Accolade (ACCD) 9 Jul 212022 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Accolade First Quarter 2022 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Todd would to conference I speaker your Friedman. Instructions] like the to over [Operator Please go ahead.

today Executive Thanks, of question-and-answer operator. Chief Chief With call Medical call. first Financial the quarter our Welcome everyone Shantanu join to call me our Officer, Steve Officer, on later. Nundy, and will Rajeev portion Singh Officer, fiscal Barnes. earnings are our Chief our the the for

measures call this over subject on discussing to that be Rajeev, we on on could that when factors note important be found uncertainties, website. Securities materially implied financial Litigation these the that this Also, non-GAAP certain will Details the please Accolade to certain or as measures most by Such we'll during call. evaluating non-GAAP from XXXX. to actual cause posted the and our are of differ in those to can the turning made measures statements reconciliations that between forward-looking the expressed call defined note performance. be are statements risks, press believe the Reform the that's Private Before Accolade's GAAP results statements for forward-looking thereof other comparable relationship please and release Act

on For to available over our our refer our Rajeev call website. filings like additional in that, turn of to CEO, and the are information, With please press Singh. with all release our statement cautionary which the to our SEC, I'd

assembling relationships longitudinal to services service the in broad advocacy evidence day of of the rich would be cornerstone make that for richer industry's will improving eventually the Most validate and customers geared strategy and each, enhanced new potential their a will their do towards importantly, specific these set We're for into for hard of foundation bring came care supplier trusted conversations richest and bold the a employer outcomes. clinical navigation That of engagement, foundational more that of program the outlining at these incremental platform have of tools for and one acquisition dataset our engagement, relationships our provides Advocacy and which are employees new the joining every into energized the one that start and financial it customer by well capabilities past partner excellent and add to results business. here We're that of be all the acquisition our Thanks, to of month with Todd. Combined the Accolade, the the deliver are communities time that and And returning single work there a six optimism year of we me of joined of close for wave PlushCare return Xnd.MD for first at was of to at thank can our that. us. Accolade underway belief well as simple integrating our It's as grounded we it and fiscal exciting sense reasons strong with for a feeling the ago, the value an to you offices, My which the Accolade. clear reduction form via originally even you better. PlushCare to market. is how been our we're a a very years value-based in that in normalcy optimism customers. deep live When solutions nearly to to excited could populations. I work about value. set healthcare differentiated Accolade and cost

working fully to when Additionally, teams feverishly expert medical launch primary integrated and opinion. combining are advocacy integration care innovation and offering seamlessly our a

the an that the a healthcare create you integrated future to our to And how consumers' needs show experience is offering. mission finally cannot wait Our for we first. puts to vision translates

successes early our the change industry. to about talking and time spend high plans I'll today, progress, For initial level

and and of and organizations City services. and our $XX.X both we told to greater reflects company, to million were Fort investments more the In First, $XX.X expected their color, adjusted including to Revenue a we highlights Revenue the Xnd.MD of high just we new health. have integration start PlushCare, to integration for of These than since of early closed of comparisons with and the we some new behavioral account opinion make standpoint, hypothesis the cross-sell year selling quarter. last ahead a in business Xnd.MD's the early business few touch some our first even our million, months the was including a quick validate launch acquisition, signed more medical than our of wins transaction positive three will business. review like EBITDA expert XX% customers I'll adding want Xnd.MD provide you Worth cross-sell with of advocacy insurance adjusted the plan a success with impact rapid the of level XX care the growing along of the quarter EBITDA continued very start Fortune guidance. a clearly. enterprise Xnd.MD. for on to acquisition. a primary the From and from of existing loss I key importance season we Steve

apparent medical customer prime The Additionally, summer at on It's we're July, success, pipeline when We're of in but is importantly, the the on our optimistic Not component value only healthcare impact employee opinion proposition, health selling outcomes NPS expert so months total have of announced we medical closed, the as about went Most and year for the our we a high been joint care of immediately the the customers. season. opinion medical remain XX. seen for member as historically above opinion to remainder transaction measurable traditional for and have our first the X. now deals importantly, well. levels expert core well-being live offerings. July more scores expert cross-selling

in the who open at of summer plans X are benefits large decisions in company, fall their and tend January those to anticipation healthcare make our big of For you launch. new and employers to related enrollment to

our selling year. before, you capabilities new our with sizes, businesses expansion told addition customers the of target include of to throughout and we we've of all As are

industry, an renewals time and the of middle-market, important the new very of in strategic. segments, a positive set in still with first our had in customer and deals it's and quarter enterprise However, signed business. each both We success we've

In addition McKesson, premier some to total of the also Fortune our company pharmaceutical signed I a for benefits, deals notable for offering. we Xnd.MD, XX health and mentioned

I base as expansions to, saw the upgrades prior belief partners Benefits to well acquisition. populations QX, also with who to key via notable more market our had with strength We with touch we advocacy One your a the other the note when two begin that we we're the on with it while plans. year note selecting offerings Total choose their would our in our meet has Total Total flavors lighter that fiscal to dimension, customers who attention I Benefits. ability particular we who one because call new national Health first Care relies to as saw carriers. multiple might fulsome health health In down to of bring the the Xnd.MD and from we road. by multi-carrier in our multiple firm and ago, serving One went solutions services financial full wins customer XXX upgrade public, one Fortune offers established is to relationships relationships Humana, of outlined customer the of the plan our served was needs employee Xnd.MD,

of brand the Pepsi-Cola bottler group, Mid-Atlantic. the is national franchise covering which One second PepsiCo those and was of beverages largest the distributor

