Q4 2019 Earnings Call
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[music].
Ladies and gentlemen.
Thank you for standing by and welcome to the Q4 2019, Tabula Rasa Health care earnings Conference call. At this time, all participants are in listen only mode.
So to speak of presentation, there will be a question and answer session.
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Now moving in the conference over to your Speaker Mr., Kevin now.
Please go ahead.
Thank you and good afternoon.
I'm cabin deal corporate counsel for Tabula Rasa health care.
The company intends to avail itself of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Certain statements made during this call will be forward looking statements within the meaning of that Bob.
These forward looking statements are subject to risks uncertainties and other factors that could cause tabula rasa healthcare's actual results could differ materially from those expressed or implied by the forward looking statements.
These risks and uncertainties include the developing nature of the market for technology enabled health care products and services and potential changes to laws and regulations that may impact our clients.
For additional information on the risks facing tabby the roster health care.
The first two filings with the FCC, including the risk factor section of our most recent form 10-K.
Well done March 1st 2019.
Recording of this call is accessible through a link on the Investor Relations page of our website and it will be available for 90 days.
I'll turn the call over to Dr., Calvin Knowlton, CEO, chairman and founder.
In the roster health care go.
Thank you Kevin Good evening, and thank you for joining us where our fourth quarter and for your 2019 earnings call.
With me today or Dr., Ortslan Olson co founder Chief marketing and business Development Officer, Mr. Bryan Adams.
Our Chief Financial Officer.
Kevin Boson, our chief sales.
First one Kevin will both be available to respond to questions. After we conclude our prepared remarks.
2019 ended on a solid note with for fourth quarter total revenue of $73 million near the high end of our guidance range.
Up 28% versus a year ago.
Non-GAAP adjusted EBITDA of 8.0 million exceeded the high end of our guide.
For the full year 2019 total revenue.
$285 million.
Increased 39%.
Non-GAAP adjusted EBITDA of $38 million increased 30%.
We're pleased to report another year of 20% or better organic growth.
Well first three important development I'd like to highlight for the year, including one.
Growth in our core pace market.
Two.
The significant investments in sales and marketing.
And in research and development.
And three.
The March 2019 acquisition of prescribed well.
First.
Our core pace markets continues to exhibit strain.
Fueled by 14% increase in our membership.
Nearly $10 million of cross sell revenue recognized during 2019.
This has increased our per member per month for P.M.P.M.C., 10% versus.
Versus a year ago.
$490.
No. This figure is less than 50% of the potential P.M. fiancee of $1100.
It is an indication that our comprehensive family of care Avention product offering remains under penetrated.
Based on new pay center opening.
And industry enrollment beginning to trend higher under the pace 2.0 initiative.
Along with a strong 2019 selling season.
We are confident.
2020 will be another robust year.
Second.
During 2019.
We made significant investments in sales and marketing.
A few future growth.
In research and development to continue to innovate and advance our proprietary medication safety technology platform.
Including the launch of our precision Pharmacotherapy research and development Institute.
Let's go to Florida.
For instance.
Research and development spend in 2019 increased 78% to 21.7 million.
Which is 7.6% revenue versus 6.0 person in 2018.
Including capitalized software.
R&D spend increased 104% to 36.2 million.
Or 12.7% revenue.
Versus 8.7%.
In 2018.
During 2019 in addition to streamlining the medication risk stratification process.
The team initiated three major research products with different universities and is focused on increasing peer reviewed publication.
In fact, we received 182 citation during 2019.
Which translates to someone getting reference to the work completed bar by our team every two days.
For the year 2019 sales and marketing spending increased 162%.
The $25.3 million were 8.9% revenue.
Versus 4.7% of revenue in 2018.
As we have discussed on our last few earnings calls.
We have been adding to our direct sales team to better target the health plan a market and we are excited about the new opportunities.
Building in our sales pipeline for 2020 and beyond.
Given the timing of ourselves investments through calendar year 2019, we began to see significantly more sales opportunities enter our funnel during Q4 and into Q1 this year.
