Q4 2020 Phreesia Inc Earnings Call
Okay.
Ladies and gentlemen, this is the operator todays conference is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.
[music].
Good morning, ladies and gentlemen, and welcome to the free just fiscal fourth quarter and full year 'twenty 'twenty One earnings conference call.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time I would now like to introduce philosophy Gandhi Vice President Investor Relations for free that Mr. Johnson you may begin.
Thank you operator, good morning, and welcome to free shows earnings conference call for the fiscal first fourth quarter of 2021, which ended on January 31 2021.
Participating on today's call from Freesia, our Chief Executive Officer, and co founder I'm Index Chief.
Officer, Tom healthier and senior Vice President of marketing and business development Michael Davidoff.
Boeing prepared remarks from Hi, Michael and Tom We will conduct a Q&A session.
A 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 SEC both of which are available on the Investor Relations section of our website at IR Dot free show Dot com.
As a reminder, today's call is being recorded and a replay will be available following the conclusion of the call.
During today's call we will make forward looking statements within the meaning of section 27, a of the Securities Act and section 20 <unk> of the Securities Exchange Act.
Although we believe that the expectations reflected in these forward looking statements are reasonable these statements relate to future events or our future operational or financial performance.
And involves known and unknown risks uncertainties and other factors that may cause our actual results performance or achievements to be materially different from any future results performance or achievements expressed or implied by these forward looking statements.
Furthermore, actual results may differ materially from those described in the forward looking statements.
And will be affected by a variety of risks and factors that are beyond our control including without limitation.
It's about our future financial performance, including our revenue cash flows cost of revenue and.
And operating expenses.
Our anticipated growth.
Predictions about our industry the impact of the COVID-19 pandemic on our business and our ability to attract retain and cross sell to health care provider clients.
These statements are also subject to other risks and uncertainties, including those more fully described in our filings with the SEC, including in our annual report on form 10-K that will be filed with the SEC later today.
The forward looking statements made on this call.
Speak only as of the date on which these statements are made we undertake no obligation to update and expressly disclaim any obligation to update any forward looking statements to reflect events or circumstances or to reflect new information or the occurrence of unanticipated events, except as required by law.
Yeah.
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 not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings press release, and supplemental materials, which were furnished with our form 8-K filed after the market closed on March 30th with the SEC.
It may also be found on our Investor Relations website at IR Dot free shot Dot com as a reminder, we are participating on today's call from four different locations. So we appreciate your patience with US I will now turn the call over to our CEO Jaime day.
Thank you Bella.
Good morning, and thank you for your interest and for Asia.
Our fourth quarter reflects continued solid performance total revenue.
Was $41.8 million up 27% year over year.
The average number of provider clients was 1800 heats up 13% year over year.
Average revenue per provider client was $17858 up 7% year over year.
Life Sciences revenue was $9.5 million up 58% year over year.
Adjusted EBITDA was negative $85000, a decline of $1.4 million year over year, reflecting our continued investment in long term growth.
Our performance over the past year was truly a team effort. There are two unique aspects of the past fiscal year that I would like to highlight and acknowledge.
Burst.
The transition to remote work from the earliest days of the pandemic everyone. Appreciate <unk> has had to adapt to full time remote work on.
Often in the same living spaces, they're roommates or families who were working or learning remotely as well. This has allowed us to continue to grow our team to over 800 folks who work tirelessly for our clients and their communities.
Our team grew 55% in fiscal 2021 with gross spread across all areas of our organization service and support sales and marketing research and development from G&A to recruitment and Onboarding of hundreds of new team members in the pandemic environment.
Was particularly challenging there is no playbook to draw from our human resources team and managers across the organization adapted to the new environment by testing new approaches to recruitment and Onboarding that we believe will strengthen our processes going forward.
We will continue to invest and learn together as we adapt our company to permanently remote first environment.
Second the development of new solutions, such as our COVID-19, screener will it take for telehealth and vaccine delivery management, all of which were not part of our near term product roadmap. When we entered fiscal 2021.
These modules are helping our clients operate safely and efficiently through the pandemic.
We saw significant client growth with our average provider client count in the fourth quarter, increasing by over 200 clients year over year.
These clients range from small ambulatory practices were on boarded quickly to large health systems that engaged us and will likely look to expand their relationship with us over time.
