Change Healthcare (CHNG) 14 Aug 192020 Q1 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Change Healthcare First Quarter Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

to President, conference Investor like Smith, to now Vice Senior Relations. would turn over the Evan I Sir, you may begin.

which quarter Thank Vice Financial you, earnings fiscal XXXX. first Healthcare's President today Change Executive by CEO, to welcome June Neil XXXX I'm Officer. of de joined operator. Good Healthcare's call and Chief morning, for Fredrik President and Change ended and XX, on Healthcare's Crescenzo, Change and the Eliasson,

the and first After for limit financial opportunity one provide please the your question, review question. business questions. Fredrik Neil, an closing that, Neil. enable ask your To and up results follow-up update quarter from then questions by will open followed call to the for a question to everyone will a remarks we'll one

you by I comments discussed which for statements. Actual are Before would the company's SEC today's call from remind materially these detail in suggested differ filings. more to like the constitute that conference begin, results comments results forward-looking in in the included reasons, we several may

supplemental required by the law, statements our financial obligation accompanying are this earnings forward-looking to non-GAAP any also refer the business. as information. our in of non-GAAP of will appendix to assumes slides Reconciliations measures GAAP Healthcare evaluate financial Please we update that or to note measures no to financial included where Change appropriate, Except measures release presentation. and

release our www.changehealthcare.com. are to at section the want our available Relations I Investor earnings slides and the of accompanying everyone of copies conference in that supplemental this call remind website

Neil? to turn With the that, I'll over Neil. call

$XXX and Solutions pleased first adjusted I'm our EBITDA Evan. quarter you, revenue of Thank report $XXX million million. of to

growth operational to leading execute strategic to initiatives across the and improve of businesses and Services and continue on we transformation flow. excellence to cash deliver quarter, RCM the our our margins free During Imaging franchises, our core

in successfully million. completed It of drive scale Change breadth on is market another know, you shareholders. July strong in customers, our milestone innovation, leadership $XXX and a position of our our our great This value and with for leverage places and financial net us extend to growth As proceeds most increased IPO partners Healthcare's Solutions of we to X, and history.

first solutions Change In have for McKesson growth, the analytics, with merged deep software a assets the the the scale technology-enabled and and with we strong network Healthcare, established provider Technology industry, since years, creating we only in independent capabilities two-plus solutions in foundation services.

customers a delivered. XX,XXX than more and and in we way role innovating With partners, central the managed channel play healthcare is XXX

and changing breadth clinical meet to from complex administrative driven provider payer our increasingly and We are data customers financial, of scale continue that our needs. and to hear capabilities, and ever insights, their essential

solutions Our and enabling eligibility deliver other consumers processing claims focus efficient innovation medical healthcare and engagement way empowering online. the of with on the we to spanning to consumer ability to transactions, and their continues, and pay bills and pre-care financial review clinical the from continuum the as accurate all

cost, enhance as and as reduce and outcomes. care to in quality, new solution healthcare like models Our well models delivery new areas improve risk value-based telemedicine, that enable

short executing When the the began we merger, and to we completed success. sustained strategy, ensure against long-term

have placing a accelerating We period, in strong great short deal position, company a a our growth. accomplished for in

and We a approach the a establishing enterprise. focused sales team, as place comprehensive well systems, Initially, dollar multi-billion in processes management. put we HRIS on integration, and support to account ERP and to diverse, as systems new

took a the Additionally, Solution combined reviewing we to approach disciplined portfolio.

there or where rationalizing solutions and successfully overlap our and they profitability. not now is do where objectives for are meet business contracts, We growth

and intelligence, to Blockchain process our now drive investments, areas automation in to robotic artificial also platform, make innovation. embedded began growth We are focused that strategic like across

benefits the build this phase. are underlying already we of our margins growth progress, potential. improved foundational the in now we with all efforts After seen And and have

further of solutions. a We to on and our intelligent initiatives few healthcare the support examples enhance core platform, in to And our moment. expand I'll are several growth executing provide a

RCM reposition businesses. deliberately and to Services our Imaging continue We

are of the segments operating seeing as to signs of performance. we success higher early pivot We drive market growth and

to and management broader, more build continue creating customers. relationships deeper, and capabilities, We are our and sales enterprise strategic our with account

So over innovation, accelerated, deliver the we and the in initiatives remain practical across coming and processes people, confident, years. that investments Company, growth can all the sustainable our our

how on and Now let innovation me embedding initiatives our some you growth with platform. provide across we're our insights, executing

leader are accuracy, Cloud. solution one we a environment from payers, payment on-premise to of As largest the an taking of the

this capabilities, the leveraging enable solution. latest claims solutions on-premise analytical editing Cloud use payer with customer's existing, while the advanced to Our content,

our why did provide because solution So strategy while and on avoiding investment, disruption. Change Healthcare, substantial Change They our implementation Healthcare? return operational chose they quickly, choose

while advanced By earlier in we process, leverage network, the increasing provider moving ROI satisfaction. intelligent analytics the customer's adjudication our increasing healthcare and

our extend growth By accelerate solution future deployment content, our their editing our our prepayment market, this leadership providing proof processes. Cloud-based of in we truly and further industry-leading

