CERNER (CERN) 30 Jul 212021 Q2 Earnings call transcript

Welcome to Cerner Corporation’s Second Quarter 2021 Conference Call. Today’s date is July 30, 2021 and this call is being recorded. I’d now like to turn the call over to your host, Allan Kells, Senior Vice President, Investor Relations.

Thank you. Good morning, everyone, and thank you for joining us.

Chief me our Brent Trigg, Chief and Dalton, with CEO; Chairman our call Officer. Travis Erceg, Services Mark Financial our the today Shafer, are and President; On and Client Officer; Don Brent will observations business more to the and detail over call on then it and to on outlook. hand our marketplace, Mark off start the with provide our results -- and Don to We’ll Q&A be joined John then Travis. and and transition by

contain comments will statements, remind statements expectations you on subject Before for and are that business including our to we and start, like our uncertainties. comments projections I’d about to our future are current forward-looking and other risks assumptions events. and These based

due to factors our results information is in assumes release, except as with in could posted forward-looking those which by materially to earnings Cerner SEC. or actual filings Investors no and indicated other differ obligation cerner.com statements update law. section by the of the those identified Our looking from our required forward statements

turn will margins, GAAP or call financial of reconciliation to be non-GAAP discussion financial not earnings call non-GAAP can release. and I’ll be or found measures our in over our be for financial measures meant measures to a on operating this of We to to per cash non-GAAP measures the flow. referring measures free A share financial These earnings adjusted GAAP. also prepared that, with With are financial to Brent. superior for substitute in accordance

we to to clients good discuss, as urgency focus deliver is increase call which talked truly this as What And on the helped sharpen our we our focus we me a most quarter. transformation, we’re key very earnings value Mark increased solid and on And presence. much, in our based unwavering last progress our and strengthening and urgency of All that focus this increase about pleases good results for is Allan, the everyone. year success, Northstar. morning, and initiatives again. very client market maintaining have shareholders. will our an second On transformation thanks us and progress, our reflected metrics outlook undergo sense our deliver on

quarter. Kantar sales data, and clients, in health consumer, dollars with space our which our of to several the which improved health, operating Through of the also in and operating I’d and XX better team major revolve delivered key -- structure through management, focus rationalization, sales share growth including XX driving accelerated the drive progress organization, as initiatives, and refine creating key funnel, And our some products far which well, during progress these this attrition. and to to client making. Travis and grown include create health, Health client a and and our client our advancing continuing go-lives. They good around as on sustainable shareholders. structure, Net progress same the behavioral fronts such investment work, his his value including have that for profitable Promoter overall and most Score also focus efficiencies and for team Our improved made have areas reducing meaningful for value innovation. driving by have improved network product have and year, so all client creating points we onboarding expect we’re that footprints resulted and should examples efforts product successful go-live our freeing sales progress new like is while in client value real-time Don activity data in rationalization relationship X second client create

world’s of best being the He’s received Forbes for that power this services make solution savings implementing market, by our all lower requirements time velocity and our also and and way navigate ensuring organization, quality, increasing from work while supporting progress running good both incident our Cerner speed business. one recently for to organizations, Employers made and also community Platt, solution the Tracy also and This flattening on Officer through is cost These delivering we’ve by running XX.XX% Human clients. of among as digital of schedule factory, these just of has innovation has also further, works, work. one XX efficiencies, initial a CareAware on is scale CTO and us products. their migrating tools Forbes progress staying efficiency and ambulatory -- who to the the maintaining improving cloud, R&D our of the and which being Employers progress increase capabilities and we good place are our of ahead very Chief and building, also our products. And set In leaders our marketplace. for XXXX Top advanced Women. a and running Diversity, our continue restructuring helped lifecycle to technology is have recognition culture costs free [ph] when named we while the our great made while centralizing drive Resources being the also and employers should inside and the focused on This increase product and important in to of Best Best all delivering functions, to including changes, to Cerner in Jerome reflected Labat, improve improve for summary, in remains platform Now modernization, or

control our in and products improve increasing pressure expand demands, are face costs, consumer as they needs operating also address service environment. provider with services to networks build reimbursement lines well-aligned meet the to burnout, clients’ evolving Our to and performance

April, Carson, physical XX locations EHR. Defense treatment with XX went demonstrating Guard XXX be In to Now, now more move to to Hawaii included Cerner an XX,XXX which late waves, DoD at commands, on of than as complete deployed system that two like with facilities update locations speed commands at live MHS Department planned. states XXX In has the Pacific the zones. scale business. And federal Wave across go-live and Coast our deploying at and plans the The their I’d military U.S. and time DoD go-lives planned with users, Coast provide at total, Genesis, full DoD live activated on continues is Atlantic powered year, and schedule. the both in can this later XX for deployment their Guard will which

report. issued Affairs, strategic their VA Moving completed to which support a we Veterans comprehensive Department review, strongly recently the it of and

findings conducted they highly more were were governance, consistent on technology this training Instead our not findings and readiness, Importantly, related. the focused own were and year. assessment earlier with generally of internal these consistent --

further solution will Veterans. Cerner expected VA of closely the finalizes our time until readiness are can governance and Veterans. new VA are lifetime return the reiterated -- and a project program including no Denis technical deliver plan XXXX. identified Secretary care and Veterans working preparation, in enhancements, with while has structure, for We so nation’s on has we address and development our Cerner to a ensuring of management his efforts, we commitment the properly the and their reiterated our go-lives and to site And pre-deployment issues, seamless but all continue McDonough, Affairs, we commitment and VA the to our

of year. X.X now XXXX reflected our As updated is the guidance expect a growth, another in result, on which we point impact our revenue for

quarter. well-positioned very believe making good remain year. am to result, role And an with search importance as Board a we last is and into engaged Now I Cerner’s well, summary, you and success. of before continue exact turning and given will we the actively to for difficult my with to progress and been transition has pleased as progress. believe team step I’d so In the it of it call a imagine, the on so as new our am my the is since like believe announced the will for search but Mark, has personally this The advance can status search, initiatives the far I Cerner confident timeline to over the search executing sensitivity I process quickly active comment the successor the very I provide continues, very CEO. key I been

