Q4 2020 Soc Telemed Inc Earnings Call

Good afternoon, and welcome to the guys and so you tell them and fourth quarter 2020 earnings conference call and webcast. All participants will be in a listen only mode should you require assistance. Please press star then zero after todays presentation, there will be and opportunity to ask questions to ask a question you May press. The Star then one to remove yourself. Please press star then.

Two please note that this event is being reported leading today's call are John Calix, Chief Executive Officer, and Kris Newton Chief Financial Officer. Please note that the company will be discussing certain non-GAAP financial measures that they believe are important and evaluating performance details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliation there.

And can be found in the press release that is posted on the Investor Relations page of the company's website.

Also please note that certain statements. During this call will be forward looking statements as defined by the private Securities Litigation Reform Act of 1995, such.

Such forward looking statements are subject to risks uncertainties and other factors that could cause actual results for and so see telematics differ materially from those expressed or implied in this call.

For additional information please refer to the cautionary statements and the press release filings with the SEC all of which are available on the Investor Relations page of the Companys website with that I would now like to turn the call every day you tell him as CEO John Calix. Please go ahead.

Thank you operator and welcome everyone on the call. Thank you for joining US. This afternoon to review, our fourth quarter and full year 2020 results I want to start the call today by thanking the entire Soc team for their hard work throughout the year.

And it's your persistence and commitment to the organization that empowers us to deliver time sensitive of care to patients at the most vulnerable.

2020 was an important year for Soc telematics and October 30th we called the spec merger transition and began trading on NASDAQ as a standalone public company and we made significant additions to our team across the organization the best position ourselves to capitalize on the opportunities that lie ahead of us in 2020 one.

And the call today, I'm going to share some high level of results.

Recent additions we've made some of the team and trends, we're seeing and the industry also share. Some details of the acquisition, we announced today of access positions and experienced multi specialty acute care of telemedicine provider. That's further solidifies <unk> position as the largest acute debt.

Kitted telemedicine provider in the U S. I'll close my comments today I reviewing investments, we're making the set up for future growth and what we were planning for 2021.

So first the 2020, our revenue for the full year of 2020 was 58 million of 12 per cent decrease for 2019 really resulting from the impact of COVID-19 had on the emergency room utilization for our hospital customers and that's something that we've previously discussed on our last earnings call.

At the same time, we achieved record bookings of $12 $2 million doubling our results from 2019.

Now and the last call I told you about our commitment to ensure our future success by enriching enhancing the SFC team to that and we recently brought on and Chris Nib as our Chief Financial Officer, Ron Egan, as our Chief customer Officer, and Stephanie Harris as our Chief Human Resource Officer, all of whom bring public company experience.

The strong track records of success and diversity of thought to the business.

As we grow the organization, we remain acutely focused on both optimizing the value, we deliver to our customers and the daily basis and being aggressively committed to our people.

And it's critically important and the stage of the company's life. They have experienced visionary leaders focus on these two key elements and that's exactly what Chris Ryan and Stephanie of brought with them. The S. O C. Additionally, high trend has been promoted the president and Chief operating officer. The focus his attention on the operations and growth of the organization.

Given the deep domain and company expertise and high is well suited to drive the operational excellence needed.

So as this is the only our second earnings call as a publicly traded company I wanted to step back and provide a quick reminder, to all of those where we're positioned and the telemedicine space.

Really before getting into some of the trends, we're seeing and the industry.

And you'll see that it is the largest provider of acute care telemedicine solutions that are primarily used inside the hospitals I onsite care teams to provide time sensitive acute care specialty solutions. The service. We deliver is initiatives directly by members of the care team and this is a really important distinction from the consumer.

Were initiated and access to remote primary care type clinicians.

So you tell them that provides a differentiated solution through the seamless integration and flexible deployment of our proven secure purposeful software platform called Tom and IQ and of panels console of coordination experts and then finally and axis of networks of providers across multiple specialties. We are proud to have worked with our pioneering partners.

Who are on the cutting edge of acute care telemedicine and it as it becomes more widely accepted we look forward to this future together.

Now acute care of telemedicine has emerged as a solution to increase access to scarce clinical resources, and improving clinical quality and really driving operational efficiencies and this creates a clear path to revenue generation and improved profitability across the health care systems, we are well positioned the step in and of this hospital leaders.