In are success seeing we growing towards faster RCM segments. as Services, we initial pivot,

system scale specialties, signed including and diagnostic pathology and as in as a imaging. practices quarter, well hospital number diverse several health customers, the During we of large

contracts have software. These for providing imaging the Imaging, leveraging Services Enterprise in X,XXX In RCM next currently FY hospitals will we our quarters, implemented support growth our several our for transition 'XX. over be thereby business, to

product the a a relevant Enterprise enabling Viewer. During of to imaging entire data, enterprise-level access to providers patient anytime, is our want platform launched anywhere, This unified view the we new thereby clinical care for team. quarter, history that scalable, viewer

health signing including platform in with While includes early, market, Cloud-based by our seeing a the Vendor large current positive and a suite, or we're system be Cloud-based Neutral Archive Imaging Enterprise reception five-year VNA year. our generally Enterprise our that analytics well regional are fiscal contract to recent as Enterprise to of a Imaging our the which the expected of Viewer as end available the

Lifecycle the our of leadership we any Prevention in claims Denial our by size position of complete claims additional applications new existing we providers, Claims denials filed. our could extending for to problem I'd issues innovation also are and have help result customers. recent with technology Intelligence of Artificial few you providers potential examples before remediate AI suite. to The provide identify infused are like these a across bringing applied management claims area the In how in that and

AI This into technology claims management suite. is seamlessly integrated our existing

times cost So value providers around or the To file applications, solutions. claim the additional original total resubmit to and this bit of the purchase cost cost solution, provided claims denied the don't claim as to to need billing context high to resubmit a the submit, of $XX with submittal. is undergo cost change correct five $XXX, provide $X.XX times XX average training making a to as a the a claim to by

being denied least average they eventually X% typically XX-physician By to the Providers work at them we claims, their of can to experience practice reducing save get that before estimate claims of number $XXX,XXX the paid. XX% we denied annually.

estimate average save XXX-bed hospital, then can the For that or more we we annually. $X.X million

see, applying Intelligence can value Change you significant and Lifecycle Claims drive for for customers as can Artificial Healthcare. our our So

increased acute and gained is Also solution. stays during clinical InterQual traction the savings, decision Healthcare's the of to Home which demonstrated alternative have first significant industry's fewer new quarter, programs, satisfaction. patient the edition have in we unveiled support cost the for inpatient an as Hospital option support features latest re-admissions, XXXX, Among and Change flagship our

Day automatic admitted over the of provide more entry on product. clinical continuous updates for clinical EHR InterQual One Review entry notable with while from patient the care. and the XXXX manual the enables the integration of reducing This InterQual data freeing of through manual driving InterQual to of to addition is an the time to a the administrative or AutoReview up on case present picture eliminating completion EHR, managers efficiency significantly We XX hours also criteria focus first altogether. spent complete

the Patient dissatisfaction improve burden patient out-of-pocket the quarter, to rise lead we During health patient to as reduced and systems continue liability increasing payments. as an helps well patient that as industry's or the on poor solution introduced is delayed journey. costs to experiences entire also liability first

synchronized liability provider and outdated means staff patient Providers of collect invalid patient revenue Gaps upfront as little patient of suite patient in XX% solutions these challenges as in greater often and system improves coverage request that payment. information relationships payments address experience collection. after dollar current hospital often to including Our designed the discharge. cannot enables provide is a or management terms

as this suite real debt. accurate, upfront by problem much of and time XX% prior the to care the increasing as risk and of accessing patient bad to time prior eliminates preauthorization management generate to liability eligibility payment thereby collections obtaining out-of-pocket Our patient to an reducing service cost,

Alliance patient including Alliance, to including acute delivery. and improve record we connectivity. and a we and of settings, Health Lastly, the to Under provide advancing contract access Commonwealth our extension contract, patient further through year and Health with more continue were emergency care retrieval services locator will includes patient companies interoperability care document even our reach Commonwealth clinical through care than improving services, care services. and XX The awarded patient acute this and six portals identification, post ambulatory

XX,XXX XXst health to case have Supporting the for which the and XX as Act. more value sites, helps forward the of enable care exchange the needle Commonweal stated move as care the reimbursement We than Cures supporting information connect provider well than for in million clinical goals more business individuals. records interoperable unique based on Century

based recent our investments across XXXX confidence of the advanced our platform, growth wins the So, year fiscal growth solutions in of to X% in of in technology and provides our the X%. adjusted EBITDA strategic in execution new range introduction initiatives of us with the closing, outlook

call on over the performance quarter Fredrik? for Now, financial will to year. outlook for with review our let who you detail Fredrik, more the turn and me the provide our financial

Good Neil. you, everyone. Thank morning,

just Xst investors. into already move completed that seen the from the want financial on the I and how our mention is we IPO successfully July Before it to support discussion, gratifying we've

of a in we significant at Neil is leverage to our a point to accelerate history key and our this As platform see strengths our and performance. where stated, growth potential the scalable Company's enhance integrated milestone

business Our financial objectives threefold. and are

revenue continued sales innovation through portfolio driving across growth First, expanded continued enterprise the and initiatives.

