Q1 2021 Allscripts Healthcare Solutions Inc Earnings Call

Thank you for calling income conferencing. The next available operator will be with you momentarily.

[music].

Okay.

Okay.

Thank you for calling income conferencing. The next available operator will be with you momentarily.

And.

[music] net.

And after.

Yeah.

Incisions, we made last year and continue to make the position the company for long term success.

Looking back a year ago, it's gratifying to see the dramatic transformation Allscripts has made improving our financial performance, we adjusted our priorities to help clients respond to the COVID-19 pandemic, and we optimize our balance sheet and solutions portfolio.

Like to once again, thank our associates for their unceasing devotion to our clients and for delivering these results.

While the COVID-19.

He has not ended we're becoming more optimistic given the trend line for decreases in COVID-19 infections in North America increases in the percentage of population who have been vaccinated in the efficacy of vaccines impacts on preventing COVID-19 severe outcomes. We also believe the pandemic highlighted the significant value that health solutions.

And data bring across the continuum of care.

We are proud of the actions, we took and are taking to lead our clients and positioning them and us to succeed post pandemic when.

When the pandemic became known to the medical community Allscripts immediately set up a team to respond to the crisis by ensuring our solutions were updated with the necessary alerts to quickly identify risk populations. We were recognized by reaction data is having outperformed our competitors in the delivery of new functionality and services to support.

<unk> organizations through the pandemic.

Throughout the early months will continue to assist our clients in their recovery from the crisis during that time, many healthcare organizations saw a reduction in elective procedures and challenges to the financial position. Once again Allscripts was there to help our clients recover the offering full telemedicine solutions workforce management tools and <unk>.

More access to data to help them make better decisions for the business.

Now as we enter into the recovery phase of the pandemic allscripts equally prepared to help consumers and our clients protect themselves and their organizations from future crises with open access to data and analytics telemedicine and cloud enabled services from the beginning and throughout the pandemic Allscripts has been a trusted partner.

<unk> to our clients.

Let's go to some highlights for the quarter non.

In the hospital business, we experienced momentum with our <unk> platform of health as we benefit from the strategic R&D investments.

We built a patient record across multiple care settings and revenue cycle our.

In our Microsoft partnership leveraged with human centered design driven by our long standing vision of open connected communities of health is resonating in the marketplace.

During Q1, we welcomed a new all in Sunrise platform of help client Mercury, Iowa City. After a highly competitive process Mercury selected Allscripts Sunrise platform of health operating on Microsoft Azure is a core EHR for its community hospitals and clinics.

Mercury with searching for an innovative partner ready for the future of healthcare.

By cloud capable features built on Azure Mercy, Iowa city's commitment to Allscripts is an important validation the vision and R&D investments, we strategically deployed over the past few years.

A single medical digital record with revenue cycle inpatient outpatient delivered through the cloud and connected to the community.

The integrated EHR that complete ecosystem that optimize the software as a service model, Microsoft Azure will deliver high availability cyber security disaster recovery and business continuity features.

We look forward to a long term partnership with Mercy.

To drive continuous improvement.

And financial outcomes with them.

And another validation of our health system strategy, our long term client blessing health system substantially expanded its allscripts relationship.

With Sunrise Black.

We will be adding two new hospitals and one large multi group specialty practice to the Sunrise platform included in this expansion Allscripts will also utilize.

Blessing will all season.

Allscripts managed services and they extended their agreement through 2028.

In addition, our largest client northwest health is also expanding its sunrise platform at an additional hospital in their system for chronic day Medical center in long Island.

These new wins from Q1.

Provided additional underwriting.

Of our health system strategy and Microsoft partnership.

We expect this to provide additional momentum as we compete for new business.

We have also received 30 part third party validation for our solutions in the health system segment. We've been recognized again by Black book. They are number one in its 2021 community health systems vendors report for the fifth consecutive year.

<unk> books cause of survey shows our commitment to providing smaller healthcare organizations with the support cloud technology tools that day.

That they need.

In our ambulatory business, we continued with our momentum from last quarter, and we were able to sign another six new clients and the independent ambulatory marketplace, our second quarter pipeline remains robust.

And as we benefit from the investments we've made across our ambulatory team our ambulatory platforms.

And breadth and depth of solutions, which is further supported by our number one market share positioning.

Our portfolio of offerings is highly attractive as clients look to consolidate vendors and for complete end to end solution covering consumer clinical financial and revenue cycle outsourcing. Our CMS business continues to gain traction as clients pivot COVID-19 to the recovery in their patient volumes.

An example is Springfield clinic, one of our largest revenue cycle management services relationships Springfield clinic has grown its in central Illinois, and as a result of the Springfield Clinic Trust in our revenue cycle management services, we were awarded a large expansion of our existing partnership.

With paradigm our business is at a key piece of our strategy to address the present and future needs of healthcare delivery.

Our industry, leading data analytics platform and bidirectional connectivity with providers at the point of care provides a substantial value to life Sciences company Payors and providers, we've made purposeful investments across paradigm to position us for relevance across multiple addressable markets by leveraging <unk>.

Asked and growing electronic health record of ambulatory footprint, along with strong provider relationships paradigm is helping to transform biopharma product development and commercialization.

We are extending pointed care foot workflows to equipment include clinical research and our vision for the future to provide a research as a care option for our providers and patients.

Let me highlight a number of areas, where we're seeing progress at <unk> and.

And the bare die in payer business, we signed two new clients from the top 15 health plans in the first quarter. We are providing our E chart Courier clinical data exchange solutions to one of these plans and our pulsate analytics for another plant Medicare advantage and <unk> lines of business, which includes almost 400000 lives.

Our maritime study source platform Modernizes clinical research, while extending our EHR systems to include research workflows for instance, identifying eligible study patients efficiently enrolling them in studies and utilizing the healthcare data to assist with their research.

Before I hand, the call over to Rick I'd like to discuss how we are leading corporate social responsibility and the impact our solutions.

It can have on improving health outcomes, we published our first CSR report quarter.

Here are some updates on how we are envisioning a role within the.

The healthcare ecosystem.

The band the pandemic has brought to the forefront the inequities in our healthcare system, We will healthcare Inc and.

And Allscripts has the power to reduce these in equities and help address social determinants of health.

More detailed information and electronic health record can provide to a clinician at the point of care the more likely a patient will have a better and positive health outcome.

More data enables a physician to provide a more precise effective treatment plan for that patient, but to be truly effective that data can't be limited to only previously documented care and treatment information.

This is where our data integration plays an important role housing status financial situation education level.

Access to nutrition neighborhood crime rates. These are all important factors contributing to overall overall health.

To capture community data that includes insightful information based on say geographical areas require strong partnerships with multiple community organizations and local health centers.

They almost come together in an API centric open interoperable health system.

This has been the philosophy of Allscripts for over a decade, we are focused on delivering solutions that help bridge. These gaps we see often in healthcare. This includes data analytics and expert consultation that provide support for at risk patient cohort identification.

Software, enabling the ability to direct patients to care and the service that they can afford to price strength the tools.

The understanding out of pocket costs associated with routine needs such as prescriptions, taking into consideration patients' insurance coverage and out of pocket fees that can be.

Barry based on where it is filled.

And importantly, more patient engagement strategies that include proactive outreach to encourage telehealth visits today that helps patients understand their eligibility for vaccine distribution.

We believe our vision of open connected communities of health position us.

To help address some of these issues while at the same time provides substantial value for our clients to.

To summarize I remain very optimistic about our performance in 2000.

21, and our ability to deliver value to our shareholders associates, our clients and to communities our scale.

R&D investments and building integrated platform solutions with a differentiated payer and life Sciences platform and our partnership with Microsoft and positioned us to deliver relevant and long term value added solutions for our clients across the payer.

Provider and life Sciences landscape.

Our improved and sustainable cost structure allows us to drive more earnings bottom line and generate meaningful amounts of free cash flow with that I'll turn it over to Rick to provide more detail.

Our financial position. Thank you.

Okay. Thanks, Paul and thanks, everybody for joining us today.

Just one more reminder, is Stefan indicated additional finance financial details are available in the supplemental financial data workbook posted to our Investor Relations website.

So we are very pleased with our start to 2021 overall bookings and revenue performance were in line with our plan and our continued discipline on our cost structure created significant operating leverage resulting in adjusted EBITDA EPS and free cash flow all coming in above our expectations for the first quarter.

This is the cleanest quarter of financial reporting that we have had in years and I think the numbers really speak for themselves as they reflect the performance trend that we've now seen for several quarters. So my prepared comments will be shorter than usual.

So with that overview, let me highlight a few items starting with our bookings performance generated $194 million of new bookings in the quarter, which was up 6% year over year and 7% sequentially in what is typically a seasonally weak bookings quarter.

The first quarter result was higher than what we have reported in any quarter of 2020 on a like for like basis.

This reflects a continued modest improvement in the overall sales environment as our clients continue to recover from the pandemic and turn their focus to improving their operations and optimizing their healthcare it environment.

As Paul mentioned by particular strength in our Sunrise franchise with four new hospitals in the quarter and our ambulatory business continued its momentum with six new competitive business wins in the quarter as well.

As Paul discussed around paradigm.

Our business there saw some very good deal flow across our solutions set including provider life science and payer clients.

These partners continue to recognize the unique value proposition, we bring with our differentiated data and analytics platform.

Along with the bidirectional connection to the provider and patient point of care.

Turning to our margin performance in the quarter consolidated non-GAAP gross margin was 43, 1%, which was up 480 basis points year over year.

