Q1 2021 Inovalon Holdings Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the noble on first quarter 2021 earnings call. At this time all participants are in a listen only mode. Later, we will.
We conduct a question and answer session. If you would like to ask a question. Please press Star then one now.
As a reminder, this conference is being recorded.
And now I'll turn the conference over to your host Kim Collins. Please begin.
This is Kim Collins senior Vice President of communications at on Overland.
I'm here today with Dr. Keith Dunleavy, <unk>, Chief Executive Officer, and Chairman of the Board and Jonathan Bolt on Netherlands, Chief Financial Officer.
I'd like to welcome you to our first quarter 2021 earnings call. The press release announcing our financial results was distributed this afternoon on a replay of today's call will be available shortly posted on the Investor Relations page on <unk> website.
For those of you listening to the rebroadcast of this call. We remind you that the remarks made herein are as of today April 28, 2021 and will not be updated subsequent to this initial earnings call.
I'll remind you that certain statements made during this call may be characterized as forward looking under the private Securities Litigation Reform Act of 1995, including statements related to future results of operations and financial position, our business strategy and plans market growth and our objectives for future operations those statements involve a number.
Factors that could cause actual results to differ materially additional information concerning these factors is contained in the company's earnings release and filings with the FCC.
In an effort to provide additional information to investors. This conference call and webcast is accompanied by a presentation, which is available on the IR section of our website, you're encouraged to download a copy of this presentation to follow along with our prepared remarks.
Our presentation also includes certain non-GAAP financial measures, you'll find definitions of these non-GAAP measures and reconciliation charts at the end of the company's earnings release and on the company's website.
Now it is my pleasure to turn the call over to Dr. Keith Dunleavy.
Thank you Kim good evening, everyone and thank you for joining our call first I want to start by saying how much of a privilege. It is to work with the team that I have today across the company. The associates of the noble on are executing energized resilient mission focused and I couldnt be more proud of what they are achieving and the impact and value.
That we are bringing to the clients in the marketplace we serve.
The first quarter of 2021 witness strength across the board market demand was strong new sales were strong implementations progressed, well and on schedule. The company's many engineering projects associated with new product innovation and development cloud and data technology advancements progressed well in the many.
Departments in projects of the company that are key to maintaining a strong foundation and enabling strong growth moved their respective initiatives forward with impressive efficiency and reliability simply put it was a quarter of great teamwork and execution and the results speak for themselves.
The first quarter's revenue exceeded the high end of guidance that we provided earlier this year, increasing 15% year over year to $177 2 million.
New sales annual contract value or ACB was $82 1 million up 81% year over year, excluding services platform, new sales ACB totaled $63 8 million up 120% year over year.
<unk> sales performance in the quarter reflected hundreds of engagements, including both subsidiary of expansions of existing relationships as well as additions to the company's new client logo list strength was seen across all business units of note even after successive quarters of strong sales I'm pleased to report that our current.
Sales pipeline is very healthy, suggesting strong continued new sales ahead.
Reflecting on new logo additions during the quarter. The noble on was proud to secure an eight year SaaS cloud platform engagement with the AIDS Health Care Foundation, one of the 10 largest specialty pharmacies in the United States and the world's largest provider of HIV AIDS medical care for noble on to be selected by such a mission driven.
<unk> is H F and for an initial engagement of such duration was really a proud moment for us at an oval on where the impact of our platform is so important to us.
Additionally, during the quarter a noble on added several industry, leading organizations to its client list proudly achieving the mark of now counting all 25 of the top 25 global biopharmaceutical companies, which is up from the previously reported 22 of 25, we also expanded our top provider client ranks.
Now counting 24 of the top 25 as clients, which is up from the previously reported 19 of 25, and we increased the number of leading specialty pharmacies. We support now counting seven of the top 10 up from the previously reported five of 10.
Reflecting on the expansion of existing logos the value impact driven by the noble on one platform already in place with clients supported the expansion of an extensive number of existing contract relationships during the quarter.
One such example of these growing relationships within our installed client base was announced on March 22nd with Humana Humana, a leading national consumer focused technology, driven health plan known ports commitment to innovation is undertaking its this expansion of business with the noble on since 2019 with the include.
<unk> of an <unk> vaccine adherence program.
We're seeing this dynamic with many of our clients as an <unk> platform demonstrates strong value our clients are expanding their use of the platform contracting for additional capabilities and expanding the population for which they're using the platform.
