Streamline Health Solutions (STRM) 14 Sep 232024 Q2 Earnings call transcript

Greetings. Welcome to the Streamline Health Solutions Second Quarter 2023 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to hand the call over to Jacob Goldberger, Director of Investor Relations. you. Thank

begin. may You

joining of the the Streamline which XXXX. of for financial second update results XXXX, XX, July review Health ended us you corporate for and quarter Thank Solutions for

operator the indicated, As call my is Jacob name Goldberger. conference

are Officer. call and the Stilwilll, Joining Ben Chief Tom and of Green, today on Executive Tee me Gibson, Board; President; the Officer Chairman Chief Financial

call today's call anyone these conclusion it of press prepared not today's for participating financial at website question-and-answer the will our the the or remarks, from full At open results, a from websites. If a session. on of retrieve text numerous does have we company's www.streamlinehealth.net you copy can announcing release

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information with risks, report, made SEC and and on the about more most is Exchange releases Please Securities the factors. and Form including other uncertainties filings with recent which press refer these the assumptions annual company's to file for our Commission, U.S. XX-K and

discuss. take Participants call management's items of presenting these risks will the as analysis should of these on today. As account evaluating we when always, topics we are this into current

EBITDA as such non-GAAP statements into Streamline call, measures our measures financial Health help these insight such will undertaking publicly Management ACV. today. discuss we not Booked to financial forward-looking SaaS performance. On and made note, uses revise obligation adjusted commitment to is any better or any today's provide Please

income in certain included not of measures. items However, and are expense these

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Jacob, you you, morning. Thank joining this thank and us all for

an our Stilwill, and our remarks, sales provide opening by financial a review Ben Gibson. President, operations will CFO, followed my from Following Tom update

implemented. which During been new metric. the XXXX, SaaS not ACV, agreements as we value are bookings being well reporting that a for have recognized contract into is Book all as revenue began annualized that

$XX.X as As of July XXXX. ACV SaaS XX, was to compared XXXX, $XX.X of million million as Book XX, January

of to new evaluated discuss nonrenewal closed totaling will successfully in by ACV and million $XXX,XXX. approximately our detail. more This the notified of $XXX,XXX recognized during ACV. offset quarter, ACV Book bookings Ben events implemented of their client, was SaaS revenue. is these We whose which $XX.X contributing us was an

of continue implemented We ACV of by SaaS the goal towards of million of third Booked the make having approximately to $XX progress quarter end XXXX. our fiscal

our As cash believe sheet term balance $X.X EBITDA positive hand of We is capitalized less the to achieve our was on had and July development. XX, our million. XXXX, adjusted cash software of on $X.X million we sufficient loan on balance

XXXX. of incremental our liquidity an $X on non-formula of We million to have through credit. our line operations evaluate combined X, Avelead We access and November

achieve smooth was and leadership, and the significant we savings to Ben's continue cost operational Under process integration improvements.

facility Epic-based flagship objectives towards corporate solutions, both adjusted a our performance breakeven utilizing and client of of XXXX. We improved One, utilizing our partner eValuator. in EBITDA. fiscal working X RevID RevID, achievement the channel An are from and

will Epic-based Similarly, year confident discussions late-stage clients remain and are this close focusing that discussions RevID existing fiscal eValuator. only are energy Within growth we and are about of with multiple with in channel clients our strong partner X the We in we RevID deliver without channel, prospects. can our utilizing diverting or with both more team. we partners unduly overall results on

top in we Since cost our trend significant fiscal expect expect HCIT in alignment in continue The combination seen will have are this our will and we flow and goals. profitability deliver XXXX industry that different. experienced no and significant and with November challenges savings line approach growth that cash XXXX, has

and our overwhelmed, systems of arms execute. to administrative nation's their are health decision-making The ability slowing their

seen have to and increasingly $XX forecast become bureaucracy as significantly understaffed more consultative we operations anticipate slowed and bookings difficult sales million IT of Increased result. We department and our closing our a have client fiscal SaaS and with success ACV. XXXX now Booked

