Q4 2019 Earnings Call

[laughter].

Good day and welcome to the Spokes 2019 fourth quarter and year end Investor call. Today's call is being recorded Omar today, we have bits Kelly President and Chief Executive Officer, Mike Walsh, Chief Operating Officer, and Chief Financial Officer, and John Locke, Chief Technology Officer at this time.

Opening comments I will turn the call over to Mr. Walsh. Please go ahead Sir.

Good morning, Thank you for joining us for our 2019 fourth quarter and sold your Investor update.

Well, we discuss your operating results I want to remind everyone that today's conference call May include forward looking statements that are subject to risks and uncertainties.

Turning to spokes future financial and business performance.

Such statements May include estimates revenue expenses in income as well as other predictive statements from plans.

Dependent upon future events or conditions.

These statements represent the company's estimates only on the data this conference call or not intended to give any assurance as to actual future results.

Spoks actual results could differ materially from that was anticipated and these forward looking statements.

These statements are based upon assumptions at the company believes to be reasonable they are subject to risks and uncertainties.

Please review the risk factor section relating to our operations and business environment in which we compete contained in our 2019 form 10-K, which we expect to file later today and related documents filed with Securities Exchange Commission.

Please note that spoke assumes no obligation to update any forward looking statements.

Astra President filings and conference calls.

With that I'll turn the call the sense. Thanks, Michael Good morning, everyone. Thank you for joining us on todays call. We're encouraged by our performance in the fourth quarter I'm 29 team and we believe we're positioned well for sustained improvements will be 2020.

In the market and sell our new cloud native integrated communication platform Stones go.

Formats, along with the significant progress on R&D team made in 2019 on our new cloud based platform provides us confidence as we enter the new year.

So before we get into the details for the quarter in full year I want to underscore where we are strategically with respect to our business plan and outlook.

Having entered a new decade, we believe we are poised to transform the healthcare landscape to our strategy of offering integrated cloud native platform for mobility.

Clinical learning workflows and contact center solutions.

Well go platform announced last week was developed on the foundation of a single best in class architecture built on a cloud based software as a service for SAP delivery model.

This effort has been a long time coming and we know it's time to deliver we intend to do so sales and revenue will ramp up over time, but based on customer feedback and or valuation of the competitive environment. We believe we're on track for long term success in value creation.

Reward all our constituents.

As has been the case the last several years for us to achieve our long term goals, we need to maintain separate engineering teams for the existing Spok care connect solution and the forward development of new platforms. So go.

We want I spoke platform developers to be on Saturday day to day support issues and distraction in order to make as much progress as possible over a short timeframe.

Oh, no continues to reflect that structure.

This has resulted in increased development cost associated with reductions in margins. These past few years.

Offset this going forward he made a significant change our strategy around on premise based spok care connect solutions in 2019 net portions of both development and support had been in offshore to take advantage of lower labor pricing on bringing increased focus on speed spoke go platform with our U.S.

Space developers for 2020, we expect approximately 20% of our R&D spend to be for our legacy solutions and approximately 80% to be on our new platform, reflecting our continued investment in our future.

You talked about this before but we are transitioning our software business from a customized premise based solutions.

Configurable cloud native solution.

This transition will take time, but ultimately result in a platform that as much easier to upgrade expand sell in service.

We also continue to remain focused on the efficient effect operation of our wireless infrastructure support systems. Our wireless subscribers provides a base that allows for investment in product development as well support for our capital allocation plan overtime, we expect software revenue to exceed wireless revenue on a quarterly basis.

However, despite that distinction our wireless business will continue to be a significant driver in our success as an organization for many years to calm.

Deeply integrate the majority of our system and consider paging to be a surface line as part of the spoke go platform.

As we've laid out in the past our investment to complete the spoke of platform and become a leader in unified clinical communication Workbook collaboration will continue to book pressure on operating margins as we support sales execution in development with our customers.

Her taking has made significant progress since 2017, just announced last week. The first availability of our new platform spoke out.

Our focus in 2020 is the balance the acceleration of the internal development and selling efforts for our new spoken platform, while maximizing sales of spoke go Spok care connect call home, maintaining our wireless subscriber base.

