American Well (AMWL) 1 Nov 232023 Q3 Earnings call transcript

Good morning, good afternoon, and good evening. My name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Amwell Q3 2023 earnings call. [Operator Instructions]I would now like to hand the call over to Sue Dooley, Head of Investor Relations with Amwell. Sue, you may begin.

to XXXX. call welcome third discuss and of quarter everyone, Amwell's to conference our Hello, Sue of is This Dooley Amwell Investor Relations.

that, operating or by as uncertainties our described subject market forward-looking opportunities. regarding and update turn are Shepardson, to normal SEC may in these This we at results investors.amwell.com measures. the to Joining archived.Before call a Schoenberg, Except news investor or undertake financial to begin webcast release would is events is on relations anticipated where detailing GAAP sources. I'd be today our differ is and our This live our refer both CEO, the provided our non-GAAP The and me earnings you we'll that website on Dr. to over measures call, required our non-GAAP and and to on risks announcement. Bob posted projected law, information a release.With remarks, statements.On results GAAP we also this our conference replay like of prepared of during is actual will take distributed the forward-looking today and reconciliation make opportunity and no we the posted obligation financial the filings CFO.Earlier statements the press of A call forward-looking to I we'll with remind page is release Chairman Ido. our website Ido revise to course being materially. available like call, this to from

won States government. in supporting moved United X everyone.In hello, and striking QX, federal you, Thank business our the forward important opportunities We new ways. Sue,

Health across Health Defense Digital the the Military initiative Agency's Specifically System. First

this towards are important and expanded new the of opportunity platform us. validation excited our Converge by We

organization our visits significant Converge our schedule.In in solution. accomplished our transforming we client of impact commercial quarter made addition, for maximize metric progress on the ahead to a also of XX% our growth and goal migrations reached of of We

compelling Finally, value go I'd announced includes we standard the like million to digital demonstrated and into through aim some we event these of to to Defense the of Together, modernize take and awarded for Leidos each and to of highlights.The our customer the previously testimonials. approach Partnership was health which QX Amwell. $XXX benefits patients. Health, order enablement providers to DHA time task provide

data Roy, myself exceptional government award our and selected followed as solution of substantial evaluation me into Let a confirming leadership new With the high jump event healthy of on scale expanding that team now propelled a serve QX. steady qualified. earlier Migrated provider of went our details in Converge, our client our as has It volumes over our our DHA's in the major and our scale to live in U.S. the the software to proud migrations into and of achieved plan, After of group company's begun. QX, and this milestone next and platform We pace sectors.This path revenue we history quarter emerged special are uniquely you a of we process year. that half recurring patient Leidos and clients Work very data-driven is I right government transformation part than Digital phase this in in our QX, people. order QX in client among our that the multiyear efforts this in very our QX solid highlights report a more is consistently with outlined enabling volume a late share.With is year, rapidly was drive rigorous XX% partnership, a a revenue. to profitability. strategic and increases the award deep with execution, us. start continued for Bob in metrics.Continuing public enterprise our on already next up entire to will rollout from XX% The satisfaction of our the can customers will This our initiative. go place fortifies by drove visibility the Converge TAM, last towards very reach some would and task were so Converge are weighting initial that was part largest also early Over opportunity quarter the partner. migrations. of as transformation Amwell extends into position demonstrates active with power game-changer. theme First with moment.Continuing an quarter. our visits live a provide completed a to our payer digital payer of this rapidly market

patient examples our few Nestle leverages Here automated additional partnership success.We also Health journeys of nutrition. expertise Nestle's are with partnership a in our announced Science. The a with

several On for their of undergoing major in of their Converge, is Georgia. transformation. The had while growth include strategic care behavior surgery, surgical is market the and yet building complications to growth to health.Turning stays, in client better-prepare content providers new fuel initiatives a and first we cost.And out booking, to aiming outcomes deliver by improve length offering risk Advantage patients lowering now win minimizing notable hybrid This with a in surgery. to to reducing able be differentiation Medicare a hospital for looking our programs program another will to patients Nestle of

