Change Healthcare (CHNG) 14 Nov 192020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Change Healthcare Second Quarter Fiscal Year 2020 Conference Call. At this time, all participants are in a listen-only mode. Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Evan Smith. ahead. go Please

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

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

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

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

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

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

$XXX million $XXX EBITDA to quarter morning, pleased revenue report million. of Evan. of Good you, Thank adjusted second everyone. I'm and Solutions

operational our initiatives services growth deliver leading core transform, and across of on businesses execute excellence During RCM the Change continued to to further Healthcare margins to quarter, flow. free imaging focus improve our strategic cash franchises, and our on and members team XX,XXX

titled to addressing US Hundreds Waste of complexity, identified abuse trillion seen the System, attributed Healthcare innovation recent in do deliver of the appropriately which We services the on At and are waste focused these billions here dollars have were and the may waste almost integrated areas work waste end-to-end a of healthcare. Change in JAMA in Change of Healthcare, underscore in challenges. providers. you both study US we fraud importance Healthcare, $X To at uncoordinated laser and to invest payers solutions and specific we care. administrative and in

execution, continue and a We we quality some the enhance investors. tangible help I'll of reflecting solutions to the while our we reduce and In take-up moment, our customers costs, examples communicated provide financial improve engagement. markets both have trajectory innovation consumer obtain of to

new the continue winning across as growth businesses and a to core of result, moving our are Services franchises, transformation As see decisively and we we our imaging on RCM business.

account sales We our to and with advance relationships continue deeper strategic enterprise will which management customers. capabilities, create more broader, our and

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

depth sales product large quality customers. our enterprise the to portfolio leverage breadth, efforts Our and of

relationship receivable software, to with Change or our of centers their working target vendor Cancer RCM provide customer analytics Healthcare we customer, by reduction million revenue cancer designated significant with Institute one approximately choice. integrated States, as to the comprehensive a Change management leading United we expanded contract the win an of accelerate of leading this RCM example, Healthcare. a accounts the For services At payments, $XXX and solution in establishing that cycle had National in

prospects Services use as for Technology-enabled within Services our to analytics data RCM our new In division, our customers. as well uncover opportunities performance and growth we improvement

provide experience, as optimal and business as cycle to patient operations effectively, access us we optimize administer improve as and more enables revenue reimbursement approach daily well management comprehensive payment solutions. Our

sales increased focused our drive Our physician efforts new growth. hospitals approach continues combined and opportunities on with to for aggregators strategic

nearly year-over-year in and the double-digit our this the a seen have additional how buys of initial already of provides the a & Services, relationship first largest patient who contract year $XX this bookings half in of contract our of RCM and our services a our in contract average like solid wins. expanding size to we customers of business mandate. to with indicative beyond increase the cross-selling A our as solutions, In over I'd increase success This initial couple Analytics in Software is systems country our great win provide a of with to QX also years. transform relationships million initiatives in illustrates solutions. next one this annual revenue we the deal Services access in opportunity like this highlight extend is hospital notable is the This that RCM our

patient's Healthcare over clinicians partner and services Imaging full reports to was are vision Their strategic the health Ireland Shifting the deliver with a in delivered in Ireland. selected have were national million the this would vision. citizens. leaders ago, was largest there. we their to single almost imaging X XX,XXX diagnostic to systems wherever diagnostic the one continue of world, they that images our business, the Ireland diagnostic service how execute to citizens to on to access transform imaging to Government clinicians a to of Today, years country our XX and supporting acquired. of has Ireland to initiatives system build wanted allow Change and

Healthcare on Our and customer, Executive Service Health delivered vision. Change that Ireland's

Health deal in our extend signed delivering country: and until of all in Healthcare's investment of and with This a quarter, full imaging the abilities, Change Ireland's the diagnostic As covers the platform beyond. special we in acquisition announce cardiology to provide to capabilities landmark contract confidence enterprise advanced imaging enterprise are Executive pleased we imaging and partnership digital in a this and XXXX Service vote a that technologies. radiology,

cloud industry's AI-centric In United the our success with also we solution. This first the native States, platform. imaging enterprise is a saw next-generation

costs future proof solution advanced in significant Imaging Enterprise decision capital and reduction operational workflow and provides collaboration and support caregiver investment that improves helps Our drive optimization and engagement. burden, patient IT

logo of multi-million agreement cost for we they from that to net networks customer, customer notable to Also industry-leading a platform. we to annually Enterprise At Change dollar move In more that United contracts to Healthcare. integrated world our costs million Imaging States two the we're imaging signed our operating one displaced saving QX, $X largest two vision, the while the our benefit and innovation. in in the is new close pleased new of that adds announce to due in capabilities largest multi-year vendor delivery aspirational effectiveness, the that

with that on providers' double-digit at and in approach process. an business to payers we and accuracy Unlike grow and office to the provide focus through innovative business Turning is a continues recovery claim healthcare our plans that payment the runs audit we rates. others before unique submitted industry, where post-pay and begins the

accuracy lowering reducing end-to-end abrasion helps cycle, Our and costs earlier the providers. sometimes payment drive friction, provider called in administrative solution and between payers

approach support contract than customer the payment and partner most Our accuracy $XX largest make country in of excellence to payment their for a and were In health nation’s superior accuracy plans logical million us business. the with largest advanced awarded one more the service book QX, plans. of solution entire the we health

