Q4 2019 Earnings Call
Good morning, ladies and gentlemen, and welcome to the are you host fourth quarter and full year 2019 financial results Conference call.
As a reminder, today's call is being recorded.
This time I would now like to turn the conference over to Mr., David homes of lifestyle Advisors you may begin.
Thank you operator.
Good morning.
Thank you for joining us today for discussion or Oreo costs for order.
20, <unk> chief financial results.
Didnt call today.
Yeah.
Executive Officer up.
You will be joining price beep, and David Chief Financial Officer, Rich Anderson, President and General manager North America.
Your prepared remarks, we will open the call for QNX.
An audio recording a webcast replay for today's conference call well also be available in the Investor section.
Companys website.
Those who maybe listening to the required archived webcast. This call is being held and recorded on March 17 2020.
This morning, we issued a press release announcing our financial results for the fourth quarter and you're right 29 G.
A copy of the release can be found on the Investor Relations page the company's website.
Actual events and results may differ materially from those projected as a result sort of changing market trends reduced demand and the competitive nature of Daria industry.
Such forward looking statements and their applications involve known and unknown risks uncertainties and other factors that may cause actual results or performance to differ materially from those projected.
The forward looking statements discussed in this call are subject to other risks uncertainties.
He knows discussed in the risk factor section and elsewhere in the company's annual report on form 10-K for the year ended December 31st 2009 cheap.
Filed yesterday evening.
Additionally in for additional information concerning factors that could cause results to differ materially from Mark forward. Looking statements are described in greater detail in the company's press release issued today and the company's filings with the FCC.
In addition, certain non-GAAP financial measures.
Maybe discuss during this call. These non-GAAP measures are used by management make strategic decisions forecast future results and evaluate the company's current performance.
Management believes the presentation of these non-GAAP financial measures useful for investors understanding and assessment of the company's ongoing core operations and prospects for the future.
A reconciliation of these non-GAAP measures that most comparable GAAP measures is included in today's press release regarding our quarterly and year end results.
With that I'd like to introduce arrays, Rafael Chief Executive Officer of Daria upheld.
Mr. Rafael.
Thank you David day, and good morning, everyone I'm very pleased to have you joining our call today.
We're not doing a pro goods for Q4 2019 going in to join US on the call today, Steve Sleeping Davies, Chief Financial Officer Huh.
And as well as the <unk> recon to send it was the recently appointed to be our President and general manager with North America.
To get it looks to be and weak with myself I'm going to Cabell full main topics today.
On this a presentation.
Number one he's did company ongoing transformation I hope you all fitting into business more the.
For a membership and actually I have four high margin software as a service company.
Number two is the scaling up portfolio growth engines, mainly Dupont formation into being a beat it seemed business to business to consumer number three is the expansion of falcone condition platform and old filling into additional diseases.
And number four is the overall the market space and the board they say that the company's making in there.
Context, the border evolution of the digital computing space.
Let me begin with the changes we have made you know business more than into software as a service side more than doing the second during the second half of 2018, we began to all Phil Oh uses and members she pogo.
That would the overall goal is to build wide use is something that these much beyond the medical device, we integrated the very powerful software with digital interventions as well as that sylvia's that is being provided in digital and also physical went on top of deposits and all these.
Elements to go though allows us to sell a membership woman in fact, we changed the old model to be.
And much movie, calling revenue, we choose a that foundation will fare well facilities. So it's tough to the Soviet company, which is something that is being.
Well go in neighborhood by the fundamentals for follow up acknowledging that these are by nature digitized OLED Therapeutics a company.
We think that given that and the commercial launch and daddy's out that we have so far with a very strong user engagement and retention and clinical data that we all that collecting a we already have enough. The evidence that and we think that we're going to be market leader in the space.
The digital therapeutics.
I'm doing it on formation, he's not completed yet I think that if we're going to look at the number listen we're going to give that a few numbers say shortly so looking at the numbers. It seems like a we have the indications that depends formation into September the sobi small there or is something is that these also already.
Blexten you know that financial profile for example, if we examine our gross profit you will see that the gross profit improved form was 13% in.
In Q4, 2018 to almost 47% in Q4 2019.
The revenues derived from the membership more then well in other words the fuel sophomore that increased from $562000 in 20 $18 million to $2.9 million in 29 team.