As always creating stockholder value over the long term remains a key driver of our strategy along with our focus on all constituents, including customers employees and the communities and which we live in work.

While we made the pivot into first place we believe our constituents will ultimately be rewarded as our investments in deference, creating a unique and powerful clinical communication platform you have in future revenue EBITDA and operating cash flow growth on behalf of our entire senior management team. We appreciate your continued support that our investments.

Right It doesn't this journey.

Now turning to the 2019 fourth quarter and full year results, we were particularly pleased to see sequential growth in software bookings in the seasonally strong fourth quarter.

Turning to more than 17% sequential growth in software operations bookings.

Also the continued yearly improvement in our wireless trends, including a reduction in paging unit in Russian as well as continued slowing of wireless revenue declines.

We believe these accomplishments for the rest meets all of the investments we've made in our sales team and infrastructure.

Overall, we continue to enhance our product offerings and maintain the strength of our balance sheet.

Our ability to continue to generate cash allowed us to execute against our capital allocation strategy, returning more than 16.4 million for stockholders and 29 team in the form of dividends share repurchases.

Mike Wallace and John Malone will provide details on our financial performance in development activity shortly.

I want to highlight.

For 2019 fourth quarter and full year.

First.

And for our software solutions and wireless services resulted in consolidated revenue of 150.3 million to 2019 down approximately 5.4% Empire year.

Year over year performance was driven in large part by $6.1 billion year over year reduction in wireless revenue, although at a slower than anticipated attrition rate as annual to clients remain in the mid single digit range.

Software revenue in 2019 was also down approximately $3.1 billion in the prior year.

Just on developing our new cloud native and integrated communication platform.

While we are not satisfied with software revenue levels. In 2019, we did see a continued trend a very strong renewal rates on software maintenance contracts also our pipeline of marketing qualified sales leads continues to grow our sales engineering team was also very busy last year. They performed approximately 120 customer demos.

I'll try and nearly 400 statements of work completed more than 50 RFP.

Demand for our solutions remain strong as a north American markets, specifically among hospitals and other help organizations.

Where we sold solutions for smartphones Communications call Center management secured texting clinical alerting and emergency notification for both new and existing customers.

Next.

Wireless subscriber and revenue trends continued to improve in 2019, as we again exceeded our expectations for gross additions that unit churn revenue and ARPU.

Noteworthy in 2019 with 112000, new units that were added to our subscriber base.

Particularly pleased to see many of our gross placements come from takeaways from a key competitor in this space.

Our year over year rate paging erosion was consistent with prior year levels as the net number of units loss during the year totaled 54000 down 5.4% from the prior year.

Our year over year range of wireless revenue erosion was only 6.5% for 2019, a 30 basis points improvement from the prior year, meaning sharp reduction from a double digit declines we saw prior to 2016.

Overall, we are pleased with our operating performance in the fourth quarter and the company substantial progress in 2019, we met or exceeded our expectations on a number of key operating measures and we achieved these results.

Just to make strategic investments in our business.

In addition to our financial performance progress was made in several other areas, including product development sales strategy and key strategic partnerships and agreements during the quarter, we did more than 36, new figure six figure installations.

More than 30, new six figure installations spoke solutions for our customers all those three when new logo deals I want to highlight a couple of NIS six figure deals for you.

October we signed a deal for large north central based healthcare system for inpatient admissions net patient revenue.

It operations and not for profit health care system, eight hospitals 145 outpatient locations nearly 5000 physicians are more than 38000 employees. Their graduate medical education include 955 residents and fell 105 residence Inn Fellowship programs.

This organization has been a valued spoke customer multiple solutions for 10 years in 2017, they switched to a competitor rather than upgrading the spot.

Competitor failed to execute on plants like migration due to the healthcare systems complex needs. The spoke team staying close during this that's sort of time, which she thought we need partnership in October the organization executed on Spok care connect one down nine upgrade $412000 and we'll leverage.

For enterprise wide consolidation efforts.

Another customer I'd like to highlight the self funded political subdivision healthcare system of the southeastern state does not receive tax dollars in the community.

