Change Healthcare (CHNG) 9 Aug 202021 Q1 Earnings call transcript

Thank you for standing by, and welcome to the Earnings Conference Call of Chase Healthcare Inc. Q1 Fiscal Year '21. [Operator Instructions]. It is now my pleasure to turn the call over to your first speaker for today, Mr. Evan Smith, Senior Vice President, Investor Relations. begin. may you Sir,

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

remarks financial update, from results open for provide will Fredrik then Neil followed we'll and by After a outlook Neil. business closing the that, the for questions. review First, quarter and the will call

measures to Neil? With financial and I'll conference supplemental the Reconciliations supplement and appendix www.changehealthcare.com. accompanying over remind to the evaluate this Before more where our business. I Except financial the which we or everyone refer turn results conference Change we in in copies presentation. update the you detail included are GAAP earnings want may for in begin, of the call law, by obligation I that the the this earnings our today's release are that, from the Neil. filings. of reasons remind statement materially to suggested would are call any by results assumes non-GAAP like forward-looking that release on slides required in note Actual appropriate, SEC differ that Healthcare to measures also company's to at as our the website available no the information. slides include accompanying will measures comments statements. non-GAAP forward-looking several Investor Please to section financial call Relations comments in discussed included for to

Good everyone. morning, Thank Evan. you,

solution strengthen economic through our as customer impact initiatives long-term and current health and While improve our introductions to operational sales future moved both activity, position cost to decisively the new and productivity needs. well structure U.S. COVID-XX at as the to in through Change address continues market Healthcare we initiatives system care to and

We indicators are positive seeing with segments. across all X customers

slightly board, in expectations steady were deal continued bookings the size our above increase line across quarter rates. a First win or in our and average with

and Our time to cycles implementation be lines extended. slightly sales continue

COVID lead are digital enterprise we payers receiving and above strong initiatives result pre our generation across as sales marketing of a levels providers. and However, both

we conviction and Our findings by on consumer the further Healthcare to Index providers the explored the journey. Change the Experience is XXXX value and bringing innovation consumers health payers, are Poll care of Consumer which Harris supported

agreed from surveyed when health retail-like system. and believing consumers health plans delivery, most e-commerce fundamentally care they they health established experience have much care research of Connected will with know plans health interact cost Consumers paying step months and as work pandemic the care. said to so health from effectively and value consumers how is a accurate chore every journey the XX% digital COVID-XX Change providers costs as platform Our X/X COVID most More payers of don't that digital care. that overwhelmingly providers e-commerce want half treatment care that seeking in with health or the accessing much finding, of post pandemic drive the manage expect They speed consumers will the consumer. the adoption. a America change the visit Healthcare suite transparency. pre for patient our later. until of to for all-digital continues, offers site that as providers comprehensive to process mostly through well price requires surveyed or said Health most especially and help avoided care a are estimates seeking than Consumers, Consumer and

related physician a appointments, modernized details, and have price our for enable yielded patient and solution schedule patients to and to solutions. by and scalable platform. collaboration integrated, access providing benefit price that reviews, service on suite Health Applications service, bundling on enhanced from Consumer Our all Microsoft patients a the Connected to transparency with an and offers other touchless has experience prepay secure comparisons Adobe care, their features check-in and experience

I'll performance the chart in we our Now June, quarter. trends improve call outlined The financial Slide initial briefly on as highlight our X. indicated last early to continued the for since on

of quarter, we result, per of adjusted earnings the for solutions $XXX deliver million. million, diluted first were adjusted of to cash a of and share reporting per stronger-than-expected share over results $X.XX EBITDA As $XXX $XXX revenue free flow able million,

we and of drawn facility. the million on Given liquidity, performance our strength credit repaid $XXX entire the our

season; with While and outlook overall two, improved one, Texas, risk the during our in health expectation have to above and around our QX moderate utilization timeline occur trends maintain seen we some Arizona have for levels continued volatility impacts already as the such assumes July, year of of the following: have the throughout were backlog recognize the we the move Florida, into flu deferred hotspots care system other and three, in we and through U.S. states; on procedures. a the additional

While both in the and detail, not fiscal external Fredrik maintain to levels COVID levels remains will year to planning of utilization more our pre for outlook internal discuss believe our end return it resource prudent until will quarterly results we that guidance. and outlook our

franchises hospital of our are unique in of the AI value relationships recognizing In that the capabilities. our one multimillion-dollar accelerate continue payment More this position companies care and expanding contracts Health and weeks. X business, our payers quarter, to with the our multimillion-dollar our of country. systems demonstrated first challenges contract leverage coordination segments. signed workflow, all and on activities only several we expanding the crisis. went In assets COVID-XX, In initial optimizing system. in imaging continued and more across the regional business, solutions accuracy managed Accuracy and payer in sign our coming our RWJBarnabas largest innovation, and our a Payment Health deals an data structure industry's In of growth from we signed case, the results to we new front-end our including our our we of core benefit out despite Our cost leading the and Providence with first interest our performance from executed quarter to focus deals

and would and modules, health customers excess typically than cloud-native less new plan addition, launched Network than for This while helping for on-premise X Enterprise year as In module including productivity staffing which analytics, with tax needs. studies Imaging new an of X well now systems, workflows, Bronson imaging X an System take in improves efficiency our at our leading Healthcare organizational we which migrating surges use us as are related COVID-XX other in system. million more care months

with We business, we the of may be virtual they the last our by pipeline, are a now our RCM growing Services are success imaging number customers, continue strong our validated that demand believe confident into providers. deals, seeing combined experience. indicate Imaging imaging organizations that strong our that aggregators, value cloud-native solutions ever have system care realization In and selling telehealth from migration and we hospitals multimillion-dollar to and Enterprise winning

to in deal size trends be in pipeline continue our rates average addition, positive. win In

applications and patients critical in need United eligibility number remain our the for the patients. programs demand of was including regions the uninsured of completed This uninsured States. engagement During which given surge for in services across a portfolio, certain increase enrollment, helps government for and in increased digital quarter, the will

able select In our clinical which our addition, solutions locations the increased RCM or recognized. AI and where we a proprietary and and cost-effective growth optimal market deliver programs solution Underlying saw effectively providers here momentum to most and also expand how adoption determine care. is being transformation for building services, to analytics payers is demonstrate for provider develop helps particular to

deliver RCM They at & highlighted the innovation, delivery. for Change centricity are the aligned with Leadership RCM of for and industry ROI towards technology customers total investing such Frost in and earned market. forefront value-based being Healthcare we Product AI trends Specifically, as progressive care patient RCM Award Sullivan's as that

