Q1 2021 Soc Telemed Inc Earnings Call
Good afternoon, and welcome to U S O C telematics first quarter 2021 earnings conference call.
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Leading today's call are John Calix, Chief Executive Officer, and Chris Net Chief Financial Officer.
Please note that the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance details on the relationship between the non-GAAP measures to the most comparable GAAP measure and reconciliation thereof can be found on the press release that is posted on the Investor Relations page of the company's website.
Also please note that certain statements made during today's call will be forward looking statements as defined by the private Securities Litigation Reform Act of 1995, such forward looking statements are subject to risks uncertainties and other factors that could cause certain.
Cause the actual results for the sea telematics to differ materially from those expressed or implied in this call.
For additional information please refer to the cautionary statements in the press release and filings with the SEC all of which are available on the Investor Relations page of the company's website with that I'd like to turn the call over to the SFC Telematics CEO John Capex. Please go ahead.
Thank you operator and welcome everyone on the call before we get into the results I'd like to provide a reminder, I said the space of which we play on why the differentiation is so important as the leading and largest dedicated acute care Thomas from provider, we operate in a very different space, the nose, who primarily focus on lower acuity.
Patient initiated consumer telemedicine.
With that comes with challenges and the opportunities actually tied to managing complex workflows.
The level of expertise and experience to provide the highest quality care possible.
A recent example, where the acute care and direct to consumer spaces differentiate came from Q1 telehealth patient usage.
As reported by Fair Health Telehealth usage, among individuals with private insurance fell 16% month over month. The first the clients for September.
Conversely, as we operate and of higher acuity space, where the need for patient care delivered in hospitals of the stable. We actually saw a significant increase in patient consult volume in Q1 across multiple service lines led by psychiatry, which is what we will cover in more detail here as we move forward. It's just one example.
Of how the acute care Com medicine space differs from telemedicine at large and what.
Continue to focus on the space moving forward.
So we had a great start to the year and I'm pleased to be here today to provide an update to the first quarter.
Revenue came in at $14 $8 million inclusive of five days of axis positions contribution. This is consistent with prior year Q1, 'twenty 'twenty result.
And as a reminder, given the timing of the COVID-19 pandemic. There are simply less impact on Q1, 2020 patient volume utilization as compared to Q1 2021.
Therefore, we're pleased with the results given that environment, our bookings, which I'll elaborate a little bit more of later here were $8 5 million for the combined company ahead of plan for the quarter.
On the call today, I'm going to share more detail on our recent acquisition of Abaxis positions high level results in additional industry trends that we observed in Q1 all of them.
Also share more information on the investments, we're making to accelerate growth and set us up for long term success exciting additions to our board and then I'll close my comments, providing an update on recognition we received around quality of innovation.
It's only been a few weeks since our acquisition of access positions. So I wanted to start by spending some time today recap of exactly why this business combination was so important to our ability to meet the needs of the acute care marketplace and what it means for progress through 2021 and beyond as we've communicated previously a key pillar of growth for Soc.
Tom It is accretive M&A activity.
I've heard too many of my conversations with hospital executives across the country. The strong desire to work with the single established acute care Thomas on partner as such when considering potential M&A targets. We strategically sought out of a company that would broaden our offerings from a number of critical specialty standpoint, the complement our current capabilities and.
Further enable us to leverage our come out of Q platform.
Ask physicians brought seven new incremental service line.
And 10 years of acute care telemedicine experience and.
And as we shared the genetic thread for a commitment to addressing and of qualities and access to quality care. It was simply a great fit.
The combination with access positions provide the three things all of which I will explain on during this call first the scale as they bring an established physician network of over 600 and programs and over 175 hospitals second meaningful growth opportunity as there is almost no site overlap both in terms of existing customer.
And prospects for.
Finally brings diversification as access positions started in smaller hospitals focussed on the inpatient space, whereas our start with focus on emergency based acute care and larger hospitals that diversification extends the service lines. The complement <unk> Soc she's legacy offerings, providing access to several new specialties include.
The cardiology infectious disease maternal fetal medicine, nephrology and others.
The combination has expanded our estimate of total addressable market from $2 8 billion to nearly $7 billion as previously shared when you look at the number of combined facilities. We support the acquisition has made us over three times larger than the next closest dedicated the acute care of telemedicine provider, bringing scale expertise.
And highly secure technology as a single solution provider to the market. The scale ultimately enables us the partner delivering network integrity.
Which is a health system of hospitals ability to keep patients within the defined network of providers.
Now from clinicians across the 11th service lines are believed to serve as an extension of the hospitals provider network for our clinical services or as an enabler to their provider network through telematic Q platform ensures patients can stay within the network to receive care.