We will continue to invest across the organization to support our work with all the new and existing clients.
Finally, we grew through acquisition in October 2020, we integrated two web based workflow applications co developed by Geisinger, and Merck that focused on patient communication and medication adherence respectively.
January 2021 we acquired Q Doctor and innovative company in our space, who we have known for six years.
Both of these additions to free Joe were led by our operating executives.
I've asked Michael Davidoff R. S V P of marketing and business development to join US today to provide an overview of the Q Doctor acquisition Michael.
Thank you on and good morning, everyone.
Q Doctor was founded in 2013 by Patrick Randolph.
Hatrick and his team set out to address the need for providers to reduce patient appointment cancellations and no shows and ultimately accelerate patient access to care.
According to industry data cancellations, we schedules and no shows can reduce a provider's revenue by over 20%.
What attracted us to Q doctor with the debt of high value Saks features that will expand the value of our appointments based offerings.
Doctor software is designed to identify patient appointment cancellations and no shows and automatically fill those gaps in the schedule by pulling forward future patient appointment.
We track two doctors progress in this space for many years and determined that it would take too long to replicated through internal development.
In addition to Q doctor strong product offering and cultural fit rough.
Roughly one third of Q doctors' clients our existing clients.
Which we believe speaks to the complementary nature of our product.
As we indicated in our earnings press release, the total consideration for the acquisition consists of $5 8 million in cash paid on the acquisition day.
$2 1 million of liabilities incurred and $2 2 million in performance related contingent payments.
Overtime, we believe the underlying Q Doctor technology will enhance our appointment based solutions and the overall value from the free ship platform to health care providers and <unk>.
Patient.
I'll now turn the call back to him.
Thank you Michael.
Before handing it over to Tom for his final quarterly review of the financials.
I would like to acknowledge Tom's contributions to free shot.
Tom joined Us in 'twenty, 12, and brought with him half a century of experience in public accounting and growing technology businesses. He played an important role in our successful transition from a small venture backed company to the freesia that was introduced to all of you through our IPO in 2019.
I speak for the entire freezer team, including our board of directors and thanking Tom for his contributions and wish him and his family all the best as he begins his next chapter in semi retirement at the end of April going forward. We will also benefit from his experience in a new advisory role and I will continue.
Moving to enjoy his friendship Tom.
Thank you Haim.
And good morning, everyone.
I'll review the income statement balance sheet and cash flows for the fiscal fourth quarter and update our outlook for fiscal 2022.
First total revenue was 41.8 million up 27% year over year.
Subscription and related services revenue was $18 8 million in the quarter up 25% year over year.
Payment processing revenue was $13 4 million in the quarter up 15% year over year.
Reflecting a continued recovery in patient visit trends.
But still slightly below pre pandemic levels.
Provider revenue, which combines revenue from subscription and related services with payment processing fees was $32 3 million in the quarter up 21% year over year.
The two drivers of the 21% provider revenue growth in the quarter.
Where average provider client growth up 13% year over year and average revenue per provider client up 7% year over year.
As we indicated last quarter provider client growth has been trending higher reflecting increased demand for our offerings.
That being said our land and expand go to market strategy tends to result in quarter to quarter variability.
Between the contribution of client growth and revenue per client.
This has been the case for many years as our historical results show.
Life Sciences revenue was $9 5 million in the quarter up 58% year over year.
Our team continues to execute on closing new business and delivering messages to very targeted patients.
Now, let's move on to expenses.
I'll review several expense line items on an adjusted non-GAAP basis.
Which excludes stock based compensation expense from each line item.
Please note that a full reconciliation of GAAP to non-GAAP measures, including adjusted EBITDA is included in our earnings press release, and our form 10-K.
To be filed with the SEC.
Cost of revenue was $6 8 million or 16, 2% of total revenue.
320 basis points year over year.
The year over year trend reflects the ramp up we discussed last quarter in our client services organization to support our gross.
On a sequential quarter basis cost of revenue as a percentage of revenue was down 10 basis points.
Sales and marketing expense was $12 million or 28, 7% of total revenue up 530 basis points year over year.
The increase reflects the accelerated investments we previewed earlier in the fiscal year to support our current and future anticipated gross.