Moving Network Solutions in Solutions business segment. our fast-growing on to our Data

particular COVID-XX Data We over recently with now with institutions University, applications, expand Duke's and market the seminar. to research non-COVID-XX Disparities Combating have life continue during XX quarter. COVID-XX presented our at We in Duke related including offerings, financial and where services sciences both and insights with COVID strength engaged we

also collaborators Our COVID-XX de-identified data. basis fight comprehensive of diagnoses, a is critical that has of XX% the from note highly patient to view positive applications significant I Healthcare of providers social of solutions. Change ahead we all nearly on which care by and reception see had working health to and of prevalence determinants have introduced our continue our COVID-related us. including would of we partners and initial recently by the given in a for growth patient been data adoption data the will value underscores valued payers be We provide potential research such of to and disease, and our other tracing efficacy other the past instrumental and treatments, related a that and spread data. claims as our details

me of past few months. dozen the them a from Let briefly, review half

touchless room customers. solution health Our Consumer has provider Health significant among in waiting interest connected suite Connected -- suite's generated sales our

up by Our as interoperability interoperability they rule. patient the for are the health January being Connected plans to adopted CMS APIs deadline gear XXXX Consumer Health access meet

home allows result eliminates Our processes providers' solid trends. costly staff a as or positive initial NPX work of Connector pandemic. seeing These providers from Payments solution, acceptance urgent X while the accelerating paper-based are priorities payments. and is market NPX, National enrollment to administrative and manual for

to Connection payments, we and XX added the During quarter, new clinical Services pharmacy, & marketplace, API spanning medical network. our products

their and products, in-home over offers tests other testing. API already if an management, address help results. order find XX the record lab clinical or helps is it revenue transactions digital Just Change have over over and and unique for medical largest immediate Furthermore, improve Healthcare The quickly health to nationwide. now processing patient of for to XX identify order to per to enables and their one patients COVID-XX customers to payments labs, nation's collect January, we and providers a using portal service need, providing quarter. marketplace access typically diagnostic burden the providers access patients facility, do, power XX% fee-based. with on workflows provided API and eligibility prescription electronic of introduced providers they options lab fall the in networks, connections to market which free the network, place can to lab testing to results The solutions our labs Only recently million to speed XX cycle

like testing network. Our labs network leading providers home-testing to hospital being labs and and identify labs commercial access existing or COVID-XX the helping from tests new on improves by and new order ordered labs, for includes the regional companies, from

payers for and we cloud-based month, broader patient organizations interoperability clinical last retrieve the that Healthcare virtually range it launched of Finally, a new instantly from Change a records service, any solution easy to EHR. retrieval makes data

the For claim care the and satisfy an profiles, first fashion time, need optimize claims, manage as can electronic data accuracy, pay they verify get risk patient EDAs reporting payers such quality interventions. requirements integrated to in

chart to dependency enhance broad error information data. manual access only the is As limits efficiency access you contrasts with but care. and help patient on retrieval as we on around and offerings, reduce Based gathered improve number our these and is traditional volume could that demand and process new customer for the to continued human the costly, improve be to also our which see, could to expect of the of due feedback automated solutions scale innovative labor, engagement records and inefficient sheer subject we not

who outlook. turn review and we Now as call structure Fredrik? liquidity me have the to our financial as Fredrik performance initiatives financial over cost well and our will strengthen provide our to let the taken

good and the everyone. across importance these Thank the even X and I'm industry. health segments first of our challenging morning, to times, the you, strong of resilience care a Neil, face proving quarter report happy in and products

$X As million and $X and second new per is the of impact quarter reduced The in sales, of other our the part optimization million expected, launch million loss growth quarter in activities. and to adjusted the the revenue This investments year. in the in EBITDA by volumes and business rebounded faster growth quarter. offset incremental enterprise of sales negative prior by of quarter with million decrease to and the support utilization business COVID-XX net period EBITDA adjustments enabled was approximately same revenue $XXX Overall quarter impact the and the initiatives. to related in to of in reflects to a fair declined development M&A the million support and imaging year. $XX impact of solutions a new Starting of resulting loss impact diluted compared fiscal synergy in million million, prior which organic net adjustment $XXX revenue partially the per first fiscal fiscal for product or the for Neil $XX was This value realization diluted quarter M&A in quarter, of compared of enterprise income exit. our XXXX. $XX of Net increased combined the implementations revenue our per $X.XX full deferred continued net fiscal and of X, solutions decline was and the $X.XX the decline in million, the adjusted McKesson unit same Adjusted revenue income was first of discussed, guidance income the with outlook of the for resulting compared us with period and with net of COVID-XX net reflects wins as the income reflects adjusted offset $XXX or net associated $XXX XX.X%. net in of million the for which, EBITDA. activity, than for partially income year. adjusted $XXX deferred compared for quarter, Net Adjusted share the new was in with million XXXX. diluted was $X.XX of Adjusted XX.X%, Slide first share $X.XX activity diluted of million revenue per quarter unit surpass $XX

strategic a amortization of outstanding higher well as previously diluted by same reduction CapEx million a the fiscal offset and outlined. This exit As expense million result as as the to 'XX XXX prior McKesson quarter the year. is to our noted fiscal in the period earlier, lower in rate we in debt. per-share IPO shares the to tax partially was of which interest effect fully higher diluted related with outstanding the expense integration compared year-over-year give fully The also of results units first of XXX result

all of to Change and LLC. Change purposes, the equal a Healthcare For intents Inc. share is of Healthcare unit