And both the emergency Department and the cross of hospital more broadly.

Hospitals are struggling with the challenges of acute care capacity management physician scarcity and cost optimization of our unique position and developed over 17 years of acute care telemedicine experience as a result of our ability to deliver clinically effective coverage at a meaningfully lower cost and traditional onsite alternatives.

And that's due to this fractionals Asian of remote providers with outcomes as good as or better and traditional care.

The COVID-19 pandemic has had a meaningful impact on the delivery of care and the evolution of telemedicine and starting from the early stages of the health care crisis, there's been a rapid uptick and the acceptance of telemedicine and accelerating a multiyear adoption curve. We believe the virtual care will continue to be critically our COO.

Critical component of the industry's ability to deliver increased access and improve quality of care.

All of that said the pandemic clearly demonstrated the high quality health care can indeed be delivered virtually through partnership between virtual specialist and onsite clinical teams as.

And we look at the long term demand for our solutions, it's evident and the same underlying challenges and placed pre pandemic.

Still exist and persist and our health care systems, we directly address increasing financial pressures and the challenges of balancing high labor costs with the delivery of quality care and the widespread shortage of specialist and the U S.

Compounded by the expected increase and the care of the growing agent population.

These challenges are only exacerbated by the small distribution of clinicians nationally.

Given the inequities of care delivered today, we believe that where you live should not dictate the quality of care of you have access to the pandemic may have caused the near term challenge in terms of the emergency room utilization, but we believe it's very clear that virtual care will continue to be a critical component of the health care.

Industry's ability to address the aforementioned challenges delivering increased access and improved care to patients.

Today, we refer to as telemedicine Tomorrow, we may just call medicine and.

Tele becomes woven into the fabric of how we provision care.

As you likely saw today in conjunction with the earnings release, we're incredibly excited to announce our acquisition of access physicians and experienced and high growth multi specialty acute telemedicine provider.

This is a pivotal moment and the growth of the Soc telematics and follow through on a critical pillar of our growth strategy and this.

This combination furthers, our Soc <unk> position as the largest pure play provider of acute care telemedicine and the nation, reaching nearly a thousand and facilities, including over 700 hospitals across 47 states.

Combined we bring over 27 years of telemedicine experience for those in need of acute care solutions and we think about the number of combined sites. We support this acquisition makes us over three times larger than our next closest dedicated acute care of telemedicine solution provider, bringing scale and expertise and technology as the singles.

Solution provider to the market.

After doubling our bookings from 2019 of the 2020, we believe that the strategic acquisition will enable us to nearly double our revenue on a year over year basis and 2021.

Supported by a purpose built.

Acute care telemedicine platform called helmet IQ the business combination with access physicians will enable us to accelerate adoption of acute care tell medicine to have a larger impact and the dressing and of qualities. We share of mission with access physicians team and the way, we strive to deliver high quality care of via telemedicine for all patients we believe this.

We'll be a great cultural fit as we progressed for the integration process part of the rationale around any access of acquisition is the quality of the talent we bring onboard.

Chris Gallagher M D. The CEO of Axis position is one of those individuals' Chris's of board certified cardiologist, who has a clear thought leader and the telemedicine space with just the impressive entrepreneurial track record.

And I'm thrilled he is joining my direct leadership team as president of access positions of division of Soc Telematic. Chris also brings a very strong leadership team with him and I'm excited to get the work with such a of for.

And nominal team as we grow the combined business.

Strategically our acquisition of Abaxis physicians expands our clinical service lines and grows our physician networks and both size and experience.

As a complement to our current offerings. This combination provides us access to several new specialties, including things like cardiology and.

The Texas disease.

Internal fetal medicine.

Nephrology and many others expanding our estimate of white space opportunity of.

Two approximately $2 $7 billion and with our combined customers and the expanded offerings, we have tremendous opportunity.

Moreover, this acquisition positions us as the single acute care of telemedicine solution provider that we believe the market demands.

And the most attractive elements of this acquisition for us as the telematics is that of further accelerates our expansion into the hospital beyond the emergency Department is access physicians has historically focused on and patient solutions, while many patients come through the EDI. When we think about and patient solutions. It is of term more broad.

The used to define any patient who's been formally admitted to the hospital. These.

