Q1 2021 Phreesia Inc Earnings Call
We will conduct a question and answer session and instructions will follow at that time I would now like to introduce Blash Gandhi Vice President Investor Relations for future. Mr. Conti, you may begin.
Thank you operator.
Good morning, and welcome to freeze your earnings conference call for the first quarter fiscal year 2021, which ended on April Thirtyth 2020.
Participating on today's call from pre show, our Chief Executive Officer and co founder.
<unk> and Chief Financial Officer, Tom healthier.
Following prepared remarks from Ivan we will conduct the QNX session.
The complete disclosure of our results can be found in our earnings press release issued yesterday evening.
As well as in our related form 8-K submission to the FCC both of which are available on the Investor Relations section for web site and I are dot Frazier Dot com.
As a reminder, today's call is being recorded in a replay will be available following the conclusion of the call.
During today's call will make forward looking statements pursuant to the safe Harbor provisions.
<unk> looking statements contained in section 27, eight of the Securities Act and section 21, he and the Securities Exchange Act, including statements relating to the expected performance of our business.
Your financial results.
Our strategy.
Partnerships.
Expected launches of products and services.
Long term growth.
Overall future prospects and the impact of the Cobot 19 pandemic on our business.
These statements are subject to known and unknown risks and uncertainties that could cause actual results could differ materially from those projected or implied during this call. In particular those described in our risk factors included in our form 10-Q, which will be filed with the FCC later today.
You should not rely on our forward looking statements as predictions of future events.
All forward looking statements that we make on this call are based on assumptions and beliefs as of today and we undertake no obligation to update them, except as required by applicable law.
We will also refer to certain financial measures not in accordance with generally accepted accounting principles in order to provide additional information to investors.
These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation from our GAAP results.
A reconciliation of GAAP to non-GAAP results, maybe found in our earnings press release, and supplemental materials, which were furnished through our form 8-K filed after the market close on June eight with the FCC and May also be found on our Investor Relations website IR.
Got Frazier dotcom.
I will now turn the call over to our CEO I'm ending.
Thank you Bill luxury.
Good morning, everyone. We hope that everyone listening to today's call safely adjusting to the challenging guidelines related to the pandemic and are engaged in the activities from your communities that are helping drive much needed social outreach.
We are participating on the call.
Three different locations. So we appreciate your patience with us.
Let me start bike deleveraging all the health care provider organizations and medical professionals, who their continued bravery and dedication.
We are pleased with our fiscal first quarter results are proud of our entire team's ability to deliver our results in the challenging pandemic in part.
I would like to specifically knowledge or sales quite services colleagues.
These genes exhibited agility and flexibility under rapidly changing circumstances their ability to embrace adversity aligns with reaches mission to create a better more engaging health care experience and it's something I admire, particularly as we continue to operate in an uncertain environment in the summer fall.
For the fiscal first quarter total revenue was 33.4 million.
18% year over year, you average number of provider clients was 1632.
Up 5% year over year.
Average revenue per provider client was 16735.
7% year over year.
Adjusted EBITDA.
It was $1.5 million up $1.8 million year over year.
Health care provider.
Across the country are beginning to book for appointments access to help jersey optional patients need to be seen by providers.
Safety needs to be Prioritise, Yeah, we'll turn the call over to Tom.
Thank you and good morning, everyone.
I'll review the income statement balance sheet and cash flows for the fiscal first quarter.
Including some considerations for modeling for the rest of the fiscal year.
First revenue.
That's how I mentioned total revenue was 33.4 million up 18% year over year.
We report our revenue in Threed line items.
Subscription and related services, which were 15.6 million in the quarter up 23% year over year.
Payment processing fees, which were 11.7 million in the quarter, 1% year over year.
And life Sciences, which was 6.1 million in the quarter up 50% year over year.
Let's start with provider revenue, which combines revenue from subscription and related services and payment processing fees.
Provider revenue was 27.3 million up 13% year over year.
And the two drivers of the 13% provider revenue growth average provider client.
Gross an average revenue per provider clients.