Mental in solutions. our primary we're in mental increase Finally, with interest to signed Integrated we Health past embedded quarter, Incrementally, capabilities PlushCare in and health to see excited mental we're our care an customers incredibly continuing solution health. This about Ginger. new the Care behavioral more

most exposed care to health our incredible going very to critical health good employees provide families. customers, that's country, we segue integrated crisis to and to their has transition customers a the with multifaceted COVID mental touch point, primary As And our and be the their solution PlushCare. a to ability is meaningful to behavioral in believe the

acquisition in of closed, customers. has XX already well our of of all, the care number than since front as PlushCare we've had significant current the as is primary expanded less it strategy solution a First days been

been advocacy out offerings. is and leverages talked about we all And cross-sell on new very to Our expert on has strategy a strategy building strategy navigation, our we're executing PlushCare opinion solutions. focus the strengths all continued existing to parallel business, an consumer looking perform trained while and very care that positive. field continuing acquisition, medical on expanded primary PlushCare the PlushCare have our a of When to well. upsell the actively business core teams The of announced core we direct Accolade that

levels, October. growth In return providers when our talked more fact, to we We'll business. while PlushCare subscriptions continued that post-COVID lower telemedicine and grow about share combined first to has a quarter in about report urgent traditional

primary work in fully broader our out enterprise standalone featured On basis a for care previously that roll to thing we plan talked is that operate in solutions care customers plan we One ahead. near the the haven't future. strategy primary to on to continues the model about and quarters

able care PlushCare especially the this powerful to and platform customers, the a the immediately. using we're both market, our primary customers many those combined the that a PlushCare Accolade offerings For It's begin execution middle is can move quickly. of existing in testament that teams to

to to something this think and home testing difference a be and self-monitoring reached new point, discussed The in advanced constant hypertension, out installing supplies the more a patient care telemedicine. care and in glucose, staff of is pharmacy refused member number was The Her levels. for sugar reality provider including rural member PlushCare medications. three kidney a liver to was transaction-focused can and Three to by including primary go had up, behaviors thought hypertension a and patient balance, disease, have follow physician physician that tests. kidney simply a but good want range. point she limited to having was lives blood levels was no follow This next At her. from access help X medical was success pressure share was medications barrier. also the type months diabetes. A complaining the dropped insulin, with glucometer patient. the discontinue by facility to didn't to across risks. but area she her The with AXC were the kit her potential for you a had urgent the the month, medication the could see liver. The and pressure the Her or engaged recommended kidney to serious the and Unarguably, a PlushCare adopted insurance clinical of normal compared incredible her therapies, to in traditional blood her dropped diet. stable fatty testing care. and levels care ordered like changing a despite was so and in in member dropped since the brick-and-mortar home It This I was At very medications. refilling delivered The her AXC guided a she blood the patient, exist far so for was PlushCare to refilled by diabetes her considered to necessary. of The who rural her normal patient PlushCare fatigue, changes. of PlushCare longer example to many Her close revealed the offset a in dyslipidemia I'd successful and had factors for of or the blood that her pressure a of who dropped, lifestyle virtual allegory twice medications. testing levels for centers barriers story country. a on levels back have a the primary by later and member Those coverage our patient of had from a COVID. requirement approach sent from strategy. to to X socioeconomic typical levels telemedicine office, way. to a elevated location employees a our the level. broader and chronic use that normal terrific and had a Suffering she with correct of After physician were even convinced problem related customers undiagnosed and one out ensure she approach the access PlushCare and relationship story PlushCare because might further blood built physician type kit The position on a because half. our Next, pre-diabetic had able specialty hospital her PlushCare The area the team, even had no our two up was liver three half the were the of treadmill monitoring, to one her nursing patient

the the the it doctor that other ups the might of capabilities with for Accolade comprehensive and through been to the likely that's monitor with reached information had break health medical to When would to on story, that delivered opportunity the way team. care in a specialist is been might the the and care she member the be critical Accolade's list the actively medical employer she come been multiple team medications, PlushCare integrated difference would have member engaged before instantly doctor physician, treatment patient's expert have she barriers those already when and of now PlushCare the a change We relationship, the the sooner. physician benefits about made and opinion delivered. primary all told follow be And this history, radar with Accolade's care providing. knew the An our have engaged hypertension medications and with have this issue. assistant talked that PlushCare all have ongoing This would care member claims this nurse. insurance members the have comes extended ongoing When would engaged supplies frontline the her necessary care beyond and and

cover turn As to goal it. now I'd over improving have what's real the approach of achieve opportunity. outlines A to this call that, rich fully we overall clearly assets integrated, and With and our a look to next, example health of Steve to financials. wellbeing data-driven to members, life like set to the we is the our

Thanks, Raj.

that the on the the press release. I'll June first closed our closed just we provide color recap the beyond Xnd.MD The I'll days First, few the results in on mind of the Where quarter. after XXXX. fiscal tables in PlushCare fiscal acquisition quarter comparison Xrd into for a first the Keep in March acquisition appropriate, year-over-year so basis our In any provide growth year combined ended, million is first the contribution there in results generated the PlushCare fiscal business XX% results. prior that XX% year-over-year quarter on forma these no show $XX.X a the representing impact of revenue of in year-over-year. We pro GAAP over first we or for period. quarter, XX-Q, growth

this pro mind forma of SEC the year, for As both in we results selling provide requirements for and separately. we're keep rest solutions together that please fiscal our

reported sell always are acquisitions forma be of standalone, So the perfect business to revenue profitability a numbers and the not customers and we as while how reflect growth intended to it may run representation overall. the pro

