we delivered stronger than anticipated InteliSwab volumes during the quarter |
| Our enterprise-wide focus on driving improved operating efficiency continues to unlock incremental cost savings including gross margin expansion and reduced overhead expenses |
| And we have the luxury right now being in pretty strong financial position to really look and choose the ones that are the best fit |
| Second, our success over the last two years in diversifying our client base, through the addition of new and expanded relationships with diagnostics, pharma and biotech companies along with other innovators |
| And we're going to leverage all that's good about our capabilities and strengths to change the acceleration on that success |
| As Carrie discussed, we expect core revenue growth to improve as we move through 2024 and we remain confident in our ability to elevate core growth in the coming years |
| We are pleased to provide an update on the progress OraSure is making on the three pillars of our strategic transformation: one, strengthening our foundation; two, elevating our core growth; and three accelerating profitable growth |
| It was so that we could both invest internally in the areas of our development strengths, but also put more of those complementary portfolios very quickly into our sales team's offerings, so that we could better serve the market with while we were simultaneously strengthening our financial foundation that opportunity to better serve, while we're completely leveraging the capabilities of very strong sales channel, really strong customer relationships and just a credibility and a longevity of having served in this space whether it'd be public health, clinical or on the sample collection side, our extensive diagnostic pharma, biotech, customers and our expansion into areas like animal health, environmental research and beyond |
| These initiatives give us confidence in achieving our target of operating cash flow breakeven for our core business by the end of 2024 |
| For the full year 2024 and beyond, we remain confident in our opportunity to deliver core growth |
| We are also extending relationships across segments and have signed multiyear agreements with a diverse set of existing customers, which we believe demonstrates their confidence and commitment to the long-term opportunities in the genomics market |
| Fourth quarter revenue from those products was consistent with our expectations and we continue to create positive momentum in establishing new partnerships and commercial relationships |
| That's an add that comes in with our public health infectious disease portfolio and really nice momentum that we have in HIV for example |
| We've strengthened our foundation including strong cash flow generation, improved operating efficiency and instilling an enterprise-wide focus on continuous improvement to fuel how we serve customers and grow |
| Purchasing patterns under our contract with the US government were slightly stronger than expected during the quarter |
| We've been forecasting that this was an important part of our growth plan and we're excited to share more about each of these along the way to deliver as proof points the growth -- the elevating our core growth and doing that just like we've been talking about |
| For the full year 2023, our GAAP gross margin of 42.3% increased by 400 basis points compared to 2022 and our non-GAAP gross margin of 45.5% expanded by 540 basis points versus the prior year |
| Core revenue growth was primarily driven by strong HIV sales in the US and international markets, which were partially, offset by declines in non-product revenue and molecular lab services |
| Over the past year, OTI delivered meaningful progress on our strategic imperatives |
| For the full year of 2023, we exceeded our target of $15 million in annualized cost savings |
| We continue to make progress on our initiatives to accelerate profitable growth through organic and inorganic investments |
| We also continued to make progress on consolidating our footprint by transitioning one of our distribution facilities into Opus Way in order to unlock operating efficiencies and cost savings |
| We grew core revenue by 2% in 2023 while navigating macro and industry headwinds |
| Fourth, our view similar to outlooks discussed by our peers and others externally that underlying market growth in the life sciences industry, will begin to improve in the second half of 2024 |
| Overall, the partnership is off to a great start and our teams are working really well together in multiple areas including R&D collaboration and in preparation for the future launch of Sapphiros' initial self-collected small-volume blood product timing of course subject to regulatory review |
| Within core revenue, our diagnostic products generated $17.2 million of revenue in Q4 and grew 19% year-over-year |
| We're very excited about Diagnostics Direct and entering the US |
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| Those factors and the uncertainty and timing for sustained recovery, is resulting in a muted outlook for core revenue in the first quarter |
| It implies the base business is going to be down somewhere in the teens in 1Q |
| The gross margins may be a little bit lower than our overall gross margins |
| Looking at the overall market environment as we entered 2024, we see end segments that remain subdued as our customers adapt to the post-pandemic environment, macroeconomic uncertainty and evolving priorities, research and otherwise |
| We knew we needed to |
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