Forian (FORA) 12 May 222022 Q1 Earnings call transcript

Good day and welcome to Forian Inc.

First Quarter 2022 Financial Results Conference Call and webcast. At this time all participants are in listen only mode. A question-and-answer session will follow the formal comments and webcast. Participating today from Forian are Max Wygod, Executive Chairman and Co-founder, Daniel Barton, Chief Executive Officer and Michael Vesey, Chief Financial Officer.

of like forward-looking you of statements Securities Reform I today management’s the begin, Litigation contain may within Act we to that remind remarks Private Before XXXX. the meaning SEC from report Actual results due a filed on section in Form of variety of indicated discussed the those factors those risk forward-looking XX-K to including those on important the may XXXX. statements by the March materially XX, differ factors company’s with annual full year its today. reaffirms estimates company’s as of management revenue particular of XXXX the In outlook internal Estimated plans is financial incorrect performance difficult may as accurately on that for circumstances and future it performance assumes may assumptions estimates based change. be to include that and is and provided a There made significant today the update the undertake statements risk represents by are call the for on to obligation differ companies view them and therefore the outlook except date any required as today no this company’s results forward-looking actual could that materially from law. projected, planned, such statements. words the are such expressions of word versions expect, of Words to identify or intended anticipate, or variations may, estimates, intend, will, those future and forecast, as similar propose should forward-looking believe, questions but to future anticipate statements and The not growth, statements prospects. regarding are performance include limited should for to up refer GAAP. considered Today's it's presenters with and on prepared company such our a call, adjusted that financial will also supplement measures and to EBTIDA, may important be non-GAAP is in to performance assets operating measures be as to believes the which financial accordance investors to on website. can A are webcast, in of today's company's reconciliation found press be available and metrics both GAAP comparable release which of the the impact anticipated risks healthcare the to including unaudited COVID-XX and changes the related and events as risks the any a the pandemic of and company's performance be may subject of Ukraine. are change and to cannabis, Those in to in related result market statement regarding numbers the are and being recorded. call webcasts Today's will SEC press of the the A be full as copies and copy recording of release transcript, available@florian.com/investors. filings webcasts today's well as I’m Wygod. the executive company's Max now introduce chairman pleased to Sir begin. you may

us today. afternoon like Good I would and everyone for joining to thank

start the past several like Forian first the in a strong XXXX the momentum good quarter. continuing had to quarters delivering performance financial in generated over

organic rapid a addressable market. serve established ability information to in our demonstrates segment in Our large growth needs healthcare our

As we trial we industry offerings the med from the are In excited and to were company, a businesses service distribution tech customers across providers. upselling clinical young successful biopharma serve to that as incremental smaller specialty existing quarter, as healthcare well adding companies new in we and customers.

market in and the need impact come. that intelligence markets solutions positioned established psychedelic for and plan, healthcare been have analytics legal of helps outcomes suite therapeutic to and from our Forian to Our preclinical environment effectively intersection why and market products years study to complex insights at that affords to a markets. is real This customers with emergence market is the healthcare customers, customers that and a to understanding ultimately, analytics view, improve and patient and the it We economics, in new our of the the cannabis navigate in the health, by in into insights them support world their insight evidence. alternatives emerging healthcare run their to products. their journeys like deep treatment markets, long performance Similarly, business commercialization, products, adopt platform delivering and their of our of and operational emerging believe the enables their will

long be strategy uniquely respective cases, growth enable positioned but merge continue effectively. compete penetrate also to is to or industries to term to the Our

the fruition. the of results EBITDA of believe capital were the and recent the factors million and million, In our price $X.X and seems to trading are to With time More current stages reaction company adjusted improved many result growth in These yet market thesis rebalancing June We systematic reconstitution markets. publicly loss rates to public the war specifically the seeing the are suggests inflation, have particular the during in company, We XXXX. of tough raising revenue quarter, achieve the respectively. generated loss in a interest markets continuing Ukraine. the company from $XX.X technical accomplished this and early the million pending to of effect $X.X net continued first in come and a selling on Russell to affecting trading, generally, tied through available will see profitability. with information pressure including it likely companies

revenue our plan to to continue I'm XXXX. hand Barton our leading Dan to talk about and CEO going reach We and quarter first to industry to our developments. it key deliver execute growth, results our will now profitability in over

guidance Good million. year for results top afternoon, track Max. everyone. delivered strong quarter expectations started line the on Thanks in of to achieve million our $XX.X revenue and We financial the $XX our full XXXX with line year to