Care as expert As solution. a quick Accolade Total standalone and as a sell we as example, of an medical part opinion upsell

XX.X% forma solid our fiscal be compared was recognized the Accolade and and also revenue adjusted would exceeded purposes including customer period. of attributable in be gross member approximately first multiple guidance QX execution achievement customer of as into some Some Both prior adjusted guarantee for relative EBITDA. fronts. The QX favorably quarter, largely revenue as outperformance timing margin of of counts revenue. the pulled built that related pro benefited performance XX.X% expectations to performance which revenues $X year the into to guidance, Xnd.MD that of Fiscal million on to a positively the revenue forward recorded would

XXXX slightly versus adjusted this QX the revenues flat million was of quarter. the of call, the XX% Adjusted to remain prior expect in to in period. margin fiscal XXXX expenses of first QX fiscal As prior And in XX% gross adjusted stated in fiscal quarter compares revenues decreased we year. on million EBITDA operating a loss of of year $X.X $XX.X the which first to year relatively

after the at million notes and to the quarter, offering. our paid balance marketable quarter estimated the we the million acquisition. paid securities related during $XXX end first proceeds approximately to $XX totaled of from and quarter Turning that ended, the $XXX.X expenses And after received Xnd.MD convertible the PlushCare fiscal million. to the cash, equivalents acquisition related in cash Note $XXX million we sheet,

cash Accounts were So, fiscal marketable expectation heading over AR to of cash, and pro quarter. quarter, basis, $XXX on primarily second for receivable to in is on outstanding the representing the update increased Xnd.MD. days into normalized the end quarter securities in forma of increase $XX.X million about the our DSO the last equivalents million the range. acquisition at relates a the fiscal XX end approximately QX the from of fiscal to revenue with XX the XX prior that And consistent XXXX

of does approximately stock million of or $XX.X the that PlushCare. outstanding and to shares XX, had related we Finally, this as earnout May note include any XXXX acquisition not common shares of Xnd.MD the

X.X So include for should issued acquisition shares your the for June. models in PlushCare you million approximately

earnout up related there the calendar turning And X.X to to X.X in now out issued and up Additionally, be shares earn approximately related to million Xnd.MD PlushCare shares XXXX. guidance. to to are million to the

Accolade. Breaking of Accolade said we down business Xnd.MD core representing at PlushCare faster the to forecast range. for over For EBITDA $XX the and than we expect PlushCare in loss revenue $XX the this Xth adjusted XX, grow ending revenue the which ending we've and $XXX the we approximately growth XX% $XX expect million, February the fiscal in at $XX year XXXX, of range and prior million second revenues in expect $XXX quarter of midpoint from million XXXX, to includes range the fiscal further, of to June to growth the million XX% million, the August million. we year that range And XX,

calendar it Accolade's range. negative fiscal PlushCare million, negative Raj investment revenues in expect with for now, loss at contribution would build at consistent revenue representing turn back This be enterprise an close EBITDA our PlushCare we of growth business. margins year If million over midpoint XX% EBITDA and you of approximately loss the you million the give last the to to Xnd.MD's of assume $XXX EBITDA $XX PlushCare it adjusted and and is fiscal XX% provided the to 'XX incremental a midpoint. approximately $XX we remarks. color adjusted the XXXX at XXXX revenue, PlushCare combined and range full Adjusted to of of quarter in as And about is concluding his the from with care for I'll primary XX% expected

Thank Steve. you,

we upcoming take of your couple session on opinion. Before questions, for of a any keep on deep events. good medical announcements. feedback inbox quick an We heard Please expert our couple following a dive eye

limited So we're this session in do also Attendance will getting later focus to to be month, data. customer next on annual planning event customers, which webcast will the but host again ready We're our plan Q&A to an we call and to for I'd Please get those more email with for the an out that, keynote save details. like host analyst reach the September. open info, Todd questions. with the Operator, don't if session. date you to

first Instructions] question Stifel. [Operator with Our Grossman David from comes

open. Your is line

with lie the at that. when interest in are when point probably customers at But early now mentioned observations and becomes too two about Raj, going look integrated to what comment closed deals, and may are know, completed these offering, a bit whole? and market and you've selling going but you that it's they're You to on you year-to-date. seeing about a this now time decisions. And some forward you the you What what that meeting gave integrated making you're know their their that little with I deals, where offering observations you've cycle two questions these

Yes.

to of thank for you, it's First to being you here. great David, all, talk and

I that and can metaphor course for the that complex you we've our weave that system utilization together brought health but the as are problem see program the we over that primary And the too They it that to they that's from to Oftentimes we've think with together our relates systems of out they solutions question partners own the see process we healthcare own. umbrella it's really solutions unfortunately and us their a future. been their and under on Trusted to confronted plans clinical very from a when for when customers and and a they care, Supplier local to is our that are acknowledging difficult is today their Accolade that perspective perspective, oftentimes They asked multiplied in a solutions. is only not looking we able important solve carving see do that services be how seeing our to to engagement our look our our are of they together to because embedded it hired for that that And a to metaphor. the driving low from ecosystem perspective. have solution buyers only like medical them called today and as advocacy solutions, to and really that many year. What their network just they're they metaphor woven the rates. customers solutions deeply bought times see And many going for looking bear. metaphor weave relates in expert to opinion, too are technology future do of

customers or be. so, extraordinarily from us They And should with David, how long-term the I understand looking far behind value positive. what what for have our they going they is of the what so mess the is to giving vision meetings understand up. more hypothesis acquisitions, been that And proposition they're think the our integration on -

is your then for prepared solutions than segments Xnd.MD that Or problems a customer? that? you made about is solve PlushCare, it specific to that for kind as at And or trying remarks market for and targeted in both take you specific standalone you're back offering more to the comment of there also to

at where customers the met. always stages they to been be of going Accolade, we've mission since really meet has the different customer journey. would are got Different David, to know, at their You like here

employees ago flavors price advocacy customer levels. three the years And so four is our the engagement our or family their buyer moment three - different been meeting one of medical HR years ago, same members opinion, we cancer, announced of that where and I true give story has a where with family think one them expert of every ring diagnosed offerings points or has various some single what We says, at for do do. their different with

expert Our Xnd.MD, gives answer think true them We the solution, to that opinion question. our virtual around primary medical that same story is care.