Research and development expense was $5 9 million or 14% of total revenue up 10 basis points year over year as a percentage of revenue.
Note that we expect the pace and level of investment in R&D to accelerate over the next several quarters from dollars will be allocated across the existing platform as well as into new products and solutions.
General and administrative expense was $9 5 million or 22, 8% of total revenue.
Down 180 basis points year over year.
As a percentage of revenue.
We continue to ramp up public company expenses.
Particularly in finance and legal and we expect to begin to see operating leverage from the fourth quarter of fiscal 'twenty two.
Payment processing expense was $7 8 million up 12% year over year.
Payment processing margin was 42% up 120 basis points year over year due to the mix of transaction type and lower cost routing of payments.
Longer term, we expect payments margins to return to the 40% range with a quarter to quarter variability.
Due to transaction type mix and interchange fees.
Adjusted EBITDA was a loss of 85000, a decline of 1.4 million year over year.
The decline is largely due to the acceleration on investment across the company, but most notably in sales and marketing in the fourth quarter as we capture the growth opportunities we are seeing in the market.
Shares outstanding as of March 26 was $44 9 million.
Cash on the balance sheet at January 31 was $218 8 million down $35 3 million from October 31st However, we paid down our 21 million dollar revolver in the fourth quarter.
Cash flow from operations from the quarter was $4 1 million compared to $1 3 million in the prior year quarter.
Capital expenditures for the quarter were $7 5 million up $4 3 million year over year. The significant increase reflects our ramp up in data center equipment purchases.
And capitalized software to support our growth.
Our outlook for revenue growth in fiscal 'twenty, two remains 20% to 25%.
Which translates into a revenue range of $178 million to $186 million.
We.
Our overall cash outflow to increase in fiscal 'twenty, two compared to fiscal 'twenty one.
As we continue to ramp up hiring and infrastructure across the organization to support our anticipated growth.
In closing the past eight years with Frazier has been an incredible journey and I'd like to thank Chaim and the entire free food team.
For their partnership and support and I wish the best day, Randy and the finance team members, who have been so dedicated to our mission and growth over the years.
We're ready to take your questions operator.
Thank you at this time, we will be conducting a question and answer session in order to ask a question. Please press Star then the number one on your telephone keypad.
To allow for as many questions as possible. We ask that you. Please limit your questions to one question with one related follow up. Your first question comes from the line of Ryan Daniels with William Blair Bryan Your line is open.
Yeah. Good morning. This is Jared haase in for Ryan. Thanks for taking the questions. Just wanted to ask maybe a quick one to start on the life Sciences revenues, obviously that was.
Strong again, both both on a year over year basis, as well as sequentially versus last quarter and I think last quarter, you talked about kind of continuing to make some investments maybe feeling a little bit better about the team and kind of where that that product line is positioned in the marketplace. So just curious if the strength here this quarter has more to do with any.
Sort of seasonality factors Youre thinking maybe year end budget flush with pharma clients or is it really just kind of continued execution with the sales team and then just a really strong demand environment.
Good morning.
And.
I Love talking about our life Sciences Org.
What I'd tell you is that it's just execution.
I want to as.
As much as I'd love to be able to point to a one time.
The seasonal thing like at the end of the day. The team has just been doing a really good job of.
Really.
Focusing on clients and making sure that we deliver phenomenal value and strong rois.
And are clearly articulating our value.
Got it thanks for that and that's good color and then yeah.
I guess, just maybe a bigger picture question kind of thinking more longer term given all the things that have kind of changed from a demand perspective over the last year or so and getting your product lines that you have developed as well as the pace of hiring and the way in which you've kind of transform the cost structure a little bit is there any reason to think.
About.
Any sort of meaningful difference in your longer term margin targets for the business or do you still feel like you know eventually getting to meet the 20% adjusted EBITDA margin is the right sort of longer term target.
That's still the right target for us.
The only thing we've done is Inc.
<unk> increased our investment levels to.
To support what we see is our ability to grab unfair share of market.
We're very.
<unk>. This is my excited voice.
We're very enthused about the reaction and feedback we're getting from our client base and we're going to keep leaning in and investing to capture that share.
Okay, great. Thanks for that.
<unk>.
Your next question comes from the line of Stephanie Davis with SBB Leerink Stephanie Your line is open.