We near-term also demonstrated on and while our realize much to have driving Cerner the positioning turn is ability you. bigger I’ll deliverables, to potential healthcare. a execute over that Mark, meaningful have to on organizational to change impact it

a are X%. provide X% everyone. I quarter and morning, our we pleased results. ago second Overall, cover which were growth up brings Good quarter year-to-date guidance results Brent. billion, Thanks, $X.XX bookings to versus update. our will year Bookings second to Today with

and ago XXXX. growth which were X% Revenue down revenue Federal our sequentially which rate year-ago The second $XX.X inflection point added believe COVID. we over driven quarter was in primarily fiscal a up Importantly, bookings positive was the which XXXX impacted divestitures. quarter, the admittedly increase up fiscal since part in slightly XX% large year to down of revenue bookings heavily The during $X.XX versus this in billion up to due is and by due strong was services. of billion, to total ended backlog, at represents higher

down of addition, largely incremental acquisition $XX is points basis XXX Kantar was experienced ago Gross quarter we from that revenue year the growth of of quarter. with margin the it the to of $XX revenue. from being divested in mix primarily the by at In was revenue during noting million worth due second million all the organic, a virtually Health XX.X%, offset

basis XX.X% tight to travel. negatively and margin to Specifically, Adjusted ago lower resale, higher reimbursed services a levels of however, impacted primarily from XXX third-party XX.X%, points margin COVID. due and margin, expense operating control driven expanded year technology by

largest took the on during across bold progress, spend actions to this Now our build pools second quarter. we

a we example, in implemented. productivity to recently of separation employee we to due incurred force costs improvements reduction sizable million $XX related For

sale Since of to the sheet and fair line a the square We connection in of space on our for properties designation feet of of properties also sale. have start other XXX,XXX charge XXX,XXX incurred year, the have of an to square the reduce property balance $XX two earmarked value with we of sold and the one as future held additional for feet office space sale. million

non-GAAP work, we capitalized nearly captured Lastly, to Each GAAP designed improve development product realizable of portfolio costs software with the carrying efficiently, up the certain These also million for drive in time communicated to previously more results. to comprehensive sustainable lower position and their was are EPS due amount for a year investment. lower annual related is per charge our rationalization a of share, tax growth. estimated better consistent to diluted return to and charges last the over clients value value our which a part of as these efforts of adjusted $XX rate stronger Wrapping count. our our recorded reduce net on over actions Cerner P&L, actions million to and is operate $X.XX operating profitable adjusted $XXX share which non-GAAP more R&D reconciliation XX% up are of long-term earnings,

and balance $X.XX from our account down is change. million sheet, $XXX billion to the things are last Moving ended of short-term for two investments, that which QX There we with cash quarter.

First, we $XXX Kantar used close Health the on acquisition. to million

Second, we spent brings the million. through which the quarter $XXX quarter, million $XXX our the second on end of during up to share purchases repurchases

at cash cash more million. $XXX capital flow $XX came expenditures flow free in year-to-date last $XXX by the than in first position and have investments we on of against software, The levels, double at amount for driven year stock, cash to After portion quarter $XXX investment represents continue cash QX strong cash growth flow XXXX. operating to free because half good we This for shares, was generated Cerner increase We at using million. cash million during year. our trading a which ending is to large the debt free $XXX shareholders. significant unchanged billion. of same a the flow of and that versus our throughout the of a been million, return was COVID-impacted Sequentially, believe brings capitalized quarter year-to-date current was million excess period $X.XX flow our repurchase short-term Operating

to Moving guidance.

single-digit quarter compared XXXX. of QX to from just expect of quarter bringing grow QX We growth million low-to-mid impact $XX organic approximately includes divestiture, revenue from revenue Kantar partial the third X% over XXXX slightly of Health, to a a offset in to range. This by

for be this This our year, growth. full topline to with do mid X.X range prior point his we we ability expense EPS of we outlook. due enhanced the to than to XX% the $X.XX now For over that third about control, in within adjusted more last offset reflected over full diluted Despite year, reflecting and be consistent to to slightly discussed our ongoing of but year QX EPS as expect revenue XX% quarter prior outlook is that continue our That guidance, in we the range single-digit XX% our a for expect now impact of approximately the to than expect VA with adjusted up of of calls impact growth diluted assessment Brent more lower prepared during confident and remarks. $X.XX, are revenue our expectations, from lower EPS per approximately guidance share. growth XXXX

For fourth to year. rate free to tax last full XX% the expect the our cash generate from we be flow million quarters $XXX for $XXX XX% approximately third million year, and we expect and approximately to of up

cash continuing year, this our and capital provided, to ample those free future of do attractive remain which believe In Finally, $X.X both for and while work have repurchase make believe in are and still strong the to track of use balance second us fund strategically return of we half will stock the and organic course, to are beyond. and opportunities position and we acquisitions done to on flow, will high to growth maintaining of we that success sheet access better financially. summary, up potential and am clients billion our quarter with second acquisitions our XXXX results pleased I

dedication strategic Cerner turn genuinely each are over a to behalf execution disciplined the will all significant your the world change. I them take to We to are professionalism focus and Operator around executive time want from questions. associates during the moment entire the on I am proud we very of areas leadership progress team. making and all Cerner’s and a every that, thank for of and call against I of seeing Personally, good day behind of appreciative our operational With

Evercore. Anderson [Operator Instructions] Elizabeth with Our first question comes from

with the Hi, you question. much guess demand engaging sort overall where we so One, and hospitals guys. how the about Thanks environment. this helpful? two, with year? What’s of are at back for half competence topline I -- can in have you. about What COVID? sectors? are I are you resonating of in clients? as about a question different can talk And the point the in That seeing be their Thank the you talk would

to Don comment on that. Yeah. and We Travis ask, then

morning, Elizabeth. Good

I you’ve as reported CEOs have some of with So, with the the provider think, our investor-owned that track they one, I market. in conversations think from seen organizations out, and

provider think core it’s levels people I disruption are and returning levels year. the volume to the so on recovering of aspects pre-COVID are and how feeling the about from business side last good

at Delta plays sort wary of and with certainly certain watching eyes disrupt hotspots. a think, same variant the time, forward the I

Brent’s focus, There’s So his of have lot I think which think broadly a areas volumes and momentum good. I that some of articulated feel in script.