Our looking we customers questions access want way to answers are to who the forever. are as with problem. those are nature particularly looking availability a wrestling them solve into think the and like about for, the approaching particular And been trying that's to And solution, market of for opposed their we issues, shoehorn that. to

Our question comes America. Bank of from Cherny next Michael with

Your line is open.

think Afternoon, earlier a you want came season congratulations on Raj, some little expected. the a nice you that cross-sell to saying on of the I made selling comments. than comment, quarter. I bit up the follow

If you the between Just you that trying and to think about have those expert capture we be driving and would rest should could there any more 'XX? to built you was guidance bit like the and the had characterize cross-sell what's common where that expecting we did, about also is you seemed what's what of earlier move through cross-sell, think you're cross-sell through and it second selling very the season about seeing potential client there and excited as that customers pace some to than traits expected? curious deal a of the fiscal through and a back little into think opinion

Sure.

after words. I'll part guidance for here, look the answer, for of since take answer Mike, at And of saw meaning, before were the we we of We mix hard make evaluating the we were Xnd.MD, the in saw the of you were of that me process just the evaluating in acquisition. leave first on acquisition. to of customers all, Xnd.MD buying the who already customers who customers who kind process a and changeover first - and who the a they solutions a question Interestingly, the I'll at if thanks quarter began the already acquired closed that? the customers in Xnd.MD the thanks being and evaluation Accolade made the looking and the acquisition cross-sell deciding the part began we - decision, How's I'll qualitative part customers, to part. that existing Steve. and Let were since of leave saw fun post who saw

So closed. types all three varieties of deals of

And is Xnd.MD. customers they if other degree, that with get And with X%, seeing that, the they're that they fundamentally critical, confidence Mike? utilization and so rates that that extraordinary and to it's outsized the I have do so of is the not that good X%, employee some think Accolade vendors opinion can are working can yield that they a utilization second of lot news value can understand above you above you satisfaction.

is a Mike, bit factored And to the this Steve. in. about I'll guidance and speak what's

occurring to will really respect excited during remember mentioned, enrollment then significant of our implemented where on 'XX, a more become have, guidance, January early know, about revenue, momentum selling open particularly as are fiscal Raj the the that's we're into because up factor some most but in with really deals this season X. and to into course, launched you set factored of be already. As that And cross-selling we of we with

will and coming bringing XX% on we're out that there, topline to that guidance million pencils that So as own, more as signaled on fairly Accolade you continuing at so then Accolade $XXX organic we million XX% and in year, market range. to giving to you that the together is grow its we speak, or the rate really could to well, integration rate to core guidance and which recall maintaining has companies XX% expect that from those from core growth impact a own $XXX growth revenue lot selling of minor and strong organic we're for that, revenue think both with to Xnd.MD so cross then their of to which a basis with growth on PlushCare the do

hopefully then very And one quick Perfect. follow-up. just

the had revenue, you have will supposed was? you Just On business forward you recognized how XQ? normal of curious at-risk you tell mentioned, million can the us, that just that pull that course $X on the that forward would in part it be pulled of the to

right, way it you described exactly the Mike. That's there,

to the we and it there. the in occur year fiscal and fiscal recorded quarter achieved We expected later that so first in it

those that important you it's think we analyzing understand results. as you're So

So its very and that you QX on strong $X into own. from performance QX. have first reasons around counts quarter pulled for And all PG member then million good forward

with question Goldwasser Morgan next from Our comes Stanley. Ricky

Your line open. is

I couple questions have a of here.

of to the I'm from the understand million on performance the first pull upside $X that sounds is just of like payments. all, So the trying Steve It forward quarter.

we to think Xnd.MD remaining is performance what and core estimates upside in the from upside, quarter? about the what's from As your on

Hi, couple Ricky. things Yes, Great. a there. of

the forma and If which you We also numbers in pro either you peel Xnd.MD see pull filed apart will for XX-Q, got do queue. will apart, filed the just Accolade be imminently. or the

XXs XX% organic in basis of take a year-over-year. see So, year-over-year XX%, it look see and you'll grew Xnd.MD the you'll the you'll low that get a there, chance on as to at a different components

had there. So, could guided we growth assume and - was that here a range XX% XX% very strong that towards you to

meaning We're very PGs So the you elements as positive across different and for to in very strong of early assume are PGs with starting chance base, we're savings, savings customer finally savings strong COVID. around the see the negative the the effects is employee And to the which bit PGs we cost Accolade our growth importantly a Accolade, from rates operational across respect way positive. in came satisfaction, Xnd.MD. off up cost customer a year. with to of extent performed and all categories, engagement and that know, well we booked And different