A successful platform sales continue to grow so too does the pipeline of implementations underway during the quarter such implementations progressed, well, adding further to the compounding subscription based platform revenue that we are achieving additionally, we continue to focus on further automating platform implementations processes.
With the goal of shortening implementation timelines, thereby expanding the company's capacity to accelerate implementations of new platform engagements.
Also noteworthy during the quarter is the increasing network effect of the Inova on one platform with the broadening adoption of noble on cloud based SaaS solutions <unk> is increasingly empowering a network of industry, leading clients across multiple segments of the marketplace as the number of clients with platform engagements in play.
<unk> and operating increases a noble on is able to increasingly bring to the market solutions, which both require and thrive from the unique interconnectivity across different parts of the health care ecosystem.
Examples include announced offerings, such as <unk> consumer health Gateway data stream API marketplace, and the vaccine adherence platform as well as custom configured implementations for large scale multi party applications, each of which drive value and benefit from the growing matrix of engaged and connected clients.
Another dynamic that is growing in significance is the market's increasing appreciation of different types of data completeness of data and the degree to which data is current while many organizations convey that they possess significant amounts of data most day to advertise by organizations within the market is second hand data.
Purchased and received an D identified fashion and glued together through probabilistic matching techniques.
Is useful for doing cohort studies commercialization initiatives and trend analyses, but unable to inform the highest value applications such as data as a service patient specific clinical decision support patient specific care protocols and consumerism applications, where it is critical to have the identify.
<unk> reliably longitudinally linked primary source data that is both deep and current when needed.
<unk> real world data assets are unique within the marketplace and they are enable a tremendous value for our clients and their downstream customers members and patients. Our data allows for us to inform test and validate highly advanced algorithmic design machine learning and artificial intelligence capabilities.
And inform individual patient specific calls for data from any authorized platform. Our mobile application in real time, you were seeing the advanced nature of our data inform industry, leading analytical research as we announced on March 31st spanning multiple high impact health care industry challenges.
You are being conducted in partnership with clients across all major health care coverage populations and you're seeing the patient specific application of our real time data stream API capabilities delivering data as a service for our client uses the.
The leadership and oval on is demonstrating through our data and purpose built analytical capabilities is driving increasingly significant differentiation impact and value achievement and the best is yet to come.
Lastly, before I turn the call over to Jonathan I would also like to encourage you to visit our website and download our inaugural Twenty-twenty corporate sustainability report, which includes the company's environmental social and governance ESG priorities companywide, we all of US at on Oberland are proud of this work.
And our progress as a company as a community and as a member of society on these important topics. The report as a complement to our 2020 annual report and highlights the Companys mission to enable a more efficient health care ecosystem that benefits individuals' society as a whole and the environment.
And with that please allow me to hand, the call over to Jonathan Boldt, our CFO to walk through the financials and guidance in more detail Jonathan.
Thank you Keith and good evening, everyone now let me highlight a few key points building on Keith's opening remarks.
First a noble on first quarter performance exceeded our expectations with revenue exceeding our quarterly revenue guidance range and growing 15% year over year.
Second there is a strong demand for our platform and our sales teams continued to execute well driving an increase in new sales ACB of 81% year over year and an increase in new platform sales ECB, excluding services of 120% year over year.
Third based on our strong first quarter performance, we are increasing our full year 2021 revenue guidance to 12% to 16% growth year over year.
And fourth we continued to make investments to further accelerate our growth investing in the areas of sales and marketing innovation and delivery all of which are driving very positive returns and payback periods.
Now turning to our first quarter results.
First quarter 2021 revenue was $177 2 million, an organic increase of 23 million or 15% year over year. This increase was primarily fueled by an increase from new customer wins over the last 12 months and the continued adoption of subscription based.
That form offerings.
Focusing on our revenue streams subscription based platform revenue in the first quarter was 158 million, an organic increase of 15% year over year and equating to 89% of first quarter revenue compared to $137 1 million in the first quarter of 2020.
Services revenue in the first quarter was $15 6 million or an increase of 15% from the year ago period and represented 9% of first quarter 2021 revenue.
Legacy revenue was $3 6 million and contributed the remaining 2% as expected.
Our noble on new sales ACB during the quarter came in at $82 1 million, an increase of 81% year over year.
New platform sales ACD, excluding services was $63 8 million or an increase of 120% year over year, while the overall sales pipeline continued to expand even after the sales team's success in the quarter.
