Health Catalyst (HCAT) 28 Feb 232022 Q4 Earnings call transcript

Welcome to the Health Catalyst Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions]

I would now like to turn the call over to Adam Brown, Senior Vice President of FP&A and Investor Relations.

Good afternoon, and welcome to Health Catalyst's earnings conference call for the fourth quarter of 2022, which ended on December 31, 2022. Brown. Adam is name My I'm the Planning Relations Financial of Vice Analysis for President and Investor Health and Senior Catalyst. Officer. Hunt, And with Chief Chief Bryan our Dan is Financial our me on Executive the Officer; call Burton, and our at A complete disclosure furnished our issued Investor our available results to in section ir.healthcatalyst.com. the as as our Form of Relations press which on found well are can today related release be of in website X-K SEC, of both the

being recorded, following is a replay the A available call reminder, and will be the call. today's of conclusion

today's of pursuant impact the the we harbor XXXX During Private call, the of strategies, levels will trends, of make the of statements provisions Act regarding to forward-looking macroeconomic Securities tight of operations, anticipated challenges, Reform pipeline our Litigation high high and COVID-XX performance safe business. rates, market of the of and and the our results on impact interest our and the general pandemic the labor conversion rates business lingering inflation including

the to XXXX that X, will on as XX-Q the factors SEC These for full year results XXXX, views of update statements XX-K relied the Actual our forward-looking representing SEC. differ. obligation statements are disclaim Please date. on upon as any not or and XXXX be filed management's may current materially with refer and in We forward-looking Form should today to November and QX any our be risk for with our the subsequent Form filed as of any expectations views outlook. based

comparable A reconciliation measures non-GAAP also press provided additional to certain to We to GAAP investors. provide in is financial refer our financial measures these measures release. to will their most non-GAAP of information

Dan me to then Bryan his the Dan? and turn remarks, remarks. will provide subsequently Dan With and for his take then questions. over prepared let your that, Bryan will prepared call

who to and Adam, you, you this thank us has everyone joined Thank afternoon.

additional highlights XXXX full quarter. from excited with performance, fourth the quarter financial share along our We and fourth to year are

XXXX, inflationary it market to due revenue, increases to a in proved increase significant without health financial challenging commensurate substantial of anticipated faced, be environment the year the macroeconomic our on meaningful in and than costs result a leading supply end to that Reflecting and system margin primarily as pressures. a labor strain

challenging items that those challenges bookings especially half resulted performance performance in the with in I’m our financial XXXX, in half we the in I’m the While during of of to environment. related accomplished year, overall, continued of light macro XXXX. our all second proud the And first pleased of

XXXX, XX% Likewise, call. our loss relative we a $XXX.X total year the that improvement million. and to midpoint This for year of an the XXXX. was guidance our of full $X.X shared the was adjusted full revenue million. growth EBITDA the XXXX, represents last $X.X This quarterly an on our relative For represents year-over-year of outperformance revenue to earnings million

to our adjusted despite EBITDA outperformed in for guidance XXXX revenue as the we initial lower at original this leverage guidance beginning annual growth full compared Importantly, the XXXX, our operating of of provided demonstrating continued business the for midpoint XXXX. year

quarter. items let highlight from additional some the Now me

our will the categories. scale. strategic these three of recall our in You previous we that each categories of earnings improvement, we'll from growth measure company's performance objective And our calls discuss you in results and with quarterly

measurable to ability category, also on engagement. realize improvement, clients while team member focused maintaining industry-leading first enable The improvements client massive, our is to and evaluating our

study. sharing client Let recently example improvement case me a begin published by a from

infrastructure with was infrastructure Health and operating out an that concluded to at ultimately enterprise worse sought organizations needed. internal this the a data, attempting INTEGRIS that health to as time ages, scale response, and unable that solution. an Health build its industry-leading, as the and too getting that solution, cost teams spent over analytics warehouse leadership and ultimately INTEGRIS In its but total and produce homegrown costs data complexity care commercial-grade observed the have data that frequently analytics insights were selecting underestimate We high ownership maintain infrastructure Catalyst and build its of problems years

implementing its at of along and scalable can of applications, our now with set and understand required and Pop continually our a deliver After to platform robust analytics data analytics scale. data has inclusive platform, that high-value organizational a including INTEGRIS performance Touchstone and the Insights, improve data Healthcare.AI, PowerCosting, analytics

Following realized indirect required analytics ecosystem in homegrown including labor resources more data reduction to and cost duplicative through the maintain million a has implementation, annual than costs, data in INTEGRIS savings $X a platform.

success Health recent have doubles partnership Catalyst has we technology pleased of its revenue and relationship and the inclusive a tech-enabled recently client new with contract. makes Catalyst, nearly our contract Health meaningfully XX INTEGRIS today Building on largest of INTEGRIS expanded services This all-access are managed announced total to this larger an clients. story, that one multiyear from subscription

manage data INTEGRIS' and integrated will abstraction analytics staff, healthcare data Health programs to and improvements. maintain INTEGRIS enable further to Catalyst informed enterprise achieve

of expanding to talent we We their and savings cost managed retention another relationship services with simultaneously valuable share example our deliver our through offerings. are clients while technology excited tech-enabled us,

external related member Also team in receive category, been we engagement. fortunate recent to the improvement have to recognitions multiple our

Utah have Companies XXXX by been to to Business honored of named Best are one Work for the Magazine. in we First,

we’re top recently X,XXX top than results. to feedback have on of based to with survey Workplaces list USA employee a more Workplaces of award placing XXth on Selected employees. organizations X,XXX received Next, the pleased XXX out

Women share named of recently And Greatest America’s Workplaces Greatest Additionally, we have recognition Health in for also that Newsweek by grateful XXXX. one Diversity received appreciative by America’s for to are Catalyst to XXXX. recently we’re finally, was Newsweek as as one in of Workplaces

includes next objective Our strategic is relationships. existing relationships, expanding client while client which growth, category beginning new also

bookings top our the last XXXX, me we earnings that commentary bookings level, with of half let included results performance shared a provide toward second our XXXX am call. from which First, related the quarterly pleased our At some the range I summary performance. on were growth in of end

Our provided we last XXX% dollar XXX% the towards retention for end XXXX rate XX% of expectation the quarter. based range achievement was high to

segment the terms lower In dollar-based than XXX%. slightly dollar-based higher our slightly XXXX professional our with retention, consistent XXX%, was dollar-based prior expectations our and retention retention breakdown our was rate services than of technology of

