American Well (AMWL) 14 Feb 242023 Q4 Earnings call transcript

Good afternoon. My name is Breanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amwell Q4 2023 Earnings Call. [Operator Instructions]. I would now like to hand the call over to Sue Dooley, Head of Investor Relations with Amwell.

begin. may You

are to today, fiscal Welcome Sue call discuss detailing Shepardson, me to of Ido announcement. CEO, Hello, and our distributed Schoenberg; and Amwell's a year-end fourth Bob today joining and quarter Investor CFO. is Chairman of our and Amwell Dr. Earlier everyone. our Relations conference Amwell's we XXXX. Dooley release This press

conference normal a call our at release being investors.amwell.com our and new is sources. available also website be earnings on This Our live website through is of webcast the replay posted is page archived. on IR will where

required regarding release. our Before operating market anticipated This the begin with opportunity of described results to forward-looking like you opportunities. subject undertake and Except call, to filings our Ido. information differ prepared uncertainties law, we these both like our the measures refer statements. GAAP is On non-GAAP statements measures. reconciliation to to to turn no results or over and I'd earnings course update take SEC, will this the actual provided projected of GAAP remarks, I'd events in by we call risks the revise to and A may posted obligation we'll non-GAAP this during that to With financial financial call, that, forward-looking materially. as and is remind forward-looking or to in we the make

big our of base strategic advanced breadth our platform, the you, new migrated offering of Sue, everyone. We part Amwell. installed Thank year and for the of hello, our marked a a and to Converge. QX maturity close and

conviction begin compelling client we we and to are these to we propel an sizable streamline organization our had achievements, profitability. and Based high market and committed efficiency our documented wins, excellent company validation, path powerful points. regarding solution, to continue XXXX XXXX to our our with focus improved We optimizing growth. Also, in reception and proof on have

previously completing in begin period, to new to So QX. and we are few growth, here this replatforming will of To how described the Health. we play the event benefiting Defense path a standout are the task tonight, partnership order, provide of returning highlights $XXX win out. our guidance, Leidos for The will our Agency, for X.X provide enablement profitability was will transparency into how Defense with organization Together, QX digital a that million beneficiaries. in announced we of modernize and as care Health million

U.S. The on Elevance in have sites. five taken well goal the Program large initiative. QX. migrated military, progressing report I'm have migrations place first and Converge for when QX that year already relatively of earlier. payer our quarter Behavioral visits digital-first similar the on prepared that are we successfully In of were planned milestone launched we to 'XX, first and QX, met We to our for with In a days our Digital schedule enabling QX our strategic Highmark. QX clients percentage for the for the also and Health the solution pleased DHA's we deploying achieved the as initial we

As a of result, from nearly approach Converge this XX% total. is today

reached and operating Their Medibank, I'm more Digital mention indicative than that automated our performing part serving Our Health was outside million patients companies satisfaction solution, Lifestyle chats, patient Behavioral to of closer Health and all-time With high to expansions, Management. and of satisfaction, Health our initial our Australia's patients. Ampler, Program QX would AP is extend proud like Up thanks QX, in metric Discharge while include Ireland measured to I Thumbs prioritizing adoption. win in specialists is us is client Also highs. insurance large Digital expanding HSC will in programs QX use Entegris one can we and the planned active between an by say a provider health including of automated for visits Entegris the scaling for win Behavioral a had quarter platform acuity use expansion sizable stay of rollout private renewals to in QX Entegris with well. is also following: our XXXX to win. largest we high of X AED. and its customers. of a already ever health healthy

the we virtual expansion this, In had continues healthy addition, market. Related our Bernards Healthcare. a in to solution nursing with resonate St. to

of final Continuing how performance commercial growth. we booking client in demonstrates QX and the the organization are to ground topic growth, putting year. future our reaccelerate place for momentum on pieces Our our existing further this base is transform

completed completed sales strategic including here adding client upskilling tenant and sales the This account We broader services. important a transformation more a management are allow model. We few basket discussions, sell initiatives, distinct from us and combined selling moving sales operations. hunter-farmer streamline model interactions, in of leadership review to highlights. will a in engage and to Specifically,

behind talent New pharma-based skill and our The ROI-oriented our selling hybrid of of this sales line direct compensation at our last model to our client experience in are with platform. with kickoff spending half landscape. healthcare under in with optimal sell a going operational set financial With and belt, on approach pain from bulk we care and resonates held motion client of with priorities. enterprise commercial first new coming new wins work delivery a us expansions squarely week. is year. across or Hunter list and confident selling this It's environments points We and growing fine-tuning the is launched an new the