I conditions, drop accurate invaluable leadership To under and ensure to the growth is this result our the ] the prior a to in our as market. [ billing Sebero, Amy our believe be target doing right for clear, things first change and of complete that of team ability that is macro solution's guidance bill

Our solutions the way of offer claims a front the processing of revenue better fundamentally in cycle.

denial net available impact volumes, at on cash identifying improving can for We the our revenue, prospects. and we rates in billing are increase have

call to President, Mr. our I'd maintain ARR implemented turn of With rarely expectation demand having lines in SaaS booking the result strong between million sales seen the shorter a during $XX of solutions are Stillwill. quarter our hears which Ben We have implementation RevID generation. to continued third for for team will that, revenue and our lag "no." Our the our XXXX. word over accelerating, and of like time We fiscal

fully is client annual compare you, and enhancing logo Tee. are growth, for doubling new our evolving to integrated, Streamline one delivery Compare, seamless technology RevID innovation and towards and integrated they team usability, making scaling significant The through clients. These products. Thank using our the roles for which eValuator increasing process on and to reach is effectiveness priorities are eValuator the and close RevID progress priorities, become allowed and enhanced have our through all our to client teams outcomes expanding service

Our clients will the of and on delivery service set to rely be soon solution. same regardless able world-class

Let the and progress innovation. some me on expand

team of completed scaling on architecture innovation ahead the Compare schedule. Our and work RevID

only will mentioned, into more implementation efficient are this Tee translate now also experience. As solutions not a These client process, better truly but scalable. a

we've make made. the We improvements to will already continue enhance system can further which in integrations, improvements

now The pivoting architecture functionality more development team our traditional that work focused road on is once following to feature map. the

of solution re-architecture is the architecture. to RevID a savings the moved as result has Another serverless significant a cost

our thrilled and eValuator. being for I management rules changes and our am we've first by leveraged through This solution also our is suggested by team. internal reviewing It tool not to humans. by finds eValuator actively announce AI-based that were overlooked were solution coding introduced patterns are flowing that the that eValuator easily is

has techniques we'll and of clients. new progress. to We our could ROI of on $XX on Xx plan excited client revenue step. technologies where the than million research represent could is team certainly The implement our a about financial and This identified Xx base. already tool potential to just solutions that for within to first these this AI these and across continue our cycle more you impact to how keep rules solutions, annualized updated our eValuator is our incremental The translate into impact

at service. client looking Now

eValuator quarter less of staff annualized a they This the contract. on auditing significant the client our in one Tee to was year. not coding renew past saw XXx X than clients do and that rate we staff, at had management auditing lost seeing drop the notified client hand This to trouble they keeping return, XXXX. audits still plan of as As they over but us were their undergone enough turnover second during their mentioned, had and

the basis, nurture do would but to relationships. fully tools investment years. see We we client our and team we with that in the the to that success churn. arrogant joined it to some learned This from formation nonrenewals clients this basis provide expect bit they be on a a prior made not the to value we have over the recent ensure solutions, on have meets monthly us have understand regular a do client which quite Today, of We not client expect our team, relationship. of significant optimized

Moving to growth.

our and to new be solutions be that for health leveraging very clients a care like in tools profile, providers buy but country. client which pleased business their to of values that team by impact analysis is our lumpy, will expect our continue our I'm the be the the growth successful ideal uses largest to likelihood We The to solutions. bookings of our continue adopted rank some client future quantify

we we have investments or solutions; strategy we leverage has the team of The pathways. have Overall, to XXXX. cross-selling in; forces existing partner continued channel, sales our base. lastly, where client to which made each resell X within the believe direct these for I success pathways for growth our larger our and right influence fiscal channel,

Tee from that health but we're feel strongly about had beyond. in quickly market and impacts care fiscal XXXX has growth stated, recovered anticipated our not post-COVID As the disappointed as we as prospects