In driven the Health tech-enabled Services segment, announced Professional our XXXX managed Carle the the the comprised of a in services portion ARR previously expansion. expansion component significant largest with by

years, We DOS net last on the of modular proportion were our came as quarterly adds addition would from our net we was mid our our new call. And on towards to higher anticipated to we range Next, more for a call. to our note high that client pleased end earnings provided subscription the light prior offering, XXXX earnings in come high-single-digit expected eight. client DOS slightly mentioned, of last relative we

analytic Kentucky. five enterprise partnership solutions a counties we utilize As improve today of its throughout additions, financial are Deaconess to Indiana, Health and publicly and clinical, few operational our will subscription Illinois and of client to highlights outcomes our partnership, net analytics Catalyst’s Deaconess year System, new and domains across this Through expertise team. efficiency excited transform to provider improvement a announce recent leading its Health with DOS XX services healthcare

data physician Health, Nebraska-based partnership an and with Health Also, our of our network, will measurable and improve subset value system analytics acute Bryan care. a over members. analytics quality multi-year highly including effort we system-wide Bryan to in trained X,XXX Health and staff leverage applications, and that are Bryan optimizer, Sciences, health of today excited expansive the DOS a to centers, five care includes announce platform College self-service its a performance medical of

Improvement GI fuel the will extensive Health Improvement streamlined our experience our Health to Quality deploying allow experience, cloud-based ARMUS happy with longitudinal Consortium Catalyst the to robust has technology I’m that that registry improvement share CMS’ recently has quality Payment as it data reporting well purposes reporting user collection Catalyst’s announced Consortium Quality hybrid enable extraction ARMUS as while the Lastly, Quality acquired to GI Program. technology. for data and of will a selected

six the held clients. to as visits XX the our executives have environment, months Next, relates have had now selling to with personally over XXX over top our it past current opportunity at approximately I C-suite face-to-face

our As continue see our tailwinds growth I to prospects. feedback in our to I relates synthesized XXXX. and it along have from and as with share we growth that recent headwinds both would organization, clients

do it call, supply revenue persist to due earnings As QX levels offerings experience a next this not have to relates substantial this health our decrease more our as to We a portfolio the parts leading our our anticipate to least increase and on of to for primarily churn for near-term and our will Translating headwinds consulting focused few in what some in we end technology anticipated commensurate ROI, at with we our solution shared in services. measurable professional business, margin that traditional clinically system continues financial seen labor pipeline such demand the costs offer without strain, dynamic and market aligned significant pressure. quarters. elevated meaningful increases

our to technology our financial services continued current have it we directly the our suite a near-term ROI, our while system financial budgets hear of conversations, strain as that solutions empowerment our financial offering, a especially components offering technology have clear pressure systems’ related includes segments As managed pressure, have health portfolio of has health recent that to to tailwinds, tech-enabled seen that our financial such suite. relates and that population sales reduce health to strong in we continued acknowledgement

encouraged are that savings. in hard of to to We of the continue dollar our our size pipeline these offer increase near-term a parts meaningful in portfolio cost see

a of our our strong comprised sales largely offerings drove half These portion XXXX results projected significant bookings and XXXX second pipeline.

increased and solution take based quarters moments we for to this for on why from a end compared managed area. levels our priority and me that seeing over let pipeline services tech-enabled last on the Given in area this higher to are market, offering demand few demand been a feedback focus as offering the the this comment levels us has offering few our historical heightened

First, Currently, tech-enabled tech-enabled and in DOS offer vantage client in services our our include terms solution services us. main contract with less XX% analytics. than abstraction areas currently has that chart we offering, of functional managed two a base this of core

labor operating past that core in expense, over areas in half their have near-term in their to expenses, are significant effectively challenges, our typically conversations competencies over belief as their labor why are systems a they retain have increasingly especially in we have struggle increase seeing address terms recruit not validated related solutions sought and of Next, expense they six pressure more where their typically our well talent. of to comprises which demand, typically the months robust or areas to health seen that client

cost services over near-term to in and managed offering expense gives labor a realize typically savings profile some tech-enabled multiyear period. Our health certainty allows system a their

Health Catalyst to leveraging so in our be operating the been of solutions operating in why already area. faster. technology reasons Lastly, drives this Health efficiency vendors, technology utilizing few would two, has and needed as unlike is we our opposed chart areas solutions to outsourcing and like abstraction, costs, highlight primarily offshoring; traditional a One, developed Catalyst gains differentiated efficiencies in continues process business labor analytics we the robust in core significantly these for kind value primarily have

have record of Health’s them contracts managed with the a gone none and Carle services of of data all-access Catalyst, of of in to an was RFP. Health And clients plus into tech-enabled services recent abstraction. expansion history an expansion we trusted track enter the includes shared our multiyear technology to we managed partnerships reporting have out the long-term announced analytics, date, management, With A lastly, success. clients to managed tech-enabled Health services of tech-enabled each these of decision December signed largest because inclusive our that areas Catalyst have subscription example in the chosen in

resulting approximately totals a types $XX inclusive contract these relationships. tech-enabled Later significant our million of tech-enabled contract and managed a on profile of is the the a services prepared typical over of expansion, technology an life financial increase in comment contract. from five-year This remarks, and managed Bryan services $XX of the million year will

some bookings provide of expectations. With background, our let as now all on commentary XXXX me that

ROI we This to the higher gross long- our of which DOS come that driven I both upsells modular well anticipate that realized XXX First, existing our our our have that will as base end non-DOS dynamics current as would to compared upsells as a from is in base other historical client to proportion existing clients. of client levels, share aligned expectation that we bookings more are market strong by a on already clients have observed over and a inclusive

compared to client in particularly be near-term logos. expansion ROI, financial conversation, term potential with new partnership framework regarding discussions to receptive tend net areas to more as of clients

our bookings of anticipate services managed Next, expectations, come we proportion in offering. our our a higher tech-enabled will from terms of XXXX bookings

I address given ROI, challenges offering clients labor solution deepening systems dollar As health resonating their partner. near-term with just is allowing a expense near-term with their hard relationship this shared, its strongly by trusted to effectively long-term

these forecasting a is limited managed provided the tech-enabled quarterly we contracts history, to in that wider lumpiness create XXXX than some they our services may retention range size have of given Importantly, translating somewhat results, dollar-based and historically. bookings our