and Imaging Service improve initiatives; transformation Enterprise discipline operating optimization on our our on automation. execution and cost with Second, cost performance RCM to focus continued third, a and

for financial Now, the and year. provide then both fiscal let the full me quarter second quarter review for our the and guidance results

XXX modified see effective accounting on As Xst, ASC recognition a you basis. April XXXX slide here a revenue X, adopted retrospective standard, can Healthcare Change new on

this Our periods use financial and to prior ASC reporting financial results April XXX. presented results going standard are prior XXXX year in fiscal recognition with recognition standard. revenue the Xst the the Historical we'll revenue forward, year for from new conformity

year results a bridge XXX XXXX, however, fiscal For for will ASC comparative purposes. to we provide

our under standard the change increase quarter $XX from to with million. recognized impact related support Solutions primarily revenue. first revenue, our the This quarter, first comes accounting XXX, of solutions, from the ASC services. of more which million is XXXX, in The a delivery For decision the aligns fiscal $XXX and was where of standard, accounting annual revenue new was the in in products certain

products related revenue and Revenue year services was these recognition time recognized prior to standard. the throughout over under the

not had will on the impact So merely the the first it material have three acceleration standard year of It change from a quarter. as remaining was material in the year. an of impact a revenue quarters full the on

million was Adjusted $XXX the EBITDA for quarter.

the addition $X from driven is impact million the also commission the This ASC lower were revenue from standard. to the from new favorably period. expense extension of the acceleration caused by XXX, by of by amortization In accounting impacted expenses

that year, $XX to full impact the we For be expect about million.

per amortization accounting the revenue $X.XX $XX million, $XX Adjusted period the improved improved the million improved both by acceleration the and the standard $XXX versus result of of for and $X.XX prior in longer accounting commission unit versus EBITDA adjusted by net expense, the quarter. first income a million of prior income adjusted $X.XX by net standard. As in

updated also I provided Public adjusted and Offering, following regarding of calculation point Securities our Commission with the that Exchange feedback out net to income. Initial the want us

Previous before certain exclude a that net adjustments. of net intangible items we the assets result, amortization us core attributable between intangible to the adjusted reflective assets only as from adjusted As effects not are foregoing acquired to operations and to and now our permit amortization resulting expense of did acquired income not amortization of will developed report guidance software. impact as tax the income from distinguish

of prior the Now our was $XXX on million under period million $XXX the to under ASC for for purposes, compared revenue XXXX fiscal XXX, X, results XXX, moving ASC quarter the comparative same of in total slide first to year.

revenue for million of compared first $XXX to the Solutions fiscal XXXX. quarter was $XXX million

We focus as on will revenue revenue, presentations merely Postage it our which Solutions excludes a is pass-through.

in of $X related more and our business, the eliminations the was business. planned million & from by an unfavorable technology-enabled Software of extended businesses from services year-over-year the Solutions both in year. and of Solutions million Connected contract Networks in care than Growth Analytics impact to optimization our offset $XX Analytics prior divestiture impact

was a XX.X% percent for fiscal year. for the with same in EBITDA in first XX.X% compared prior XXXX period the of year. Adjusted Adjusted the million prior quarter margin as the the $XXX of of $XXX of the with of quarter XXXX first period Solutions compared revenue fiscal same EBITDA million, was

The of from growth favorable across cost the eliminations. the divestitures Networks of with than to Analytics the aforementioned associated unfavorable impact related contract and improvements segments & our elimination productivity more Software and impact and timing offset planned

$XX diluted net fiscal million of compared first income of reflects XXXX diluted items respectively diluted $X the first XXXX net for of income $X.XX or quarter first of $XX for compared adjusted adjusted of and unit quarter income net Adjusted integration-related fiscal net per expenses. $X.XX of fiscal net and above per the of was $X.XX fiscal with $XX XXXX. Adjusted respectively income $XX in per net quarter million income first XXXX. noted strategic unit the of of resulting $X.XX reduction quarter unit, Net in was resulting million million, income for of for and per the million, income income with net diluted unit

provide in let's Software revenue, the of our X.X%. for more divestiture flat care, slide the Now XXX look Once using Starting Analytics impact detail segments & Adjusting a are our year-over-year with take would accounting meaningful we performance again, standard essentially segment comparison. of the ASC the growth was of the XX. to prior on more year-over-year. at a have been extended

our the strong optimization Analytics partially assessment and our to were Software and our core investments our our enterprise transition and impact a analytics growth, solution connected of of business & showed imaging Imaging While in continued by solution they cloud-based offset solutions. strategic