Research and teaching hospital has five locations 747 beds and around 9000 employees and 700 positions on staff.

This organization Thats been spoke customers more than 12 years, they acquired three new hospitals between 2018 and 29 team.

Last year senior Maya was not pleased with competitor they were using for secure messaging. So they turned the spoke for their physician collaboration needs.

Staying close during the transition and in doing so strengthen our partnership with the clinical level.

Temper the organization executed on Spok care connect upgrade a $402000 while locking in a five year deal thousands spok mobile licenses and an expansion for messenger solution. These are just a couple of examples of our activity in the fourth quarter.

Finally in 2019 spoke continues to build an industry leading reputation in the marketplace. Let me give you a brief overview of some of our accomplishments in this area first for the full year 2019, we added more than 160, new accounts, primarily in healthcare and government sectors.

Additionally, during the year, we announce key strategic partnerships, most notably, notably with Amazon Web services or NWS were complete cloud services infrastructure installed enterprise come us customers excellence and security agility, and breadth and depth and services. That's a real time cloud based communications solution or.

So in 2019 or management keynote speakers numerous conferences.

Yes, but we see recognition as the number one secure communications platform for hospitals and health care system by Black book market Research.

Also we continue to provide solutions to all of the U.S. News will report best adult hospitals, and all but one of the best Children's Hospital.

Finally during the year, we continued to add depth and experience spoke management team, our new Chief Medical Officer, Dr. met and ethnic and Chief Information Officer dependable.

We intend to carry all this momentum into 2020 to stimulate long term growth.

I will have additional comments on our 2020 outlook capital allocation strategies and governance matters in a few minutes, but first Mike Wallace, Our Chief Financial Officer, Chief Operating Officer will review financial highlights of the quarter and John will Love, Our Chief Technology Officer will update you and provide more detail on a recent development efforts.

Right.

Thanks, Vince before I review, our financial highlights for the fourth quarter and full year 2019.

I would again encourage you to review our 2019 form 10-K, which we expect to filed later today.

As the contains far more information about our business operations.

And the performance copper on this conference call.

As Vince noted, we we're generally pleased with our overall operating performance in the fourth quarter full year 2019, and believe it positions us for sustained improvement in 2020.

While we were not satisfied with revenue levels in 2019 significant progress was made in meeting our loan business goals.

Sustained levels of software bookings and continued record low attrition of wireless revenue combined with continuously focused expense management resulted in 11.7 million in net cash flow provided by operating activities in 2019.

Spoke was able to achieve this performance as we continued to return cash back to our shareholders in the form of dividends of 9.8 million and share repurchases at 6.6 million, while also investing in our business for long term growth.

Our balance sheet remains strong.

Cash cash equivalent and short term investments now 77.3 million at December 31st 2019.

We continue to operate as a debt free company.

We believe this provides a solid financial platform and are well positioned to execute against our long term goals in 2020 and beyond.

In the interest of time today, I will not review, our fourth quarter and full year 2019 income statement on the line by line basis since much of that information is contained in our earnings release tables and as you've seen filings.

However to the extent, but you have specific questions about our quarterly financial results I'd be glad to address them during the Q and a portion of this call.

Rather I want to focus this morning on for specific areas. These include revenue.

Operating expenses.

Review of our balance sheet, and our financial guidance for 2020.

First with respect to revenue in the fourth quarter 2018 total revenue of 39.5 million was in line with the prior quarter on down from 43.3 million fourth quarter 2018.

Full year 2019 revenue of 160.3 million was down 5.4% revenue of 169.5 million in 2000, an age.

Looking at software revenue total fourth quarter revenue of 17.9 million was up slightly from the revenue of 17.6 million in prior quarter, a downturn revenue of 20.2 million in fourth quarter of 2018.

This decrease in software revenue of 2.3 million on a year over year basis was primarily due to lower license revenue and associated equipment revenue.

As a result of our software operations bookings being slightly lower and mix of bookings being more heavily skewed to services, which has the positive impact and increasing our backlog.

Does not have the immediate revenue recognition of license in equipment bookings.

That said software revenue for the fourth quarter was supported by sustained maintenance revenue renewal rates of approximately 99%.