Average provider clients grew 5% year over year.
An average revenue per provider clients grew 7% year over year.
Average revenue per provider client growth was directly impacted.
By a decline in patient visits work provider clients as the outbreak of covert 19.
Resulted in various responses, including government imposed corn teams.
From the middle of March through the end of April.
Patient visits declined approximately 50% compared to the beginning of March.
Visit declined significantly impacted our payment processing revenue.
Consequently, our average revenue per provider client growth was negatively impacted.
We estimate that the decline in patient visits negatively impacted provider revenue growth.
By approximately 3 million in the quarter and year over year average revenue per provider client growth by approximately 13 percentage points.
Patient visit trends across our provider network continue to be below recalled at 19 levels.
I will now cover life Sciences revenue.
Which was 6.1 million up 50% year over year.
And our life Science revenue was based largely on the delivery of messages that contracted price for message to targeted patients.
Messaging campaigns are sold for a specified number of messages the liver to qualified patients over expected timeframe.
Revenue was recognized as messages are delivered.
Strong fiscal first quarter performance was driven by our team successfully selling an expanding.
Some of our current programs.
And it's also worth noting that we had an easier easier comparable quarter.
Life Sciences, which impacts the year over year growth rate.
Moving onto expenses.
I'll review several expense line items on an adjusted non-GAAP basis.
Which excludes stock based compensation expense for each line item.
Please note that a full reconciliation of GAAP to non-GAAP measures, including adjusted EBITDA.
He is included in our earnings press release, and our forms filed with the FCC.
Cost of revenue was 4.6 million or 13.9% of total revenue.
Which is down 10 basis points year over year.
Sales and marketing expense was 8.7 million or 26.1% of total revenue down 60 basis points year over year.
Research and development expense was 4.6 million or 13.6% of total revenue.
120 basis points year over year.
General and administrative expenses was 7.1 billion or 21.3% of total revenue.
Up 40 basis points year over year.
As we have previously indicated this figure will increase as a result is continued ramping up of public company expenses.
From a modeling perspective, we expect to see operating leverage and Gnh during fiscal 2022.
Payment processing expense was 6.8 million.
Which declined 1% year over year due to lower payment processing volume.
And some lower cost payment routing.
It's also worth noting that payment processing revenue was up 1% year over year, while expenses were down 1% your year over year, which is due to a mix of transactions price with higher pre transaction revenue offset by a decrease in the volume of patient payments.
Adjusted EBITDA was 1.5 million.
Up 1.8 billion year over year.
This increase reflects the combination of higher total revenue.
And delayed spending in hiring lower payment processing expense shares outstanding as of April Thirtyth was 37.6 million.
Cash on the balance sheet in April Thirtyth was 90.3 million flat from January 31, 2020, which includes the benefit of 1.7 million and proceeds from the issuance of common stock upon the exercise of stock options.
Cash flow from operations for the quarter was an inflow of 1.9 million versus an inflow of an even 2 million in the prior year quarter.
Capital expenditures for the quarter were 3.1 million up 400000 year over year and the 3.1 million includes 1.2 million of capitalized software development.
In summary, we're proud of our performance in the quarter in spite of the effects of the pandemic.
And I think we're ready to take your questions now operator.
At this time, we will be conducting our question and answer session in order to ask a question. Please press Star then the number one on your telephone keep hard in order to allow for as many questions as possible. We ask that you. Please limit your questions to one question with one related follow up you May then reenter the queue for any additional questions. Your first question.
Then comes from the line of and Samuel with JP Morgan and your line is open.
Hi, guys. Thanks for taking my question.
Got you spoke on the last call about virtual waiting rooms in other ways to help your patients feel safe returning so kind of demand are you seeing for those products and is that still within your existing customer data are you starting to feel maybe demand from from new customers for that.
Hi, and Ah. Thanks for the makes any for the question.
We it's mostly been a with our existing clients could be dimmit and its place a ton of demands on our on our organization setting up those workflows, we turned on to a chat. So that you could actually wait and your car for the and you know.