These patients require highly trained specialty physicians and care providers for their inpatient care, which all have significant significant clinical shortages.

This is truly a complementary combination that broadens our solutions across the hospitals continuum of care.

Which also provides a natural hedge the volatility of the utilization across departments and specialties and.

And importantly, we expect that the combined company creates a meaningful opportunity to accelerate growth through cross selling and.

We only have six of 1000 sites that overlap between the two organizations today.

This business combination will create a singular clinical solutions provider and partner rapidly growing demand and the market together with access positions, we will be a solutions provider that can offer more to our customers and any other organization could on its own supported by one platform built with the focus on security and flexibility.

City.

Moving forward as we look at 2021, and addition to the integration of access physicians, we have a number of key strategic priorities aimed at driving growth and our business first we continued our investment and our go to market capabilities during the fourth quarter and further developing our sales and customer success teams, we're taking a phased approach to that expand.

And of our sales organization and while there's still some work to be done. This development is designed to enable success and 2021 and beyond the new team members are building pipeline closing deals and expanding our reach at.

And as hostile leaderships primary focus shifts away from vaccine distribution.

Back to really hospital operations and the strategic initiatives that they have we're poised to gain momentum through this team.

These investments were intentional and a bad time to help us activate or expand the capabilities outside of the EDI with access physicians acquisition.

In summary, we are really confident and our ability to leverage this investment to deliver results.

Further in 2021, our customer success organization will provide continued support and deliver value for growing the number of customers.

As we mature this is an area, where we plan to continue to invest to really ensure optimal support for our customers scaling of accordingly with our growth.

With an increased focus on expanding system. Other partnerships, we really believe that we're well positioned to work as a strategic advisor to the systems based on our Thomas and expertise.

This expertise is only bolstered by the access positions acquisition as we now offer more services to address the needs of our current customers.

And finally, as we look in 2020, one we plan to continue to expand our new markets and into new offerings to address the widening needs of our hospital customers throughout their facilities.

And my interactions alone with large health systems as well as independent of hospitals reinforces our belief that there's a pent up demand for a single and multi specialty solutions provider with a broad portfolio of clinical networks that can be accessed through a proven and secure and flexible telemedicine platform.

Purpose built to support the facilitate the care model.

Additionally, I continue to hear the term vendor fatigue used by both current and potential customers and a fragmented space Hospital systems of independent hospitals are looking for single partner with a single secure platform. The optimizer service lines and a meaningful way, we're now uniquely positioned to be that partner.

We intend to continue to build our presence and adjacent specialties and the acute care market, both organically and Inorganically our experience with the tone out of Q platform, where we support more than 20 clinical service line. Today provides the foundation. We believe is really required to enable this growth.

Now more than ever and I feel incredibly confident that Soc Tam that is providing the right solutions to meet the needs of the market.

There is clear opportunity to leverage our foundation of 750, plus positions 27 years of combined the acute care telemedicine and experience and proven dedicated and secured technology platform to expand into adjacent markets to accelerate our growth.

Before I hand, it over to Chris I want to officially welcome the entire access physicians organization, the Soc tell them that.

Additionally, I want to really thank both the Soc <unk> and the access physicians leadership teams for the just their tireless efforts to execute this meaningful transit transition and the acquisition.

With that said I'll turn it over and out to Chris Nib to review the financials in greater detail Chris.

Thank you John and thank you all for joining us today to review our financial results I'll.

I'll start my comments today with an overview of the access positions transaction details I'll then review the fourth quarter results and finally share our initial thoughts on guidance for 2021.

To expand the poll of John already shared we announced today after market close our acquisition of access physicians via a cash and stock purchase valued at approximately $194 million with and additional potential consideration based on <unk>.

<unk> the transaction, which closed on March 26th is comprised of a $100 million and equity and approximately $94 million and cash funded from a new five year term loan and the subordinated note.

For the full year of 2020 access positions generated approximately $27 million and revenue and grew approximately 50% from 2019, while approaching breakeven with an adjusted EBITDA loss of $1 $8 million.

As you heard the acquisition will broaden our service offerings and is expected to create meaningful cross sell opportunities at the same time and continues our expansion outside of the emergency room to several departments throughout hospitals, making our solutions more robust as the single provider.

Other of multiple service offerings over the long term, we see potential for increased operating efficiencies as we consolidate onto a single platform, resulting in improved margins.