We through market paid accurately and HHS. proprietary converting retrieval, where submission regulatory another timely source adjustment analytics, and to our solutions to coding risk incorporating customers to managing and where facilitate technology chart health assist our our a submission. their business, a to turn within complex adjustment plans me are we end-to-end environment be area expertise and data use leader and we errors Let accurate risk our help and

plans scores. health and evaluate also Our the identify between by provider their advanced and analytics risk and status documentation are quality of documented reported health health to utilized status, gaps enrollees

with more hierarchical accurately language HCCs or are in to technology processing manual We improperly coding identify missed condition commonly reviews. natural optimize categories or coded that reimbursement

miscodes the to are of to or continues organizations. or and are ecosystem to risk to challenge code regardless they the they now healthcare conditions to. of significant the bearing the shift visit patients' receive coders not the are for Clinicians patients chronic to document order reimbursement whether in for related As review entitled care, reason need all value-based

a over opportunities approximately in of value a largest their As with of one entire the country of types signed these a contract payments we and adjustment book million with with business. across the of unique risk additional expansion result years and in capabilities, proven three across payers $XX of QX electronic

Our payments business growth. continues its also strong

solutions distribution payment Our electronic and adoption administrative streamlining reducing print lower cost payment and by mail increasing processes. costs

providers, as XX%. to of from the store as rates preference payer Funds clients Transfer high realize vast accurately enabling adoption payment derived analytics our Our our data predict Electronic

electronic attracted and a quarter, the InterQual solutions InterQual a year the to ACA medical workflows leading we compliant. clinical this During We real-time signed payment necessity electronic base decisions and authorization Connect network were enhanced ability to to enables our innovation payment of broad IRF deal costs drive health for automated to are noted adoption, Healthcare payers existing bringing dollar from decision payer within their for market. by our multi-million with and a provider. in franchise. earlier reduced administrative support our Change the behavioral we They

members we QX, Medicare Medicaid health service In InterQual data helps medical Change the exchange advantage in integrated provider programs. is review and and entry into our expanded Solutions high Medecision Healthcare its commercial, integrated relationship Company Connect now that with manage Medecision solution.

to largest industry partners sizes, enjoyed types with and new administrative we which of intellectual our channel over channel small clinical We telemedicine health. the property distribute innovations throughout in relationships to to valued digital allows believe software EMR network, XXX pervasively vendors largest decade and from partner highly-specialized the in partners highly long us all and Our entrants with industry. financial vendors the the and is

the of InterQual with confirm and into Corporation, we in responsibilities auto now which services to have coverage solution determining appropriate receive care one acute automatically, helps Case of without reviews of correct managers This status managers Case verifying Cerner healthcare medical improving QX, setting. and are completed case side health in able insurance view In have additional the case Change medical of the a its efficiency services an management InterQual is managers the benefits, partners level larger review process. agreement review solution. patients' our service integration include integrated that the right range providers. quickly Healthcare that of channel of review the coordinating Healthcare signed been patients and

case them focus to managers burden responsibilities different efforts the receive helps administrative for optimize many patients they their need. time their on care With helping reducing

case the simply level Cerner in Cycle in Development game of automation new Corporation, changer. Director As this Revenue stated by management is a of

continue In addition added new partners, new and front we to our success introduce to solutions for business on with our to customers. value the drive customers

solutions ROI position development development capabilities, position pairing the our internal data our by workflow We a to drive deliver to the innovation high embedded and are assets, unique in in to our of key strength partners market. and

we introduced Revenue QX, Capture Charge solutions, In Charge portfolio Solutions. Imaging a Advisor and with cloud-based addition CareSelect intelligence. to new artificial Capture Advisor of two new is our Integrity

model AI and/or or auditor or and the accelerates within provided for workflow, devices proprietary mischarges send or and for procedures, claim services complete reject them their the charge recommendations diagnostics care charges episodes, predicts accept to to for payer, scans can more helping user Our the We present or their increases who ensure revenue. captured. a implants which

qualified implemented make We at installed leverages help of CareSelect CareSelect capabilities clinicians point the decision is CMS support diagnoses our imaging new better X,XXX solution, datasets healthcare also over provider in AI Imaging organizations. care. which in Imaging to

is support which also clinical to inappropriate exam be at our hundreds reasons patient and potential that predicts providers analyzes deficiencies time eliminates of comply necessary order search an indication tests, such a the to uncovers possible with patient complexity exam for reduces through ordering Our the It for. the can exam. ordered. the Overall, need use record patient the physician intended model of of AI physician services related to the solution This and of care reason in improves specific documentation and a the PAMA the a inadequate regulations. Imaging history for documentation as our helps the CareSelect

provide fiscal of our outlook wins high the our and our year solutions across growth and of introduction the with initiatives the X%. to XXXX the closing, adjusted in X% range confidence us EBITDA strategic recent execution highly-advanced new of of platform, growth In in ROI

