Ontrak (OTRK) 10 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Ontrak Third Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to you speaker today, Ryan Halsted, Investor Relations. ahead. go Please

thank And for in participating Thank you call. today's you. all

and Chief are on Lou Brandon Officer; for Financial the today XXXX. financial me available September copy Ontrak Executive Earlier Osborne, Park, today, Officer. Terren Commercial quarter Mary Joining is results Officer; of website. Peizer, Officer; the the released release Chief Company’s Operating LaVerne, Chief XX, ending James A Chief press

in concerning I intent and The subject projects, begin, limited make Therefore, and like XX-K may conference forward-looking obligation over include, results XX-Q condition uncertainties. forward-looking from and of or Other which Form with any other certain historical statements. than and that results, statements. guarantees forward-looking would expressed risk are risks may statements financial some the estimates, words expects, identify factors outcomes Sections in SEC. not by statements. the the business, remarks described we Before to affect intends, targets, filed the forward-looking other turn facts to, Terren. Ontrak’s materially to All statements. Risk are operating I’d not guidance, actual expressions disclaims expressly update to this of future those these believes, these like that, statements. Ontrak used call may With forward-looking implied to Form to other call to differ forward-looking are but or but statements factors the confidence, following are are and These performance, anticipates, typically and involve

everyone. welcome and Ryan you, Thank

the as and to of as the many help save am the [indiscernible] I you of power reminded of As our CEO, people possible. lives I mission health through as

improving that in principal signing mission on answered a he the industry variety outcomes. ever, I'm not but with I'm prospects of also And investor stage CEO, more only is why resonates everyone convinced focused than member our it's of new in our final As company. the

providers, enabled groups. cost AI confident provides you a to progress solution the in for the and and with step first employer whole outcomes members about significant durable to plans, I'm growth. share are put is person Our health for savings return we

to Officer, co-President Lou call to Osborne. our Now Mary over I'd Commercial Chief and the turn like

you, to encouraging We now are value our are quarter. XX XX based in provider prospects Seven lives groups. Thank eligible our which about health progress is plans. Terren. our prospects in excited the we more XX three double I'm share the representing than pipeline. lives, have groups, active described million total of employer last

health While few pipeline, other and dropped a of health several the in to-date. plans the most closer robust pipeline couple smaller resulting plans final off we larger to a plans signature, move added health

start final our Let's stage pipeline. in with of prospects the

realized work for end scope beginning being agreement for South prominent Plan with contracted Regional Medicare a of in of with we both Western East are Advantage and for XXXX. year revenue master customers plan their We Medicaid be new believe calendar service could population. analyzing population a QX, their base We data and before this finalizing the a are

are for And their the in to time. from multi-state the by with launch largest one to prepared Northeast We one plan at end states We of interest also paperwork year. all and value XXXX being various this primary a we to conducting state the implementation finalize care and prominent Midwestern meetings financial care in to group meetings we as expand launch states significant of provider plans have with are this all proposal group submitted a scheduled of initial business. based lines the in in two additional

million lives final we have late these QX, in stage start over positively would generating our could XXXX. revenue which a await we that discussed final X launch impact beyond. Together, While their in XXXX response, prospects revenue QX and represent

different of with pipeline in have not million X current pipeline entered NDAs lives an us. in agreement yet, associated our million almost or with are into these business there nondisclosure prospects prospects. lives representing additional lines X While Several additional

this weeks, just believe in potential a which We the have sales matter stage reduced reached several from several cycle. of abbreviating is months, we

data All the over While robust the pipeline. Midwest based lives, or large group lives represent XX% remaining million three of with plans across regional of X.X in health a in stage, lives, the one about includes over nation and million stage and varying pipeline early provider of pipeline exchange. enter plans by encouraged lines X value prospects plant and million the are approximately health X These another told, total business. others we to final our and in our with

is faster standard at this be the engagement. year month cycle XX deals as a of sales anticipate of pace All we closing one initial happening than could within several

including Our LifeDojo large and a are organization with two professional to XXX,XXX digital manufacturing platform over aviation pricing prospects reviewing proposals, a who lives. large of access pipeline five potential includes employer, employer customers

us well for importantly, the our behavioral XXXX. conditions, network Most health revenue for our in standing as in as in are believe those timely plan are outreach in we robust additional will coming chronic we two an active to contracts provider existing expand We Finally, behavioral weeks. eligible pool impact health discussions and have pipeline, with believe eminent unaddressed access people signatures and and QX XXXX. nature of lines we our with telling the availability and with customers excited populations being materialize with comorbidities, prospects essential see throughout a we by of I'm the to long accelerated will health QX offering added to treatment.