As you the get but booked XX% revenues savings fourth do get the know, those during some about year. do the of cost quarter, booked in of

across strong so And QX categories. of each a it's those different

'XX year about quantify of spilling as us we in happening you're over And businesses? size help you XXXX? should of we should can elevated level then investments, investments or to think that to the the an we think model investments making And about fiscal those them integrate the

with you Sure, a bit. quite help I can that

about, just bounce that let's seen we had the off you If what that from previously. backwards of and you guidance think work presented

complex So $XX guide One, $XX look step-up would there for teams $XXX business that loss prior who we're the so the care supporting members, are that, with that if EBITDA, see that of bring the and investing customers of incredible million you to create what a from million is we experience across million, to adjusted consumers frontline EBITDA topline to in quarter you different for the these elements. acquisition, an the we are what integration significantly each can frontline million few element. who the care the the and at a to together are last and guide, $XXX technologies our provided teams

roughly expect year. with form we why lot So cost or where up up this revenues that the show a do does our in margins, in signaled gross to has P&L of flat shows of gross margins which

that the care of investments frontline Some in teams. happening

also the in in to continue that significantly product of technology, ought percentage 'XXs so see there, number low invest You'll be to fairly so revenue. as we'll and it a

investing we're area is across distribution. Another in Ricky

So as broader low this of with And fiscal percentage our number the year. year, 'XXs if that marketing the from a go has into look out and that and was development revenue this sales up teams, you what to high building expanding in go-to-market the teens we line 'XX building everything are who and to which all expect between teams primary do and and question, at Raj expert together in business a the marketing care advocacy his integrated this answering spoke connectivity medical opinion a underlying further that navigation, on completely piecing way be the just the a Xnd.MD in remarks prepared in is that and would story about was elements. teams that

across towards into over those really So the up breakeven chunk in year. or shows ways of this it adjusted EBITDA down investment the the XX% couple bringing years. next that XX% we'll range continue while different revenue of P&L loss we the And

front So that towards also opportunity over of that's years. we we next of that couple growth us, continue while maintain very on to intentional in the discipline the capitalize breakeven

who quite think you one, And I are if platform seemed that helpful. think and very one about have extensive. are who I Steve. I may about replacing, or you, you with is That's PlushCare when competing when Thank it just last the

not about is care? competing but PlushCare we urgent care health should behavioral think just primary with and also So

our course that situations. can one and the where, fundamentally solution on you. primary is also And in the can a customer grab care in we when position provide behalf chat position a relationship. leading with event I'll from a implemented of of perspective. to urgent to behavioral Ricky, we We health then is things that highest helping one. needs care with leads the urgent the is Oftentimes, is It's belief great that our delivered care customers offering primary of serve of to that the that and value see when care the

the to And certainly emerging we'll under umbrella will so we that urgent care drive it we're but offering way baseline primary where positioning and I for the our situations think customers, which is expect lead visit care, and as the delivering that well. care

next Our Daniels from with William question Ryan comes Blair.

is open. line Your

strong Yes, on year. the guys, to the congrats start

more have Just the you. momentum if on work heavy to curious be of sales may you're to part return pipeline. seeing and again the know the in core a helping And drive is or kind this products, wanted trying towards absent workforce to Thanks. Is I'm the of with for follow-up need still a a after with to for aspects working clients? I for the the given the workforce that's year re-engage organization. year conversations remotely keep or that to being you a engaged perhaps question cultural conversions

the Ryan, for Good and thanks Yes. Thanks. question. evening,

of hit Corporate tailwinds really part you've a some happening what's the we fact, on think macro that today. of America In in are

fundamentally wrestling to for work, distracted. employee that employees return engagement only First, is who with challenge issues their not variety and companies are a other of families have their a but

needs and them and gone out to Second, And figuring tailwind has their of there that number months and is and last of where over to a front a find with that shock work, healthcare are another employees to system families. or lots clinical are XX the center driver. return help through a in

are pipeline opportunity and what growing a think are so, on as growing macro driving see - the we that we continue there tailwinds And for and a basis, a business. continued to

with Our Suisse. Credit next question comes Singh from Jailendra

Your open. line is

and the I strong discussion contract wins. to offerings, around, It guys. Yes, the thanks, selling evaluating guys employers any all to My and season been a really are for you selling seems and questions seeing thanks on changes you're XX and for curious go on health even own costs comprehensive consolidation our - for partner fatigue that, like to past months, solutions? the thoughts your changes over aggressively employers digital or best if And also of for on want quarter. are has congratulations given back highlighting are alternatives various company looking for related are breed pushing going congrats solution. you your well insurers way their in around, the season having looking expanding seeing those employers and vendor on vendor and more approach

Just sort little a flavor of give that? around us

one we'll something wrap of sure in cover answer. question Jailendra, please element I that all. you, make And Thank up to for to up every Yes. and the and I'll if miss try follow it question,

selection from let's - has process with buyers and in to approaching the start how relates XXXX evolved how are XXXX. that it As

that when largest buyers measured measurement what marketplace, seeing be are drivers. we'd a the outcomes, contracting measures to are value is. of clear and increasingly the you're area value that come value geared success drivers those clinical to around going and and pretenders And employee lowered all that satisfaction. that I demand from vehicles costs increasingly and differentiating to there the value by real Buyers the orientation solutions single understand with a in point orientation think we're a the that table is hundreds of seeing that understanding value is

in of certainly favor. profound reports obviously 'XX on point in That's value that's prove that well. core say. point, particularly longitudinal believe that drive that place it really a I obviously that answers documented examples. where was very we are around deep the being And increasingly two to is savings - a directly and being as navigation, 'XX, with they idea Part looking than integration, in compelling single the think our incidentally I'd of drivers, is question healthcare one, documented experience good find and plays from around where So can primary to two our companies more able relationships, of important care their

