Sharecare (SHCR) 12 May 222022 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Sharecare First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today’s conference is being recorded. now today, hand President Evan and Relations. would to conference of I Investor speaker your Smith, Instructions] like the to over Finance [Operator Senior Vice Please ahead. go

morning and Leading webcast. [Operator opportunity will Chairman This quarter Jeff Good and Thank and Sharecare's of Smith, be today's to Instructions] Mr. welcome today's Investor Arnold, conference and earnings an Relations. is first After you. call Mr. call are fiscal and CEO; SVP XXXX questions. Finance Evan ask to there presentation,

and Ferrero, is today of Justin be the Officer. being section recorded Chief later President Financial recording Today's and on available of relations website. call the investor an archive our will

be to uncertainties you statements expectations These Act to information includes various meaning would we year the statements XXXX provision forward-looking of we assumptions beliefs, the to Before which safe will the guidance. currently XXXX that and Reform reflect statements remind and Litigation begin, Private Securities full harbor and available second within us. made like are subject our certain on our of of call and forward-looking during our quarter risks based this current

statement statements forward-looking we year will the detail XXXX. of believe are we more the expectations in from XX, in with actual discussed revise XX-K changes materially section factors cause the results factors risk no including are of of occur the December filings differ SEC these our to ended some reflect reasonable, these for to our obligation Form any after Although this Descriptions to that undertake call. that could

company's financial Arnold. please on call company financial hand important measures believe go the Mr. between the in Jeff now non-GAAP the to I posted comparable that measures and note release non-GAAP is non-GAAP a evaluating please addition, will we be Details Jeff, measures that on are GAAP to discussing reconciliation to the found be conference press most these website. can to relationship the would historical of performance. that like In measures ahead. certain

larger are our all was morning. relationships in us ago. entered sign all XXXX, one times this Evan. exceptional further it sales you, retain company's and in further and off year Continuing position sales existing three partners has expand strong strongest growth history increase to benefits integrated we and capabilities. our and support consulting And market reach penetration. expanded extend our successful a thank you channels. continuing as here several our Thank across new to clients, benefited team our well where a in channel we firms pipeline for forward, in the The believe going the we pipeline platform fiscal build joining leading and XXXX beyond To Coming as clients renew build from team growth with to

million, adjusted XX% In of the I client we all exceeded and XX% call. growth revenue with our technology of and addition, and the guidance second invest ahead support our in quarter, we channels, continue across we the which our $XXX accelerated on our sales continuing EBITDA the as of end positive balance in in half With retention to on and first $XXX.X mentioned In well in and guidance to year. remain as be client sheet our growth all cash across cash year renewal last by full over support year confident three marketing over a to securing channels, largest while product to the the flow XXXX. ability year X-year have delivering strong positive prior of including million into to

price be has XXXX, of program. share approved situations and shareholders. the in our behalf a our We'll times. XXXX fiscal for our buying our outlook million has at attractive on confidence market and and balance sheet repurchase created fiscal those stock conditions $XX strategic strength board our of of to Given Therefore, opportunistic advantage volatility performance various and the in take

market a increasingly from As of for engagement digital are account determinants platform, a including health we fully social the that we've the front to virtual an of single to Sharecare advocacy solution our positioned of offerings, and digital Sharecare's between and of Plus, community seamlessly suite now individuals. of with populations more library how health links, care set. our introduction home live, touch critical which diverse in into XX% and in data play. differences effectively a of of index and clinically communities the solution, addressing door are up impact Further, gone part a Health which enterprise at their wellbeing uniquely care to work, becoming component is primary high consider tech-enabled outcomes clients care offering by accredited they as equity looking our of virtual pray and a care integrating with therapeutics integrates

purpose. me benchmark nation's health is of communities our enables So to The and opportunities financial risk take across refresh resilience, that and context to wellbeing a of everyone index health community let on value moment index. understand social and community the physical a and and our states everyday