year. highly achieved lot our to by ever infrastructure positioned the past growth believe profitable and platforms. software a promised we than I deliver in market have SaaS-based are large opportunity the We better differentiated

that care to selling a page couple It's I from telehealth organizations of It's a as connecting crucial mobilizing have transformation partner transformation goals. XXXX, I to within the to assets a As about to and and we enablement achieved. share it telco believe the to and we to seek organizations. video turning a transformation client provider successfully also key are turn digital and is points from a between want they this. vendor achieve understand networks visits to hybrid modernize operational

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proving differentiating element for a professional powerful services us. are to be In addition to our technology platform, our teams

us the our good in work We clients' at complex important our services workflows are assets, integrating particularly and of further market. challenging set and AMG most the apart connecting and

clients costs. access to deliver leverage AMG for and payer primary our high-quality members that care improve increasingly reduces Our and providers also care virtual

of clinical clients the the of most provider own maintaining highest provider and expertise, make services look while to provides Our the a that care critical times. for combination their today. market standards are teams in load-balancing bandwidth, wait AMG and unique

is role validated partnering in market. the Our

goals. examples benefits Amwell us for Leidos to CVS, others help achieve And largest broad Our value validation, their Defense spectrum while powerful expertise us are the and Elevance, give organizations to our clients of clients. and Health, a partnership turning strategic them clients, of

expand all when of today ready. to to new needs clients address of Our future-ready sizes cases use they're enables and platform the

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covers healthy financial the year. like key financials, in to share our we visibility, Bob conviction high priorities improved our our balance path Before have profitability. our sheet I'd With to coming for and

are on three towards the We priorities. top supported advancing profitability, laser-focused by following

First, solutions system. military a broad our deployment for of a successful portfolio of we to work the will health ensure

enterprise and support of initial which this the to DHA's Converge. we implementation, anticipated We is will on execute of remaining our phase year. the majority continue the migrate demonstrate on clients to expansion, will our value, Two, later

metrics, right on to enable bookings. expanding Finally, the winning like of footprint would to installed long-term well our healthcare growth within digital to sites will base turn guidance. aspirations key reaccelerating our made to are return continue our by our and moves Bob I with growth Bob? over We we and within to the organizations we've believe profitable our XXXX, our some new that, set financials, In With call to clients. review the sites.

meaningfully profitability. financial for strong future Tonight, given in guidance transparency visibility XXXX. on a opportunity have evening you, the call. few to growth results We our path I additional last our in approximately year. $X.X early well were versus for did plan adjusted small you severe begin, for revenue will from and metrics well and to our position total good expand QX and near-term with and breakeven. and not $X.XX Thank you began Last a year. will our walk EBITDA as we as repeat the everyone into our profitability, as operating into of the through visits Ido, decline year's I million provide Then, the year our XXXX to a as season expectations million fourth flu To this quarter,

clients. visit highlight Scheduled reflects to provision to some represented virtual within hybrid volume strong So, care urgent evolution payer visits platform the of XX% of our growth provider enabling the care. continuing strategic of of our company from total, relatively a

our clients flows. for we were successfully January quarter one largest for clients year migrations strategic payer at make We for goal good off QX. Converge. the XX% payers our leveled progress up continue Converge After early, on teed We migration's achieving some Visits our migrated to launches. quarter migrating QX of to as temporarily

end With materially the percentage January at Converge, their stood volume nearly on higher of XX%. now that and is at

for We expect visits on earnings year. to we formal a continue quarter report Converge next the our on number stream this the and migrations of steady call, will

contract over late to active which our We and for new providers Plan our as both groups of we was look of for number Health was and at After consideration, providers within year. the value, good platform QX. was that in indicator is or a grow this as sunset healthy beginning add X in sustained. to expand of of the strategy. The at $XXX,XXX above is quarters on on for and in time. XXXX, has platform XXXX X,XXX our or ACV of ACV conceived level. our to footprint a by activity the was the After XXX,XXX an ACV, the $XXX,XXX steadily existing XXXX. $XXX,XXX was we clients almost of indicator metric initially for annual careful success metric end number Systems active in approximately clients XXX,XXX from providers the growing land-and-expand our important Active our Health world last plan last ACV end remained Another average post-COVID