post-pandemic in the is in ongoing to think because strategies. interest want consumer of active to real value-based then, disruption and now strategies that of relates and with particularly think conversations as think, their a Advantage. lot in model going workforce had part providers, lot what how look I think to business they’re Medicare through a interest such of about time, care, about conversations I that to normal. dealing with, as in strong hospital areas forward, They’ve a And going and a they like it interestingly, new

landscape. interesting an it’s So

the I the and to recovered to where think, main good real about in I want business feeling half. about take think opportunities they And first us. the asking, people for they’ve create questions how some

to add do to Good. you want that? Travis,

our doing goal health. Don think, clients’ work in I on Brent in those our to confident needs. Don. to funnel of Thanks, Brent. we’re our is ability yeah, My related Thanks, ability noted is that. directly I topline, the meet to the some really reiterated had improving our script. -- Thanks. the Yeah. focus be and our

So growth funnel the process we’re and our on focused that velocity sales of sufficiency of through funnel.

and inside our of been we’ve think discipline our improved process, and processes. -- inspection forecast business I we’ve got

the we’re greater move tools, forecast that really we forward. discipline, our will topline working with confidence us and visibility our automation and and to And underpin as in plans so give to

we’re holistically challenges although perform and U.S. Don’s able half I our Federal think, well seeing globally. the client our in U.S. in our business, that moving forward. But client on, spot first I some was business were to we in confident base, mean, in business I’m

and good a value see businesses inside strategic growth we and with around opportunities great we’re that. products. so And to We extension expansion large campaign client, base and our client U.S. our focused of on see opportunities

been buying has Federal works global year, our U.K. win. had I and East, robust be there’s parts in and think opportunity the and this that and and to Middle and then business of as very expect business we’ve wins community we And Canada. globe other aggressive great go

in of So I’m year. the confident second half the

and think the transparent business Federal accurately about that. the of nature I reflected we’ve been

so, and continue think, will well to underpinned I And it’s resilient and move forward.

going as gross the then just half And quarter? the between follow-up, back it. the the of maybe margin of in third you Got the as to fourth line about in of a pacing terms and think are quarter year

I think what say third that, those is quarter. in comparable to the relatively quarter I see would and fourth expect I both

you. Thank Okay.

third-party a to one and of services note the about And amount is, of revenue margin Kantar gross services. uses thing XX% on fair

on just P&L that’s a issue. the So location

loop So at teens it’s their the margin level just the little upper overall margin, operating does really gross at but the bit? a margin

helpful. That’s Thanks. it. Got

Draper with next question Securities. comes Our Sandy Truist from

much. very Thanks

strategically at and you see from, color I on line targets that brought financial wanted or get the along that willing growth strategic I do a about whoever areas, One, if more primarily those would focused you up whether you’re guess, but on Just be lines? that And other commentary else on to great? bit just specific they anything potential strategic it’s looking would much. assume financial. have accretion, could Don, that be to new any would so Thanks comment little maybe earnings ROIC, revenue contribution, the share, I then, M&A,

Yeah.

far competitive as something position in criteria, the four action first would earnings that our us the the enhance have in it and As I We call. we for marketplace, think, to said articulated first foremost. to

to cost Second, would capital. of exceed have our

clearly over Third, have we’d And then, be create fourth, would accretive value. to to shareholder need it time.

refer as looking this I like point. would we at Don currently be far where As might to

morning, Sandy. Good Yeah.

areas aspects seen we of, that of if business, think strategies our are I what and data the areas I we’ve So cybersecurity just about where some enterprise partner think our in space cyber traction inside both core strategies like third-party that and you think of space. like

I think walls, we of the said operate in fashion provider make I looks and four fee-for-service traction network once to you as move integrated lot outside around I and -- think, trend it there’s an and what fee-for-value. earlier, for those like a

an good an bit. And faster. data at the can in to we that’s given what I a the think, take close look quite post like very has view team, integration how help go a And like So space. we’ll acquisition area hard us then, think looks I set opportunity the where the a of look area inorganic work Kantar, that’s

Thanks. Great.

Our comes KeyBanc. next question from Donald Hooker with

Hello.

Sorry about Good on that, Yeah. I because mute. was morning.

you that just like can deployments, and lost the It year, stuff -- and some maybe on elaborate bit your the we more little a due you VA? maybe a want back but other about there? think some you be hear the going normal elaborate year. just next there’s pause can the do that you get Can can Is seems revenue to you what about maybe sounded next thoughts VA, to think the doing as it of Just are hope we cadence? like to offset maybe parts all maybe moving -- to on you’re

don’t one? why that you Travis, take

opportunity business. appreciate it. for take Thanks question. the Always to Happy Absolutely. the Yeah. to discuss the

our I by think encompassed other It federal business DVA is about and holistically. opportunity.

I’ve my probably pleased the go-live As years with largest ever very Brent that XX that mean, was I DoD in had noted, seen space. we’re industry. the Carson that single go-live in we’ve Wave the

well which with bodes And relates well. it us so VA moving forward we’re DoD, our very business to well for as as

on months with was similar similar to -- in I after about the position For a we can recall and to those things And -- lot what DoD, work a we Fairchild of journey, VA. took in we’re go-live on the XX on were are at we to working are we we that, our VA.

do the surprise need in, And opening assessment so, his really And training, we’re support to and we forward got got directly, expect be the on question change second and who We’ve backlog We’ve collectively. We expressed and focused To come administration doing noted opportunities as be in us. continue ready think, had to both technical spoken and we’ll be support We’ll to mutual we’re work. doing. going site work readiness as the governance, solution, remarks, came readiness, to Secretary doing. I be Secretary, got we value-add on your to the assessments configuration Deputy We service that Brent to management. a it. to half that and in, deployment. we’ve strategic move wasn’t the

pick alignment exit going we’ll out other forward in deferred support to will into in activity XXXX note of to it collectively go-live and this business. also and it I productive all contracted and with work the up activity XX-year IDIQ opportunities noted XXXX. like better DoD the We’ve move to we’ll a XXXX, wave at get plan I we the good the did right. industrial And impact The years. that So with a with aren’t will are and opportunities strength year agency I’ll revenue VA expect the similar governance into contract. think Those to XXXX. lost. in beyond and really very in level, the then start be on wave start

future up think good this. know your have for just thoughts we that. in -- of would overall thank a to because -- maybe you more kind the there clarity. keep of maybe And they’ve answer catch the could be a would you be deployments get where have do may the period, that? you of just That’s you you then want will But some And timetables to Okay. -- What of do think any not just bolus sort maybe you stable. delayed they a one on about I’ll follow some would up, interesting,

Yeah.

