Streamline Health Solutions (STRM) 30 Apr 242024 Q4 Earnings call transcript

Greetings, and welcome to the Streamline Health Solutions Fourth Quarter and Fiscal Year 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jacob Goldberger, Vice President of Finance. Thank you. Please go ahead.

ended us Streamline corporate fourth Health fiscal XXXX, joining results and quarter for year of XXXX. review Solutions which you for update the financial and Thank XX, January for the

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

call the Ben are Officer; on Chief Officer. Stilwill, Chief B.J. Reeves, me Financial and Executive today Joining President and

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

that we as be viewed. Before our information, how record sure to should certain be clear with earnings statement. may calls, we submit are the facts the Private on therefore, call we the prepared not assumptions materially actual of Reform of Act results could conference historical Statements Litigation we provided that be to all following record those meaning begin to to These which risks, factors remarks, of XXXX. today want the are be statements from and uncertainties, the for for Securities may with We, are are cause this discuss. subject everyone forward-looking on made within other differ considered

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

or call when take today. statements to analysis topics publicly any note, forward-looking made presenting will evaluating Participants discuss. today. is any into of revise account As on these items management's risks commitment are undertaking as not current always, Streamline Please obligation we such the these of should this we

to these ACV. call, non-GAAP EBITDA we help financial discuss SaaS such uses as Booked insight financial into today's Management our provide and measures performance. adjusted On better will measures,

these help non-GAAP measures, those, entity measures. certain earnings www.streamlinehealth.net and However, own a such on of calculations from income GAAP may the items these another calculating for so amounts not included utilize most their please in To reconciliation website may our non-GAAP and these in you measures. differ expense are refer consistent at release measures our of to compare to terms, which comparable

I the now call Stilwill, to and turn like to over Ben President CEO. would

challenging Thank you, Jacob. XXXX was for Fiscal business. year our

excitement impact have continue clients' future. the the our fuel about solutions our for operations and team to However, our positive our

solutions exist. our the our clients model needs need market business to and Our

So leaner when we say it's become organization. stronger, to adversity, had agile more we knew we and a

team, of more landscape Today, exist experienced hospital in and growth capable as we the revenue driving innovation a cycles. complex of

agreements value we all As $XX.X currently of yesterday, for annualized which recognized ACV, bookings Booked well implemented, million we which announced have contract Notably, that breakeven is discussed implemented. for as rate needed is $XX.X the run above $XX.X not million million, this previously. the is been adjusted being EBITDA as SaaS totals

bookings over unimplemented course and breakeven we EBITDA an year. the the achieve of of the half during adjusted remaining that rate $X.X this expect We of implement second million this can year run

about to our on state before set the to challenges to clients' business comment them. I'd moment like current address talking is a take of our up how

as contract make added by turned and years, to more have to high in to challenges, negotiation. these care. it something a have today's keeps not more, result. but incredibly unfortunate to that providing fundamental recent get combat time paid in possible, all staff think spend systems together complex, more they cost is health because and to are clinical reimbursement To they system and We forced resources increased valuable in is to that care, it the exist even denials market, the payers collect nation's to historically But have difficult hospitals labor but made Our was provide the outsourcing fixes. this more more but through The only their already for chance revenue critical many outcome, so just challenge an cycle. missed operations, not outsourcing to hard-nosed

compensated vision, guide My within care system, as for change true our provided. for they've by be is come which their serve that then shared team, quest from can the must and health organizational we to recognize the accurately the

innovation And investment reflect are which allow will education actionable, eValuator, inevitably create our financial this systemic They in loops growth. make identify, and improve. then as the model, necessary vision. innovation and of leaders, opportunities. in we and a message that changes today's cemented cycle make resonates flagship by service the to our and improve innovative via with feedback we our clients RevID Our specific model way to service revenue needed it to prioritize and solutions, Both our them creates

provide front on me innovation and before updates So handing let growth B.J. to some off the

made satisfaction. During stage previously which the we for of the fiscal XXXX, RevID, rearchitecture performance mentioned enhanced within innovation. We significant sets strides and client

forward, we innovation for is within our look focus RevID automation increased interoperability impact. enhanced users for As financial for and our

we forward, existing AI And as other across our the client under we model of rules. tackling X AI AI On project that base. rules in found our opportunities weeks enhanced we well out, $X the improve of with further during the belt. substantially impact as initial happy deployment, eValuator, enhances XXXX, more report have comfortable financial model features We're developed million impact the that of to and feel looking our to first the an intelligence