Hey, guys. Thank you for taking my questions and congrats on the quarter.
Looking at your three ramping lines.
And next year you buy.
The acceleration in your subscription growth because you just had a huge sales force that's net.
Likely acceleration in payment processing type of Inc. Copa Com.
That leaves life sciences, as the quad to meet 20% to 25% gross.
But all market signals on recent performance there suggests that that shouldnt be decelerating dramatically. So.
So could you help me reconcile that.
I can't reconcile.
Your numbers and I tend not to run the business by plugging.
But I will say that we feel.
The investments we've made across the board are are really paying off and all of our early indicators that we see are.
Very very positive and we and I think life Sciences is our life Sciences team is capturing also an unfair share of market gains too. So we feel good across the board.
But that being said I have no idea what the recovery is going to look like and we just know that we're going to keep supporting our clients any which way possible.
Maybe asked another way is there anything that would cause a deceleration in our life sciences that Amir.
Uh huh.
I'm sure if you like.
Thought enough place there's ways you could decelerate it but we're really focused on on.
Continued growing at I don't know if debt.
No I don't really wake up and think about how I could decelerate the business.
Okay. Sir is that they'll never like we're we're pretty pumped about all like just everyone's sort of running hard here. So we're really excited.
So how do you get to only I got the midpoint three points as revenue growth acceleration.
The numbers get bigger.
And Randy I guess that the plant is the only three points, it's not that it's Lancashire rally.
Yes.
Stephanie I would just say.
The acceleration in and of itself.
Can move up from a growth rate historically.
So.
I'm, just sort of take it that way.
Okay, and a quick follow up on the Q Doctor.
It sounds like Theres, only a third overlapping your client base.
Are you going to use this more as a capability of expansion or is there a cross sell opportunity for incremental revenues there.
Yeah.
We we.
We both think this's capabilities and.
It will allow us to cross sell other application it will fit into applications that we are cross selling to our client base.
It's already integrated when we've had early success to date already.
So it's been good.
Alright, thank you.
Sure.
Your next question comes from the line of Scott Schonhaus with Stephens Scott Your line is open.
Thank you hi, <unk> and team.
Wanted to ask you a balance sheet related question I thought was interesting property plant and equipment nearly doubled from last quarter wanted to see if you could provide more color on what investments youre, making there and what that means for your business.
We're making because of the.
On big ramp in volume, we're also making fairly significant investments in data centers.
So a lot of that is just to add significantly more capacity.
And is that also a sign that you're continuing to succeed upmarket into larger hospital systems you need these larger data centers are more datacenters.
To be clear I think we're succeeding not just in large health systems in the mid tier and large ambulatory groups and surgery centers and frankly I think the team is.
Doing a phenomenal job across the board, but I think we've had some really nice wins in all the markets that we've been tackling.
I'm just very pleased.
And so we want to make sure that we continue to invest to continue to support.
The market share gains that we're winning.
Great just a follow up there.
We're obviously seeing success in selling to you.
Across the board on client base and taking share.
How does this how does the dynamic change between provider client growth and average revenue per provider.
Per client.
Given these large larger land and expand opportunities with larger hospital systems, just to be specific there the cross selling and up selling opportunities. Once you expand into these systems as a way to think about.
The average revenue per provider growth kind of accelerating in the back half of the year into fiscal.
Fiscal 'twenty three.
Trying to get more color there.
Yeah, I think when you think about one of the things that we pointed out even in our Tam.
We didn't think that we're going to be able to grab as much payment volume in the large hospitals systems. So youre seeing some of that shift happen.
But look we're all.
And we're all we view those metrics is tightly tied together both average revenue and revenue per client those are metrics that internally the entire leadership team is is.
Strongly tied to.
Thanks, Tim.
Sure.
Your next question comes from the line of Sean Weiland with Piper Sandler Sean Your line is open.
Hi, Thank you good morning.
I'd like to better understand payment.
<unk> is up 15% life science revenue up 58%.
I suspect that both of those have at least some correlation to visit volume.
Can you discuss what the.
Net.
The separation areas.
Are there is some correlation to visit volume you're correct.
But.
The life Sciences revenue.
Has other drivers to it as does the visit as does the payment volume.
Since we did see a slight drop in our where.
Where the payback was the.