that the of of on our provider each are improve by by our number automated we can the outcomes many Converge, volume including programs. majority With are our by patients aiming adding now our to platform care providers, rather capabilities, but finding less of clients increasing using care for

lower driven the AMG quarter lower severe this lower increase the $XX.X revenue and QX flu by was slightly and legacy revenue. X% Turning was Total platform last $XX.X revenue was for QX and versus higher a shift season $XX early in versus balance of slightly year down revenue XXXX the more to AMG and of mix last a the from fourth Carepoint's million XX% within in and visit our normal declines in Average the split quarter year was last quarter by services primarily financials. to and decline XXXX. $X million than declined were onset million and visits at an revenue between from a was year driven a revenue year ago. quarter. with last year Approximately $XX this Subscription quarter. reflecting subscription-related per of AMG. visit million to the than visit ago, XX% return trended a in XX% season for quarter, flu

be Carepoint's marketing revenue the increase timing Carepoint's the can quarter, programs an in services of professional million by services due primarily our from $X.X precede million increase deployments. for in last and was professional quarter-to-quarter revenues patterns driven to as and quarter, for an of services customer Our services as well that marketing. $XX.X for buying uneven from These

profitability. to Turning

flat services Recall was quarter deployment services. heavy a software XX%, last in to work strategic marketing away fourth from Our and that client quarter professional was quarter live year. with profit was mix from margin January. down This gross largely lower-margin go higher-margin to XXXX, implementation revenue in with associated QX to as services due a lower last combined revenue we performed XX% shift subscription a

Turning operating expenses. to

We company our are guidance. applying across our ongoing cost figures that discipline into

organization, XXXX in below merit-based the was attainment, incentive revenue our plan. As compensation reflected our which

reflect end our of our headcount Our underlie expense a approximately over XXXX, company the Further, portion expenses containment since and have the operating this the reduced across of year. by we XX%.

tracking is compared to primarily expense well expense. adjusting R&D X% quarter SG&A capitalization. spending. respectively, This compared quarter, first expense primarily to our to in comp. QX Sales normalization of last our last and X% This R&D costs to for severance flat XX% down compared to approximately due to XX% for and DHA are spend was lower year quarter and of the after after compensation and $X of XX% work. this increased stock-based We QX below year. associated million by second overall software $X marketing capitalization software G&A due XXXX development also year declined XX%, with in approximately lower the of million, on path and brings adjusting the the the was stock-based half GAAP on to the was half and

the We on changes the leverage last with need of and year, sheet, In while healthy not streamline in our with and $XX.X the rationalize and last re-platforming, balance goals, and ended cash with believe to side. in And spend commercial do the is Putting quarter our all we improvement X% fourth out the operating to headwinds quarter securities. reflect SG&A coming EBITDA respectively. continue the and our it growth there other to XX% a more believe negative scale. transitioning our $XXX we was million, adjusted We associated headcount organization. together, growth to our as we keeping achieve we we million XXXX conclusion, are quarter financials marketable for in

of has business ahead our transformation, backlog. meaningfully growth our terms moved growing normalizing place contracted cost, in and rationalizing Our putting in and

year a our our Turning to de-risks the the significantly adds this DHA, financial year our to outlook. The for XXXX. The is impact guidance enterprise made path not profitability. our of meaningfully plan expansion, including progress fully within we single visibility supporting and to of visible

and and So, profitability reach on will the our also tonight we breakeven. taking step extra we provide are providing of EBITDA expect in at XXXX, thoughts to the adjusted a look we growth some plan

XXXX First, I guidance. our would like to provide

expect million to revenue for XXXX in We be the of range to $XXX million $XXX for the year.

be to similar XXXX. to revenue subscription expect roughly We that of

from and to $X.X total We single-digit high of percent expect range and points million visits million to care the services revenue. in to $X.X be

for initial work, assumptions DHA expect build plan implement periods range. assessed the the to at five will solutions revenue, with end the re-platforming-related With are XXXX guidance Here the carefully impact of sites at XX% the year our approximately to key prior decline at the The with respect we up a enterprise contracted few which of arriving in headwinds to from portfolio then anticipated full DHA the quarter subscription year. we rollout our the first in go-lives. our is over back

discussed, As milestone the are there achieved revenue over course we three of as deployment, go-lives the ramp initial separate have so first the year. will the We've planned. in

enterprise little from the to no expect We expansion in revenue XXXX.