X.X% growth data increased Our by year-over-year, primarily payment strong and Network due to solutions. Solutions revenue BXB in our

to areas use on for expansions health continue marketing payer new for in cases flexible data progress make including areas market We accounts. savings new services, spending like adding growth and opportunities attachments, like for healthcare and data

offset growth Enabled in contract core than $XX million Technology And of of segment, our Service $X eliminations. planned were the by million more

to us. see the and We more seen system in wins have early opportunities health ahead of and market aggregator continue

synergy quarter, productivity Turning X.X% Network than Analytics of Software more & our the in realization payment core to divestiture. from EBITDA and again in growth the Adjusted and almost grew impact solutions. offset in BXB solutions EBITDA, the Strong year-over-year. care by the the increased offshoring growth driven initiatives, data extended Solutions adjusted X%

and revenue process basis year, automation In million productivity our of we Enable EBITDA on communication our adjusted improved estate more cycle artificial repositioning the and Services, that business real payment expect to we $X Margins sequential through will solutions. robotic a due see intelligence Technology declined our strategy, and the the both throughout improved and move initiatives. as we

full we result, expect grow this segment the adjusted EBITDA for will year. a As

flow funds of months the XXXX. pass-through, cash XX. XXXX, XXXX cash million the $X free flow to balance The our ended in only sheet adjusted improved June same cash for $XX million impact year-over-year. flow was compared the on June Netting the inclusion adjusted primarily $XXX year. our to flow XX, prior three Adjusted and cash ended in to slide the out million months in million $XXX three XXth, as $XXX ended June million, Free the million compared decrease of XX, $XX and $XX million in year. months cash free fiscal months compared prior was three free the flow on cash pass-through free resulted flow three from for the to for of year Moving

Cash than flow a in and remaining in capital the as employee the working seasonality lower first compensation performance-based of quarters quarter is payouts. our historically result

and capital, integration to with cash integration expect continue reduced the compared We reduced year-over-year to CapEx prior strategic year. improve improved free working growth, earnings our to expenses, related and flow

effect net redemption common portion, of concurrent given debt, pro net the the approximately debt, billion, including initial and of public short-term term was This reduces offering The $XXX long-term approximately IPO the Total in excluding forma proceeds. X.X. of as the million stock proceeds $XXX of $X.X from impact equity the loan agreement credit ratio $X billion. units of a to offering it's facility tangible well net obligations, as our leverage million

and amended, which liquidity July it revolver, the Our maturity the we quarter to a ending $XX remained fully strong, XXXX. and cash $XXX of equivalents recently of and million cash over increasing to undrawn with million extending

down a reduce including to half pay and is objective leverage year by performance. approximately improved turn a debt operating Our

our to the strategic XX. full and slide the X% on Change of XXXX Services fiscal to Healthcare on our moving subdued will assessment analytics as and X% our of be to revenue connected due Now Imaging of assumptions business repositioning key year strategic business. growth guidance growth financial expects process revenue RCM and

with the expect EBITDA X% initiatives growth our of of strong subdued Even adjusted across due revenue to pipeline to X% performance, the we productivity company.

We methodology. based amortization of net million new with consistent versus This of the year. we adjusted intangible of on year fiscal growth acquired $XXX only adjusted add net amortization also $XXX X% expect income back all definition XX% this net growth where, income, XXXX income under the of is the million prior adjusted to

that also be and cash this to million range for $XXX operating excludes free be temporary CapEx expect our well We adjusted million free with year flow to to expenses in $XXX flow full integration $XXX million. the above of cash

we and year expect of X% XXXX, to next as X% revenue as business to year to well. see repositioning of we’re the expects growth growth adjusted company the that fiscal X% growth For we year returning X% this EBITDA

full is quarter result not first the the from extended differ materially a of year year implementation, full while between expense two of recognition revenue as be periods for accounting expected million favorable per earlier, year. impact $X the ASC of about for commission for revenue increased mentioned standards. for The to I total XXX million a to quarter fiscal As the expected is remainder $XX

a not get intend year this to view XXX to is our our it’s of ASC that important longer-term investors due provide of While our our company, we guidance, quarterly to and as clear the being first impact a felt this for year expectations. quarterly public

for in be second to the EBITDA such, be solutions our is of to to range As $XXX for year in and this $XXX million of $XXX fiscal adjusted million, million revenue our expectations quarter range million. $XXX to the

expect net In range addition, be the adjusted we $XX to $XX income million. of to in million

As a and certain reminder, reported year of a based result XXX prior the in our first its again, revenue our on results ASC quarter. not the XXX to guidance aforementioned in recognized is ASC acceleration comparable as of

To to guidance; I would transparency fiscal CapEx of investors, highlight XX%; integration X% the units. assumptions of million adjusted to range even for outstanding of $XXX key $XX this for interest to excluding revenue, that to year million million; $XXX CapEx effective $XXX in full solutions fiscal to approximately of further $XX provide like million year for million units of expense support basic expense million; XX% XXX.X tax the and integration-related $XXX of rate the the following approximately then million; of

over me that, closing to Neil his for comments. turn it with Now let

Thank Fredrik. you,

our the our XX,XXX extend On customers the drive position to we more are of a inspire as value continued and work than channel off better to by a a start through excited system. opportunity the to XXX IPO, partners We're leadership innovation heels year. great to healthcare successful for we and

their customers thank to customers' the accelerated dedication our partner to I continue members our out are operational we partners. Looking choice to the drive improvement to Change the will industry. support is success strategy XX,XXX innovation our execute hard work with of They performance. and our team reason combined of and Healthcare for the and like would in longer-term,

and our and public create can value value consumers payers in system so, and demonstrated, company shareholders. for doing a for As first broader quarter create we as for healthcare our the providers,