While while you're waiting for the Doctor that's been wildly successful I personally have used freezes virtual waiting room, my my youngest set of broker leg.
About three weeks.
Five weeks ago at this point and I went to appreciate client weighted in the car and they tend to a text to check in and I are they told me when it had to come in.
And it was it was an amazing experience.
We also I think there was an article that came out.
Yesterday in the Wall Street Journal, which represents one of our clients.
Using virtual waiting room.
That's and that was that's a good example them.
That's great I want to the Doctor. This weekend, we didn't hour and the waiting room and wish that they had had the frees up.
Virtual we don't know my car [laughter]. My My next question you know around the subscription base you were still able to achieve mid single digit growth and provider clients. So is it fair to assume that the sales process, how little impact or was there. Some maybe february outperformance that drove that.
No I think it'd be wrong to stay the sales organization hasn't been.
Impacted or implementation, what we saw a lot of the quarter was just carry over from what you know so if you think that.
Most of our clients go live within 90 days.
Historically from when we sold them.
We really worked really hard to get as many clients lives.
As we always get in front of the corridor and then a lot of those clients, we converted over to where we causing seeiso zero contact intake and kept taking them libel throughout the quarter. So a lot about is the effect of you know very strong.
Execution from the implementation team and a strong quarter ending Q4 last year.
That's really helpful. Thanks, guys.
Sure.
Your next question comes from the line of Ryan Daniels with William Blair Right. Your line is open.
Yes. Good morning. This is buried deeper Ryan Sainsbury for the questions here I'm curious if we if you're a lot about companies focusing on digital pig patient focused solutions things like virtual waiting rooms, and hey can telehealth and all this sort of tank.
I'm curious if you've seen any early signs of changes in terms of market dynamics are your conversations as providers, specifically, one if there and maybe any new players that you're starting to hear about in those conversations in this space that maybe you hadn't competed against in the past.
Just any color would be great.
Oh I we.
In the 15 16 years that we've been doing pre show.
We've continuously.
Seeing new entrants come into this space and try their hand that what is what looks like a pretty easy thing to do what's hard to do is.
Patient intake at scale and I.
I sort of welcome the idea that there's more companies.
Sort of making noise in the space, because it's sort of rising tide lifts all boats.
Most most organizations when they're looking for solution tend to look at us at the same time right as the market leader.
But yeah healthcare needs innovation and the more companies investing in that innovation to better.
Yeah I got it yeah. That's that's really helpful. And then maybe just a quick follow up on the average revenue per per buyer client in the quarter.
Obviously, there were some some headwinds related to cover the 19 be still saw growth there I'm curious if you've seen any shifts.
To the extent that there is girl driving that line has there been any shift in terms of this specific drivers just around whether it is this sort of balance between expanding adding incremental seats with your existing base clients, adding more solutions or selling to larger clients overall.
Oh.
There's been some shift I don't think we're prepared to go into detail about that but that's a great question.
Got it fair enough. Thanks, a lot.
Thank you be said.
Your next question comes from the line as Stephanie Davis, Demko with SBB link Eric Stephanie Your line is open.
Yes. Thank you for taking my questions just following up to the tire sales question from Q. When you were not able to propose a sale this quarter how much of that would you attribute to a push out in demand the competitive take away versus maybe something else.
Oh I don't think we've seen any change in competitive dynamics that mostly we've seen same thing we've always seen which is just bandwidth and and budget.
When we haven't wanted deal.
I'd say, probably shifted way more to bandwidth.
And budget in conversations than traditionally.
You know I don't think we've seen something on naturally.
I think it's just hard at people don't it's hard to make decisions right now and health care and economic environment, that's rapidly changing.
Yeah, it's a it's tough to make choices and they're very uncertain environment.
Continuing on that right with the uncertainty you seasons very early utilization improvements.
Looking ahead do you expect any areas, where the recovery could be a bit more elongated purchase surgery centers where should stop.
It would take a little more time in scheduling. So we can see some plateaued mr. Jeffrey.
So I'm sure that you guys.