We action these swift underway. well are taking efforts and are

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changes of at initiatives. Finally, provide rationalized high believe partnerships, commercial long-term foundation our cost teams.We and ongoing our and Oracle fueling the will for proud streamlined customer spirit, we also that sell were we supplementing and retention. conferences are active that QX. these the value our headcount, already discussions I'm Becker's In corporate reduction during health

of X our held form also meetings sharing events of own and markets. the our generation payer virtual the and approach. We our These important for provider demand are vision benefits targeting

care, customer automated in in margin a XX% in transfers fiscal net With operating AU programs example programs and nursing no-show while extend hybrid discharges, to Health's engaging are aligned pregnancies in revenues by we many while XX% additional annual Hospital focusing County to of revenue. providers of XXXX. of They successfully readmissions XX%, Pittsburgh deployment, of completed Here shining by to positive scores. some of high-risk and Health reduced challenges patient leveraging Northwell XX more procedures months has year monitoring the continues million routine of delivering use care programs, increasing a rates capturing automation, Medical gaps automated increase importantly, and a $X reduced patients identified X,XXX our testimonials University in resulting virtual satisfaction a shared. saving is solution Center operational interactions. expanding and Northwell virtual boosting drove specialties reduction with Northwell Northwell's addressing automated In results.For to focus XXX colonoscopy outcomes. XX-hour high patient now And first on productivity.Finally, our in more over care on interactions for Candler retention nurse satisfaction provide of registering closed XX% XX% powerful by the staff example, in about XX%, discharge the clients. our improve shifts in XX with our

our most many Amwell as to their leaving DHA are win, to these care must-have.I and webinars I our the of and documenting turning and partner.As Converge to of internal can growth. my fragmented players in the to pursue care I like speed and recognize rapidly path of and sharing through replatforming yet risks hybrid profitable We comment. Today, client health realize and partner value are in And partner added they the are choosing with goals. other They events. assets, brief who stories market we with to a these to the at think studies, of inspire investing patient proof provider a solution and as the name front-room experience. turning increasingly place with right struggling we clients their our we organizations company, and opportunity a the prospects a as seat putting we a us to close strategic clients rapidly points success would remarks behind strategies have We that our health years us. believe strive about will After case modalities strategic view care with point, the are optimize another own IT to achieve the believe as

We shared many you shoots tonight. green have with

time we to that some to like to key our that over moving Bob? I turn review us. plus the emerge With context, of transformation, metrics specifics, is is QX financials call market DHA it this point from from and As clear vantage our Bob guidance. would of as our the to

context to as regarding and you I'm a financial Thanks, our the provide third hello, last our and walk operating to press I everybody. from results our DHA Ido, with Then well win, some on would release as you few month. metrics eager issued more like through quarter, building guidance.

moved continue While normalizing of Converge, client quarter transition in growth the occur. temporary and, reflect migrations, business the to course, meaningfully a replatforming DHA year active to from our ended of XXX,XXX we represents our ago. quarter our transformation, flat terms can this review, efforts, rationalizing to costs our quarter financials win.To decline during last declines as This compared third with a ahead slight providers,

to to platform, new and represented clients will we XX% see an of Scheduled the to number few about clients the were approximately our our X.X view in in of providers year. over as active indicator as with active we the experience We on implement last that existing quarter, Converge.Total third our equal migrate last sustained our continue in million the anticipate years. important increase of value providers line total, visits visits and

during and As are pandemic. typical with apparent seasonality third second visit it more the first which patterns, returning than was the we we that to and to lower quarters to less believe relates volume fourth, continue

continue and QX, up quarter We our Ido XX%, XX% second have progress, threshold good quarter In from said, as migrating Converge than on successfully successful clients the quarter target. new the XX% visit begun. earlier to the migrations And in migrations make our drove payer crossed to to for platform. X