I are ensure turn mission I to all all are care paid Tom, our provide. members Before supporting over of the like call would hard-working our for care to who health team the our clients provider to they thank

execute all Tom formula, to excited of that equals results as CFO, our our tremendous innovation and continue Gibson. believe will that, to to plus talented strongly the hand and expand. very I'll call With growth team lead I'm for service we us our yield over

the fiscal At reporting the is now revenue. XXXX, income the categories headline SaaS Thank its changed of of our revenue you, for statement. end Ben. company

revenue the July $XX.X to XX, revenue year first months total total ended X quarter months was during million XXXX, XXXX. July ended period. the to XX, For the for And of $X.X compared compared million million XXXX, $XX.X prior was million the X for $X

reported, its going part fiscal the large services XXXX at XX% that renew professional to the end compared contracts not a the are services the of second and company company's half As forward. These business of SaaS core did first in period. the year previously year. professional of contract not grew had quarter revenue prior XXXX

in see SaaS company line revenue to has successfully as We expect the its quarters implemented growth the coming the solution. on

million We second ACV fiscal has for million approximately as July the expectation X% fiscal revenue SaaS in XXXX. quarter XXXX quarter $X.X Booked XX% of expense XXXX. the million XX, SaaS down XXXX, growth to during second unimplemented $X.X operating compared to of maintain of The XXXX. Total of of our $X.X was compared company

XXXX, nonrenewal $XX.X Avelead discussed businesses half eValuator the of expense attributable lower call. to by half fiscal contract to operating first achieved Tee, The XXXX. million, head expense the through X% associated and count in professional services of large as savings of with earlier cost well this as the the down $XX.X integration first operating the totaled million lower was the fiscal during compared For of

XXXX quarter loss fiscal million Second compared in of $X.X a million XXXX. $X.X loss net totaled to

For million our for loss compared contract the revenue of was X of to X net not first revenues XXXX. loss high-margin of X million months that the lower the growing as demonstrate -- the during smaller the renewed. a loss $X.X The net of months professional totaled $X.X on SaaS to first compared value XXXX, services months

Second second million the during quarter fiscal a compared of XXXX million to $X.X loss loss adjusted was XXXX. EBITDA quarter a of of $X.X

of the adjusted $X.X narrow the its a ago of anticipates million a adjusted EBITDA and expects year continue will XXXX. EBITDA quarter company of For X reaching in to first compared $X.X near EBITDA months that million, XXXX, third breakeven period. to for The loss loss adjusted the fiscal loss of was

Moving balance to the sheet.

of XX, XX-monthly $X.X agreement, million additional contracted XXXX. million at to of compared provide on consideration January XXXX, the $X.X date. had company X, Under hand anniversaries closing the to XX, acquisition July cash the each of has the Avelead of first on As we

quarter XXXX. these of first The fourth the paid of in payments were fiscal

$X The in on stock sheet sheet. cash liability is company's on and paid earnout amount, we liability it will is valued acquisition balance pay referred balance second approximately to be this million. Of the as in November $X.X estimated XXXX. in that million payment is and the at cash will The

The The lower months recently than implemented million The with receivable attributable are XX, $X.X historically invoiced these to performance implementation. XX, eValuator the company guarantee XXXX. was substantially lower met. January until X not of met partially X has to accounts company's guarantees July contracts receivable guarantees is that within is at XXXX, accounts

as loan term XX, was our million. of July balance of The $X.X XXXX,

principal XX we are next make September of of XX-month third million loan months. the XXXX, of and of X, the period in course will As over the $X payments the

without financing we need sacrificing We future ongoing have additional a our million line to to necessary. credit, we may access Based if $X current of forecast, can our which growth. fund operations on draw

refinance. This Our the us for ARR. recurring average successfully current million debt-to-ARR in annual markets similarly are ARR. facility is X:X.XX. a if is with some bank that capacity refinance in debt X.XXx and credit of credit to approximately industry believe X.Xx believe hours of $X.X bank debt range our companies the the improving, venture-backed We situated debt X.Xx or we ratio our million could We $XX revenue, gives to

Green adjusted will now company to Tee of the the rate $XX On continues achieved this third gross the of commend its his progress proud current fully SaaS believe make revenue revenue my of we remarks. our I have back staff. breakeven I level expect concludes cost achieve SaaS will a of The call XXXX. million. XXXX am and incremental margins of quarter to our That for to is during implemented overall Tee? realizing QX XX%. want structure, this and closing in bookings above business turn at We this company to comments.