Turning to gross margin first quarter 2021 gross margin was a strong 74, 9%.
Gross margin increased to 150 basis points compared to 73, 4% in the first quarter of 2020.
Sales and marketing expense for the first quarter was $19 5 million, an increase of $4 3 million year over year sales.
Sales and marketing as a percentage of revenue was 11% in the first quarter of 2021 as compared to 10% in the year ago period.
As we discussed on our fourth quarter 'twenty 'twenty conference call a noble on resumed its investment in further expanding its sales and marketing engine in response to the strong demand we are experiencing for our data driven technology platforms.
At the end of Q1, our noble on sales and marketing team expanded to 299 people from 277 at the end of the fourth quarter of 2020.
First quarter 2021 adjusted EBITDA was $58 6 million, an increase of $11 1 million or 23% year over year adjusted.
EBITDA margin for the first quarter was 33.1% representing an increase of 230 basis points compared to the year ago period.
Our profitability continues to reflect industry, leading SaaS profitability.
First quarter 2021 non-GAAP net income per share was <unk> 17 cents, an increase of 55% compared to Q1 2020.
Turning to cash flow net cash provided by operating activities in Q1, 'twenty 'twenty. One was 32.4 million, which is after interest payments of $10 4 million and after $16 5 million in outflows associated with the company's 2020 annual discretionary incentive payments.
Q1, 2021 net operating cash flow increased 130% from the year ago period.
In Q1, 2021 a novel on generated 14 million and positive free cash flow or an increase of $16 4 million as compared to the negative $2.4 million in Q1 2020.
Moving to the balance sheet and no one's financial position and liquidity continues to be strong and nobody on cash and cash equivalent balance as of March 31, 2021 was $128 6 million.
Total outstanding debt was $905 5 million.
Reported balance sheet debt was $886 million net of issuance discounts and deferred financing fees and the net debt position was $776 9 million.
Our net debt leverage ratio as defined within our debt agreement continued to improve at the end of Q1 2021 our ratio further reduced to 3.19 to one this.
This compares to 3.79 to one at the end of Q1, 2020, and 3.37 to one at the end of Q4 2020.
As a result of our improved leverage ratio being below 3.45 to one our interest payment rate automatically to reduce by 25 basis points, resulting in approximately $2 million in annual cash interest expense savings.
At the end of Q1, 2021 on Nov lines weighted average interest rate on its debt was 494% of which 77% of the principle is fixed.
Now, let me conclude by sharing updates to the company's 2021 financial outlook.
We are raising our revenue guidance range based on our first quarter's performance strength.
For the full year, we now see revenue ranging between 745 to 772 million, representing an organic growth rate of 12% to 16% with subscription based platform offerings contributing 88% of our total 2021 revenue.
We continue to see strong profitability and strong cash flow generation and we are reaffirming our adjusted EBITDA range of 265 million to $275 million, representing an adjusted EBITDA margin of 36%.
Non-GAAP net income growth of 18% to 21% and net cash provided by operating activities growth of 23% to 33%.
For the second quarter of 2021 we are providing guidance of 180 million to 187 million in revenue, reflecting year over year organic growth of 11% to 15% adjust.
Adjusted EBITDA of 60 million to 67 million and non-GAAP diluted net income per share of 17 to 19.
We encourage you to refer to today's earnings release in our first quarter supplemental deck for more details on our 2021 guidance ranges and quarterly revenue cadence for the rest of the year based on our views today.
Before going to Q&A I'd like to reemphasize Keith's comments first <unk> performance was strong coming in above our expectations for the first quarter.
Second we are seeing strong demand for our platform with significant new sales and a continued robust sales pipeline.
Third implementations of prior sales continued to come online as planned resulting in a compounding subscription base growth.
Fourth we are seeing a rising appreciation for the differentiation of our data and our analytics capabilities across the marketplace.
And fifth our investments and further acceleration in your growth, increasing our sales and marketing delivery and innovation are showing strong results.
With that let me turn the call back over to the operator to conduct our Q&A session.
Thank you as a reminder to ask a question you will need to press star one on your telephone again Thats Star one on your Touchtone telephone to ask a question to withdraw your question press. The pound key we ask that you. Please ask one question and one follow up.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Daniel gross light of Citi. Your line is open.
Hey, guys. Thanks for taking the question and congrats on the quarter.