For the full gear, we saw the same dynamics just mentioned.

Play out with respect to license and equipment revenue.

Were positively offset by increases in services and maintenance revenues of 6.1% and 3.3% respectively on a year over year basis.

[noise] wireless revenue for the fourth quarter remains solid.

Climbing by only 0.9% prior quarter.

For the full year wireless revenue was down a record loan 6.5% 2018 levels.

Noteworthy in the second half of 2019 wireless revenue erosion slow to historical low of 2.9%.

This reflects this result reflected another impressive performance by our sales team to again generate significant wireless gross additions, while minimizing churn and maintaining stable price.

Now turning to operating expenses for the full year 2019, adjusted operating expenses, excluding depreciation amortization accretion and goodwill impairment charge totaled $158.8 million.

Down from 161.9 million in the prior year.

This performance, primarily reflects increased efficiencies and expense reductions in general and administrative costs.

And partially offset by increased level of investment.

Research and development and then our spoke go platform of 12.6% on a year over year basis.

[noise] depreciation amortization and accretion decreased in both the fourth quarter and full year 2019 compared to the same periods in 2018.

Primarily due to lower amortization expense associated with our intangible assets.

As you May remember due to our rebranding in 2014, we had revise the amortization period for the intangible assets associated with the M. column acquisition, which resulted in increased amortization expense in that year.

During the fourth quarter, we performed our annual assessment of goodwill.

On an assessment and given the recent decline in the market value of spokes common stock. It was determined that the carrying value of the business exceeded the estimated fair value with the company developing it and impairments.

However, let me point out in our belief impairment does not reflect management's confidence in the future value of our business. Our outlook continues to remain strong.

We believe spoke though is set to meet significant need in the healthcare marketplace and will create significant value for shareholders in the coming years.

For more detailed explanation of how the estimated fair market value would have been used arrived we see no six and our 2019 10-K, which again, we expect to file later today.

Nonetheless, the assessment of goodwill resulted in an eight 8.8 million non cash impairment charge in the fourth quarter.

Excluding the impact that the charge, which we believe is it more appropriately to look in our results. Since 2818 did not include any change in the assessment of goodwill.

Net loss and loss.

We're more consistent with 2018 levels.

Next our capital expenses in the fourth quarter 2019 were approximately point 7 million and worker and were incurred primarily for the purchase of pagers and infrastructure to support our wireless customers.

For the full year capital expenses totaled 4.8 million down from 5.9 billion in 2018.

<unk> decreased capital needs to support the spoken platform development.

We believe that we're past the major portion of our capex requirements to support our strategy and that level should generally remained flat over time.

[noise] finally, looking at our deferred tax assets on duty days.

Approximately $49 million in DTA is at year end up 2.5 million from the prior year end level.

The DTA is primarily consistent net operating losses, which will expire in the years 2025 through 2029.

Based on the availability of these DTA.

I'd expect to pay a significant amount and federal income tax.

Foreseeable future. The DTA is allow us to offset virtually all of our regular federal tax.

And lastly, with respect to our financial guidance for 2020.

As is typical with our fourth quarter earnings release, we have included an additional schedule detailing the components of our annual guidance here.

We did in that guidance, our spokes expectations for software in wireless revenue generation in 2020.

We expect total revenue to range from 149 million into 165 million.

Included in that total we expect software revenue comprised 72 million to 80 million consistent with 2019 levels at the low end at the right.

Low end up the guidance range and the 10.9% improvement in 2019 at the high end isn't it.

Finally spoke expects adjusted operating expenses, excluding depreciation amortization and accretion to range from 158 million to 167 million capital expenses to range from 2.3 million 6.3 million.

I would remind you once again that our projections are based on current trends and that those trends are always subject to change.

With that I'll turn the call over to John the lines, who will update you on our software engineering efforts.

Thanks, Mike Good morning, everyone I appreciate joining bins and Mike on todays call to give you a brief update on sports foods and development efforts.

I'm pleased to report that earlier this month, we made the third major release of our cloud Native spoke go platform available to our customers.

I'm truly excited to showcase all the new functionality concludes workflow automation next month.