Have.
People with you know.
Mph is or your phds and Mds that could give you a better view on what's going to open when get a week, we understand when it's happening but.
Despite my mother's best desire I never became a doctor.
So I don't think I'm in a position.
To give a view on you know how and when Pandemics will change and or wed hope policy will change in certain states I know that people need to get that to care and doctors want to treat their patients.
Yeah, we know that PPS become more widely available and.
Best practices are starting to change rapidly. So I do I think that this is a.
This is a need or want to think it's a need and I think it's going to happen as soon as you know governments dock health care professionals and patients feel comfortable about there so.
Maybe putting that another way looking towards the ended the year would it be relatively soon.
Okay, great back to par.
Hi, Stephanie I I don't know.
I have no idea like if there is a another nason second wave or a third wave I have I have absolutely no idea and I don't want to predict on it because that would be a disservice to.
All of those people that hub.
So a lot more.
A lot better docking background in that and to our investors.
Right understood yes.
Sure.
Your next question comes from line of Sean Wieland of Piper Sandler Sean Your line is open.
Thank you good morning.
So the numbers were clearly better than that we expected brace this last quarter for an air pocket and we got it and that the payment processing business, but clearly it's not as bad as it could have been so my question is is this was this market related or was that was the market.
Did the markets there is stronger than you anticipated with their elements of the model there were more resilient than you anticipated.
Sean that's a great question.
You know if I had to put it out one thing I'd put it on the.
Just phenomenal execution of all parts of the fridge organization that we were able to come out with product.
At breakneck speed that such as well.
You know the things we do a for virtual intake things, we do of course, your contact intake and those things allowed us to just sort of be top of mind for our implementations that we were that we were kicking off and for our customers that we were a needed solution.
So I and then our implementation team just frontload frontend loaded as much as possible and are quite success team flipped over hundreds and hundreds and hundreds of practices to all different types of workflows in the middle of taking care of the kids and we did it with like why.
Last resources that we probably would have had normally so I would I would say could have gone the other way and the reason that didn't is just purely the team that guy and I'm, just sort of think tool and proud of them.
Okay. So the follow up to that end it sounds like.
The new client adds in the quarter were mostly signed before the pandemic hit so what's the cadence here that we should be looking that does if we saw an air pocket it appears that.
Processing growth.
This quarter you know what is there is an air pocket and new client grids to comment how should we.
Model that in the back half of the year.
[noise] Oh, no I'm looking I Miss having Tom that's to me at the table because you'd probably be.
Well be communicating only say not in billing Ah theres going to nodding and talking telling me what to say, it's what happens when we're all in different states right now.
[music].
I would say that.
We.
It is not the same selling environment. We were January we had 65 SC ours, which our sales development reps.
Right now I think we had six to seven right. The rest had been reallocated to other parts of the organization.
Although we are starting to ramp up hiring again sport our clients.
And our and our future prospects.
I would I would say, it's not a I'd say, our offering something people want but its I don't think we're going to see that same type of growth.
The next couple of quarters that we thought and it's definitely going to impact some of the subscription animal and frankly, it's going to impact cash flow.
Okay, I'm, sorry, I got to ask a follow up to the follow up I didn't understand that SDR can you Oh. So those are there was or sales development representatives.
So we you know those are the people that do most of our prospecting qualifying and our future sales reps.
So it's part of our early had year program.
Okay.
Doing it.
65.
Never got seven.
[noise], where did those extra 58 people though.
We spread them around the company and they are they volunteered to do any and all types jobs sort of make sure that we could support our clients move over there were close.
We basically move them to all different roles in the company.
Support.
Support the organization.
And it was important to us and important to them, it's been a great experience.
Alright, thanks for the at though.
Thanks, Matt.
Your next question comes from the line of Matthew Gilmore with Baird. Matthew Your line is open.
Hey, Thanks for the question I mean, you mentioned cash flow in Dsos were up a little sequentially was was that due to the deferral program that you mentioned last call and more broadly could you just give us a sense for the financial health and the client base and are you seeing any type of uptake with bad debt.