manifesting do across enterprise of that hand 'XX was to we are of those, through manifestos are say, - as all not think that that quarters couple talked this, that of the particularly, I we're midpoint accounts in true depth hit 'XX and have while strategic a accounts, I really absolutely article industry, other ago are about and but Wall work so say, but the those And solutions to other And two - the are the understand that market market. of I'd middle Street think would staff we things Journal - it's - evolving the two here. the as kind

some around of kind or you you to that more might like examples clarify time, contracts some have to question level release earnings contracts can employers? how follow-up base that your like risk commentary my your I sharing look just so in mean clinically - be the give specific covered to noticed any you value wanted and with do maybe I actually because Yes, the these value-based first I model that. set, for

with Well, customers, Jailendra, third risk as about fees an our of our ongoing and you know, are a today. risk we basis take a

with we And risk - in taking so agreements of regard today employer one are of it. has in employers, our every taking that risk that any our element

to value arrangements. more think around based question of your I the point

value, is not We reduction going out and be the we point future Here's of space. just future the that and capability cost fundamentally that it or the about to to. clinical think extending to you is what tying would employer

integrated thinking about contracting, which and And offering, little how this little bit the bit a so, about be detail will we're we'll more a year. we deliver when give later

outlook for then Do Steve. cash quick have question flow 'XX? one And you for fiscal Okay.

We do.

but it's this EBITDA timing, million can the dollars number to same think, bit to Jailendra, you for that to in a cash that proxy ballpark. maybe us, tune few a a be of consider free higher I year adjusted related pretty flow, for than good that

comes Our from Jeff with Piper Sandler. next Garro question

Your line is open.

earlier? See, driving of the channels, those time, still to those those relationships the with some from you've curious about partnerships? positively build leverage good the about congrats on and channel your some and very investments questions the health partnership. are over Yes, efficiency, expect I'm there question second spoken marketing thanks is, afternoon, for of part upfront you but about sales And what's investments success sales using mentioned taking the are would that plan and I - quarter. part the that

talk investments new relationships in out partners. great you. with some building Jeff, to our channel to carrier there are Yes,

this solidified. channels to opportunity channel, organic customer year, customer believe is that to grow we're continue terms within those increase really customer see already continue And acquisition we the their that sales can solidified, that to Clearly, have seeing and in grow been on And the be even that to marketing once of base. extraordinary ratios within you're LTV absolutely expansion still the We an have relationship bullish efficient we in be mentioned, an strategy. optimally while spend yes, we opportunity business. in and Steve acquisitions seeing the

efficient perspective, very of marketing why. that's sales still and from reason part the a and So we're

I meets met. reason with our offering for customer fundamentally channels to think is those the that success where they strategy want the be

differentiate two solutions are looking advocacy That expert and and core added blend that bases to carriers added we've clinical deliver carrier so to When can care, advocacy. really medical themselves. primary that customer in unable adding delivering therefore who we be differentiation take capabilities advocacy. of virtual And started tools might new opinion that forms their for of to multiple to with otherwise are what new partners technology, core customers for our

things our do. the that breadth depth we think, one partners I the what that services, is to of really and So of attract

Excellent. as That continued well hear the Great as economics. focus differentiation unit helps. to on

from expect fiscal first the component variable in the revisit forward quarter the is could contribution rest me, second we the rolling the of you maybe and year? just Xnd.MD, outlook So contribution about much the that throughout about question how the business from you of thinking of that seasonality think the business, and

you Sure. to And talk again. Jeff, to Steve. this Great is

of medical that their offering. ways that through to model part Xnd.MD different market of with So expert revenue has a we Accolade opinion that go as couple

expert sometimes Sometimes an with it's exceed is it $X,XXX it's $XX,XXX guarantee something through And opinion $XX,XXX you as substantial, recall, on offering a rate when oftentimes and But a a service case it. medical has offering, average surgery associated is returns price. or the performance like very can on PMPM the a Xnd.MD will it involved.

is, an construct. quite the unlike to Xnd.MD it's way fourth as recognize the that of it's that based typically to paying Accolade, customer. though those a So PGs attractive revenue The for we're show those quarter, the goes recognize - up return because where on, lot we savings year deferring different able a were

you're full has will out a We revenue, we what to of as a that going closed just So you portion transaction much year Xnd.MD know. PlushCare. a Accolade more quarter, for which to bit fourth see with on as of flatten significant a bring worth Jeff, today start it board over year's time, is that

flatten a As basis, on you out then year's at and fourth revenue looking the when bit. the start recognition see to year-over-year a year, of seasonality see this that next quarter in that you'll you're

as be dramatic Accolade. as been it won't has with So

Richard Our Canaccord from Genuity. Close comes next question with

Your line is open.

customers you some lot are of educate out of on there other first looking companies confused of a With little a to pipeline of Congratulations Maybe couple the customers on value to already as well the and hit the on quarter. the are Is customers potential noise the are acquisition but address, questions at the a as Just conversations maybe curious all? thoughts add just sort around to have respect with that or that first there guys is answered the in and - that to been - all? at of talking that customer on? it. navigation could