For example, the number of sales leads in the first two months of Twentytwenty.
Nearly threefold versus the same period last year.
We have a healthy sales pipeline across our three target markets pace.
Pharmacists.
Tire market.
Yes.
Our March acquisition are prescribed well this greatly expanded our total addressable market quite strong pharmacy footprint.
And synergies to deliver clinical programs on behalf of health plan.
Well as diversifying our revenue mix driving services revenue to 52% of total revenue.
Software related revenue to 16% of total revenue.
Before turning over to Brian to cover the financial highlights I wanted to reiterate.
Our key Twentytwenty growth drivers.
Excluding one.
Continued success with our cross selling activities within pace.
To.
Accelerating the adoption of our Medwise solutions by Health plan across all business line for example, Medicare Medicaid and commercial.
And three increasing the number of pharmacists licensing medwise platform.
We signed important new deals in 2019 during the fourth quarter.
Including the Jones, and Bluecross Blueshield of Arkansas.
Plus we've seen an encouraging interest from pharmacist looking to license dark pools outside of our recently launched Medwise pilot.
Validating our strategy to propagate the use of Medwise. This last new population and in new setting.
A recent industry article identifying tool to help pharmacies meet operational clinical ball highlighted the use of medwise.
Well the owner of 22 central pharmacy.
The pharmacists use medwise to review complex multi drug medication regimen.
Well also leveraging prescribe wellness the gain insights into the medication that here.
These pharmacies are participating in our pharmacy network supporting the enhanced medication therapy management program for part D patient.
According to their pharmacy director pharmacists are improving patient outcomes.
Assessing the risk level other patients for an adverse drug events using the medwise risk score.
This allows their community a long term pharmacy location.
Be part of the value based healthcare movement.
Finally, the owner of the pharmacy is noted that he is now looking for ways to extend the benefit of med wise to a broader patient population.
Interest local market.
I mean, I'll turn it over to Brian.
Thank you Kelly.
A couple of highlights from the quarter include another strong period of performance from our pay segment driving product growth of 25% versus a year ago, an 8% on a sequential basis.
Non-GAAP adjusted EBITDA of $8 million, which was $1 million ahead at the high end of our guidance range due to favorable expense management.
Now turning to financial result.
For the fourth quarter of 2019, we generated total revenue of $73.2 million, an increase of 28% compared to a year ago.
For the full year total revenue of $284.7 million, which increased 39% on a reported basis and 20% on an organic basis.
Fourth quarter product revenue of $37.8 million increased 25% versus a year ago, well service revenue of $35.4 million increased 30%.
For the full year product revenue of $137.1 million increased 22% versus a year ago, well service revenue of $147.6 million increased 61%.
The strong year over year growth in our service revenue of $56.1 million was driven by contributions from acquisitions, namely prescribed wellness and 17% organic growth within our service offerings.
Gross margin, excluding depreciation and amortization expense was 34.3% in the quarter and represented 150 basis point improvement versus 32.8% a year ago.
For the full year gross margin of 36.3% represented a 370 basis point improvement.
Versus 32.6% year ago.
The increase during Q4 and the full year 2019 is primarily the result at the ongoing shift in our revenue mix towards services, which includes that.
South revenue accounted for 16% to total revenue during 2019 versus just 4% during 2018.
Increasing the mix of services and south revenue as a major focal points at an important driver and improving and meeting our long term growth margin target range of 40% to 45%.
As we've noted previously overtime, we expect an increasing bias towards licensing medwise for internal use by employee to clinical pharmacist versus the full outsourcing model that dominates today.
Product gross margin, excluding depreciation and amortization was 25.7% in the quarter compared to 24% a year ago.
As we expected the increase in margins the results of our recent transition to a new prime vendor.
For the full year product gross margin improved more modestly to 25.4% from 24.7% in 2018, given the timing of implementation with our new prime vendor.
Service gross margin, excluding depreciation and amortization was 43.5% in the quarter compared to 42.5% a year ago.