This improvement reflects the dramatic turnaround in our client services organization over the past year as we right size the cost structure in that business to reflect the current revenue environment as well enhance the productivity of this labor base.

As a result client services margin was 19, 8% in the first quarter, which was up more than 600 basis points on a year over year basis.

That strong gross margin performance, along with our cost discipline around R&D and SG&A costs resulted in a consolidated adjusted EBITDA margin of 18, 3%.

Which was up 860 basis points on a year over year basis.

This reflects $31 million or <unk>, 83% growth in year over year, adjusted EBITDA compared with the first quarter of 2020.

As a result of our strong margin performance along with the benefit from a lower share count we reported first quarter GAAP diluted EPS of <unk> 19, a share which is up from two cents a share that.

Quarter of 2020.

It is worth noting that we did not recorded restructuring charges in the first quarter of 2021.

During the quarter, we generated $56 million of cash flow from continuing operations and $35 million of free cash flow.

This is a dramatic improvement from the first quarter of 2020, and a great start towards our full year goal for 2021.

Subsequent to the end of the first quarter, we settled our income tax receivable as well as all remaining tax obligations related to the divestiture of care port.

So to make sure everybody understands our cash position if we perform these transactions back to our March 31 balance sheet, our overall cash position exceeds the principal balance on our debt obligations by approximately $60 million.

I will finish today by commenting on our previous instead, we have provided.

We are reaffirming the full year outlook for revenue adjusted EBITDA and free cash flow that we provided at the end of February on our year end earnings call.

And we're doing so because trends we saw during the first quarter remained stable.

Also given the divestiture of care part I'd like to provide an update on the long term segment margin outlook that we originally provided last year.

Our long term core clinical and financial solutions segment, adjusted EBITDA margin outlook remains unchanged at a range of 18% to 20%.

And our long term data analytics and care coordination segment adjusted EBITDA margin outlook is updated to a range of 23% to 25% to reflect the divestiture of <unk>.

At the business segment level seasonality effects and revenue mix will drive quarter to quarter volatility. So these targets are intended as full year goals that we will continue to drive towards sales.

To illustrate this point, although the first quarter adjusted EBITDA margin in data analytics and care coordination segment was well below the targeted range, we expect to see high single digit to low double low double digit year over year revenue growth in this segment for the balance of the year.

And this is expected to drive adjusted EBITDA margin performance in the year. The long term range over this same period.

So to wrap up we're very pleased with the execution and results across all facets of the business in the first quarter and we remain optimistic about our outlook for 2021.

That I would like to open up the call for questions.

Thank you ladies and gentlemen at this time, we'll be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the Q4 participants using speaker equipment. It may be necessary to pick up your handset before pressing the star key.

Our first question comes from the line of Charles <unk> with Cowen. Please proceed with your question.

Hi, This is James on for Charles.

Obviously virtual care is playing a greater role in care delivery. So can you talk about.

Allscripts is doing to enable virtual care.

Yes, we've got we've actually been talking about this for a few quarters now.

We rolled out very quickly last year.

Telehealth capabilities to our clients.

And we've gotten pretty significant pickup on with our clients on that so thats contributed to our revenue, but also has been a big win for our clients as.

They've been able to maintain their relationship with their patients.

Paul went through a lot of other items that we're doing to try to assist patients assistant so I should say during the pandemic and help them work remotely with their clients.

But I think telehealth tele visits is probably at the top of the pyramid.

Okay.

And also can you talk about your capital deployment priorities given the strong cash position.

Following the divestitures of EPS line care points.

Also how much capacities.

Available under the current share repurchase program and any plans for additional authorizations in the future.

Yes, So let me take those two questions two part question there.

Our priorities are we want to continue to make.

Smart investments in the business.

We will do that we've been net we continue to maintain our R&D at a pretty high level.

And we will look to.

Continue to add to our capabilities as we need as we see fit.

But we also I think have been pretty transparent about the fact that we think our.

Shares have been dramatically undervalued and so we have been focused on returning cash to shareholders.

We.

Detailed out over several quarters now we're up to and.

Coming to an end next week of the accelerated share repurchase program that we put in place in Q4.

As we do that we will have used up about two thirds of the authorization that we just got in last November but we still have some remaining authorization close to a $100 million of authorization left.

And we.

We will continue to monitor our stock price and do that and make incremental decisions from here, but our plan is to we're quite comfortable no net debt as you heard me say, we in fact have net cash position right. Now so we have tremendous capacity to continue to.

Return cash to shareholders.

Okay. Thank you.

Our next question comes from the line of Michael Cherny with Bank of America. Please proceed with your question.

Afternoon, and really nice job across the board on the quarter congratulations.

I wanted Mark again.

Little bit.

It's been I believe and please correct me on timing, but close to a year. Since you first engaged with the consulting firm to start working on your operational dynamics.

Showing up very nicely and the margins can.

Can you just give us a sense of what comes next from here, where you are focused on the next leg of opportunity and how much of what we should expect ongoing margin expansion will be further business improvement.

Some operational dynamics versus some of the mix components that come with the growth in particular on the data analytics side.

Yes.

So thanks, Mike for the comments on the question.

I guess you have a few questions within that so yeah.

First off yes. So it was about a year ago that we brought in some assistance from the outside to help us.

Very rapidly.

Scale, our cost structure back to where it belongs.

And I'm happy with the results of that.

We published long term margin targets.

Early in that process and we haven't.

Forget about those we haven't deviated from them other than the fact that of course with with some of the portfolio changes we needed of course refresh the margin for that and that's what I've done with this call.

But we're still hold ourselves to a high standard.

And our core clinical and financial solutions segment.

We will continue to really focus on efficiency on the cost side.

But also look for opportunities to grow and so we all know it's not a high growth market, but there are pockets to grow into and there is still a replacement market that.

We believe will be a net winner in.

So some of the examples Paul went through on the.

The inpatient side with our Sunrise platform.

And as I said, we continue to log women's in our ambulatory side.

It makes us feel good.

Have the right solutions.

Very competitive as that replacement market comes up so it'll be a focus on cost, but also picking off some.

Placement wins as well and then of course, there's use cases that continue to evolve with that client base too and.

Revenue cycle services is a big area in particular in the outpatient space.

Nice lift there from our client base and that's providing some good growth for us.

The first question today about telehealth and some of the remote patient.

Tools that our clients are looking for it gives us an opportunity to.

Provide solutions there. So so it's a combination of all of that will help with the core clinical group continue its march towards its long term goals, but.

As you started in your question, we've made significant improvement already in.

We will continue to drive a drumbeat of change, but we've made a lot of progress and I think we're not going to see step function changes here, we're just going to see continuous improvement on.

The data analytics side.

As I said, we're expecting nice growth for the back half of the year. The last next three quarters of the year I should say.

And that's going to do a lot for margins so that we.

We're going to be smart about our costs, there, but scenario that ultimately we will be investing to support growth, but we will get some nice operating leverage off that growth.

So let me pause there Mike I don't know if I got all your questions or if you are still left something out.

You did Rick I ranted products, along the needed. So I'll ask one more separate question thats much more quick and direct.

Given where verity business growth profile, how do you see it shaking out in the various different competitive dynamics of the market since it does seem to be an area, where other companies both traditional competitors and others are trying to expand as well.

Yeah, well look imitation is with serious form of flattery right. So we see that from other folks. The good news is we're not just talking about it we have a real platform.

Real client relationships over multiple years.

A real distribution network there so I feel good about our competitive positioning I also think we have a unique.

Net of apps data assets.

That are not only asset we own but we also have some of our competitors have asked us to help them with their assets. So it's a unique asset base that.

It is.

Extremely difficult if not impossible to replicate.

So we feel good about the position.

And I think as I said as we look out for the balance of this year, we're expecting to see the growth engine start to yield some nice results there so.

So things feel good on that side of this.

Perfect, Thanks, Rick and again congratulations.

Thanks, Mike.

Our next question comes from the line of Sean Dodge with RBC capital markets. Please proceed with your question.

Thanks good.

Good afternoon.

Rick your comments earlier on opportunities in the replacement market.

I would imagine the pandemic, probably sidelined a lot of those decision processes.

<unk> seen any change in activity levels, there now I guess.

The thing either just the fact that being kind of hopefully post pandemic now or is there anything kind of regulatory or otherwise.

That are kind of percolating here and helping them maybe catalyze some some activity.

Yes, let me start and then I'm going to ask Paul to feed because Paul spends a lot more time in front of the clients than I do but.

The.

I'd remind you that we actually had some nice wins last year on our ambulatory side, so even though with the depth of the pandemic. We did see a lot of replacement market activity on the ambulatory side last year and.

We're very happy with how we how we fared there.

But I think on the inpatient side it was a pretty slow year in 2020, so almost by definition.

2021 will be a better year than 2020 with Inc. In terms of opportunities.

And I think that's especially true internationally.

Those tend to be more public sector deals and I think public sector, all but shut down last year for obvious reasons and we're starting to see some momentum creep back into those those.

<unk>, let me ask Paul to add to that yes. There is a real our pipeline on the hospital side is as good as it's been for new business for the last three or four years. So theres a lot of activity interestingly and thats because of the team that we have it's been going after it but also <unk>.

Getting better at being in front of the opportunities that exist with consultants and just buy.

He will brighten the payment very hard.

As Rick said, we had a very good Q1, and we have other things that are teed up they're all competitive so sometimes those results are more lumpy as Rick said at the outside the United States. There are some pretty good sized things that last year. There was a big diversion at the administrative level to take care of the population is much more so than it was to go replace electronic medical records.