If we did you mean.
Into 2019, while the majority of depends formation has been done we're going to see if you keep alarming to US number one is that the gross profit increased from 884000 those into films puzzles plenty 19.
The $1.7 million into second half of 2019. This represent the 94% increasing the goal spoke with from first talk to the second half of 2019.
They'll put anything expenses weve used by 25% dealing descent periods, respectively. This is mainly due to the fact that when we are launching a b to b to C business direct to consumer.
That they keep is much more cost effective in them. So fair expenses. He said some marketing.
I've been resolved all day improvement into goes appropriate then the and cost reduction or a index spans says the net losses will also reduce the respectively. So the company net loss in second half of 29, Pinewood, 35% less than the first puzzles plenty 19.
As a result to fold improvements in mainly the margins improvement if we remove the onetime expenses that we had been in Q4 2019, the reduction is even higher.
The trend improving margins is expected to continue for the next few years with the goal conventionally reaching margin, so fat and means 70% and I imagine that's there they'll go to the business and then the next few years, we're gonna see a gradual improvement like we've seen a in the last the.
Three quarters.
In addition in addition onto the greater margins that are reflected from this business more than.
I think that that invest those were the and be able to see much more predictable revenue a into future waterways would start to the L. report the other information like Ala Moana driving evidence Wi calling them and you. So it's much more predictable for wealth management and also for investors.
As to explore let me because I mean, a business says it's evolving.
In father's day enhancement into pulled them in the product also think a we also made a significant change in the way that we always sourcing new users to the platform by implementing go b to B to C strategy.
They go through this approach is to rolled in a market reach and that has access to bigger piece of fuses and.
Eventually the main goal is to abuse the cost of acquisition that we have comparing to a company that these doing direct to consumer warming.
So I spent the besides the G. We opened a decent.
From a we established partnerships and a as you remember probably from previous calls we are walking guy in few different China form embroiled.
They love health care providers any true.
Although these and satisfy 'cause might be long ago as like a 12 to 18 month, we believed that the return on investment.
There is a considerably higher comparing to the direct to consumer we already signed a few phone trucks and ER and we understand that we like and took a in few moments wouldn't elaborated on the programs that we made on debated BDC.
So given the fact that we have a very strong all things that I business small doesn't like that man and financial structure.
Fall unit economic we had and given the fact that we want to penetrate into the b to B to C. We made the decision that we should things all the team in the U.S.
And one of the things that we did these as searching for are too high of.
Well seasoned management and says professionals practically we increased the size of the team and Ah Ah with regards to these oh so to eventually we hired a they understand the joined US at El It is too big joined at the genuine meningitis.
And ER, the President Oh, the company and digital General manager North America, I think is responsible for both of the nation on inflammation, well knows development or in North America, mainly in the U.S.
And they have a a track record.
In selling guys. They though we got into the technology and driven product for the total variable performance based which is what the I'll pay is sending choose so looking full which is a these kind of pile that shows that we all the very very focused on in shoes and bags.
In the United States and this is the the future will follow business the lead to join some kinda see slightly spend more than 10 years cultivating a business and the building a business that was scanning up a eventually will the health plans on ensures a full tens of millions and dalsa well.
The the calling revenues.
We still think appointment doesn't inflection point in the transformation of the business that into a b to b to C, which is an ongoing transformation will that we're doing in addition to we also hired the buyback spark and we're joined as the had the managed markets and Bob Bob brings a proven ability.
<unk> to grow topline revenue in health care and specific inane digital technologies.
So looking again at the numbers, we are reporting today well the business transformation is not yet being reflected significantly in the topline go no tangible evidence Oh progress.
Despite the fact that we manage the that we made the and on how to a boto business. We still experiencing growth you you. So like Q4, 2019, a and going by books amazingly, 5.8% versus the comparable period in 2018.
Well, so confident that the product off the thing that I financial structure that these already proven in Q3 in Q4 numbers.
Add together with a a significant amount of fuses that we collected from the direct to consumer more than 46000 active paying users and with the ice team in place. We all like confident that the changes that we are making would also be reflected in the topline growth as we move.
ER deeply into 2020.
And I would like to know to zoom out about and talked about the whole industry, because I think that also here.