Perhaps, thanks being here. I for the appreciate you question, and

to be and to how question capturing on and are - noise that well, Is sure that The think capture back prospects my come right, innovation the confusion. then ripe here market rephrase sometime I way Did best is I'm in to and with entrants, responding make market I am your is new going it. let try me question, to really think that it view that confusing - with your the confusing. buyers I noise they Rich? can I

correct. Correct,

in the buyers, discussing, the And the We - confusion brokers is the it's that to just struggling innovations even fundamentally the matter that up so the who buyers. we're that, or is market. having weaving reason, on part us in it solutions in It's believe some parcel a you're and absolutely plethora their for is keep which only creating together of part not the view finding carriers ecosystem. and medical obviously the not you're under both it's I is and Total The weight macro for consultants are reason. market with the a company. think of large and issue right, example expert platform market. you a as success but of why and for the the And Health we give healthcare mentioned McKesson opinion. McKesson Accolade Customers call, I'll purchased Benefits pharmaceutical today, that

together. is more are so companies confusion value look the be where we we - our they're at think know platforms customers value. the where that and integrated. responsible right the to confusion, we from to our and in is can of going utilized That all know for breadth more it seeing We value and that platform You're of offerings one all noise market location person view in the single be offerings for the leave accrue of a

ask value, appreciate But can have becomes And as flattening question, included. fourth I being a wouldn't the that like quarter now fourth the more customers predominantly Xnd.MD. if greater Steve, I quarter the of said, value are in in, if with value you Plush you a moving maybe, then And towards mix? coming

for contracting, different the have to these next bring And us of the for we today think early where, completely and I days as move getting understand it's it early I around together. question. call that we answering Jailendra's It's Raj, to so the type days of contracting generation than point to a value I based is in think all yet question of capabilities

you more of year. have about part how fiscal around 'XX that to material latter impact color We'll give in certainly in some current this a that visibility I the you back come to looks. the expect we So fiscal year as the towards around model, financial expectations the with but wouldn't

Davis comes with from question Leerink. next Our Stephanie SVB

open. is line Your

that on my an towards that dig How and we footprint something you is question this care think last about physical sell is to about an the bit you Congrats partnership, care. taking value it in so I and quarter either trajectory want M&A can should a as that mile think this or offering. little proceed you as thanks can always. something a integrated wouldn't for of for the of be opportunity

let I'd it's great say, talk me excuse Stephanie, to - with the me, take what, you.

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is care mile important. talk first, to great you. question. to of extraordinarily Stephanie, for the So, last The Thanks

of power part little our the I'm to in first of and collaboration the take me bit that Dr. then question Nundy to talk about a Let going of terms engage ask model. and

capacity in For to $X industry do imperative. us, trillion is the believe fundamentally a ecosystem, collaborate across the that trillion, we $X

servicing brick-and-mortar directly with just I'll healthcare will think We after and that importantly, working turn to on systems Stephanie, customers. ground existing are be Shantanu. the this, our over it We

about based currently radical they're the they choice, to them to forcing which leverage with powerful so doesn't healthcare care concept that we fee-for-service Instead, that a are while we can implement. do our to concept bring not customer them thinking we're system they're want on make to is you to that's really chassis maybe change that deliver taking speak things there require powerful that's away changes And can the around of this the already existing the of model important, we're one running. make we're of that? jump everything about radical our not to Importantly, value in running how their really struggle to platform that Shantanu, and infrastructure, fundamentally and using.

Stephanie important such it's absolutely. think an question. Yes, And I

is I in right. the think, lives, I most the itself. the think decisions is think clinical decisions, we the the And people of - highest service decision about point leverage clinical their that make upstream from really right, that perspective the

the Really we system about and the and like call decisions the person go that home, number so their diabetes for you of think story the and day the the it's with down And is what member most when people falls where about where space, well-being. liver those to that space issues. that interstitial started make with between we right, visits now have health every function

we've so us, And we past for what demonstrated the plus. that's where that's decade over thrive,

are to think brick-and-mortar but get need with up that getting that outcomes. the going just so we to that sets decisions, not need nice And ecosystem they people We want to in really collaborate a be environment, get the the help to hours brick-and-mortar a care make we're that the they're X,XXX service. to them physical going we we're hey, through see that the saying, it's sure really ultimately for to way going where the guide absolutely right we're accountable better them, to for people

might cost more the of one, steer client? or to follow-up claims care this on I some improved are starting toward something these ROI guess hybrid up savings? kind appear just their given the where is Or them models of read risk-owned you of do you of that the and to venue want to

team one. tag we'll Again this

is are that the pride the by together capability of our one reached care our measures. as to we quality bag Stephanie, that people provider on leveraging in to matching intelligent things think, care tools that cost, I it to appropriateness relates right the our capacity get tool and ourselves

us which right capabilities treatment for. on opinion to medical allow ensure decisions we're expert the that Our

we're think, focused you on I be are measures quality cost partner going that have customers with of around and Shantanu, our on on with areas addition our there? like anything us to the behalf measures focused the and to on that interesting do focused customers. are clearly

Yes.

that or is does I part as particular call value-based think local as getting questions think or think employers I with, have that your clinics if I care, assets really No, what model. that of they sites develop brick-and-mortar have fold you're with many I I add, believe brick-and-mortar into at our to how something would partnerships move they onsite

I And your think I that's part think... maybe question. of

You that's are reading exactly my it. mind,

Yes, perfect, I and Okay, we that have I number already - absolutely. on-site short mean of I a think answer perfect. is, think customers clinics. the today have

care to still other think provide I able at to the value And numbers. care organizations, by need Even not they're that may best those providers, still be those those to are to they think have value absolutely needs towards environments. missing served real that serve as those the differential going care opportunities be of is more getting those that or to members those really are based a local there accountable move lot continues market I providers. data to numbers getting local may

looking to. absolutely get about to able get employers And on so building that think capabilities that we the to outcomes ultimately we're are that the to Raj going be that talked those to to construct ecosystems

with comes from question next BTIG. David Larsen Our

open. is line Your

Xnd.MD. bit maybe margin? a I you are integration little for going expectations Plush where like we What margins you Congratulations there 'XX for and time over expect beyond, this a to understand trend? into about as gross will good get Can investments on quarter. period? talk year your Thanks. fully about there fiscal But gross long-term think and would you and that what