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

everyone. good Well, thank And morning, Neil. you

Before to want reiterate which business our are and financial I discuss the I threefold. quarter, objectives

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

execute automation. on on RCM We the on with on initiatives. to remain excellence third, objectives our year. and execution to for and enterprise target all Second, service imaging our improve operating operational transformation optimization a core cost And of focus performance these full

provide third And results guidance quarter now and the for the fiscal the full quarter then let and our year. both for financial me review

As accounting Healthcare as Xst, can and this new results the effective new for on the Change April see a XXXX X, ASC-XXX. standard financial financial quarter prior slide recognition you adopted basis. ASC-XXX April going retrospective outlined year revenue a here Xst with modified I on last XXXX prior In and we recognition revenue revenue fiscal recognition results for periods year in conformity standard Historical the presented to use standard. forward, our will reporting are

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

in accounting our revenue was software more and quarter new quarter. related Revenue our our the decrease recognized of results expectation This For $XXX the network product as in delivery was of second XXXX standard. in the strong support services result during the the comes standard $XX and of under enabled to the aligned of certain solutions in and included change was ahead million. solutions with technology annual revenue million ASC-XXX, analytics of fiscal solutions from in performance a revenue These services. first primarily our decision given segment where accounting our segment which

our As is fiscal expected of have results ASC-XXX year in current although impact QX will XXXX, the material quarter, results. full it QX in compared ASC-XXX not negative impact to also and the on a when to

Adjusted offset position primarily negatively Adjusted year analytic million EBITDA second placing cost result and a accounting support new on the favorable of line new up quarter $X investment impacted to objectives. additional a partially by previously for our us data contract impact and to was as our network expectation software in revenue ASC-XXX meet our million by full with in EBITDA from an was the commissions segment, the set growth standard. financial This mentioned and the $XXX solid in solutions businesses. impact our of is

of impact year, to $XX net approximately on diluted and or expect we half $XX quarter $X positive year. net the be Adjusted the the full for unit million was the per million was For income $X.XX. commission million income per about adjusted second expense

on for purposes slide moving under to results our ASC-XXX Now comparative X.

ASC-XXX, For quarter under same $XXXmillion, total the second of the prior to of was revenue period fiscal in million XXXX the $XXX compared year.

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

merely postage solutions focus a excludes presentations revenue our it will We on as pass-through. revenue which is

impact the Overall services Linux connected $XX million included in $X growth revenue year a from to in revenue non-recurring million second of contract optimization prior which quarter and eliminations was imaging technology X.X% solutions planned our in a effect naval related business, business. of the business of one-time year-over-year

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

in income of care the income XXXX diluted of million, XXXX. XXXX million a diluted quarter diluted net quarter quarter respectively per fiscal $X.XX second of the fiscal units income or $XX of for second per $X.XX or per was with $XXX was adjusted sale that unit net the of included the $X.XX net the unit fiscal compared in of extended for the million net of fiscal for of second of adjusted $X.XX net resulting Adjusted diluted diluted million with respectively the business. per for income of income in quarter unit approximately XXXX. and per for $XX year gain income $X.XX Note $X after-tax income net compared an prior income period units Net $XXX million second of resulting

in diluted the fiscal in Adjusted the in The a million diluted of and give integration $XXX same and units also and amortization fully fully units prior improved million strategic in of period XXXX including expenses effect margin expense year. outstanding which expense higher and strategic million by $XX net compared the reflects income more our offset integration reduction period. current were per-unit at income tax higher $XXX than IPO CapEx with to the second to related quarter results

starting look Now the in support. segment on revenue X.X% comparison, with Growth like year-over-year. XXX our our analytics of a grew decision in year-over-year the software our using including let's take the analytics segment and strong ASC performance we're our Once more to was payment provide more again, software at performance detail a in slide. with prior accounting segments accuracy next franchises expectations in line leading meaningful standard

of business of impact transition imaging Results a assessment and imaging disclosed in impacted investments connected the by and cloud-based solution. our strategic were partially our and enterprise solution analytic optimization previously through an

network solutions were additional Key payment in one penetration revenue a network and continued volume growth and dental and business market solutions data drivers including growth our increased BXB Our X.X% inclusion increased network, network the year-over-year. medical across in solutions day. of

make and use million expansions for contract e-prior healthcare data In we areas payer $XX and includes addition, declined accounts. new opportunities like including flexible eliminations. our for enable to adding authorizations, spending growth X%. savings services revenue overall areas of data segment, in payment, cases like continue This for In market health planned services, marketing and new technology progress