Q3 in Q4 was a very cool hsiaolin big for the digital don't do they seem to slowly so it's a nobel and innovative pumping in the digital therapeutics industry. We are excited to be both of these a abiding change of the health care and doing 29 pain, we have seen a silver lining peos and we have seen.
In the companies that have a competitor that financial profile.
The other tubing.
For multiples.
From my perspective, we chose that investors have an appetite for digital therapeutic solutions and then it's done therapeutics thing or is that space that a invest those are looking into and we are looking to seek to benefit from these says that when the of the overall I mean this thing.
And so did you thought therapeutic sees a is something that a is going to impact the whole ER and value chain Ofer health care.
And are looking on a on reports so fab business inside of for example, or you're going to see that in the United States alone.
There is a spent of 3.3 trillion dollars for chronic condition management. This is a number that these from 2018.
Looking at Daleo, given the assets that we have given not just the technology, but the proved that we made the along the last three years building, a very big user base collecting data so beating data to multiple entities.
And showing a as significant cost reduction a full ensures a and it also fair and capabilities to create used to defection in a user engagement with things that we got a elite de Silva was space of digits until acuity and other very interesting number that Uh huh.
Giving a highlight for the overall space and this number there's also published by business insider its in forecasting that the global digital therapeutics market is projected to be was 9 billion dollar by 2025. So are we all else being involving a week.
The market and the markets these providing us a very good that pickup when.
With that I'll handover the call tool they understand that will elaborate on the b to b to C and the clinical aspect to fall product and how it's going to help us penetrating on the b to B to C.
They please.
Thank you for us.
I wanted to start placing how excited I am to officially be part of the Dario team. This company is poised for great success, as we leverage the broad existing customer base, which is now more than 46000 users the strong product offering and the dynamic open platform on which the digital therapeutic is built.
We're very excited for this new phase of expansion into selling two businesses and we'd like to provide some additional insight into our approach and the progress we have made establishing partnerships and marketing Dario into these various channels.
On the retail front, we have established new relationships with several major retailers and launched a major new initiative with our membership in a box with membership in a box we transition from selling devices in consumables to selling monthly recurring memberships essentially a soft sales in a retail setting.
We started membership in a box in partnership with best buy online and we are now in the process of expanding it to or other retail chains.
After launching our retail effort with best buy our biggest single accomplishment in this channel with expanding to Walmart in November.
Walmart is the largest retailer in the world and his second largest ecommerce retailer in the U.S., providing access to a significant customer base.
They have a reputation is innovators in health care, having piloted several initiatives, including the opening of their own Walmart health centers, and creating home health care section on Walmart Dot com.
Following warm Walmart, we then launched albertsons in their marketplace with three significant partners in the retail market and our membership in the box. We believe we are well positioned to leverage this channel.
Second we believe we have a significant opportunity in the remote patient monitoring market, providing our solution to chronic care companies also known as Ccms.
Major health systems, and large Medicare provider groups.
At the beginning of 2020, CMS implemented remote patient monitoring or RPM billing codes, which allow providers to bill for remotely monitoring their Medicare patients with chronic conditions, thereby creating an opportunity for providers to increase their revenue streams.
We believe that our solution and engagement capabilities provide a unique ability to assist providers to meet the CMS requirements to build lease kids.
In particular, we're pursuing ccms, because the remote patient monitoring codes or a natural fit for their existing business, which aggregates providers for chronic care management.
This makes them in a fish it means for us to ramp up our sales as well.
We're pleased to have gotten some early traction in this channel and believe we should start to see revenue from this channel beginning in the second quarter of 2020.
In the employer channel or digital therapeutic provides the ability to improve the health and reduce the cost of employees with diabetes and other chronic conditions, well, increasing president he isn't and reducing absenteeism.
Our his deep experience as a consumer focused company provides the differential ability to engage and retain members in this market providing us an advantage over the others. In this space. In addition, we bring this channel compelling clinical outcomes data strong consumer satisfaction and health economic data that demonstrates.
The benefit to employers health care costs.
We are encouraged by early progress here, both directly with self insured and companies.
And with companies that can help us distribute our solution to a large number of employers in fact, we have entered into an agreement with a significant distributor that we anticipate announcing in the very near future.
In addition to the above channels. Our approach also includes a focus on strategic partnerships.