Was tied to freesia, but we've also done a great job of cross selling more visits to different life sciences customers using our significant investment in data science.
Okay.
Hi, Keith.
Can you just as a follow up what was the overall trend in visit volume for the year across the platform and how is pricing holding up in the in the payments business.
Hey, Sean this is Bob.
Okay.
The Commonwealth data, which we've been putting out I mean.
We want to be clear, we don't disclose visit data as far as our kpis or anything like that but you can see the data from Commonwealth, which spans pretty much the entire fiscal year.
Good day.
It basically got within low single digits of pre COVID-19 levels by the end of the year.
Overall, I mean, it was clearly down year over year.
Hope that helps.
Helps here and it's more tied to payment to volume side than it is to.
Life Sciences, there's some nuances scientific payments there is much more.
Okay.
Direct impact.
Okay, and how about that.
The net pricing in the payments business.
Can you be more specific on that.
Hum.
Can you characterize your debt debt pricing environment in the payments business.
Price.
Sean I think youre talking about our take rate.
Is that correct.
It's been pretty flat.
Sequentially.
Sound like a share but not much sequentially.
Okay. Thank you very much.
Your next question comes from the line of Ken <unk> with D. A Davidson Hana on your line is open.
Hi, Thanks for taking the question as free from the upmarket with larger helped us from clients coming on line, putting pressure on the percent of patient volume processed through refresher can you ballpark, where we should expect this.
Present to moderate.
Yeah.
Can you repeat that.
Yeah on.
On the Scott the 79% this quarter patient volume processed through freesia, obviously estrogen moves more up market the larger health system clients coming on line, that's going to put some downward pressure on that statistic can you ballpark, where we should expect this to the lottery.
Move more upmarket.
Yes, I think I'll, let I'll, let hi, Matt.
Follow up on this one.
It's a function of just the types of clients, we add quarter to quarter and the type of growth. We get so there is definitely mixed in there.
Hard for us to I think tell you what the payback rates going to be.
There's a little bit of a chicken and egg there, but I think.
Thank God I have been talking about.
And here, but that debt change the delta and that percentage is a reflection of moving up market.
Decline that you saw anything going on.
Todd.
No.
As we add as we add health systems, and if they don't take payments, you'll see that decline.
Okay. Thank you that's very helpful and just one follow up on.
Recent.
Likely episodic shifts to vaccines vaccination sites pharmacies and grocery stores as opposed to traditional ambulatory care centers are you seeing any customers impacted in regards to the visit uplift that they might have been expecting specifically for COVID-19 vaccine.
Not sure I understand the question can you.
Yes, absolutely.
And kind of make shift away from a traditional doctor's office in an outpatient care center to say is CBS on have you seen any customers kind of be impacted in regards share customer revenue they are expecting to get an office.
On because vaccines have shifted to kind of these external care centers like a pharmacy.
I don't think our clients and this is conversations we've had with them.
Our waking up thinking that vaccines are a revenue driver I think that what we're seeing is they are our clients from provider groups and health systems are mostly looking at this as how do they vaccinate their communities as fast and effective as possible.
I know a bunch that are partnering with the.
The pharmacies locally and other organizations like I think the goal is to try to vaccinate the population as effectively as possible not to think about this as a profit driver.
And we don't.
Monetize it.
In any meaningful way.
Got it thanks guys.
Thanks.
Next question comes from the line of Ryan Macdonald with Needham Ryan Your line is open.
Yes, good morning, Tom Best of luck in semi retirement.
Great working with you.
First question Amit.
My My first question is I guess for Haim.
Obviously seeing some continued strength in new logo growth.
Curious to see here, how the new newest group of <unk> that you added in throughout 2020 are impacting.
That new customer logo growth how are they ramping in terms of productivity versus your internal expectations.
You know I've been really I've been very.
Please would be an understatement I sat through the one of the weekly demand Gen calls.
Last week.
And I know, Tom said to a couple of them too.
They're just doing a good job.
They're really able to reach out to people effectively either do on their calls effectively we're seeing good demand gen.
I don't want to say I'm pleasantly surprised because I'm not surprised because we have a phenomenal organization, but they are doing is as expected.
We're very excited for the new.
The new group.
So the folks that we have on the team.