the finalize growth year. transformation the in gradual assuming as first organization half the of are of a of growth we return bookings We our

negative XXXX As negative be to million to profitability, adjusted we range expect million. the $XXX in our EBITDA $XXX to of

in to reduce our XX%. reduction. the on of to government-related spending year, As R&D context R&D mid-teens overall circa we around decline for customization platform are assumptions, by Converge however, percent a will This annually track moderate our additional our related to XX%

in over savings. assumes return will actions result comp million of headcount Though Our levels versus incentive normal our in guidance $XX compensation-related we to XXXX.

be compared XXXX expect circa by including move beyond As of DHA of primarily million our million, story XX% initial enterprise-wide software in We to fairly of to DHA $XXX driven we reaccelerate XXXX, go-lives the contracted XXXX. dramatically XXXX revenue planned deployments. our deployment and growth and currently of $XXX bookings, for in in complete representing the financial phase range backlog, changes to the

profitability. Moving on XXXX to

of We expect XX% negative to EBITDA million in $XX our range $XX adjusted negative improvement approximate million. an to a

it entire future this EBITDA In achieve are We strides to encouraged adjusted required. by on lift and the enterprise and remarks. will software towards the investments market mix system revenue expect currently just balance XXXX health be growth scalable conclusion, to minimal cash for the expect margins a believe with we complete to area call We trajectory over for guidance opportunity, our subscription XX% high across Thank for ecosystem, beginning we envision. hybrid to care made the in deliver listening. guidance, we Ido? Ido turn customizing fully operation we've from closing XXXX. some government change our in the the and to back in the million. breakeven our in with finally, I'd After And gross $XXX rounding for business. development to XXXX, XX% of in our like days ready forward-looking platform you in capitalize marks we to that, out early With approximately our are the long-term profitable military

you, Thank Bob.

our day achieving Amwell path every advance mission. our to the along driving are and at We to pursuing goals

high solution laser-focused Our We proven now today marketplace. on degree footing facing financial and most of the strong the solves on XXXX a problems priorities. our healthcare in important begin visibility is organizations and with

you. our to for Thank open we conclude passion Operator, ready today. their to are work mission team. our are for want line formal remarks. you ready questions. for With one the as and that, we a take thank I listening always, extraordinary pursue As to we to team Thank a as moment

Instructions]. [Operator

Craig Your Stanley. first comes Hettenbach Morgan with from question

transition through you're 'XX. It intentions of does like improving in just from kind there, at Ido, And you're some from what seeing going look to health versus health plans systems the utilization. spending are starting Yes. currently. systems Understanding benefit curious, health

Craig. hardship recently. they retention interested buy is them and mean Well, that help all as through you're different are systems improve what what going financial general, are buy and the systems platforms to systems efficiency. they right. we a know. And help health In staff improve health only them from I bought

you give I'll item is for Virtual So, systems. nursing an high-demand example. a health

tasks programs to of automated well to their the As performance. do a variety as improve

So, business. important part they a very continue of be our to

is allow transformation Special that are we on payers stickiness member that options focus have story laser-focused in very the employers health, sub-area, which we steerage them option. and in ways be available more need. and digital to putting many for options especially much the However, clients, and upgrade seems for to members, see becoming for and digital biggest as first care in place primary that experience is now their cost-effective improve effective the greatly to big our in meaningful

for segments, platform providers tailwind migrated hybrid and relevant us understanding ever. suggest of in are such today awareness point in all sophistication growing proof a the platform would more we very Converge the is care very very both and challenges both and for for There payers. parts strong enable clients the I general, the the required need a fact definitely of that, clear many than so with a and have So, for that digital to a to is

detail thanks quick 'XX follow-up. for bridging all and 'XX Bob, on then and 'XX. a the just And to

reduction, on the and share? to terms touch that were else you maybe doing within you're organization of things able the headcount XX% anything getting some in lean just can On the of with you

this So, company. the across was

spending of we our R&D. in And it programmed rightsized was as of terms related get to some in

organization, in detail what it's trying it we're best of maybe in Ido doing to addresses there we're more to bit some the doing and growth a what what And really and accomplish. little was Craig, if we're related

in the you, patient enormously period this for even if Bob. we zooming our essence, are went And partners re-platforming Craig, Look, completing, Amwell. investors didn't comes out very on opportunity in Thank we line, we been headline for as in we reporting the have about is is the investment. and guidance. clearly with we are our today in second, complete or us And quite already a through the after Bob biggest the phase very bit The that ] it what re-platforming. and a [ top the growth, important growth talked