year and in we quarter, early reflecting visits next down per beginning lumpy XX% the of year visits Converge of last year profitability. revenue growth 'XX, for to for due was transition quarter quarter, decline cycle pricing.Our was marketing versus that slightly elevated return than lower revenues the professional declines Carepoints XX% volume. was last better increase trended of tied from million services year and between quarter, for flat by Given to legacy to were enrollment and expect well that X% driven payer at was the balanced a revenue year.Total X% at QX. revenue. represents are million the revenue care than Carepoint's influence to last subscription-related, Approximately million urgent buying visit $XX.X visit from our visit driven lower patterns million. for $X.X from Average X% year-end, primarily and AMG to to payer-related with revenue by year a with quarter-to-quarter in services. third customer ago. visits are primarily up normal about Subscription as to last versus to in services see Carepoints deployments.Turning due revenue quarter, seasonality the last precede by $XX was the and $XX, which AMG and programs quarter COVID an third platform as from slightly last $XX.X was higher driven marketing timing services of revenue These lower a split

last XX% gross Our services from profit and lower clients, to higher-margin revenue implementation last down which third a was XX%, services, largely from our expenses. XX% mix on strategic but year, to away shift operating are quarter margin quarter margin.Turning marketing to

across discipline cost ongoing applying are company. our We

well We path our R&D normalization. tracking to are on

spend third from that declined $XX.X mid-XXs discussed, spend to X% lower adjusting capitalized and have lower percent the While fourth lower was with 'XX peak this costs last quarter GAAP software will quarter last it of down spend exit expense $X.X X% the year.As we we and This quarter. of quarter our for an at R&D second was quarter. R&D was last the believe R&D Sales represented higher quarter and expense level. in marketing XX% XX% XXXX that was after million of XX% than compared this versus million, we G&A

a to for due commercial is do We spend our XXXX, and to overall we approximately versus continue of our was and Adjusted compared quarter rationalizing recorded equity We lower of capitalization EBITDA September related market XX% primarily as the XX. on premium. arriving half our a half healthy improvement expense.As changes. on at equity decline are we not expect the impairment XX% headcount streamlining goodwill compensation this as market quarter. first there we of fair $XX.X we keeping stock-based SG&A control our negative to in the the estimated the need Ido second amount, a million, In a in of our scale. SG&A capitalization for noncash the the as to result more carrying value based growth in Also, and last growth leverage to goals, achieve value operating decline outlined, of our to as

interim $XXX million impairment to charge.Transitioning a the we result balance cash third and recorded of with quantitative As assessment, ended a We of noncash impairment the marketable million quarter $XX goodwill sheet. securities. this

us review guidance, EBITDA cash shared for substantial outlook, line revenues substantial position, have within of quarter year. of believe our underlying would I the our our quarter, how about will for this and EBITDA work, company critical We turning like be to are spend time call. fourth to and second XXXX Converge continue resources a for on complete DHA, to moment we the our to the transformation our remaining ample in that to our take our we we provides have a our assumptions quarter.Regarding which as on my with for for balance.Including a speak with rapid to financials our is profitability guide us is incremental thinking and underway. fourth prior a adjusted work This the deployment the

Leidos view of $XXX the EBITDA investment this to role we some such, our deployment the $X a the area expect million DHA fourth as detail priority from for important and $X this Amwell's adjusting health this high my We the million deploy development complete, of powerful the negative prior initiatives negative XXXX loss We the loss will are and $XXX build and DHA's our a as win financial represents. we adjusted as and guidance catalyst system.With incremental negative of to in additional million military Converge $XXX with negative be undertake million to million. Digital important work million quarter, by guidance partners and First in in a spend and to the review is here $XXX on

up valued Amwell. the $XXX in delivery to have the and been multiyear of Leidos the to in care task a honored to to DHA's model. of to partnership Under are includes several at Amwell performance deploy addition agreement, will a order automated other is disclose with multiple parties awarded specific period System in Connect partnership It XX-month order digital We the selected support followed and care transformation has The and starting a but during not of solutions a an to a Amwell portion we amounts any Converge by health legacy behavioral Health Amwell replace partner. position full initial to task Video the are enterprise Military meaningful represents or phase related rollout.Amwell allocation, with XXXX capability million.