And the Deschanel benefit of that scale come through working with our large customer base on her time on our Q platform, which enables the SLC to deliver significant value back to our customers through benchmarking and advanced analytics to optimize clinical and operational workflows in a time when hospitals are managing multiple success metrics.
They are looking for embedded partners, who provide valuable reporting analytics and insights, which we do.
Now to provide some additional color on why this is such a good fit for our organization. We should start with the $2 7 billion dollar of cross selling opportunity our newly expanded service lines to our current combined customer base.
Access physicians focus has been on establishing new hospital relationships that drive growth with limited resources for cross selling and account management for existing customers and that's really consistent with a lot of lot of high growth companies. This is an area, where <unk> has proactively invested in and we will continue to do so and one more week.
The real momentum expanding from 1.7 service lines.
In 2019 to $1 nine service lines per site in 2020.
Of that experience and investment will play significant role on our success.
Finally, we're confident in our ability to consolidate on our proven secure and flexible come on IQ platform that will help better fracs orange clinician time to drive longer term margin expansion.
Together, we're nearly a thousand sites of care across the nation. It only overlap in six existing facilities that ensures that our ability to deliver additional value to better address and equities in access of care is only strengthened together.
Our combination with access positions not only increased our national footprint.
Expanded our clinical service lines and significantly grew our provider of depth and breadth, but it also accelerated our expansion of the hospitals beyond the emergency Department.
On an organization that started in the inpatient space access physicians business, so less impact from COVID-19 as compare the SLC.
Experienced in terms of utilization.
And as you'll see historically, what's on the organization with strength in service lines tied more closely the patients coming through the emergency Department.
This diversification and expansion across the hospitals continuum of needs will be a key factor on our ability to drive growth irrespective of the macro environment and any related volatility of utilization across departments of the specialties.
In summary, given the feedback we've received from the market and opportunities created by access positions acquisition. We believe our combined organization is well positioned to accelerate growth in the coming years.
I'd like to pivot and discuss some industry trends, we observed in the first quarter.
As we had anticipated we've seen increased utilization of our psychiatric service line.
It's really fitting that here in may of mental health awareness month.
We're talking about what is becoming a concerning but expected rise in behavioral health related volume tied to the pandemic.
Volume dropped dramatically in this particular area in hospitals during the height of the pandemic. So we knew was only a matter of time until those patients will be coming back into the hospitals.
The supported by research conducted by the CDC and other agencies the impact of COVID-19 pandemic on behavioral health was significant and.
And we saw the in patient volume in the emergency Department in late Q1.
And that has continued into Q2.
Utilization of our neurology off from is also picking up those volume increase of generally in line with our expectations.
As of Vaccinations increase continued patient volume increases will act as a tailwind for our business.
While we are seeing the upticks as a sign of normalization of hospital volumes were still on the early stages of COVID-19 of recovery and like many others in the space, we're taking the conservative approach to how we see this playing out over the remainder of 2021 <unk>.
Longer term the.
Underlying model is built on the idea that there will be continued to be a mismatch between supply and demand.
As volumes are unpredictable, even more on predictable now hospitals look for partners like us to be able to scale and meet those unpredictable of acute care volume shifts via telemedicine. This need will only be exacerbated by future volume changes really in either direction.
As previously mentioned pieces of coming back to the hospital for care of that can only be delivered in the hospital the.
The acute care of telemedicine space is primarily focused on delivering care to patients who can't receive it at home or in an inpatient setting at least not for the initial cancelled.
Why the Lockdowns tied to the pandemic kept people in their homes ultimately.
As we're seeing in psychiatry, the acute care nature of their issue is we'll continue to drive and return patients back into the hospitals, which is where we provide our services and for that reason we are optimistic about the long term growth of the space and our position within it.
All of the speaks to our mission and the value proposition, we deliver to our customers in the market at large.
On an environment with the significant shortage of specialists and the complexity of tied the staffing for acute care volume volatility in searches hospitals are often challenged the staff to actual volumes due to the volatility the error part of it either of staff with the onsite physician to meet peak volumes, which is very expensive and only exacerbated.
By the Mal distribution of specialists or staff, the average volume, which can lead to both quality and operational challenges in the delivery of care during searches.
Now as I've mentioned previously we saw a 30% increase in our pipeline during the first quarter nearly all of which came prior actually for the access positions acquisition.
This included the spike in interest across the for service line. So we offered prior to our expansion, including our more recently launched Pulmonology services line.
When we then layer in the new seven service lines, we added our ability to better address the challenges of complexity the come from working with multiple vendors that we've been consistently hearing across the acute care space further differentiates our Soc.