For the full year service gross margin improved more than 400 basis points to 46.5% from 42.4% in 2018.
The increase in service gross margin is primarily the result of higher margins on the SAS offerings from the prescribed wellness acquisition in March of 2019.
Operating expenses of $33.6 million, excluding the impact of the change in fair value related to acquisition related contingent consideration represented 45.9% of total revenue in the quarter up 77% from the 19 million were 33.2% of total revenue a year ago.
For the full year operating expenses of $132.2 million.
Excluding the impact to the change in fair value.
To the acquisition related contingent consideration represented 46.4 percents of total revenue up nearly two fold from 66.9 million were 32.7% in 2018.
The increase is due to several initiatives.
The launch of our precision Pharmacotherapy research and development Institute.
That's that's related to our recent acquisition and the Buildout of our sales infrastructure.
As previously stated we expect improvement in our operating leverage to begin to materialize over the next two to three years as we capitalize on expanding our salesforce execute on synergies, resulting from the acquisition and continued to integrate our platforms and infrastructure.
In terms of adjusted EBITDA, we generated $8 million in the quarter compared to $8.5 million a year ago.
Adjusted EBITDA margin for the quarter was 10.9% compared to 14.7% year ago.
This was ahead of our guidance range of $6 million to $7 million due to better expense management.
For the full year adjusted EBITDA of $37.9 million increased 29% represented a margin of 13.3% versus 14.4% a year ago.
Research and development costs, including stock compensation increased 37% to $5.1 million were 7% revenue compared to 6.5% last year.
For the full year, R&D increased 78% to $21.7 million were 7.6% of revenue versus 6% in 2018.
Sales and marketing costs, including stock compensation increased 149% to $6.7 million were 9.1% of revenue compared to 4.7% last year.
For the full year sales and marketing increased 161% to $25.3 million were 8.9% of revenue versus 4.7% in 2000 <unk>.
GSK caustic, including stock compensation increased 52% to $12.1 million were 16.5% of revenue compared to 13.9% last year for the full year, Gionee increased 81% to $50.9 billion or 17.9% revenue versus 13.
0.8% in 2018.
Lastly, depreciation and amortization costs more than doubled to $9.8 billion were 13.3% of revenue compared to 18.2% last year.
Our GAAP net loss of $6.8 billion compared to GAAP net loss of $10.6 million a year ago.
GAAP net loss per diluted share for the quarter was 33 cents compared to a GAAP net loss per diluted share of 54 cents for the same period last year.
The net loss per diluted share calculations are based on a diluted share count of 20.9 million for the quarter versus 19.4 billion a year ago.
For the full year, our GAAP net loss of $32.4 million compares to GAAP net loss of $47.3 million a year ago.
GAAP net loss per diluted share was a $1.57 compared to GAAP net loss per diluted share of $2.48.
For 2018.
The net loss per diluted share calculation are based on a diluted share count of 20.6 million for 2019 versus 19.1 million for 2018.
Adjusted net income per diluted share for the quarter was 13 cents compared to adjusted net income per diluted share of 21 cents a year ago.
The net income per diluted share calculations are based on a diluted share count up 23 million for the quarter versus 22.8 million a year ago.
For the full year adjusted net income per diluted share was 79 cents compared to adjusted net income per diluted share of 77 cents for 2018.
The net income per diluted share calculations are based on diluted share count of 22.9 million for 2018 versus 22 million for 2018.
Turning to the balance sheet as of December 30, Onest 2019, we had $42.5 billion of unrestricted cash compared to 47.3 million last quarter and 20.3 million at the end of 2018.
We currently have $60 million available on our line of credit with nothing drawn.
To wrap up my comments today I'll provide an outlook on the first quarter of 2020, and our initial outlook for the full year 2020.
For the first quarter of Twentytwenty, we anticipate revenue to be in the range of 68.5 million to $73.5 million.
Adjusted EBITDA to be in the range of $4 million to $5 million, a net loss to be in the range of 13.2 to 12.5 million.