I on the as and think the finish we’ve to collectively. XX-year budget our goal time program basis, is on noted, on

think to originally increased see that, I and -- in do will in we activity DoD able the program. -- as continued we continue would more will that I is up and we as out years. and hoping we XXXX activity the to noted, middle that our When are to goal similar how But is together. comes speed planned be goal exactly I our than is I can’t our today. say That of expectation. be

Thank Great. so you Thank much. you.

Thank you.

with question next from El Morgan. Samuel Our comes JP

Hi, hanging do guys. of any some reduction actions to you then in else the that left quarter question. quantify you the And there could wondering the if low you was that that for expense on think I Thanks the Mark, model. Thanks. fruit? for there’s taking is maybe took also, anything

Yeah. Appreciate the question.

doing of a has probably of about more lot million the to One where normalized million and items. associated finding million we products features, charge for into it. the work related that to the and we’re this state. annual to drive talked That ways principal portfolio So we’re three about optimization R&D was with $X a capitalized itself, $X savings there’s is on $XX the redundant and

is point, us value that that and on our the one about marketed then appraisals between received. probably the XXX,XXX another side, assessments sale. to million largely $XX in action that marketing had in reduction plan the talked force, annually roughly On actions this the we depreciation north covered and $XX sold of with on we to property before million we That’s XXX,XXX we little have about we being At save talked property operating took. of now square space, office owned we’ve costs. had fair line XXX for the feet That bit XX% going charge. there XXX square million X.X in cited, total done And $XX to I space of we the million feet a we we’re we as based the And bring people. about that about -- feet square adjustment

you costs something normally We also of positions. And eliminated XXX see in amount themselves. severance that the what equal savings to roughly is that the about open is the annualized like

So maybe additional call that an XX.

three So $XX between of been to that’s items, we’ve annualized million able about capture. that those savings

And streamlining that still really so costs, is something on forward. think I revenue target it bottomline think cost structure you single-digit the can about higher the then, growth? as fair you That’s helpful or for much. guess, mid think Is about to achieve Thanks going you growth color. digits low-double do Thanks.

No.

should progression you where monetize and should probably where low goal our all the you Yeah, that’s dividend towards of by able our to think look mid right. I back that payout is the by attractive in we buy what should to revenue to we margins be respect think I right. prices, a mid-XXs it that When be growth increase single-digit shares bit to about continue expanding we’re EPS just to at fiscal XXXX. be balance in at being right, where double-digit and with able doing at look ratio sheet, able we little each year,

much. very Thanks great. That’s

Thank you.

Our from Cowen. question comes next with Charles Rhyee

help Maybe has clients a the around kind your coming about then, across talk just Yeah. you particularly and it opportunities readiness about, particularly, business, the rules think, can to the into that enforcement as you, comply what sort for thinking as Thanks. new they through? are from of services of more Can of rules to start area? kind for bit business And question. created the you little the is looking them you about data for your you industry. and I guys relates secondly, does -- all what what extra with Kantar integrate this how of maybe -- just Thanks the the taking of that summer the interoperability talk

a that It’s question. fantastic Yeah. is -- a

So, have to think, material end-to-end it. be set what been and compliant like investments Century fully one, we Cures with our looks it I for product some making around XXst

magnitude and their through also are big which Data impact in about implies, think are I Management your just really not enterprise for implications technical early thinking think in assets they nature, how them has as but question of network. clients of those provider across changes, their terms in terms Master of and

of So they’re early around we’re I conversation with clients that and in it. think thinking kind our

of it think business a us. ton opportunities up sets for I

So, strategies assets front how and a where and us to make it’s think the a about of and example technology good terms center relevance their first center action approach. in need of our of regulatory clients foremost, to

some but been about like management for tackle by real and sets data, So for we’re they right things management, near they terms associated had conversation think up larger of opportunity strategies time how hospital space. described organizations of And not that that just also to it those thinking relevant of it them in capacity security thinking to some definition. it in the importantly, growth how has data of workforce. cyber about thinking has risks that about we’re I earlier, opportunities in want It data operations, transforming their with the and has about role middle provider commercial dialogues then

our perspective this huge who than around next can So it’s want right a a regulatory great the example from It book revenue us be the and better to of XX big and into it vertical with where if then companies a can or over landscape, revenue months. get have tech conversations early-stage companies for smart understand we be tailwind clients.

follow a there… just helpful. up That’s And

Yeah.

are competitive look landscape now first like do coming that the lot And of startups integration players been existing find to looking in start coming these to they kind open hearing that, where have you different clients in does who you is is -- and right landscape your lots a about other you provide? have and the out it pitching made to tech look or like traditionally does they is clients before easier, vertical What of the part that competitors now guess. have up say, not to new alluded healthcare, you What I services can let’s new kind and today? talk big to that to it changes, that are with of don’t it does

be noise. conversation particularly outside see of they EMR assets, you up also against think well clarity there not trend the with a to have scale effectively CareAware, integration. make Well, as with our integrate size day, and At the capabilities space, with to central I our with look for contract who what their lot systems, look hospital us of intent. a has operate needs you around for provider Is I they’re healthy and operational But network with looking are agree were that network in incredibly set there’s earlier, the the And I it. and there. to we’re ought to up do importantly, end but look, set how strategic clients. to as this the they provider their thinking to more Well, the to and about like. that, said only strategies strategy someone

to opportunities, I where to patient drive for manage fee-for-service that’s the is and workflow hundreds profitably in that occur like away actually that the both MA. today, area of move really risk integration to someone buying standards is integration. exist to provider can on that So a or hundreds take solution, but points this the count market understands needs dollar first integration from also who importantly, to who within an And decisions looking going to

lot. Okay. That’s helpful. Thanks a

Yeah. Thank you.

comes Our with Caliendo from next question Kevin UBS.

can to or offering re-platforming actually question. an with us point? you. efforts stand whether you’re develop what this the if for curious whether complements Amazon with comment Amazon give just was and if in at AWS for Adam on those Noble Great. you Thanks onto that with you Kevin. This I looking more by And and for update could announcement general where of and that, is competes your in the recent just availability HealthLake on beyond the view that

Yeah. Great Thanks, Adam. question.