And so that did in fact slow down, but I wouldn't say that the U S slowdown as Rick also said accurate the new business in the ambulatory side of the marketplace.

Very robust last year, and we had a pretty good Q1 day.

Existing clients are also expanding so theres a number of organizations that are raising their hand, and asking to be acquired and that's how we're getting some of those.

We talked about today, but also some of the other relationships we had last year expand into additional hospitals that they have acquired an additional physician clinics that they bought and that always bodes well for us when that happens when our clients buy more and that's those are the other AEP will highlights to that the thing that is different today.

Talked on it a bit is that we have a breadth and depth in our suite of offerings that allow somebody to come in and do a bit more one stop shop, not not only on inpatient outpatient revenue cycle, but also for revenue cycle outsourcing services for total up.

Outsourcing services and for some of the consulting fees that are usually reserved for perhaps a.

Organization that may have.

As a history and specifically only doing that we're seeing clients come to us for value added services and for many of the things that they would not have historically outsourced with somebody like us and we're seeing that as well some of that I think does from the pandemic, where those organizations actually sent those people home.

And like a lot of the people that were working with you all in the back office and they are noticing that that freed up space inside the hospital and they are actually interested in perhaps looking at somebody else to take that function over for them given that they've already if you will moved it out of the four walls of the hospital are four wall for the clinic. So that's another.

Interesting dynamic that's come out of the pandemic.

We will certainly.

Try to work on aggressively with our clients.

Okay.

That's very helpful. Thanks, and then maybe on the rollout of the new Sunrise platform. How long do you expect it will take the majority of your client base upgraded.

Transitioned over and then the choice they have to migrate to the Microsoft.

Can you walk through maybe how that changes the cost of economics for them and as Ed.

A decision you expect most of that migrate will make.

I think that as you bifurcate the market and into new business versus those that are already clients of ours that are already hosted in one of our data centers versus the third option that people that are on premise like the on premise folks are going to be very interested in this especially when they think about the things I talked about earlier around fiber.

<unk> continuous operations and around some of the capabilities that come native in the cloud.

<unk>.

Texting.

Voice recognition the ambient technologies that you read about Microsoft doing not only with their acquisition of nuance, but even before that the capabilities that come native inside the cloud are pretty interesting to people, especially as folks are trying to get to more of a keyboard less experience for the physicians when you think about the broader <unk>.

Physician fatigue.

So those are all things that that helped drive us towards that but when we do new business or new business almost exclusively cloud base.

That's number one that people that are in.

On Prem are going to move over a period of time I'd say the next.

18 to 24 months. Some people are already moving and then other folks that are already hosted depending upon what their contract looks like with us.

Host over the course of the next I would say three to five years.

Okay, great. Thanks again.

You bet. Thanks for the question Sean.

Our next question comes from the line of Jeff Garro with Piper Sandler. Please proceed with your question.

Yeah. Good afternoon, thanks for taking the questions and congrats on the quarter I wanted to ask about bookings.

Charles question with a nice day here I was hoping that you could comment on the mix of bookings between recurring revenue and non recurring in the quarter and particularly in the light of what sounded like a very good some nice quarter and then knowing how that product is evolving with the Microsoft relationship that you just referenced.

Well.

Let me let me start by its we don't typically report as you know bookings on a recurring versus nonrecurring basis, we don't really.

Yes.

Categorize it that way, but I guess, what I can say is this there is nothing about the quarter that I think fundamentally changes the mix. We have today. So we're 80 ish percent recurring 20% nonrecurring.

Non recurring again as per our primarily made up of.

Project E services software licenses to the extent some people still buy them on a on a perpetual license upfront basis as opposed to through a subscription.

Sometimes we have some hardware sales, but those tend to be the things that are the non recurring aspects and theres nothing about the composition of first quarter that.

In my view fundamentally changes that okay. So so thats.

On that part I think.

The contribution to get all the way to the full 494 million net we reported of bookings.

Yes, Sunrise had a good quarter the new deal with Mercy was was a nice deal.

As was both the blessing and the.

North well hospital extensions.

But we have the other big areas of the company. So the ambulatory franchise and also varied on.

Were also significant contributors to the overall bookings mix. So there was nothing unusually skewed in my view about our bookings performance for first quarter on any on any area of the company.

Thank you that's helpful that may not answer your question, Jeff, but I, just let's start with that backdrop, and then see what what else you want to ask us.

Yes.

Very helpful color wasn't expecting specific percentages, but maybe a little bit more commentary on.

What are the Sunrise deal looks like today in terms of recurring versus nonrecurring and the Microsoft relationship.

<unk> Hao.

Like a mercy deal.

Bookings and then translates to the P&L.

So a new logo relationship Mercy is.

Is typically structure it as either a seven to 10 year deal.

Most of the structure of the deal everything is bundled in.

Kind of a single subscription price so that is.

Largely there is a little bit of initial implementation services. So there is some nonrecurring revenue that goes with it but they are largely.

They actually probably look a lot like what our long term averages now with 80 20, when you break it all down so nothing nothing unusual about that deal and nothing.

It really changes what we look like today because of that deal.

They it's structured all as recurring revenue once you get past the initial implementation fees.

The Doe the deals where it's additional hospital with with a client that's already in place.

That could be different based on how our relationship is with clients. So some clients are long term clients, who started on perpetual licenses.

And when they need a few more licenses for a new facility.

That tends to be the St. Paul the same structure of the deal that they already have others.

Others started as a subscription model and they will just look to add on top of that subscription so.

It tends to follow what the client was like Jeff and so nothing.

Beyond that generalization, it's hard to say, it's very client specific what the structure of the deal would look like.

Okay got it very helpful. One last one from me I wanted to ask about the ambulatory market and the comments around consolidating vendors.

Curious what types of organizations are pursuing consolidation of vendors now and how your portfolio that segments for different parts of the market might help you address those consolidation efforts.

I think some of the consolidation that I was referring to things that we brought to them specifically during the pandemic bank. We are seeing that their clinic business are going down they were seeing and perhaps they were unable to see patients a full year ago.

I actually had some financial pressures and so they were talking to us about some of their wall as we talked to them about the number of different relationships that they had.

It'd be more cost effective and it turned out to be more cost effective to put more of those relationships into buyers.

Virus bucket, if you will and that was us.

So as we have a broad breadth and depth of offerings, we would.

Look at their accounts payable and work with them to try to figure out if we could.

Consolidated many more pieces of business that we didn't currently has.

A larger if you will percentage of their spend coming to us versus in some cases 20 or 30 other players.

Yeah that was a way for them to become more efficient and achieve their goal, which is the overall <unk>.

There it is.

Spend a bit.

And that benefited us because that would that percentage to continue to spend actually increased our share.

Perfect. Thanks again.

You bet.

Thanks for the question.

Our next question comes from the line of Eric Percher with Nephron Research. Please proceed with your question.

Thank you.

I appreciate what you termed it a clean quarter two quick clarifying questions and then one for Paul on the clarification. So cap software at $18 1 million is that okay.

<unk> right sized relative to percentage of revenue or perhaps let Paul and then I want to make sure I understood that comment, which I think was $60 million of net cash.

Stating, what the cash or debt level was so just wanted to clarify that.

Yeah. Thanks, Eric.

So on the second question, Yes, I mean that was the.

In an effort to make sure everybody understood the cash position.

It's a net of $60 million, if you pro forma the tax settlement that we did in early April.

And then you just compare that as you as you know.

The convertible bonds that we have outstanding don't show up on our balance sheet at face value.

They accrete upward over time, so the cut through all that noise for anybody who is a little less familiar with it I want to make sure everybody understood.

If you just compare net cash to face value of the bonds.

We're in a net 60 million cash position.

Makes sense.

And yes and cap software okay.

So.

You were a little hard to hear so I'm not sure. Let me just make sure I understand what your question was so $18. One was the amount of spend this quarter that we capitalized alright. So.

The growth of $67 million.

Right.

And that's why I think I lost you a little bit on the on what's your question was but as a.

So you may have to repeat it but the capitalization rate.

Thanks, Mark Tony.

Okay. So the cap rate.

I have been talking about that for a few quarters, we've been trying to drive the capitalization rate down and not continue to just build up cost on the balance sheet. So for three quarters now we've been amortizing more to income that we've been capitalizing so.

Good that the quality of the earnings continues to get better and better.

That that should that trend should continue.

The rate.

We were at 30% in Q3 dropped to 23% in Q4 went to 27 this quarter.

That's around the edges youre going to see a little bit of movement on the percent just because.

The accounting rules intersecting with what our gross spend is during the quarter. So youll get a little bit of Bubbling, yet, but I definitely expect that number to sit in the twenty's and not go back up to where we had gotten too which was almost like the mid thirties.

Okay, that's always going on room for improvement.

Then Paul on the topic of Microsoft sales.

Like they are everywhere.

Yes, I think beyond nuance.

Expenses last week seeing alignment with health systems, and even Biopharma manufacturers. When you see that expansion does it appear to you like to us.

Expanding faster and broader than maybe it was expected a year or two ago and do you think there are opportunities that extend beyond some of the core that we've talked about.

And as we think about paradigm.

Opportunities that you've been excited about relative to the moves that they seem to be.

Thank you.

The fee.

Our parents and the reality of what's going on with Microsoft in my opinion are that they are absolutely getting into healthcare and a very big way. They will continue to be an enterprise software player. They will continue to have if you will an operating system that resides inside of their cloud.

I think as an interesting to think between them and perhaps some of the other people that are out there in the marketplace. Specifically when you go to the cloud youre going to pick up all the work.