And of fragmented space with significant resource constraints healthcare systems of hospitals are looking for single partner with the secure platform to optimize their service lines in a meaningful way.
Post the acquisition the conversations the early conversations are tied to addressing needs based on both the specialist shortages and the challenges are on clinical load balancing issues with health systems. The.
These range from strategic sole source of conversations with large idms.
The ability to the offer support of multiple specialties and smaller regional hospitals.
And the desire for network integrity, and the express need to work with the single partner in the acute care space for telemedicine and that continues to grow we're starting to see clear strategies for me from health systems and hospitals.
Additionally, we're only a month of to the merger with Axa. The physicians, but we are quickly collaborated to ensure we are collectively meeting the needs of the market. A great example of this is our ability to respond to multiple rfps within days post closure as one organization across 11 service lines, coupled with our differentiated telematic.
Q platform. This demonstrates how the combined organization is uniquely positioned to meet the needs of the market.
This was the type of asset that we anticipated and we expect the only accelerate.
I want to close by spending some time discussing how we are ensuring we are set up for success going forward at the recent recognition around our commitment to quality and innovation.
We recognize that the investments we began making in 2020 to build out our commercial organization have helped position us for accelerated growth those investments were timely.
They have enabled us to actively and quickly move around new opportunities coming in from the access physicians acquisition.
Connected to our growth we have plans for continued to expand our customer success organization to enable us to meet the needs of our customers and really ensure we're embedded partners with alignment around delivery of value.
Investment in customer success really the investment in our customers enables us to spend more time on average per account, which is service lines expand will be critical to providing the highest quality of support build deeper relationships and grow together.
As previously discussed with an increased focus on expanding system level partnerships. We believe we are well positioned to work as a strategic advisor to the systems based on our acute care Thomas and expertise.
Now as you may have seen earlier. This week, we're excited to announce the addition of two new board members, which brings our board to nine <unk>.
Kathy Chelsea, former President and Chief Executive Officer Hospital clinics of cancer treatment centers of America Global Dr. Chris Gallagher President of Soc. These recently acquired access physicians are now on the team.
It was important that we found directors, who would bring diversity of thought background and experience to our board and we've done that with chassis and Chris both have dedicated their careers to improving health care in addressing health and equities.
Chassis is a proven leader in the health care space with experience, leading large health care companies executive roles on managed care space and multiple hospital administrative rules.
Chris as a thought leader in this space of acute care of telemedicine and brings on additional clinical voice to the board as a physician board certified in internal medicine, and cardiology as well as the strong entrepreneurial perspective.
In addition, we're delighted that Chris has joined the management team. The play a critical role in day to day operations that drive our success. These are two well qualified leaders fully prepared to help the SLC got her of course forward.
Finally, I'd like to share an important update that speaks to our continued commitment to quality security and innovation in March Soc achieved re accreditation by the joint Commission through the goldfield of approval. The goldfields the symbol of quality of that reflects the health care's organization commitment to providing safe and quality patient care.
As the first Thomas on company to achieve the joint Commission Goldfield of approval way back in 2006, we are proud of the continuously maintain that accreditation. Today. This is further proof of our commitment to quality and it really maintains our position of the only dedicated of acute care telemedicine company, maintaining joint Commission accreditation.
Jurek accreditation, which recognizes the commitment to quality and clinical excellence from telehealth space.
And hi, trustees have certification of <unk>.
Estimates of our commitment to the highest security standards with their tomo IQ platform.
To add to this news we're really excited the share that are highly secured come out of Q platform was awarded the 2021 Med Tech breakthrough award for best overall telemedicine platform based on the robust flexible and secure nature of this purpose built offering.
This comes a year after winning the 'twenty 'twenty Med Tech breakthrough awards for Telehealth innovation.
When we developed telematic Q is our proprietary acute care telemedicine platform.
The built to enable flexibility.
Robust clinical workflows and the optimization of scarce resources on a highly secure environment to provide context to why this focused benefits our customers you.
You need to really consider that we operated in the space with many new entrants with clinicians using their own personal devices on platforms not built for acute care Thomas and delivery. This creates massive risk for health systems and hospitals operating in an environment, where implications of ransomware and other cyber attacks can be crippling the organizations to address this.
Risks in addition to utilizing tomo.
Come on IQ Soc provides all of our clinicians with company of devices that meet the highest security standards to ensure our customers patient data is secure.
We'll continue to lead in investing in these areas going forward to provide the secure differentiated solutions for customers and the market.
The close of my comments today I simply wanted to thank all of the members of our team of our combined the Soc E com at family.