My the profiles time [ is to users ] to with rolling week. a My feature [ of role-based productivity. experience We eValuator ], out called this also user enhance major eValuator user which a advancement spent on is eValuator

leverage this and create we'll efficiency more our users. forward, more for Going to

a there's here. And theme

road make improvement in the back most out improve map, to help and need our automation health financial and systems Going usability the to That's continued footprint. vision, ROI teams. will products leveraging find opportunities of and more expand the of relationships financial our our their focus of client to while

in the we front, our growth remain leadership. confident under Amy's growth on strategy then And revised

went strategies, our lower strategies one these As we and they we to displacement emphasis three, that then eValuator existing to beyond partnership, and shared tailored proven last push significant have Each existing sales, where RevID; a of effective new have base. more an key to four, last include: both do want we've four several and flagship year, one, we out specific campaign these and recent one, client seen progress potential names, two, enterprise in had the continued a to delivery space, clients cross-sell is for much partner; continues broad expansions within better solutions. the and our our We've related to contracted a and from development results cost; offering a each X advantages. that including aggressively and I market channel call our on tool which base, for late existing new in Oracle client believe market approach accounts within approaches, of we of upsell to client

to emphasize they coding success our of agile focus. who's Amy using terms effectively all to improve our in growth also to where the flow. prospects cash reconciliation, most health priority areas not but our allow in both for at us messaging and managing charge and and These team ability within are denials levels engage We're on approach only multiple has organizations also our ultimately, to their and enhancing top with an organizations. strategy, been decrease

our capitalize us and these making ability work adjustments focus that service. to on to need the and innovation to in help optimistic in systems strategy believe about marketplace on with remain will health be challenges. investments made We the their and We

CFO, Reeves. I'd over to the our like And B.J. with turn that, call to

Ben. you, XXXX fiscal $X.X quarter as the of of during fourth for million fiscal Total revenue Thank million $X.X the was compared quarter to fourth XXXX.

compared XXXX, XX, during SaaS January offerings, $XX.X the maintenance revenue professional legacy, revenue totaled million ended change revenue attributable The offset and to and was as by support revenue. months from periods XX company's lower services the for higher total a $XX.X XXXX. in both contracts fiscal to million For

large contract had business is not related at This to contract, company forward. year. going the core which company's services the reported, previously end the professional that XXXX As fiscal not was services a professional of its renew did a

$X.X During and XXXX, revenue $X.X and SaaS million compared grew year as respectively, to the million, fiscal fourth quarter periods. year prior the

duration changes the previously Please of our XXXX for SaaS base, will that anticipate anticipate a announced recognizing to revenue sequential quarter first decline in the during the XXXX due XXXX. lag fiscal client fiscal revenues note, we our SaaS and of fiscal in

and of quarter Total reported XXXX. million The million the operating previously expense quarter in $X.X was during of fiscal the integration eValuator the and Avelead the businesses, overall operating R&D. lower compared of was was announced the result SG&A of fourth $X.X and expense fourth for company's primarily to XXXX

costs revenue from lower with associated overall saw and software that our of our fees business. lower portion licenses also line professional with We in