Now of in X. let's segments more take look at a performance on the Slide our detail

discuss change. performance, to I the the want I highlight key Before

been During can things, quarter divestiture primarily extent, Connected respective business effective of in Analytics differs joint from member those risk EBITDA our corporate lesser FY the as $XX allocation found with prior other allocation presentation. for fiscal legacy businesses driven reportable of was consistent a & allocation the the imaging & that, the with 'XX, company's certain year-over-year. a and new declined payers administrative methodology venture's Therefore, RCM to in engagement Software revenue, implemented to contingency-based all X.X% and, impact in the years. first in by Software nonsubscription reportable to their utilized adjustment other expenses fiscal XX-Q methodology and we methodology be new and and the This solutions allocates the our our due and among COVID-XX, adjusted the be XX% recast of methodology. the a has decline as segment The recast well prior The year's segment results in in decrease to Starting the of our an segment earnings million. Analytics approximate Analytics segments.

coming the also stability and new saw bodes management well quarters. accuracy, decision in for underlying We in the solution and strength as Imaging capacity Enterprise which as payment well cloud-based wins support

approximately respectively, to overall We X%, impacted Services and PDX the approximately medical Our due segment, BXB solution of the implementation increased offset the health volume impacted the network which customers revenue business. business this correlation print include XX.X%. were lower growth to and Network solutions to and in COVID-XX. services negatively by the eRx hardest includes business BXB payments hit to declined by $XX RCM business In XX% from by network data spend. revenue drivers in due of was high and increased payments The its market Technology-Enabled COVID-XX of and TES due growth impact X.X% to primarily XX% from saw year-over-year, Key penetration business new and in and million. communication care approximately COVID-XX. XX% due

front, remains win track, size. turnaround trends positive RCM continue and rates deal RCM positive the our and in to see we effort On on

and RCM addition, business uptick further which transform business. support consolidation in we vendor as In to we continue an potential outsourcing Services should we continue see new to believe trends our

EBITDA. to Turning adjusted

declined investment mentioned as due period to product volume expansion the by driven underlying and mentioned earlier, related of was Software by franchises. launches our in impact In AI by Technology-Enabled and same significant COVID-XX fiscal driven as results impact print XX% key $XX COVID-XX in million other XX.X% year-over-year. I were and and The I growth COVID-XX increased negative driven RCM again million prior $XX revenue initiatives well imaging investments businesses. support and well the EBITDA by compared our services the enterprise EBITDA year to lower new declined as in support network lower to the the Network opportunities. of quarter consumer adjusted as number Solutions adjusted offset with to market in Services, primarily volumes transformation

discussed the quarter, from delayed million benefits initiatives in guidance results to last $XX our of excluded of we As the approximately during quarter. taken cost impact

flow payment and flow the year our resilience even our customer and prior confidence our quarter sheet us quarter in past Free million of the in was full and strong compared free our million to was cash base. biggest on period driver Slide timing, flow of $XXX to giving $XX Moving greater fiscal on diversity same the this year. cash better-than-expected cash of X. the in outlook customer The cash balance

the from of taxes. million from was payroll pandemic $XX payments in by $XXX to flow We $XX million the our loan quarter impact the the quarter million from Adjusted in first compared a free benefited fiscal $XX deferred last year. cash despite first million interest term also shift and

Although result cash COVID-XX, obviously our $XXX care in the next confidence a in fiscal strong the million to draw of and health to X remains year, our the of X in regards collection cash for uncertainty due quarter. in the flow remainder to in repaid our utilization as we months QX revolver the

credit liquidity portion, leverage remains ratio in cash revolver and ending end $XXX million quarter Total slightly of including cash and with agreement debt, the capacity. $XXX at quarter $X.X short-term strong, was billion, equivalents with of million over a Our net net cash of X.X. long-term under undrawn

move with supplemental information quarter, guidance for full Let's the and for for year. along certain financial Slide the assumptions XX second to fiscal

For to million solutions $XXX exit, to includes the second revenue the million; fair a quarter, due value expect be we to by which earnings EBITDA be impact revenue and per the reported million share reduction revenue will which second $XXX to per million $XXX to $XXX to in adjustment $X.XX $X.XX million; quarter related be of reduce to share. adjusted deferred in McKesson $XX to adjusted

COVID-XX. me requirements. high-teens relaxation XX% revenue and in about growth on which on In timing are negative are the by also quarter, XX% or the BXB claims decreased network second by The decline elective payers activity X% volumes is Technology-Enabled a XX% our volume volume subscription the a for decreases network about we you data on a revenue. mid-single-digit of impacting provide care software TES our by in renewal-based solutions lower currently stable. and additional due quarter. a in for volumes case due implementations, communication limited on fiscal RCM and impact in and contingency about X% consumer visits of and is increase EOB and Last, S&A and XX% each are expected we full and the Solutions, of and 'XX. services The procedure driven procedures, about impact reduction in our related in Network to revenue remaining to Services, to of of to In solutions, contingency-based while decline reporting trends, Let maintenance color assumptions timing In is some ERA we impacted driven year volumes represents expecting or the network businesses elective billing of activity for approximate decline is current COVID-XX. about about network XX% XX%, payments, In expecting services, information volume based and and also an which to revenue by by single analytics, anticipate number health is print of supplemental payment reduced let low by estimate in RCM which is have average impact digits segment. The approximately we second the reduced provide driven grow quarter. impact the me of states business with

remainder As I utilization assumption stated, health fiscal year. for continued the our current is of of improvement the throughout gradual

in approximately are integration-related line as expected fiscal excluding excluding $XXX prior expect change CapEx 'XX expenditures, full $XXX million. adjustments from still the COVID-XX impact. of revenue, between with be impact $XX of we value estimated solutions to Integration-related approximately year quarter. spending flow Capital capital manage to the is expenditure approximately We $XX free be million. Integration-related operating X% fair cash and to million million. the expenditures No