I'll take the first part and then I'll pass it to Tom.
To answer some of it you don't look I can think health care organizations are hurting for the reasons why we wanted to aggressively publish that data till now with the Commonwealth Fund and Harvard Harbored is because we wanted to highlight the material impact ambulatory care was was happy.
Thing.
By the by this pandemic and you could see isn't the payment volume that we make a tiny piece of what they make two of were down. This much. They are and so I think all providers right now across the country are generally doing some type of pain.
But we have I'll, let Tom talk that sort of the days outstanding at Tonight I'm sure that we've seen some it I know that we've seen a fair bit of impact from that but I think most doctors went to medical school.
Because because they wanted to take care of patients and I don't think this is Dick.
Turned them from doing more of that I think it's just caused economic hardship, which is very sad and I hope that as a society, we could support all these healthcare organizations.
On the want to answer the second quarter net yeah, Yeah, Matt we are seeing some some stretching out of payments.
It was not not unexpected and we did increase our allowance.
You will see on the balance sheet, a little bit during the period. So we are going to see a reduction in cash flow from operations in the second quarter.
As a result of that.
Of that the issue.
And receivables did increase which you noted on the balance sheet.
Got it but that's helpful and then as a follow up I was hoping you could talk a little bit more specifically on the on the life Science revenue you you continue that really meaningfully outperforming I think Tom had mentioned.
Good good momentum with the sales front I was just hoping you could kind of give us a sense for what's going on are you delivering more messages or do you.
Just have had.
Sure it more opportunities given that the sales or Rob just trying to understand.
Dynamic in the sustainability.
Our.
Our life Sciences organization has just done.
Phenomenal job of.
Putting their client of all of our clients.
Being able to explain educate the clients on the changing dynamics, our life Sciences partners have been wildly supportive of the work we've been doing a flat.
Yes.
Last year Q1 was.
Frankly, lower than we had hoped but so I don't want to say it was an easier comp, but it was really lower costs.
And the team just executed.
Sure than we had a seamless Q1, so a lot of the programs that had to be resubmitted and re done just just sort of went through.
As early as possible, giving us as much had headroom as possible for the quarter. It. So just yet again that the team and I think I brought it up last quarter. They just did a really good job just executing.
Focusing on our clients and making sure that we're able to lead to live or the most valuable messages to the right patients.
Great. Thank you.
Thank you.
Your next question comes from the line of John Ransom with Raymond James John Your line is open.
Good morning, everybody.
You know clearly you've got a PC your business, that's very volumes centric, which is the payment side and you've got the subscription side of the business.
Which should be less volume weighted but if we think about the subscription business.
Let's just say hypothetically visits are down 25% and they given quarter.
How should we think about the effect on that business.
You know from a volume standpoint.
I mean, let me answer that one.
Yes, I'm happy that on time.
Silent.
No. So you repeat the if we think that part of the Christians yeah.
So how do we think about the sensitivity of the subscription so revenue per the subscription revenue per provider how is that if at all a weighted to changes in line.
But there is some.
You know.
The overwhelming majority though.
It is not as much tied to volume.
I'd say.
Yes.
Tom did I get that right.
Yes, that's correct.
Very few customers have a.
Revenue tied to ER visits it's generally we're on a per provider per month.
Revenue basis.
And I know you're provider providers on always a provider of provider could include a large system or it could be an individual doctor practice, but just at a high level.
To use the baseball analogy.
What inning are you and in terms of upped hearing your customers from say the based subscription rate to something closer to the.
Paul Monte in terms of your all your your full package of services.
Oh that took a new way to ads asked the question.
Yeah, I don't think we'll ever.
I don't think I've ever thought I'd be saying the full monkey.
Earnings call [laughter], so I.
I think the best way to think about that is.
We're continuously trying to drive more of our clients use more parts of our products and I'd say, we're in the very early parts of that for the vast majority of Barclays.
And frankly, we have parts of our of our offering that.
Werent around at the start as here.
So try zero contact intake and tele health, So I think what I want to.