Lastly, pipeline let half services pipeline. managed our compared me of SKU inclusive that average, from higher in largely occur our the larger bookings we a to timing historical of our share our the of second tech-enabled as resulting the of anticipated anticipate year opportunities will

with opportunities you existing starting recall, discussing began QX proactively clients XXXX. in services managed we As may of more tech-enabled

to anticipate be gather average data tech-enabled services overall cycle. deals cycle similar sales continue company’s the sales for progression the opportunities, on to of on one that year these estimated will we While managed the we

relative backdrop, share XXXX anticipated With perspectives achievement meaningful retention. anticipate XXXX XXXX on of between XXX% anticipation now and dollar-based will our improvement an realizing with to XXX%. We XXXX for this some our achievement retention dollar-based relates first, it I as to levels, bookings

professional As previously services higher tech-enabled our managed to pipeline. anticipate driven our by mentioned, we than technology, services be achievement

by to systems. we Technology recent clients, technology segment, churn relationships limited churn to modular services outside expansion. feel the anticipate some we client of anticipate our largest with continue our time, discussions our driven financial commitment Health long-term some Based will the on our contractual these services expansion pressures faced Catalyst we bulk tech-enabled in At health In our professional same managed of more that continued drive many the smaller, partnership. their by and primarily by encouraged

new likely return net we DOS to adds net XXXX, but improvement client macroeconomic relative yet a DOS resulting achievement, continued anticipate XXXX, low net not pre-XXXX as subscription in Next, DOS new it subscription in our relates to double-digit new subscription clients to due to pressures.

our performance, XXXX. EBITDA share relative higher relates significantly range XXXX financial that let full EBITDA as pleased it to performance extremely guidance adjusted our in am XXXX. me And Lastly, with for our year to I

improvement. XXXX, am lower look Our XXXX as our well revenue as than business prepared near-term will as basis of our to XX% of operating EBITDA in target our the XXXX. of achievement continued margin mid-term approximately our XXXX adjusted is to EBITDA our in EBITDA originally demonstrates I Bryan target of that ahead in our anticipated previous of well leverage guidance level, of is despite expectations our margin continue confident his XXX EBITDA progress cover we points growth, long-term of and plus. encouraging adjusted and adjusted as year-over-year the XX% margin highly pleased adjusted In midpoint I remarks, feel

targets, revenue drive adjusted mix if shifts EBITDA even In mix a towards continue few more these on more to and our ability moments, to our time. Bryan anticipated revenue color over services moderately in professional towards will provide XXXX our

ecosystem. my Health, are his is to sharing the Matthew Operating of X, extraordinary Kolb, and Health throughout has XXXX. of President me that and we Health’s honored be by Board joining conclude deeply in leader been Officer massive Chief committed remarks Catalyst’s healthcare shared will data-informed enabling Health of and an improvements July Directors that Vice effective announce in Matt improvement, healthcare career Carle to Executive Carle mission Catalyst’s Let

character, to months be impactful contributions and years contribute depth to We in experience and significant his and the to have and our Board, anticipate ahead. are honored Matt of commitment, his

deeply market long-term of a to Catalyst’s oriented a ownership own to our Health months, Health the the owner over group. company. long-term-oriented deeply purchase shareholder long-term mission-focused with XX Catalyst welcome made common in like-minded, to mission-aligned Health Catalyst We meaningful estimate which me a past to has am as Health them decisions add shares deepen my shareholders, market personal open among company’s places and grateful the on Health on several in Catalyst’s largest the we fellow Carle open I stock. investment purchase the Consistent its decision Additionally, with

news the relationship Carle builds announcement its This XXXX which of with size Catalyst. December in client the on time quadrupled nearly shared at Health we

long-term We some successful most positive dynamics client we’ve multifaceted similar for other and which with our with experienced deep, Carle mirrors grateful this relationship of are a Health, relationships. historically few

And call with that, I’ll the turn Bryan. over Bryan? to

Thank you, Dan.

into financial our echo our I diving now am of fourth I results, strategic Before Dan on scale. objective and comment financial quarterly that with to category annual shared and will quarter I performance. say want pleased our what

outperformance of revenue. XXXX, total is X% of quarter generated it an year-over-year. relative guidance, an total $XX.X This million midpoint and quarterly we of to fourth the represents For the increase our in

For revenue million, of by higher access the representing year-over-year. clients year-over-year. additions of year-over-year as was primarily total the a growth growth for new and representing full XX% XXXX year built-in XX% escalators. driven paying XXXX, fees quarter revenue revenue $XXX.X from result technology recurring existing client contractual Technology fourth $XX.X was million, from our growth This was

For the was $XXX.X year-over-year million, representing technology growth. full XX% year XXXX, revenue

of was dollar-based revenue less in for was the relative due to of million, This quarter professional in a year. non-recurring XXXX our revenue XXXX. services primarily a the that $XX.X retention Professional as recognized XXXX than the well same representing fourth X% period year-over-year of QX as being half professional XXX% first decline last services to services modest performance amount was

$XX.X For the million, year our XXXX, X% revenue full representing year-over-year professional growth. was services

representing year-over-year. XXX XXXX, gross points total was approximately adjusted margin fourth the a quarter XX% basis For decrease of

gross year full representing approximately adjusted points basis of decrease margin total XX was the XX% a XXXX, For year-over-year.

margin transitioning to XX associated hosting costs due hosted by access from last of client commensurate a year. to increases cloud which performance fees was portion contractual gross QX data our clients costs. to the XX%, Technology increase year-over-year approximately segment, Microsoft mainly higher the continued existing paying centers costs XXXX without of This partially third-party in technology points base relative by with the period headwinds technology was a driven escalators basis a adjusted same our In offset in our Azure, hosting built-in decrease

technology of For services the was year-over-year. QX approximately adjusted the of an a decrease margin basis XX Professional XXX to increase XXXX. full representing and segment, relative basis year a Services year-over-year basis XXXX, decrease QX In was margin professional XX% XXXX gross gross our points approximately our adjusted point XXX approximately XX%, points

performance the shared line our on call. quarterly with expectations last was in This earnings we roughly

results, these quarter. per client of With rates, lower and at anticipate steady partially levels by a partially of higher the state we driven services in delivered utilization than result the driven mix by staffing

For adjusted In $XX.X gross our and expenses QX point total XXXX, full professional adjusted year-over-year. decrease basis the were million. was services XXX operating XX% year our margin approximately XXXX,

percentage a to adjusted As XX%, compares XX% revenue, operating in QX total of were expenses XXXX. favorably which

adjusted operating $XXX.X year, expenses were full For the total million.

percentage favorably full As of XXXX. total a XXXX, full revenue, in which the XX% were to year operating for expenses year adjusted XX% compares the

a quarterly outperformed strong driven in EBITDA $X.X guidance, performance revenue midpoint by QX the of loss which and mainly XXXX our was the reduction of our cost Adjusted million, mentioned efforts. previously

XXXX. of XXXX, For loss a EBITDA was to adjusted adjusted EBITDA in loss million, the favorably $X.X which $XX.X compared full an year million our of

XX.X in shares. $X.XX. adjusted per Our number XXXX QX loss was share The of shares QX used weighted share net million in approximately average loss adjusted calculating net was per in

average our used shares net share $X.XX. the For adjusted XXXX million in year net share adjusted was number weighted calculating XX.X per shares. And loss loss the per of XXXX, in approximately full was

cash, equivalents $XXX $XXX.X compared sheet, year XXXX we the investments XXXX. cash at to Turning short-term to with and million balance of million ended end

of of net of $XXX our currently component value a amount is face and $XXX.X liability outstanding notes the convertible the amount carrying is million, million. the Additionally, principal

financial million we As to the guidance and XXXX, million adjusted for it and first total million $XX.X million. $XX.X our and revenue between expect $X quarter relates of $X.X between EBITDA

and total million $X EBITDA million full we between million For revenue between the and $XXX XXXX, adjusted year and million. expect $XX $XXX

details additional to a let Now related me XXXX few our provide guidance.