That they have with the operating system thing.

We have had over time, but also layer and capabilities that people are going to be extraordinarily interested at go to the cloud things around AI things around voice things around ambient things around the fiber hours that comes with that but those things are pretty interesting to people because of the rate at which you can put them into production.

So that is a big piece, Eric as to why I think we're going to get a lot of traction as a result of that and Microsoft as many other people have historically noted.

Healthcare is a very large marketplace some of the things that they're doing in this marketplace. My expectation is that they will also leverage into some of the other industries.

They serve and some of the other very large organizations that work with around the globe. They are targeting a lot of large healthcare enterprises and theyre targeting larger a lot a lot.

Large fuel ministries of health in different countries around the world and this is not short on them the ability not only to have a.

As your relationship with those organizations, but also then to drive additional applications and capabilities into those organizations in a rapid manner. So my.

Alignment of our alignment with them. We think is very strategic they have an incredibly great to work with the engineers, they're supplying us.

Well the intellectual capital of those people of how we can get to where we need to get to.

Point in time is helpful. And then I also just working within going hand in hand with Microsoft as we are.

Calling on some of these large institutions. They are all interested in listening to what a joint relationship might look like as they think about additional capabilities that fit either on top of or in place of existing.

Historically, if you will electronic health only.

Opportunities.

That's interesting thank you.

You bet.

Didn't really get your hands a lot.

I'm, sorry, I didn't get to a final Eric on your own.

On <unk>.

They've had a lot of discussions with them around what Microsoft around that as well theyre very interested in the closed loop nature that we offer.

What we can do with pharma and payers and <unk>.

They continue to be interested in that set of capabilities.

Abilities that we have they also see it as unique.

Payer relationships.

Pharma relationships and we have provider relationships not everybody else has all three of those.

Our next question comes from the line of Stephanie Davis with test VB Leerink. Please proceed with your question.

Hey, guys I Echo my congrats and thanks for making time for questions. It sounds like you have been very busy this quarter.

Thanks, Mark to here.

I'd love to hear more about your longer term paradigm strategy around the pharma digital ad spend.

Do you see any pockets of opportunity that leverage aerodyne lifesciences relationships with your clinician facing real estate in your core EHR or.

Or is that something that youre only using four and the practice fusion side of the big Mark.

So as you know Stephanie that's how practice fusion started right.

A lot of.

Pharma like ads and.

Sure.

Went through a learning curve on what was.

Okay to do and kind of helpful. As part of clinical decision support and what was not okay to do.

<unk>.

Things that might be viewed as.

Fostering more prescription activity right. So they've kind of learned that lesson along the way. So I think we're really good at that we can go ahead.

Because of the pure cloud nature of practice fusion, it's much easier to deliver those opportunities.

Two a wide client base than it is with some of the client server technology of some of our other EHR platforms, but.

The net.

The longer term answer your question is absolutely I mean, thats, what theres opportunities that was quite a big part of the acquisition case, when we bought back season as we knew that they were doing some things that we felt we had a larger base to leverage that across and we will continue to pursue that.

Are there any opportunities in some of the adjacencies around the EHR, such as our patient portal or may be even having some sort of embedded telemedicine solutions.

And that component there.

Sumer and clinician Paypal.

Yes.

Let me say it this way I say it as an add.

Maybe as a little too narrow are there opportunities to create new revenue streams off of.

The people the users of our <unk>.

Personal health records.

And are there opportunities to bring information to providers.

And reduce some of the friction that they have within are interacting with the payors. The answer is absolutely I mean, thats really what <unk> is doing for a living and they spin up new.

Product streams and new solutions streams.

Every quarter.

So.

It's a place where we innovate on new solutions.

There are.

There is a pretty good web of Rulebooks you got to leave your way through when we do that so we.

Intersect the commercial opportunities with a pretty strong view from our end.

Review from our compliance group to make sure we're staying within the rules, but yes, the opportunity is very real.

And then just one quick one from me Microsoft has been known to sometimes one way exclusivity on the partnership is there anything like that did the deal or.

Fully clean now.

Got it correctly.

Awesome Awesome day here. Thank you guys.

Thanks Steven.

Our next question comes from the line of Donald Hooker with Keybanc Keybanc capital markets. Please proceed with your question.

Hey, great good afternoon.

Just want to make sure a lot of questions have been asked here of course, but just for my edification here. So I understand so you guys obviously are doing.

About the progress you've made with operating margins or EBITDA margins in the core clinical and financial solutions segment. I mean, you just to be clear you are at the top of.

Your long term range there.

From what I understand from your comments.

This was a seasonally weak quarter and it sounds like things might be a little bit better next quarter is there a reason why margins might recede from here.

Well I think I think let's make sure we don't mix and match some of the comments Don.

Sure.

The seasonal weakness is.

<unk>.

The comment I made with what is typically the bookings activity in the first quarter.

It is it just tends to be a softer quarter.

We are and Thats why we were very happy with where we came out for the for the quarter not only did we have a <unk>.

Good sequential lift in bookings.

Highest we've seen throughout all of last year. So.

So that was more a commentary on the selling environment is improving a little bit.

I think as you talk about EBITDA margins.

I purposely made it clear that we will see quarter to quarter volatility.

That is a big function of revenue mix during a quarter and.

Revenue mix was was favorable in Q1, and we had a good boost in our EBITDA margins.

We also had a.

Nice flat curve to some of our SG&A in that in the segment.

I'm going to have to see a little bit of a lift there over the next couple of quarters. So I think your observation is right that quarter was a great quarter. It was at the high end of the range.

I think I don't think were going to see that for each of the next three quarters in this segment.

And so we will see a little bit of a tail off here probably in that segment, while the other segment grows.

And so.

All my comments around segment margins were meant to just be clear that these are annual goals and we will see some quarter to quarter volatility.

Okay. Thank you for clarifying that and maybe one maybe a mundane question here.

You have the two segments and you have an unallocated segment, I guess, which.

My understanding was EPS Si.

Which is now gone I guess is there some sort of run off here or is there a sort of this is going to be.

How do we sort of work that into our models on that yes.

It was more it was.

A little more it was a little more than EPS side down.

What you see this quarter is not going to very much on what the reason we needed as we have some transfer pricing we do between the two segments.

And obviously, we have to eliminate that revenue when we do consolidations. We also have.

A couple of.

What I call public company costs that we don't allocate out to the business segments and keep the.

So there's a little bit of a pool of company cost and then there's just the necessary.

The elimination that has to happen for intercompany revenue.

So what you see in Q1 is.

As a pretty steady level I think you could use that in any modeling that you wanted to.

Super Thanks, so much good day.

Our next question comes from the line of George Hill with Deutsche Bank. Please proceed with your question.

Yes.

Yeah, Hi, Mark.

George Thanks for taking the questions.

So we can talk about the significant improvement in cost structure and service that line this quarter.

Going forward to achieve the long term margin goal do you need to get more aggressive on the coffee payment side or is it mostly going to be.

Driven by revenue expansion.

Well, we've kind of covered a lot of that question in the last few questions.

I think as as the just the previous question noted were this quarters segment margin.

For our core clinical is.

Net.

<unk>.

Thats ever been its at the high end of the guidance range, we said, but im tempering that by saying.

The goals are annual goals and.

We're going to see some quarter to quarter volatility.

But largely as we talked about earlier. This is one of I think continued cost focus no step function changes, but cost focus along with some.

Modest replacement market wins as well as some new pockets of demand opportunity, that's what's going to drive the core clinical and financial solutions tour on their continued journey upwards.

The data analytics business, we're going to see a lot more of top line lift will really be the catalyst for its margins to improve.

Great, Thanks, and maybe a quick one.

Improvement in client attrition last quarter can you provide some color on the client attrition.

Our business in Q1, and the churn trends you expect to see for the rest of day, yes. Thank you.

Everything about our assumptions and beliefs around attrition are reflected in the guidance we've given.

And we pointed out client attrition last year, because we had a particular bolus that we.

We knew was going to hit us and we knew that.

We share that upfront so that everybody can understand some of the year over year comparisons.

If we ever got to a point, where we had such a bolus again.

We will provide the same guidance, but that's not that was not what we needed to do for 2021 and again our outflows.

Reflect everything that we see happening on that front.

This concludes our Q&A I'd like to hand, it back to Mr. Black for closing remarks.

Thanks, everybody for spending time with US today 2020 was a big year for Us where we did a lot of reset as we talked about at the Jpmorgan conference and we reset our cost structure reset a bunch of different things inside the company our portfolio as well as we got a lot of focus on.

Unlocking some value of some assets in the company.

Think about where we are today.

Throughout the first quarter, we are selling a lot of resiliency with regard to not only the people that work here, but also our clients having now experienced some 14 months of a pandemic and theres a lot of clients have been on the front end of that of this that we respect everything that they've done. We're also see are starting to see a return to normalcy with regard to patient.

<unk> and with regards to clean the United States to the revenues that our clients are seeing and expecting net.

The result of their day to day operations, which gives us the confidence to reaffirm the guidance that we gave you today. We appreciate your time and your interest in Allscripts. Thank you very much.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.

Okay.

[music].

[music].

Greetings and welcome to Allscripts first quarter 2021 earnings call.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Stefan Schulz gained vice President of Investor Relations. Thank you you may begin.

Thank you very much good afternoon, and welcome to the Allscripts first quarter 2021 conference call. Our speakers today are Paul Black Allscripts, Chief Executive Officer, and Rick Poulton, our President and Chief Financial Officer.