System the of support Excluding see more and to our continue and continued discussions a you achieve drive revenue across mentioned for goals wins this and and year. results aggregate to our growth we ability expand Overall, the X.X% plan market additional opportunities in revenue continue was as us. our the attrition ahead Health to business

decline the in Network Turning year-over-year. again driven related revenue grew X% offset EBITDA results solution connect to cost adjusted initiatives adjusted by quarter, growth, driven increased enterprise in The continued in and synergies new by network penetration volume to of the market operational by solutions increased were analytics software the X.X% partially EBITDA, analytic solutions in expansion network, and solutions to across data increased investment data including growth medical by the and network. a and into dental growth our and partially offset expansion the BXB market payment business dental imaging. support

artificial of throughout the EBITDA due In repositioning basis more we a as productivity year-over-year a business. we year, and well enabled as move that cycle and we communication intelligence $X expect as on improved million improved result will revenue services of to and initiatives. see approximately payment services, the technology adjusted improved a strategy a automation solutions as and the real-estate Margins

we result, the margin EBITDA year. for of expected show a improvement and As remainder the adjusted segments sequential year-over-year stronger and related will

Last prior million tax company increased $X.X IT for initiatives. corporate expense expense increased due expense public indirect increased to year combined credit, company-wide with

on to Moving X. cash and balance flow sheet a slide on

to ended in Free months fiscal year. was free the million compared $XXX pre-tax months cash million $XX prior million cash sale million Year-to-date prior includes care. year-to-date compared versus $XX And the million XXXX, free a year $XXX same negative was flow the once the $XX was the again three of in three fiscal million $XXX extended September flow in and proceeds year. $XX for the flow XXth the for was prior a in to for year. prior million $XXX fiscal XXXX from adjusted a cash year-to-date Adjusted versus the year prior million

net capital, portion integration include cash in and long-term debts term was slightly improved the compared related improve credit continue flow year. Total agreement expect expenses earnings ratio leverage of under to and year-over-year the due short CapEx $X X.X. working with billion We to with integration free to reduced reduce prior the strategic growth,

During we debt. in paid the out $XXX quarter, million

with revolver. ending it's of liquidity equivalents. cash quarter and million Our remains cash And fully the undrawn strong $XX

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

our financial to on on guidance key moving and XX. assumptions Now slide

do we as for important our this quarter, the we intend but not last expectations. to company, a it of guidance given impact XXX year first quarterly provide stated I being a public of longer-term our ASC to get felt and As investors clear view quarterly was

in million, of revenue million impact from in quarter fiscal to approximately XXX anticipated for million contrast for greater compared year $X the to expectation be TES for quarter. this includes to a the including Our to headwinds the the impact ASC $XXX benefit $X range third is $XXX which had solutions million, XXX we second quarter second

$XXX a the already also expected ASC remain to revenue We Adjusted result for corporate EBITDA year-over-year XXX permission quarter offset million to of eliminations the with remainder expect benefit flat second and margins from that impact in deferrals. to sequentially, $XXX be million as of range $X is I the on the year. million overall of continued and improvements TES mentioned partially lower the by

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

up segments ASC the relates be solutions ramp wins. year-over-year versus contract, expected in fiscal strategic a of quarter where and revenue business our reiterating to as we slower connect of TES expectations result expectation business. as well assessment will the to due on strategic the RCM in Moving will guidance in revenue of new be prior fourth of is as analytics to stated of and subdued including year growth full timing due prior is XXXX our year repositioning X% the expectation analytics that full-year new revenue than a are to X% the which impact our of services software and the in guidance process previously the results customer Included improved XXX the a reported a with line imaging and

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

We XX% also growth X% expect year. this to net adjusted income in

in expect free for above of range expenses the $XXX year integration $XXX to $XXX Based to free be cash flow temporary also full excludes performance be on a and adjusted to million. that our million operating year to growth with million X% flow X% our and expect the expect X% that CapEx EBITDA cash we bookings We X% we're repositioning as see growth business continues we to year to next this year-to-date, of growth the for revenue year fiscal XXXX, our company to adjusted of well. as this returning

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

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

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

a delivered and We we Fredrik. excited opportunity our, to extend for continued by half XXX channel partners innovation work system. first drive you, and a and through than healthcare inspire more value our the position to leadership better customers remain XX,XXX Thank strong as

we forward. of advancement our the improvement strategy in to drive performance move and be will as foundation investments innovation operational accelerated continued Our

administrative Our members clinical working our improve and eliminate diligently for to are XX,XXX financial health enhance access team deliver day, care helping value consumers. optimize engagement outcomes and performance for customers them waste, to