Technology points as and that XXXX sequentially. anticipate to will both our grow relates professional our expectations, services revenue a few it QX First, revenue we

margin, anticipate technology the in gross quarter. the terms first continue adjusted to will of our we Next, in be XXs adjusted margin our gross that high in

client utilization we per adjusted as by segment, will QX anticipate of by we in XXXX. continued driven our This state services higher steady that be mix staffing out lower the gross margin. gross of at compared Professional result at roughly our QX managed inclusive tech-enabled levels services percentage partially the higher which is to In than rates be of as of driven professional and start lower Services flat a delivered partially anticipated quarter, services, to anticipate a margin the anticipated a

QX QX cost QX expenses our will and XXXX. to of result the we continued operating Lastly, XXXX, mainly decrease efforts anticipate the in that relative into reduction XXXX

revenue to let of Next, the guidance. few slightly weighting heavier anticipated by XXXX revenue mix XXXX. of revenue details a XXXX we services year-over-year outpace our in share me will second From bookings growth, half anticipate standpoint, professional XXXX driven full a growth additional and the tech-enabled in our year managed services year-over-year related Technology

meaningfully first second we professional revenue half our growth, bookings tougher the year-over-year achievement increasing will year-over-year limited professional anticipated revenue of not and the with benefit comparison, half services have growth segment this anticipate XXXX, in first by services the of that the of driven year. In year-over-year the half

gross our Next, multi-tenant year. will centers well by escalators, a for anticipate gross small adjusted gross will offset environment. XX% base our XXXX. our our transitioning anticipate gross Azure mainly be of contractual adjusted subset the the in margin client be adjusted professional partially XXs in data in technology base we enabled and cloud-hosted data third-party from Snowflake We Databricks services as built-in We Microsoft of with of Technology our expansion, margin, driven as of associated margin will roughly headwinds on-premise from the high platform client be the costs our subset through terms expect level to by client a migrating margin to

of for a gross the and next services quarters historical to out professional comprised continue our at rates utilization anticipated managed which mix our a larger that couple be margin. levels of lower percentage that is of services, lower tech-enabled of than start Given

anticipate we will and efforts as reduction Next, of continued largest percentage our meaningful pausing will leverage. revenue result adjacency M&A the year-over-year, points life basis of inclusive largely our XXX and our of integration, restructuring further expenses adjusted align down XXX of The approximately operating year-over-year services sciences between the rightsizing occur be economics. a our to cost result the unit go-to-market SG&A, structure our tech-enabled to current of managed in operating with

Next, we anticipate our line adjusted EBITDA adjusted revenue. our free cash flow and will as also percentage make better be will than progress meaningful slightly a progress in in XXXX of to

dollars our in result Lastly, compensation be a XXX by stock-based revenue XXXX, reduced points we as stock-based absolute of basis compensation year-over-year. declining anticipate in percentage which in will approximately meaningfully will

Next, unit share on tech-enabled economics Dan comments services typical mentioned offering. the our earlier, some as let of managed me

First, renewal terms of long-term long-term a usually signing subscription require contract we locked-in expansion. in structure, or are also to contracts, sign technology which clients

functional as existing managed tech-enabled rebadges contract, Catalyst team Catalyst health members employees. area the a of applicable Health system part Health As within typically services

to We cost after providing improvement in displaced scale opportunities savings efficiencies And that Catalyst. necessary and drive margin while areas time aim by efficiencies their to other members existing to with provide spend growth starting footprint relative at to we the leveraging reduce nine team over also contract months signing. labor our incremental technology, a process gross client typically at client Health

relationships, margin increases period typically our low historical gross one, at year few with a managed starts gross the such, to a our over in year tech-enabled we’ve to services As seen approximately margin. X% what of XX%, component contract typically and XX% with an and consistent

come SG&A over relationships the the margins. do Importantly, there Thus, contracts is these very incremental as our require operating line typically client targeted meaningful are R&D. adjusted not in incremental that run, EBITDA confident long-term long feel economics existing associated little and with client they expense from we or with total

this our Lastly, a long-term to share mix. me comments couple revenue topic, related on let of

For the full technology our total of comprised revenue XX% revenue. year XXXX,

professional to higher services we for mix come mentioned of XXXX on based expect services. in we our As demand previously, the tech-enabled from bookings proportion managed are a pipeline seeing

over our this our mix to longer-term projections. inform longer-term mid- segment we and at time, by mix will are continuing assess In terms point of revenue mix our which bookings in time, revenue

ability such demand over tech-enabled continue over time, the bookings If persist continue drive tech-enabled come long longer-term our operating our mid- elevated managed to to the our operating that a unit just confident professional the leverage see I and run, targets, meet our we from still percentage EBITDA leverage given we and adjusted managed services and described. of profitability and that be services economics to for in higher significant services

Dan? I will that, conclude prepared remarks. my With

thank optimism the to In recognize express and and as Thanks, conclusion, well team Bryan. I would like and as our future. committed my and members highly mission-aligned engaged clients our excitement for

call And back turn the the for with that, operator I to will questions.

SVB [Operator Securities. question sir. you, Thank with Davis Instructions] And our first will come Stephanie from

line Your is open.

taking for you Thank question. my guys. Hey

brand. in tech-enabled DOS wins on met a call, But So super of outsourcing Dan, DOS look super time could up you what and positive the bunch on August like. we were and last are cautious the you announced you demand with

else the did the in clients? what it year-end after environment? of you changed? So it change missing? Is a something is it round Was Or I’m in the outlook a change

Yes. Thanks for the question, Stephanie.

as and by the that the about last call announce pipeline we continue encouraged the Carle to be managed we’re to excited announced Health tech-enabled were have meaningful tech-enabled earnings we today as Health, we’re regards So robust pipeline And to services. well. that services a and seeing meaningful expansion to have optimistic excited well. expansion with the We since INTEGRIS

they large as do managed with estimate one-year might sales average discussed in these cycle overall tech-enabled services past we we similar and will cycle. our meaningful we’ve deals. that associated a our mentioned the anticipate prepared in As remarks, look sales And on we still to that there’s

conversion we play take that wanted part to the of will that pipeline. the thoughtful time the of and some that it we our for be way forecast So out, in of to timing

cycle informed that that pipeline. think our in than part remarks we the represent If a little about way of bit what pipeline prepared found of half so year, one or in sales the And the back was conversion. that earlier bit upside the that around faster the a little perspective of we weighting might some that of and we shared that terms

lot to As DOS, to the one solutions cost continue a clients ROI as to those that commercial-grade a it is homegrown often is like to of case an be see it we shared alternative maintain study INTEGRIS pleased offers does to offer to that relates that example a that – we DOS it lower solution.