We've taken the number of vital steps over the last few months of set ourselves up for success in 2021, and we're encouraged by the market reception and are excited to share our progress with you on future calls with that I'll turn it over now to Chris to review the financials in greater detail Chris.
Thank you John and thanks to those of you who have joined US today to review our financial results jumping right in for the first quarter. The combined business generated $8 $5 million of new annual recurring revenue bookings, providing a strong start to the year given the complexity of our space.
And the nature of the sales cycle, we continue to expect bookings results to vary between quarters. We are also taking the opportunity to adjust our definition of bookings to reflect the expected annual recurring revenue from new contracts signed during the period, which Craig.
The single definition for bookings between legacy FMC and legacy access position.
Taking a closer look at our bookings during the quarter cross selling remains a key focus and our Soc customer base and Greenfield opportunities represented the bulk of access positions contribution at the.
Recently, our sales pipeline grew throughout the first quarter tied to high interest from hospitals looking to adopt the acute care telemedicine and current customers looking to add new service lines, even prior to the acquisition announcement.
Post the acquisition, we believe access physicians of additional specialties and the previously discussed minimal customer overlap per wide significant opportunity to continue continued cross sell within the combined customer base and to address the broader market need for our expanded.
Breadth of services.
Reported revenue was $14 8 million in the first quarter consistent with Q1 2020.
As a reminder, given the timing of the COVID-19 pandemic hitting late in Q1 last year. There was limited impact of around Q1, 2020 Hospital volume utilization. This was different in Q1, 2021 where we didn't start to see patient volumes recover.
The until late in the quarter. Therefore, we're pleased for the current quarter as a result, given the environment.
The access positions transaction closed on March 26th Hence their results were consolidated for just five days in the quarter and contributed approximately $364000 to this quarter's revenue.
On a pro forma combined basis, we generated $22 8 million in revenue for the full quarter.
Revenue for our legacy FMC business was driven by modest recovery in core council of volumes in the second half of the quarter.
The continued utilization growth of our tell him that IQ platform.
For the quarter 94000 Council for conducted on a platform of 40% year over year increase as our platform all the customers continue to increase their utilization.
31000 of the total council for what we define as core Council.
Those that utilize our Soc telemedicine physicians.
For those core council, we saw volatile utilization trends during the first half of the quarter, which stabilized and then increased over the second half of the quarter with particular strength in psychiatry as John previously mentioned.
Access physicians had 28000 core council for the full quarter, which represents the strong growth year over year for that business on a pro forma combined basis for the full quarter of the average revenue per core consoled was $356.
Reflecting the lower per account for average from access for physicians and patient Council, which generally take less time, resulting in a lower revenue per council.
Now turning to our non-GAAP financials in the first quarter adjusted gross margin was 42% compared to 34% in the first quarter of 'twenty 'twenty.
On a pro forma combined basis, our adjusted gross margin was approximately 40% in Q1.
The improvement in adjusted gross margin is the result of closer alignment of scheduled physician hours with the volatile council demand experienced during the pandemic in March of 2020, we were unable to reduce physicians work schedules as quick.
As demand began to fall off in the beginning of the pandemic, which resulted in the lower margin position.
Operating expenses, excluding depreciation and amortization integration cost from stock based compensation was pinpoint 9 million, an increase of 42% compared to a year ago, reflecting our increasing investments in our go to market functions and the costs associated with being a <unk>.
Public company.
Collecting those investments our first quarter adjusted EBITDA was a loss of $4 $6 million compared to a loss of $2 $7 million in the prior year quarter on a pro forma basis.
Adjusted EBITDA in the first quarter would have been a loss of approximately $5 $2 million.
We ended the first quarter with $32 $5 million in cash. Additionally, as previously discussed we established a $125 million five year credit facility of which we have used $85 million as well as a $13 $5 million subordinated note.
Both related to the access physicians transaction.
Finally, while we've seen an uptick in utilization we are still on the early stages of the COVID-19 recovery. So we're taking a conservative approach and maintaining our previously stated guidance. This was consistent with our underlying model, which assumes overall utilization will return to pre <unk>.
The 19 levels in mid Q3 2021.
For the full year 2021, we continue to expect pro forma combined revenue in the range of $107 million to $113 million with access physicians contributing approximately 30% to 35% and on a GAAP or reported Rev.
The new basis, we expect revenue to be in the range of $97 million to $103 million.
We expect adjusted gross margins to be in the range of 42% to 45%.
And adjusted EBITDA loss to be in the range of $15 million to $19 million.
While there continues to be some pressure on the utilization of our core services related to COVID-19, we are seeing the number of promising trends first the vaccination distribution has transition outside of the hospital, meaning hospital executives can turn the attention back to more normal operational of concern.