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

Instructions] [Operator

Our Sachs. of first question Robert from comes Jones Goldman

is open. Your line

if in questions. was in a contract adjustment Thanks get I for the a like risk in accuracy said sounds on bookings some It highlighted. thanks. Great, a the you that doubled that to quarter you just heard Neil, mentioned couple RCM, looking payment of the correctly, quarter, taking behavior. little you bit wins more the number you in positive imaging, wins the of context

was would of truly wins course kind of things you I to Just to incremental and big of of across the these there. segments? you pacing characterize highlighted really previously where them a real number these is were of normal you guess any and relative business and how guys question sizable any

year. it just of double-digit to perfectly half growth it TES; bookings that what first was for the a the Sure, was previous relative the half about I said to talked accurate rate this be year in Bob,

be too to would there. So doubling bookings but just accurate wanted good be

business whole the across as In deals of say really is as adjustment, terms I our really to have RCM the ability thing I'd mentioned mentioned, portfolio, including imaging, InterQual the asked that the on above customers. relationship with ones these accuracy, risk our services, build business. of payments RCM, trend payment sort you you already we our

we other Every mentioned than our of single enterprise the these very one beginnings imaging the an pay displaced essentially logo. strategies competitor cross-sell example new of I significant where of that activities off. and seeing

I to so as that that's talked think And about note, we've point important previously.

XQ. Great, you pointed $X maybe I cadence, I half. the benefit that's heard half correctly, XXX helpful. expecting the like out, XXX $X sounded And million guess, Fredrik, in you on just to But up if million, back it a follow expense then over headwind back you're

the back to little So around make should the XQ? in XXX thinking pieces half $XX the moving what we look a maybe previously. folks could cause expect million in benefit cadence what different Just were want to than sure I understand

Yes, sure.

in S&A obviously about impact quarter biggest as headwind have quarter in we've third said be the the an most piece the we will from the TES negative well. million have third $X XXX but So also and a that of we the quarter is

$X expense benefit remainder this go $X a So to a on million for $X the in to on line. the down quarter, we that, to commission million that, year. million negative had will million benefit about it a the had - going to to on this we revenue quarter that's addition go of about quarter, swing are deferral a And the there we in $X that's so million addition and side, then $X

sequential you saw from in So the change you're seeing that's what of part why second reason a the quarter.

see kind fourth then of some quarter, would you those Got of the okay. items? it, And the of catch-up

remember, pull we you quarter revenue year-over-year. lot as first a of through Well,

second, is fourth. seeing $XX so have first into pickup between million, the offsets one side. $XX to most specifically, XXX a then and The of the revenue basic overall the positives bit see $XX revenue is third implementation of we quarter the we're quarter, on S&A about in but headwinds little the quarter full the TES And a million fourth million, the forward we impact S&A and quarter on the and but

third as second, the for the For quarter, third and say I when overall And adjust specifically the you we would think about fourth. XXX. the

I guidance to think full growth the for adjust adjusted is the you that our X% XXX gave on about to consistent X% the EBITDA line, guidance X% once side about on revenue with year out X%. we

consistent terms quarterly with the cadence changed in in our our from cadence of neither of our nothing and So has nor expectations expectation. really in our overall terms perspective full-year

Patnaik comes question next Manav Barclays. of from Our

open. is line Your

morning, just, Thank My have these line. highlighted also business? pipeline in you've again, context expected better of just all question had in or coming like in first you what than comment good your wins around in you been gentlemen. could retention the if And existing you. wins, Good is deal of

we FY'XX. Well, year supporting all overall to I benefiting trajectory to from in our the our increase looked mean cross-sell, X% X% in sales the revenue is at enterprise growth capabilities,

put our and or expectation. think So And these would we're expected from had we're what we are retention just efforts now of place. course examples, happen of transactions because the we of perspective, I an into examples to that's guidance year and and included for in this seeing attrition hoped kind that we tracking

of that. part data how could basic any little of and minuses then exchange. just And it. the maybe we color you the should was the I us benefits - there joining just guess announcement was AWS that being pluses about of on the a of yesterday I hoping think there Got And give

Sure.

it respective to this not bringing data yesterday use For seen and that data subscribe find, make fields to in the might leaders third-party for together have where AWS exchange cloud. they they people said announced in easy customers were securely their that to