We be of expect outstanding includes basic the $XXX shares in will number $XXX fiscal Adjusted and the million minimum approximately TEUs. million diluted which and of about million range shares of $XXX for fully rate for XX% year. effective the to tax expense the interest

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

you, Thank Fredrik.

longer-term close months me summarizing our remarks what have our well past we over Let learned views. as prepared aspects as some of key few by the

have we results to the picks from even already sales. overall benefits as up, as naturally health we care improve will activity First, new will see seen, our prior

we period third, will to enhance the These COVID-XX. our this we impacts from and improve important our solutions us streamline we enable of excellence and COVID-XX. our engagement are operations, Second, even operational the cost structure provide to increase to revenue initiatives as emerge continue given actions stronger. impact of more even And the navigate

you, continue members in communities our for customers, to and our Change While and there in remains we partners economy, system the challenges team and serve. our care will the live drive resiliency will health for Thank take Healthcare commitment U.S. questions. and now of the we value strength,

And our of from the question [Operator from line comes Instructions]. Barclays. first Manav Patnaik

the margins segment. had just by a question I around

you the each the we of how segments was margin targets now be the cetera. should cost, could long-term some you about. maybe So or obviously should reallocated about those think what us we hoping color give for are on et just I targets thinking what

Yes.

So obviously, of bit allocated we it out changed now a of all full as corporate all little the -- the have costs.

if the at think I I think -- our segments, look in year you -- last and by XX-Q you have presentation. that the in earnings and

will I said think obviously, to year starting And a to we've going we segments. and Obviously, point, by three. because, bit But margins XX% SSI the publicly be different. a good we by in little about across we to company. good opportunities expect each first vary so last the whole a year from year XXX -- a all and those XX% improve there, the of public with year, little for feel company. drive first the pretty Each margin bit that's is it's to forth as expansion

the I So changed, think That restated. baseline we've that 'XX. you has FY given fundamentally has which anything now for don't been changed, except has

converting portfolio tested looking if of subscriptions. more was volume-related one were any it. people. And lot think into defenses what you're about is areas then question. just the at COVID broader means for recurring there that curious has that you want and Got just a and to obviously I

that. I that's look question. mean, We a do at I good think Yes.

to what best some us because accelerate our really growth we've share. we I In customer and have and it value arrangements perspective be had them, to a down that think they more comes to general the ability provided, pricing transaction-based their from felt, approach. M contracting or allows where go to the market to -- per cases, and type cost PMPM P consistency a valuable just something might and decided it forecast PM

So the that on that, bring our flexible gains. we're best one things we really it gain your to and is It's way to to customers. the link pretty what's of

any say there's point. happen, been does this at but wouldn't So wholesale it I change

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

Allen is for Mike. This in

bottom is free the assumptions the range? and frame there any top the what utilization are guidance, at Looking to cash way embedded of at flow end

Fredrik. is This

that this to the quarter $XXX based point will where it's than was from about presentation And we going that than not is gradual so so our little recovery shared that recovery down. things in $XXX range collection average utilization driven stand and a million is million bit have we assumption here a is the is be the the XX% today, our working more from So The where more down. around patterns we on The a far assumption actual X% more changes. this at around slow capital point to other and by there. It's utilization gradual much the itself. last

you mentioned dispersion the then the you on of COVID between up June and the following point, there geographical the then some cases gone of And is hotspots utilization Great. anything have can places about down? say about where some and July

our think doesn't really so provide et material it on we've seeing as caseloads for we variability because implying a admissions, I given and cetera. of in overall X. Slide inpatient the impact line are Well, the example, we around broad, network of the all services trend different sort are and issues shared, the have you're that But

really wouldn't news anything about in So be we there that from known that whatnot. and you see provide caseloads isn't what just would already the

many really at challenges it way forecast crunch impact us, run hotspots or the in services where periods see it the fortunately, caseloads, we -- and look had the have or -- confident our way for business growth overall the think given currently, overall progressing. But of these our then the and cases hasn't helped into the keep are breadth on an them least of this. they've and network, at are decrease coming in a our material capabilities we the the and operational is We perspective. from very way and I customers

Our comes next Jailendra from question from of Crédit Singh line the Suisse.

Yes. This Singh. is Jailendra

like guys your than past here. COVID trending true on And for volumes over was below that at positioning back? So you on say is well we that it same dollar COVID, trying have at comments months, around also to or that fair pre volumes Just months what as and much understand the is on solutions comparing better X% line level now company's pre products new better X, it dollar is volumes X are with than the part, volume pre are to transaction launched apples-to-apples the it COVID? X

Yes.

Let to the me first, first question Jailendra. get

right? differs, think is which average been been I seen it amount, a a what so overall hasn't like but dramatic the of in asking, kind in And haven't we change big -- country, you're change that. it the obviously, claim there's across

I you been a there's federal the as and lot of to think, provider other government support means. provided community from the well know, as

seen network. COVID times I second expense, will, sort it. claims if don't so changes coming I'm see not caught yet any come to relative in that your And you we again? of Could the the question think through I sure quite we've to particular pre you

I to understand want Yes. that.

months operate or of much current to today pre back in Just terms similar profile? right Change is to X, Now COVID COVID. that at the level trying X X and at need Do volume a company that that the like your better understand you're a you products months, operating have taking a positioning back. you I'm trying versus to launched seeing company several now level come of volume solutions volume think will Healthcare X, past understand just you level advantage really over at growth pre X, to versus

year saw Got into described, know think growth we I the pillar the IPO, ability as any it our growth customer the quite to Yes. really in then as our changes foreseen, for innovation. versus after trajectory, well obviously what which us even -- more question. this but base some of health us sell I was the we both now. care, we really Good had had as general third