social single brings our proven environment on enterprise address individual from clinical solutions including measure, risk, the define health and informatics, index on health social their a health their to based determinants the that surroundings. both By represented in Our clinical social inform a their clients profile and and risk the best those can in we community factors highest more into is US together combination risk factors. of and combining leveraging XXX surveys than every of populations' and

places digital burden a solutions. reduce cost those solutions. an confident compared addresses experience the a of we population, digital and administrative of individual's who with but health data-driven entire seamless strong improve are the are managing member on not each narrowly touchpoint outcomes needs each our a that client Sharecare that only We of more delivering associated focused By position and also front high to litany in door platform comprehensive or

the pipeline the value the channel. XX expected growth platform additional and quarter We enterprise launch is had half of eligible first we with in second across as onboard wins driving and on clients new new year. new Our are in platform approximately lives we business creating the opportunities programs million and the

employers In than the addition contracting to more for go Plus that late the will and mid-sized XXXX, in Sharecare live discussed now additional and call XX,XXX opportunities we last eligible stage pipeline. we lives earnings have in large in in XX the

NPS clearly upselling opportunities demonstrating wins quality targets. showcase during Hydrogen joint These continued existing and In new customers, we to added with payer another the partnership service, build, higher enabled with well turn, payer cross-selling one addition, value of new approach in buy CareLinx, tech partner and new This its example achieve add of Blackstone, enables opportunities. engagements capabilities the solution care on and the business and our Anthem, clients With are care is score home CareLinx opportunities XX, versatility Health, and that expanded our fiscal interoperable XXXX entire high venture K to an engagement, tech across expand our to PMPM will also into that its exceeding to quarter in initial service as our of across our journey. Anthem. quickly By clients, enabled important with growth as and retain support us pipeline platform capabilities a whether Health and approach enhancing drive we Sharecare's XXXX. primary expanding with or our increase and navigation our drive them offering. and strong patient virtual focus growth reach will

result XXXX confident fiscal wins half and we As then to as of in XXXX. momentum partnerships and a fiscal our move continued innovation, for we new increased of enterprise the second towards remain

move onto the let's Now, provider business.

new we improve the by which increased of growth, expected record strong to quarter, the reflecting in primarily business. area delivered We the medical X supported year. penetration plan retrieved through client on retrieval and increased achieve as million securing During our remain this sequentially retention existing of we are Growth for to solid year. target year-over-year records clients, results move

underlying strong new The and cycle to double revenue onboarded additional opportunities retrieval see our growth average pipeline and or quarter, the increased large over and Medicare with record continued those sites including and management commercial audits, the we with denied trends trends client the for ROI increase for During for in in deal risk claims demand nearly improved XXX and expedite with a significant claims. payers. market and demand remain review [indiscernible] upward adjustment, address to size

we recent offering compliantly and contracts margins going information process the oversight as record opportunities grow forward. of existing for clients. addition, we improve are it facilitate as process, customers and pharmaceutical we The we cases on use easier believe FHIR, move solutions an Healthcare can and performance secure as to for digital brands. solutions implementation due insurance with digitize continue which for new business And to combined the When Act, interest increasing of of in interoperability even to Interoperability providers, our make our opportunity. well companies behalf Resources to deliver will our well can Fast manual number in automation, drive the patients, apply quickly our regulation market new engagement our and CARES In life other top leading requested payers, or release patient XX of seeing robotic the the sciences, client as our will we that higher retrieval expand administration information and to reduce increased and