As with easy insights which optimized information. a for is gets providing digest report geographies and launched, quarterly trend local we're this market to measures

our from set this IP Just data believe for analytic data an spectrum. We we AWS and population this as of to identify our based including compliant. procedure of the all ahead. at distribution data some aggregated the insights in that with financial and a into in report permission is all exchange continue data new is can months cost data small key we'll years customers who the provide our us of in lower and hopefully some insights the end-of-the-size that And Access benefit now other appropriately HIPAA example, leverage statistics, to on and utilization broader channel, and provides assets. health participating and

next Wieland comes Piper Sean Our of from Jaffray. question

line open. is Your

to your Thanks changing say landscape Good competitive shall we here? particular that ask Cerner, affecting cycle revenue very morning. go-to-market How strategy is much. de-emphasizing in Wanted about that. with the in

that are tethered I really Well, to go-to-market, of EHR any a think said, a that as broad affected hasn't we've it's But on long Sean. not optimization focus capabilities the recognition on to data circumstance. mentioned using be it particular really call, to our having to and is the I and that wins customers the improve some of analytics continues set revenue cycle attractive

on think focused remain see we and we're our the think I So I in strategy take up market. continuing to

that And one? so key on with call the you cancer Can the for center. out you of whether reasons highlighted win maybe some the that

with all software vendors our in scale our you and competition large it multiple products both services mean a complex would a I a of was facets was it as again head-to-head And the cycle I revenue mentioned, environment Yes, really expect. and as software institution.

I of help flow. value multiple was to to of large I our produce So aspects a ability our as have their very expectation in mentioned it say improving and process would cash terms

of from Blair. comes next Daniels question Ryan William Our

is open. line Your

Jared is morning. this Ryan Thanks hi, this for the for Yes, question. Haase

competitive of Just somewhat wanted to similar ask question landscape. a the on

about just advanced other the we the analytical curious in or of continued Just kind how proposition sort you resonate on of sort comment value clients, think capabilities. broadly you're with investments curious either artificial could more innovation intelligence around as if you think some the seeing business of about if of

Have thoughts competitive on And then the any situations? a proposition. as maybe follow-up. just sort seen there an value drive uptick rate in you in the win Just that of

Great. Well, questions, thanks Jared. for the

me with first Let the one. start

they are approach things of the themselves large we Change can value, that that either that as customers, them especially what that from as of with customers to that set think ability provide Healthcare industry well we grow that many value ROI seeking allows types our more fast we're broad on be seeing consolidation to small, growing being selling continued continues is important have to companies, not these do more the in financial and I a the of market, are to the that are among including industry than formed. buy with that formed, improve their efficiently or market continues our perhaps solutions see participants the as seeking companies resonate effectively the as do they can, in to to own as much larger can we well quickly companies are What performance.

because approach opportunities continue in we've win to and at effective of I I for as portfolio some that well think to ROI-based gave selling. services examples we rate continues and be upward. cross-selling that product And it's of move broad think we portfolio, sort as the looking to the that with seen

Our next Morgan. Lisa from Gill comes of question JP

open. Your line is

margin about want out I'm much. quarter, Great, down specific wondering it do anything just thanks in talk here there's or just Good very business the morning. going is profit and mix think was we to that if I sequentially. call gross to really the forward? just about how it

Yes in points have we expect basis of margin, of because took the year, we we the year-over-year improvements so of EBITDA at quarter the adjusted in that second some year-over-year of about XX the we we about XX EBITDA, the second the as acceleration actually first place. kind get initiatives quarter, basis to half points in look

if not versus to We margin the vary in XX% margin of from can on other. the the expect does why well. process a business this, bit primary a year metric, continued margin business margin don't big margin want year, as talked to forward expansion, this have but is going is it grow since one don't which expansion expansion because and part IPO you a about business, bit it little change next little emphasize that over And make clearly so the XX% we your we depending just quarter we faster story it the

there was EBITDA Thanks think specific where again we another? is margin, guys. is business margin versus anything better is margin talking it carrying it gross mix of than I as about a - gross Great. about margin, one's the gross

vary; through it same the Yes, is gross margin. does answer

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these more us follow-up and sounds you talked can us were remind like about question Okay, what than for they you a had expectations wins around quarter, my that then that's sales to of your incremental guidance helpful was fiscal expecting already just will just lot you the wins in through what income clearly just expectations and as you are model? how XXXX the it flow to them curious statement? that these about this how in were more will and had I'm So or just think for your the impact because curious of

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comes next of from Jailendra question Our Suisse. Singh Credit

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the you the quarter? lot. ramp realized talk you Good also talk about the synergies in a guys drivers morning. Maybe synergies half? the in expect you in behind about second Thanks Can the

Yes.

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opportunities push you healthcare implications then maybe and the about price my Change follow-up, from and for Okay this spend for some Healthcare Neil, on transparency time the can all from administration?

including the a the transparency. where cost one in price agencies, have and leaders federal around been providers we we've areas agencies, industry, state payers the Jail, Certainly, to the well and with our as ability to working everyone the of tremendous and impact price and It's because of insights around to as identified as of for the trends, data and amount have transparency we customers use them. data the have cost

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Connected year-to-date run you. Thank A your on the expectations to question it this for similar sounds like Analytics, is year.

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Yes.