Tom. you, Thank

enable continue over revenue deliver growth performance and improve address value term. leakage We that and to long company drive better the to financial our streams health to providers position to shareholder revenue proactively taken reoccurring forward care steps for and major significant have

for macro for self-sustaining believe on We and generate milestone While and we changes next methodology challenging environment solutions. ability be expected, and remains prebuild cycle. am from step our significant our executing to this cycle I for demand more revenue strong necessary life business. than our the of previously operations the proud see cash a in is our our making team our

serve. they entire support care hard clients providing and Before we for to all and the session, team the I'd once Their your Streamline again our Health quality to ensure they our tools all for dedication. provide support Q&A Thank Streamline to the thank contributions resources are like have our communities to you and and for for begin work health us the care free necessary of up vision. time essential

open like Operator? call to I'd Now your questions. to up the

[Operator Instructions] Matt line Craig-Hallum. of Our the first questions from come with Hewitt

I'd of period know I to bit that commented you on a seeing. environment. COVID off, decision-making the you on selling process. little weighing dig current a the Maybe like X.X-year had more hospital's challenges little in first you're on with bit Obviously, some a

there, of expectations volumes we whatnot. kind many off and started We which were to a see expecting we to see are guys? right of improving now? what this of what's I But mean, we factor think if to that hospitals where the get that spring, flowing started for I software you fiscal this through kind as and gating seeing you the lift equipment are -- little to bit of that procedure see would some I think of improvement some the purchases increased year revenue are

Tee here. Yes, can This is Matt, Yes, thanks. hear me -- it's okay? you

Absolutely.

CFO slow, pipeline. office mean I legal, the through and the mean the its I been I been Yes. The of seem fairly to or make out have coming starting has way administration's fall good. of Okay, the think, to first when half 'XX industry-wide. those

we struggles, well. think some in beginning getting I IT, to real departments, thaw have priority the but IT that's the still as even

you is at we They did really which transactions, If were ACV. really, they look XXX weren't X maybe QX, average smaller, like encouraging.

all happened this and X and One though what Oracle super know and was ] then them it's [ encouraging the those the for which strategy because had we all of months with Cerner, or with out. to we relationship management ship X of is taken

we're encouraged. really So

and technology in with have, fact, booked solutions. we're Oracle we meetings prebuilt XX their have clients, We like

are deals and of the in -- really X that's targeted kind the XXX. So didn't close encouraging. ACV got that quarter we've other We

ones, the coming but the big XXX. jumped through get system. QX, and they're look then didn't looks And like it you we they at So to

to working So feels again, all guess like the starting side, the open been at things these towards, I already Oracle. X up. it of one that we've on them things Well, are smaller but

lights these for -- is good green are this So us.

if still between mean of that's be red at deal, the the vastly going sell But ACV that that -- is $XXX,XXX when as that redline our back to a look and different. team $X We're Ben and our do lumpy, think, obviously, we because contracts deals pipeline, are -- We I closed forth versus team. ACV their lines. in you deal bookings going where we mentioned the cautious. million

the look You going really this at back half quarter of and impressive front into really, transactions really, in QX, us. of

the a are again. last I quarter X, but So great not those us think in releases lot press from coming of or

So we're excited that. about

very That's And separate a encouraging. then maybe question.

feedback? on guys new this on into was product or Was you realize would that, Any What -- this But by I on now additional the the be is jumping requested was is been and for feedback congratulations -- something customers? that color customers? what just launched. And helpful. the So initial the working AI a from AI is been time. realize feedback it's that have that

is This being client a Matt. you I'm word Tee without as prospect Ben in understand go opine asking, questioner let right? asked in can't going Thanks, really or technology. every you're if what the doesn't conversation they're if But meetings Yes. well. customer into Even to again. about. It's the

the ago, We Stream on started technology it. could X.X use year defining at what could do, working over here we how well we AI/ML

we've in And it we've so rules our rolled out done what is internally division.