We'll be making a number of forward looking statements during the presentation and the Q&A part of the call. These statements are based on current expectations and involve a number of risks and uncertainties that can cause our actual results to vary materially.

We undertake no obligation to revise these forward looking statements in light of new information or future events. Please refer to our earnings release and SEC filings for more information on these risk factors that may affect our results.

Please reference the GAAP and non-GAAP financial statements as well as the non-GAAP tables in our earnings release and the supplemental workbook that are both available on our Investor Relations website.

That I'm going to hand, the call over to Paul Black again.

Thanks, Stephen and thanks, everyone for joining the call. We appreciate your interest in all scripts.

Let me begin by saying that I'm very pleased with our solid first quarter results. These results reflect the hard work and tough decisions. We made last year and continue to make the position the company for long term success.

Looking back a year ago, it's gratifying to see the dramatic transformation Allscripts has made improving our financial performance. We adjusted our priority is to help clients respond to the COVID-19 pandemic can we optimized our balance sheet and solutions portfolio.

Like to once again, thank our associates for their unceasing devotion to our clients and for delivering these results.

While the COVID-19 pandemic.

He has not ended we are becoming more optimistic given the trend line for decreases in COVID-19 infections, North America increases in the percentage of population who have been vaccinated in the efficacy of vaccines impacts on preventing COVID-19 severe outcomes. We also believe the pandemic highlighted the significant value health solutions.

And data brain across the continuum of care.

We are proud of the actions, we took and are taking to lead our clients and positioning them and us to succeed post pandemic.

And then it became known to the medical community Allscripts immediately set up a team to respond to the crisis by ensuring our solutions were updated with the necessary alerts to quickly identify risk populations. We were recognized by reaction data is having outperformed our competitors in the delivery of new functionality and services to support provider.

Organizations throughout the pandemic.

Throughout the early months will continue to assist our clients in their recovery from the crisis during that time, many healthcare organizations saw a reduction in elective procedures and challenges to their financial position. Once again Allscripts was there to help our clients recover they offering full telemedicine solutions workforce management tools and more.

First data to help them make better decisions for the business.

Now as we enter into the recovery phase of the pandemic allscripts equally prepared to help consumers and our clients protect themselves and their organizations from future crises with open access to data and analytics telemedicine and cloud enabled services from the beginning and throughout the pandemic Allscripts has been a trusted.

Partner to our clients.

Let's go to some highlights for the quarter.

The hospital business, we experienced momentum with our <unk> platform of health as we benefit from strategic R&D investments.

We built a patient record across multiple care settings, and revenue cycle or <unk>.

Microsoft partnership leveraged with human centered design driven by our long standing vision of open connected community of health is resonating in the marketplace. During Q1, we welcomed a new all in Sunrise platform help client Mercury, Iowa City. After a highly competitive process Mercury selected Allscripts Sunrise platform of health.

Operating on Microsoft Azure is a core EHR for its community hospitals and clinics.

He was searching for an innovative partner ready for the future of healthcare.

Cloud capable features built on Azure Mercy I would say its commitment to Allscripts is an important validation the vision and R&D investments, we strategically deployed over the past few years.

Single medical digital record with revenue cycle inpatient outpatient delivered through the cloud and connected to the community.

The integrated EHR as a complete ecosystem that Optimizes software as a service model, Microsoft Azure will deliver high availability cyber security disaster recovery and business continuity features.

We look forward to a long term partnership with Mercy.

Drive continuous improvement in patient and financial outcomes with them.

Another validation of our health system strategy, our long term client blessing health system substantially expanded its allscripts relationship.

With Sunrise last thing will be adding two new hospitals, and one large multi group specialty practice to their sunrise platform, including in this expansion Allscripts will also utilize.

<unk> will also use them all.

Allscripts managed services and they extended their agreement through 2000 EBITDA.

In addition, our largest client north line haul is also expanding Inc. Sunrise platform at an additional hospital in their system mechanic Bay Medical Center in long Island. These.

These new wins in Q1 <unk>.

Provided additional underwriting.

Of our health system strategy and Microsoft partnership.

We expect this to provide additional momentum as we compete for new business.

We have also received 30 part third party validation for our solutions in the health system segment. We've been recognized again by Black book. They have number one it's 2021 community health systems vendors report for the fifth consecutive year.

<unk> books survey shows our commitment to providing smaller healthcare organizations with the support cloud technology tools.

That they need.

In our ambulatory business, we continued our momentum from last quarter and were able to sign another six new clients and the independent ambulatory marketplace, our second quarter pipeline remains robust.

And as we benefit from the investments we've made across our ambulatory team our ambulatory platforms.

And breadth and depth of solutions, which is further supported by our number one market share positioning.

Our portfolio of offerings is highly attractive as clients look to consolidate vendors and for complete end to end solution covering consumer clinical financial and revenue cycle outsourcing. Our CMS business continues to gain traction as clients' pivot COVID-19 to the recovery in their patient volumes.

An example is Springfield, one of our largest revenue cycle management services relationships Springfield clinic has grown its Frank in Central Illinois, and as a result of the Springfield Clinic Trust in our revenue.

Cycle management services, we were awarded a large expansion of our existing partnership.

With paradigm, our business is a key piece of our strategy to address the present and future needs of healthcare delivery.

Our industry, leading data analytics platform and bidirectional connectivity providers at the point of care provides a substantial value to life sciences companies Payors and providers, we've made purposeful investments across paradigm to position us for relevance across multiple addressable markets by.

By leveraging our vast and growing electronic health record of ambulatory footprint, along with strong provider relationships paradigm is helping to transform biopharma product development and commercialization.

We are extending pointed care workflows to equivalent include clinical research and our vision for the future to provide a research as a care option for our providers and patients.

Let me highlight a number of areas, where we're seeing progress at Barrett on.

And the very dime payer business, we signed two new clients from the top 15 health plans in the first quarter. We are providing our E chart Courier clinical data exchange solutions to one of these plans and our pulsate analytics for another plant Medicare advantage and AC <unk> lines of business, which includes almost 400000 lives.

Our <unk> study source platform Modernizes clinical research, while extending our EHR systems to include research workflows for instance, identifying eligible study patients efficiently enrolling them in studies and utilizing the healthcare data to assist with our research.

Before I hand, the call over to Rick I'd like to discuss how we are leading corporate social responsibility and the impact our solutions can have on improving health outcomes. We published our first CSR report quarter share some updates on how we are envisioning a role within the.

Healthcare ecosystem.

The pandemic has brought to the forefront the inequities in our healthcare system, We will healthcare, Inc and.

And Allscripts has the power to reduce these in equities and help address social determinants of health.

For more detailed information and electronic health record can provide to a clinician at the point of care to more likely a patient will have a better and positive health outcome.

Our data enables a physician to provide a more precise effective treatment plan for that patient, but to be truly effective that data can't be limited to only previously documented care and treatment information. This is where our data integration plays an important role housing status financial situations education level access to.

<unk> neighborhood crime rates. These are all important factors contributing to overall overall health.

Net capture community data that includes insightful information based on say geographical areas requires strong partnerships with multiple community organizations and local health centers.

Almost come together in an API centric open interoperable health system.

This has been the philosophy of Allscripts for over a decade, we are focused on delivering solutions that help bridge. These gaps we see often in healthcare. This includes data analytics and expert consultation that provide support for at risk patient cohort identification.

Software, enabling the ability to direct patients to care and the service that they can afford through price trends the tools a means of understanding out of pocket costs associated with routine needs such as prescriptions, taking into consideration patients' insurance coverage and out of pocket fees that Ken.

Vary based on where it is filled.

And importantly, more patient engagement strategies that include proactive outreach to encourage telehealth visits today that helps patients understand their eligibility for vaccine distribution.

We believe our vision of open connected community of health position us to.

To help address some of these issues while at the same time provide substantial value for our clients.

To summarize I remain very optimistic about our performance in 2021, and our ability to deliver value to our shareholders associates, our clients and to communities.

Our scale.

R&D investments and building integrated platform solutions with the.

<unk> payer and life Sciences platform, and our partnership with Microsoft and positioned us to deliver relevant and long term value added solutions for our clients across the payer provider.

Provider and life Sciences landscape.

Our improved and sustainable cost structure allows us to drive more earnings bottom line and generate meaningful amounts of free cash flow with that I'll turn it over to Rick to provide more detail.

Our financial position. Thank you.

Okay. Thanks, Paul and thanks, everybody for joining us today.

Just one more reminder, is Stefan indicated additional finance financial details are available in the supplemental financial data workbook posted to our Investor Relations website.

So we were very pleased with our start to 2021 overall bookings and revenue performance were in line with our plan and our continued discipline on our cost structure created significant operating leverage resulting in adjusted EBITDA EPS and free cash flow all coming in above our expectations for the first quarter.

This is the cleanest quarter, our financial reporting that we have had in years and I think the numbers really speak for themselves as they reflect the performance trend that we've now seen for several quarters. So my prepared comments will be shorter than usual.

So with that overview, let me highlight a few items starting with our bookings performance generated $194 million of new bookings in the quarter, which was up 6% year over year and 7% sequentially in what is typically a seasonally weak bookings quarter.

The first quarter result was higher than what we have reported in any quarter of 2020 on a like for like basis.

This reflects the continued modest improvement in the overall sales environment as our clients continue to recover from the pandemic and turn their focus to improving their operations and optimizing their healthcare it environment.

As Paul mentioned by particular strength in our Sunrise franchise with four new hospitals in the quarter and our ambulatory business continued its momentum with six new competitive business wins in the quarter as well.

As Paul discussed around <unk>.