So these all these of the works the saw, of some imagine, you -- or over can announcements the some breadth areas. a innovation the mentioned time, these solution the for quite quarter last of that have as you in you been lot given including so,

utilization. mentioned as be dramatic occurred and But both the power in return back in a that out element trends benefit addition, innovative health the So COVID. I growth of these more terms do of new to solutions that care the we continuing our will from in get expect care I we to under we think underlying the health to changes typical particularly system third

And for Fredrik. just one follow-up quick

results, So second which fiscal included you debt not I this true expense and was million that think additional your in fiscal fiscal is when million outlook? $XX $XX reflected of still overhead, quarter. extra repeat to Is guidance, that $XX in cost gave of cost, quarter first quarter million expected second bad and

Yes.

things there. two So

the $XX cost obviously, we to those delayed going to are So when of need to we takeout, volume returning, starting as add million comes back, do we're that. see to already it and resources

to margin of back in the be glad obviously, don't and incremental of productivity. What drive back come the job doing the to back revenue So to we'd the And managing and team of volume on to some we going is to it's that one-for-one good add incremental terms associated, do make a of resources. want we resource very because we're sure some is the trying add side. the

as in see in prepared collections. not debt did we we our terms anticipated you On heard remarks, had the the impact delayed of bad side, that

prudent. think we wasn't as to was As end it a We the that high in thought don't were so to range. all kind did would debt. on not some out to upper impact have single had severe of impact But it health we yet, the are thought more of We of that take go our still completely bad systems mid- in to as of result, we originally. there. the digits that have terms We woods

Your of Davis next the Stephanie line comes SVB. question from from

quarter. the on Congrats

Change. I forward, get about remarks. stronger efficiencies update from lighter on of a to check an And there and around you thinking pandemic given prepared in your any for efficiencies more takeaways long-term on want and workforce? are clients lot within your changes You Are just of a making mentioned productivity the results looking any nature? these

Stephanie. a It's good question, Yes.

dynamism help Fredrik run. and also talked call as even forced business, long somewhat understand all that how things, the into let's make our of I about of got us us into we one the can is, that in earnings last in think I the injecting really the sure

the we even focus us said, you level how and to to as to really the us have going continue of that done work enhancements, we And crisis, that from accelerate we've revenue our has helped can and and the dynamism savings apply resources home about cetera, allowed and et service. customers the working and think productivity think our how forward. quality of in we metrics productivity through I on to So provide now continue the the obviously,

help we continue about like pretty from think productivity the the a But process. everybody that our we're And long we we, previously. margin So that, lot learning I continued enhance run, services still is with I will that else, helped it us enhancement obviously, this talked to of the in confident provide. think

question guidance full guidance. seen emphasized things skewed your for conservative. not client quick versus are And should a Last estimates about year what volumes? guidance that you've you How the across just starting Why on Fredrik. issue think quarter, XQ And a one how this Helpful. we Understood. off? for given

free in we the side clearly, well. results were helping full came quicker our terms clearly, of things cash it's now Obviously, first and delighted the on flow Yes. and than the our at that expected. And year, quarter we're fact the we as for had conservative Clearly, back guidance.

care, that the smaller not across frankly until just that variation there isn't see it's getting you see versus are back levels, across a that pre assume levels there's a it's think to a back health to As to of reasonable, now lot all a I I of that and to COVID prudent, it's much And us much vaccine we hard mean, place still not because see getting that decline way different in -- COVID left. we back to just activities. pre

this throughout And the so recovery our of kind we why gradual very that's maintained rest fiscal year. of

terms fourth in of that year-over-year, the and being somewhat productivity by quarter the in expecting you us terms guess so some in year in obviously, part end volumes an now. flat given quarter, incremental with have gains what decline we In and guidance, synergies. degree, We've point offset products question second about we're think the second forth I we average essentially front the of full and right of guidance to the your is of

really there so the is between, third in And quarter.

thing path I So we've There it could accelerated setting degree, the our and growth to of you where drive come from point a the capable are for think know that the our makes some a I But that mean, that for on year. of. perspective, year. sort businesses rest sense full key kind of the management given of to 'XX portfolio as we're team now FY up ourselves of we to is focusing really the

Our Goldman Sachs. next question comes Jones from the line Robert from of

Rogoff Jack Bob. is for This on Great.

it correctly, care recall this you because but Accuracy quarter or I be Payment in if expected what in challenged health of a out curious like as it of it business. called you utilization line to Was else? better-than-expected something So utilizations, first happened lower was previously strength. just looks it I'm

Jack, bit. parse to just Well, that little a

I payers contracts what gains QX. out in market multimillion-dollar we strength share new the think with called we a through is particularly as had

that. on be So just clear to

of from Accuracy there seeing and back I of were restrictions the some of some to occurred that did We're you're of some then. normal. the states think you get obviously because that now practices -- Payment market in payers as well-aware, changes the

in in So our it's QX were different there occurring still a you a the was from of emergency that in states. lot circumstances when almost will, rebound, and place if actions put

coming it back. see we So

just the clear, of I we business to put remarks place that deals had were So particularly our very remains what new sense. QX, prepared some be in if mentioned in that that makes in strong. But

contributions you've or the API channel recent I Yes. it Very to the too this move And a And in as needle? think utility about quarters. pretty then number sales quarter from is Is nascent there to the the there helpful. in a marketplace talked lot is intuitive. far as

No.