able humans. the that wrong in able where we're So also in now to with introduce written things but care were rules, find by humans, RCM the so written by And most that's being things world world weren't even health rules of that to or right? are technology find

just clients. And And capture And found already in month. this the started additional Ben we've just revenue we've this out our as million $XX this we -- mentioned, rolled last process. for just of

only our it clients not It's seen touching it team. haven't internal They're so yet. yet. And

you dog if Ben, to that? our kind do want food, we're make further any own comments on of So you will. eating

they Yes. with lot and little coming go a it's through We've intuitive. The research clients on reporting, hyped this mining of own, knew their up of it a somewhat our today and of so having on a lot do was their bit individuals own. it lot we is already, that a process data

whole to themselves and us about just cuts findings think technologists and thinking off research very excited our are users bat. I step then And just the users intelligent it But the give out And or it. very internal that right expand and that's are about initial but clients, of hyping of already and with going well. excited our a client-facing current all about already sorts things, do we're they'd prospects how be into eventually, areas with variety it talking as up it

next line of Our Capital. Street the Lake questions from Wukmir Aaron come with

Aaron for morning. is the this on This Brooks line

-- just at towards a effectiveness RevID So through terms comfortable sort couple Are you of -- maybe towards last in evaluated progress client where usability. quarter, with annual goals mentioned you your the making you're scaling of priorities. of the sort increasing and of

if guys And on back here? going of bit focusing of just year And on a are into half you the more you progress if could little a color priority sort higher the give that there? there's

I'll Aaron. envisioned. Not into major on and that But Yes. Ben was platform. let yes, any larger a This probably is unlike start it, Tee, we have was Thanks, going knew to we it projects, and done major, opine innovation to the little than was a there be going RevID, as And rearchitecture progress. well.

now true has a is tech glad platform. and been up -- and wrapping cloud-based it's it wrapped up -- that the with But it cloud has

We I just exact that. month a the -- mean know cost almost have lowered like don't I something like -- is $XX,XXX infrastructure our I Ben. what hold we've think But major. me don't -- to numbers,

be because enterprise it be it we've about, it enterprise our has now has class. everything the to And class, in talked scale to can to

how tackle It's And increase the and future We've been going we we have so a the for map to really our that's projects on first for time, road RevID. platform project-based now. cool. velocity actually,

we're know what every we sprint. in So building

the architecture until ready. do couldn't You that had you

tool On enterprise is architecture create opportunities that and it is continuing exciting mean Streamline. is to ready go. eValuator, grow it's the an class. So for to I

road -- like making map biggest just X-year the evaluated front now sure getting for road It's is is our have we right map in that, clients. a things really with continually technology-wise, eValuator. on been eValuator the So of really that defined us that

we really eValuator can on So the go side. really, fast

So that's exciting.

introduction That's receive that the platform. done I AI anything than are in ML several to of don't the we've next see biggest of that obviously clients and benefit and the on going other quarters. the thing

So that will anything about specific these Ben, X be But cool. platforms?

will the on I to No, exciting the prospects cost clients it's with out I don't exciting is is comments than going more to But find said, a server What we're And going stuff part as I then, reliable. think your the rolling and more you features they were that architecture start like now yes, find current on most list. eValuator think, lot important them. agree that other affect right with well. you too decline

end We I session. for Goldberger of any have our would the the closing floor question-and-answer reached now Jacob to turn over back to comments. like

Thank you your of all and again for Streamline support interest Health.

more information, any forward to again have additional questions look our you or quarter financial need you please third we all with Good when speaking me day. at performance. discuss jacob.goldberger@streamlinehealth.net. We contact If

Thank conclude appreciate you. your participation. This We teleconference. today's does

at day. may your rest time. the your You disconnect Enjoy lines this of