Compared operating of quarter. restructuring our the in to previously quarter, $XX.X quarter third sequential the a impairment and million. to expenses seasonally low result of fiscal total of expenses fourth $X.X compared excluding decreased in expenses, the decline third million operating our total The expenses was announced

current will we than fourth our quarter during that Looking a experienced fiscal XXXX. stabilize forward, slightly model, expenses we anticipate rate based higher of operating run on the at

the continuing related for the investments technology. development We including as technology, such improvements and improve implementation, our ] applications the to RevID of eValuator to ease we content for development make expansion to leveraged technology the AI that have generate update, the continue of and enhancements to of My [ additional especially

operating our first first annual fourth note which due to our than recognized Please expect quarter shareholder that the to sequentially we we fiscal be expenses, meeting expenses during audit quarter quarter. higher and

businesses. Fourth fourth was expense to totaled million head expense a net higher $X.X lower net $XX.X quarter operating fiscal XXXX loss goodwill. fiscal noncash quarter with primarily of the including impairment the integration to during is of primarily compared the associated count related fiscal to to in million XXXX of XXXX Avelead eValuator operating XXXX compared impairment, of expense million operating the fiscal loss a the fiscal for XXXX. $X.X lower net million and charge with XXXX. XXXX. a totaled totaled loss during to million million Fiscal XXXX $XX.X The Not compared million and attributable fiscal compared loss $XX.X $XX $XX.X Fiscal

cash revenues. operating offset lower static on the increased net result expenses relatively impairment loss total The primarily charge, was of the by noncash

During the company's of XXXX during Fiscal of the fiscal quarter as of well compared significant generated $X.X is XXXX was in the XXXX. the the fiscal EBITDA a cost million quarter of The revenue favor million fiscal alignment. $X.X a shift achieved fourth of to adjusted to XXXX, $X.X a EBITDA adjusted $X.X loss compared fourth of million XXXX. we loss in result million fiscal as in of adjusted the composition savings loss SaaS revenue through high-margin improved strategic EBITDA of

the moving sheet. Now to balance

and January term balance cash As was million at million XX, XXXX. January to of had our million $X.X $X.X compared XXXX, loan we on $X our million, of we had of revolver. on The hand $X.X drawn XX,

XXXX, subsequent proceeds gross announced, for placements on to quarter of previously $X.X As close February we executed private of the the X, million.

SaaS wins As mentioned, our recently $XX.X Ben our $XX.X above is ARR previously expected Booked ACV, of announced including point. million SaaS million, our current breakeven

that can anticipate second run remarks. the we of implemented. That turn for concludes I rate bookings our now closing result, we his half a these Ben back during to as the my call fiscal breakeven review. are achieve will XXXX, As

in We shifting seen B.J. numerous KLAS investment dedication of system revenue More pre-bill solutions to solutions bring leading translate expect for current with and our believe revenue demand and the helps in conditions September some ] by our impact revenue to third-party integrity, are was clients. in you, as macro know half of an we the offer. than our respondents we In and cycle support solutions priorities our new for top importance survey we priority. cycle We've that to a movement increased value their emphasizing the future health in and a closing, conducted our provide to reports pre-bill the to technologies clients. Thank the [

have ability made health I up you expectations your support to nation's care meet hardworking challenges for our all of opportunity Streamline day our I'm is to thank lead provide. are associates, the in and our of ensure I thrive high of the as paid rise organization. team. grateful new support for this dedicated, of for continued to for an who each to our mission they And systems team

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

from Today's Instructions] Matt [Operator coming is first Hewitt Craig-Hallum. of question

maybe quarter that Maybe things how very are sounds a has first up, I bit perspective. right that things. was environment you you what wrinkle a things color of put little it noted change provide a curious, better. just hospital getting you're little could from in challenging year But sound on kind on are bit last like I'm a if It last the does But health getting evolved? a like better. situation spending care year Maybe seeing now. know a little

Yes. Matt. Thanks, Sure.

are So integrate are the hopefully, fully need I solutions who can't are looking out some there's some understanding they're systems to technology people think to a with specific prepared problems up if think that of how "We of that in find have priorities remarks, technology of those these out vendors think there I to dynamic their our solutions to buying waking but I a can We lot these some care I change. and systems help Health problems." can health at others how stream some of and are outcomes. right, had the issues?" As outsource the "All say, solve into the saying, understand technology about cycles, of my talked outsourced momentary, having to into certainly who we health returned disruption need they us

it. this second, maybe Got is current. then pretty And All and right.