Steve. is you. talk to Great this Dave, to

plan of this absolutely part that year the flattish as year, taking we business and up this into in right, invest roughly margins and our while of year. gross next over time You're expectation, part

the with So into longer-term. think XXs, of the mid-XXs the call over long-term target that a as mid-XXs, it

that the create mid-XXs gross outcomes really see and and of going together year, are drives types into year health and savings in think to is though critical to high what driving to these that this that we fully that experience have similar rates margins of that customers. retention you're the cost capabilities I we customers bring existing integrated think are very the new with of all growth range kinds next in

into that very importantly, out the that continuing over few platforms frontline different create more things, a Now our integrations be be will the efficient. care mid-XXs build how that take from the to XXs. through technology time, we up It teams help

a medical teams total you direct help that So benefits offering thing where that someone leverage to health mentioned to it's have leveraging there's with the there's best our on deeper we operating to opinion our if member secondly, business the and the automate leverage like care we next action with what we do will. margin as next to and something an the successful McKesson overall, certainly that coming elsewhere segment, all, and frontline Raj the Raj, improving go have gross we in into the the recommend then where teams segment in equates AI teams best machine prepared upsell, on and up learning ecosystem transactions weeks gross the combined as are analyst as to data makes way, that direct, over remarks, leverage know and on that expert engine care And will call alluded that margin, on the that. we the line frontline selling margin or cross-sell coming would including more at be more will we efficient. By a his

Those factors driving time. over big that's there,. margin improvement So gross think two there is we where opportunities are

the plans of comment describe And in very a no, unexpected that respond Accolade we've you answer react don't plans are, we've to groups health seen in the point is good a to That's at bring health the your But they such to very a sort right you there And anyway employer like the thanks. that's couple taking it. themselves. have your Have than is sales try way I seen job. mean, here they of benefits. us efforts from I'm product lower of Thanks. any, like, good heard the assuming you seen the from self-insured how been away large They're much large I purchase any helpful. fully Accolade Accolade but all Accolade. mean, are services here large lately? health backlash are doing like can in then to aware Great, get very insured very, and in business know, price first because some all, plans plans can of some if a potentially Have if of heard I

I appreciate the question.

about I a we think for earlier. bit talked and currently us little it

that in our going value finding are we We with They're acknowledging it flip a to I'm and question take understand, - and carriers differentiation. actually positive and can looking way. to increasingly add at that your them

we that yes, there advocacy they've and compete be with where And there acknowledge customer market solutions. of opportunity we're be going serve so the clear their those the as and we to exist But have where going where opportunities to competition, in we when them level collaborate moments to is got well-though well. are to own win a an

And so is answer question think longer little a now you the the color. I hopefully, answer, short give your to

from with question comes Ryan next Our Macdonald Needham.

line Your is open.

with this a there Thanks we've impact different of to still for heard continuing selling and taking navigate a to But there added is on is questions organizations something mentioned the strong health that. behavioral great you have models quarter. the this trying is that similarly Raj, my and of the with. complexity health season, spoken congrats behavioral within on we've layer

your you're component Ginger Thanks. the directly with at model? your can mental health how PlushCare of as or look As the with the and those you to included talk evolution PlushCare, partnership and selling start more two you about Accolade integrate that's you behavioral into positioning with

Thanks question for Officer, here. the question, Medical to Ryan. Glad that to you're our going I'm Chief hand over Shantanu.

mental important health so because you're again right. It's top that emotional from and question, seeing it's our mind we're of that and over up customers concern over Yes, come health. such an about and

answer think health, covers a point, health psychiatric conditions. your that one-size to right. atypical is approach, more very the behavioral there to is, substance short a emotional I think don't depression, abuse, to we To from gamut broad anxiety

to shortage together nationally time, think going - to services is there going know integrated of of psychiatrists. types there And multiple I meet Part just to as you over challenge is nationally of be therapists, scale. we ultimately require shortage needs. the of is there's so it's that mean - the a

about is maintaining thinking also meet what an quality while high needs, really really we're broad on. so outcomes, very, employers' that and focused can And our approach very

Excellent.

integration of you thoughts we very maybe that expect some Thanks. to areas As as terms acquisitions, a Steve, might obviously businesses early you the synergies discovered Steve, about for but surprise pre-acquisition of sort curious think in days follow-up didn't get have your integrated? in of both just it's the maybe on that being of upside

improved healthcare. there, healthcare and common we've Ryan, seeing to Massively spoke a has I is reception optimize, the about medical of way similar backbone had I a has success example, earlier. improve prospective We're buying opportunity the seeing been early and to mission with business. a and and Particularly, health ground, expert integration opinion Raj example, with the we're really around great that we're better positive opportunity just the teams more the very and of the like-minded, is think on here. customers but incredible, we people McKesson we're upside days across from customers on the with to Xnd.MD not PlushCare go-to-market seeing strong the drive also utilization Hey, with Sure. think most been And in of benefits really and the total Accolade the early our only have seeing working really services. that and offerings the along the with the we're the together

topline opportunity and about been and it's so far. mostly TAM positive it's extremely So the expansion

turn am remarks. would for to Thank any now management you. to not over time. closing further this call the I back like I at showing questions

quarter. Thank your next Bye operator. being you, We updating all to now. for questions really forward Thank and here. you we you appreciate all look

call. for conference you today's concludes participating. This Thank

disconnect. You may now