I'll the questions. call the over to turn to Now operator take

from Jones comes Instructions] [Operator Goldman Robert first question Sachs. with Our you. Thank

line is Your open.

you customer questions, little that renegotiations performance seen about were the expected. better came Great. Good you better those Network impact And on were that I offset if morning. margins talk for a to you Was you're from were just if those if that had was segment might than could I Solutions, impacts bit that able --on offset expected? any you're from have to in segment. one able that or than any in there consolidation with then, it re-contracting we if if to any on from hoping guess curious that in Thanks products -- new maybe those re-contracting from impacts any offset re-contracting, able just there on if renegotiations

for the Thanks question.

years, with in of look space, to segment, new So, course, are either continued solutions past Solutions then Data new overall electronic that transaction when in Payments we that segment. in the attachments business course, as and our other to have types in do and that contract part such we're of have also we back expand Network and Solutions customers growing of namely capabilities, continue businesses renegotiations, the as the adding

RCM on was impact contract just there? Great. just an And over other contract I million said sneak TS exiting any from if of I from balance guess wondering exits one impacts in more about should the a think quarter, how believe the year you the then $XX the Fredrik, there segment, I could we

just year, year. as of it the year. there rate. same I were the keep end rate of the would the about that they two million both sort for overlap, at actually rest Yes, the the but fiscal model $XX There's generally, I little the think Essentially and same at bit I constituted end a of would about essentially a run of

much. so Thanks Great.

Thank you.

question with Our comes Lisa JPMorgan. from Gill next

open. Your line is

on Neil. understand of I to wanted some couple highlights and your very business Thanks just things, of much. recent just Good follow-up a morning.

what impact existing the First, new on you're talk when customers? we think seeing you will versus some about that have about and for it XXXX Can of these.

how landscape, entrants the get we we new then questions competitive around think into the the And market, the do broadly, of of side a maybe that coming around analytic lot current especially, more about are business. just

Thanks, Lisa. great. Okay,

the new well have a that as is the large, with current with you customers. So, very customer terms I areas extend seeing of some the ability for us business know, what as new mentioned, as we in we're to base of

able imaging analytical us for the is that platform years, with remarks example had in this we're given with Google, the relationships that with expand that innovation over the in business, of referencing. I with to customers, innovation, pretty conjunction market, we're now have with those the they as of bringing So, kind you we're data, mentioned, with which unique we've relationships what thousands when really segments described to we I many seeing our to customers in do kind my multiple were native and the cloud-based leverage of AI-based across

can with In the new channel one work is distribution to our of with partners work things the entrants, with be these customers of about very we entrants terms our of to a new industry with and and that's the we our have in ability complementary. lot great often relationships help

with You announcements payment the we for payers provider companies seen MDsave a market. Fidelity, may language consumer natural made platforms like in around processing or have Health

perhaps learn from even in and but they them careful can to an perhaps with eventually or we pay ultimately, to new about do often acquisition. and innovations partner able new work we're what with them these So, attention the commercially more entrants,

you your Fredrik And side, Thank guidance the in tell That's synergy then what's capture for can us helpful. you. just on just XXXX?

fiscal year, by Yes, we had $XX so I five had left. quarter. million $XX beginning about million, this captured or think this six We've

the million for accelerate that little capture throughout expected. $XX what rate half full current the we and of the will had on and year of So, we run we million a to bit with expect we're the going that's rest consistent $XX year, we're about

Okay, you. great. Thank

you. Thank

comes question Manav with next Barclays. Patnaik from Our

Your open. is line

could what Thank help if My the lot wondering separately? and just core connected then stuff clearly Software you. just analytics was morning, and I good imaging first in headwind stuff segregate and and going is the business that Good gentlemen. analytics analytics of growth a is business, from versus you on is of the question

the talked Great. about core with see solution as as months, this you have network solutions defined growing growth we've & at X% excluding as recent connected Analytics the Software analytics Well, business, in full the it year. that we as the investors where business clear well still

remember, part continuing of of about in may FY to that reposition strong for our is business which while we business, EBITDA and see is XX% our growth year, last As test deliver results, XXXX. you we

is Yeah. X% as fully but we And that we growth return then then obviously analytics to had question topline. the some that we about expect And to includes connected the quarter million specifically been term, seeing move are to forward. short imaging expect also $X to business about to this million as your $X drag on

-- building. to, provider sounds I switch it's as guys? backlog the from you the change's repositioning. mean, it like from I is getting customer understand what guess just presume I if perspective curious RCM you on just that's was us to -- I then help a another And pitches it. the follow-up Got could your these

their clear they kind to helping proof are the side. on a on-premise solutions be to of future them strategy solution us just going not or of at out imaging cloud the from offer looking Well, just native imaging historically by and

based going from us RCM others players. and comprehensive in us expertise the as differentiate this to have the expertise side, allow business process allows to the -- that to we On services particularly solution service the on market domain and take the technology, that smaller market, with it's is a really a

Thank Okay. you guys.