Including projects tied to acute care telemedicine.
It is important to emphasize that the pandemic has become a tailwind for our segment of the industry as it has driven rapid acceptance of telemedicine as the solution to provide efficient time sensitive and high quality care. Finally, we are seeing.
The desire for strategic consolidation of telemedicine vendors in the acute care space within hospitals, and health systems, which positions SLC very well given our experience our scale in established leadership position.
Finally, I know many of you are aware of the recent focus by the FCC around back towards the accounting we are happy to share that this issue has not impacted us because our original accounting was consistent with the SEC's guidance.
To wrap up I want to thank the combined <unk> and access physicians teams for their hard work as we integrate into a single combined business. We have a lot of runway ahead of us and like for I look forward to keeping.
You updated as we progress going forward.
With that we'd be happy to take questions operator.
We will now begin the question and answer session.
To ask a question press Star then one on a catch 10 pound. If you are using a speakerphone. Please pick up your handset before pressing the keys is that anytime of your question has been addressed and you would like to withdraw your question Press Star then two.
At this time, we will pause momentarily to assemble our roster.
And the first question comes from Ryan Daniels with William Blair. Please go ahead.
Hey, Ryan John Cahill from Chris here.
Can you guys hear me now.
We can now we can yes, sorry about that.
Thanks for taking the question and congrats on the strong start to the year quick housekeeping issue can you go into a little bit more detail on the change in how youre calculating bookings in particular I'm curious if that includes just the fixed recurring fees or if thats now also inclusive of an assumption of the utilization based fees on top of that.
Yeah, Ryan So previously we.
On a standalone basis for our bookings included from the upfront fees as well the technically get amortized over the estimated customer life. So.
On that number we're just taking the estimated 12 month period for now and we are making a better assumption of around what we think the variable fees might be.
We work really closely with the customers when we set there.
Minimums, and we get some Intel on looking at their history, where we think they might have overages. So to the extent that those overages on our.
Of our anticipated to come into play those would be in the model now.
Okay. Thank you for that and then John more strategically I know, it's still very early on you acknowledge that but given the expanded service offering I'm curious.
And you did allude to this what the conversations are more with the larger healthcare systems are they seeing your organization as a potential entity that could be someone to work with enterprise wide or is it just too early to tell if that could actually come to fruition.
Yes, Ryan it's a great question and we are seeing much more large and strategic discussions taking place and actually think about it in two different omics, even just commercially with our newer commercial team that we've ramped up at the back part of last year. The discussion on saying, Hey, where can you need help for neurology or psychiatry of Pulmonology in the ICU.
You it'll be much more specific obviously with just the specialties.
In this broader discussion we start with the strategic question of walked me through as Youre thinking through a system. What are your three or four largest specialty needs period, let's just talk about more in general what's the areas that you need help with maybe not at your largest flagship maybe it's your more rural areas, maybe it's about the fact that again, it's not just about true.
To find the shortage of specialists, but in some areas of just two consolidated and of particular geography for that same hospital customer. So the combination and the simplification of let's pick one of those specialties put all of your specialists that you currently have in your network on top of that IQ and then we can where you have peak demands.
Where you have gaps on clinical coverage, where you're not able to recruit or where you don't have the the specialists very much at all on we can literally do nearly all of it for you the create new service lines create new marketing opportunity within the areas of most importantly, keep patients as we've talked about that network integrity element keep patients.
Within their own space.
So for us.
Any solutions, resulting in the deployment of comment on Q1.
And with those customers becomes easier to add other specialties. So you start with one we start with the peak most critical element that theyre trying to consider it.
And then you talk about a layering effect on actually what we're seeing is that layering effect is coming in what we mentioned <unk> been between 19 2019 of 2020 growing from one seven to $1 nine the.
The conversations now on not just about whats the one specialty it's a here's the plan, let's start with one and then we will quickly move to the second and the third specialty and it is much more about just the single location. So our conversations have.
Pivoted rapidly from even what I would call singles and doubles, just the single site or one of two sites within the region two of health system, saying. This is the next on what we have to tackle it.
It's complex.
I know the due this Friday, we need this customer canceled centre in the work flow assurance I need all of my clinicians credential of and privileged I have to have something that activate the position of one physician for gets the jump on that we don't have of specialty critical of acute care scenario weighting for that specialist. So what is my work flow assurance to ensure there is.
Oh with someone watching over that as the second safety mechanism and so the conversations have pivoted pretty.
Pretty dramatically on the first quarter.
Okay. That's great. That's very helpful. And then the final question for me and you May have highlighted this before discussing the transaction, but can you talk a little bit about the sales investments and customer relationship for service investments you intend to make now given the the big.