I think growth. to the help just continues it accelerate

processes mentioned, solutions, a prior this, some Fredrik think been pandemic. through in be our we good cases solutions were As the have to on planning I And provided want trajectory COVID architected people SaaS-based to where and we to then them for we've into services their or easiest with services going our intellectual APIs and to customers around wrap the through way inject it and channel where our be to the property processes partners. and that's capabilities uptake

another be particularly acceleration to rate of to going the out we growth just contributory expect element COVID we it's as pandemic. come to So see the that

next from question Lisa line JPMorgan. of comes Our Gill the from

bounced come clients just and stimulus for and has on speak your Can demand of back you It's Lisa. looks how to the Annie health the has environment utilization through? financial currently given

of thinking around to we prudent X uncertainty Annie. ago tried Yes, months I Fredrik that. I'm as or about mentioned, sure remember the this. you'll amount only huge be mean, X

is support uncertainty of in reasons the and as more of Obviously, XX think clearly some to the the means government negotiations an in return issues we dire to on about are the them have the had we've and that's somewhat vaccine obviously one predictions why the for provided a by a think think this impact. them, normalcy, places how regarding customers haven't I some prior next months maybe is given the thinking seen what continue others the I about our Washington. that been to certainly been federal But a of given what that's to had. there's that seen has number financing going I are that's as still going much

of over the about XX,XXX for surprising perhaps, as And wherewithal the people, elements get others. the in through a by provided also course, dynamic of smaller are of customers I progresses a ahead. strength this. inherent a in or We to that in have that this large, at rural spectrum. some I of Health serve of But that's included, And do all been how number care and concerned of the clearly, of pretty been course, some, ourselves think, always, volatility have and some various financial through situation. size months providers example, in market. health has don't the support much areas, a lot of has get federal to we'll with ability -- to think next But see there's the had agencies by it to practices

marketplace? the environment in any opportunities the just given consolidation hear. seen And changes disruption have to That's great the to or you competitive

some we the Annie, pharmacy network. quarter, you I expanding in -- the as we mean Yes. in acquisitions know, our made business particularly

to continue more for need as I the partners the consolidates think we're to these broader-scaled entities. for see industry going

the we fact M&A value on we've is one commercial the working excited the a over I companies. provide And is of think long companies. that of of these can smaller back with smaller that done most we're years the about the things sometimes relationship with

the continue a it's think as going be historically, been more you that. care we're market system continues bit then of into to little and health I a will from in benefit So to hopefully to out less itself see the silos in consolidation continue to the broken

comes next from line Our Sandler. Piper from Sean question Wieland of the

data interoperability rule, is provider just about quarters. like on CMS and meaningful directory briefly the an opportunity go-to-market there in more a your patient for you strategy that the it learn I'd mentioned and for So data. coming little bit you to how

rather you that Yes. a with period prior were And know, rules, Sean, being I NCE, involved. all, the had worked mean, extensively first of we as folks to all different CMS, issued. lengthy had those them

in were for had who I postponed offerings. access they all I hopeful then or going terms And don't X series particularly where And be And implementation our free system of that requires of the of just months of we up a we able really that with value interoperability built COVID. were But some be to to us I people being the to uncertainty bit imagine, ago, take not significant continue add what a with our something it's working you the to announced our continuing number more them grappling, But really done think able embed And company, is directly. a around We're take payers customers. our of would growth the X their APIs. it's it's -- can given as accelerant also to rate. it's are developed breadth with beyond to And in so than huge customers. company overall deadline ones during January. APIs that to advantage up them because to a think time we the

X out, something to the they said be enforcement Some final of to has X postponed realized X X over rules came been needed that subsequent months. only or next people months. when the But do months these ago general, in

and And So new this fortunately, for payer seen strong customers smaller demand offering. kind help them. and there customers very to including our of we've we're from

the Great. COVID-XX, collect Are it or government in collection related the meaningful to all program And data. interoperability, Connect data that there? the COVID-XX involved like doing sounds with you could related on anything of to program at a contribution HHS have you in

Yes. We're Secretary working this. of the with around José Azar programs Under part Arietta, CMS many CIO, as

than data to really good it's sort they've put things would already or -- agencies case allow manual and of been to that a because be data the collection So faster system new and in they that they're some relationship will they federal or I think the trying versus to the data -- be them, a of to collection cognizant fact available aspects. help be place been that's the rails of may want do, initiating otherwise

collected has really among The thing working know, and think reasons, of is or we've I is for other you important for, with appreciated submission often understand, as for data to others, been that everyone our other that, and billing them billing.

providers for there's of and operating being a basis the of so And natural special an it. emergency not part It's on to quality a purpose. sort element just collected of It's mechanisms basically others.

appreciated also they've something as well. that's think I So

Your of from next from question Cowen. the Charles Rhyee comes line

on James for actually It's Charles.

for how -- the the you a Also Can your XX% hotspots revenue Texas customers do Florida? exposure quarter. COVID and of declines potential have if that for to impact assuming like decline us the RCM tell much from assumes like contingency-based second these areas? in You're

we broad very business. think a I have Well,

do and code some of that this to there state down down that business level, as we've all looked the flair-ups. looked level, hotspot really with that to of breadth XX the even And impact our be in seen done it So at some would forecasting fact we actually, operate and haven't fact in at ZIP cases, the states. and our and material comes a a a we the

to other RCM that for system. kind XX% And the of -- there's lag clarify revenue thing, XX% activity versus services care health network also It's in fact of the around just between the claims. the terms just the a Yes. our the in more and

the the of that's there. X, if asking were driving kind X% So of difference you clarification for kind between

speak that us? And so, Okay. with synergy of that the Great. you and integration opportunities? identified is and could also And eRx revenue have you If can to PDX? How you progressing? share cost

of decades. out. organizations. one part literally all, company Sure, And first well. James. also network the then progressing brought spun in. X company We got Well, The it before Again, part we've these back it of obviously the worked it's for was is PDX with are

through expected synergies. So the smoothly I'll has we And as the of to. financial And proceeding about it going talk some maybe are let certainly been integration to Fredrik aspects. very get advantages we

Yes. synergies can million over but we No, we of to yet. that we really quantified about there's the And haven't additional realize $XX next expect then that years X synergies, there. X we think ultimately revenue

Our from the Gillmor next question Baird. from comes of Matthew line

that. about myself. I muted Sorry

and was On the hoping Neil front, slightly. from talked over had a And that recovery could with you the details improvement perspective utilization you have dynamic. any cycle about past provide some I the month? sales extending cycle on bookings seen the sales