Thank you.

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

open. is Your line

lines, working applications the thanks we premise of on what drive as new you some as do your R&D guess that money do Artificial how about far. for rate product where Intelligence business. Maybe are about think now, spending ROI color so that those you and R&D spend? other right returns. to also drives And bridge the biggest a for from had higher a you're elements what all Neil, I opportunities aside bit the morning, growth as that through priorities, along Good think about your your as about way the innovation how your you're and talked you doing you see what and it's

look in intelligence. spend. part where Well, of really it's have at and data we be workflow the provide around embedded the our areas technology, not leveraging that we we and the many our more because we of the the I the understanding and core our where going of how of a success industry, only ask we sit critical broadly we're chain spending of them because faster our big And connectivity them R&D customers' you can money, is our our mean, we're about think business actually we and AI value we the to than of have, from customers, and customers' are in the the to with co-creating of customers. artificial when value in but have certainly, provide data Because people solutions

process helping cost, every more get The other XX RPA, from through our us million see area it we our day solutions. services is our be than secure like including that we'll blockchain, improvement provides highly in continue blockchain more own and approach our lower operational customers to a -- much value to transactions our in will technologies important network

for maybe a number said, together is put delevering And the give follow-up business turn just take. or a and half about the that Thanks. a acquisitions. annually this of quick talked That through being then you Fredrik, was a priorities of

build and do you your in how M&A how and terms in you want think think relative will priorities want to So M&A priorities as be what to target about to you bolt-on out? what of going you forward, prevalent

strategy to I our look there are nice more add at lens it. how Yeah. can are that's capabilities the look at I versus by on, growth ourselves. M&A exactly that We or there to suitable tuck-ins mean, that buying think we are developing

And medium so acquire to it that terms priority, XXX% a linear. is M&A small deleveraging is there opportunities in going one along no of be forward, way. or won't will necessarily things There our number be but the doubt things

and do will shareholders sense our enhances our We growth that. That certainly for profile. makes

to divestitures is you of -- look always us, will to think opportunities. than if I to in area at did at of where ones somebody We couple And us new valuable continue a also to more year, to look Solution opportunities are course well. as last else small there expect and if we

Thanks. Excellent.

Thank you.

next Our with question Stephanie from Citi. comes Demko

open. is line Your

first my on for Hey, quarter. a questions. taking guys. great Congrats Thank you

Thank you.

Thanks.

us payment Could Well, the about the institution financial you given recent business' just can M&A -- network FinTech it. larger more of the us and in the you your tell some appreciate yeah, tell more of space? players, defensibility against healthcare about some

companies, like it's that Global some our are the JPM continue these best We so, of and to whatever variety more work we'll advantages Sure, multiple of Stephanie. customers. Payments healthcare or to services behalf, large very merchant service surprising investing a large get and Well, and not merchant companies looking first on all, of with market. understanding do

with new partner discussions And we'll in are be by continue innovative and that their Payments. them with contract engaged with solutions to I services network like our after now customer the with some They a We acquisition them management of to around example, customers. co-create mentioned. extended companies AdvancedMD recently ours, Global to innovative We for continues very team. have like, of a

we certainly care. innovations appreciate So increased the us are the payments for that on potential in health focus big a

talk thought, And could your consumer-facing there of you your to with kind that of your more Rev-Cycle an in payments of growing opportunity innovation In this of the of facing hospital marrying in portion solutions? is some business? line any

Yes.

course, not through big one to only payments, to providers way for the stages that all make value are process. I we So bills. payers at fact co-pays in their the sure think, facilitate in But consumers, then facilitate is around work things that we order medical people that advantage payments of from us for whether paying in the the do all a payments that's or we of

sure needed that's regimes to is they're that to It more the actually under like transaction industry-specific us types payment the allows us also to electronic and maintained payments payments, order to to and electronic administrative will, because if by accurate data make have that consumers. and enables we other key allows attachments, financial be raw and authorization that of to the needs the information healthcare differentiate, in regulatory facilitate clinical, add payments you prior areas information understood the

questions. it taking Okay. my Thank you Appreciate guys. for

Thanks.

you. Thank

Jailendra comes question from next with Credit Suisse. Our Singh

Your line is open.

a lot. Thanks

less -- this XXXX year? to benefit includes your EBITDA slightly X% FY from benefit just XXX it this say clarification quick to growth on that of adoption First, X% fair it $XX a than from guidance is million X%, ASC

benefits some includes It from that That's as correct. well.

in acceleration Okay. share expect versus is core headwinds Then XXXX driven how flavor, going help us facing of year Give onto thanks how this of the much like growth by gains expect Can FY XXXX, gains you moving or much projects next us in or revenue market that FY for you you're you FY acceleration market can XXXX? away color the some in understand new market on year? some growth that.

acceleration forward. the RCM to itself degree, by is, Clearly, out what to see and business we of largely going are driven expecting our Okay. Imaging

what but here and growth ex-Connect Network X% we're two to Neil around those core to as FY into well, returning as as We as like we that getting Software business accelerate key see as Our we're business, businesses defined really the we Analytics said is said XXXX. our growth that driver earlier, is expecting here.