2020, <unk> Orlando, beginning our selling process.

It will be an outstanding conference for spoke this year within already very high level of interest from caused customers to see this release persons.

Vince described earlier during the call. We believe we are poised to transform the healthcare landscape through our strategy of offering a single integrated cognitive platform for mobility clinical alerting scheduling will close in contact Center solutions, we've partnered closely with Amazon over the past 20.

Four months to design spoke go platform utilizing the very latest compliant and industry proven Cws services.

This effort has yielded the best in class real time system architecture within that and outstanding level performance reliability and security.

A few companies in our market segment, but means to make this level of investment required to get more true enterprise grade.

Communications and clinical workflow automation capabilities. That's both has been able to manage it also requires the top notch R&D team with season expertise in cloud platform engineering, which we have assembled over the past two years.

Spoke go platform represents a significant leap forward in delivering innovation innovative solutions that the market is demanding.

I've met with dozens of customers a new prospects over the past 18 months and I'm delighted to report that the feedback because frankly been a bit overwhelming regarding the suitability of spoke going to address longstanding unmet needs in patient care coordination and really much of the increasing burden clinical staff taste.

Today.

It's also imperative that we innovate new lead new ways to help address clinical staff burden as well as mitigate new risk the patient safety.

Let's move release.

Oh the spoke go platform is a culmination of close collaboration with our clinical innovation partners and literally hundreds of thousands of hours across our collective organization.

The set of new features and capabilities in this third released or more than doubled first and second major releases of spoke go combined.

Indicates our organization that's accelerating its paids.

Innovation.

Customers buy into spoke goal this year and participate in Spokane political inhibition partners program. We expect this piece to continue.

As Vince described earlier, we pursued a balanced approach to onshore offshore resource allocation.

Based on successful models put in place in my previous R&D.

Leadership roles at the trial and GE healthcare.

Key members of our in engineering leadership team have also having just spoke with these companies, which is aided leveraging prior relationships with global engineering firms and achieving our long term goals and balance quickly over the course of 29 team.

Haven't giving.

The background for development efforts, let me now take a moment outlined just a few of the new capabilities included in our latest release of the spoke go platform.

Most significant new capability is a cloud native on call scheduling service. This new wont be service is both multi site and multi department, beating become scale from a single hospital are coming to the largest of health systems with dozens of hospitals clinics imaging centers.

In ambulatory surgical centers the service always remains performance and isn't different to the total number of schedules due to our use of dws elastic compute and capabilities.

E.W. us infrastructure automatically skills up computing resources, when needed and reduces computing resources when the Ankole system uncalled scheduling system activity is classes.

This means that we can instantly impedes computing horsepower, and then drive down as needed with lower activity to optimize responsive months, while minimizing costs.

Hundreds of uncalled schedules can be created and manage within this movie service if everything can be accessed and can be viewed through your favorite web browser spoke provides important analytics.

Hi, Paul schedules.

To more effectively balance.

Yes, sure loads and determine in Atlanta.

Yes, Matt schedules, thereby mitigating potential where no one being designated for an on call roll.

The global Directory for the spoke go platform has been extended to include share device support and aging device. The permission customers have long recognized spokes global directory, that's their source of true they read who lead acknowledge spoke provides more enterprise value and other.

Price directories based on for example enterprise email.

Spokes global directly now in the cloud secure access and immigration with apps has been made radically easier and with the new enterprise value for healthcare organizations.

Clinical work full packages have been as labs, radiology, which are fully integrated with their desktop and mobile apps, we can now.

We can mobilize customers each ours by routing high priority orders of indeed trying to care team members with Configurable Escalations speaking of mobile we released a new title version of our enterprise clinical communications mobile App for iOS I pad.

Well, that's an Android.

This new version of spoke go now offers integration with our paging network infrastructure, a flexible global search capability and an innovative activity concept, which is a one stop shop, where all activities from real time lab results to group chance to pages could be organized filtered and presented in a way.

Tailored for each user finally, it's new version has the ability for users to see all of their own called schedules directly within the mobile app.

Finally, as a reminder, all the functionality I have discussed today is wise and production no additional functionality will be added over the course of 2020 and what we call featured drops which follows best practices established at Google Amazon, Microsoft and others to get new features.