In terms of linearity throughout 2020, we expect the first quarter to Mark the revenue low point for the year, followed by a material sequential increase each quarter as we benefit from the seasonal strength and MTM.
And the conversion of opportunities in our pipeline.
We expect profitability to follow a similar path.
For the full year 2020, we anticipate total revenue to be in the range of $332 million to $352 million note. Our guidance range is wider than it has been historically due to the overall growth of the business and the changing revenue mix with an increased focus on the payer market.
The sales pipeline is exponentially larger versus a year ago, including larger opportunities and average deal size.
Adjusted EBITDA to be in a range of 46 million to $52 million. The midpoint of the 2020 margin range, 14.3% represent 100 basis point increase where we landed in 2019 and 150 basis point expansion versus the midpoint of the full year 2019 guidance provided last quarter.
And is consistent with my prior comments.
Net loss to be in the range of $31 million to $27 million. These net loss projections do not include any future adjustments to contingent consideration liabilities related to M&A.
We expect to generate $15 million to $20 million of free cash during 2020 and looking beyond 2020 recall, we provided long term target during the analyst Investor day at the end of January including revenue growth of 20% to 25% gross margin of 40% to 45% and adjusted EBITDA margin of 20 plus percent.
For modeling purposes, we anticipate margin expansion in 2021 to be at a slower rate versus twentytwenty with a key factor being 2019 is easier comparison in an anomaly given the dilutive impact of our acquisition of dosing the launch of our R&D Institute, Florida, and the significant expansion of our Salesforce is highly.
I did earlier.
Overall I'm pleased with popular Ross's performance in 2019, we ended the year at the midpoint of our initial guidance ranges for both revenue and adjusted EBITDA that we provided post the March acquisition to prescribe wellness.
But the last of the large contract we discussed last quarter.
Our traditional paced market remains.
No, but with continued strong membership growth and cross sell effort that exceeded internal expectations in 2019.
We're optimistic that the Salesforce investments we've made in 2019 early wins and the resulting growth in the pipeline will convert into even stronger sales momentum outside of peak years ahead.
With that said I would like to turn the call back over to Cal for his closing remarks Cal.
Thank you, Brian and thank each of you for joining our call.
Sincere thanks to our sophisticated team members, who have enabled us to continue to propagate are disruptive medwise medication safety solution.
We look forward to continued solid growth.
In Twentytwenty.
Operator, please open the call for questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound.
Please standby wildly compiled the culinary roster.
First question will come from Ryan Daniels with William Blair.
Hi, guys. Thanks for taking my questions, Brian maybe one for you in regards to the wider revenue range. This year.
Appreciate some of the.
Volatility there given the size of the pipeline, but can you provide a little bit of color, maybe it's a midpoint of how visible. Your revenue is for the full year and then maybe some of the key puts and takes to get you towards the higher or lower end of the range sure.
So at this point Ryan we've got about a 10% bogey that we've got to go in with at this point so to get to the.
The midpoint of the range and you know in conversations with cabinet I'm sure we'll expand.
Future questions today.
We feel pretty good about that number based on what's in the pipeline. We've got a number of pretty large opportunities that could put us at the high end.
But we did spend last year building out the sales infrastructure. So we felt it was appropriate to put a little bit of a wider range in a bigger target given the fact that we've now got a team that's out there.
Selling.
And so that's because at the midpoint of the range would be about a 10% to go.
Thats helpful. And then you talked about one of the potential things being conversions and.
Your current client bases.
When you referenced converting MTN MTM and if Thats. The case can you talk about what type of momentum you're seeing in that specific opportunity.
They will have Kevin take that one but I think that your question was can we talk a little bit about conversion in the pipeline and what we're expecting the.
And what is that exactly as anxious MCM begins in and then.
What level strengths are you seeing what opportunity.
No. Thanks, Brian that probably what's what's building this is Kevin Posen, but which building in that pipeline from a conversion standpoint, probably more than a traditional MTM to any MTN as new programs by Medicaid and commercial Payors. There are some Medicare plans that are looking to add the med wise or the empty.