Sharecare every and employer better simplifies and drive to outcomes. single go platform and It each providing and every rising provide person engagement and health new contracted survey in and client and a including opportunities their solid time our why we level Consistent same The each strong recommend a clients us. compared and costs all needs. omnichannel we During wellbeing, and one double for and content, journey underscores costs person their individual our see data conducted the This competitive to renewal personalized understand digit while quarter, last front our year. place delivering your related provider increased pipeline we customer of digital manage to for performance our rate wellness empowers of XX% as populations, the new business, both retention visibility strength knowledge XXX% health over and with their satisfaction continues the a increase metrics matter, in the improved driving quarter, for and program empowers payer, diverse nearly demonstrate door enhancing into have the digital our well with wins. highlighting It needs. approach first to addressing prior quarter customer's as opportunities benefits to client service simultaneously to execution a subject healthcare and likelihood campaign which also advantage. the feedback with healthcare productivity day,

clients. and selling CareLinx new In acquiring by enabling for public In comprehensive or growth. a In addition, product we drive XXXX, our value in entire patient efforts optimal innovation across care. lower and care uncover in in-home advocacy and our clients, platform, existing us we us XX, cross-selling home in larger enabled team helping navigation extending and with with gaps including by the on to a payer on as foundation journey, presence cost to future to and and solution, our support for Doc sheet invest to focusing help success virtual this strengthen agnostic to which adding foundation, increase and more opportunities care our Anthem digital to established sales more expanding AI reach support our and we balance going partnering engagements, are to a to to advocacy build deliver into creating development, that settings, stronger continuing drive product building first closing, innovation stronger the

and engagements, objectives number capabilities, increase access, and expanding believe on partnerships tech bottom outcomes partners our addition, digital automation of in In efficiency, to this by growth we with going will To new accelerated and covered to the internally remain our whether operational cost. lower line top end, enhance XXXX unchanged, investing improve forward. we platform, enabled drive integrate improve drive and wholly-owned strategic continue lives and through and or

turn me our who XXXX. and review call let financial for year fiscal results to share our quarter Now, financial fiscal the and will and outlook the assumptions over Justin the for

Justin?

on everyone your to thanks Sharecare. in And Jeff. for interest call the Thanks,

XXXX adjusted we revenue results quarter both As of Jeff first for indicated, delivered and strong EBITDA. the for

sunset our quarter certain million increased revenue breakeven prior for for $XX.X investments approximately well quarter by to exceeding businesses positive guidance. $XXX.X impacted retrieved. $XX technology to EBITDA a top X.X quarter decision by grew increased our prior eligible support first of on the and records Our expansion in million and company Year-over-year increases ago, our the of by from in disclosed lives period. as the growth. from XXX,XXX year slightly public as Adjusted number incremental EBITDA XX% which also end impacted was million of previously of positively year ahead a in growth to year, and the factors Growth was same and the was million revenue platform year-over-year revenue the driven in Adjusted product the expenses salesforce had was guidance. as

investments these and growth expect leverage our digital our and second customers. channel life gain support retrieval expand Sharecare additional We to with long record term existing half the in sciences as greater of the platform, our operating year, in traction the new drive for we and execute

with position better good than remain million now to quarter, our balance the health $X.X position free $XXX strong non-recurring placing our quarter year financial items second and reflects sheet. included year transaction to disclosed cash end. portfolio the medical integration our related in XXXX. guidance we we breakeven for on turn our home in flow costs be us and in security to ending business. actions what million cash of which the full a came I'll disclosed by and To expected, last a patient-centered We for in quarter flow reiterate cash free Our guidance

period. million quarter the first combined our million approximately would the we for in of an $XXX in of slightly on the occur to the to is the better XX% revenue than first with that QX year year When expected $XXX the range. prior be the in revenue over which end year provided approximately first using performance, represented our Our fiscal the increase of stated sunset half year. is that revenue half revenue Note, assumption for our call XXXX of of we guidance businesses X% the midpoint XX were in million,

expected In positive. adjusted addition, is EBITDA $X approximately million between $X be to million and

guidance year unchanged. full remains Our

expected guidance is to XXX the an XXXX. the at million, is over year, For be million XX% increase XX million to XX% XX% growth fiscal revenue full approximately of XXX midpoint. XX or EBITDA million to to year-over-year Adjusted