Now turning to the results from the quarter.

We generated $3 $9 million of new bookings in the fourth quarter, a 95% year over year increase the strong growth rates reflect reflect the increased interest in acute care telemedicine solutions and the momentum we are seeing and our suite.

And of services.

As John mentioned and.

And the latter part of the Q4, we started to make investments to build out our go to market teams. Accordingly, the ramp up will take some time as the result, we expect to start seeing the increased benefits from those investments and the second half of 2021.

Revenue was $14 $5 million and the fourth quarter, a decline of 13% year over year.

As we've discussed previously regarding utilization volatility revenue and the quarter was impacted by lower utilization of our core services, resulting from a decrease in the hospital and particularly emergency room visits.

And due to the third wave of the COVID-19 pandemic.

After seeing an initial recovery and volume in October the third wave led to a volume reduction in November and December which we understand is consistent with hospitals experience and emergency department utilization across the country.

In terms of total council for and our platform. We conducted 88000 canceled during the quarter, a 26% increase compared to a year ago as our platform only customers continue to increase their utilization.

31000 of the New Council, where what we define as core council the.

<unk> utilized those debt utilized our network of specialist physicians.

Now turning to our non-GAAP financials in the fourth quarter adjusted gross margin was 44% relatively flat compared to 45% and the fourth quarter of 2019.

Although revenue was down 13% year over year, we were able to largely offset margin pressure by managing our expenses through closer alignment of both physicians and schedules.

Our operating expenses, excluding depreciation and amortization and integration costs and stock based compensation.

And was $10 3 million and increase of 42% compared to a year ago, reflecting the increasing investments in our go to market functions and the cost of being a public company.

Looking forward, our public company costs are expected to be higher than previously guided.

As directors and officers insurance expense is about $3 million higher than what we had anticipated as the market for back related insurance increased dramatically throughout 2020.

Reflecting those investments our fourth quarter adjusted EBITDA was a loss of $3 $9 million compared to a positive $200000 last year.

We ended the fourth quarter was approximately $39 million and cash and no debt.

However, subsequent to quarter and in conjunction with the access position of transaction, we established a new $125 million five year term loan of which we utilized about $85 million and.

And we established a $13 5 million for <unk>.

Coordinated note.

Finally, we are initiating our outlook for the full year of 2021 as the combined company on a pro forma basis as follows.

Revenue will be and the range of $107 million to $113 million.

Of which approximately 30% to 35% is expected to be contributed by access positions.

Our address adjusted gross margin will be and the range of 42% of 45%.

And our adjusted EBITDA loss will be and the range of $15 million to $19 million.

Drilling a little deeper into our guidance the pandemic has.

And we will continue to impact us and multiple ways, which had been considered as part of the guidance provided one.

One short term headwind as the variable utilization of core services and.

As I discussed earlier, which impacted but we are starting to see early signs of stabilization, particularly around psychiatry.

The pandemic has also created significant tailwind, which we believe to be and enduring long term benefit given the growing recognition for the solutions that we provide which has led to meaningful interest and a growing pipeline.

Additionally, we will now be able to cross sell of a broader portfolio of solutions and continue to diversify our revenue base.

For booking and we see them as weighted to the second half of the year as our existing and potential hospital customer decision makers are focusing their attention.

On the vaccine distribution and the near term. Additionally, we expect the increased contribution from our new.

For more newer sales of members, who have a ramping of effect as they mature into their roles as we look at consolidating the practices of both organizations, we will be reporting on our 2021 bookings to be defined as an estimate.

Of first year revenue.

In terms of quarterly revenue given the higher levels of Covid cases early in the quarter, we expect Q1 to be down sequentially and then growth throughout the rest of the year.

We believe we believe adjusted gross margins will be and the low to mid forty's, reflecting excess positions lower margin profile of.

Soc Standalone and higher margins are the result of a more robust platform <unk> Iq.

And which will drive long term margin improvements as the businesses the integrated.

Our adjusted EBITDA outlook reflects continued investment and look for middle class of being a public company and our go to market teams.

In conclusion I want to thank the leadership teams of both access positions and Soc <unk> for their continued hard work throughout a very dynamic here and we look forward to continuing to update you on our progress throughout the year and with that we'd be pleased to take questions operator.