Solution to their existing programs, but not necessarily forecasting.
Any changes at CMS would do to change requirements in the MTM model. So a lot of it is in other markets or is Cal mentioned.
Community pharmacies, taking on some of that some of that delivery and opportunity as well we've seen some.
Some good strength in the collaboration of of how we've aligned our payer and our pharmacists business unit and that we have this pharmacy network that can provide clinical services. The payers are excited about that it's a great patient engagement strategy.
And likewise the community pharmacies are excited about our our our payer relationships in the opportunity to provide services and some of those other markets.
Super helpful. I'll hop back in queue. Thank you.
Thank you. Our next question will come from Matthew Gilmore with Baird.
Hey, Thanks for the question.
I wanted to ask about the payer deals you signed in the fourth quarter I think last call we talked about Magellan.
I know you mentioned Blue Cross Blue Shield of Arkansas, which was I think a new disclosure. So I was hoping you could talk about that relationship and sort of the nature of the you know the services, you're providing selling them at why side or is that.
Prescribe wellness or.
If you could just provide some details let me great.
The the Arkansas Bluecross Blueshield contract is something that came through that prescribed wellness side, they're interested in working specifically with community pharmacies to deliver services, it's very much gapping care closure focus.
So leveraging the community pharmacies to provide more support for patients with diabetes hypertension.
Dyslipidemia high cholesterol. So it's a it's an opportunity that came from that relationship and they're interesting community pharmacies. So they're very pleased with the outcomes that they've seen in that program had been a great partner to work with and we're looking at expansion opportunities and including.
Increasing.
The use of Medwise from a patient targeting standpoint.
And then.
As a follow up Khalid mentioned getting medwise licensed by more pharmacist says one of the key goals for 2020.
Hoping you could talk a little bit about the ability for and a willingness for pharmacist to pay and kind of how you're thinking about that pricing model.
Given that it allows pharmacist participate in these value based care programs. So just wanted to get a sense for.
Their ability to to buy the services.
Hey, Matt Brian we already have some pharmacies that are licensee the platform as you know with some of the at risk provider groups that were partnered with but that's more on an enterprise basis. The Golden Callout line was.
To have more pharmacists.
More so in the independent pharmacies license the platform, we launched a pilot very recently, we have a number of pharmacies that are involved in that pilot and part of it is to really understand what is the ROI that we're able to deliver for the pharmacy and the willingness to pay.
So that's going to run over the next few months. So our expectation is that the bulk of those pharmacies that we ultimately onboard as licensing and paying customers, they're going to happen in the second half. This year once we have some more information.
So we don't have all of that ironed out just yet although.
Cal commented.
We have a large number of pharmacists.
Individuals that are interested in licensing the platform outside of those that has decided to.
As we've we've allowed to participate in the pilot.
Got it that's great. Thank you.
Thank you. Our next question will come from Sean Wieland with Piper Sandler.
Hi, Thanks, so much so just to continue.
On that you also said, Brian that you're getting used to licensing model more.
Then the full outsourced model.
Based on the demand that you're seeing can you just expand on that a little bit is too.
Why that trend and what's the how that impacts your economics.
Ill ticket person than maybe I'll turn it over to Kevin I think that we've continued to see interest from at risk provider group and those health plans that employee pharmacists with using our platforms and licensing those.
And we're expecting that that trend is going to continue we had that on a very limited basis today.
So even incremental.
Conversion of those opportunities could be pretty significant for us, but Kevin I don't know if you will expand on that.
I would add I'd agree with everything that Brian said I think as the as we go out and do.
Do a lot of vegetation up that at risk providers or even the payers.
In the pharmacists out those plants at the opportunity to see the platforms.
They very much want to use it themselves and then there's there's a great opportunity for them to use it and collaborate with some of the other internal programs that they have so.
Theres, probably a higher interest then I think I would've expected initially and having it be a a license model versus a full service model.