These deals create an opportunity for dorio to monetize upfront or development fees with the potential for royalties on future sales.
This is an area where platform is especially valuable because it provides us the flexibility to integrate with other technologies.
In 2019, we signed a license agreement with Aero Me Therapeutics formally known as dance Biopharm.
The two companies are working together to integrate Aero Meas gentle missed smart inhaler into darkness platform, allowing for automated real time treatment data through a mobile application.
This is a development stage collaboration but we also could see ourselves partnering with companies that have existing commercial products.
Underpinning each of the above channels are multiple studies in abstracts that we have published over the last two years validating our clinical outcomes. These studies include several large and long term studies like the one presented at the American Diabetes Association annual scientific sessions in June 2019, which incurred.
<unk> for more than 38000 active type two diabetics with over 3 million measurements and a study at the recent advanced technologies and treatments for diabetes meeting in Spain, which showed that over a two year period patients were able to significantly reduce hypoglycemic and hypoglycemia.
Given.
These analyses, which involved large real world populations Crete further evidence of the benefits that are platform provides to these extensive populations across our channels.
As we go forward, we believe that a major value driver in the medium and long term lies in the capability of our platform to help manage multiple chronic conditions. Our initial focus has been on diabetes, because we believe that to be the biggest opportunity to improve health care outcomes and lower cost in 2000.
19, we expanded are offering to include hypertension.
Our plan is to add additional chronic conditions, such as pre diabetes and obesity this year.
Given the high rates of co morbidity. Among these conditions, we believe we can drive better healthcare and financial outcomes by applying the same platform technology and an integrated user experience across multiple chronic conditions.
We also are also integrating behavioral health across the platform and conditions. This is a unique approach in the industry that recognizes the close interaction of mine in body and that durable behavioral change requires addressing Beth.
Through increased utilization among the medical community demonstrate value to pairs an active user engagement. We believe our technology will prove to be extremely valuable across the broader health care system I.
I will now turn the call liver disease to discuss the financial results.
Thank you Rick.
I will not provide a brief overview of the fall financials additional details on our results can be found no fault, okay, which we have filed yesterday evening.
Revenues for the fourth quarter and the December so it was 29 team well $1.8 billion.
5.8% increase from the $1.7 million, mostly bolted.
Well the fourth quartile ended December 31st 2018.
Revenues for the 12 month at the December 30 for food 29 theme with $7.6 million, 2.2% increase on revenues of $7.4 million for the 12 months ended.
Number so the fell 2018.
Revenues generated during the year ended December 31st 29, PMBA derived mainly from the sale of the all of a dollar you'll have components and our membership plans well customer.
I mean do United States.
Recall that an additional 497000 barrels of deferred revenues for revenue generated from our new membership offering to our customers. They do you like.
Gross profit in the fourth quartile Ftwenty 19 increased to 8000.
$140000.
Well below Plugless Bofi totaled 223000 barrels in the fourth quartile of 2018.
As a percentage of revenue the gross profit increased from 7% in the fourth quartile for the 18% to 46.7% in the fourth quarter of Plenti 19.
For the foreseeable Ftwenty 19, gross profit was $2.6 million compared to a gross profit of $1.8 million important the 18.
As a percentage of revenues the gross both I think we've formed 23.9% in the full you want the 18.
The full 0.4% important the 19.
These increases in gross margins for the fourth quarter viewer and 29 team well, mainly due to the increase in revenue generated from our self what are the Soviets based membership plans.
Operating loss for the fourth quarter under the simplicity close what do you like team was.
<unk> million, the 4 million of $200000 compared to nearly $5 million operating loss in the comparable period of 2018.
The Queen is mainly due to the increase in all growth Paul.
Operating loss for the 12 month ended December 31st what the 19 was $17.7 million similar to the operating loss for the same period in 2018.
Net loss attributable to the oldest of common stock decreased.
Full 0.1 $7 million in the fourth quarter of 29 theme compared to $5 million.
In the 2018.
Yes, I guess equivalents at December 31st went the 19, well, Yeah 20 million on 400000 gold.
In December we closed the private placement of convertible preferred stock for institutional and private investor.
Proceeds after deducting placement agent fees and other operating expenses.
Ultimately.
80 million and 700000 all.
Let me turn the call back now to whoever is for his concluding comments.