marketplace. we a what perspective, side have side. client the and think existing out, the see the on and were We been play in bookings QX seeing I QX client we on have both strong expansion pleased from that strong new that’s And to did a

lot we consider of discussions. But those no clients think still professional we And recognize we’re as are of also But to client are QX. prospective that that seeing that recognize both existing I there were wanted our in there’s facing financial client for relationships services a that encouraged in doubt, terms smaller a we as still headwinds a just – from especially, systems as well but are modular health decisions. strong it by challenging they that also purchasing more side pressures our really perspective, making

that, Dan. to with one Just to add Stephanie. thing agree I

in by ability our new DOS offering constraints saw in target of for we little our some average historical DOS the this roll DOS given have adds that dynamic ARR kind more that to Lite mentioned Dan was a our that was we’re overall, remarks, cases that year, little financial XXXX. the adds through ended have, net we as bit and for we around use the in these And made towards that QX a than impact But skew we we smaller encouraged does prepared other million mentioned. just The $X.X XXXX. have lower in did the expansion of That $X land then million. and even our as revenue potential thereafter. full of our It kind that

does we that way inform the XXXX. think And about that

about long-term that new to targets their XXXX, existing percent in on client way We growth of are progress XX-plus the we to relative maybe some time what the talked those a saw that side through. side client take anticipating but will work back progress meaningful in both and we’ve to on

Super helpful Understood. color.

about follow-up a pretty this you immediate contracts year on the kind and revenue of uptick Bryan, them. from economics of that, Just talked this

we’re in? wins baked what could the level new guidance, share seeing given you So is in of what

Certainly. Yes.

that of that’s first, the So XXXX, there metrics rate, so services. the range tech two retention XXX%, in side and on bookings our color for and of rate overall to XXX% retention between we terms on in provide dollar-based we shared terms was what the

we realized XXXX. example, that’s to an meaningful the just XXX% that as XXX%, range of at improvement in that So at compared the midpoint

encouraged we’re there. So

Now that does managed terms of of the services expansion good in from tech-enabled portion a that, with managed services deals. of portion tech-enabled come existing clients

if split our So color little will that segments, you of well little with that the – kind proportion, services the dollar-based into be we a bit a than shared technology of that retention in higher XXXX.

material mentioned, of So those for have pipeline as we opportunities. do Dan kind

We’re assuming that come those XXXX. through in

back And end the typically of existing little a historically. cycle, on we on weight heavier year kind towards we bit side. than client the the of the dynamic the Based that’s have seen did sales those

of DOS working client up digits that XXXX, of kind we And will just aware closer time continued of double to low an the to within. side, and over take new net ramp new guided our improvement end that On markets little levels. historical be to XXXX, to a for financial wanted bit constraints the it again,

you help. folks. Thank for Thanks

Thanks, Stephanie.

you. Thank

from Our next come question Samuel will with Anne JPMorgan.

open. Your line is

so taking much the question. thanks Hi, for

historical below revenue forward you’ve year, can even margin growth margin pipeline despite delayed. could pretty wondering guidance some the points And to to XXX basis similar remains Your implies annual outstanding of if achieve I or if next just if it rate. you year the share expansion your going if this that somewhat rate, is returning you pointed expansion on you that predicated to historical was

Thanks Bryan, thoughts, to feel a then, free few Yes. Anne. well. share the add for please question, I'll and as

the multiple similar ways what for XXXX. did to us forecasted. get with even achieve than experienced original beating We thereby XXXX, for we to and we even So meaningful guidance revenue there leverage what were in growth to find operating had EBITDA lower that back originally

executive to that like didn't R&D triples relationship and or one able senior or We significant. we in in or that some the is leverage Health those leverage a in go-to-market where strong really it Carle pursuing example. that existing encouraged good even from have is is was size meaningful operating perspective, INTEGRIS been we cost-saving manage a client been diligent opportunities. particular, as we have, G&A account doubles we've size example a when much spend. expansions good found very And Health quadruples in operating a require seen of and where, way incremental

and well really, in much That doing perspective offers that so compelling the in value operating terms level we that's confidence few forward and of approach for our of clients. found future strategy them and to informing our few our of focus moving we is a our to there and And really try our our meaningful with in a very for amount leverage clients expanding continuing our And us. our XXXX portfolio in we're technology believe things beyond. is simplify existing and a control. on our runway because increases years that use that's And under portfolio of tremendous and full

to for We growth trajectory a XX-plus can right that a in get trajectory we feel example, on beyond back stay trajectory. that of to And enable confident back that to scenario what percent a that, but XX% may likely guided meaningful it will little from all we've in to still EBITDA us continue to and where ahead growth even even achieve stay informed we schedule XXXX, we of on to margin So us believe XXXX, XXXX. our like take progress the to profitability perspective. that track for won't ability get

That’s the terrific hear. to Thanks color. for

Thanks Anne.

you. Thank

Blair. from question next with Our comes William Daniels Ryan

open. is Your line

curious core is Thanks questions. highlight is Dan, mentioned you there. This general around areas analytics sort of around to Haase for I'm currently solution the tech-enabled you outsourcing, functional Obviously, a of just Jared think in focused taking that two data the for your I Yes. the just Ryan. sort great where demand lot terms of of continue or chart abstraction.

the So potential help a under other I M&A or from look slowdown flagged to like Are curious, of tech demand you pace the add you'd offerings. to value types of for services? terms given of sort propositions know just in of there still health these relative this a thinking of systems but might Thanks. who for other capabilities are you just strength? development other financial perspective level, to about historical where ways your capabilities

believe have remarks Jared. I areas Those abstraction. analytics depth be depth and where Thanks Yes. prepared beyond those the question, for areas are additional the the may experience and of there but in areas that of where where that exists of chart technology Yes, are what core real we faster managing total around we mentioned will a there we've better, that's already same today. yield other technology we developed, than we and areas proposition package us that end-to-end solution have believe developed cheaper value some

remarks vetted operational of that prepared right partnerships competency be core long-term on And We're similar those clients areas. is and other examples open nonclinical along of their focus in consider areas we've but the described focusing operational categories carefully areas, to already by some the to systems been not in as asked what are we in in nonclinical of to other could health strategic areas, that. and far think noncore what in being

to both also been eight we tech-enabled grateful cases, but We're that we're willing first areas that side, expansion areas, we've with these to this record consider together two demonstrated clients managing looking managed on focused years of strong have the plans services behalf the really technology some for where number opportunities track pilot on other a and we're on potential a seem and on where side in us. over for of