Sort of anticipating a little bit of that the challenges of pharmacists, taking on the education around it but we've seen probably the opposite in most cases.
Okay and does that change your economics at all.
Sure overtime those those relationships are going to be soft driven very high margin.
Certainly.
Longer term kind of play into how we expect.
The business mix to shift.
Ultimately whats going to lead to us being able to achieve those longer term margin targets as 40% to 45% EBITDA margin target.
North of 20.
Okay got it and then.
Just one of the the cadence the seasonality in Q1.
We haven't seen revenue down Q4 to Q1 before can you comment on that and what you expect the mix to be between products and services sure. So.
Typically what we see is.
Q1 is the weakest quarter.
The MTM offering standpoint, this is where they are qualifying a lot of their members.
And we did have.
Strong second half of the year, which as you look toward.
Through the first quarter modestly down.
But we do.
We do anticipate that that's going to ramp pretty significantly into Q2 and then.
Following quarters as well, but.
Just given the amount of.
Work that goes into qualifying those numbers.
Really what's driving.
Revenue to be more modest acute.
Okay. Thank you very much.
Thank you. Our next question will come from Jamie Stockton with Wells Fargo.
Hi, good even thanks for taking my questions I guess, maybe just a follow up on on what Sean was just asking about.
Maybe more specifically for the pace business it sounded like.
Last quarter, you know you guys talked about finding a lot of business.
You expect that some of it to launch.
I think early in 2020 can you just give us.
An update I guess, maybe on how things have gone and the cadence of.
You know, but the pace organizations that you've already got signed that are going to go lives. This year, what it second I'll look like are we going to see most of the business early in the year and then a relatively static steady level of business or is it going to continue to ramp.
Hi, Jamie this is Ursula well I, our cross selling certainly has begun and with regard to existing what's already signed a last year. At this time, we had about eight new clients an expansion schedule.
We have over 20.
For 2020, so exciting year for us that is made up of plant expansion, new clients start up as well as an expansion multiple locations.
Typically we do bring on new larger programs later in the area, we expect that to happen this year as well.
Okay, and just maybe specifically because I think a lot of is thinking about this.
No I think your commentary is kind of like holistic thinking about what you're doing pace organizations, but a lot of us think about it along.
The products and services lines.
Should we thinking about maybe the product revenue for the traditional pharmacy revenue ramping earlier in the year and some of the cross sell stuff hitting later in the year.
Oh, I don't know that necessarily earlier in the year.
Yes.
Jimmy the way that Brian the way that we've modeled it out.
You know is a pretty consistent growth rate for the pace throughout the entire year although.
There is an opportunity to see some of that accelerate in the latter after the year.
But what we've currently model than guided to is about a 20% growth rate.
Okay, and then maybe my only other question I was just.
Prescribed wellness contribution during the quarter.
Sure so.
Brian prescribed wellness, maybe just even to recap for the year I don't know calories.
Comments on the prescribed wellness performance, but I think the businesses really done significantly better than we had expected when we completed the acquisition. So we're all extremely pleased with not only the financial performance, but the team that we've inherited feel quite lucky about having.
Onboard with US now and so if you look at the revenue contribution specifically for Q3, it's about half million dollars.
Excuse me for Q4 for Q4, Okay. That's great. Thank you Sir.
Thank you again, ladies and gentlemen, if you have a question at this time. Please press. The Star then one can your touchtone telephone.
Next question will come from Steve Halper with Cantor.
Hi, one housekeeping question.
Then another what did you say the free cash flow would be for 2020.
Team to 20 million Steve.
Okay and Thats after interest the interest expense correct that's correct.
Okay, and then yes in the 2020.
Guide do you make any assumptions about.
Expanded CBS contract.
Okay.
This point, we havent, so should that come through the way, we hope that could it could put us at the higher end of our guidance, but at this point the mid point does not assume a significant contribution from that new contract.
And and why is that is that it just takes time from.
I get that thing going.