Our business there saw some very good deal flow across our solutions set including provider life science and payer clients.

These partners continue to recognize the unique value proposition, we bring with our differentiated data and analytics platform along with the bidirectional connection to the provider and patient point of care.

Turning to our margin performance in the quarter consolidated non-GAAP gross margin was 43, 1%, which was up 480 basis points year over year.

This improvement reflects the dramatic turnaround in our client services organization over the past year as we right size the cost structure in that business to reflect the current revenue environment as well enhance the productivity of this labor base.

As a result client services margin was 19, 8% in the first quarter, which was up more than 600 basis points on a year over year basis.

That strong gross margin performance, along with our cost discipline around R&D and SG&A costs resulted in a consolidated adjusted EBITDA margin of 18, 3%.

Which was up 860 basis points on a year over year basis.

This reflects $31 million or <unk>, 83% growth in year over year, adjusted EBITDA compared with the first quarter of 2020.

As a result of our strong margin performance along with the benefit from a lower share count we reported first quarter GAAP diluted EPS of <unk> 19, a share which is up from two cents a share that.

First quarter of 2020.

It is worth noting that we did not recorded restructuring charges in the first quarter of 2021.

And so this along with our lower R&D capitalization rate is improving our overall quality of earnings and we expect this trend to continue to help drive our free cash flow conversion.

During the quarter, we generated $56 million of cash flow from continuing operations and $35 million of free cash flow. This.

This is a dramatic improvement from the first quarter of 2020, and a great start toward our full year goal for 2021.

Subsequent to the end of the first quarter, we settled our income tax receivable as well as all remaining tax obligations related to the divestiture of care port.

So to make sure everybody understands our cash position if we perform these transactions back to our March 31 balance sheet, our overall cash position exceeds the principal balance on our debt obligations by approximately $60 million.

I will finish today by commenting on our previous instead, we have provided.

We are reaffirming the full year outlook for revenue adjusted EBITDA and free cash flow that we provided at the end of February on our year end earnings call.

And we're doing so because trends we saw during the first quarter remained stable.

Also given the divestiture of care part I'd like to provide an update on the long term segment margin outlook that we originally provided last year.

Our long term core clinical and financial solutions segment, adjusted EBITDA margin outlook remains unchanged at a range of 18% to 20%.

And our long term data analytics and care coordination segment adjusted EBITDA margin outlook is updated to a range of 23% to 25% to reflect the divestiture of care part.

At the business segment level seasonality effects and revenue mix will drive quarter to quarter volatility. So these targets are intended as full year goals that we will continue to drive towards.

To illustrate this point, although the first quarter adjusted EBITDA margin in data analytics and care coordination segment was well below the targeted range, we expect to see high single digit to low double to low double digit year over year revenue growth in this segment for the balance of the year and this is expected to drive adjusted EBITDA.

<unk> margin performance near the long term range over this same period.

So to wrap up we're very pleased with the execution and results across all facets of the business in the first quarter and we remain optimistic about our outlook for 2021.

That I would like to open up the call for questions.

Thank you, ladies and gentlemen at this time well be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the Q4 participants using speaker equipment. It may be necessary to pick up your handset before.

Pressing that starkey.

Our first question comes from the line of Charles <unk> with Cowen. Please proceed with your question.

Hi, This is James on for Charles.

Obviously virtual care is playing a greater role in care delivery can you talk about.

Allscripts is doing to enable virtual care.

Yeah, we thought we've actually been talking about this for a few quarters now.

We rolled out very quickly last year.

Telehealth capabilities to our clients.

And we've got pretty significant pickup on with our clients on that so thats contributed to our revenue, but also has been a big win for our clients as.

<unk> been able to maintain their relationship with their patients.

Paul went through a lot of other items that we're doing to try to assist patients assistant I should say during the pandemic and help them work remotely with their clients.

But I think telehealth TV is probably at the top of the pyramid.

And also can you talk about your capital deployment priorities given the strong cash position.

Following the divestitures of EPS line care points.

Also how much capacities available.

Available under the current share repurchase program and any plans for additional authorizations in the future.

Yes, So let me pick those two question two part question there.

Our priorities are we want to continue to make.

Smart investments in the business we.

We will do that we've been that we continue to maintain our R&D at a pretty high level.

And we will look to.

Continue to add to our capabilities as we need as we see fit.

But we also I think have been pretty transparent about the fact that we think our.

Shares have been dramatically undervalued and so we have been focused on returning cash to shareholders.

We've.

Detailed out over several quarters now.

Two and or coming to an end next week of the accelerated share repurchase program that we put in place in Q4.

As we do that we will have used up about two thirds of the.

The authorization that we just got in last November, but we still have some remaining authorization close to $100 million of authorization left.

<unk>.

We will continue to monitor our stock price and do that and make incremental decisions from here, but our.

Our plan is to we're quite comfortable no net debt as you heard me say, we in fact had a net cash position right now so we have tremendous capacity to continue to.

Returning cash to shareholders.

Okay. Thank you.

Our next question comes from the line of Michael Cherny with Bank of America. Please proceed with your question.

Afternoon, and really nice job across the board on the quarter congratulations.

Mark again.

A little bit.

It's been I believe a please correct me on timing, but.

Two a year since you first engaged with the consulting firm to start working on your operational dynamics, it's showing up very nicely in the margins.

Can you just give us a sense of what comes next from here, where you are focused on the next leg of opportunity and how much of what we should expect ongoing margin expansion will be further business improvement.

Some operational dynamics versus some of the mix components that come with the growth in particular on the data analytics side.

Yes.

So thanks, Mike for the comments on the question.

I guess you have a few questions within that.

First off yes. So it was about a year ago that we brought in some assistance from the outside to help us.

Very rapidly.

Scale, our cost structure back to where it belongs.

And I'm happy with the results of that.

We published long term margin targets.

Early in that process and we haven't.

Forget about those we haven't deviated from them other than the fact that of course with with some of the portfolio changes we needed of course refresh the margin for that and that's what I've done with this call.

But we're still hold ourselves to a high standard.

And our core clinical and financial solutions segment, we will continue to really focus on efficiency on the cost side.

But also look for opportunities to grow and so.

We all know it's not a high growth market, but there are pockets to grow into and there is still a replacement market that.

We believe will be a net winner in.

So some of the examples Paul went through on the.

The in patient side with our Sunrise platform.

And as I said, we continue to log orders in our ambulatory side.

It makes us feel good.

Have the right solutions.

Very competitive as that replacement market comes up so it'll be a focus on cost, but also picking off some.

Placement wins as well and then of course, there's use cases that continue to evolve with that client base too and.

Revenue cycle services is a big area in particular in the outpatient space.

Nice lift there from our client base and Thats, providing some good growth for us.

The first question today about telehealth and some of the remote patient.

Tools that our clients are looking for it gives us an opportunity to.

Provide solutions there. So it's a combination of all of that will help for the core clinical group continue its march towards its long term goals, but.

<unk> started in your question, we've made significant improvement already in.

We will continue to drive a drumbeat of change, but we've made a lot of progress and I think we are.

We're not going to see step function changes here, we're just going to see continuous improvement.

On the data analytics side.

As I said, we're expecting nice growth for the back half of the year. The last next three quarters of the year I should say.

And that's going to do a lot for margins. So that's.

We're going to be smart about our costs, there, but scenario that ultimately we will be investing in to support growth, but we will get some nice operating leverage off that growth.

So let me pause there Mark I don't know if I got all your questions or if you are still left.

You did Rick I ranted products, along with the needed. So I'll ask one more separate question thats much more quick and direct.

Given where verra <unk> business growth profile, how do you see it shaking out in the various different competitive dynamics of the market since it does seem to be an area, where other companies both traditional competitors and others are trying to expand as well.

Yes.

Imitation is the sincerest form of flattery right. So we see that from other folks. The good news is we're not just talking about it we have a real platform.

Real client relationships over multiple years.

And a real distribution network there so I feel good about our competitive positioning I also think we have a unique.

Set of apps data assets.

That are not only asset we own but we also have some of our competitors have asked us to help them with their assets. So it's a unique asset base that.

It is.

Extremely difficult if not impossible to replicate.

So we feel good about the position.

And I think as I said as we look out for the balance of this year, we're expecting to see the growth engine start to yield some nice results there so.

So things feel good on that side of this.

Perfect, Thanks, Rick and again congratulations.

Thanks, Mike.

Our next question comes from the line of Sean Dodge with RBC capital markets. Please proceed with your question.

Thanks good.

Good afternoon.

Rick your comments earlier on opportunities in the replacement market.

I'd imagine the pandemic, probably sidelined a lot of those decision processes.

<unk> seen any change in activity levels, there now I guess.

Anything either just the fact that being kind of hopefully post pandemic now or is there anything kind of regulatory or otherwise.

That are kind of percolating here and helping them maybe catalyze some some activity.

Yes, let me start and then I'm going to ask Paul to feed because Paul spent a lot more time in front of the clients and I do but.

The.

I would remind you that we actually had some nice wins last year on our ambulatory side, so even though with the depth of the pandemic. We did see a lot of replacement market activity on the ambulatory side last year and.

We're very happy with how we how we fared there.

But I think on the inpatient side it was a pretty slow year in 2020, so almost by definition.

2021 will be a better year than 2020 with Inc. In terms of opportunities.

And I think that's especially true internationally.

Those tend to be more public sector deals and I think public sector, all but shut down last year for obvious reasons and we're starting to see some momentum creep back into those those discussions let me.