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to Our guidance. assumptions that have terms in the part with either of will X% year that. top deal we we factored or a as that the headwind, will not but guidance to that's have fiscal is 'XX, that the line, in have X% of the into But

question comes Sandy next SunTrust. Draper of from Our

open. is line Your

Thanks.

get mute, technology Sorry, guys, I of myself off couldn't challenged. how to out figure

I a even for that think questions just about people to I using lower, you a years, that you're about my side Neil cost of cost AI you guess out take think Fredrik, to when thinking of I out X here. lot. so question is that about XX,XXX one I'm little about in the X you I is and how - taking When technologies, technology really number for growing this the can taking just think taking about from the use customer if and years. other out is because much costs, maybe is a about asked, bit have, when language that burden longer-term you're talked you or one the just that actually technology customer. So off the actually is much it how processing, could newer natural Thanks. cost be or think flat

No, is insight absolutely a both. great Sandy, that's and it

call AI fully expect to Wieland's own question services We earlier solutions. from the revenue cycle or But better Fredrik excluding the we've for RCM back as of us and years continued point software well underpins around as for provide efficiency points your as in using improvement going many sometimes operations uses, really into that we win, the to case us for the to seeing also customer robotic bear innovations, as AI performance fact, our the that for process margin some it, we operations as service them process of which that the call them. both In well automation great future. automation solutions bringing that Sean example arena in announced our about about our intelligent a that's improve

Stephanie Demko Our of question from next Citi. comes

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Yes.

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Yes.

can we up release of to they shareholders. a and providing this and and in our to and process started working their earnings is so, completely to to support So, and ultimately continue from the obviously to Neil up completely expect shareholders. that decision my terms here but within It's myself at is XX have that the is understanding update months exit shared team an McKesson something do whatever the will point. X

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

open. is line Your

for in Mike. is Thanks questions taking imaging. the on for Allen This

the talked think that then should launch. last quarter in how revenue How guys viewer expectations? You And XX? is we contribution through about fiscal Enterprise performing about versus that the

in like, It's your sounds performing and very as to know, it relative well expectations as you question.

You any launch. never product should on that in count

So great question. it's a - a it's great

gain wins; and roadmap for to our of their the that confidence the we of initial us modules of is reasons long-term solution initial our of both performance that fact large one the mentioned the some think turn why prospects the I I for imaging.

We've be of imaging lead we bringing and as in a a journey the will mentioned that to guidance expectations at really cloud-based industry included In we've platform. for enterprise our next this year. impact, our terms the that

the So discussions. that same we we see previous continue in to trajectory estimated had our

win other that similar exist? if partnership other you Can And about then, countries and any are any the congrats there global imaging or Ireland. countries in on European a drove what talk opportunity where

say deployed vision patient imaging, clinicians patients. I'm that of approaches a more to a number sort to of not really and get and other what obviously of a large to large how drove the with care was Well geography better and satisfaction on I'd common across their going clinician speculate some countries enterprise of

common already about So Irish vision approach cloud-based that us when and and Service that technology vision really you XXXX. Health different the decade-long a Executive modern including think now had that we fundamentally been the and drove start leverages as with a the between to technologies, a AI really what had way government continuation and of all partnership,

Our comes of next Grosslight question Leerink. Daniel SVB from

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Hi the guys, thanks taking for question.

changes which TES your You versus around attrition of contract eliminations contracts EBITDA million of the we elimination for $XX How TES of around should year. represents last the to and year, $XX previously attrition also those the around of - the of plant about TES, balance this grown you in in business, of think that in planned business to XX% of core core has year? cadence any noted million the prospects noted growth that X%

Sure. Good question.

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the continue business, X%. has core we see changed that terms of kind to nothing in of X.X% So to

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to So it fourth get progressively we quarter. easier once will the get

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conservatism? due So just XQ general through curious this XQ. much - was just is pull how from to and much of Thanks. how it And quarter that

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Our Gillmor Baird. next question comes of from Matthew

is open. line Your

sounds in new clients historically the in strategy. approach and different update on it for more thanks converting in minute of and siloed like Hey, you the if referenced, From take wins, get that sales it with resourcing far some was could past are to to and more an key to along question. you engaged was what's comments, Change the remind the us about you want Neil's enterprise these I enterprise how factor sales the how a a driving approach?

been question. as is members in some mentioned, process. team on the other mean, multiple prior thanks even times for the in process. multi-year executive through IPO Myself Matthew, during leadership This Yes, a cases, I the and multiple we have companies.

what results one plus and And so AI a customers and equals process I three in the intelligent capabilities. by our Analytics would do larger provide modular about senior among creating automation how data, to say comes are and understanding set The our we Yes, we executing our broad down of it a our it the systemically unique approach. it methodically. can one leveraging we executives and we're seeing really for an having in all of particular them

some are relatively and customers like went time, solution we of understanding they'd internal power different making a or when illustrated that data services such the or initial in a remarks. software we in a own to Analytics, their our through it that's progress but wins take number in customers large If solution creating why we especially large areas

that, as a Fredrik Fredrik discussion sounds then quarter. underlying follow-up there appreciate some there upside And the the on I benefit an like business, of I to was also network stronger additional performance it day. mean revenue solutions the the mentioned just were on mentioned, timing

more I think and just a for, those well. factors of also in driving better network? as and give I product penetration were of volumes sense there terms had you the stronger any if one underlying mentioned revenue were Can you think important growth us