So, to enabled as sort Brent but up of successful CareAware, our only is growth we his strategies, platform we’ve integration around also intent, a framed drives core publicly now strategies now cloud hospitals. time that had in second not move real only have which but with in not device space our also healthy remarks,

our base. it really what for we build path how us to surfaced to of capabilities contract been to non-technical across good about that strategy think It’s management parts in go terms that of out of we client I like. technical in other some need and really think that looks So terms modernization through has learning important also what work like looks

progress positive, first this the milestones So I say some would year. the in has been of including there important half

you healthcare. be of normalize is In to we market healthcare Data fire see a it I process. But data IT. at entry of and cap sort leveraged smart That’s where we case, as looks big data be things. cap AWS deep and and an terms is of that workflow like history of different have and Amazon being and can level very of competitively to we’re competency clarity healthcare there’s what what care again, part aggregation. where as and complexity Management, that around in a exists. inherent of focused I healthcare growth a for around exit long strategy interest that of is we based the that imagine the the strategies in could very our data to around in There’s vertical, very need areas from have the differentiate able around interesting. the Those from intersection do Master it around said provider And a into validating big are on opportunity earlier, pushed being dirty

that primary year been enabled come That’s past super companies more Got it. care over sneak can rush question the just the space. of helpful. have there’s the in market if I one public a And to tech in,

And explore so attractive health given into technology to more you you additional broadly -- assets? wondering your service And be as envision that time think I’m can relationships if system guys, just you and care market opportunities? Cerner you deeply more you I delivery a that’s than over getting and would guess growth

the So a networks out I basis. how get four market-by-market built going that think, the going like to provider absolutely these trend. Again, on are what has are and outside walls look strategies hospital to right, you’re of the a been

foundation think I those to level we’re incredibly and technical well of positioned systems strategies help thinking to and be with activation. design the

lives level today play own partner right for thinking. to managing strategies to Lumeris, have of where players our Mark’s and we a provider network drive point around signing around our where how with refine To as that use growth and like where profitable they’re up We way risk performance to we the we want around strategy.

So provider to it about performance start I think it that’s needs risk taking attractive services way to how to technology and for it. look think to the our like and is we’re networks. What’s around into moving us strategy support

you when it. lot thinking of think profitably start value, and can deliver take you I you a about how of benefit advantage

the Thanks Great. for questions.

Thank you.

comes next Our from question Sean Capital RBC Dodge with Markets.

facility coming just your to Mark of maybe around action. mentioned earlier one morning. cost like Good The the saving the cost clarify Yeah. comments from Thanks. you rationalizations.

said I sold include the think XXX,XXX once tied to square does or should for you be the you what you’ve have feet just that that $XX million. XXX,XXX Is realized you currently sale? already feet square sell

Yeah.

expect the we sale. to marketed be additional for being properties of that when affect We annualized sale savings the the

Okay.

if Brent, a the So happening across sections, that’s little more all in. about what’s cost talk R&D could seen maybe organizations. you on then the maybe And bit

of at some you the higher of or lower guess kind little to reinvest see optimal there. just annually a you work point a projects rationalize and do one. you’re of to million there’s your like right bit better amount been projects? and R&D focus It sounds maybe lot budget an I that opportunity $XXX reduce the spending spending more think on ROI you kind You’re of

I think it’s question. great a

different those We groups it’s dispersed. XX little for that, product bit, continue assembled different a product XX combine process one the into products to We that the know our we’ve work our through XX,XXX area. groups into that I product and spending going were accounted this at right? in about portfolio been year R&D top We features. plus and a point is We $XXX those fact to very of talked took the we’re think XX% revenue. XXX new million

time didn’t enhance we’ve We so reporting of few systems to also that weeks, one we that about specifically the things teams have every level a excited and doing really And to to There’s spending and have that the opportunities exact very, and bring to of we’ve can them are I’m talked internal now, look penetrate about to dramatically been really fact we we clear needs delivered our was lets of single we can know in here every is scrum of what that is a us last be management doing work literally the each one million that the lot that’s one scrum markers that things the now the and previously now granular that exactly allocate and very week. be our which milestones we able have. at can that $XXX frankly, teams, for an been we system of XXX projects. forward of capability the those one just

it a The And of and that do to review are the getting sense out. of dollars with then, lot probably he’s So That’s that is But to able It’s course. Jerome, every a little if is as set. we’re itself in on plays team likely in and factor, I work going sight. to able whole think that that as more is with the great the his is, XX% very are digital a be each number. it roughly the doing comprehensive just efficient. make line going might a large he answer see lot a we sales visibility on do and Don matter a of more leading in very spending be going of fact, we product thing we true, that’s R&D of is lot new yes, a the year. been less. We’ve to money, we’ll spending be, whole to with

very I’m excited in happening area. about So whole what’s that

market. I issue of did to add time whole the

Because we’ve tremendously. and market. time as is the of ways about better are That better gotten scale, with to us. talked processes, larger and huge win velocity help it’ll You managing, for a these

We are cycle. just the through working development

Okay. That’s great. again. Thanks

Thank you.