Impress upon our investors is there is something that's an important to us for our entire existence is that we're going to keep investing in.
Innovation in health care and so it's not just what we have today, it's what we will happen and we think that's really important for just improve for our mission proving the healthcare experience and I think the healthcare needs a lot of innovation, whether from us or from other stakeholders.
And I think that's important.
And just the last follow up the we shouldn't expect when you do your third survey with the Commonwealth of fund.
At that time, you might give the market a glimpse of what's happening intra quarter with your volume trends.
I think I pretty sure that they're going to do another we're gonna do another released with the Comingled Fund.
And because I think I saw internally a conversation around that and if that's the case no below she will file will work with the team and we'll file an 8-K and you should be able to see some trends and we think that's important to drive the conversation on the impact just this pandemics, having on the health care system and patients.
Right.
Okay. Thank you very much.
Thank you.
Your next question comes from the line of Donald Hooker with Keybanc Donald Your line is open.
Great Good morning, everyone.
So just a follow up on the earlier question on the life Sciences revenues I think you mentioned no scribbling notes down here, but I think you mentioned that there was a.
A nice year over year, an easier comp, but I guess the truth is even on a rolling four quarter basis. That's revenues have been really strong is there any kind of large project I mean, how many programs are you working on there is there anything kind of one times I know you mentioned that passed or some lumpiness there.
But is there any one kind of drug or brand that maybe driving abnormally strong demand.
It's a great question.
I'm not going to provide any guidance or view on that.
But it's a great question I would ask this thing kind of one and I would say that.
We don't provide much visibility on the number programs, we're doing and who are doing them for.
If you're really interested should go check into doctor's office.
With that.
Program is needed for your health you could definitely see it.
Okay Fair enough and then maybe just my one follow up will be.
Yeah, you come in and we all see sort of the struggles of ambulatory providers in U.S. right now.
Has there been much need on your behalf to provide any sort of price concessions temporarily or.
I think Tom mentioned, some maybe some lenient payment terms.
Let me maybe on the revenue line that would there be any sort of concessions there that we should sort of brace ourselves for in the coming months.
We oh it told US we haven't really we've just tried to be is flexible to our.
Provider organizations and health system clients as possible.
I think.
If you do the right thing.
I'll take the high road, usually it's the road.
What's travel than the one I'd prefer to be on so we'll do as much as possible to try to help our clients out whether it's with product or work flow or implementation training for pricing and or deferral.
So we try as best as we can.
These people doing really really important work treating their patients and I think that will be of alignment between our board our employees and most of the investors that we've talked to and then.
The only supportive, but very happy that we're doing that.
Good thank you.
Yes.
Your next question comes from the line of Glenn Santander, along with Guggenheim Glenn Your line is open.
Yeah. Thanks for taking my question well just.
Yes, you quickly, but the balance sheet a few minutes ago, you talked about the company must continue to invest in innovation.
And im kind of curious if any of the dramatic changes in the market are making rethink some of the strategic priorities are uses for the cash and your balance sheet, maybe with respect to M&A or or any new strategic growth opportunities.
No I.
That's a great question I think.
You know my General view is the.
You know the balance sheet that we have is really there to support our planned growth.
You know we've looked at.
Things over the years.
I think our core focus has been continually innovating and meeting the needs of our clients and investing.
Investing in the people we have.
We will house.
And the clients that we will have M&A is not something that's top of mind and but it's not something that's off the table. It really if it accelerates product development or adds the right members. The team it's something we'll consider.
But I feel pretty strongly in our ability to continuously innovate.
And invest in client growth organically and it's just in the way we've operated for.
15, 16 years since having a nice certain company.
Okay. Maybe for you says one one quick follow up question on the 5% client growth it kind of sounds like asking the question a different way kind of sounds like that that the result, this quarter was really due to strong execution from Fourq, you and maybe some.
Good implementation in terms of this quarter, but as we think about the environment, having changed pretty dramatically in mid March you commented that it's impacting the selling prices going forward is it fair to say.