You But the risk can contracted only transforming beyond. are addition all completely is the and cost which our 'XX see to execution. focus really entire structure that, is what's in happening, area in across and we And company.

completed now everything with them, rightsizing deployment a have competition we because sales the is Converge doing tickets is R&D that, were organization. support So the investment did us delivery are to grow, less transform But to very we It's and a that completely people but dramatically. is the fraction to reliable obviously, only we are very very much dramatically R&D, addition The is need modern, in the And our and migrations lot. marketing this in support some understand very, a of organization seen and marketing, do we cycle and they in easier. giant really sort growth shorter, in more of most But platform. more importantly, allow legacy. changes to really efficient. The that we've in of what not

the very we going large, we an specific segments where of are done win. is farmers. reassess very includes very clients great rigor sales segment, representatives have implementing on single very a to offering Then skilled partner are that. individuals that our fragmented over sell and the we The headcount well trained, and are go-to-market And portfolio a We changed of course, from are our in We have well-defined our where thing team. now. The right full lot and that after the plan to hunter first advantage enormous into of very team. smaller we our is with changed account hybrid And we a a sophisticated upskilled the operational to we've management a right others. beginning model very to model execute of the

less clearly bigger. quota much is very but have carriers impact their already we So,

software, that We encourage the subscription high-margin our to beginning compensation pay also changed is recurring to off. change and

anything that now significantly is smaller, is market. in It's in we it and the large that product market and very explains It's our of Bob shared, we which all proven in it need really and by the that So, of continue mostly require a cost just believe unnatural. the to execution do and sophisticated maintaining are We the customers, contracted. selling belt. don't results to we a us more lot under have attractive execute,

we that small So, from very execution is think risk where we sit today.

Your Jack next Wallace Guggenheim Securities. question with from comes

I from then appreciate prior 'XX. the multiyear like guidance sound outlook year and transition exciting That the analyst. echoing comments a pretty and

the with I and 'XX, terms order model? get on Focusing impacts sometime order MHS in customer the that just in And correctly, just about the how that better be the And year, middle from back to and deal guidance how contribution specifically, for that half 'XX task understand wanted contract, thinking the what I if MHS of the maybe once a more we of of task the about understanding thinking ends? should 'XX? for the in is

I'll the then of headline, take any Maybe sort. year the not is a more This Bob year you give details. will and transition of really

get to are today. new market segment, government which the We us investing health will which that phases. sector hopefully doing are our a similar with strong on and million number quarter already work going phase, that we military health, same out, in live, some few the returns, the of course, the the market the with already the really we does of are with are programs contracted and per to portfolio variable full very Leidos But and earlier, automated the the up one is it and, is big This it the we're vehicle for We and up the is the talked other enterprise. financial can the investment we other choric it vehicle you service through initial is but order, covering This cover will allow are mentioned step see segment, is which of enterprise deployment going is EHR entire this deployment. in government now deployment. step through that and Converge transition as to go-live the in this sites the 'XX last our includes it basically From take I a clients the five about elements. budgeted in and entire that, across task part of already in the Genesis already The the contract $XXX using, contracted with call order, care includes about others. that task us, client military health service and full

health infrastructure the is core really for this So, military the systems.

investments continue in the quite continue process high assuming the confident to very We need are anything there in that. execute as add. This risk do, budgetary government that are continuing, the that we know rest do to provide we on Bob, will of that And and deployment. believe if don't our this slim. not we that making it I likelihood partners enormous is believe us it's through mission-critical this the going see to forward. what very, very as that because don't I infrastructure. that setting, We We to have you is a not a this. will don't mentioned scenario where a earlier, we the for And of is think

you I it. think covered

contract with that of over government for the EHR undertook the beginning I not that a of assuming growth run of the but the we I be deployment multibillion-dollar sustaining to course of part years. rate 'XX 'XX, that that's any the in although from of the conservative, are here clear, continues Jack, it's we're think forward. it, going think end DHA together last assuming just couple assuming We're

alluded we're within I the I you much to lifting really broader was customer, think VA R&D then side pretty of the on you And the think heavy say and helpful. Excellent. this thinking That's about expansion getting before. as others, what potential government the I it heard done all But year.

correct. So, lift, the potentially And expansion if a the software your about have at system that have It's of some how that, There's as military just turning a gone that point. on the happen. opportunities? training big if in matter follow-up future discussions just with quick not and others so, health potential to expansions I and