Piper comes question Sandler. Jeff from with next Our Garro

some progressing of the fewer mentioned areas, growth operationally. like Yeah. Good morning in areas for strategic definitely although, here thanks how It those would innovation and the the on like and will Maybe on those seemed in continue taking update remarks Q&A. I But front. Don, are there addressed questions. script on the an being the were

Hi, Jeff.

did absolutely of speak those a to yeah, So, earlier. couple

engage there from things, of end doing with access around the some enterprise lens around excited still patient and team we’re we’re in with access very think, in and a centric I offer the a like cycle frankly, of core lot revenue space, trend a of the market. management areas in in front traction core kind Travis’ -- space the around the

about Certainly ton that. only partner broadly capabilities we’re space about capabilities, more has a around traction very us, excited native consumer excited what but been also our of consumer strong inside and and framework trend a not RTHS So space. unified doing for the in And communications.

think, the nice So momentum, network some I extend into capabilities really out provider enterprise capabilities around and space. that enterprise

second tailwinds, with very about As a behavioral the side really partner lot and we we’re obviously, and quarter gives behavioral coming of health. complexity the has say, you we’re longtime health seeing thinking over there get around provider onto continuum chance a A landscape, area successful we UHS but from outcome of a an as COVID health start know excited network about, in and that a end-to-end I’ll out us mental of of the out crisis to COVID. the BH perspective, and traction related lot trend that huge venue build capabilities

think think the So work alluded relates some data And organic and how balance in also space activity intelligence, future. putting sheet today data update both both that strategies as that of integration to of look we Kantar, about the around it the inorganic then area. to, we also the really but like but the we about to as the

next we’ve needed quarters. to of in nice half traction bets We two, the the six where for some and four, in faster over this made space. go So year the now we’re first the scale happy progress see we areas round with impact further

skunk about of and pick just set I to group, fair approach bit a up allowing of a things autonomy, it’s on up on that, give your a think, one Maybe amount speed, operational up development a of Yeah. went bit works question set the the view, to go. the we to

also benefited standard working portfolio. of and I we’ve I join from across that level, CTO with think some us the think we’ve found can consistency Jerome help tools having that velocity processes us as

are that those ultimately benefit, with concepts think, speed help will same applying through we us and groups we development. and see I market to So consistency those

talk at the We level about about Absolutely. a Yeah. entrepreneurial business lot group scale.

their So when are orientations. non-provider we that strategies market in have

But and the Keith we’re about like that investment benefits type. allows selling some market pharma buyer leverage factory. of So around of the life things the when digital and Jones we’re the to a attributes also level different very operate imagine autonomy pace very through thinking of looks them with sciences in scale to like it illustrative that and a way operating model are and in different move that Jerome Kantar, we to at what making in the

market. at and the so across sale terms And it scale our a operate that platforms. inside provider to with to space, more cost the are enterprise how be areas flexibility we that in different of very time, think attributes all little than core allows us efficient us same gives but the in also And autonomy to bit

the comments today. any press, on for leaving all customer more seems it there. One make cited customer me appreciate the I Excellent. retention, you’ve retention stronger to but into

on us improve tell could you primary your So you any dynamics working Thanks. give I your update to to us what’s hoping was against improve then competitor? and retention competitive could intent

a you really let But, around let this comment. there. of client to me it’s put work Travis, been ask to retention a been metrics, -- comment. effort done multiyear lot I’ll place you Travis, in has Maybe, focused and focused I teams

Happy Yeah. too.

that got I think you to what the different. are first my going was earnings do question I first call,

matter going of in the -- these of are what’s And we’re improved. discipline about So I’m I’ve to talk talked matters past. a and focus.

I terms how think of aligning our to that doing more in we’re we’re clients.

of alignment. improve my some Those earlier really, view, mentioned our client taken. actions we actions we’ve to were So in the

retention that, of engage We’ve that’s team, we prior. be organization. to expand value to points level, important So our have only a tried our how think not touch to I clients client strategic out with number really more on the to Don also strategies We eliminate to we’ve flattened noted with but them.

So, alignment. better client

organization, are only crucial. sell We commitments delivery our promises. deliver end-to-end we the in but Our client not on

and end-to-end the And our take not our But there do of actually support entirety data managed insights services, focused get consulting to that path. an on we businesses, on clients just good deliver meeting where so go-live. we’re get to we our basis commitments really we and how with along by to

us think, we meet we also clients, keep manner. so, think, end-to-end to an getting the tools great is a then as I capabilities have And for focus set and continue most weren’t crucial efficient of, commitments. And high on to in I we that and our delivery

Lights got in So and comprehensive at On driven treasure working have trove to client a we’re through data develop our we’ve programming closely of Network level. a insights, we data

the I to direction. we’ve a like the I how on the upgrades competing. and our think for your how bringing activity around question, like configuration in strategic in we’re uplifts. work I So work approach all think I I in the strategic and client half clients. That are needs that the But we’ve around the in it more -- we with always things But heading specific together those in to to work we we’re we’re clinical like and clients evaluation, earlier their planning second then their to the targeted of to proceed clients thinking space, based in -- value our I of area. holistic ways right back is about manner improve go. done and enabled how do question It’s like never individually. think, right needs blueprint to tool a and got experience. a tools focus. I those sets lot -- done. And And There’s market around that we’re collectively And

is for know we clients. our that think winning market the our driving I value And in client’s needs.

working market closely our better got organization. with insights, we’ve think I marketing

I way about that think think that we’re improving enablement. we the sales

and also also as we how infrastructure, lead. demand do as work on noted, velocity. Brent how we’re so quickly, And But on sharpen we we we generate market our as with to get our product do more IP working focus,

value, progress, monitoring, community will clients to work works referral good. Don around more teams the will which I EMR really think us that with time traditional competing allow that more our will starting good in us the with years, new health last our with the of I three really patient end well been our more footprint seen will on remote areas happy I we’ve And that And campaign competitive. so global productive outstanding, footprints, we’ve frankly, doing noted, really real are makes just come -- fruition to outside and is are add is space, how win I’m we our competed system, management, and the say rate very kind key as there. very to

So, lots progress, good to do.

day. got We’re are seeking every us tough competitor, that in we welcome get environment. better a win competition highly a and competitive and We’ve makes but we better the to

again. Thanks, Great.