A big opportunity ahead of you I think of lot of that was frankly, probably made in advance knowing that you were going to do M&A. So maybe its already established.
You don't need to ramp of the sales as much as might be the case to kind of expand.
Into the the larger client base, but just any color there would be great as well thanks guys Brian.
A great question Yeah on your initial statement is correct. We did this very much in a proactive fashion and formats. So we knew as we let me even start back the moment. We went public we knew one of the strategies of becoming a public company with the become a lightning rod of activity and a number of different groups reached out to us or we were able.
To reach out to the have conversations from our merger and acquisition standpoint access physicians, who has became the clear <unk>.
Symbol of how we wanted to look at merchant acquisition again, they had 10 years until medicine space. We share. This same vision mission kind of culture element within the space and there was that strategic element about how do we move forward, but we also had meeting with a lot of other companies and even mean with access positions that element of large commercial team wasn't there and so we.
We knew and the investment we made on the commercial team with help them get up and running to be ready for an expanded portfolio. So there was strategy to the timing of how quickly we move the commercial organization hiring from spreading it out in 2021 to really doing it much more upfront and preparation.
Now I will say the other side, which we will continue to have the higher on the account management space.
As we grow we want to have really high touch with our customers and that's the has to be done locally as well as at an IBM level nationally and they're our customers are expecting that within the systems because of our so many differences, but also in the fact that as you can imagine we're not just talking about one or two specialties now we're talking nearly.
It doesn't specialties, we need individuals the have the time to really stand back talk to the different.
From groups different heads of departments to the CMO is on this broader implementation that can take place given our broader breath. So beyond the investments on the sales resources and then the expand the clinical service lines.
Coupled with come out of Q. It really enables us to say, yes, with just about any opportunity that hits, our table and Thats. What we are ready for now, but we're going to continue to expand our account management team knowing what the growth that we had in bookings in the first quarter and knowing what we are working through on our pipeline currently.
Alright, Thanks, again and congrats on the industry recognition of late thank you.
Hey, Brian I appreciate that.
The next question comes from Sean Dodge with RBC capital markets. Please go ahead.
Hey, good afternoon.
Afternoon. This is Thomas Keller on for Sean Thanks for taking the questions.
I just want to go back to the volume recovery of real quick you mentioned returning to pre COVID-19 levels in mid Q3.
Can you give us a sense of where you stand right now relative to that.
Yes.
We're tracking in line with our plan so our plans had.
As we came through the third wave.
That started the stabilized and pick up in the middle of the first quarter towards the end of the first quarter on.
We have a reasonably.
The straight line.
<unk> the.
Up back to sort of pre COVID-19 levels mid Q3, as we stated.
We were really happily surprised to see how our March volumes frankly were up 17% over January so on.
On the volume started to come back and look really promising and were in line with our overall plan that we laid out when we did our model. Originally so things are still on track.
Okay. That's helpful. Thanks.
And then I guess.
You mentioned more before about.
I guess on the access position side shifting some of those docs from 10 99. The W. Two employees have you guys started any of that process, yet or do you of any early goals around that you can share with us.
Thomas It's of Great question, we really look at that as a process over time, one of the element about scale and one of the elements of our talking and meeting with our customers.
During that we meet the customer demand first and their needs and we mentioned that was the first part of for the organization together, both commercially and our clinical teams are already meeting and getting to know each other of thinking through how we help each other with future coverage given the given again the pipeline that we've been talking about the the element for us when we move our <unk>.
The team from 10, 99% W. Two is where you really have consistent scale on demand, but you'd need breadth and they're able to do that so as we grow each of these additional service lines, we will absolutely moving the visuals from 10, 99% W. Two we see that as of slow March of Thomas spot.
It's a slow March for purposeful design of the last thing we want to do remember.
These are very critical patients on the other side. This is not a cough and cold. This is not pin guy that's not of dermatology appointment.
And we have to ensure that were there on the minutes notice if needed or within the timeframe that we commit to our customers for the specialties. So we're going to do a very slow designed to process on that it's already considered in how we think about margin moving forward in the future, but we're going to be cautious on that on that overall, we're also going to be teaching them.
Clinicians right on how does the utilize the tone out of Q platform and pull them in to the to the broader SLC teams. So so.
So far the discussions have been great for the leadership teams are getting along wonderfully.
And it's a testament to what Chris Dr. Gallagher has done at access physicians with his leadership team and Jason <unk>, our CMO with our clinician leadership team things have been going off better than expected.
Okay. That's very helpful color. Thanks, guys.
Appreciate it on us.
The next question comes from Gerald on dressing with credit Suisse. Please go ahead.