Yes.

is and in are our things well aware activity Clearly, be around going people that our to understand challenges sales travel other I to an industry the you'd cycle. the given just think bit even trying there's especially customers still a of of. extended how our and own work air sales

We are it was it pandemic. the is before customers. now selective meeting more with Again, than

months side what and back are up you for, say were the probably completely self-evident. they're in on payer sales to ago. side provider We are some find relative cycles I the pretty They wouldn't more X seeing they tighten normal. reasons or X again, to instances,

people we're on of to that I where not want a proximity. lot an think still to there's customers going a challenges our our era having but So to but on on with work these understand normalcy, I'd only us, interactions have they with also physical track say back of there's mobility and in how lot

George from of Hill Bank. question line comes the Your Deutsche from next

for Charlotte on is George. This

will service, revenue model whether opportunity new about how work the data you and market clinical will be it or can and the On discuss the should there? transaction-based then be how retrieval subscription we thinking

the obviously, clinical Well, early data been lot days, Yes. of importance that of appreciated promise think during it's than probably now we're because but seeing the -- I of the pandemic. a has never better in

last million the we've moved XX about we've about records Over medical about each for think moved is weeks just I records $X And which almost around week. June. so, from XX X now, million I think, or million up people,

the of substantial which opportunity cases use So by it specific data. is is under data used us. The or payers need is others a who for to that growth it the use very

say, will in circumstances the very really But different. I'd we So be a, will paradigm it create of think, it the country. transaction-oriented the demand a of But data expect significant bit we way use a of cases, in that some to be in given sort generally of the overall, probably to case to who person the the typical the the value speaking, a the that's I need business complexity be pricing comes. over to of relates business to It a the time. helped -- specific or really

It now will data. relative the it's pricing reality for come will mentioned, to different scale. the specific But substantially mechanism see need I more cases unique this As at the be to who use pretty finally to be transaction-oriented. into primarily people the starting

Daniels from comes William Ryan question line the of next Your from Blair.

one Haase the for guidance. revenue Jared just is in This QX Ryan. on Maybe

to that, get the Just you volume of should of larger the Any end that there Just should high of about or utilization with range. as come to to of factors that end potential think sense the to low deals -- that we we mostly kind range range, things a potential low think of of that or be thinking kind the about kind sort related the of high from the are sort of we the of? any from to swing or of the of issues potential as trying sort expected activity are the variance end sales like through? get swing cycle variance being you factors end

Yes.

a is dependent clearly volume-dependent. you I especially it's the right. this the It X our business is #X on and in at It and say then deal I months XX% CM think the timing less when is network in you're have point utilization-driven. quarter. in of in S&A driver services much there the would in that left

could driver have You forth. here revenue deal the comes overall good slip utilization. visibility that But our something pretty cycles. always is There's bigger and to it into when performance so

point, than that? but utilization. earnings So and we ago Clearly could, release, the we've decline. is led seen magnitude overperformance there. than last now Could down a kind better XX% a a far market rapid of the at the that we're were we obviously of so much just because But snapback months in the earlier, a as it it comeback little terms was such saw looking it few our to that of smaller variance I bit this between said at go

on with Maybe more recurring nature. efforts. then enterprise that an That's broader of to update kind cross-selling quick maybe effort helpful. the and just the a of Got of one just selling That's And sort transition follow-up. an obviously themes it. of been of things

maybe think billion I past, for cross-selling. a in Neil, you mentioned So the potential $X.X opportunity

builds rest for So expectations maybe progressing, impacted year? that that that's and on sort QX just the of of how sort into how the of updates any how

a No, Yes. question. great think I that's

in business, Some multimillion-dollar RCM of taken. sales the Accuracy, we've the Payment our enterprise approach really business, Imaging services benefited our has that I mentioned, whether deals that from

people looked we obviously, they to had. as with over very I existing provider services relationships as as in were expand to the They continue stressed, QX. side, on at customers, new the of had the areas already strong that think so course services well particularly our

et As we XX% a we the imagine, cetera. working service can of XX%, cases, might institutions expand the some you can in then hospitals, XX%, be with at XXX%,

had we business So in be obviously, successful a our pretty a uncertainty, quarter. driver extreme a think still was period our and continues which that I why QX, to of even, of sales

the Your comes line next Daniel of Citi. Grosslight from question from

want cadence quarterly the Congrats rest on to the just the back the for quarter here. I year. of to go

you think previously your think the negative to later COVID I kind cadence impact that year. steady in cutting of you've from kind to get half of quarter until quarterly the mentioned state each fiscal of about in

being each still think So of of the does the of assumption as throughout quarter? year negative hold? kind that we the Should we rest in impact cut half move

Yes.

in utilization, proxy And has first quarter about my line we the for today. gave versus guidance as the in quarter. -- we fourth quarter now the first of we XX% the down slope the claims the obviously, of data think, about say the kind think the for versus a we we the changed here and I when where use guidance the think that, as are in

year there, I the should straight think is draw basically think a to line about way from you the end it. to the of

rapid was of a So of point few the comeback utilization. very just the is concept and different the the a end because it but same, months slope of the line ago than is

normalization? linear progression -- we should that Got assumes it. so assume it to a But

correct. is That Yes.