Great and as a follow up to that as you as you sit on those types of calls and listen to the dynamics of the market is there anything that you're seeing in terms of incremental change and whether it's you know.
Heightened demand or as your reps are out.
Talking to perspective customers is there.
Noise of other vendors sort of in debt are in the same markets right now we've certainly heard a lot of noise from a financing of <unk>.
Space, but I'm curious to be here, how how early stages the market opportunity killers here.
Okay. You know, we've always heard noise for 16 years everyone's always.
I've always thought that what the space is easy to be in and delivering solutions on it requires is a website.
<unk> press release, our general view is raising money and putting out websites in press releases doesn't create products that drive a phenomenal amount of value.
I think what we're doing.
Doing is making sure that our customers get products that drive a phenomenal amount of value at great value and then.
On to the missing out in trusting us even more for more products and debt.
That thesis has proved phenomenally well for years and we're not seeing any change in debt.
I think what.
When we use usage as our Northstar, we want to make sure not that we just get our products sold but debt patients use it and we transferred.
For the work to the patient you got this amazing ROI.
So like.
Mike I don't think now is any different.
Just think that the numbers get bigger and the press releases get louder.
Great. Thanks for the color and congrats again on a good quarter.
Cheers.
Yes.
Your next.
Rolling It comes from the line of Sean Dodge with RBC capital markets. Sean Your line is open.
Yes, thanks, and good morning.
Maybe on the acute care opportunity.
When we think about.
Timing and a potential ramp from that is there anything you can share with us to kind of help better frame that out and obviously hospital workflows are a lot more complicated.
So there's still a lot of de Novo development work, you're having to do with a lot more integration work how far along do you think you are on that in and then I'd I'd imagine sales cycles. Our sales processes are different to anything on anything just to kind of better trained on timing.
Look I think.
Question from investing I don't think this is the.
If anything it's probably closer to the second inning.
And we're seeing real value propositions and wins and we're going to keep investing heavily.
In the product and the work flow in the integrations and the people in the process.
And in the value.
We're gonna could we provide our clients and if we just keep rinsing and repeating with the same formula and we keep doing it at scale I think we're going to keep having the success that we've had previously and hopefully it even greater degrees.
Okay and then.
And just to clarify I don't we don't have any data to say that the sales.
The cycle is longer.
Okay.
On.
On on social determinants, if it was about on a year ago. Now you guys begin to highlight that the work Youre doing there I think it was initially in North Carolina building and the ability to screen for those integrating that into the intake process is there any.
The interesting development updates you can share there.
Yeah, I think we just did a we've been doing a bunch of work and Michael can talk to this also around vaccine hesitancy in different communities and understanding vaccine hesitancy in understanding the impact of.
The virus.
On different communities.
Often tied to their social determinants, but this isn't an area. This is an area, which we have not slowed down our investment and we think it makes a material difference to health care delivery in patients.
In America.
Michael you want to add to that.
Yeah, Hi, thanks. Thanks for the question I think I would just add that we're continuing to invest in our clinical team and expanding that group and they're doing some incredible incredible work with measuring hesitancy and working with our clients to really understand.
How they can.
Improve.
The ability of the delivery of the vaccine to grips that just might not be comfortable.
Getting the vaccine right now so we're.
It makes us extremely proud and speaks to the mission of the company.
Okay, great. Thanks again.
Your next question comes from the line of Daniel Gross night with City Daniel Your line is open.
Hi, guys. Thanks for taking the question and congrats to a strong quarter I just had a quick question on that Amy Ah patient payment volume, if I, if I divide patient payment volume by the average provider clients.
In the quarter I get a sequential increase versus <unk> of about 1% versus a.
An 8% sequential increase from <unk> to <unk>. So I'm, just curious of any trends you've seen recently on the payments.
Uh huh.
The patient payment volume per provider gross was the large sequential increase in <unk> due to a bolus of larger clients coming on board et cetera, and how should we think about the gross and patient payment volume per provider for fiscal year 2022.
So on line to get that there's a lot on that question. So maybe just.
To break break it down now Daniel So Tom maybe the first part is what it was it was sequentially Daniel you're trying to understand payment volume trend from was it was a two three or three key to force. The exact so I'm trying to understand the patient payment volume per.
Provider client.
I see.