Ask Paul to add to that yes, there is a real our pipeline on the hospital side is as good as it's been for new business for the last three or four years. So there's a lot of activity interestingly and thats because of the team that we have that's been going after it but also <unk>.

Getting better at being in front of the opportunities that exist with consultants and just buy.

If you will right and the payments very hard.

As Rick said, we had a very good Q1, and we have other things that are teed up they're all competitive so sometimes those results are more lumpy.

Net of the outside the United States. There are some pretty good sized things that last year, there was a big diversion at the day.

The Ministry of health level to take care of the population is much more so than it was to go replace electronic medical records and so that did in fact slow down, but I wouldn't say that the U S slowdown as Rick also said accurate the new business in the ambulatory side of the marketplace.

Very robust last year, and we had a pretty good Q1.

Existing clients are also expanding so theres a number of organizations that are raising their hand, and asking to be acquired and thats how were getting some of those.

But we talked about today, but also some of the other relationships, we had last year and expand into additional hospitals that they have acquired an additional physician clinics that they bought and that always bodes well for us when that happens when our clients buy more.

That's those are the other AEP will highlights to that.

This is different today I talked on it a bit is that we have a breadth and depth in our suite of offerings that allow somebody to come in and do a bit more of a one stop shop.

<unk> not only on inpatient outpatient revenue cycle, but also for revenue cycle outsourcing services for total up.

Outsourcing services and for some of the consulting fees that are usually reserved for perhaps a.

Organization that may have.

The history, and specifically only doing that we're seeing clients come to us for value added services and for many of the things that they have historically outsourced to somebody like us and we're seeing that as well some of that I think does from the pandemic, where those organizations actually sent those people home.

And like a lot of the people that were working with you all in the back office and there are noticing that that freed up space inside the hospital and they are actually interested in perhaps looking at somebody else to take that function over for them given that they've already if you will moved it out of the falloff in the hospital are four wall for the clinic. So that's another.

Interesting dynamic that's come out of the pandemic that we will certainly.

Try to work on aggressively with our clients.

Okay.

That's very helpful. Thanks, and then maybe on the rollout of the new Sunrise platform. How long do you expect it will take to get the majority of your client base upgraded.

Transitioned over and then.

The choice they have to migrate to the Microsoft.

Hosting can you walk through maybe how that changes the cost of economics for them and as Ed.

A decision you expect most of that migrate will make.

I think that as you bifurcate the market and into new business versus those that are already clients of ours that are already hosted in one of our data centers versus the third option of people that are on premise like the on premise folks are going to be very interested in this especially when they think about the things I talked about earlier around fiber.

<unk> continuous operations and around some of the capabilities that come native in the cloud.

<unk>.

Texting.

Voice recognition the ambient technologies that you read about Microsoft doing not only with their acquisition of nuance, but even before that the capabilities that come native inside the cloud are pretty interesting to people, especially as folks are trying to get to more of a keyboard less experience for the physicians when you think about the.

A broader topic of physician fatigue. So those are all things that help drive us towards that but when we do new business or new business almost exclusively cloud base.

So that's number one but people that are in <unk>.

On Prem are going to move over a period of time I'd say next.

18 to 24 months. Some people are already moving and then other folks that are already hosted depending upon what their contract looks like with us will.

Host over the course of the next I would say three to five years.

Okay, great. Thanks again.

You bet. Thanks for the question Sean.

Our next question comes from the line of Jeff Garro with Piper Sandler. Please proceed with your question.

Yeah. Good afternoon, thanks for taking the questions and congrats on the quarter I wanted to ask about bookings.

Sean's question with a nice. Thank you I was hoping that you could comment on the mix of bookings between recurring revenue and non recurring in the quarter and particularly in the light of what sounded like a very good some nice quarter.

Knowing how that product is evolving with the Microsoft relationship that you just referenced.

Well.

Let me let me start by its we don't typically report as you know bookings on a recurring versus nonrecurring basis, we don't really.

Categorize it that way, but I guess, what I can say is this there is nothing about the quarter that I think fundamentally changes the mix we have today. So we're 80 ish percent.

Recurring 20% non recurring.

Non recurring again as per our primarily made up of.

Project E services software licenses to the extent some people still buy them on a on a.

Perpetual license upfront basis as opposed to through a subscription.

Sometimes we have some hardware sales, but those tend to be the things that are the nonrecurring aspects and there is nothing about the composition of first quarter that.

In my view fundamentally changes that okay. So so thats.

On that part I think.

The contribution to get all the way to the full 494 million net we reported of bookings.

Yes, Sunrise had a good quarter the new deal with Mercy was was a nice deal.

As was both the blessing and the.

North well hospital extensions.

But we have the other big areas of the company. So the ambulatory franchise and also Barrett on.

Were also significant contributors to the overall bookings mix. So there was nothing unusually skewed in my view about bookings performance for first quarter on any on any area of the company.

Thank you that's helpful. I mean that May not answer your question, Jeff, but I, just let's start with that backdrop and then two what what else you want to ask us.

Yes.

Very helpful color wasn't expecting specific percentages, but maybe a little bit more commentary on.

What are the Sunrise deal looks like today in terms of recurring versus nonrecurring and if the Microsoft relationship changes, how something like a mercy deal hit.

Bookings and then translates to the P&L.

So a new a new logo relationship Mercy is.

Is typically structure it as either a seven to 10 year deal.

Most of the structure of the deal everything is bundled in.

Kind of a single subscription price so that is.

Largely there is a little bit of initial implementation services. So there was some non recurring revenue that goes with it but they are largely.

They actually probably look a lot like what our long term averages now with 80 20, when you break it all down so nothing.

Nothing unusual about that deal and nothing.

It really changes what we look like today because of that deal.

It's structured all as recurring revenue once you get past the initial implementation fees.

The Doe the deals where it's additional hospital with a with a client that's already in place.

That could be different based on how our relationship is with clients. So some clients are long term clients, who started on perpetual licenses.

And when they need a few more licenses for our new facility.

That tends to be the St. Paul the same structure of the deal that they already have others.

Others started as a subscription model and they will just look to add on top of that subscription so.

It tends to follow what the client was like Jeff and so nothing.

And that generalization, it's hard to say, it's very client specific what the structure of the deal would look like.

Yeah.

Okay got it very helpful. One last one from me I wanted to ask about the ambulatory market and the comments around consolidated vendors just curious what types of organizations are pursuing consolidation of vendors now and how your portfolio that segments for different parts of the market might help you address those consolidation efforts.

I think some of the consolidation that I was referring to things that we brought to them specifically during the pandemic. We are seeing that their clinic business are going down they were seeing and perhaps they were unable to see patients a full year ago. They actually had some financial pressures and so they were talking to us about some of their wells, we've talked to them about.

A number of different relationships that they had.

It'd be more cost effective and it turned out to be more cost effective to put more of those relationships into one suppliers bucket. If you will and that was us.

So as we have a broad breadth and depth of offerings. We would look at their accounts payable and work with them to try to figure out if we could consolidate many more pieces of business that we didn't currently has.

A larger if you will percentage of their spend coming to us versus in some cases 20 or 30 other players.

And that was a way for them to become more efficient and achieve their goal which is to overall reduce their spare.

Spend a bit.

And that benefited us because that that percentage will continue to spend actually increased our share.

Perfect. Thanks again.

You bet.

Thanks for the question.

Our next question comes from the line of Eric Percher with Nephron Research. Please proceed with your question.

Thank you.

Rick I appreciate what you termed it a clean quarter two quick clarifying questions and then one for Paul.

A clarification, so cap software at $18 $1 million is that about right size relative to percentage of revenue or perhaps let Paul and then I want to make sure I understood that comment, which I think was $60 million net cash without stating what the cash or debt level was.

So just wanted to clarify that.

Yeah. Thanks, Eric.

So on the second question, Yes, I mean that was the.

In an effort to make sure everybody understood the cash position.

It's a net of $60 million, if you pro forma the tax settlement that we did in early April.

And then you just compare that as you can as you know.

The convertible bonds that we have outstanding don't show up on our balance sheet at face value.

They accrete upward over time, so we cut through all that noise for anybody who is a little less familiar with it I want to make sure everybody understood.

If you just compare net cash to face value of the bonds.

We're in a net 60 million cash position.

Makes sense.

And yes and cap software okay.

So.

You were a little hard to hear so I'm not sure. Let me just make sure I understand what your question was $18. One was the amount of spend this quarter that we capitalized right. So.

The growth of $67 million.

Right.

And that's why I think I lost you a little bit on the on what's your question was but as a.

So you may have to repeat it but the capitalization rate.

Thats why we are coming.

Okay. So the cap rate.

I have been talking about that for a few quarters, we've been trying to drive the capitalization rate down and not continue to just build up cost on the balance sheet. So for three quarters now we've been amortizing more to income and we've been capitalizing so.

Good that the quality of the earnings continues to get better and better.

That that should that trend should continue.

The rate.

We were at 30% in Q3 dropped to 23% in Q4 went to 27 this quarter.

That's that's around the edges or youre going to see a little bit of movement on the percent just because.

The accounting rules intersecting with what our gross spend this during the quarter, so youll get a little bit of Bubbling, yet, but I definitely expect that number to sit in the twenty's and not go back up to where we had gotten too which was almost like the mid <unk>.

Okay.

Got a room for improvement.

Then Paul.

On the topic of Microsoft sales.

Like they are everywhere.

I think beyond nuance.

Expenses last week.

In alignment with health systems, and even Biopharma manufacturers. When you see that expansion does it appear to you like to us that theyre expanding faster or broader than maybe we expected a year or two ago and do you think there are opportunities that extend beyond some of the core that we've talked about.