Sure.

answer yes, are Look, are the relevant military off So will correct. lot to to super pay we that sector. a is the the entire work system doing today health you short that of is

a just headlines. So quick little

We creating are of cloud, production, all Converge, and environments, preproduction are our configuring environment, portfolio staging systems. administration across we now those care environment entire automated multiple silver

the accreditation elaborate and We and government. are going cybersecurity to of the MHS in hardening detail

any repeat additional It's We in It's as are we and the very lot in encouraging a clients I mentioned budgeted is we not live And government which training probably will beginning work. are the which we contracted this going Upscaling confident described to similarity a administrators. other next identical environment. And course, lot going earlier, not forward. turn client, and measure of between be we going sequence of users does there, clients are these are of a of that an to from to I and effort. when require this lot and fully segment. impact,

that government on. And that Jack, have get singular that the many the a great into across to customer health now a really that environments I'd systems, EHRs might all to project as EHR has relates work regardless a was it have but is. add, like EHR just To about clean, the over the in And ecosystem time, operation the we're we brand-new DHA that you thing here integrating wouldn't be this is the different going just doing what degree in of is. implemented. that great have is multiple one and this in the sector one we're of built up

there, point, last end shared a with to we bookings One, important really into have our world, very, which full degree from very just and connect with new visibility this higher namely, the software is scalable the takeaway. And and margin new one moving of really that doors selling and almost we profitability going software, in page in is today, an a years much you are can Amwell were we and is see a very everything where we Maybe from D&A entirely really to different typical very high into as only going almost the selling future than ago. we transaction the and believe we SaaS even a opens 'XX, mechanics are more mostly extrapolate if this is that of to that you're before. very into which transactions couple Amwell, era the be to as something which entirely for important, is of

comes question Charles Rhyee Cowen. next from with TD Your

I about bookings to talking to key of touch you're bookings is on one have wanted your acceleration. and initiatives, -- the

clients that are health focus You expand systems question, Can on clients? sales force more of And an talk with the of an going in really as to it this is that strategy expansion on forward? board? the list in who trying yet start at digital the mentioned the just receptivity committed is next to at on focus sort the have new for high this earlier And Or clients a already going priority really Entegris is client. not focus so, integrated platform on capabilities. thought to of an this point? How getting services there back about period, you is existing curious,

third outcomes way it grow, Charles, we that's currently we The great a The question. migration, offer earlier, of I And really us and type those very are clients. that base can even the mind savings a health on Health mentioned systems both. is traction after what's systems. on in depends Obviously, from of installed while have very, daily. plans population we almost is of that for is payers' retention aspirations room their demand focusing customers. the to lot really large clients resell through member additional parties at-risk better to offering as that is answer on stage. has growing their different appetite we very a of different The sophistication health can to solutions for retain and better ownership staff through very, high and have and as to and

going it's So, that our Converge, and from better of most only are here. to we get are pleased clients on so

know So, really are this really, effort is happy. We winning. they

patient/members the very, impressive. XXs, Our high and sums of providers up NPS it's all-time is at both high, very in

valuable, don't So, further are we'll our that's as more course, margin. in past, for point relationship for a is But there are there They Typically, world Amwell. make additional and even higher health dialogue this we careful. that And sticky. is discussed entire very, obviously and use and big governments of plans more both a great expansion out of and the very of starting us market them systems risk-averse. begin to that the very

platform, expand biggest So, to that And this of is now the is also new to at. installed value logos base of plan the the referenceability on journey begin they we go. our certainly today proof with more points, our enormous see and with Converge what those We of really transactional. lifelong It's as and the need selling is not them future-ready we relationships relationships. starting

booked. doesn't some likely re-platforming bring we are We value everything discover us the what of to are even come as dependent peculiar the realistic we by anything very optimistic. profitability offering to to and to the require lost require not that expect the of discussed that hopeful execution based that not they That's we going today. on mostly on years work very, and on back dramatic It's already entirely people are It's during say teams. But contrary. what of our or we we're our quality market-facing the forward

this very milestone optimistic. hugely to get just important it are profitable count We growth. don't on of We to

contribution because enterprise about around kind really like the it's helpful. year, is the into That's maybe, end revenue here, of the of think of 'XX. of Bob, that with 'XX coming How And step-up a falls most million. the much as of it at sounds DHA, that we expansion guide $XX

clients? versus give can from backlog us from existing perhaps much how You a sense of government rough

very want go don't is percentage, EBITDA, important Leidos there big with that. for a predicated is of revenues that really I huge But Leidos. our a much think adjusted of important contracted Charles, DHA is what's that increase to Clearly, to And doing another. detail in that a versus in we're thing is what about terms most increase Look, backlog, contracted want XX% the in inclusive component associated Yes. the and communicate of XX% of this XX% that on I with too with into work I beyond high is that thing amount of backlog. the client plus one

with question Singh Your comes Truist Securities. Jailendra from next

Eduardo on is for This Jailendra.