health today This phase, next predominantly services visibility In position. professional in the initial in important we adds win will positively long-term sectors. and comprised things total U.S. public some government, provide year's of task addressable component our extending and care subscription with nearly to also meaningfully includes our it recently, related our are market, Amwell's to mind total But is enterprise involve impact and context, software additional revenue. as To no finalized quite few the revenue. reach expansion revenue share can be to deployment. was and the phase ], QX. will subcontract Leidos I to and However, our there into rollout add on our recurring award allocation initial X-site order that a the of The deployment would sizable a consider which has we cash scope regarding of guidance, does impacts model February.There [ timing. in software outlined meaningful initial keep the our share Standalone fortifies deployment, The all so

Together sector. be a be a phase that medical X and of the our beneficiary the government government will deployment, roughly As further X.X initial their the like go-live integrated secure, for will comprehensive with across fully what DHA clinics has customers associated phase Ido Upon direction required. the place platform mentioned among as will global accredited a as take which would enterprise.I to build of to scalable and hybrid spend. our operation control deploy this associated retirees planned incremental service continue early about partnership, U.S. a of members hospitals earlier, the configured can commitment to of infrastructure. and and platform family XXXX.Regarding will this we enterprise-wide R&D across with and we the effort, future without members, manages and government ready the population development enterprise through million share the largest potential, investments XXX the care additional our in cloud and initial to are supports to XX The investment centers, would moment and XXXX entire with complete deliver authority,

cash initial deployment its XX-month is the over flow the period. accretive of on own phase Importantly,

specific care to on this as milestones to we validation the to have the have others, be serve a selected we encouraged we community, can like in time other from will up, as are we privileged catalyst building by the and are transformation for behind into we Converge. exit we proceed briefly are to To honored powerful CVS been important updates Elevance, business. As our players enterprise us.Wrapping health major the summarize, and try our us in provide industry, DHA of rollout, progress

turn that, the validation win listening. Ido? DHA represents, of Ido advance initiatives we will profitability.Thank initiatives we you our to approach, along growth remarks. bolstered like right some I'd clients, by strong that have we confident to broader have enable migrating potential quarter, our We for the our With our and in enter path call place organization.As growth our are closing success to back that we the believe us for to the fourth

Thank you, focused Bob.With out X of strong areas XXXX. execution the position look to QX behind on are a we year us, close in for as setting up key we

First, we growth are finalizing transformation. our

will on the work partners, finally, Digital beginning deployment we with are First the DHA's Second, important And working Converge. to continue we clients supporting migrating our LPDH initiative.

with Before through as we your that, this the final we you. conclude today. towards the our but of a hybrid from for quarter. market industry one an Operator, Amwell, share and for line believe questions. in mission take clients remains to listening Thank to to toward every growth.With the care Thank our change. delivery, we remarks. for and please drive like open pursue as evolve enable we evolve spent for driving their our At our you frontiers formal technology. is to days to clients industry early ready the ready are care are day still we I'd questions, It's time profitable we inspire this approach hybrid Health insight care optimizing for

from will Craig Stanley. our Hettenbach go question Morgan [Operator with Instructions] first from We ahead

solutions to of particular, what DHA you they and terms rigorous in amount anything there the is that And else evaluated terms can on the you in Congrats -- edge of evaluation, Amwell gave besides deal? biggest win. clinch any the think that of you in share the

they serve known other very the and options in that are try we the they were X able, privy we've sure, short, detail Navy numerous very, to during color. known not look strategic share to I'll award vendors, way We if very, is we record. at can there. and give very the that deployment we're relatively to This with evaluation, contractual This with and and in to that. you track nature even The share deep bigger. Craig, and I for years the but the What not long participated is clients more is maturity and pilots. works process very selection DHA the was our effort and us did a share was ago, for every We such are prime plan did U.S. and -- process with very impressed started large they time. robust. of even serve we the their that that size But

lot think of of technology. I like a the the they elements

give is just to It's I pretty call course, Of example maybe. the this way describe you too short one list. can long.