Thank you to be so before we close I would like to briefly mentioned a involvement of the situation with the feel the idea 19, well the cooling of iOS in other words.
So it's as you probably can imagine deep.
The uses the WL dealing with people with diabetes and hypertension.
Exposed to a higher risk with regard to these are vital is a situation. So oh technology action to help them and I'm not being exposed in an unnecessary a way.
Two places outside of the home.
Actually we have a few key advantages that we can help them ways and this is what we're doing these days, we have specific a combines and support goodwill providing oh users.
Our lead time connectivity, our ability to coach them formally mode to specific coaching sessions, how to do with the situation. It was saying is provided digitally on the platform. We're looking into the VITAS I'll coaches. So working extremely hard in order to support you. These days.
And in addition to death, we also had the consumer and advantage and the fulfillment that meant that well I'll users or don't need to leave the only know the to collect though disposables oh the devices sale. The strips everything is shipped to though so a form that and.
We think that a solution like a value healthy something that is very helpful. Then we also see in today's market a lot of recently quest and or the agent Oh fees in order to provide the remote patient money tolling got systems, which is exactly what we have so oh, we think that.
In day to day devoting a award.
Technologies that we have been proved to be effective for tens of thousands of users is extremely important and ER and a week. We believed that we were going to be very hopeful that and 12 years loosen a potential clients and potential partners.
Leveraging this technology.
From an operational standpoint, Oh, we always a good with a enough and inventory, we all and being able to provide the uses a with supplies and so from that end well not experiencing any risk at the moment.
Oh employees are safe Oh employees, our operating gain on remote we are using a small tools like zoom and slack and from an operational standpoint, we feel as effective as usual so dorset situation is pricing, but ah but.
We are not experiencing any issues at the moment than well very positive that we're going to go through this period or a stronger than ever.
Before we started I just want to highlight the main points. So for this call. So number one and I think that in 2019, we successfully d. the major transformation into a software as a service model and the fact that that we all their as selling a membership we.
Hi margins, we improved the margins Oh from 13% Q4, 2018% to 46% and you full 29 thing. This is a significant change and Oh, it's going to be a very high.
It is gonna be high margin business as we move forward, we will exceed the 70% into future, we believe and the spaces halt and 9 billion dollar protected by business inside the full 20 to 25. In addition to the business model, we have that probably one of the best products in the monkey.
At the as witnessed by more than 46000 active paying users, but you know just go to the upsell so to pull down and see what you'll do so telling about us.
And that I think that that given the fact that will conforming to from direct to consumer to beat a b to C.
It's something that that would make the cost of acquisition much a loyal and eventually will be able to get the successful opening and make it scalable. So we're having that I'd point out well, having the right that China's and recently also we made fuel key hires. So we have the right team that already have a a threat correct.
Good. So we think that we are very well positioned a full a successful 2020 2021, and we're really excited about it.
With that I will open the session for culinary and hand, it over to the operator.
Certainly ladies and gentlemen, if you had a question or comment it a star one on your phone star one for any questions or comments at this time well go first Alex dock at Craig Hallum capital.
Good morning, everyone arise last quarter, you had 100, the 200000 type two diabetics <unk> access to Daria by the that this business channel. What does this number now based on the new contracts you have signed and when do you think you'll start releasing some of the payers that you're partnering with.
Yeah. So we we already have ER and few agreement that we signed a we believe that when the next the quota we go in it and known so some of the ER and agreement that the only the in place.
This agreement so we'll get that say access to a network of friends Broyles and as we move forward, we're going to go Oh, so into the health plans also here, we have some traction that wouldn't be able to a publisher later this year, we think that.
We're going to see a significant at a jump at toward the second half of 2020 or in terms of the a percentage of the revenue that is coming from b to b wheel stealing the danger sofa and around the 15% and 15% to 20% B to B. This is b to C.
We don't see in these numbers the scale up off.
Oh, the b to B, yet, but this is something that we believe that is gonna is going to come eventually.
And what does the rationale for continuing to focus and stay within the D. DTC channel with Walmart and Albertsons Aegis announced recently instead of focusing solely on b to b.
That's a very good point, they I think that the market is very is very hard to both digital and therapeutics a solution. So one way about knowing whether that someone like watermark, though albertson.