Hey, this is Adam on for drilling are today, thanks for taking the question.
I wanted to follow up on the question that was already asked but.
So I guess in the guidance you indicated.
Spectation returned to pre COVID-19.
Levels of the middle of Q3 Q.
Just curious whether that assumption takes new accounts any any pent up demand or how we should think about the.
Run rate of utilization after any kind of pent up demand clears within your customer base.
Yes, we don't really view it as pent up demand per se although.
We've had a little bit stronger recovery in spike on.
That kind of was a little bit steeper, but we don't view it all of pent up demand, we see it as confidence building is the vaccination rolls out across the nation.
People are less afraid to go back to the EDI and People's needs are not fully being met on through.
Having.
Interactions at home or otherwise, so we're seeing people coming back into the hospital on.
On a more normal course regular basis.
So the.
There's always potential for upside of let's say, maybe and fake.
But we do see it as a ratable stable.
Tick over the balance of the year.
Got it that's helpful and then just a follow up.
Does the acquisition of of access physicians <unk>.
<unk> the rollout of the Standalone telematics platform in any way or how should we be thinking about that aspect of of the business moving forward with obviously a lot of focus on the integration of the axis positions on and then just the backdrop of the competitive landscape, but other just.
The standalone platforms out there, providing telehealth or video conferencing services. Thanks.
Oh, yes the.
On the acquisition in no way.
Distorts our rollout of the platform I mean, frankly every customer of legacy FMC is operating on the platform today and then over the long term and.
From a very customer centric perspective, we will ultimately migrate the excess physician customers onto the platform as well and we are continuing to see strong interest from hospitals and physicians groups to buy platform only services from us on so I don't see it.
Any of them.
Any deferral of the.
Rollout of PMI Q across.
Anytime horizon, Yes, Adam I agree with Chris the answer is no there once again once Tom out of accused in.
We can turn on a number of new specialties, regardless of who will be owns the provider network. So whether it's the hospitals own clinicians and providers, whether it's another physician group that they've outsourced that worked to hospitalists or E. R.
Et cetera, and so that element of looking at it as a tool that really allows them of Swiss army knife of options across numerous specialties is that.
Actually brought in our individuals' that's all from us on IQ and our expanded sales team into many more co deals because of the conversation becomes much.
Much more natural we're not trying to displace.
Specialist without the hospital currently we're trying to help augment where theres a shortage or where you would have the over higher to ensure that youre hitting the peak capacity.
Got it very helpful. Thank you.
Yeah.
The next question comes from Bill Sutherland with Benchmark Company. Please go ahead.
Thank you Chris John Good evening.
Bill of orders.
Tellement Iq.
Do you have of revenue number for them in the quarter and up for that product and how did that factor into bookings.
Well Bill you know the bookings.
Each contract for total net IQ is the smaller dollar amount on average than a full services bookings, so and we haven't broken out those bookings.
Between the different service lines.
And I can tell you the tone that IQ is continuing to grow we had.
But the it grew.
Grew the utilization on the platform grew over 100% year over year on about.
In the low teens on the sequential basis, but I don't think we're giving out the.
The revenue number per se.
Not significant enough for to.
To meet our right when the lunar.
Lunar break it out for an S&P perspective, yet.
It's the even smaller percentage now that Youre <unk>.
Combined with access physicians of course.
Wanted to understand on the other the other part of that to keep in mind is once.
Once work once we activate with the provider organization right outside of the Soc on clinicians.
The expansion takes place there because they adopted this as their solution and again, we really seen now really seeing where everyone who has tried a simple zoom based platform or tried to do it on the platform that didn't have the technical capability of the workflow assurance has learned the hard lessons where they work.
Well enough as a band aid approach and the initial on shop, because everyone wasn't sort of the the push on the COVID-19.
Then just kind of be urgent, but now the thoughtfulness of the platform and we've mentioned before we've already working with several large physician groups and where we're at.
We're now working with a few others as well the ability for us once they start it's one and then if it doesn't then it's two dozen we are we have the team focused on working with those organizations have their own sales teams to activate against their own clinical group. So the this element is once we increased scale of increases.
Workflow you have increased scale you have increased workflow complexity. So large groups lots of volume complexity goes up you need the ability for something the manage that complexity and we're we're fitting into a nice niche there.
Great.
Chris just help.
You could.
On bookings the way you define it now which was $8 5 million.
In the quarter, what would that have been in <unk> 'twenty using that approach.
Bill.
Last year I did not go back and we do what that would have been but for the legacy business. The.
The math is not wildly different because when we did bookings previously included.
All of the upfront fees that in reality get amortized over the life of the contract. So now that has the lower effect on our math because we're just taking 12 months worth of that and the.