the to a is We have that to a for it's multiple for if really dynamic it globe they much allows, care. dynamic queuing. seek that sure to call better are around globally, access provider have not, deployed available. based the And But system make a scheduling if we a very on extend can when fairly Hawaii and provider, able rules, close care anywhere this in complex reach seller we

that, importance have Telita to Lloyd [indiscernible] that. of call we Crosland, wellness, taking the about TCOP. all to talked the vocal, of DHA, DSA in they services, health it access care, to the the Secretary people. about much to And the of They addition Defense, Director crisis the care Austin, MHS were and including and and chronic very of In

is a comprehensiveness Cerner really our with this So partner, in integrated would and the I is the really helpful deployment to lower, the that Converge work that X all add feel many well really participants, including the the includes and need for I in maybe Oracle for years, element. can the that together. think Oracle Cerner. also The partnership client fact the of we was many well more of offering very longtime match we've good worked clients. This risk

with Berenshteyn Stan from is question Wells Fargo next Securities. Our

us pretty fourth range? a the just you that implied and the driving downside walk wide of have quarter. guidance, what's through Can range the upside you on in Maybe

Stan, it's here. Bob

place, fourth I on meaningful pretty think some because had we saw an volumes. some the and can left last pretty we We have year that early flu guidance season in volumes. the quarter visit primarily severe swings when drive large

might that opted things cost in place. That we And would also So bit associated you around be a range. move as on that saw, the to with within DHA. side really leave factor widened the little the out the we

And it. model about Got on that. quick How just the a impact we of maybe incremental think the should follow-up we R&D spend XXXX? as

I done, cost R&D on of year. think, with through the Yes. those say we job would the of good continue that end year. on types -- delivering we'll I associated to think real I through declines see a we're we've in savings the And the as progress

the with there, spend and to years. we over next be subscription that and on away would the the a implementing DHA year, from contract revenue couple XX% and of of Next continue towards integrating to XX% normalization customizing associated path in

proceeding that's planned. So as

deployment, the kind end in the to we next year, had closely the on process budgeting, get position partners think there. on with guide working LPDH and we'll of As what budgeting to our here into spending much of be for very a we've to the incremental I better out come are

question next with is Our Singh from Securities. Jailendra Truist

and like on staffing deal guys strain buzzers there. appreciate the, some they're business process provider I core called talked clients' My your to the the DHA getting the shortage past with sales on color improving question out patient of your about contract, elongated. around kind trying Congrats all have where in experience, you and is as and you

particular? trends? spending more your capital provider you can provide on Just update bit seen little improvement you curious any Have if from And there? in color clients in any

is in that the pressure Hi, cost to there is pressure market, Jailendra, anyone this apparent that is Ido. there. obvious Essentially is

where of With especially, I time we but of critical are pathways a more in terms the points both prosperity, Converge budget prepared remarks. the that even in gave tight. proof relevant examples my relevant have few is around lots in

we prove we helpful things level, retention a retention. improving high are in to able staff in that and So like member are

I We customers. products the as have gave of a of ways have list impact that can scope or drive expand to that to line well. examples for few services and for long we ways offer top And and our efficiency, the our clients a

I are easier those if those points consolidation would So also more is having in organization time time becoming cost even as of repositioned market, see in electronic behind a of rationale especially and in we those growth to quite investments add in Converge market, and available bit articulate an really proof the that between of our pressure. organizations. easier the effective a the market serve provider group

that I way priority these them during a savings would significant. reach type ability a So home and this supply the some digital staff that shortages, and that it's to have pressure including is we to to really a to things, very is high your integrate data other allow many of good many programs integration for in of discharge and Nurse add, customers short many immediate lot with basically of to of those organizations. serious do and cost the hitting very allows staff the also services digital period. lastly, you assets, such that create IT especially expand and seems of that a the be are

of So overall, now points be necessary a a used some this again, improve were proof the luxury day-to-day is product innovation add-on customers. our performance like is with actual telehealth a And shared we today. and not things This that infrastructure have years to ago. proven type financial you them few for and to is

Our of is Wallace Jack next Guggenheim question from Securities.

an this upfront on be an I upfront that the got And there's there? type then instance if was flow would the make customization. Bob, some would cash accretive. component. would professional there's just a a a It be VA I per the would opportunity be and or from follow-up on of the wanted se you also much here mentioned that, then how in confirm second the services that to was spend, to the that have of MHS you're award. particularly standpoint plug-and-play that sounds the spend about on an of thinking easier to that, whether similar And transferable margin like, award going for of And upfront element build

take the part your and of do question second Bob I'll let Jack, Hi, first the part.