$XXX,XXX forma $X.X a note from basis versus of on These $X.X accelerated XXX% important revenue growth. XXXX, of $X.X by million software year-over-year. the our XXXX Healthcare with growth growth pro the million representing healthcare is business quarter million of XXXX up year-over-year at or on results were quarter in organic driven quarter growth. reported that first quarter to and continued information XX% first basis, quarter information grew the a in First in XXX% is was our the in XXXX, grew information It nearly first revenue business. or this revenue first all

insights suite integrating and offerings consumer sale underpinned compliant processes, innovative and are of coupled and platforms. alternative and Our product cannabis our algorithms including believe intersection have therapeutics, point all of We By offerings deliver cannabinoid technologies. healthcare to of our traditional This value from our of customers. therapies HIPAA technology, on leveraging created information a and disparate we ontology siloed, sources database, data includes data offerings, of science claims these and innovative products. our unique which information the transaction proprietary database product with by pharmacy with proprietary based are medical profiling claims,

Our solutions commercial based driving innovative tailored needs solutions information and to performance. multiyear subscription power largely products contracts, clinical to are client providing specific

Our based two or to $X normalized clinical as to ARR and also averages make clients report on a aggregated our recent our investment, analytic contracts need. decisions. and time run a subscription purchased million. custom specific a are products basis market provide meet three Products Information one which use commercial to over typically measures, typically product, These years,

information, approach address asset compliant into These based the a customers patient completeness, wins. coverage data diagnoses racial client Kronos specific continuum U.S. data the for health hybrid along the degrades healthcare pharmacy the of proprietary We comprehensive to of foreign HIPAA Plan and care for to to these launching able with continue a and underway health with traditional patient investigation combines our for profiles, studied key switching Kronos more sources. addresses generating and unparalleled payer cohorts study patient patients the diversity insights the work challenges in drug Kronos issue marketplace. Kronos healthcare both In in commercial to care in claims differentiated insights were offering provider and due is longitudinal invest active insights. clinical Kronos recently product, criteria information several clinical to many had quarter, healthcare first inclusion frequent of switching. product. based capture plans

and We've relationships. data are are information because that is, clients. internal business strong an they further seen few customer, also comprehensive customers customer low of deliver. our require workflows tracking is growing into market increasing latency and processes power key with sales number and contracted product dynamics of for sticky offerings and that able The backlog Our longitudinal existing clients our stick to it a evidenced by new demonstrating others

with to companies. biotech, to with begin good seeing and into opportunity large are primarily penetration small the sciences We customers, pharma life work emerging which

also We in success solutions. leveraging seen provider and through the provider hospital our profiling have market partnerships

adding quarter client the engineering, to services clinical in and portfolio distribution, this health resources, To added especially sales we've pharmacy and diversified delivery data providers. trials Our assets, team. growth and medical device, talent the rapid support care, first

customer our may analytics These have based have as SaaS questions about retailers measurement, standard that for to first targeting or cannabis with onetime our to our into our solutions platform use can first analysis sold customer analytics With as in including successfully market the segmentation, sold to Catalytics focus said, of complex uptake their continue we was forecasting. more meet that solutions propensity analytics clients as specific market The case, recurring to not and product, the multiple revenue well segment expanding quarter or answer and deliverables a materially We services XXXX. the add quarter. customers. of clients in manufacturers innovations to predictive a on expected and be modeling in advanced

to stakeholders to launched cannabis use market uptake continue clinical in evolve the to drive business of up ramp commercial Analytics We addressable for healthcare, further and be performance. other next expect the financial product and product. planned over is as year this analytics and total segments and increasing psychedelics, customer mature their to for the

were independent market of use enhanced As cannabinoids as in operators by traditional offset BioTrack partially of understanding treating point-of-sale evidence of competitive a such like small record alternative a replacement of therapies. churn targeted this with This in of the more therapies of fragmented ever by efforts flat in driven go-to-market ethical in keen highly I treatments convergence There's be the these than We market. therapies expected. and a conditions. with said quarter there's growing to continue being churn sales alternative the earlier, These of solutions had result and software geographies. and is in interest many pharmaceuticals the use as before. in combination or new efforts healthcare traditional