the the margins Sharecare the to Plus, our to with expand Please EBITDA of and press our anticipate we platform, While continue refer than invest XXXX, because year move in We while line of inherent revenue salesforce rollout full we or in Q&A. support leverage. guidance performance also XXXX in better solid a release adjusted runway which adjusted remain that, year-over-year and XXXX. for our for unchanged. strong to building EBITDA confident assumptions growth remain With delivering strong fiscal operating will we

from [Operator Instructions] question Our Canaccord. first with comes Richard Close

the on quarter. Congratulations

maybe of the in guidance a a big but over second half there's of confidence. the us some maybe bit there. go through little walk to the terms the Obviously, of in Justin, the building get more blocks just year ramp

the for question, thanks Yes, Richard.

XX% the provider the growth Number in And half on So a areas. year. and in out have is do strong it's first business, that of in number we call one would the first we comes that expectations year from in line of the pointed XX% we the sequential over with the course as half. end second

business, take you'll the consumer remember that or and feel the highest and XX% pipeline the customers have for half, robust fourth very the we're on quarter year, QX that a think well. we is second seasonality have growth enterprise On the in there we year. entire then that of side, give business always especially And begin as in the quarter the typically I and in new onboarding confident

year. a last really it's similar cadence So to

from bit moving Okay, maybe pipeline And customers little contracts. Jeff, actually that's pipeline to helpful. sign and the a about talk

in but Can maybe completed. talk delays just companies talked deals getting what bit marketplace about have other little a you in the strong seeing about you're please? pipelines Some

Sure. a Well, platform. robust I think and really have first capabilities of all, we

that of sell to new the starting the helping benefits So and we which the with win investment team. made we've us retain have lots And our of to to products see clients is really sales logos. enterprise we're

new what added at XX XX is Salesforce. salespeople on and last year. time leader So was spoke since pipeline it a we year we time from last the this sales We've the brought last more

us So a it's it and and year it renewals and feel like yes, in like that we slowed offering next feel and but me anything has our with pipeline we're seeing growth we're in we year this gives confidence space have a obviously competitive our seeing and doesn't it differentiated to down.

virtual and And how do me. primary that Okay, my that? that's helpful. Health play guys owner Are was Hydrogen an care? on you to actual in is of That question part the new you final

Yes.

Health and between might our add building you Anthem solution. part Sharecare we venture Health, solution, a of K that care be differentiated primary virtual out a Blackstone. as joint wanted us So advocacy familiar plus Hydrogen is to And

to And that so some plus to other therapeutics added of digital Sharecare our partner, similar we've as a that have. how we

us of as Health. thinking we're So distribution K for

from question comes BTIG. next Our Larsen David with

about you is progressing advocacy the [indiscernible] aggressively? and the Can more Anthem selling as please enterprise the color as that side? are How well what with on broadly the itself driving momentum with talk CareLinx? business relationship Any engage members on things

Sure.

we're Sharecare So to ways. going in market with Plus multiple

So current have large of a book is one business. we

that health you have know, now many plans Sharecare Plus. We've as So and employers utilize many added Sharecare. we

bought Plus we add-on account management in our from to Sharecare Sharecare. selling team, are aggressively through they've as so And an already what

up quarter, that number that's through So announced we channel on lives we And have direct. as one. the signed already XX,XXX last

team. collaboration for In accounts with agreement addition their Anthem to national that, we signed national a

large has of that so in RFP. RFPs Plus many part their as and Anthem of Sharecare And have written

before. presence had we've sales been and conferences. us and just of then Like year And in lot conference board at the bigger we've at much heavy a than team into has haven't brought Blues we with last opportunities a the a week. we ago them pitching so got conference in time that conjunction we've invested we We're And of at were clients a having yesterday. lot did lastly,

more getting with in a we're lot and then the that brokers, past. [indiscernible]. lastly, a RFPs underinvested we've we maybe something And more so in, And the time lot invested a more lot are

And so well. working as to with bring the new they've large into RFPs consultants, started us

as So multi-payer Sharecare us have Plus. clients upsell all Sharecare currently embed and where combination we and RFP those Anthem take accounts on it's the it's of Work that big into national finding with them a really many closing a got we're our us then rate. trained And the when [ph]. salesforce that good get finalist to we and stage we've as get and possible hit get that

Okay. business for home books patient-centered those That's very convert or books businesses? helpful. to will then medical And are off the costs they or soon advocacy and business, off they cost roll more variable your will your

Yes.