mentioned adjusted breakeven that On indicating you million I the $XXX for could 'XX, that of Is breakeven expecting you on previously 'XX? a comment in revenue. you're get EBITDA of ballpark to achieving think guys of what

look, think, from quarters mean, I ago. few we've a Yes. I updated, everything

mix, would than Our heavily software more prior. is towards weighted I expect

operating margin available, what's impact to so profit meaningful our on And obviously, cover and a has that costs. gross

$XXX we're and would and kind ancient million negative gone negative number, reluctant. I'm 'XX pretty as $XX so, thing think 'XX. is the $XX million, has clear of I view million here in important really that 'XX in We've what about the I in And to happen And history. that guidance It's on talked EBITDA. guiding long

in goes that year. line to the following there million fair don't we're to out But plus lower anticipating. another for top mix change to like given that X in I I So in than $XXX it's feel that need say put 'XX. the yet it's we number think

Eric from question Research. with Your comes Percher next Nephron

Bob, another question you. for

I part the time. mitigation over in the us commentary. in how a was DHA, out XX% there with that I function a think that to on reduction? the the to of are? that to Remind reduction Converge revenue reductions side. getting XX% then heard little bit was to volume with flushed that's R&D mid-teen to you've And stair step you what steps would And was is think that in path What ask mid-teens? I'd like the last XX% what I dig more

Yes.

Let me Eric. clarify,

the So, year-over-year decline the no there's work spending, in would some Converge saw 'XX that for versus related 'XX. XXs We continued I for here. mid-teens that that, decline have will would high down government so pretend XX%. the in government we're to in as Is opposed of area the XX% clear? ecosystem more like that to investing that operations mitigate doing in 'XX. expect The

Okay. helpful. That's

Yes. Overall like be more mid-teens. are declines going to

to we're you call If software forward a back it, have but down on from in to for segment investing XX% takes side track declines. of up then And code been ZIP get that's would government that run that, those the back XX%, 'XX, we it And of, envisioning it XX% mid-teens. 'XX, by revenues. the going rate on

anything Got it. dividend beyond Converge? you're And that point, from getting the sunsetting

Yes.

comes with Your next Tassan Piper question Sandler. from Jessica

from payer And And appreciate whether the CBS occurred any occurred large have expect have in you customer on there from recognize by help can that Converge these includes to to all the revenue the type. maybe visit of just us Is update shift alongside like subscription migration? subscription way level just spoke customer that migration or you to I just the customers payer the revenue migrations would guess understand XQ there? these or transitions ACV the maybe shift you big a those about? then as

no, is answer Jess. Short No.

that customers I recognize type migrating does think it all from to the now they're just how us not position you the for won't do, we or fantastic of alone What upsell fourth quarter includes in it. charging with it We're that that us those migrations. doing a on the puts Converge. change mentioned. customers revenues clients And revenue they're

to is on platform. potential the them much so, the legacy from them revenue relative enhanced And remaining

really, upside to where with expect And that's customers base able is that. -- you'll we and doing sales think see those to increase So, there I associated is over then so think, expanding the the with I current yes, same-store see time. in be

Maybe I'll just you give one example.

information. go-live done a enable Elevance, relevance. we So, before Converge everything we've to programs things the included did we've I fully of in with largest we and was lot which The our for of before history, Sydney. to migration different enable But integrated the think public on addition it's in done everything

with in elements. we for model There about to begin of has the growth think other the some this. interaction currently it, customers, and examples about very the can, value do are same-store enormous of that to how they not. to we care. are But way element similar enormous cautious public And virtual an that primary some are potential also We

of solutions, all just members both for increased is providers for participants with customer, the satisfaction, the the stickiness different are and because So, selling opportunity significant migration different for dramatically an the opportunity biggest with the ramp-up level and we increased patients. and in much additional seeing volume a experience of is