I wanted to dig into the consumer API product a bit now that the interoperability rules have started to come into effect.
He is with the Perry adoption has been there previously CMS noted around 480, or so payers will have to adopt these API cost around $2 million how much of that market do you think you can eventually capture.
Hey, Dan Good evening, Thanks for taking the time to join US today and thanks for the question.
That market is really a great market for Nov on for a number of reasons most significantly because it highlights the connectivity we have with the payer space. The relationships, we already have in the payer space and the API capabilities of our platform.
That is playing out nicely, we've captured a number of clients in that space, how many we ultimately capture and how what they scale to win.
We'll obviously have to wait and see.
Our subscription based approach and there is a volume based approach on those platforms as well.
Net provides for us an interesting upside opportunity as we serve that customer base.
So don't want to make any guesses as to what percentage of the total marketplace will ultimately capture but we're pleased with our progress and excited about what the overall API capability is for the company.
Got you and maybe just one follow up on the leg legacy revenue.
Yeah.
I think that was probably the.
The most impacted by COVID-19, along with services, but it seems like services has come backward, whereas legacy it remains at depressed levels should we be thinking about legacy at the same kind of quantum for the rest of the quarter should we be building in sequential increases as.
As we lap COVID-19.
Great Great question, Dan certainly Youre, absolutely right that legacy was most impacted by COVID-19.
And as you might recall for our 2021 guidance, we maintained the presumption that COVID-19 would persist very much at least in the <unk>.
First half of the year and then make some recovery in the second half of the year on wanting to take a more conservative approach to how that's going to play out.
Obviously.
A lot of our customers have learned that cloud based platforms are a great solution during the COVID-19 experience and therefore.
Ultimately migrating the remaining legacy clients to cloud is a great opportunity for us, but as you think of that portion of the business going forward, we see it roughly where it is now on a percentage basis with a little bit of a trend up in the second half John you want to expand on that.
Yes, Hi, Daniel Thanks for the question Yeah, we continue to see legacy at 3% of revenue and as we look through the year first half still expect some some COVID-19 overhang and then continuing to trend back to normal on the second half.
Got it thanks guys.
Thanks, Dan.
Thank you. Our next question comes from Donald Hooker of Keybanc. Your question. Please.
Great. Good afternoon, so the ACD statistics look fantastic.
And I'm trying to sort of.
Before I get too enthusiastic here I'm trying to sort of talk myself down so I'm just sort of thinking through.
Is there anything that you would before we get over our skis here.
Was there any sort of pent up demand are you you mentioned in your prepared comments there it seemed like a broad based demand but.
Was there any kind of pent up demand maybe people held off over the past year on our sort of coming to you and mass now or.
How do we think about sort of the cadence of your ACP metric.
Looking forward than looking back.
Hey, Doug Thanks for joining us. Thanks. Thanks for the question look our sales team is really a fantastic and they're a fantastic across all the business units.
Certainly.
They get a lot of credit for how we're progressing but so too do the engineering folks who are you putting fantastic innovations into the marketplace and our operations teams, they're doing the implementation of this stuff and our client services and support which are.
<unk> total client experience that excites the customer to buy more.
We're in the right spot with the right technologies and we're building out the capabilities, where the puck is going to be not just where the puck is now.
So all that is driving strong sales and as we mentioned in her prepared remarks, we continue to see that progressing.
And certainly Q1s numbers, while they were really nice we've seen quite a few quarters of pretty nice sales.
And.
Strength in our opportunity pipeline still here quite quite nicely.
No pent up demand.
And what we're seeing we're just seeing continued strength and building relationships and building appreciation of the capabilities of the company and a team that's executing on delivering four net demand.
Okay, and maybe just as my follow up in terms of I guess using that ACP metric is a leading indicator of revenues.
Is there any change in terms of the conversion of that or any kind of difference.
I went back a year and kind of compare revenue growth off of prior year ACB data is there any reason to think it might be different now versus a year ago or two years ago.
Well also a great question done obviously as you will recall our individual <unk>.
Engagements are going to have different characteristics, depending on what the underlying offering is that the client has signed for and the implementation of those timelines are the timelines as implementations pardon me vary quite widely.
So I wish I could say that every quarter, we sold an identical mix of product offerings, such that the translation and progression of implementations and the revenue was identical in.
You all could readily build models off of that.
But that's not the case the cases that it varies quarter to quarter.