It's Jared. Dan good in We as mentioned, differentiation these question. Let we me prioritize to areas just competitive add because have do that, a do, first those areas.

these out in prepared and more typically with on based opportunities mentioned client. a in to remarks, of Dan They're existing I like trust not that going for just they're expansion RFP process. clients, think are competitive relationship that opportunities the as sole-sourced with

that we a differentiator So that's feel us. meaningful for

also market with are to Anne, additional of DOS that earlier investment, additional penetrated today, then clients areas we managed to XX% cognizant if current And now. any from needed we opportunity where the tech-enabled there were for this be to our want roughly robust service question opportunity of with be the balancing have

runway we way And with cost-efficient do that a forward can so that lot opportunity. there's a of growth in moving

sense. make go queue. hop and the ahead back And in Thanks. Great, I’ll

Jared. Thanks

you. Thank

Our Sandler. next with Jessica Tassan will question Piper from come

line Your open. is

architecture. maybe migration talk so much the could guys early you for you thank in about questions. any Hi, hoping I multi-tenant experience the was the to

neutral? gross migrations? of virtue any they or incremental of profit to Or be just available kind tended P&L have those revenue of to by is HCAT So there kind

Thanks Jess. Yes. question, for the

and migration infrastructure. gather as cost see, And do some expansion path. this in the continue result take structure We our that from already some few belt. a migrations to had experience long-term of we multi-tenant a perspective, platform additional profit We've will place a gross Snowflake enabled Databricks under likely

by So we're that. encouraged

that by Now the some costs. will be near-term offset migration in

expansion, maintain combined lower to already strong But economics still gross And with seeing, price gross of a possibility some will margin up. time revenue profit perspective, from show meaningful little additional choose margin. point we unit take our the and so a and to are a leverage some potentially that ability

leverage way work so how multi-tenant are this lower we through structure our advantages but seeing we that meaningful cost in we'll position, And infrastructure. cost

to in technology investment. is other now the impacting the is our addition area, margin P&L that Yes, gross the

of side, So we cost the in multi-tenant on development are platform. the made of good the middle investment We've R&D the progress.

of kind capitalization to to and We opportunity allocating we're efficiency we drive ramp have terms as R&D use of down as is start That meaningful for a investment. into some today. software also XXXX internal additional go us we ramp will that that down and of in cost beyond

two quick – And just helpful. Got it. really had I clarification That's then questions.

help the is Services? with revenue managed rate and Professional run the LifePoint percent you. then tech-enabled two, at of traditional us the this fourth services in understand what kind one Thank quarter So you of kind or contract Services to could Professional full was able versus are of

Sure. Yes.

amount the traditional well. with revenue. majority that then around DOS revenue ramped, clients So And tech-enabled fully a clients professional those LifePoint is nearly almost we’ve to QX, total contract in tech-enabled ramped services those that this XX% XX% was – the implementation terms across it past, we’ve on Jess, services shared in so managed of the fully essentially as consulting in and of being side, then of professional small component had of our services services managed the this revenue

you. Thank Awesome.

Thanks, Jess.

you. Thank

Our Grosslight question next with will from come Daniel Citi.

is line open. Your

sure I to XXXX. Hi. of question. for understand new the I cadence DOS make in adds just net taking the want Thanks

So call and if I look it second the five-ish in around clients the adds at or off. around net three life XXXX, roll or of you year likely half sciences four so had

up, get gross second nine-ish I the half to in gross or of XXXX. I if that So around eight adds

around if adds gross nine gross guidance. I low-double-digit to high-teens, your than that or I get annualize which is XXXX, higher to for mid eight So number

down client question out? a expansion growth of your my this bit then year you’ve headwinds operating to DOS this XXXX net low-double-digit a is is, we health system is Are do where to more of guide? temporary a laid there a adds, for factor going you from in to beyond. that of environment or having anticipate still new higher gross that and new mid-teens is bit those existing adds? just adds come So, over attrition to conservatism get net And a than normal in high larger Or question

Yes. Great Daniel. questions,

So a Bryan, and few comments feel add I’ll to free well. please as make

assessment terms of of I did a QX and what fair you’re strong particular performance, half in assessment a So for comeback the the strong think XXXX think in have general was happened. our very second about of very directionally way XXXX to company. is We

So by encouraged were we that.

a certainly At and pressure with is the I’ve XX again significant. real across I’ve that’s plus over financial had face-to-face same there heard C-suite executives still that that over those time, visits very

expansion, continue longer-term continue of a foundational is expand why clients, with our existing and lot reasons that us. see that growth And we to expansion we our existing there larger among the want element to relationships and we’re the to opportunity feel client coming one excited their sense they about of long-term. Now from of

by So we’re encouraged that.

we have and in On new Catalyst health success a client system this can with that relationship can of a when to – track recognize relationship record we’ve the Health do strong you already – ROI side, have want a you is success client system a you still conversation kind relationship discussion that have of health where there and different than doesn’t entering client the is the together. that the multi-year perspective had kind of

dynamic. is So a that

our modular more and to still smaller, client still both relationships, we of XXXX the and level we QX It’ll we with on be had the And strong relationships but remarks, some were what to a larger expect mentioned prepared by DOS continue anticipate might that we expand experience of maintain in some us, relative while their in as and progress encouraged a expect it’ll do were DOS we state. a side churn. our with side do while And clients little that relative subscription the non-DOS elevated to that. we will be more in to we as where those steady

net as that clients Bryan, well XXXX. a we wanted in would factor so for to what And or as you add? thought DOS of subscription projection range a we about

Yes.

client think well And your existing to XXXX around add question longer-term, that just I kind to Daniel, was of focus. said.

toward to so drive our – way are and we’re assessing We gathering growth and model. data of kind one, long-term the best learning still

managed under to for services this encouraged customers existing we the are the both kind across penetration see client and have our do subscription of year tech-enabled new this We’re excited But on by DOS improvement client, side. the XX opportunity.

over of will and how cross-sell relationships, to those deployment of be that in that forward for these us clients we that across modular more smaller early have can very again those drive And expansion also of we’re on XXX a clients. then focus clients. moving we So

be lot growth the a excited terms have be we base. of about in so within existing how client can to And drive to we

sense. the Makes for Thanks color.