opportunity so, couple wins you both and helping wins that about on course the of Maybe and a or past the more tape drive opportunities. where some a bit over the there, little got year the see of here what's in maybe You've going forward? going talk the those of and those week cross-selling are

Sure.

years, solution In earlier service year, we've the of trusted calendar technology. that that, in flagship that example they one several other solution. both existing of us partner was cases, it they they clients enterprise put that saw the an mentioned So on they've model where had and for as we an our X a was bought combined and we our top have with

they you our revenue cycle. and said, a reached when having know the in "Hey, also out so And We issues we're have solution. areas of other guys

current As same understanding and the If more long that. it's we anticipate overall was to we ARR, do base, outcomes trust so model, that enterprise client number SaaS something million have some is And today. that a we with helps service as selling really our like client. it's to what having of is there $XX total the of across addressable were to a the which in." that an we're commitment level double a their And

So definitely substantial.

buying or consolidation health trying We see other entities or within systems. that well. of other seeing expanding they to facilities fair expand of also as footprint We see facilities, the have, prophy building that a we're whether to it's amount

out do can very it model some we service and we're into material happy we bookings with that -- well. as So turns it the have, turn

that's million Got ARR, it. be that And to $XX or opportunity? just incremental that's the clear, total

be what would not That opportunity, total for the currently sold. yes, incremental we have

Incrementally.

the all like. look we solutions that to sold if clients, the So would that's what all

queue. rules and you I'll your last maybe guys. AI one either But Okay. for opportunity, AI new years, hop out Got real over the or But current That's got one, new obviously, beyond back take model? for where the you that, big a coming you've And the look else then opportunities with it. there opportunity opportunities, you eValuator. that? in the other could the Is as portfolio

Thanks, Yes. Matt.

a creating The refer lot that we scaffolding. in using as obviously built it So way it is we of today, very It's case. it a a specific we're value. to

future. probably things data as with things that so as looking noticed at solution more on denials, see automation notices feeding back meaningful doing it current our not and we additional data like that in by the our on the clients, model that feeds, in get improve can elements bring that opportunity data doing we we're it can we side, incrementally in are things from So in the well a but the We're that solution, our humans way. We that then in necessarily more focus. RevID

So they it and the that, reconcile see so then make a The is model able to time creates charge. user observe they try automatically always task does next whenever the to task. that that try to a this it

There's there's we a are had size democratized. company of are a to things lot one that trying tools we've use But able project been just now also bit that a have of out we're little where to we've that our that for there better understanding. do,

we at of have kind do a We lot feels have how very subject going subject can to that ideas technology of to how on fashion. do that medical matter be other like it And least we're And who this our educate once, matter that who to deploy in to able modular experts we associates we've experts are able this a now on great have in digital areas. works. been

So we're well. in I but it, excited about as road there's map that no there there's value is a current doubt it. mean

The next Markets. of question Lake is O'Neil coming from Brooks Street Capital

of a couple have I questions.

First, this you SaaS I all think awarded the any know question, the been I but yet on do you that not collect at implemented? have [indiscernible] have but contracts to unimplemented guys answer

Do that we Is issue the number? Brooks? question, the

sorry. that I'm question you ask sorry. me again? Can I'm

Could your Sorry, repeat will you question? that easier. be

think term? Or if includes sure, then of curious about all $XX.X about million is thinking to which level you Oh, relatively out, SaaS were of What breakeven. I'm $X.X you're I'm And you those you are the about that the were sure. you'll that? getting of obviously, to implemented million figure above talking and a in how you trying the contracts. unimplemented get Do near talking

Understood.