Like any quarter in our 138 year history.

And we will now begin the question and answer session to ask a question and you May Press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

Withdraw your question. Please press Star then two and at this time, we will pause momentarily to assemble the roster.

And the first question today comes from Ryan Daniels with William Blair. Please go ahead.

Hey, guys. Thanks for taking the questions and congrats on the end of the year performance as well as the deal if we look at the transaction.

Can you speak a little bit more to one and the integration plans and how rapidly you plan to move them over to the Telenet IQ platform and then number two.

Just your thoughts on how to capitalize on the cross selling opportunity I think I heard you say theres only six of 1000 overlapping clients, which is pretty remarkable. So obviously a huge greenfield opportunity there for upsell. So how are you going to capitalize on that and once.

And once the integration progresses. Thanks.

Thank you Ryan let me take the second question first and we'll dive into some of these details because of and they're both really important questions. So first of on the cross sell you are right. We looked at the total breadth between both organizations and there was a really unique jigsaw puzzle that comes together here, where you only have six 1000 and sites, where we have any overlap and we've talked in the past call where 50 per.

Net of our bookings come from same store customers that is where they might have psychiatry with us, but we havent even talked to them about cardiology and infectious disease nephrology internal medicine the.

The amount of detail and breadth of the discussion that we can now have with customers. We know will make a difference customers of coming out of the Covid cloud they've got the vaccine plans in place like we had mentioned of the opening comments and the conversations of definitely turned the much more strategic broader all hospital all of the IBM type strategies they truly do.

Vendor for the T. I use the words in my opening statement, but there is the settlement of I can't actually maximize the my own physicians on any platform. What does the debt you have tell him out of Q, that's something different and hey, when I have all of these other specialties, how can I tap in on the floor by floor area by area of basis of different specialties as I need them and this cash.

Combination brings us two jigsaw pieces.

Jigsaw puzzle pieces together quite eloquently. So one of the elements, we talked about from our commercial strategy and not only that we already double our sales team.

And so our sales team is well under foot to.

For the size that we expected at the B for 2020, one we're rapidly finishing the second part of our strategy, which of the account management team, which regularly meet with all of our customers and you can imagine now theres many more sites.

Whether there wasn't really deep account management.

And the axis position side that we cannot sit down understand deep needs and bring a very broad portfolio of together.

So the other the second question is how do we think through the the.

Getting customers onto the IQ et cetera, well.

Well first of all we're going to start with.

And where the customer begins right we need to understand what the customer's workflow is what's the workflow that we bring and what's the workflow the access position brings and we not book of.

Of the customer likes of particular workflow for nothing.

We're not here to break anything but we're here to show is if the for instance, it's and access physicians like the does not have or utilize the telenet IQ, they're using more of a phone true type system the of.

Ability now to say do you need do need specials or not.

It's your own specials by the way Here's the thing called Tom out of queue that you would maybe never considered because again, we've had no overlap and these sites.

And then also you can bring on the 10 to 12 specialist who we're talking about where we now have access to more than 750 positions to help sell that solution and so we've talked about a wraparound solution start with your clinicians and layer I was on top of whether that's for peaks weekends of vacations holidays night, It's hey at the service line you may.

Have never offered before because you simply couldn't find that person and one space now you can take that hospitalists and they can hit the button and when they go to their EMR and they can activate the cardiologist onetime and infectious disease Doctor. The next time and Nephrologist. The next time.

And you can really start to virtualize, how health care changes and that's why I think the whole team realizes and believes that you can we want the goal to get the tell out of telemedicine and this is how our hospitals start the operators a fraction of lines of maximize so we also know that we're going to also evolve our roadmap as well as we better.

Understand those needs and so that's going to take time, and we want to sit down and we want to listen I've had the chance to spend a lot of time talking to hospital C suite, and large IV and and the strategy was clear to me that bringing of multi specialty.

Solution on top of that IQ platform are we really diversify our offering we go deeper and wider more specialties.

We can go to more floors inside of a hospital and we could talk on a national basis with Ibms.

And was really the basis of the strategy and we do see the sticking point of our same customers in Q4.

Of that phenomenon half of our bookings coming from same customer and that was no different in Q3 of them and we shared at the last earnings call and now we can unleash the team the team that we built we can literally unleash them to names we already know customers that we know have been already been on the forefront of thinking about how common and can choose their hospitals when they are thinking of.