That we should maybe expect a little bit of an air pocket in terms client growth you know as we look out to fiscal Twoq you just given the environment that we find ourselves and right now.
Our seizing the IR guy.
Velocities says we shouldn't make those type.
Forward.
Statements.
I'm looking at him shaking his head dramatically. So I would say that we had the team has worked really hard and we did have a couple of decent weeks.
To start to Q1.
So and it's not just the selling motion its implementation organization or customer success team.
In the deployment of products that we've had so.
I'm not going to comment on airport, but I will say just flat out. This is a very very different environment than the one we were in.
January and February.
Mark in the first couple weeks of work.
Okay. Thanks for the comments.
Thank you.
Your next question comes from the line of Jamie Stockton with Wells Fargo. James Your line is open.
Hi, good morning, Thanks for taking my questions.
I guess, maybe the first one the Commonwealth data the last release that I saw on that I think was kind of second week of May data.
The down something like 30% year over year.
Or maybe versus the baseline I guess.
Is there any more recent kind of view, what you guys, you're seeing that you could give us.
Closer to.
Yeah, It makes Archie could change.
Yes.
I don't think we're prepared to give any view on.
Volume or how it's structured if we do it's going to be.
Released in conjunction with the convertible bond and Harvard and it's really not.
We're not doing this to give visibility to our investors were doing this too.
Hello participate in the policy debates and educate.
All the stakeholders and what's happening in the healthcare ecosystem right and just you guys get benefit from it thing.
Yes, that's good good but it's generally our view that we're going to publish this.
Family, we have to and.
And when we will publish it anymore, we will publish it anymore.
But I think we still have that I think it's coming out in a couple of weeks washes over.
Yeah, that's right and again the June.
I think they're targeting ended June.
Okay.
And then maybe just a quick question on my POS fun. So I don't know Tom once you take this not bite.
The.
Second quarter should reflect the full quarter.
You know trying to make sure you guys. Your game, where you can keep Pos down I guess I'd be curious.
I know you don't have a ton of visibility into what the revenue is going to look like but theoretically maybe there's a little more arbitrage fine.
From a visibility standpoint, there is there anything specifically that we should be watching out for.
As we kind of model the second quarter.
From a cost standpoint.
Jay.
Jamie I think we mentioned on the earlier call that we had frozen Irene.
And we're going to be looking at that again in the second quarter, I think we're going to be increasing hiring.
And obviously on travel I think we're still going to be highly restricted.
So I'm not sure we're going to see much movement, there, but we are going to see we should expect some increase in expenses and we're going to Stephens. Please see a reduction and cash flow from operations in the second quarter.
Okay. Thank you.
Your next question comes from the line of Sean Dodge with RBC capital markets. Sean Your line is open.
Hi, good morning, maybe.
Hi, I'm, taking a little bit of a longer term view Jamie's question, you mentioned restarting hiring I guess would visit volumes tracking back up again in looking like maybe on a path back to normal.
Yes, a large scale restarted how are you thinking about balancing degree ramping of spending in investing against what could could be still that's somewhat depressed revenue environment for the next couple of quarters.
Uh huh.
I think we have which I think we decided as an organization to.
Start rehiring in early career program.
Have we have.
Whole bunch people starting in next week in that program, we should expect larger cash flows this fiscal year versus last to let Tom handle that but.
What are the things that we found in sort of the long term growth. The for Asia is that if we don't hire into our early career program now it has a material long lasting effect in two years ago. Those people become indoor senior implementation leads and a couple of years and some.
Okay.
Watch them. Some of you have met them, but I've watched them start their careers appreciate and turn into this these phenomenal leaders little rock stars that organization. So a lot of the bet. We're making is not just now it's on our future growth.
Tom you want to handle the cash flow issue.
Yes, as I as I mentioned, Shawn Roberts, we expect a cash flow from operations to be negative in the quarter and also for the full year old higher than last year higher outflow than last year.
In terms of your modeling.
Okay.
That's helpful. Thanks, and then maybe a quick on the Tele health offering there any update you give us on.