the cyber clear. The the this work the we in regulations this GENESIS comply with Nothing do. work to of by partners the in foremost, enormous environment into And and directly are and and are, do in other with the very cloud, our first know phase, they like lot rules for Oracle to risk elements. opinion. This many the very EHR unique not a is potential in including -- of us. do past environment, and work to the work Leidos So experience government clients initial integrate is GovCloud, will what security together the we work clients Oracle familiar are this who quarter, is with going very who are and for relevant included are and that concentrated VA. other Cerner, We that

a DHA, and enrollees. integrating also is medical there is system very mean, the similar typically built very the And sure are I actually VA MHS to important. really XXX really larger X,XXX continuity and DHA choose the the the It's Video is for centers, like ways which X that the is I'm As for Very DHA, why, VistA are of than And the many one with. that's of million important you one we know, solutions. similar between EHR, X another is is the movement point, that is derivative VA essentially organization those we in clinics the there the care. the replacing population Video this over about And very, Connect, large. much the Connect. is modernizing

that, believe to other of we position that compete for the and the public maybe entities. the effort take So very business well us VA initial will first Bob, you'll question.

Yes.

Ido. thanks, So

you that the and So Jack, think thank There's we enterprise If The to this -- phases. initial cash for is is Amwell. rollout. the -- about and X accretive deployment initial it an itself flow about phase, then full in in question. a think just initial of phase deployment

to medical deployment XX required the from that And There's care to rollout. no performance. go to that across go deployment, to full the investment to and million deployment us from a generator initial the clinics. the the centers DHA initial hospitals X.X that's So provides and or the full positive so enterprise cash XXX and full enterprise incremental that's the period for people XX-month over to of the and

So We're come on. going on you'll all of need to center basically just to spending see medical any to It's on. incremental without that to bring bring everything first we the about spend. that spend

think you that's how about So should it.

is Company. question line from MacDonald next & of Ryan Needham Our the of

to Matt the the active touch providers. on This on for Shea Congrats Wanted win. Ryan. DHA on is

So see providers down I to the was tick in surprised again quarter. client

to churn the any to expect And that there that of we replatforming there's now? XX% then on margin within or AMG was was what gross number decline curious, also, on providers? Converge, AMG curious should Just with see if side call out benefit to visits drove and sequentially from now just in any increase just start less that

second. the Bob and part let Hi, with take the Matt, continue I'll first

means. lot a talked calls replatforming about we in So what previous

some have in legacy. your You of clients

to in There mirror you where volume than the one we much are in is them from design, move more growingly a our churn when it, you Converge. of gain another, talked more very quickly, but an Per but quite of and them little you rearview half stand lose environment slower. right people already on we element about with now it's of Some migrating.

his active in that prepared think continued remarks. answer question we So and plan actually the your said I see expect And Bob to to providers. growth in that is certainly our

to there deployments remember, why raise certainly to early don't also may Bob, all are big contribute year you the number. going take you As year, next second this part? are but increasingly that this

side, wouldn't have active our providers. the into a read from of need APC Yes. have too XXXX -- impact number panels there. We the to is those some have there gross subject We to and think on I SLAs AMG as need up -- about They're much ramping availability for to perspective business. And margin we we SLAs. for

from some And too -- too having customers, gross platforms much there from don't to too adding of side, -- doctors. the into much -- can activate wouldn't that a their read negative many actually urgent I care we -- capacity have our be it. perspective. we're that can can margin the But -- building away I on So be

side wouldn't on the you growing that on side. of can AMG And so and we the be business, that see

didn't, but question, addresses I me know. let if think it that your

is of TD question Cowen. next Rhyee Our line the Charles from with

an update just new the to implementation maybe touched you've your on of the focus to of third I get as you force know of particularly any of sales tangentially, changed of on but sort progress go-to-market strategy, trending it bookings for quarter, on wanted ROI. next kind of kind how update sort year this sort of here the are

Thank is questions. Charles, Hi, Ido. for this your you

we today, customers. very staff Converge very we good on a stand where So have and happy