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Our next Charles Cowen. question from of comes Rhyee

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and XX the Most questions I of know the customers you Charles. billion my from some asked, details opportunity outlined regarding you us but you're see, have some I of you cross-selling $X.X there's embedded James still benefits Hi, more top this level is cross-selling, level for previously as do within your think and been noted. cross-selling from cross-selling on payers expected. guidance provider you realizing of as give can

We do I Yes, question, of some I those and of that's given examples certainly James. the good think gave the just magnitude Yes. why contracts.

for enterprise feel you that about the that as well size to sure on asked all our people a broaden Just these opportunities by making sales executing portfolio. how other of question give we capability can this as understand

the and to around the software, they'd that fewer folks provide solutions, to data customers can them prospects like industry either expectation had attractive them especially to. fashion solutions that be services have more to a analytics, I we talking think vendors who where continues in in connectivity, can larger but consolidating do provide modular the among that it you we're

Will terms but think guess 'XX should how synergy, about flatter? it be synergy Okay, little a in great. And fiscal also we they throughout would the to similar ramp it or I ramp expected of are be 'XX. bit fiscal in

tailor our We going investors a ago. there becomes there. - with at are to opportunities really very to remember from to productivity, now, ongoing counting saying we of it's difficult for going $XXX of right it's the it's to productivity, stop as this think million general little beginning productivity the come we several then going can and I at it's be as I of and drive think to be then that a going accelerating end year. the logically delineation out at the because but more it, we're set then it's to going with be it what off And million this a going see should between just relatively down, $XXX consistent to we're as synergies years onset bit important year we're you -we're probably more get to throughout the transaction to

for that at, looking for but drive line synergies process to we many the good a questions margin the between automation come. have AI expansion earlier et years have of the of good into we also alluded some rest to continue productivity, So to sight line going of we're lot sight of that's cetera more to intelligent

George of Hill next Deutsche comes question Our from Bank.

open. is line Your

imaging taking Neil what's would a bookings And space little guess, Good you imaging logo. environment for ambulatory the market care talked acute competitive the or the decision and bit imaging functionalities to bookings you're first in question. based? seeing about whether morning, making handful could of the kind the for the could the you're be like seeing talk one guess bookings from Thanks. I I guys you process and more about for thanks is was about new demand the strength guess driving or you there? Fred, then concentration, I there space, significant a highlighted with respect of you talk broad more

me George, start on your Imaging Sure, question. let

to mentioned sounds expect there, And be it different you think well solution on some about as types might intent the are of quite proofed, you always mentioned. future as vendor I in a if radiology have like think these that's can how arenas, their call, have I of get certainly they centers. segments ambulatory which demand a historically, might the long-term much they're beginning support smaller a been on there's going the in of I not in that a from bit aggregators consolidation ambulatory different I do terms and the technology

network that see to solution we're environment. delivery a more leverage having side, more get on cloud integrated On believe is that a and hospitals focus the native people beginning do we or

the many the has centric AI an approach versus years. been for that so prevalent approach on premise departmental And industry in

we've an level then we're upward Enterprise see the trajectory and for we the approaches, platform. comfort Imaging course investing obviously to sorts So those continuing is why in of think the demand been of in which

we and in hopefully point about that our journey guidance broad confidence that on. the your as what is remarks, is see bookings second into and we with consistent in year will going proof visibility further in another even our and it's year next our Yes, of us in investors had expected question it terms prepared as said for hopefully, gives but the Healthcare also based, as well Change

on-prem? for a and what in if a sneak Neil, do versus you market could quick sense has I of follow-up, to Yes, the remained cloud the have moved percentage imaging

Well, stages. I the think early at we're

are made you So journey, the significant, years. on number move, more for as bad very decisions that lot have the the important of who commentary adoption rate process and may purpose, important intent is a prize take people implementation because a desire expressed also previous of remember, and size an imaging I these will the any but describe being the our is the there enterprise just actually not have think of we

we in are say a and progress desire it implementations. vision, be seeing a quarter-over-quarter will intent, would of I So of that terms percentage measured higher pace but of

Crescenzo remarks. I'd over no any back to de for are further questions. closing turn to the Neil like call There

support continued our company. dialog pleased all the every and the everybody. that of the our our customers The day of another quarter We for hard to continue partners to your on thank of and and who support Change Healthcare. forward as and value we very Well, members with very XX,XXX provide value. you and bring have team interest you work had much to appreciate look our we strong our journey We're

So thank you very much.

you Ladies for and participating. conference gentlemen, this concludes call. Thank today's

may You disconnect. now