Well not just having in mind, a selling or books, a sale slips, we all having in mind, Oh, sorry, modern and all but from a so think about US is an open platform as opposed to our competitor those that though sending just the membership.
But for me is open and what I'm, saying open nimbly failing to two main things number one is the fact that we are having a the coaches that can quotes on top of fault block foam.
And here, we had few partnerships, where we partner with that provide those that though coaching on top of our blood flow and number two is integrating different devices into our platform because it generic so when do we have an agreement with albertson, we see three steps of the agreement so without.
Some thing that these opening as to sell online, which is a maintaining I'll call in direct to consumer and as we will eat it goes and we go we believe into licensing in the platform because all these retailers say like water mountain on those are going into.
A big clinics as well no providing coaching and they become more and more digital health company and we believe that given the fact that we opened our platform.
As a as to licensing the like it a few software company. We believed that there is an opportunity here so.
In the show them. It just an expansion of the direct to consumer in the long term. We believe that we have an opportunity as a software company and the future for businesses to BNN below two why those.
ER, we would have to ER to explore very carefully how are we going to utilize our resources and lilly or a significant amount of money that we raised in a in December and know that to get the most benefit.
So is as we move forward would have to.
Evaluated the best that investment in sense of marketing in terms of though but at the moment, we still see the Retailo says an opportunity not because of the selling devices, but mainly because of the platform licensing.
Got it and then rich can you provide some more details on why enjoying what what you saw in dorio and kind of your first steps here to move Daria better within that B to B channel.
Sure. Thanks, the you know I think that what I saw I hear it are you in kind of building a little bit on what rents. Just said is you know they are unique in the fact that they had a very established a consumer business. So you know as we all know health care is moving to be more.
More of a consumer focus business in the ability to engage members in programs that will save cost is what's important it doesn't matter how good your platform or your product. We're you know your treatment is it's the members won't utilize it and one of the things that I saw it Oreo was in fact, a the user satisfaction on the consumer side that the.
They have and I believe that we can utilize that in the market to demonstrate differentially a an impact on the members that the other thing is is that I was actually quite excited by the open platform because I think that that provides a variety different applications allows the company to move quickly address different.
Conditions. It also allows to work with payers and based on my experience in the pair market. They are looking for flexibility, they're looking for the ability to configure a situation excuse me a platform in a way that you know can quickly be put in without a bunch of development work and I think that dorio has done a great job of doing that so we can share data.
Can integrate that data and also the cost to delivery is significantly lower than others that are in the marketplace and you know as the digital therapeutic expand and there continues to be pressure on health care cost that's gonna be important factor as well. So those those three kinds of things put together I think you know were what really drove.
Me typically the door you can be successful and you know I like the space or that were in I think there a digital therapeutics will continue to be a major driver you know the current crisis. Probably is also you know may move us a little faster, but no matter, what we're going to end up having a lot of.
Remote in digital health care. This can be provided in the industry, that's kind of inevitable you're seeing that in telehealth, even before what's happening currently and I think that that's just can expand so you've got an expanded market you got a flexible technology that can be applied and I think it can be applied in a way that is a competitive advantage for the folks that are.
You know paying the big dollars to be able to treat people in the system today.
You know I've been here for about 60 days. So you know some of that has been really getting into a deep dive in understanding the data the technology Ah. So that we can position it appropriately, but we've been moving quickly to get a bigger footprint in the employer space and as I mentioned, the remote patient monitoring codes, which came on in 22.
When he said we've been.
Moving quickly to take advantage of that because it's a nice source of 2020 revenue and also are starting to pursue the health plan space in a bigger way than the company was before.
Okay. Thank you and then a rest kind of staying on that topic. It. It seems like the company has jumped around between a couple of different business models over the past couple of years. So first Daria was a phone base glucose monitoring and then it moved into a membership program for straps and then it moved into a diabetic counseling service now it seems to be more of a remote.
Patient monitoring system into other diseases. So just first am I reading that has it correctly and then if so you know explained the rationale for kind of switching between needs and then who is the right comp here.
For the business is it isn't love Bongo or that Weve historically thought it was or is it more like teladoc.
Yeah. Thanks for the question I think that they voted meant that the way that I see that and we had a and discussion in the past about the difference between people too if anything I think that we will eat the writing.