BioTrack to next same continuing X.X few the product. to as our We months, for we next our the are solutions bring level at BioTrack in market generation invest

market. Following focus rollout, investment we begin as can to down we ramp to X.X on bring to that BioTrack opportunities

which pro new wins modest First quarter and implementations growth based on $XXX,XXX, revenue was forma state work. showed on basis project and services a

call, quarters one last on business revenue the item. mentioned quarterly I service based As fluctuate installation and can time upon state

priority. multiple the for looks We of the business the RFP continue states year process track balance are revenue to make promising. outlook the state trace very and in for a The

We growth in good turn position to a focus balance who forward. a few organizations looked in spent resulted which focus XXXX our to in further productivity end rate our now expenses. provide on are burn a revenue achieve laser managing our on To financial will Mike performance next for call as order discussed. moving investments managing the for the strong flow by operating sheet, enhance over to reduction We're quarter. more burn to the at detail I will and previously appropriate efficiency, our excellent and of accelerate and the cash expense operating the we quarters, ways over with cash positive position the a on

Today Forian’s provide of Dan. the XX, XXXX. ended quarter will I an results Thanks, March overview for financial

As Helix our previously Forian March disclosed filings, XX, of in on Technologies and SEC analytics combination the business completed XXXX. more

results results the March are basis. The issued XXXX Forian’s operations on in As today beginning included of a result, our GAAP press first Helix XX, release quarter and XXXX financial presents a XXXX. financial

quarters, prior as of on also as forma of if performance results we've first revenue for entire in track the business. XXXX. management were uses And to Helix included adjusted As quarter reported pro a the measure the the a basis, which EBITDA,

loss. As include a release to of net and materials these press adjusted detailed presentation noted, the EBITDA reconciliation

year-over-year. Our $X.X of forma XX% were to by increased year. basis, up revenue the the compared quarter prior million pro On revenues $X.X a million or consolidated for $X.X million

sales driven well products. provide recurring our healthcare healthcare in increased for prior growth On growth information stream. to quarters, our the information over as basis, from sales deliverables pro a of period, of in acquisition contracts forma In products. many attributable our a a predictable As was was growth revenue organic entirely multiyear to information cases, our continuing providing customer year-over-year revenue of revenues our as our by Helix

revenue get revenue public As we each is revenue of we sequential our contracted, in financial obligations in seen a A footnote our increases began have quarter reporting disclosed performance undelivered as remaining our result, growth as of statements. our since recurring we in part that company. healthcare a indicator valuable

the departure at represents of and for which You customer March expense in compensation, Public expenses of amortization negative in million of total and expenses million, related to increased EBITDA, accelerated quarter inclusion company operating this as reflecting $X.X the $X.X XXXX. the expenses, contracted and note March Adjusted excludes development offerings, resulting million was that items $XXX,XXX first for revenue activities outsourced organization. from the recognized you to the software the Company our increased Separation the over XX, $XXX,XXX XX, of certain non-cash stock depreciation the first based Helix for $X.X and advisors quarter continued end amount, Helix certain comprised to of delivery have million loss depreciation, higher stock of the periods net development assets, will XXXX, acquisition. $X.X amortization, other Note which $XX included Product costs of the and million quarter investment the acquisition and other $XX.X million quarter to million staff transfer expense, an costs. net effective executives development first referenced December $X.X and to related an from of expense and Argentina future teams. internal our was resources, severance to operating and of support $XX stock former of compensation million last separation year compensation The expenses XXXX, Helix increase that related are Development at same in to

As you areas build growth, invest to however, to begin level half we XXXX to the last the and going during growth, call, with first support of support as our investments benefits optimize on sales to software operating growth incremental leverage continue these on as realize revenue we also capabilities and expense of in discussed plan lower a XXXX we and half earnings offerings, second the specific these our and recurring of continued our during information to expect forward. of reap XXXX,

included the earnings along reconciliation in release. items to noted EBITDA, of our explanation As today's loss an is earlier, reconciling of net adjusted with

to prior business. periods, on depreciation as security of warrants expenses, net of to to mark-to-market gain the to compensation, the sale noncore are reconciling related adjustments as in expenses aforementioned adjusted the and stock activities related severance related and amortization, loss and non-recurring As transfer primary transaction EBITDA assets adjustments a wealth outstanding our well

prior quarter ended Now $XX.X XXXX. convertible turning to of the cash of sheet, to and maturities we our with securities notes no our marketable balance million with September

of that know and with the also acquisition. XXXX, reflects XX, our and related merger goodwill intangibles balance million on XX.X sheet We March that Helix to approximately

Regarding our total and revenue our resulting over XX% XX%, million $XX.X we’re financial expect to to growth to XXXX able of XXXX, for we of to adjusted revenue form in begin XXXX, expect leverage the of revenues benefits to outlook in realizing data in platform of the making million the to scale, EBITDA continue investments be half get $XX positive software adjusted contribution running half during XXXX, and loss XXXX. a and factory to in the while our growth of of EBITDA achieving improved second to the second

And noted, the that, call the to plan operator securities, and line As this prudently million to goal. who for open ended will cash our we and quarter capital to marketable $XX.X in with turn over achieve manage the the I'll with questions.