Cantor. Steve from comes question with Halper next Our

When that company? the the at $XX are actions that, whole assume Hi. million it of -- think to impact cost savings the amount will we the going be about of some portion will of profitability or point, safe the is some to take, that that impact redeployed

have in looking this of right? within talked make lot constantly we’re organic through. and didn’t of think of on XXXX. can about fiscal to case, really revenue mean, But We go we drive much dollars the areas But COVID, sights we contend by I that recycle will margin the to the particular company we during that likely redirect set year mid-XXXXs a our progress. towards this bottomline, that, growth the still would fact I we that

bit help and us that of to specifically. we And regard, little most so so a have in this ways will go

period, its or that’s of if long income the that going statement? of right, hit a to case, I’m then, in XXXX? if hit do going you time income XXXX hit most the you’ll is statement, that how get And to assuming, it to the should Right. all -- in --

No. question. Great

has reduction at in time. we in point the, is been So this completed effected what say force, that I would that

our as think be fourth about run third should quarter, quarter that rates, reflective. So, you

amount forward through the that in start a As the huge amortization I flow P&L. capitalized immediately isn’t we you clarifying with didn’t you’ll roll affect associated took the the that carrying of so because position have charge that on ourselves And a it appreciated value about on $XX a earlier, property we in then then yet find earlier, that rolls largely to sale, effect, once to the we did campus million actually through. see and the of the R&D benefit side, there think question to sell

So that bit more little determinant. time a one’s

Very helpful. you. Thank

next from comes Our Eric with question Percher Research. Nephron

coming where moment, a process But CHC ongoing this you. progress evolve Mark, and thoughts traditionally you the for conference have we you for up, that’s morning. XXXX or evolved Thank kind revenue I’d have cost early around was the your growth? on I of know might the this growth commentary clear, to also there revenue evaluating after TAMs. it your look especially the long-term to And thoughts welcome on increasingly a on process is opportunities. thoughts is mid- in is

I No. appreciate that.

the we progression gross our repeating points in That’s by basis XXX-basis-point QX, it but by just prepared reversal adjusted right? in remarks, was our about You bear operating had year-over-year, the a it takeout and comment gross up I effect. might cost margin and points, XXX, a despite XXX In the right? margin made margin margin the fact know compressed actually was XXX basis down But that here.

that being the basis speaking. done So from right? just XX a team, of points broadly divestitures, this lot was only of hard Now, by came work

going plot As we revenue forward. the about think

our said, understanding One have like different to better I of are also, the vectors to a that allow we have that growth us we’re organically. the things capabilities strengthening we doing major reporting is of

out, call, what the I before. allocated business we company, had XX building within right we never P&Ls are So fully now which group

are effectively be we able out processes. multifunctional through to to planning General that businesses full our for that going resource we build with have, now in can And are plan. charge of XX our three-year have We with Managers teams we right process to going accountability use that

entire to with XXXX the We bridges involvement XXXX and them team, with level share along goes broad have we’ve our so built with whole the at and never else a everything going fiscal Board, leadership plans that before, XXXX, full date a we revenue up whereby December due that have it. clear right, that based we’re across

we And can that enabler we will then a to. us have because about the need want we understanding into I strategic better to line So we think we drive a as will capabilities these for business for that think what the allocated be across thus really to I once internally, respect a inform, might fully also internal of process, taking really to M&A point we step P&Ls of business better of to big itself. our have get do where our groups XX think, with expect what enhance impact sight

So out. more to come on

very That’s helpful.

detail that certainly I’m that. great build we to level. committed But, need to time out next three-year at doing plan very a

Very Thank you. helpful.

Bank. with Deutsche George from comes question next Our Hill

think And number the given live a off should ones guys impact XX taking or question. way a have quantified that for it’s XXXX for the -- what estimates? you a jumping headwind gross attrition Mark, you more for we new were the XXXX or about off jumping morning, first net numbers way declining of think the footprint I $X.XX a are point and number? maintenance you tailwind? XXXX, -- two, revenue And Thanks, line? would And guys, or you, on whether COVID Good you little bit point the XX the I either a for that two maybe with there what’s thanks number quick for a Hey. ask sites in is going and quarter? talk the said

I towards you. directed part that first was Travis, think,

first footprints expansion. the Appreciate Mark. if XXX be had question. clients I new I Yeah. note, half of also extensions Thanks, and XX XX would also the year. the Yeah. in remiss we didn’t

new. number we commitments clients together. gross a based a that was had to That XX the us So whole to on a our go-forward bunch made basis work on of

obviously that net I the going attrition forward. positive. improvements as three We’ve the at, net that. also or double-digit it’s year. we’re as downward good The that. been tough on several But us. in know, our of turn addition year. us half say gains last for in been back made second us some think for the starting years, over specifically four a good turn we’ve we vast that revenue and where -- attrition, where can’t to trend for noted, positive many for opportunities, have last on but positive towards been can in got say, the had net to were gain versus meet half I we’ve momentum I’d That’s terms I’ve versus or And of and feel of you The we like over we’re first years. a exceed I terms -- attrition on our years of of the

so made like I notes competing. our how -- And we’re around I and I like focused earlier competitiveness now and

that think performance we to and to continue have environment. competitive we that that, bears half our to improve have first highly in I that And continue out so

and wood, I think forward to this a say on we respect to think question at baseline $X.XX year-over-year is the pretty Certainly, is use as to you’re comes about what the COVID point, speak, differentials projections. our second to $X.XX, that I’d normal, for heavily impacts, good With going were and is the new and so the Yeah. prior in this I driven talking talk your guess, XX start year. everything by us hear knock impacted plans on the a I don’t about lot we thereafter. this,

take it think, been that is workforce properties well with $X.XX account. as arrangements. our point, We We’ve our I that working to to flexible build a pretty adjusting that our But and we’re relates say into at this making have been clean obviously adjustments relates footprint going it to to as to as to on. base

Helpful. Thank you

with Windley next comes Dave from Our question Jefferies.

your the analytics morning. drill opportunity you do for -- of like mostly, getting to sciences one, little for, trials I and/or revenue around data-as-a-service wanted business have for Good models -- data for clients top there, Thanks you identifying detail about some you’re for space life in to the revenue terms I’m clients. just the basically you providing and with, a sciences patients that Hi. taking -- revenue trials maybe model. on on identifying of thinking your provider questions. paid I just -- revenue the the or bringing life for are are patients also in interested am your but are specifically more my your getting community in to

Thanks, Dave. Yeah.