price potential clients we because Okay. around And next thoughts your current just Are reforms maybe I putting one, hold the environment. out political around the uncertainty on coming to of get year you the other focus implications and then DC? projects year any of enter want election ACA as transparency last seeing of or kind the on of

changes changes ask questions in things put Well, how people they're these about to than seeing less more or actually potential on with we're hold, reimbursement models. seeing going of new some people grapple

focus destination and I efforts they both made to deal some that our try healthcare MDsave in the as Adobe changes to these really with we've have that our done determine patient joint them reference. a Microsoft react consumerism, on player to of you in different us around among had own partnership to how think with -- we've experience, in the with offerings help

the reimbursement models, and some system. you new having focus they all look at Also of more when on access value-based reducing healthcare a improving cost,

us -- engage to see any the made how meaningfully to we've in investments the can customers to years segments help changes. be leadership role now many of in we caused reimbursement very see years have our with really we'll to So those them have due changes over has with that to many

a lot. thanks Okay,

you. Thank

Jaffray. next comes Wieland Our Piper question Sean from with

Your line open. is

Thank you technology organization Good or can morning. you. in the time, that maybe different terms On that to your how services what CommonWell us capability? you're from tell is from bringing a renewal renewal, of in aside extension

Yeah, absolutely. Thanks, Sean.

all, the into network in mentioned, AWS to Blockchain, of because has over with and of in second the our capabilities as recent able of first technologies the integration So efficiencies years. cost like been we've we've conjunction scale none, both to design become really the also network security but

capability a become really the it's in to So industry. none second that's

say, I'd you addition, of of others now continued level and has relationship evolution CommonWell that really pervasiveness on growth weren't such and achieved. that retrieval really CommonWell's practical achieve some capabilities document as In the new in focused the they've our with industry of the until

that are connectivity investments years cases, the in the really So the if have in improved due it's technology we capability dramatically we've by plus will, recent the new that's enabled market. of that ubiquity use to a case you made,

FY the you on you. FY thank one operating a guidance, And sneak leverage think quick the but appreciate about -- do XXXX? Great, peek I also XXXX. how Fredrik in on what

our forward. of segment the such think continue our because a focus of operating margin. between I in business guidance, units to terms Well, drive It is the we not going leverage see we disparity of have opportunities to

which So, we we're the as could continue to drive margin forward, just it depending one improvement. But to faster, margin going since expansion. we vary goes year, on move see this clearly,

I you. understand. Thank

Thank you.

Daniel SBV Our next question Leerink. comes from Grosslight with

open. Your line is

wanted Services to solid taking I return little question into a for in bit. XXXX, here. my quarter guys just in RCM growth a dig Thanks to and congrats the on

So after at should where normalizes same attrition do rolls year, beyond? the it in same-store And XXXX how and growth going think in healthcare off sales outsized about beyond? grow XXXX spend? Should as think you attrition and rate the this forward we generally

Yeah.

perspective, for those to overall, that We good to range X% from to X% that's our that X%. use, mean, think from a the overall this a $XX market customers. you think and quarter depending see when saw the at perspective, stabilize to our our normalizing, you of already you as on But if you we that focus business. strip market area. but expect proposition to look about can really impact specific our it that attrition to improve specific comparables million I the that continue value I out we depends X% on grow that's

We side, is sales to just same-store good, growth is rate market to we going on going get the good. think opportunity but we we as the a think brand both opportunity be that So attrition and level, very seeing we're attractive. general growth which also attrition the lower forward already, think this is

on aggregator And add I'd in to see including the thing only to side. the market, continue we the that, consolidation

The about scale, come to ones to customers finding, providers security, information concerns ourselves. to whether bear. the it's increasingly And operate scaled so like AI RPA and being like larger innovation bringing able at to we're demanding, are more especially

just imaging still for then we in X% growth growth on kind XXXX. returning thinking kind flat to about And to the to thanks. side it, X% Got of Are of XXXX? down-ish slightly

place a be. think I to reasonable that's Yeah,

Okay, great. Thanks guys.

Thank you.

with Research. next from Our Percher comes Eric Nephron question

Your open. is line

Thank is you. Imaging, forward. part of with I'll this continue the important story moving

see in wins little and or how you what have it don't that or market are communicate before you give revenue. bookings responding Can mile for you'll seem see would a well to you'll you're we do you feel might the have it number, be business how bit new offering a what how is this As adoption? we a the us when for on more markers looking

Well, really I all market. the at Eric, to customers going first back excitement think of seeing we we're just look in the among

to integrated especially discussions benefits their an large increased with in among as the on active we delivery see we're now market hands small that anywhere really the get to networks, them number can of their users. the continue mid people and practically modules have So to from producing

we expense addition, on least at operating into we of on-premise of typically their a XX%. In can these implementation, applied benefit Imaging to most go see

in, many very environment conscious increasingly cost IDNs -- So are these attractive. increase of the in that's operating

the of to really the a help cost this the continuing native-Cloud AI-first operational is developed us only So in having plus being platform combination the benefit pipeline. market build

income to I I'm on Fredrik, a the make want follow-up topic just maybe here. on And clear a net sure separate crystal

we a benefit think How how forward? year remain you expect line does might going Do steady net it expense headwind $XX do that and about So net million. of have, or the commission forward? this income that moving impact that a at income you become that

to it's period, Yeah, going the extended amortization of going continue because forward.