Instructions] [Operator Martinuzzi Street. you. comes question Eric Thank Our from first of Lake

Your open. line is

quarters? and chain tell the customer strong interest and expected can undelivered issues. But quarter. contract, looked the wanted looking anomaly strength that I inflation about more go, the given same far hearing the the your it through an We're about out in in of number lot to macro first Ukraine of customers QX I'm kind and as but of QX What it the results. QX? pretty kind us there it Was the as on pull the more like at view. was Congratulations back for or into year; follow remainder you a to the demand. of supply

Hey, Mike. Eric, it's

strong in to into as about that. we quarter can think $X the pipeline pretty as have good, to the mentioned, we Dan a quarter. next the going grew by performance So add see, unrecognized obligations And the you million we

think to number I the people that's that watch, business. it's encouraging we we're cash steady as flows to, that of information So healthcare get indicative the the from

into we the expect trend few that So to forward going continue quarters. next

macro BioPharm, no in Med customer the so segments, your Okay, of pullback, any the device.

a your We're question. Dan. Eric, is there very any pullback to pipeline. We're answer strong seeing this not seeing

to mentioned, types we're as high customers competitive, the that more understand for pretty gets be their demand especially of the still help services the environment our business. them more As our products providing is Mike competitive about for

different our what's So products. in if increases the the the and we which competitive markets, for anything, environment serve, happening demand

side? as is far healthcare about and cannabis representative then XX% QX, of how Okay, XX% the looks as is flushes out? mix then a like Or year that is healthcare all going from on month, the the, flat million remainder and and it really more the in their a, come the BioTrack’s growth think it bucks side, you roughly of a then the to

that's right. Yes,

QX as Substantially that expect in Eric. in growth And to year this the it throughout was our the trend And it business. got the You healthcare year. has we through from continue come all well. prior

In more an to additional assets in us I some that you're it's add in business, from we in observation right terms some think looking you some And investment at XXXX, debate is that participate of were trend way. to year the to. coming look place contract continue. backlog put licenses of in healthcare, BioTrack in the to the your the is growth in But as for growth markets at that that if to want expect to growth we it on

XXXX? are investing offering, Kronos and development key little what about Okay, are on you you a bit their product you do initiatives the talked have the for side, then

client So are on first market. of we feel Kronos that the number can that can we that like provide capability asset have, hybrid, expand we set Kronos we the initial to The healthcare capabilities the built wins the about, the to that's really data we quarter in on spoke line. the that I that the offering side, can product first feel out continue build and longitudinal

of continue And going later to the functionality year the throughout which features we this product. additional side, MVP on on as We'll sale. geographies with capabilities and you product, our the this the be we do into analytic BioTrack next we're be other that then As next as continue And particular one to our either embedded look is release sold some data going products. launching we're point to for mentioned, build that science or team, that generation product, ads out time suite can generation catalytic to custom additional month.

suite that new cannabis. the and But healthcare both Catalytics more which of in We segmentation like for module is segment and brands custom for modeling, a a studies of marketing things model, etcetera. coming propensity do productionalized of larger version out, either have we can also

Understand.

Okay, then me, you one kind with for high thoughts the wisdom year of the BioTrack, of question that with and anniversary one here level that next last you kind for ownership. forward acquisition year the celebrated retrospective, of just then year on lessons learned take looking and of into

Hey, Eric, over learned We've this is last lot the year. a Max.

the most cannabis I think U.S. with in space. companies legal

safe We making. have different more the side the the expectations either progress accurate for on regulatory with