the beyond. providers for attractive that this hearing in are foundation groups model is XXXX and for employer We build can growth business payers, return our to an and

our to LaVerne. Brandon and Now, over I'd like the Operating co-President Chief turn to call Officer,

on of enhance like AI-capabilities for we natural as time the XXXX. plan both and Number to is the priorities members notes one; our coming is and system members These X% business our the benefit Thanks, an maximize These plan as burden feedback comorbidities. processing many of Mary needed. a more that increase behavioral represent the opportunity clinical and throughout the to savings are who months, plans and offering, our we reviewing focus health informing X% mid treatment ability customers would XX% and approach. the include include, our principally chronic from I'm augmented improving engage fewer outsize to capabilities expand our The and three as core members and for from Plus for Ontrak access as undiagnosed of intelligence, using along whole includes to of bi-directional driven focuses the are Number best bring already and on positive who the customers. our evolving mission population number to cost our coach We are have to on coaching our pool communication person track only generated current members through could coaches traditional for remain possible. operational person tranche our part to X% X% plant's and to have the three; through assessments providers of and coaches significant potential engagement behavioral health variety from people our effectively individuals To energized we we improvements This will comorbidities. continued two; This advanced offerings. seeing clinically also program engage to techniques with Health of our call and end, and getting inform to to seek whole Lou. care to Whole significant cost clinical continue serve year. This pipeline. AI conditions, anxiety after X% the model of to we momentum conditions, our This most a outcomes in members. to by members, acuity our indicate and identify, benefits while strategic in to orchestrated. bedrock which is our as we next a prospects health or new members people deliver on outreach serve for effective physical with untreated program through that providers a durable of only help depression being chronic language that the to to to very population health

our prospects. and number new networks. four; our out new improvements of health providers five; the customers in Number represents it modeling network believe LifeDojo and attractive to of out absorb that platform. we're our our well credentialed And roll we capabilities customers existing to upside that financially and and clinically initiative are this the strengths, process and We of and market way in core we revenue reach positioned supplement be expanding so leverages of potential digital further will to a members continuing the to extends behavioral

for for a all new We of overall rigorous, top international as and as line users the trajectory. language focus customer modules currently app, are our capabilities continued revenue centric and markets. well measurement reflects as new clinically our on being adding rebuild we based customer This base, of set expanding growth

call to Chief our James Now I'd over like to turn Officer, Park. the Financial

Brandon. Thanks

To for about $XXX into same a large beginning of saw XXXX. and the QX XX% of enrollments have average the of the compared compared QX quarter, analyzes the enrollment and to the for in simple XXXX decrease XX% of members QX per During in during enrolled month At due in XXXX. to of the to quarter of in per and of with we XXXX average we member loss increased enrollment, previously we we of year-over-year go the QX at month enrolled XXXX. of two from deeper of end $XXX the total third enrolled by ended quarter, outreach XXXX primarily enrolled the a per which of for quarter, to a million customers $XXXX pool year $XXX per last XXXX enrolled $X.X per XXXX. a $XXX per to rate, it quarter, rate of for QX member our QX That recorded of bit and the members revenues month QX and gross we've XXXX Divided member XX% discussed. equates a QX the $XXX during revenue quarter,

in in average of Further, or decrease the Our graduated the that quarter. enrollment quarter, enrolled XXX we in XXXX. XXX Net same was rate impact of QX rate XX% The members disenrollment about the during members saw which members the to all program of third a equates of XX of beginning X% the quarter. at monthly we net the was

time our margin positions, of Our primarily restructuring restructuring completed decreased The gross XX.X%, increase $X.X sequentially annual plan, to of year. this XX.X% annual we reduced approximately for plan quarter was last was as which million margin XX% million part full a third of Under and in and well quarter as due XX.X% as from measure. in increased $X for sequentially from costs. saving management's of costs, gross the we party third approximately the compensation of third cost QX

As previously in the two model decrease year-over-year We by in this including cost pricing gross decrease XX we of at revenue was down customers implemented with in our our XX a members, the decrease with is of the to the to normalize during of in margin gross in The a to as end enrolled due of well the QX, ended quarter which members. our a loss the from the the related new is end as our of line mid year. XXs our margin expect revenues quarter, discussed.

improved the improve the to processes made facing time our of us of with of administrative and customers. direct to more automating and increasing enhance capabilities members. amount to during the even members investments continue or will we amount our efficiently The spent higher with ROI and by Additionally, year we AI spent deliver help to time enable a our our technology our the reducing efficiency employees member