So it's not a headwind.

see piper generally versus next Eventually, over something this growth, eventually and period accelerate headwind, the time. of don't be part think But as and being of a as forward, as course amortize you see of you that we unless -- but flat guidance year headwind pay don't longer anytime to I it we'll we soon. our a you year. it's going as anywhere see really of a kind going

Perfect, thank you.

you. Thank

comes Charles Rhyee with question next from Our Cowen.

line is open. Your

seeing area payer that you're to in seems focus like in so selling science far your don't I for guys here just sort But the get a sort on on question. wanted you're Yeah. in really an to companies of and seeing this your space what Thanks think get of you into data business, sense for taking -- be presentation. positioning other give what Data it life on the Solutions your the and space, color the touched of in some market? maybe areas there

Yeah, great Charles. question,

to cases with for course, provider it continue in the existing done work traction use continuing payer make we in does the for years of So and expanding the our data market. we've many and start,

referral patterns, and patient we federal, greater cost the analytics, the and especially push at have around commercial price like things cost So state level transparency. as comparative

people markets, also and FSAs data you financial better other they and have more the marketing hired to information we recruitment, such companies up HSAs have are in the and around who services expanding patient and services now to provide in life mentioned, and as want as financial operate sciences and companies, services consumers. opportunities media target for consumer But around that

do see where what maybe in growth rates, to do and outlook could we you this growth growth then the see then And for about terms area this overall segment helpful. you think of That's start an accelerate? as

and a the previously, accelerating given new as at look to business But Data we've the footprint. such of just segment, rapidly far areas payments Solutions that are as got the growing, more mentioned. very these described that we've growth broad continue we'll you Yeah,

growth balance So, new healthcare year. we're the because about of and these recent that between the over U.S. very steady we begun have high-margin tailwinds of areas businesses still happy we've growth exhibit innovative that

this had kind any selling what the in of Did kind of in. quarter? talk if kind you Great. at cross sort you in can could you -- you outlook? sneak about do of And guys all guidance more 'XX, initial did your if you I And it. this missed of Thanks. of, I'm one just -- and I assume for sort sorry, year of But the benefit then,

we're seeing, certainly relationships, with expectations the in guidance industry. developing the some larger we're the the and selling, more We really deeper to strategic have our not only but due Yeah. players included in of cross

opportunity steady have, we're mentioned, see Solution our businesses. the of as and as the cross-sell us accelerate in growth seeing our the we And portfolio, to We're you continuing the benefiting base. from So, breadth our core given of customer we've already growth. frankly size

thank Great, you.

Gillmor Thank with question Matthew Baird. comes Robert you. [Operator next Our from Instructions]

open. Your line is

exits contract kind some helpful. from which Hey, the understand over trend pickup you Services you at RCM line the thanks next the quarters? for we get the you the Can revenue of of couple sales was you so the million, question. may can of outlook, that Maybe, quantify following up that mentioned, also just on the quantified $XX

think, mean, our FY embedded is part of 'XX. growth I that get Yeah, to rate obviously, as I we improvement,

give proof the try to will way along continue We for to that. you points

going And deals I be new we're as seeing confidence those it strong able the numbers funnel frankly, to a and signing. next said, hit of clear visibility And year. are we to that us we're gives that

Got it.

And guidance Yeah. has Fredrik, included provided. the that's that in

stand the potential Connected I sort then, stages there's just and say early not topic. business? you to that And on a enough. want you sense in for, on of give for you on a or Are Analytics, lot assessment know a the, range of where strategic probably fair latter just you process. maybe, Okay, us outcomes, the But that the stages, can

the analytical you we thoughtful just looking thinking through Well, that, that those with at think, have, capabilities still I being about assets. know, and we're

the core So have at we're in of options for we'll And look really process. the we And capabilities just midst continue to them. there. the the

next assets our we're of the that the year will for will continue going guidance to utilizing we value process there some that appropriately. in want is we sure And sure very we're And There make And outcome, just in optimize it's it I been. those thoughtful Either through the assets. terms right stand. of make have in to a great hands. way, mean, that

Got you. it. Thank

And no at I'd de questions, this you. Crescenzo, showing Thank Neil turn to the to, call over like further for time. back closing I'm remarks.

questions the have that, our to had partners such Well, very customers, on excited the we're we very of our our all call strong employees, Company. on IPO. a pleased received and and in also interest quarter behalf the XX,XXX our We're after

to are communicate for potential our we making our excitement questions. forward and continuing in answer And our the And the look your improving accelerated able investors. we discussions sure growth to And have healthcare. we'll Company over with

thank So, much. very you

And, Ladies you and Thank day. gentlemen, everyone have wonderful this joining. concludes for today's conference. a