The dollars and now they're thinking about dines post COVID-19, but then one of the thing about new specialty lines, we can uniquely bring that and.

And we can solve I think really some of the health care's biggest issues and that's why bolt teams or the.

The energy is palpable and we're ready to bring to market.

That's great color I appreciate all of that and then I guess as my follow up any commentary on their revenue model. I know you have a model that's a mix of fixed base fees and utilization base fees with the latter being a little bit more expensive, but also more volatile.

And regards to the revenue stream. So can you comment on what their model looks like and if that will also help kind.

And diversify the the volatility of the revenue stream going forward or if it's really just diversification based on the specialty lines.

Hi, Brian This is Chris.

Yes.

They are of similar model to ours with fixed fee and variable fees as well so the diversification and really comes from R. R.

Our diversification outside of the EDI and we've been very concentrated there we've started there but they came to the business from a different angle. They started with inpatient and have grown into the EDI. So.

There's very little overlap and our business not only in facilities as John mentioned only six out of the 1000, but also on our service offerings, we do overlap and in neurology, but quite frankly, there's a lot of non overlap business the neurology pieces not significant so the.

Of the business models are very similar so it'll be.

And really easy to adapt as we go to market together to sell our solutions together.

Okay perfect. Thanks, I'll hop back in the queue I appreciate it congrats again, thanks Ryan.

And at that.

And our next question will come from Sean Dodge with RBC capital markets. Please go ahead.

Yes, thanks, and good afternoon.

Starting on the revenue guidance I was wondering if you could parse that out a bit and then maybe just give us a sense of.

How much should be contributed from the acquisition and then if we think about setting and the acquisition of site.

And how much of the incremental revenue is expected to flow out of backlog from from new clients that you've signed recently versus how much is expected to be contributed from <unk>.

Maybe you kind of of a COVID-19 post COVID-19 normalization of existing clients kind of re ramping there.

And their utilization of platform.

Yes, so John this is Chris on the what we're.

Spectrum from the contribution from access physicians is as we've stated and the release and on the on the.

The comments earlier.

We expect them to contribute on a full year pro forma basis.

Between 30, and 35% of our overall targeted revenue.

And so on the but on the backlog question both.

Both companies have had really strong growth and so theres a significant momentum and are already on boarded core signed and you know.

And customers that we are delivering services to and as you've seen we both had really strong momentum and bookings.

The Covid tailwind for US just continues to pay dividends as we're really starting to see.

Significant ramp up and our pipeline and so there is a.

Of relative amount of growth baked into the plan, but as you know we're a recurring revenue business model and so as you get throughout the year, those new bookings contribute less and less to your current year earnings. So the business models have not changed their model is really similar to ours and so.

We would expect.

To be able to hit the numbers and we've put forward.

Okay. Thanks, and then.

So maybe the on the acquisition of the business and that as Chris He said.

And similar but margins for active physicians being a little bit lower than at the piece is that just a function of scale or is there something structurally different about the technology of the platform maybe COVID-19 just looking for.

For insight there.

Yes.

Look this is the business where scale matters of course.

And our where we really shine and tell them that IQ, we have the sort of best in market.

Operating system out there that allows us to optimize our most expensive line item the.

And the physician fees that we pay so are we able to highly fractured wise debt scarce resources time, and therefore, the expense and spread that expense over a wider service offering so our panels are much more.

Active and delivering the services to the customers than what they were able to achieve at their scale. So it's a combination of scale and the platform.

Okay, great. Thanks again.

Yep.

And our next question will come from Joe and <unk> Singh with Credit Suisse. Please go ahead.

Yeah. Thank you and congratulations on the book QUADRA and the exits predictions projections I want to go back to you of 2021 revenue outlook I think it's getting the confusing like cobalt, but is the contribution from access of prediction.

Are you, saying that we should use debt 107 to one and $113 million revenue and apply it hurt EBITDA, 35% on that number to get what is the contribution from access physician or are you, saying that if you pro forma EBITDA guidance for the fully yet been applied the 30 to 35 person because it's not clear like what is the access.

The foundation contribution and what is the cord and associated I met the revenue contribution can you. Please sorry to go back there, but I want to make sure that just scared because we got and getting some questions on that.