Thanks, Daniel.

you. Thank

Our will Evercore with come ISI. Elizabeth next question Anderson from

Your open. line is

Thanks question. guys. for so much Hi the

of short-term, products how going your your forward, these do are sort about of or like about of how need focused or maybe the OpEx think what of are you focus to between and two. and the spend of sort you the of of sort also of need over longer-term, As your just think integrate balancing sort wondering for areas maybe the will financially of sort customers priorities some leverage? you R&D kind of longer-term priorities sort kind sort do what to maybe I’m balance longer-term of regards sort year in next where

the for you Thank Yes. question, Elizabeth.

where that now right are and really think of those services we suite that compelling, I of want on well need. what So help portfolio are and we’ve our clients our health they or that it’s meet help elements technical suite a be talked of to portfolio areas they couple or focused financial that’s about, to are And whether really of sensitive the like areas there empowerment said pop them deliver our most. our can managed that

we so focusing will be there. And

the be use we’re focusing level data and in at really sure focusing that that R&D helps elements, case and our level go-to-market We in investment the will platform at us good stead our both make those there.

clients perspective already compelling gives greater helping expand I’ve technology feel that that good and think times over, do have about found from I ROI we with we many many, we of a portfolio multiple portfolio longer-term, relationship Catalyst. their heard the us have is our a the and from technology years and this keep have over and to directly and that Health realize runway

XXXX start years. be that beyond. the number tapering a investment in will that and really infrastructure XXXX that bulk There’ll we multi-tenant been of our in a Snowflake that down leverage and platform earlier One a we’ve XXXX As OpEx R&D mentioned investing that in Bryan multiple we meaningful enable result, R&D see do data leverage and levers for as really of infrastructure deploy of should finish in leverage – beyond. lot and is, Databricks-enabled meaningfully

with provide that So will leverage. us some R&D operating meaningful

and the And have go into as think we leverage to I clients today because new on we refining then like that strong we strengthening leverage us is a as of and portfolio. taking sure that stands trying example. focusing our a And an that it area, there’s that pretty of have making meaningful portfolio a higher activity in than years, number full are some portfolio advantage existing for a feel all of

so Got much. Thanks it.

Thanks, Elizabeth.

you. Thank

with Genuity. Close Canaccord will Richard from question next Our come

open. Your line is

there’s long Congratulations the sourcing. curious need a ROI One the for I’m thing is Just there sales the year or for questions. a Yes. the year the so such in why tech-enabled cycle if on Thanks like end. the so? offering, is curious. on

client learning. we we mentioned has data set exactly we’re I we where And terms had cycle share a are one those Yes, to in have than it’s have would also some already opportunities we But existing Richard. components it’s remarks, a understanding even great dynamics. and observed shorter And some of the question, relationship. some as been sales there relationship year. limited far in unique cases of an have the their prepared that a still strong And these we’ve thus and existing takes the work pipeline majority way vast though time through,

have lives locally is of to the size these of go the in well. so of the often team impacted, month to deals answer questions. a they can that to deployed feel such, to them team the with are so large, that care as Health health we lot And meeting move. rebadge that factors of members their directly involved extend that that to and It’s about and before keep and are about take Board often needs It’s that contract strategic process the big First, adjust and really comes And time good discussion to individuals very going fruition, seriously, realize members we some before, how up Catalyst join very review those team effectively do involves offers one as We But team the rebadge that also can these to concern for that. a a come typically the time enable approval. they and that as members. rebadged most systems also about differentiating the those we members like do and reality. and take there’s we much as and We them steps we them.

executives teams multiple abstraction associated are multiple going good C-suite with feel often, to about those areas there then analytics, management when and we’re doing And functional often the this be to together. C-suite need all what executives, like and involving is

all it those through those we Now and that deepened but as takes discussions of more clients. with and also and multifaceted the even strengthens thoughtful of way reinforces We go this time, an our come a experiences process out with relationships. together and relationship

opportunities rate seeing are and time, a the we worth very we through as conversion these high it’s in So work

to bit some would damage. than the the natural we dynamics move can pipeline, but little of We want also faster we are where avoid there if do cadence, or a to a things through that. try process artificially pressure be relationship

clients are this next These XX thinking are our renewable years, decisions, long-term often over the about XX XX five-year years, contracts, and years.

if a the it so takes we we’re that board, about those it’s months everyone long And on effort. few build into always them that is that right be client make wanted worth sure just we and forecast through. thoughtful progress well of as extra relationships so And to our to that taking view longer

to the – with And tech-enabled half. weighted bookings Okay. the then That’s respect appreciate second helpful. to

last your year it. steps terms maybe guys to say set as in compared year derisk you to of this what would and guidance you like curious Just sort taken have how you of

Richard. Yes. I appreciate that,

headwinds think client what base of our of base certainly and to did that translate discussions be might parts think prospective portfolio to about have we a the year. at I understanding lots we and I they’re in have our striven last client about much that, that therefore, realistic deeper time at our we from in year really feedback And and our this facing time from of facing with we would that incorporate they’re than this them. headwinds face this

a year. full have didn’t last clients our understanding think time the of I this headwinds

embedded deeply much certainly the is that So forecast. more in

from we’ve a prepared another about in in go-to-market talked say foundation We’ve the Catalyst I’d is existing Q&A our moving growth their the clients reengaged perspective Health remarks and at element that a is forward and of for is I’ve expansion. with months those consistent over now. in is that six referenced C-suite that And clients. our the team discussions remarks our had or with existing over XX really prepared deep face-to-face now last I what level doing executive the so.

clients. face-to-face relationships. increased to element, confidence reengaging in a client gives the discussions, our kind foundational the And the in deep of it that I trying to data I we’re same think for prospective And exists clients. existing opportunities of for especially that investment of with The approach with with think us expansion that take growth We’re existing informed. more pipeline as level, an then more relates those

our spend clients We’re that moving inform time face-to-face time and let with forward. taking those perspective more prospective to

you. Thank Appreciated.

Richard. Thanks,

you. Thank

Capital question RBC from come Dodge Markets. next will Our with Sean

line Your is open.

afternoon. Thomas good This is for for taking question. Kelliher Hey on Sean. Thanks my

So, I wanted to go to Carle back expansion. the Health

You How any is that year. portion up wanted I the is much $XX going like performance-based? the that is million per opportunity included pretty mentioned that there to be much before of XXXX to And Thanks. in? locked guidance? $XX revenue is to Or million of in confirm,

Yes. Thank you, Thomas.

is locked contract million in and in, all structure is all So of Health. a with it that $XX included Carle five-year

signed deal embedded And late that we so that year. is in the guidance XXXX last revenue that given

included is that in So XXXX.

at-risk structure have because be the especially kind of as other what are – as as no of kind to that, issues to locking in well to is the value from terms significant components proposition well, where having just on contract feeling spend, around components spending they’d wanted side, in that of that add And performance-based there Carle part type. the which services on of they’re that of the inflation retention impacts visibility

thank Burton, you. great,

Thanks, Thomas.