And the individual product lines have quite a different characteristics. So it wouldn't be.
Directionally, it's going to help you out, but it's not something that is mathematically exact quarter to quarter.
Okay. Thank you.
Thank you. Our next question comes from Stephanie Davis of SPV Leerink. Your line is open.
Hi, This is actually Joanna on for Stephanie. Thank you for taking my question.
Hey, Joe My first question Hi, My first question is on the vaccine adherence program.
You mentioned the Humana contract expansion can you just expand on what nature solution work better than what payers can do in house right now in terms of identifying candidates for vaccinations and is that differentiation driven more by the quality of your algorithms or is it more on the uniqueness of your datasets.
Thanks for joining thanks for the question George So the the vaccine adherence platform is really quite an exciting demonstration of the network effect benefit of Nov on it requires relationships of beyond just one vertical cohort of the health care ecosystem. So if you think about it.
Have payers involved you're obviously a patients involved providers have to administer vaccines and pharmaceutical companies need to be producing them and involved. So the fact that we have relationship and engagement and data.
Right and authorizations and datasets that glue all of that together.
As to our knowledge unparalleled in the marketplace. So the ability to have all of those different constituents dealing with the cleanest set of data that exists out there in the marketplace and apply analytics to them that can identify not just who should have a vaccine, but also who doesn't have a counter indication for <unk>.
Axiom, who might have gotten the first of the vaccines, but not the second or third depending on the type of vaccine involved what the timing should be what's the right place for them to actually receive the vaccine once engaged all of these questions and making sure that it's in strict compliance with CDC and HHS are requirements.
Is no trivial task. So it's a great demonstration of the combined power of data and platforms and contractual relationships across the marketplace.
Got it thank you.
And on the life Sciences market side.
Can you talk to you what are the potential areas of expansion within that market beyond the sort of outcome based contracting on work that Youre doing now all for example would you want to expand into the real world evidence solution space for clinical trials. Thanks.
Sure well, we certainly see any area, where data makes a difference in health care as an opportunity for expansion.
No vaccine adherence obviously is key to the life Sciences space today outcomes based contracting as you mentioned.
Drug development device development post market testing surveillance tracking all of these things are quite key but also key is the consumer level aside of the pharmaceutical space as the as the pharmaceutical and device space tries to better understand are for these high.
Cost medications, who the ideal consumer or user of their medication on device might be and on the consumer side. They are increasingly trying to understand the selection of how they can better.
Get to the right place for them are uniquely so ton of opportunity for expansion in life Sciences throughout what we would call the CRO space.
We're pretty excited for that and we will see more on that to come going forward.
That's helpful. Thank you.
Okay.
Thank you. Our next question comes from Ricky Goldwasser of Morgan Stanley. Your line is open.
Yeah.
Hey, Thanks. This is kind of a lot for check on for Ricky Goldwasser.
Keith you mentioned in your prepared remarks that in overland automating some of the implementation can you expand a bit more on this.
Maybe give us a sense for which functions are being automated and how these initiatives could increase throughput kind of in debt in the near and long term. Thanks.
Sure. Thanks, Thanks Connor for the question. So we have a fantastic engineering team led by a fantastic CTO, Jeff Sharon and Theres a lot going on that take the many steps that take to go from a signature through to full operation and any large platform implementation. So some of the types of things that you need to see happen.
Are the connectivity elements of all the disparate pieces that make up the operation of the customer you just signed with making sure. Their laboratory systems are connected and they're they're literally even their print systems their distribution systems are inventories systems.
Their revenue cycle management systems all of these other parts of their ecosystem need to be connected into our platform for instance.
That all is cloud based connectivity and it's a lot of individual process steps.
Automating more and more of them is quite key and then also automating the ingestion of all the datasets and.
<unk> the process of setting up the administrative claims submission process. These organizations they're processing.
Prescriptions on our cloud platform for the specialty pharmacy marketplace for instance, or providers that are handling all of their encounter activity or decision support activity on our platforms in order to make their workflow.
<unk>.
Completely seamless within there a work environment all of those individual connections need to be set up automating those and other things like our key time.
<unk>.
Accelerators, and how fast we can get a larger and larger client base up and running and what it also does is allows us to go upstream and downstream in the sizing in these verticals.
Which allows us to have a much larger reach and customer opportunity at different price points in the market.
Great. Thanks, that's really helpful. And then maybe switching gears a debt on my.