To the hands of our SaaS customers more quickly and with zero downtime.

At this point I'll turn it back to Vince for some closing comments before we open up to your questions. Thank you John Okay with respect to our key goals and business outlook, Let me take a few moments to outline our strategy as we've talked about in the past about four years ago, we embarked upon transformation. It was a title shift in our strategic direction for health care.

Our largest customer segment.

The strategy.

Five year plan that signal them very intentional intentional move from offering our customers point solutions are single product solution for call Center software alarm management and secure messaging to offering them a cloud based single integrated clinical communication and collaboration platform cost of go.

Oh.

We previously outlined our decision to make this shift focus on spoke a platform.

Opted for many reasons, including customer names healthcare customers are telling us they needed a more unified approach to communications across their enterprise.

The large potential market opportunity as we further penetrate the multibillion dollar health care IP communications market.

And the simplification.

And then offering our customers to make different products a multiple versions on several different platforms.

And competitive positioning.

As we concluded that no one else offers a single integrated cloud native platform for health care Communications.

Listening to what our customers have been telling us and as a result of our work with our innovation partners at the hearings 20 conference next month, we are proud and excited to showcase next generation of our platform spoke go.

Our core foundation clinical communication is strong.

We are proud of the work our employees are done in support of this mission.

We have accomplished so much together since we became spoke.

We are laser focused on making spoke the leading clinical communication and collaboration platform. So the healthcare industry.

So that as background and with respect to our 2020 guidance this year.

We continue our commitment to investing to address near term opportunities and to achieve long term organic growth. We believe these investments are critical and supporting our strategy to deliver industry, leading clinical communication and collaboration platform and drive long term stockholder value. However, what we believe that we need.

We continue investing in our future.

Completed the bulk of our investments as we began selling spoke of platform.

That reason, we're holding the low end of our 2020 guidance range for adjusted operating expenses essentially flat to 2019 levels.

As a backdrop in 2016 R&D expenses totaled approximately 13.5 million an increase in nearly one third from prior year levels in 2017, R&D expenses totaled 18.7 million increase nearly 40% from 2016.

2018, R&D expenses totaled 24, and a half million, 31% increase in 2017.

Last year in 2019, R&D expenses totaled 27, and a half million, 12.6% increase from the prior year.

We believe that R&D expense increases will continue to slow at 2020 in approaching more steady state level.

Included in expense guidance range. It like that I wanted a few minutes ago and 2020, we anticipate that R&D expenses will increase in 2019 level.

At a much slower pace and we will be primarily offset by expense reductions in other categories.

With respect to our capital allocation strategy overall goal has been to achieve sustainable business growth, while maximizing long term stockholder value for our multifaceted capital allocation strategy that has included dividends and share repurchase.

Strategic investments to improve our operating platform and infrastructure and drive long term organic growth.

And potential acquisitions, the could provide additional revenue exchange there are accretive to earnings.

20 Twond.

Submitted to continue paying or 12, and a half cents per share quarterly dividend.

We will continue to evaluate our capital allocation strategy on a quarterly basis communicate our plans with you with respect to dividends.

Share repurchases and other uses of capital each quarter quarterly report earnings.

Finally, I want to touch on two governance matters.

We recently added Dr., Bobby Burn a CIO advocate award help to our board of directors.

Dr Burn brings a breadth and depth clinical and high teen knowledge, So our board.

We're delighted to have heard as part of our team.

As the appointment of Dr. burnt demonstrates we are committed to having a best in class board of directors with experienced professional who bring the board relevant expertise.

We expect to continue our efforts in this regard our nominating and governance Committee continues working with Korn Ferry and we will report to you on those results as we make more progress.

And then to adding software and healthcare expertise to our board will maintain stability as we make our transition as a leader clinical communications and collaboration solutions.

From a business configuration that strategy perspective. The board believes we are optimistic situated at the moment as a standalone company that has an organic growth engine and spoke go in a source of strong cash flow and our paging subscriber base.

You run the largest painting offering in the world.