they And until full -- you kind with of to it. new, at kind Got imaging or are down are to some if adding Providence. to side, settle follow-up on suite able imaging of a do just COVID? some new have implement of going things And the wins you them? then these you your cloud are you be Were on the this -- and just kind RWJ clients good modules to or have year wait

through I all, cases, cases, -- vendors. customers. existing major in processes competitive first actually wins RFP against so Well, were of industry In other other were they the some mean these

mix. of So a it's bit a

the Sometimes it's the latter. sometimes former,

solution from really on-premise to And solution. based the capabilities cloud-based cloud-based have particular implementation, rapid migrate the our systems of things a I is that's one of of as approach. upon cloud-based terms if to the inherent in with ability you a some In we mentioned, have technical

especially And could So data about what's more for think rapidly. been that new case the the than they how of will. historically. implemented in you we having do any absolutely that some the these frankly, going implementation, they're system these to I much They happen management But And we given change rapidly. have actual when deal do of that really challenges implementations little gave bit I it systems, of are the being institution's be implementation you core of fast speed more sort with to if new think with that. on organizations cloud-based will, with point, our with solutions. the the if going to new than more And inevitable many your it is have, far break, the gave ability a a still fact the provider you world, theoretical on on

as we as as of providers. of really break today, out a the will that's going expect here sit implementation in of hopefully in more on probably will over once surprisingly do things And go disruption But average we systemic we bit time basis the these some there's still down. get fast So the a they time pandemic. not

Securities. next Your Sandy question of Truist comes from Draper from the line

gained guess most question. so smaller that questions the bundles maybe in past, guy telehealth-related obligatory you've I'll of my traction asked, This Sandy. providers. I said for ask be telehealth selling have your is and been Stan you've on the know towards I

curious kind seen this what quarter Just uptake of past you've

of as come uptake vendors. from including telehealth I think our talked during -- that and the API I does remarks, uptake, well about prepared Yes. and some Good

cross-selling begin question with I we is that So with companies to the us wallet capabilities relationship smaller back to opportunity, start a them. then could that but on may tied these some on some things what's share think have discovering and they do for an often the of other basis, been of good really API

us. care, aware, follow-up of relationships it's been these health, And aspects specialties, the are services telehealth a as vendors historically, are starting some fact, developed the of so primary cetera, given AI original of business, operating incremental that companies are over back period they years. that really care had some of I'm growth sure increasingly the In of expanding commercial even through billing versus more beyond for insurers et they as great their having, a of you're the to areas pure opportunity office have our RCM for these models, might for fortunately, we apply some visits these not

bigger develop letting expansion, of was get players, as then newer can they've the for they expand. us, well-funded and of to get on us the VCs we a others relationship, more sort cross-selling while. dynamic the this easy they very around some do by of things of It the more do technically very and board some more So opportunities been opportunity, an through but with of we and companies,

the line of comes question Next from Larsen Verity. David from

Congratulations on quarter. good a

And as term, to X% adjusted X% top longer like terms X% reasonable? to the is that growth, of in still is sort of move line X% EBITDA still Just growth, goal? we past pandemic

that I more But and additional to the X% X% set next kind an interim from the product obviously X% Well, X% getting because you capability introduction work target strategic we X% think to consistent to step. the that to and of our solution we're in were going additional the the of And also we from think a our we includes around X% there, X%. that. a than plan. been to we've that a or tell number warrant growth of But portfolio that part capacity have we X% higher should IPO is of were to underlying cognizant

as masked so FY is where certainly we underlying the long it's base to that. specific we But right higher to because than been you something that going growth -- obviously an that now rate clearly, by that be move low, going is we about think than forward, as 'XX, the X% significantly term. but are But So the as X%, greater pandemic. over we expect forward, is

Okay.

be then fiscal just as to pass growth. into planned some line fully an TES, Are some We'll 'XX fiscal enter I we see going that has know easier had been And 'XX? with top So attrition. good there comp. we

impacting only starting of still half lot business the second half of second to going that and have is were services other we attrition Yes. The the We part third have in leaving customer. quarter year I leave large one relationship release actually impacting here of in we the on us attrition the customer the passed one was this. that our earnings think, it's announced, The is a But already. additional really planned us that with that predominantly.

we that forward. And that business at so TES least doing things that that other itself. impact going and we're hope growth But drag we the on obviously, have will new will there partially offset

line comes of Percoco Research. last Lark Our question Stephen from the from

a just could in One, revenue the couple eRx I give us quick you acquisitions, PDX? of quarter here. the questions from benefit have and

was in benefit of Sure. the million about Connected S&A, Analytics two the obviously, $XX negative quarter. And of because sale had impact those a $XX from we The in million.

revenue the impact on million favorable. overall, So about was $X

to on McKesson Okay. exit? presume, purchase will reduced revenues. the increase And how accounting The impact understand I that that $XX How secondly, and adjustment was your offset, It forward? work revenues. me going could deferred help an million the results you does

up so to second was impact our result the million the million is the transaction years that first $XX first and we now million was Well, next is really quarter. fourth $XX in was in about going this the it the that, scheduled so revenue you quarter, million accounting it exited outlined the and fact the million And purchase really back, $X It happened necessitated third that merged in with was And through ago. then just to It's Healthcare accounting. Change LLC. out. in down the of tax-free never that set part something $XX we step the $XX to deferred where merger as nature purchase in write-down a $XX when the Change to accounting year purchase the there's in Healthcare half exit had quarter, by really as perspective was the because $XXX that original effectuated million. McKesson We've a they a of of year. go Inc. process, until And from three in million

that And through so we're this here going at point.

So the really really any flow in way, the of it kind company doesn't of cash adjusted impact impact it form. or doesn't and generation EBITDA, the shape

million Okay. was reduction what a offset? revenues, was But if the of $XX

accounting up goodwill you The our was offset year-over-year, as cash And difference. you at set It look part overall the see was set it balance in the purchase in the if flow and sheet. statement as on the way that that of well deferred the can up revenue?

Please There continue. are time. no further questions at this

for our the service. for very period been to system. continue customers this Also all care everybody and were quality in. thanks of during innovate you team continuity the services Again, trying with very We've provide in right. and to pleased Well, through our we're able for of States our able calling U.S. All our time service the health very the the way around United world. this members to difficult and of

to described the So financial we've QX QX now to performance to for and stability value our we're seen and going you've to provide as well. continue have We're customers. in fortunate that and innovation

in customers earnings in look you seeing with call. behalf continue hard of and we forward So the the on touch our to we'll industry, and quarter QX during our to many keeping you work of then on

thank So you very much.

This concludes Thank joining. today's all conference for call. you

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