Yes.

Happy to do so so the guidance. We provided is the full year pro forma range to one of the seven to $1 13. So assuming the transaction had closed on January 1st of this year for that is the range on a full year pro forma basis.

And within that range.

Expect access positions to contribute between 30 and 35% of the number that we land on within that range.

So and so when you report 2021 reported number will be lower than the 170 to one month free because it does not include and I don't like roughly three months of contribution from access condition right.

That's correct yes.

Okay.

And you're talking about the adds up for me I mean, yeah. So we would think about debt yeah, we would think about that number.

And we're in the range of.

Right around $100 million.

Okay and that hasn't made the portfolio.

Yeah, that's on a GAAP basis around the $100 million.

Got it and then when we think about excess tradition of annual revenue run rate.

And what Youre, assuming in 2021 the.

Is that the real one day or even that business is getting impacted from COVID-19 and just trying to understand what is the court of revenue run rate for that business right. Now if you and just for any COVID-19 related headwinds.

Yes, so the additional.

<unk>.

Additional strategic value to this business as it relates to coming together with us.

Is that they were not as heavily impacted by COVID-19 because of their higher concentration on inpatient specialties, So where we were more dramatically impacted because of our higher concentration historically and the emergency department hospitals across the nation has seen significant.

And volume decreases through the EDI, but overall, they've had less impact and impatient so for them they've.

They haven't had the same volume declines that we've had.

During this COVID-19 period.

Okay, and then a couple of for the clarification with respect of the impact of this transaction and some incremental expenses you're incurring. This year are you still comfortable with your broad outlook of getting to EBITDA profitability in 2022.

Yes, our current expectation is that we will be achieving adjusted EBITDA breakeven around the second half of 'twenty two.

Okay and the last thing of island to go back to I mean, I wanted to see if you can elaborate a bit on the old and Oh, how many physicians are ex expedition has holidays sourced and produced shows do they also have the mix of employed and contracted produce Jones and how are the paid maybe just compare that to the side of the model that your business model.

Yes, I can take that actually so the some of the opening statements. We made the are more than 750 physicians out in the network and the way of really look at this comes back to the even some of your beginning questions and some earlier questions uneven Fractionals Asian, So as you get size and scale and you have many customers using a particular service line.

You can start to move people from of 10 99 model over two of W. Two model right and that's where scale does matter and it doesn't change how you used home out of Q, how fraction of lifetime, how do you really think through maximizing and breaking down the borders but scale does help you think through 10 99 with our specialists with the versus the tenant versus.

The W. Two so we have within Soc. The legacy for instance, we've mentioned in the past about a third of our physicians and 40% of our physicians where W. Do but they are doing more than 30 75 per cent of the total volume that we had and the marketplace.

Access positions had a different approach simply because of the scale and the breadth. They want they went and wider we went deeper so they went to cardiology infectious disease nephrology of material maternal fetal medicine. They also did which we did neurology ICU and pulmonology.

And so but they have many more physicians covering the cross those states to cover those specialties as we grow we see where we will be looking for individuals to come over and BW twos with us and the and the physician ranks, which will allow us to more.

Value matters, and the fact that just statistically your peaks and your trough become more statistically enabled to really predict and thats one of the things that the data that comes off come out of Q that that allows us to predict.

What might be coming from our needs necessity, so whether you need a specialist and five minutes 15 minutes or two hours.

And what are those use cases, the data will tell us how we can actually not only lean into help and actually improve health care before where it is today and that's the benefit of the model growing you will see us moving to more W. Two access physicians right now the specials are largely to 99.

Great. Thanks, a lot.

You're quite welcome.

And our next question will come for David Larsen with BTG. Please go ahead.

Hi, can you talk a little bit about the volumes that youre seeing I think that the consultations of 80 8-K, I think it's up about 10% sequentially and the core visits of I think you said 31 is down slightly sequentially, maybe like basically flat.

I guess, just how are volumes trending and how do you expect to bend the trend as we go into like <unk> of 'twenty, one and through 2021. Thanks.

And let me start more 60000 feet and I can let Chris take some additional detail here I can tell you today and we use the phrase and we.