Integrated its operations deeply with our up operations and software and continue to enhance our paging platform and user devices.

While we cannot comment on offers received by the company rest assured that our board is open to considering all strategic alternatives presented to us.

While we will consider any alternatives presented to us the board's view, that's focus that an important inflection point.

Has continued to spend on R&D and development of spoke go but not yet realized significant revenue and profit from that platform. We strongly believe that our best financial results are ahead of us and we believe we have better visibility into that and any strategic partner or acquire or would have and so we are pleased to remain independent.

I believe doing so is the best way to maximize shareholder value.

I also want to know that I personally I'm fully committed to this approach and believe strongly our future cancel my Tenbfive one plan I have no plans to sell any spoke stock.

At this point I'll ask the operator to open the call for your questions actually the limit your initial questions one and a follow up.

One and a follow up after that we'll take additional questions as time allows operator.

Thank you if you would like to ask a question we signaled by pressing star one Oh your telephone keypad. If you were using a speakerphone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again per store one to ask questions. We'll pause just for a moment to allow everyone an opportunity. This.

Signal for questions.

We do have a question Ryan Vardeman.

The logic.

Hey, guys. Thank you for taking my questions Congrats on continuing to.

Maintain those legacy business lines.

What are the 2020 bookings goals for the.

Cloud platform.

We did not issue specific bookings goals for our legacy or our spoke go platform at our current guidance, we gave guidance for revenue, but not for booking.

Okay. I mean, you, but what are the things that you said during the call are very exciting and it sounds like customers are continuing to look at our solution.

But were five years into this development of this platform, we spent over $85 million on R&D over the period 100 million Bucks in sales and marketing yet it doesn't seem you are any more certain as it relates to success them. When we started this development spend.

And when I say that I would think that you'd be excited to provide bookings guidance goals targets aspirations.

And help quantify the market opportunity that you see for the next Gen platform.

And trying to get some of this for the last several years I thought today was gonna be though a day that you were going to unveil some of these metrics but.

Just like to.

Understand kind of when how are we can start seeing in the numbers. This competence that you say that you've got thanks.

Yes, Ryan.

Thank you for your question in for your support for your patience over the years I totally get your frustration I totally appreciate your question and your first for knowledge with respect to what our bookings are going to be on this new platform. Yeah. We were behind in delivering this platform. We didnt deliver when we thought we would the wherever we thought we would have higher.

Our bookings in 2019 as result of the platform, we actually hit our legacy on software bookings platform goals. We were short because the new platform was an out there in that shortage resulted in us missing plan. So we're a little bit gun shy in terms of actually putting the numbers out there I can tell you that I've never been more excited about the future.

Sure This company than I am right now I looked at a very large.

Pipeline list for spoke out yesterday that our sales leadership showed the our board of directors, we have a ton of meetings set up a chance to demonstrate this platform. We've got great conversations going on right now with additional clinical innovation partners. We think this thing is going to be a big game changer for this company. We've said for years, we would make.

Yes investment and we hope to be the leader in clinical communications collaborations as a result of that we're meeting with Amazon in two weeks, where maybe with some of the big DHR as we have huge customer interest in this thing and I appreciate that you'd like to actually see projections and seen numbers with respect to what we think we'll sell these budget cycles that these.

Chuck parents to some SAP oftentimes last one year.

Now, having said that we expect significant bookings in 2020 on the new platform majority of those bookings however will be in the second half of the year and as we get more visibility and as we get those actual results under our belt will report to you and we'll see what we can do about truing up the forward guidance with respect.

Bookings, we traditionally never given bookings guidance.

And so that's something that we need to think about but I. Appreciate the question and I just want you to know for me.

Expect that this company is going to be successful and as soon as we can get somebody these bookings and get some of these new clinical innovation partners under our belt, we'll see what we can do about signaling that to the market.

Fair enough.

I mean I don't.

Yes. Thank you.

Thank you Ryan.

Okay. We have no further questions in the queue at this time.

Okay, well look everyone. Thank you for joining us. This morning, we look forward to speaking with you again next quarter after at least our results and the end of April actually have a great day.

Thank you ladies and gentlemen concludes today's teleconference. You may now disconnect.