Things like what proportion of your provider clients are using the solution or maybe what.
Portion of the payments you processed.
During the quarter were derived from telehealth visits.
I'm not going to give visibility on.
On.
The peanuts, I will see them purity of our clients or.
You know so more than 50% of our clients I believe.
Definitely have the telehealth offerings.
Yes.
Okay.
We didn't grow as an unusually good.
Okay.
And again, if you would like to ask a question. Please press star one on your telephone Keypad. Your next question comes from the line of David Larsen with Dougherty David Your line is open.
Hey, can you talk a little bit about your relationship with RCM and they obviously recently acquired Serrano ramp works solution or services tied to that like is there any sort of near term.
In shell opportunity into Cerner space.
How far along are you with hospital solution.
Real World.
Would that be up and running thanks.
Those are those are some great questions.
Your first I'll make a comment on Joe Joe and his team that.
RCM I've been had been great partners. They have been there just terminal operators and I think that there.
They have just the ability internally to be able to execute really well and we were proud to partner with them till now and into the future and we've really done a phenomenal known as innovation with them.
And I'll, let them talk about you know the cerner acquisitions, because frankly, they know more about it.
However will and so all I could say there is that it's a it's a really strong partnership that's just making a material difference to patients.
Healthcare systems, and we're really proud of that partnership.
Yeah, I think Joe and his team has done a phenomenal job and we're really proud to partner with them and I can promise you that.
As we have something to say around the hospitals and the acute space.
As long as she will create a slide and well make has talked about it.
So that's sort of our view and June were sort of stuck to it.
We think hospital in acute it's really hard.
And.
We we've done a little bit memorial, which is which the Wall Street Journal published an article about.
Yesterday Memorial is using our solution in acute probably much sooner than we would have anticipated so.
We think we have something.
Long term that could be a value and when we have more visibility about it we think it's our responsibility to educate our investors.
Until then sort of plateauing.
Okay. So memorial it's actually using your solution for acute care intake.
Great distressed sites now fully functional.
That's correct.
Okay, Great and then with these 58 STR, what's keeping them from selling right now I imagine that you have probably at least one SDR in each state so they could probably drive to different physician offices.
I mean, when when will they be sort of back.
Selling to Doc offices in your mind.
And any you know if you have patient volumes of Pulte, maybe 20% I mean physician offices are still seeing 80% of the workload, they're still activity there, what's preventing them from getting on the road right now in selling.
When in your mind will they all be back in their roles operating in the sales capacity.
I think well so first off just to clarify most of them are in the RTP North Carolina Research triangle area.
Not in the field, new mostly phone based prospecting.
I think we'll start slowly ramping them up over the quarter.
In a lot of it has to do with.
A lot of practices.
And calling on them, we found that a lot of institute bandwidth right. So they still have a tremendous amount of furloughed staff.
Right, they still they're getting their volumes back and just.
What we have to be thoughtful voters.
What and how do they want calls question, though because we're playing the long game here in a lot of this has to do with reputation and you know I've done that job early in my career and you want to make sure that you're not on the the wrong and up to many really angry people when your cold calling.
So we think that that's it's important and will ramp it up slowly over the next couple of months setting of those those folks or it's going to get back on phones. There. It is a good nominal group of individuals.
Okay, Great and then.
Last one any color around bookings for the quarter or signed contracts that you can share and if not not totally understandable.
That does not something we have her ever will give visibility on.
So, but it's great question.
Okay. Thanks very much.
Sure. Thank you.
This concludes our question answer session I will now turn the call back over to Hynek for closing remarks.
Thank you everyone and I really appreciate.
Everyone's interest in Korea, and your support.
We hope that everyone's think stake and it's really advocating could that needed social change that our son sightings and.
I just want to take all of my peers and teammates or three show for their dedication or hardware means.
It's the most proud thing to be able to work next to them. So that I missed them seeing them in person.
Sure is over.
Ladies and gentlemen, this concludes today's conference call on behalf of frees us. Thank you for participating.
<unk>.
[music].