Turning balance flow. sheet and to cash the

restricted $XX.X total $XX.X was of million of and from to decrease equivalents quarter the Our at cash, in $X.X quarter final second cash $XX.X cash was of $X.X end million quarter Of operations million the the during year. million million quarter XXXX. and cash the to and cash loan net the related from the in second with balance. payoff from flow negative year. down at million the this negative GS We cash the third the ended million quarter down compared $XX.X for third Including $X.X quarter last was

of agreement offering of During and $X.X fall quarter, to in maturity the we our in direct our the on work date net key capital We're million XXXX. into raised improving structure. registered also continue stock, common currently extend our our to the discussions

revenue issued call year. open previously Operator? outlook, up like for of million confirming we're now questions. any our Regarding the $XX guidance for $XX our million to to I'd

[Operator conduct line Thank answer you. the first Benchmark of the we Instructions] session. Bill question this Company. At the Our and Sutherland question time, from of comes will

is line Your now open.

in Hi, everybody. the pipeline. Nice the with work quarter

if the of gating So to the that know would are next it maybe down nailed factors, all about, come ability cadence a of you deals. sense get there's But play I year? of in? it's Mary would, there Lou, you And possible any what talk is to as because be, this moving in in setting these difficult up they obviously to enter as parts is if terms close as

Hope good. Yes, Bill, you? how are you're

plan we right XX stage our I in to the prospects the on a evaluating the that very release. signatures now large in And expect days. late we proposal. next reported So on XX working have financial We're earnings

hear would off. a continue other that need expect say, within forward. to makers may back, of go be to we we're expecting couple couple to sign to I a There decision So that weeks. But

For stage reviewing late additional the one. data. had We and to prospects data other of group us reviewed the we asked review data they some for are

that XX a we good we sign. that the a we plan fast expect as an expect close one have of increased process, through amount one pretty So that's to that that Once well. now. I XX reviewing we're actually deliver from will And data go right to always will also financial proposal. within days. next go We would

MSAs couple and And working a are SOW. along. there we're that addition, on further are In others

getting a of just matter the paperwork, finalizing signatures sign the launching. have ensuring offs, all decision we makers those it's and So

XX building our provider to launch. expressed XX We prospects. for of days days But about networks. all to have takes It not begin to we're waiting

new, prospects. we've we've very, network that these and very of new work already Ontrak So pleased program that the the far started brought providers build thus we with provider these into net the prospects for done all have for

a be for that. XX of shorter a a Does of us period could it result So day that help? as implementation

Appreciate process changed And of getting that's Yes, feels a here from kind the like in What's follow receptivity And far obviously you're faster it. that here. to as signatures? from getting? towards view the conversion there's your, good. as faster, up your introduction

Yes, well, for thank you acknowledgment. the

We really working hard at are here Ontrak.

phenomenal have sales a We team.

asking Ontrak prospects time are reaching We out week our to to for of hundreds each program. introduce

we the We're our We've we know, bringing has, program. Brandon's based model have technology that a bringing through forward it that our one you As are comments, evolved an space evidence improved our model and we do. and else forward capabilities program. no in appears the

We're with So engage identify impute fact waiting to these call behavioral activate very can members. prospects The are that we capabilities. members that and us. health, intrigued not and for we our AI

long we're how seeking for be everyone seen time need providers. knows, what from hearing sure As by very well, of part is And that plans problem. that's to a that not not Those are to health care care. where go, the it's access They're as providers. to members

it a for the six made members are be months months Some last saying of a for four visit of that as couple provider much as to can in plans session. actually to the access we've

And so to the to providers guarantee are weeks, resonating. seen with couple within new message timely not a net of our that months, four manner forward bring ability is to in six a members

are provider data. plus model let's interested all the of call. a in BAA our NDA, And their and So And the to that message steps and based we next it that's techniques fashion. in are and evidence steps an for acknowledgement next very an start members that exchanging plans network of present timely with capabilities in addition is a available our introductory

what that's working. we've And so focused been on. it's And

is. or the the the maybe ramp like last of And happens? then it up? Sounds that you from James as the both. Brandon What about requirements one, timing cash, flows as cash liquidity me of Remind

about stage the Sure, quick. Bill, launch, And think prospects very we to this James. generate think is these it late with is way the XX we days about

the execute of on plenty also us and with cash agreement the sales available we should to XX give runway million that we pipeline. that Now [keep still have our hand on will], on

would depending cash generating it of to gauge? of year? a course, Or Is So next to as make just impossible expect midyear lot you on factors, soon is it be as a hard?

at little difficult a it's Yes, bit to point. this gauge

through first we prospects, once think EBITDA. I positive a on get these flow a late of wave and have stage the think we'll better I view potential cash

the all Okay. progress. Congrats on

I'll So sign you. Thank off.

you. Thank Great.

Bill. Thanks

for their I'm this showing up time, questions. At

for today's So participation you thank your conference. program. conclude does in This the

now may You disconnect.