So Those EBITDA Dave, the to quarter we year. a thank you million on question. The off and the books. still higher half through for about are and been our on expect a costs roll would've those

just one And great. Okay, last very your high one. How PMPM That's get? helpful. can

Well, over as for. ceiling pretty up much I a our lives X times, we increase it's on other a the that. and PMPM that think higher dramatic mean, I'd but for gone we've add like still there's it primary seen XX,XXX contracted say I we've care average, services virtual

it some gone in RFPs $X. the range. seen last time year, $XX PMPM I've that was recent This So is around out

adding it pretty care. increased adding by adding now we've So CareLinx, primary dramatically virtual advocacy,

Our question Motz from comes Goldman Cindy next with Sachs.

couple questions. a of have I

And reorg then to of not also maybe obviously on see And to that of but the EBITDA then average. about Is just again, then question the average, the Because provider, know is guidance. sort we're $X? or do cost year? other million. in million potentially Thanks. Just around that's in that's add-back PMPM That's transaction a provide terms but question enterprise, of I like that be X rough. on that the could I $XX some there's can non-operating. still the usually and you businesses? the X.X the the consumer breakout between So that it your of if I obviously think you it curious had something overall just throughout then the going

Okay. Yes.

take It's thank I'll Cindy, Justin. the first. for question. the So you

breaking it question, first on revenue. So the the out was

XX almost million almost at the our business XX The million. enterprise so consumer came in business in And provider business around XX million. came and was

our pitching XXX.X million answer around is, but is a $X I plus. is that $X we're then for So the total. every now PMPM, think, average And deal on

that strategy can been there's where PMPM, we're a of bring think where always pressure we why And while products we have more on bundle. I been our a which for diversified a to around the market pricing PMPM. moving lot on conversations chain food is we the actually has platform, up seen the and

home digital straight just benefits and to from navigation now engagement health. to So

our see we over PMPMs time. expanding So

when million XX came When like look at but the cadence in. it quarter, I how it of looked guess calculate you it, if on depends to I last I It went like that of Like the than but the maybe quarter. how [indiscernible] maybe because in, quarter. there the fourth was fourth was you people came a at pressure it's the lives less little end were

And quarter. maybe so I'm but in in they you're guessing. just late the million XX came

depends on come which Yes, in. type lives it also what of lives,

heavily weighted slightly And home a is significant it's benefits so had area lives, our a navigation more it'll around ultimately onboarding be which PMPM. higher lower We than PMPM. health if

Sharecare expect year to plus XXXX So referring the the just But what to is mix. I on of sales. course that it's range. for over all PMPM $X in really be the was And we

as Okay. going whatever or X.X can we specifics as guess does well. follow offline And that EBITDA just to question like include would on I'm CareLinx be million around up then good but well, the the so, though,

I EBITDA the was What Okay. question again? apologize.