It's coming we just didn't know when it would be here because we definitively see the psychiatric tsunami, taking place now that was already known and the more direct to consumer space right people going online meeting with psychologists and psychiatrists on line, whether at home, but given the length of time and taking place with Covid people that met.

The allergy is simply not a.

Meeting their clinical needs and we're starting to already see this pretty large increase in psychiatric demand. We didn't know there'd be a little bit tale from neurology demand in the EDI, if you're going back to the legacy Soc.

And that's when you hear the EDI volumes basically taking place out there.

The the volumes that are are still down but they are starting to come back into play. So just like we have that difference between what's happening and the EDI between psychiatry and neurology and <unk>.

Happening across within the hospital and again, as we talked about diversifying and going deeper.

And this is now a matter of us and leaning in on other specialties and that's what we know this is going to be organic growth through.

Through the new larger Soc telematics the.

And building for us to really think through and see the.

Uh huh.

Thanks for the the telematic Q platform, which I think of the basis of some of your questions is that's the new need that is quickly coming up and the strategy is how do I first if I'm a hospital IBM, how do I first maximize the investment of Cabot and my current specialist physicians and that question that simple question leads to of TMI two disk.

Cash and tell him out of queue that we were not really having and depth and detailed during the crisis because everyone was in crisis mode now.

Now it is this understanding of hey, the thing you were talking about can we revisit it the amount of revisit meetings. We are having right now is significant and we are fortunate that we brought on our sales team the focus on top of it IQ individuals that have SaaS based software sales experience that can articulate the value proposition.

And but talked through the IP security demands and this space of remote telemedicine.

People are also looking for a secure platform they know the the the element.

Element of getting hacked into at a hospital has significant repercussions and so they want to see something that is Europe certified high Trust certified tested and.

And with the secure platform basis, and Thats, what Tom out of Q brings and that is the difference that we're starting to see on the value basis and I'll, let Chris go into some of the numbers and then any additional detail that you might have.

Yeah, just to add on to that so.

As we stated earlier, we did see the third wave volatility come back through.

November and December and continue into Q1 and as John just mentioned, we are starting to see stabilization and an uptick particularly and sake.

As we come out of Covid and our models reflect.

And getting back to a more normalized volume number in Q3 around the July and August timeframe and as it relates to tell them that I Q, we've seen of 90% increase and counsel on the platform.

From our platform only customers on the year over year basis. So there's.

Two new and tremendous <unk>.

Usage and overall and the long term debt increased utilization leads to more licenses by our physician groups, who are using the platform that ultimately frankly, we're only just beginning to offer this and dive into this theres a tremendous white space opportunity within just.

Our two largest physician group customer and so there's a lot of runway to go there.

Okay. That's very helpful. Thank you and then I'm, sorry, I, just got a little bit confused with the 2021 revenue guide if I heard you correctly I think what you said was it's going to be about $100 million in revenue. After we account for the fact.

That you got three quarters of the new acquisition in the full year for 'twenty, one is that correct.

Yes, yes that would be okay for the GAAP basis full year GAAP basis.

And that assumes 10 million in revenue is deducted from the full year to account for about one quarter. So is it property of assume about $30 million of revenue is is included in the guide from from the acquisition, which means you have about $70 million of core sort of revenue and 21.

And from the core business.

And those numbers are within our range, but not I don't think you have the mix exactly right and the I think the contribution in Q1 as more and the $8 million to $10 million range that you'd be looking for.

Okay. Thanks, very much remember the ramping of effect of the business.

What are your expected what's your expected growth rate for access physicians and 'twenty one.

We are our growth rate that we have and the model for the year is and the.

And.

And the mid Thirty's, and so where we're and.

I haven't bifurcated the growth rates of between the two businesses.

Okay, great. Thanks very much.

And this will conclude the question and answer session I'd like to share in the conference over to John Calix for any closing remarks.

First of all I want to thank everyone on both the Src team and the access positions team and all of our advisors that help with the steel.

And I wouldn't put a tremendous amount of work into this.

And I think the teams are really excited about the the elements and I'm talking to our customers. Shortly after we and these calls and being able to start tomorrow and I. Thank everyone for joining we look forward of taking additional questions and.

We are short on time here, so with that operator, we will will conclude the call today.

And ladies and gentlemen of the conference has now concluded. Thank you for attending today's presentation and you may now disconnect your lines at this time.

Okay.

Okay.

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