$XX.X SaaS Booked ACV the So is that over just million.

get implement breakeven, need million. to we the to yes, to the so $X.X And

that there of that ones $X.X to. half But towards in line we territory. the of the We we've and the a going relatively very into second course have we're into the of us are general, that a into flipping line But million have the rest get large guided of is those with. of profitability sight over couple large projects projects why year, of that's There's live that sight a couple there. good close

Great. partner. who to about? there. And I'm what us in remarks, color reference That's helpful. a not involved any that's I'm think secondly, I is And you the give Can what's XXX% prepared channel heard then a on or that all new with sure I familiar

Sure.

sales is So one on, of four partner. strategies focused that which had productive we're we a new working channel

to really with. talk mutual would Obviously, are but channel a of reseller We've negotiations that channel for one looking others in partner we're be in it's more past. So partnerships, consistently the about market that in peer we the signed benefit. we a relationships

the ones inked hunting that significantly benefit client of be yet, would One of to very bases teams. It's one are the to just a we provide not our we would it as opposed point. to is announced if that got sales amongst both and relationship mutual that

all Okay. I We'll just I you here yet, -- what at I'm as a SaaS for this you keep time, And the and provide, understand an eye is the are to and what for myself, it one. then I as industry no-brainer we and time too, wrestle this at the level. but I breakeven think sit out as can think with sure least barely well of at guys just do, here that I

I marketplace And the just party? missing Does sense the My that the there, picture? not you superior bring the tell this missing what -- party? best your I to guess solutions properly? solution me Are picture. value the is a else your I'm doesn't guys Or in somebody thing you proposition understand get bring out have the am it solutions but true to what question is I in do is, this far

Yes.

the executives an of priorities to appropriately I So revenue there element being message think able have. is that cycle to that

charges. hierarchy. need to the coding specifically of kind primal your Maslow's the serve. of ability quality solutions affect we that and Our That's That's in reconcile

that now have our far entire We've What is greater collect. specific our do a our believe we than show are do. what X impact on messaging to current we're to they trying we impacting heard the to clients work from solutions how cost

overall their so picture we that their picture. staff, how we to other et affect cetera, the working vendors, currently able into on. and message executive work with what work fit That's with being to are And higher around

long. the of solutions decisions maybe terms have who like these other yes, couple In also sales they've angle. their more the or in landscape, a vendors just There's outsourcing gotten this are cycle for pocket there itself are relatively

prospect And next happened, X months as the have the entered disruption ago when that's pipe. so should

line. get we're to get So significant prospects we we the whenever pretty conversation these that a confident can with them across

so diligence it's level that we're make we such into sure attention, it that messaging and And then how of in show get way we impact. a do that due get that really

most to also And you clients herald way the you how higher to the that's why do powerful clients we our and industry. others significantly the ability our to mentioned, that able X than to And they're is preferences that current do is use clients' many it. but see our see enterprise in

we're And to that leverage trying so them voices and sales in their process.

great, That's that. appreciate I Ben.

it more Let what as sure the solutions underpinning cost It a correctly, parts think you environment. way is the to trying really bring. SaaS sure One understand effective to about. a money. are one X alluded I if bunch to that more to I'm guys follow-up me you just correctly, with understand labor-constrained in ask value be a hiring of there's cost than I'm it I And to that and strikes the the proposition your you me, just were collect just I people talking

is the you and the from collect -- the by doctors they're you key others But care of it that's collect due that provided clients payers your X-part in on also part health Am me real proposition value help I strikes formula correctly? been system. all understanding a that money based

that is then to find cetera, metric existing clients much the solution, it we with that's that with the collect then about we the get been me how do parts. we et recently Yes. staff talking how one to did in, am our that we you bring I There's do cost opportunities, X and the have revenue? So the And there's the denominator. because able more -- SaaS revenue so is to And have it financial cost numerator. X to we much prongs

for At this over floor any time, back or comments. management additional closing I'd like to to turn the

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

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

Ladies and gentlemen, your This thank participation. you event. for today's concludes

may You the off this the or your and day. lines rest your disconnect webcast log time, at enjoy of