Sequential growth trends because it it grew pretty rapidly and three Q about an 8% sequential increase per provider and then slowed to around a 1% sequential increase still very very good relative to historical but a sequential slowdown so.
I'm just trying to understand the trends underlying the sequential growth in payments per provider and how to think about that in 2020 fiscal year 2022.
Dan I say I think there's.
Probably some seasonal impacts in there and some impacts from our land and expand strategy that makes it somewhat difficult to answer that question.
Crisply.
The decline in a per provider patient payment volume.
It has.
There's a lot of factors that go into it.
Size of the customers et cetera. So it's it's tough for me to give you a forecast as to what that's what that's going to be in the future.
Okay, Okay understood.
Alright, and then I guess another question I have is.
On the vaccine rollout there's been some good press reports on how you've been.
Been helping some of your clients with the intake process, there and I know, you're giving those capabilities away free of charge similar to what you did.
With with Telehealth modules.
But I'm curious how you may leverage.
Of the goodwill or the learnings that you learned.
During the vaccine rollout into a growth acceleration in fiscal year 2022, I will just accelerate some of the sales prospects that you had in the in the pipeline.
I think it.
It helps us I think all these things when you do right by clients.
<unk> really amazing products that help them massive amounts of people.
The general view that I have and everyone here has is the.
Positive outcomes, usually follow and that's something we've seen traditionally.
And on traditionally through our entire existence in 16 years. So we it's not a halo I think we've built some really amazing products that have helped us win clients because of it.
Have one clients because of it and our.
Clients feel really good about us being able to support them through tough times and that's.
What's.
That's part of broker relationship that we build.
But also it's just the right thing to do.
I want everyone to understand that we will always endeavor to try to always do the right thing it's important.
Understood Alright, guys.
Okay.
Your final question comes from the line of John Ransom with Raymond James John Your line is open.
Good morning, Hi, Thank you need to practice that excited voice a little bit.
That that wasn't all that excited but.
The question I have is recent.
The visa Mastercard talked about maybe bumping up the interchange fee.
You know they pull back after some political pressure, but just help us size. If that does go up on does that mean for your payments business.
Do you want me to take this.
I do but do you have from your voice first familiarity with.
Pretty excited about that.
[laughter], Hey, John I think they announced about a 10 BP increase in their list prices.
In fact January or February.
And that's what they backed off on I assume that's a rumor I don't.
Because Europe.
Number, but that's what I read on the press as to what their price increases would have been on a list price basis in April.
So that gives you some some side is that on it.
So can.
Can you translate that to a free here revenue, okay, sorry calculator down here is broken.
If it does go through.
It means that we don't have to pass on increased cost to our providers. So it means that visa Mastercard unfairly taxing health care providers in America, just got put on hold for a little bit it's pretty it was good day.
You know I think it's on the.
It's it's great.
That they have that pressure.
Okay Gotcha.
The other question on and I'll, probably be the only guy that doesn't understand this but.
Could you say again, why as you transition to larger clients. Your debt 70 odd percent ratio that you referred that put some pressure on that number why is the why is.
That ratio lower than than it is when youre doing mostly smaller Doc offices.
Hum.
In in the sales cycle, what we've often found us in very large health systems. The Treasury group of the large health systems have tight relationships.
With.
Large banks can often they give them their credit card processing as part of those relationships.
And so it often takes some bit of.
Maneuvering to be able to pry that away from the banks, who are unfairly charging and taxing them for it. So that's generally what we've seen and it's often tied.
Lending relationships.
I gotcha okay.
Okay and you know.
Go ahead.
John you there.
John if he would like to press star one to re queue up.
Tide to lift John John line is now open.
And so she's got me off reminds me of home.
The jump in S. D and R is that I'm I'm, sorry, marketing is that mostly just the head count issue and SDN or is there something else going on there.
Yep.
It is.
It's us.
Singing.
Bright future team.
Great. Thank you that's more sales thank you.
This concludes our question and answer session I will now turn the call back over to <unk> for closing remarks.
Thank you everyone and thank you again, Tom for you.
Investor earnings call and we appreciate everyone's support and we'll talk to you in a couple of months.
Sure.
Ladies and gentlemen, this concludes today's conference call on behalf of free just thank you for participating you may now disconnect.
Yes.
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Last year.
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