So affect the other to that and by willingness pay and things [ph] affected in the is their by XXXE flow. retailer's cash limitations space greatly that

large we So that side, how name as And more in out with of and that on where set budgets keep became and monetize really we healthcare the selling to momentum. and the it. educated that has company the a on the opportunities exploring market business; our getting side new much that need good getting there really new of unmet serving to been

the congrats microphone. turn and the I’ll quarter over Understand on again

you. Thank

[ph]. question from Engel Donald next Our comes

open. line is Your

CEO. addressed this the I've hello. Yes, to

products you have have the XX% will do you're the future How many top of bottom many see line XX% talking You're in of products somebody those of that line about.

specifically, said as think year, in growth healthcare we next the growth majority coming product, do I that's some as as that software And I coming information from as our the mentioned, of of analytics, and in as think this year from the the our see we moving growth Mike the Yes, healthcare assets. is our into BioTrack remarks, from in well prepared growth SaaS solutions. well,

next that both think being I this segments. and being driven by primarily year driven year see across you'll So healthcare

there's many my so but revenues. that, have understand not that is many potential I is, have you because question products how the

bottom line XX%, However, be get mature? line potential as they have more top the and they to

bottom the through and it XX% To line have different SaaS mentioned, analytics of have I upon be studies the definitely and And of The XX%. grow products ability growth answer tool, or be to your ability healthcare the couple then years information custom BI depending business top question the over overall the to the assets be suite, next mature. XX. and whether through about our the top our top how

ranking land think going the to I revenue of in to where that's is dictate kind forward. product a of moving going terms

So part of with revenues approximately. the be basically, products those what

what your going revenue so $XX just track? kind at talked a about be of is if we to percentage million, is on what that So of

you products. our, results, our, this its think if I think look if Mike. is you period our I The at look at legacy current obviously

point in a revenue have sale business. We government is trace and a and business have and that's business, which recurring BioTrack we BioTrack, of down established established its

that's Dan XX% of starting on business, obviously, that just is could what that that's, say we're And product branded separate think business different So XX% our the then our selling into I our of information I lines. to and to business products side today, we're of was healthcare today. saying

that. we expand could So beyond

So selling future be some under of derivatives labels, what no, could branded today. we're of would that products be the

and selling be to are XX%? of to call today; over want hard products put expand product on if by…. would we you number a that we're what say, it line that It it So to would one it's very which kind similar be could the

I understand. understand that. Yes, I

any that on there growth is side, Helix the on Now side?

XXXX. online, come in start XXXX. as some year, see York, states is in think BioTrack flat the in back and Illinois, half to the then XX had Jersey, see and licenses we into growth year of growth of see roll the new product Florida, to earlier, and New as I and Well products we we like product New start investment And through the gone this Mike the out an being

that correct? the [Indiscernible] of some right, All that of the is states disappointed late are

been I I been if mistakes. don't know Well, they've there's say would that or would, late, he

growth historically high. has license been the that very think I

as in par as previous year, with hasn’t of uptick see on an the either business go that into this segment. medical the expected, years and that's the we growth and states these recreational expand license or been think new cycle I

think of the data that its is thing the will in the and be down in and building add just the itself. value business access revenue the to the value and data to I care even existing creating Helix that primary base strategy Yes, know mind products other is in keep to the growth in a in the

time, capture productize opportunities been So, for should a year that own, lot this take That growth and its asset to of it. spent because be that data to market has advantage properly in being are the said, there growth it market on of over a we as several the if needs there'll they next on roadmap, hit to and be bit. states more with opportunity coming to licenses the years all we a take. over enhanced online come the be little should product more But expect some be

you, thank fellows. Okay,

Thank you.

email Mr. the Thank back for over you. to line. Max phone on turn any I'm the Wygod questions I'll showing no call questions. further

How have many will we Russell sold I'll question reconstitution? of as one Yes, be it. emailed shares the and read part

have factors their sold believe companies. among and public ETFs this, with one positions. So us reference efficiently Russell call, our of yet, will by several other in are as off that we there communicated as reports has has the likely drop dropped list affecting We companies. Forian on you the the price, recent that Russell not been share but as other the note shareholders be should the that the But are cut been follow noted of

the XX. number Russell. shares exact by shares. million on that of the approximately to to released X.X estimate be the hasn't addition been X.X It range to reports In June public But will rebalanced be

a to as reconstitution in well. the short increase believe our we Russell that result in So position XXX,XXX of shares approximately is recent the

So be enough we've And question. that should email. is that the emailed last that question for received color through it. that That's

thank today. for their everybody So you, time

conclude gentlemen, Thank participating. conference. and you for all Ladies this you. Thank does today's

day. a now may You disconnect. Have great