Follow up.
The bite administrations opened ACO enrollment through the summer I think on the last call. You mentioned that you haven't included any benefit from that.
With the process and now ongoing do you have any update.
With these enrollment trends.
Is it embedded in your guidance going forward.
Yeah that is a positive incremental tailwind in our business going forward. It is obviously still open and still expanding we support the vast majority of the players in the marketplace on the platform so that as a positive it would be.
Still early to give any kind of.
Our projections as to the impact of it but it is it is a positive we've been watching the numbers and the population roll in.
But you certainly don't want to set any expectations before we know what the final numbers are.
Great. Thank you.
Thanks Connor.
Thank you. Our next question comes from Ryan Daniels of William Blair. Your line is open.
Yeah, Hey, good evening. This is Jared haase in for Ryan. Thanks for taking the questions. Jonathan I think this is maybe for you I think you mentioned.
Some some new hires in the sales force I think you mentioned if I have the numbers correctly 299 people now versus 277 at the end of Q4. So I guess number one I just want to make sure I have those numbers correct and then two if you could talk a little bit about just the composition of those hires any specific end market or channel.
Focus with those obviously, Keith you mentioned a little bit about that since you are making from an implementation standpoint, so maybe they're more oriented around that just any more flavor you can give us around those new hires.
Great. Thanks for the question first yes, you have the numbers correct at the end of Q1 2021, we had 299 sales and marketing team members net did compare to 277 at the end of Q4 2020.
Your second question was where is there any concentration within our verticals and.
Right now we're not opportunity constrained we continue to see very strong demand in all of our end markets for the technology, we're providing.
Specifically one of the largest areas. We have continued to see strong growth has been on our pharmacy.
Payer and life Sciences, and then finally provider.
But where there is a specific focus it's really across all because.
Because we continue to see that demand for our technology.
Got it yes.
It makes sense and then.
I just wanted to ask another one just relates to visibility and in the context of the guidance. So.
If I look at the updated outlook it looks like the range from the low end or the high end is is the same in absolute terms as the prior guidance and Keith I know you've discussed kind of debt.
Layering effect of new sales over future periods, you've talked about that in the last couple of quarters. So the answer may just be that theres kind of uncertainty related to the timing of how that all flows through.
But I'm just kind of curious how you would sort of characterize visibility and maybe why the revenue guidance range at this point wouldnt be a bit narrow or just kind of given where you sit at this point in the fiscal year.
Jared.
Certainly we had a very consistent range over time.
I don't think it's.
I don't think it's wide for at this point in the year I mean, we have to with your rollout, but we.
We have a lot of visibility we're pleased with it our goal is to under promise and over deliver.
And we think it's prudent to have a little bit of range.
<unk>, where you are on the year.
Okay fair enough I'll leave it there thanks.
Thanks Kurt.
Thank you. Our next question comes from Jessica Tucson Piper Sandler Your line is open.
Hi, Thank you for taking my question and congratulations on the quarter.
I think.
Interesting to note though.
You signed the 25th on the top 25 pharma clients.
In the quarter.
In addition to that consulting and platform sales with large pharma are you guys benefiting from some of the shift in pharma advertising from day to day count on.
While our net.
Do you think that Lyft is terrible and can you just kind of help us understand how the contracts work.
Hey, Jessica Thanks, Thanks for joining the call I appreciate it.
The new changes in marketing for life Sciences is not a principal driver of the revenue during the quarter. It continues to be our historical.
<unk> of development and post market surveillance and commercialization and real world evidence in value based contracting and now more increasingly the value the vaccine.
<unk> programs, but not principally seeing a unique driver out of the virtual marketing side.
Got it.
I can follow up.
On kind of ask so when you think about what your solutions for pharma.
On a more effective or high on higher ROI than the alternative.
Does it come down to it David that or like an algorithm more.
The platform can you just kind of help us quantify that competitive advantage.
Sure the competitive advantages are a few different pieces of the machinery. Jessica. Most importantly is the primary source data capability of the platform.
Much adjacent to and obviously at least with that as the connectivity.
But then what they are increasingly seeing is the true differentiation of that data versus other alternatives. They have in the marketplace I can't stress enough. How important it is to have longitudinally League identified primary source data in the marketplace I think it's.
Hi, Lee.
Underappreciated in some corners of the market certainly our client base is increasingly appreciating it.