So really that's good a starting point.

importantly, transformed platform, that really a and it the over meaningfully next have growth to our the few our methodically we way But in healthy very grow years. we pipeline. organization same We transformed

requested, we did and So first and focused value we and on thinking people. win research maximize to on impact where to the of now subsegments are focused did upskilling and give some and a market -- thing is you as to right And have you are the team we profitability. we more really segments very details, strong on and

into Converge not strategic I platform think actually with rate tend our that large is only example not not forget to very on a won encouraging and hit but we People just strategic market. a we X this customers. X, very X, that X, the good completed very summer, large emerged customers

We what operation. And our work very operate we really communication. the good of sales sign. did And we a improved a So definitely our there. clarity and of We way lot methodology, that the legacy. X with and increase clearly is that's what an we to report points. saw allows different us I we today and are capture much more importantly, than today. optimized very communicate the Very think And infrastructure to we able we built that it sell

these value platform. different You have are of especially other in new but show clients beneficiaries the lots where really one places, we calls, we the of utilities of the with the can on

solution issues not built solutions question, their have And new understand asked a we for in it's are a a really and the that you whole right As with them. organization that build game. really slow allows customers to dialogue to us

a vendor. just as viewed not are We

as are need of help do and as organizations are a they helping partner, we lot We and do they those transform a viewed important need to things. to

experienced growth we some company different are one across that really units the mature improved leaders delivery brought led And the working together all between leaders, the as that team. and capable by organizations, Lastly, Kathy especially but very and we very product, way we of shared growth Weiler United. from

our in very readiness to pipeline faster, we it begin to level did than a our all good those translate, overall, faster So before. efforts opinion, of convert and grow to much

Our with next question is from Glen Santangelo Jefferies.

scaling to really now of we come just Should the Or back not relationships it's want of number like to made sort remarks. looks XX% comments prepared sort like some and for just in into think the mean about in I been I visits strengthens about way of about the XXs right to in so of more points. a to upsell you the now clients, remarks a has that number these those it migrated for winning this rapidly, converted it? stuck suggest very that seem and get you migrated these number Converge, your understanding of about prepared these total suddenly to seems talked business? of Ido, you and what the proof Hey, I with opportunity is clients quarters, high your better migrated that to revenues, trying when already revenue these customers. back sort subscription take to that But like I'm all subscription that good think it new are

are a that and here. have basically the expenses time. should we drawing and whole here new is legacy especially the not platform there takes with because it's At it's mirror. And number time, One going you that there have but legacy well, a a points multiple looking comes it -- the implemented. it's Well, Glen, still platform that developing to rearview way in is fantastically clients, normally, sunset. is it's things a be And is same with is process of some being larger pain

you this finished Converge You summer. train, and I you time don't integrate, We overnight. you line. grow grow mentioned

But to that expect ahead with fully existing the a it's we new ones, of very but store us nicely. we same also to with platform. scale going our as of accelerate and So in lot new have a clients upside

a past to little see see you to take we a is momentum are as full some is next the you in number that be bit but time where trends that the thing we what that conflicting And confusing, the a We we of there and stand. finish So for combination expect these fully the be of opportunity. X may year.

from next with is line BTIG. of Larsen David the Our question

Congratulations obviously Shows wins. on that right these enterprise Converge the large strategy. is

Converge for decline about platform with FTEs? there vendor much going more You've XXX% kind call you? sunsetting of of that exactly nature describe platform. is does what R&D the then the talked, the little sunset? save vendor disappears? who costs, you XX% or money it, And that? Ido, Can that legacy can you you're external or is building XX% you once that maybe the how And bodies? in mean? And like Is a that describe are an at, Is then migrated, to once Is

Sure.

sunsetting when time a reasons. for of talk goal, When to various few they and ready not legacy company. were happen a things happens, platform the we lot about the to wasn't of the legacy we clients good on building things. of wanted because migrate, So that for are nature. They're ready our some functionality Keeping when that it on things

half for customers. it And expensive. volume, an investing and there. So still it's is is not Supporting our older less of now platform for and uncomfortable about a little us

this much Converge single, really are, The significantly. heavy that that is less modern, summer, down question we So once and very very finished sentiment importantly, costly. capable base high it's customer code are a you scaling And we is no Bob really very better. R&D as there is the quality, lifting have mentioned, very

we R&D now engineers the employees with did in what Our And a Amwell. of are you Converge. the includes that contractors full-time we few And work of built see as is reverse that. right core quite