So, is just of that, sits you the as of small release revenue to sciences But inside the kind fairly business. share the lion’s over level with set, said the strategies how of sitting associated data-as-a-service and information you’ve define got the pharma. we that around business life

So a of Learning organizations set have we Network. participate in that our provider Health

So we’re year. the the XX participants targeting by of end

we on that business We’re kind different QX, on our half six economics. strategy drives clients a related of opportunities sit in economics that who One, have That based to said, hey, path partnership of performance, well Elligo. for and related first have new investment research in model we participate to including want in us. couple partner some that with

they some often. to do have So work

not Those to of to If of with related with around how you’re readiness. work looks not looks to midsize A do some or for provider MedStar what audit And clinical document like participate you’re Georgetown. you’re to [ph] trial. deal site U realities organizations the a and be with have educated asset it like what not IUH or participate, banner it in

predate then, obviously, of -- business And research those that economics So going finally, work sharing model. we’re business, sciences our we’re that players bringing those in as strategic final consulting members Allan that back we’re those set those integration we actually Cerner, opportunities activity. that. Kantar, those their top creating economics the to Learning alluded components pharma, in Kantar and in we’re Network where yes, into opportunities are small sharing engaging with businesses a and Health have include, XX around life that some standalone has of And associated to with and then, and with trial

point, than Very percolate? now? core hopefully, you’re the have of you and curious market you. end replacement beginning, helpful. legitimately the to what business, decisions opening and at do pushed assess that when to to been this I’m seeing right the Thank that is Back the just you closer replacement kind up about of pandemic think the now

footprint Yeah. then framing Well, extensions, Travis importantly, expansion. did up a really net nice and activity, job kind of new

every it the in term healthy intent. space expansion conversation have to time capability chance have RTHS a talk of client, provider affords in we’re and like things us we a sets with about most to CareAware, associated probably, around network a that driven importantly, capabilities going and with So

Mark’s paths in that the part get have maximizing make that deliver that futures. to better how sort around we actually clear deploy So value renewal a feature discipline extension around pushing dialogue with and I to of we’re there’s in an and to terms conversations to those of hard point, of them always to of think to And a any value conversation I appetite client. have we’re sure those also point, also They want as and period. think, conversation. have Travis’ And

Dave… And

you. Thank

are end …since we to individually we you’ll colleague, points million difference the work going There’s for regulatory on to from $XXX acquired probably all and million close cash we’re a to about that you. closed on up Kantar, of talked some of and markets cash question $XXX that of We part smaller going haven’t $XX process we a million. through. international I’m Allan, said yet previously, and and of get a transaction favor to between the that each two otherwise do going as two due that, you times we’re were that with and using friend there’s those data-as-a-service of topic my Kantar, answer and

that you bridges versus million $XXX the net spoke today. that the $XXX we with tell So I previously million

Thank Helpful. you.

with comes Davis SVB question Stephanie next Our Leerink. from

as for you, takeout Thank spot mentioned the the one quarter quickly of quick strategy. you Mark, hit question. taking cost how on guys, a my have ground in side, forms the lot but folks the that running bright but the

normalized year? op software the have topline maintain revenues, we if should -- the Like have like up? growth guidance about how more margin think op would you expansion where opportunity and VA EPS ended the a on Given didn’t we headwinds,

the of related now X.X And assessment. about subsequently, point Well, had another I as asked VA to to in the that. we first our point added said a revenue we was release X.X what we’ve probably think, earnings

fair would it At to X.X I say point, will of another revenue full point… mid-single on X.X think, be add this that point year if said be almost it we’ve growth. So at there’d this the another be you digits, point, simply

On the op margin side, now expect that…

Yeah. I way like say you. rates what I yeah. what guess, be guess know the generally would it, call you look for extra say I an would point $XX model so I’d the revenue would what that I pass-through kind of of guys -- is, And million. and is, that

Don, side, All on And call. earlier mentioned, I the Helpful. cybersecurity then think, you strategy right. the on

And decision? So strategy healthcare over in against for companies, to companies moves your going that this cybersecurity made be to have the assume what safe a generally tech given a the is some is competing is of specific space? already early large cybersecurity it build the buy healthcare scale lack

Yeah. question, That is Stephanie. awesome

that observationally Isn’t you’re great specific scale have businesses a just billion plus it don’t impact making one $X mean, we healthcare? I point. cyber any interesting So, to

Why?

environments combination high. think cloud, activity? when set on-prem It’s continue really about the tailwinds you and opportunity around to significant there do those going see Absolutely is think and we’re environments to interesting manage and of breach to hybrid very you with a

space. interesting really So

done lot to what down do some and thing our look think, finally, take to think like is, is smaller I capabilities. up our the an hospital good at like this try really market a today I providing we’ve size look clients opportunity it in opportunity a and think space, clients, of going where what for say, I inside using what to what those the mid holistic it do a looks owned really, And like second to say, it affiliated of footprints. of client And say doing would and we’re looks a the It’s this modestly larger The work, topline about service from as would and heterogeneity to NIST really, combination perspective as framework community. facility And from then, about importantly, like. that a how methodologically do it and network all technology level would systems to and look and market. with complexity then, it really what you with we’re also in of think provider space this

an is space. So -- interesting a this this is

the growing really the it Our candidly, Travis that do like. like is like business would of in it of the DoD, of imagine looks it in also, what the sector both of driving opportunity of But in work it to needs competency public is scale. VA in some terms and what terms the be looks terms fulfill to what at

and a bigger space the a we we’re like I about So to thinking lot it and drive organic see there. opportunities business

at something Do you as important actually think the look health for cybersecurity large to are their core systems ready strategy?

I think so.

to This to levels and think [ph] be to $X XX-day for greater opportunity front to the, the CSO say, leaders a senior it tends visible I of the in the at get is big I’ll the than basis NPR on Board. at CIO million. really be

is a care now a bit for they for point a type, implicitly for increasing. and making, which little of lot about they it conversations know buyer That’s they’re different sets. to yes, that how than are to are our sell ready strategy looking they’re around of how We capability looking level a So you’re it, so, and it.

Good.

you, guys. Hey. Very Thank helpful.

Thank thank all and Appreciate you energy listen, time it. for your you. Well, today.

a together. days, me of and great last progress to hard great opportunity take XX team lot leadership work this the all Let thank really the team for gaining over the traction just

I So great associates -- work. shout for to and worldwide also all the out

You close we’ll now. take care Thanks. and

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

may You now disconnect.