Sorry.

anymore? those curious, you X.XX an CareLinx see to So rest is of would not part to that add-back year its we're [indiscernible]. It into thing. or assume but another, and costs. know from million are get of I to million non-recurring EBITDA the costs the about there's one-time million costs. the X.X And and are of reorg going continue cash they a to X.X I just then adjusted of I'm going had transaction X.X in

we've integrate for guided the but when as cost. integration year we earn We've is built to about and when of our in in we costs integration the talked some systems rest the of areas, is this to this other CareLinx cash our- reorg these have

earn is that costs acquisition out. of M&A related active the is We're in Some severance which market. and there's then

So come there'll that level down. this and start costs we some of in but don't will believe these be there at to

next Our Percher from Research. comes question Eric with Nephron

start authorization Share capital broadly. stock purchase interested and It deployment like cash be it's of indicating react for environment, I'd more the the you also your that the or with flow to to thoughts hear maybe the decline goal. seems about seeing time here you're price what like I'd the positive a to you're marketplace. M&A whether on to but whether in valuations taking or valuations think

a maybe company. positive. I'll clearly, We're EBITDA with a year. the to be Well, to on adjusted start to grow it judicious believe have We're We're of to on going cash XX% going but we the the flow path breakeven by we XX% We're buyback. year. be unique this end

strong No sheet. We have debt. a balance

this what on levels, and believe undervalued to going seen trading companies to And diversified in and business we're is question just we have big pullback front, these at opportunistic, a second on our a space. your relates we're continues. if M&A we've the public model obviously be We it as

shareholders. we'll up evaluating we're but it good I are that pullback we that and companies side, hasn't constantly our we for much to and yet opportunities private on the as tuck-ins value and as think for the think the caught public look company on expect

offering. that is about that potentially individual tangential you to or side, of or individual? think stay hear each addition does love And the I'd to need do digital on think you how interesting. the also that to digital plugs therapeutic into therapeutics a other Hydrogen enable that may have component maybe virtual as And the Okay. offering total

platform have Well, approach. we we because see a

for and logical idea to as primary this that and having what the the we partner solution, And care do have we Sharecare care were for us. side, be of what Plus was do we to kind relationship virtual add primary of selling virtual buy? with And we would wanted We what build, K on we so the Anthem advocacy an choice Health add-on. our do

example patient we've disease operate program we program a We're from so conditions. Medicare. right heart chronic for that Orange's $X,XXX reimbursed That's that. An is And integrated building other of and reversing at now. Dean virtualizing

virtual they CMS COVID, now out for and During came sessions. would said reimburse

virtual building building version at that conditions analysis. And example one of our various out chronic so these as we're similar looking like and we're other an ourselves. doing all of capability And right we're in-house the now that then,

that addiction. of whole from have lighting our hypertension smoking weight we we programs and loss ranging of portfolio We're programs. those and mind have that We the with products more many green own anxiety development will a component. our our All where sciences, programs to have virtual

Got clients, on you for XX last earliest clients you that the include or the opportunities question, Could XX Sharecare to was when you. think the I various Anthem clients. one consider channels you also And it and timing speak where commented talk via are you comes later would you to have Anthem, incremental and sales, that you Plus accessed when think it do to closing versus client?

haven't And we January but as And them. greater I direct how some that one that the client. of are and started consider sales. XXXX one in start I then to we as many those we're was XX XX cycle client hopeful Anthem all sales I I consider start- they when RFPs for XX of than It's in it's yet. just XX we're referring will in them were those of do but know still but selling

where the XXX you the those return quickest of or ones expect new clients? more which mean are I generation of channels

I be think going to a it's healthy mix both. of

Anthem to close sales we We ourselves. and partnership our expect expect wins through to with have

of And mix a think so I both. it'll healthy be

comes question next Our Instructions] [Operator Canaccord. Close from Richard with

and was flow. Thank question It answered. was share you. cash repurchase My the

for Thank no Arnold turn the further like back remarks. you. to this I'd I'm to time. showing call closing Jeff at questions over currently

on time Okay, plan. great. cash morning everybody in has active we positive for committed million We're guidance We're Well, stock know XXXX. We're this launching but reaffirming for in M&A to continue thank invest a our the to we're and and Sharecare. in program. your We be the get your year. going going believe market to sales interest in repurchase $XX flow continue front. to volatile you very the We're been to

have and So thanks your day great a again interest. for

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

You disconnect. may now