R&D, to our which amount and components normalize able we're a reduce Converge, we as really of to is significant equity. a save of the finish So potential

to a normal this the the not are add. sums to continue platform, to Bob, and extraordinary know invest in proportion don't few really We in platform. anything the of as have you've you build our seen going budget past transformational that years if to but I

between say would add money the we're sunset save $X million of to amount million. that that platforms estimate couple Yes. able I to of a is once we'll and is $XX on. those One things we

other point piece and And of is now of resources some to of cost -- is we a migration. we like the is hosting redeployed vendors sunset things right resources once we're where have this can those and say can at platforms, obviously And of would that lot dedicated a other I the and those elsewhere. be

think happens So year I ending how what the those effort, next of platforms which migration targeting really think another we're that's for. of the of with to and about part the of the end sunsetting

Tassan with Sandler. Piper Our next question line from Jessica of is the

on the Congratulations DHA.

understand positioning in far large to the the for the commit So XXXX. replatforming I strategic we I payer DHA XXXX. into wanted we think so plus of just have players X know kind

strategic from Amwell visibility new revenue XXXX. payer complete of 'XX commitment customers does we hospital of kind can migrations of the complete heading into XQ in or from have as with And quarterly low think payer layering forward? for this from point So at guess, point cross-sells kind I this and here point, subscription

good voice. Hi, hear to Jess,

named, X X not. have strategics, X is We are

to All of year, Converge degrees. live, X them thereafter. live at early and committed will one fully shortly various other in next are this point the are be X

part don't that's So question. second headline. of you the Bob, take the the why

don't on Yes. subscription very Jess, point I in XQ you, for answer I revenue, could don't the represent well. really it low an have -- does

there's the next that DHA several because will go-live the obviously about contract. nothing from that that think them in DHA, we to for at build see year. that year as And associated the there forward, think here rollout we with start will go-lives this I going are revenues

other in to the think DHA estimate of that any end to a investment. towards function there's step financials I election our rollout, bring government, here, which important once to year go That's purposes the understand. incremental makes enterprise for said earlier, planning really note is doesn't I step the function to be the important 'XX. thing to full I the within to And as we the think from the 'XX

on flow that the here, loaded So the accretive period cash in initial initial the for full deployment just the all deployment is of over -- that's deployment. is XX-month performance enterprise over -- the initial which the spending

we'll initiatives contract, here in revenues for that around well expansion that looking associated but the ensure dramatic we're a myopically should So brings about it with as growth at this potential upside the be, with just DHA revenue. low has point the where of subscription Ido subscription as talked the

the We question. just time That one line America. have final from will for Diana of be [ ] Lee of Bank with

on Allen This Lutz. Lee, is I'm Hanna for

on been know or assumptions you're those can $XXX if about And how to related any you about expectations gross of if frame what targets. thinking to the profitability targets? any wanted you're thinking margin OpEx million updates in there's Just terms

Yes, here over has of X,XXX $XXX growth million, of what the And sure. software on basis would quarter. -- points revenue. of say there thinking over than accomplished we've real it it. brings been driven expansion by with subscription be to No that margin share going area I last Other meaningfully new getting over gross getting lion's that as to that really is with the derisked

improvement in that primarily together that comes over X,XXX a also level. over that with R&D SG&A. million that deliver of of around operating $XXX leverage declines expenses, all about combine you by period time, of kind in So probably to operating but spending decline and And driven pretty breakeven basis meaningful in in XX% points

We are just at time.

So over Dr. Schoenberg to I'd like final back for any it turn to comments.

night. and Aaron, you you, wish and Thank everyone. Thank you really evening appreciate us this joining you, great you. thank We a

you. And today's conference this call. Thank ladies does conclude and gentlemen,

care. You now a Take disconnect. may Have evening. great