And as we think about paradigm.

There are opportunities that you've been excited about relative to that day.

The fee.

Apparently the reality of what's going on with Microsoft My opinion are that they are absolutely getting into healthcare and a very big way. They will continue to be an enterprise software player. They will continue to have if you will an operating system that resides inside of their cloud because I think is an interesting to think between them and perhaps some of the other people that are out there in the marketplace.

Specifically when you go to the cloud youre going to pick up all the work.

That they have with the operating system.

We have had over time, but also layer and capabilities that people are going to be extraordinarily interested to go to the cloud things around AI things around Boyd things around ambient things around the fiber or is it comes with that but those things are pretty interesting to people because of the rate at which you can put them into production.

So that is a big piece, Eric as to why I think we're going to get a lot of traction as a result of that and Microsoft as with many other people have historically noted.

Healthcare is a very large marketplace. Some of the things that they are doing in this marketplace. My expectation is that they will also leverage into some of the other industries that they serve and some of the other very large organizations. They work with around the globe. They are targeting a lot of large healthcare enterprises and theyre targeting larger a lot.

A lot of large if you will ministries of health in different countries around the world and this is not short on them the ability not only to have a azure relationship with those organizations, but also then to drive additional applications and capabilities into those organizations in a rapid manner.

So my <unk>.

Alignment of our alignment with them. We think is very strategic they have an incredible great to work with the engineers, they're supplying us.

Well the intellectual capital of those people of how we can get to where we need to get to.

Point in time, it's helpful. And then I also just working with and going hand in hand with Microsoft as we are.

Calling on some of these large institutions. They are all interested in listening to what a joint relationship might look like as they think about additional capabilities that fit either on top of or in place of existing.

Historically, if you will electronic health only.

Opportunities.

That's interesting thank you.

You bet.

Our net didn't really get your hands a lot.

I'm sorry.

Eric on your.

<unk>.

They've had a lot of discussions with them around what Microsoft around that as well theyre very interested in the closed loop nature that we offer.

What we can do with pharma and payers and.

They continue to be interested in that.

Set of capabilities that we have they also see it as unique.

Payer relationships.

Pharma relationships and we have provider relationships not everybody else has all three of those.

Our next question comes from the line of Stephanie Davis with test VB Leerink. Please proceed with your question.

Hey, guys I Echo my congrats and thanks for making time for questions. It sounds like you have been very busy this quarter.

Thanks, Mark to here.

Thanks.

You hear more about your longer term paradigm strategy around the pharma digital AD spend volume.

You see any pockets of opportunity that leverage aerodyne lifesciences relationships with your clinician facing real estate and your core EHR or is that something that you are only using four and the practice fusion side of the business.

So as you know Stephanie that's how practice fusion started right.

And pharma like ads and.

Sure.

Went through a learning curve on what was.

Okay to do and kind of helpful. As part of clinical decision support and what was not okay to do.

<unk>.

Things that might be viewed as.

Fostering more prescription activity alright, so they've kind of learned that lesson along the way. So I think we're really good at that we bought it.

Because of the pure cloud nature of practice fusion, it's much easier to deliver those opportunities.

Two a wide client base than it is with some of the client server technology of some of our other EHR platforms, but.

The net.

The longer term answer your question is absolutely I mean, thats, what theres opportunities that was quite a big part of the acquisition case, when we bought <unk> season, as we knew that they were doing some things that we felt we had a larger base to leverage that across and we will continue to pursue that.

Are there any opportunities in sandy adjacencies around the EHR, such as our patient portal or may be even having some sort of embedded telemedicine solutions.

And that component there.

Humor, and clinician day thing.

Yes.

Let me say it this way I'd say it as an add.

Maybe as a little too narrow or are there opportunities to create new revenue streams off of.

The people.

Users of our.

Personal health records.

And are there opportunities to bring information to providers.

And reduce some of the friction that they have within are interacting with the payors. The answer is absolutely I mean, thats really what <unk> is doing for a living and they spin up new.

Product streams and new solutions streams.

Every quarter.

So.

It's a place where we innovate on new solutions.

There are.

Theres a pretty good web of rulebook. She got we've your way through when we do that so we <unk>.

Intersect the commercial opportunities with a pretty strong view from our end.

Review from our compliance group to make sure we're staying within the rules, but yes, the opportunity is very real.

And then just one quick one from me Microsoft has been known to sometimes one way exclusivity on these partnerships is there anything like that in the dealer.

Fully clean now.

Got it correctly.

Awesome Awesome day here. Thank you guys.

Thanks Steven.

Our next question comes from the line of Donald Hooker with Keybanc Keybanc capital markets. Please proceed with your question.

Hey, great good afternoon.

Just want to make sure a lot of questions have been asked here of course, but just for my edification here just so I understand so you guys obviously did.

When I think about the progress you've made with operating margins or EBITDA margins in the core clinical and financial solutions segment. I mean, you just to be clear you are at the top of <unk>.

Your long term range there.

From what I understand from your comments.

This was a seasonally weak quarter and it sounds like things might be a little bit better next quarter is there a reason why margins might recede from here.

Well I think I think let's make sure we don't mix and match some of the comments Don.

Sure.

The seasonal weakness is.

The comment I made with what is typically the bookings activity in the first quarter.

It is it just tends to be a softer quarter.

We are and Thats why we were very happy with where we came out for the for the quarter not only did we have a good sequential lift in bookings.

It's the highest we've seen throughout all of last year. So so that was more a commentary on the selling environment is improving a little bit.

I think as you talk about EBITDA margins.

I purposely made it clear that we will see quarter to quarter volatility.

That is a big function of revenue mix during a quarter.

Revenue mix was was favorable in Q1, and we had a good boost in our EBITDA margins.

We also had.

A nice flat curve to some of our SG&A in that segment.

I'm going to see a little bit of a lift there over the next couple of quarters. So.

Yes. Your observation is right the quarter was a great quarter. It was at the high end of the range.

I think I don't think we're going to see that for each of the next three quarters in this segment.

And so we will see a little bit of a tail off here probably in that segment, while the other segment grows.

And so all my comments around segment margins were meant to just be clear that these are annual goals and we will see some quarter to quarter volatility.

Okay. Thank you for clarifying that and maybe one maybe a mundane question here.

You have the two segments and you have an unallocated segment, I guess, which.

My understanding was EPS Si.

<unk>.

Which is now gone I guess is there some sort of run off here or is there a sort of this is going to be.

Or do we sort of work that into our models on that yes.

<unk>.

It was more it was a.

It was a little more than EPS side down.

What you see this quarter is not going to very much on what the reason we needed as we have some transfer pricing we do between the two segments and obviously, we have to eliminate that revenue when we do consolidations.

We also have.

A couple of.

What I call a public company costs that we don't allocate out to the business segments and keep the.

So there's a little bit of a pool of company cost and then there's just the unnecessary.

The elimination that has to happen for intercompany revenue.

So what you see in Q1 is.

As a pretty steady level I think you could use that in any modeling that you wanted to.

Thanks, so much good day.

Our next question comes from the line of George Hill with Deutsche Bank. Please proceed with your question.

Yeah, Hi, Mark.

George Thanks for taking the questions.

So we can talk about the significant improvement in cost structure and service that line this quarter.

Forward to achieve the long term margin goal do you need to get more aggressive on the cost containment side or is it mostly going to be driven by revenue expansion.

Well, we've kind of covered a lot of that question in the last few questions.

I think as as the just the previous question noted were this quarters segment margin.

For our core clinical is at.

Best it's ever been at the high end of the guidance range, we said, but im tempering that by saying.

The goals are annual goals and I think we're going to see some quarter to quarter volatility.

But largely as we talked about earlier. This is one of I think continued cost focus no step function changes, but cost focus along with some.

Some modest replacement market wins as well as some new pockets of demand opportunity, that's what's going to drive the core clinical and financial solutions tour on their continued journey upwards.

The data analytics business, we're going to see a lot more of top line lift will really be the catalyst for its margins to improve.

Great, Thanks, and maybe a quick one.

Inc.

Many client attrition last quarter can you provide some color on the client attrition in the quarter.

In Q1, and the churn trend do you expect to see for the rest of the year. Thank you.

Everything about our assumptions and beliefs around attrition are reflected in the guidance we've given.

And we pointed out client attrition last year, because we had a particular bolus that.

We knew was going to hit us and we knew that.

We share that upfront so that everybody can understand some of the year over year comparisons.

If we ever got to a point, where we had such a bolus again.

We will provide the same guidance, but that's not that was not what we needed to do for 2021 and again our outflows.

Reflect everything that we see happening on that front.

This concludes our Q&A I'd like to hand, it back to Mr. Black for closing remarks.

Thanks, everybody for spending time with US today 2020 was a big year for Us where we did a lot of reset as we talked about at the Jpmorgan conference and we reset our cost structure reset a bunch of different things inside the company our portfolio as well as we got a lot of focus on.

Unlocking some value of some assets in the company.

So I think about where we are today throughout the first quarter, we are selling a lot of resiliency with regard to not only the people that work here, but also our clients having now experienced some 14 months of a pandemic and Theres a lot of clients had been on the front end of that of this that we respect everything that they've done. We're also see are starting to see a return.

Turn to normalcy with regard to patient volumes and with regards to clean the United States to the revenues that our clients are seeing and expecting.

As a result of their day to day operations, which gives us the confidence to reaffirm the guidance that we gave each day.

We appreciate your time and your interest in Allscripts. Thank you very much.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.