The highest value you can deliver to a life science company that has let's say 60000, 80000 $100000 treatment or device is unique identification of the specific patient or specific provider and the actual clinical profile thats going on there.
And then the analysis you can do from that real World data is quite differentiated as well that is key and then additional to that is the fact that we have relationships with the other parts of the ecosystem right. We can talk to a life Sciences company and then we can go sit down with 10 major payors or.
100 different providers and stitch together a solution that nobody else in the marketplace really has the ability to bring together so.
It's that combination and then if you look at slide 12 in our supplemental deck. It's the unique depth of specific high value areas in health care like oncology like heart failure like rheumatoid arthritis and other autoimmune.
Those areas are datasets that are deeper than other people have in the marketplace by far I hope that helps.
Thank you.
Thank you. Our next question comes from David Larsen of <unk>. Your line is open.
Yes, good quarter.
Can you provide some color around your relationship with Walgreens.
Walgreens, Wal Mart and Cardinal.
Maybe just if you could talk about the nature of those deals with the potential infill opportunity might be and then obviously you don't want to get too specific around each client, maybe just sort of your views on the retail pharmacy space and the solutions that are selling most well in that channel. Thank you.
Thanks, David.
We are obviously required a stick to the four corners of what we've publicly announced with each one of those those partners and we're super excited about each one that you named all of them fantastic in all of them not only great individual engagements, but.
Now multiple engagements and expanding engagements and most importantly really positive relationships.
As they build their strategies and their expansion approaches were very.
Fortunate and honored to be at the table on on a lot of that work.
The the expansion what are the parts of your question was into into retail.
The line between specialty and retail is boring fast and the reason that existed in the first place was a concept between low cost low margin low impact on on one side.
And high cost high complexity high impact high margin on the other side and the reason those were differentiated of course was because there was a high cost of achieving the things necessary on the specialty side until came and oberland right. So because of our platform is able to deliver so many of the value differentiator.
There's that you ordinarily could only afford in a specialty cost environment or revenue environment market. We're now able to bring that further and further down to a unique experience at the retail side of things. So if you were.
Especially knowledgeable about who the patient is especially knowledgeable about their clinical care, especially knowledgeable about the provider that prescribed it how their kidney function is going their liver function is going and so forth you can deliver as a retail organization.
Client or customer experience with that.
Consumer with that patient debt.
Debt you could only hope to have at a much higher price point.
The offering so we're really changing the marketplace. There we're excited about where that's going to go and obviously that is a massive massive opportunity.
Okay, and then just one more if I can please the.
The growth in HCV am I reading that correctly does that say up 81% year over year, and then if youre a long term sort of revenue guide is maybe mid teens growth.
Just any sort of thoughts around like what on what you would expect the CVD grow at on a I guess on a normalized basis. Thank you.
Well one of the things, we have coming up David and I'll mention that at the end of the call again, and Theres going be a press release out on it Tomorrow morning is we're going to host an investor day on may 18th.
We will provide some additional detail into what youre driving at but what we're seeing is.
Continued increase in the performance of our sales teams and obviously, we're going to keep on investing in them and investing in the products, we bring to marketplace and the delivery of that because.
With every dollar we're actually getting higher returns as the sales team.
Becomes increasingly sophisticated increasingly seasoned and has greater and greater products to sell so we're far from calling a.
A quote normalized sales environment.
We're excited that we're still seeing on up into the right scenario with our progress so.
Some year down the road, maybe I can tell you what normalized sales will be but we certainly arent ready to call that now as we're pleased with what we're seeing.
Great. Thanks, a lot congrats on a good quarter.
Keith.
Okay.
Thank you. Our next question comes from Glen Santangelo.
Your line is open.
Thanks for taking my question.
Keith I just wanted to follow up on this on the questions around the recent ACD momentum.
Kind of go back to last year, we saw a little bit more volatility, particularly in the third quarter now we've had a couple of quarters in a row, where we've seen that that contract value momentum but.
Listen to the prepared remarks, it seems pretty clear that there's a lot of things on the kind of coming together right at the same time to contribute to that result, but if you think back a few quarters I think we maybe saw some churn that may be undermined.
Some of that contracting momentum and so I'd be curious to see what youre seeing in that regard and maybe is there a less churn within your existing customer base that might actually be augmenting the revenue growth in a way that we don't fully appreciate any thoughts around that.
Glenn So theres a lot in there. So let me let me hit a few different pieces of it and hopefully not.