From a from a medical device a into a food and membership program that was the plan from the first place and this is what we did so the way that we build the technologies that as a software company. We ended. The addition, OLED digital services on top of the platform.
Well, we added the physical services on top of the platform and we will utilizing the platform for the benefit of I'll use those so from from from our perspective, a we are now and this is a transformation that was that he is happening for the last six quarters since mid 2018, a stop selling appeal device, sending a member.
As you pull gum and allowing our those two a benefit.
On the platform because its open in order to sell a membership program as well. So you can look at us a like a in terms of the business model.
As the business model like when do they see them the close of convertible.
However, though we can allow is as you won't go not doing it at the moment, but we are allowing others to set a membership program also full daily use those and this is a way to scale.
And see more and more use of sat on the platform. That's the way that we envision all platform. So those and then one of the partnerships that we're going to announce a shortly.
We show that our platform can be license by others. So.
Huh eventually.
We hope to own coaches coaching on top of the platform, but we can get out those two cogent onto the platform saw we'll see I was too small and membership SaaS company.
And then add fuel remote patient monitoring company and there is a very importantly, the fault the can always.
Thing that other companies don't have.
Which is the.
Which is the the.
Hello.
Yeah, that's all I can tell urea.
So and so there is very important level folks will fall there and.
Technology, which is.
Oh, the engagement land I think that's one of the things that we could act is the ability to communicate with the uses seen lead time and to engage with them and to good use of engagement that traditionally bold remote patient monitoring companies that we have seen five years ago in 10 years ago, we're focusing mainly on being.
Gauge month of the clinician and the thing that it's very hard to engage the user truthfully nishan engagement you need to be much more user engagement. This is why and also to your previous question, we insist to keep operating on the direct to consumer because that's the way to get the best user.
Experience, that's the I mean, it the how little away into market. These two companies they use listened to give them something that they like and I think that this is what we did better than everyone and the tens of thousands of Oh reviews that we had one obstacle and Google play a that's the best every then that will probably the best.
In user engagement. So we're going to emphasize this user engagement and also add when when leak he's talking about a a the CCM and remote patient monitoring could eventually maybe Ken I'm going to be fully code well, they're gonna see enough interaction with the blood from every month they are requiring at least.
Seeming to auction in order to in 16 interactions you need to have the best user engagement than we think that this is what we have and this is something that we're going to strength, but wouldn't and provide the clinicians. These kind of fan engagement that we managed to create without users. So well very focused on you.
The engagement the platform easily remote patient monitoring as well, but as opposed to other companies that were focusing on the engagement of the clinician, we would still be focusing on the engagement of the use of and this is a very big difference so well much Moldovan go then tele though.
Okay. That's helpful and there's one last quick question revenue growth in 19 was flat year over year, I know, you're not providing official guidance here, but can you just help us out of benchmark for the growth you're expecting in 2020 on revenue side.
Yes, absolutely so I think that a that the older confirmation that we did the as from the fuel device into the membership and I'm in we will and we will manage to do this transformation that eventually cost us money. It's a it's an implementation of the technology the software the Soviet also additional.
Only conditions. So it's it was a very.
Yeah, it's tough fuel for us a in terms of the topline growth that's not the plentiful 2020, selling 2020, well planning to get back to a goal as we have seen in previous you and I think that seems to be sold or changes in place and are there.
I'm trying to profile that we showed in Q3 in Q4 in terms of the margins are and in terms of day, increasing revenue failed the membership.
Yeah, Hey allow that was thought to publish in the next few quarters I think that the way that the market should look at it is that we're well on getting back to a two girls that it's much more significant than what we have seen plenty 18, 2019, ER and that's the plan.
Alright, thank you.
Thank you so much oh.
And once again, ladies and gentlemen at West Star. One if you had a question our comments well maybe next to Ben Haynor at Alliance capable partners.
Good day gentlemen, thanks for taking my questions.
First off for me the you don't thanks for sharing or the number on the more than 46000 active paying users can you maybe provide a little bit more color. There on you know how many of those are on a membership program. What you consider to be active I mean as that someone that's a been active in the last three months.
Last year, how is the right way to look at those.
Yeah. So one of the number that we were pulled lighting is that a weekly and we showed a in this call is that.
Almost $4 million so far revenue came from members.