Your Fargo with next from comes Berenshteyn Securities. question Wells Stan

steady to Is comment I that to the to XXXX. earlier. It contributor beyond expect correct? made Bob, DHA crystallize a you seems want you revenue be

No question. expectation. That is our

pick if case, And the on do expect Okay. growth… up to you that's I guess where

no different customer than that sign. other It's any we would

we know We I time. don't this we're given the differently, us making, that would a they'll that expect for why especially long right? any investment think be one of about with level

course. Of

incremental from? into question Just in DHA, it's parlaying that it from what's where XXXX. And coming if growth is about If there? your we're not thinking a XXXX, coming about visibility

all customers, customers. We're a signing and expect logos, lot new of existing wonderful do with business It's we there a expanding are our we with to them. and big of of world out

revenue then So our from costs, Stan, you lines by probably look in the I about mean at perspective the improvement by we're is flow across driven success presuming of XXXX and the gross for there there's and yes, if breakeven a driven what 'XX, is somewhere balance business. But cash guide XX%, profit. probably XX%

with MacDonald Ryan Your next question Company. comes from & Needham

Ryan. wanted about Shea on I This of the customers. an is circle to Matt for on question earlier base referenceable back

on been opportunities commented base seeing team the health systems payers. has last how also sales this over nice the quarters have and couple but new with now, You of

ultimately, Just those new sales curious less down the just or base conversations? starting customer more velocity development net referenceable make of the evangelical new and must-have how Converge to is the a of of Converge is an force design curious increasing that solution wind sale if and of best-of-breed

wholeheartedly is which It's this almost with. like I Matt, question. statement almost not a agree a

market. more the we're market for and many signed with too any value, There accepted. I early Converge bleeding-edge you that are in by the So, are first essential, give The be doctors obviously, maybe initial vision, platform platform. would of for be still understood not and customers details. up to to those They were to our color new the excited super

everything that think very, very infrastructure so else. safe with digital when a are the only big especially, workflow and regulatory in that's the It's a choice we where market deploy well have are the becoming very in a There we are that not the for reaching really go-lives point These compliance. and points we for entire about you things that care healthcare, many scaling things and the to proof all deal. of We organization. an are need value or cybersecurity, very very like is quickly good metrics very proven infrastructure and a with

So, a few happened. things

platform platform matured two in today it need Our and the and or really but for don't than a ago. market the is much year our was also it's palpable clear proven, more years We detailed are explain why invited more it's participate to RSPs are we do and long. And to we and what need about want important. much today People than ever. to what The know they buy.

following the are and execution an if of innovation at and will, you we lot dreaming. phase, So, boring age of a daring

about really of than laser-focused high-margin generate business subscription, we anything it's means rebuild growth, which working about to else. Now it. and post the more also software efficient It's really our part well on execution it's XXX%

question Glen Jefferies. from last Your Santangelo comes with

the now half migrated booking new Ido, with I was customers has already your And on of down just volume from curious translating subscription suggested modestly than Converge, QX. decrease to maybe Maybe to I subscription revenues prepared I'm over And migrated is that increased that with source from Bob, customers? was have new your a you like I to revenues those what already remarks, with think legacy some Converge, have about more that that experience with said there been over those the platform? from the listened just were decline. Bob think, to those the platform.

Glen. a things. few Well,

a decisions absolutely eight that There four today. quarters and are what heart in that missing or we sometimes we of ago. are in re-platforming, of experiencing outcome right is always are the You're this were the made that tail see subscriptions

more as mentioned more for is when would I excellent and you and examples mean use I in results atypical see people often. I are earlier, to clients any are few with we the As migrated metric they're which have buy first happy the almost platform thing to a doing that are And that that expansion. the were really choose. not gave

our want different we than that. to are I'd ways we optimistic out a in many, on assumes guidance and again that reasonable months lack There in it reality point ago, just XX Converge the we But to dramatic do into our nothing which point. where focus many just put with don't very any now at to So, growing are are share, that thing guidance we enthusiasm, retaining were even our beyond like be this and of and not should we clientele. confused

the at Schoenberg now call turn back for time. this Dr. remarks. further no will any questions to are closing There I

many us to we re-platforming. Roy, Thank your for Amwell faith, for through I'd other this everyone, patience your like express joining went as in evening. and so the for May, Bob, people Again, you,

and phase We other in and to really uniform are and that better get the men today. very deserve company of than by opportunity growth be people, our many they excited humbled care to women in help wonderful including our people the

So, again. thank you

concludes This conference today's call.

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