Markdown.
You are speaking to so first of all.
Our churn we have not seen any variance off of what our typical churn range has been which is I'm sure you will recall historically going for many many years, we typically have a client churn rate.
Our our retention rate, 87% to 93%. So if you want to use easy math for your 10% on the churn on a cloud client count basis on a dollar retention basis.
It's a nicer number it's a higher number because clients continued to expand and buy additional things for sure, but we have not seen last year or.
For quite some time now.
Abnormal churn rates.
So this these HCV sales are layering obviously, we have to implement all of those sales we have to get those on to place that can take a long time for some of them others can implement quite quickly, but we have to get that work done. That's all scheduled work, meaning there is a known timeline for how it happens it's not something like.
You work through and you hope it ends on time, its contractually obligated us to win we have to get those implementations done and as we mentioned in our prepared remarks. Those are all progressing as scheduled and progressing well look this is a team sport here.
We've got.
Great team and as I mentioned earlier, it's a lot of different parts of the machinery that are executing in great synchrony together.
There is product innovation theres product maturation. There is theres, obviously sales there's the implementation there is the client support what you are seeing is a lot of those pieces really coming together and coming together well and we're obviously enjoying ourselves as we do that.
<unk> for our customers and succeeding for each other in the marketplace.
Great and we are continuing to see that.
Progress and stay strong so even after the quarters you just referenced of strong numbers with which I agree. We also wanted the message that we've got a great looking pipeline as well and we have to do our job to convert that pipeline into ACB sales, but that's what we're doing we're doing our job.
That's great. Thanks, maybe if I could just ask one quick follow up the more registry now contains 336 million patients. So you saw sizable growth again this year, but I think that small greater than the U S population and so should we see that sort of start to flatten out or are you starting to get international pay.
<unk>, Inc. That database, so I just wanted to try to reconcile that.
In terms of where we are and then any update relative to the consumer opportunity being able to leverage that that registry into that opportunity you talked about in 2020.
Thanks.
Sure.
Well Theres a lot and therefore for a follow up question, Glenn So sorry about that but those are on.
So all good questions. So so the the more squared registry because it funds similarly linked going back quite some time. It does have some patients obviously, who have died alright. So.
<unk>.
Frankly, why did that patient die what were the circumstances is very valuable right. So.
<unk> of patients obviously that.
May have died in 2012, 13, 14, 15 day stay in the more squared.
Registered.
<unk> is frankly very valuable data.
Extremely deep and linked total set on those patients.
So thats why the number can climb above what is the current population of the U S.
This this this data set today is <unk>.
United States dataset.
Obviously, there are some non U S citizens and that data as they reside here in the United States, but it is from U S locations of data source.
Also during our Investor day, we will talk more to your question of international elements of that going forward.
One of our areas of excitement.
And then lastly, you talked about whats the rate that we should see expand.
You see a flattening as you would rightfully expect as you approached near the whole population certainly that's not going to continue to grow at the same rate and you've seen that I think in our data where the better proxy becomes the number of medical events in there, which interestingly reflects if you look.
At the climb year over year this quarter Youre seeing the medical event impact of COVID-19 right as people were less able to go to the hospital and go to the Doctor, but if the medical event count will be a greater reflection of the continued data flows and growth of the more squared registry as you correctly point out the membership.
We will have a slower curve to it at this point.
Okay. Thanks for all the comments.
Absolutely Glenn.
And with that I'd really like to thank everybody for joining us. This evening before I wrap up I'd like to touch on reiterate on a few points first of all we're seeing as I hope you see really strong demand for our platform with significant new sales and continued robust sales pipeline second implementations continue.
Come in and online as planned resulting in a deepening layering of the compounding subscription based growth that we've been speaking up now for some time.
Third we're seeing a rising appreciation for the differentiation of our data and analytical capabilities across the marketplaces. They can better understand the value impact that it delivers.
Fourth our investments and further accelerating our growth the increasing in our sales and marketing and delivery and innovation. They are showing really nice strong results. So simply put we're executing well and we see a strong year ahead and strong years ahead now with that I'll close by as I mentioned earlier inviting all of.
You to our 2021 Investor day, which will be on May 18th Youll see an announcement tomorrow morning out on this and with that thank you all for taking time this evening to join us and thanks for your interest in <unk>.
This concludes today's conference call. Thank you for participating you may now disconnect.
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