Operator

you. Thank

Our BTIG. Larsen from David will next with question come

line open. Your is

I guidance And missing? that am what your the clients? for line without XXX% the any of retention top XXXX if use doesn’t if that of so, guidance Or growth XXXX new midpoint conservative? we of look is imply that somewhat that at sort mean at rate X% in XXX%, When I adding dollar-based doesn’t to X%

Yes. question, Thanks for the David.

we where a guidance be bookings that So would are lag end think XXXX the of where XXXX. start relative to as we it of that one-year providing

DOS So revenue that foundational that good block then growth for growth. for and at XXXX building And would XXXX. part net expectation around XXXX. first be for DOS subscription client bit retention growth, in-year of the add be building midpoint expectation new you That X% any would the that And then be a would for adds growth. a block the dollar-based to our which But a we we that subscription Lite. the blocks just shared building we of net little a take to XXXX more existing new clients that because Add had starting clients with for that you bit XXX% DOS shared, good was XXXX. as those lower for little point was at the

that So that you client plus revenue more of $X revenue to per that like kind growth X%. million shared guide that that’s around some get of ARR to in-year we

about, have talked mentioned to half the year weighting the component, last to as muted David, revenue bookings is in of QX XXXX well. second just we’ve of heavier towards year, weighting with that like we the Just a more given add towards back in-year a assumed a that Dan little that, this heavier half bit piece our

from That’s helpful. Great. or to convert you anything a to notice of anything it of that any about like customers the your all taking DOS very any gotten knowledge, or And best your expectations competing in-house? platform retaining then your haven't to Okay. or like are DOS of existing customers? You

to system mentioned with I expand deep to face-to-face just clients, minutes few C-suite Catalyst and Catalyst. more larger Health more top clients to continue a business as our that see, visits do pleased to XX especially us, with that with pleased, a strong we're with have XXX Yes, relationship our we're desire with health a Health ago, than just, after there's

with more as more our churn. our modular of we even smaller think be then clients, bit certainly And of smaller possibility more little more of non DOS DOS Now, the modular. I clients, also the they're mentioned, there may a even a modular

and to they those relates see even about to that been We clients pressures financial But larger the expanding with the they're expect DOS continuing Health are Catalyst. excited and as under. some that churn we've subscription pleased relationship it

Okay, great. Thanks very much.

David. Thanks,

you. Thank

Guggenheim will from question next come Our Jack Wallace with Securities.

is line Your open.

I'd if One, the remind your more it's the of more DOS modular mix for clients I'm the Hey, on more this to relationship? if upsells how just thanks is probably take former, modules upgrading revenue Two that the base year, modular light Thank the and could only. but get much you. for applying taking to is a of want my that here. versus tech imagine And for of then, your full And you questions. your within thinking customers DOS the about us that. what

thank a think we the questions. I hear, you, bit we was to got but little Jack. I two Yes, think hard It –

couple So a and free I'll make to share. Bryan please comments

comment second maybe of questions. the your I'll So on

move the of saw meaningful think like In the a that INTEGRIS. able services anticipate with And expansion, we tech-enabled that's share we Carle associated pattern an saw follow expansion, and would modular way relationship. tech more I meaningful like definitely all growth want deals take to a managed access it were with We we terms that. we with Health, relationship from some the we to about do from and tech to see where, especially some that tech

our be the to also cross contribution There'll about sell at our continue technology. base our as we in larger DOS then level growth opportunity are customers, apps will in And and that to the excited DOS we DOS non among the add built-in contractual at our those escalators DOS focused the of to are light customer customer as well both base there. level. And

at better you and that add better getting What on? about excited cross-sell are would We motion.

Yes.

your Jack. Just first that on question,

of have, platform platform So is three technology And of technology addition to on of offering, domains. that data kind related do in revenue we side. horizontal the technology majority our application the revenue our – revenue, that's to our the then that offering revenue, in main

So one is quality use cases. and clinical

cases, empowerment and the is third use The financial second is cases. Pop our Health use

good is headwind And of so there of and of demand decent kind proxy more bit selling, terms those ROI Population which suite. kind those offerings, kind our that And around revenue financial patient to described we're while attribution less we're a little in offerings. a a our in of is where dollar just still quality again the less savings, seeing clinical Dan of is financial engagement, a the the as empowerment of given of for Health as offering for on of that's seeing categories well hard way near-term

Thank helpful. you. That's

Jack.

Thank you.

come will from question Scott [ph] Schulze KeyBank. last with Our

is open. Your line

team. question. Hi, taking Thanks my for

follow-up So this question. a is last to that

DOS from you some XXXX. double provide smaller versus ads double low DOS digit pure ads that churn new the net breakout digit DOS you modular color DOS any and this, average, an expected growth Can and You is ads customers, modular what maybe the the are to but expected it. could on harder in light appreciate get probably mentioned customers, light I you which Thanks. the average versus provide margin contributions if on DOS pure versus said

Yes, good Scott. Sure. question

ads of XXXX. a be So continue kind in majority the our DOS approach terms DOS non for to of yes, will in enterprise XXXX, under our of ads more of light

make the of up higher last proportion little will the a than However, light couple years. DOS

around of new per little ARR decent what for average to given XXXX, ads a That's million DOS proxy the and light terms was net for probably margin Our those DOS X gross in higher mix contribution in new client expect towards XXXX. kind in just margin. offerings of a

in light of one. of traditional motion. they profile It's similar DOS to kind year DOS has our more a offerings, technology escalator each that offerings kind those upsell profile, contract the then built-in fairly modular slightly the year. of margin that technology don't gross – are a So DOS have but offering lower light smaller And or

less the which the we gross in pricing those do have that But we gross on and as a given margin clients upsell they do profit. incremental have don't And on to opportunity locked cross-sell deals just those progression have so time, little technology well. visibility over drives

– here, high Is gross it XXXX. mentioned moving investments. high get on your years to you out just for ramping out parts? some XX% Thanks. technology But mentioned my your those multi-tenant in infrastructure possible up with the down Thanks. structured cost you based all XXs at and gross mid to And margins gross margin to, the follow also advantages the

to question. of it your point, will Great in because little would typically XXXX. cost on a expect is. we some technology working margin we less Yes, we that and Yes, into migration progression through XXXX are gross than have

architecture, efficiencies, to confident long-term client. support we in given well mid-XXs as gross as additional we cost to technology our multi-tenant drive of margin a as these for efficiencies through technology continue continue the feel However just range growth

Thank you.

Thank you.

the Thank you. there queue. no are questions this right. in At All time, further

closing turn it our over or like to I speakers to would remarks. So additional back for any

the you Take keeping and Thank us for and interest in that the all we future. your All invested with look care. you've forward time in right. to touch

your Ladies today's conclude we this Thank you. and gentlemen, and participation. teleconference appreciate does

at You time. any may disconnect