So product if you feel looking on the 46000 barrels around and then we'll still making this bone formation and stuff that we launched the membership a in late 2018, we continue the transformation in 29 team and this is something that they still evolving however, we've seen that he's out saying the numbers of the gross book.
The 46% in Q4 and so on.
The way to look at it is that at the moment wheel house way of them transformation. So oh on high profile users, so low a member somebody calling and ER and.
And.
And that I thought I still device users that over time, well looking to create a SaaS only company. So practically it will not be selling devices anymore. Just a small collection Oh, Oh I am Oh revenues from the membership is 2.9 to 3.99 million soon.
So the way that that to look at it is that the the transformation is that still happening and oh, 50% of the use of.
On the membership Domestos still devices and we're going to continue the transformation moving forward the to afford membership.
Okay. That's helpful. And then just maybe a follow up on that so if you have or.
You know, let's let's just call it 23000 active memberships.
If we assume per 2020 that there's zero attrition just for sake of argument.
You know call. It 30 Bucks a month you know that's eight mm mm plus million.
For the or do I mean does that sound.
Reasonable for the kind of a baseline membership number and then you know any members you add on top of that provides upside from there is if if my description there makes sense.
Yes, the way that you're looking at it they make sense I think that given a sophomore though.
Well the retention that we haven't and Oh, the annual recurring revenue that we have I think that that assuming that that when you pull them. Those shape you can assume that but every dollar that Joe generating 2019, you have their own 70 cents that will go into 20 or 2020.
That's a more or less or the way to look at it when one well in full information into SaaS model. This is not a full transformation, yet, but I think than the way that you're looking at it it's right because that eventually and building. The 2020 numbers, we have like three buckets so for those.
At number one is the use of goodwill on the platform that will contribute to that and to the revenue of 2020 bucket number two is the use of that we are acquiring from the college business model, which is the direct to consumer and that is still open I think and bucket number three is the b to b to C users to where we already have a few agreement.
And this is something that will also contribute users and just to remind you. We have two membership fulghum said that we have the the standalone for them, which is whenever they something that is more close to 25, but the number per month, it's not say 25.
And we have another one which is the premium that we are providing much more intensive coaching including city. This is the 50 999 that is low a available and employers spot. So as we move forward and getting more users of the 50 999, you're going to see higher margins than you're gonna see higher average revenue per user per month.
So this is something that will make our topline and bottom line to look much better as we inject smoke b to b to C users as opposed to be diseases.
Okay. That's that's definitely very helpful. And then finally from me just on a the online marketplace efforts you have going on at Walmart in Alberta Albertsons.
How would you characterize those how there how how's that going so far and then are there other marketplace program. So you you can join and plan on joining.
Yeah. So is so so far we'll just the beginning of they have the Oh the launch a so I mean, it's not reflected in the number that which is the number that we just presented.
However, the thing that the opening more China see something that is helping us as Ken on the consumer side I think that we're gonna see a few more agreements as we move forward.
So this is something that is still happening, but oh, we don't see the numbers are significantly yet so if a if we're going to take LD agreement that we sign and assume that ever gonna see numbers are towards Q2, and three and so I think that this is something that Olivia.
Shouldn't give some kind of indication to invest those that Oh, we can grow the said, it's a year over year sequentially and this is not including the other agreements that we have like better, leaving now and a few of those that already signed <unk> loan the bell side than the hopefully it wouldn't be able to end.
Known from them or within the next a few weeks. So it will give that to get lemole tangible oh evidence to invest those so forth exactly Oh, you know pipeline is based on so from my perspective, the open sort of the world. It's just an expenses.
And the expansion of the direct to consumer and it will be to be with that I average revenue per user per month is something that we're gonna see from the insurance into Pakistan, which is something that we hope we'll be able to publish within the next a two to three month.
Okay sounds great. Thanks for taking the questions gentlemen.
And with no other questions holding I'll turn the conference back to management for any additional or closing comments.
Okay. Thanks, and thanks, everyone for joining US said this morning, ER I want to wish you all to be safe in this kind of environment that I'm sure that.
Well all be fine and you know things whether the evolve in the next few months and we'll get back to where they go long life.
Thank you so much and never good day.
Ladies and gentlemen that will conclude today's conference. We thank you for your participation you may disconnect at this time.
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