Yes, Steve this is Kevin.
It does so that contract is that how.
And work with CBS as they approach payers with the opportunity to provide.
Use us for additional services. So we're in the process and CBS is in the process of talking to their payers about what makes the most sense for 2020. So we just haven't forecasted that because of that.
Great. Thank you.
Thank you. Our next question will come from David Grossman with Stifel.
Thank you.
Brian I don't know if I caught the numbers right, but just based on the.
Prescribed wellness contribution on a quarter it looks like service revenues.
They have been flat year over year. So first of all my am I getting that right and that is right, perhaps you could explain.
Why the organic growth rate to seller, if it's so much in the fourth quarter.
Sure David you do have that pretty much right.
At this point, if you recall, we forecasted about $6 million worth of revenue from the CBS contract that was cancelled in the third quarter for Q4. So we had really planned for.
For that to.
To be stopped during that timeframe and so we had pulled some of the work forward into Q1, two and three in order to accommodate that.
So the growth rate on the first half of the year, which was much more significant than what you saw in Q3 in Q4 as a result that.
So so basically there was a $6 million.
From the loss of Cvs on the service line in the fourth quarter.
That's right.
Okay, and how does that play out then as 2020 progressive does the new contract start contributing in a way.
With that growth rate improves in the first quarter or do we still have that headwind since you pulled forward revenue last year.
And we're not fully ramped yet in 2020, I'm just trying to get a sense of what to expect for service revenue organic growth as 2020 progressive so there's going to be some pickup related to prescribe wellness for Q1 Q2, but on an organic basis.
I would say that there's going to be modest growth.
In the first quarter.
Somewhere between.
Let's call it 5%.
Q1.
So we are starting to build off of that fee.
With that.
That's the appropriate expectation.
Got it and then as you look at your guide for the year, if I just want to make sure I understood you correctly, where you talked about.
That you needed about 10% so does that mean to hit the midpoint does that mean your visibility on the low end of the range today and that to get to the midpoint of the range you need.
Basically another 30, some odd million dollars of revenue to book over the course of there.
That's right I mean, and just to put that in perspective, when you look back a year ago, where we were and what we've guided.
We were somewhere in the 5% to 10% range.
And now this year, we're saying we're going to be closer to 10% at the midpoint. So this is not an unusual place for us to be.
Right, we have a little bit larger of a bogey. This year given the sales infrastructure. That's in place in the opportunities that we see in the pipeline that we expect to convert so we think that it was appropriate.
With the band out that we did.
But yes, I mean, we have we have clear visibility as to how we get to the low end of the range and then we would need to close about.
$35 billion, though.
Got it and Kevin just way on the line I know you spoke a moment about the pipeline but.
Can you give us a little more granularity of.
Of what's in the pipeline that could close and 2020, what type of to obviously name names, but just give us a better flavor for that type of revenue that's in there and the type of customer and the size of those deals because I think you did mentioned that you were up a lot year over year.
Yes, we're going to give the names, but then you said I didn't have.
[laughter] the so what we're seeing in the pipeline were heavily focused the sales team on the expansion of med wise in the payer space. So the majority of what where we're really focusing on is is the MTM type of model in different markets. So the majority of what we have probably half of what we have in the pipeline.
Are those contracts and they involve commercial payors and Medicaid Payors and then some add on services like I mentioned in the Medicare space. So for example, a Medicare plan that wants to target patients.
On opioids from medication safety standpoint, so those programs that what are nice about him is there not calendar year related so that we can start on mid year. So those are the types of programs that we're expecting to fill that need within that 2020.
Got a great thanks very much.
Thank you speakers I'm showing no further questions in queue. At this time I would now like to turn the call that goes into management for any further my.
Well. Thank you very much for everyone that participated and again, we are very optimistic on our twentytwenty disruptive solution to continue to solid growth on medication safety and we Didnt mentioned, we do have a.
Couple of other things in the pipeline that are fairly interesting and we'll be able to share that with you hopefully in the next month or two.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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