Then to the extent that we believe that there would be overages were adding that the backend fill it has somewhat of the neutralizing the effect yeah I can see that also so it would compare I mean, the three I think is $3 nine for the fourth quarter for the <unk>.
Sorry.
So it compares pretty directly to that or is there some access position.
Yeah the.
Eight and a half million is for the combined business because of all of the benefit of that bookings will come in turn into revenue.
As those new customers get on boarded in the future.
Is it kind of proportional with the size of the two businesses.
Curious.
Actually we had there was a little bit more weighting towards access physicians, ironically, but ours moving on trend with our historically from the notes okay.
And then just one last one for me just so I understand.
Kind of as I look at the comparison, the where you.
You.
You talked about your core consults.
I think you said 31000 or was.
Yes, we had 31000 in the quarter with.
Total quarter to quarter sequentially was about the same it was about a 2% lift.
Sequentially, however, in the first quarter.
On our average core consoles per day when you compare March to January we were up 17% in March over January so the quarter itself is a bit of an anomaly, particularly when you look at full quarter of full quarter, but we did see the recovery really start to flow then.
As we had modeled thankfully so.
Yeah Yeah.
We do see it coming back the acute care setting where we're uniquely positioned.
We believe is coming back online.
And the.
Sorry, one more core revenue for that.
The revenue per core consult was what again.
So we gave that number on a pro forma basis, which includes the actual physician counsels and its $356 for the quarter. So trying to sort of help reset that number.
So.
Just so I can think about it versus for Q do you have your standalone.
The last year at the end of the year, we provided the full year number which was $430 right alright.
Yeah, and the the access physicians has the.
The I Shouldnt say a day when they're part of us now.
But the inpatient council's generally take less time, so now I understand average weighted down a bit.
But you guys are running kind of like the <unk>.
2020 number.
What you're saying.
Yes.
Okay.
Thanks, Chris Thanks, John Yep.
Yep.
As a reminder, if you have a question press Star then one to be joined into the queue.
The next question comes from David Larsen with BTG. Please go ahead.
Hi can you. Please talk about your cross selling expectations like into your core base what areas within access physicians would you expect to see.
The highest demand coming from like what different specialties. Please.
Over what time period would you expect to see meaningful cross sell thanks very much.
So the cross sell activity actually happened quite quickly from me.
It was coming of three elements one was simply inbound the reiterate built up of pretty significant marketing presence online and the instantly on the day of the announcement made sure we updated on.
All of the company web pages, we've made sure. We went back into we've mentioned before that you lay out crumbs and make sure that you follow those out for people that are looking for telemedicine in the past. So that was the first avenue incoming the second half of it was obviously talking with the sales teams and the ability for them even with customers. They are talking to about a neurology need.
The hadn't yet closed the ability of the go back to those same customers because you have the captured presence to have that discussion of the <unk>.
Third element was the larger discussions which either our client services team activated against obviously quickly the meet with our current customers quite regularly as part of their job responsibilities on bringing forward the metrics to our customers to be able to utilize for efficiency and clinical quality measures. So we were able to activate all three of those groups into the into.
Of the teams of look for initial opportunities with our customers. So that part we started nearly immediately out into the marketplace. The.
The interesting thing is you would expect certain specialties that I'll give two examples used the expect certain specialties to quote unquote falloff after COVID-19 one of those being like the infectious disease.
Would think infectious disease, because it's COVID-19 would start the tap of downed as COVID-19 exits, but that's actually not the case.
What ended up happening was hospitals, who had not thought through the need of infectious disease, who now have that specialty available for them.
See the need the value add.
And the opportunity for their own patients and their own communities by having access to the infectious disease Doctor. So that's an example of of specialty that has continued to grow because of the specialty with dramatic shortage.
And of specialized need MFN is the exact same thing there are less than a thousand MSA and specialists in the country and well more well more than 1000 hospitals that need access to MFN clinician maternal fetal medicine specialists and we're fortunate to have some great ones on on team SFC and that's the element that we saw.
See just the uptick coming because the interest is there.
Can imagine during COVID-19 and pre COVID-19 actually.
Tell us stroke was known that was where acute care telemedicine was essentially founded and it became a basis of.
I don't think everyone clearly understood until the technology was understood and it won't start having the more direct to consumer experiences at home and trusted the interaction.
Knowing that Tom out of acute already had been built in for 'twenty specialties, the ability to say can I do for nephrology pack.
Packages for cardiology, I didn't think I could even think about for infectious disease, and so that conversation, we're bringing the need.
When people are having the enlightenment of this can work within their institutions that you don't it doesn't matter of about Zipcode address for location and as we mentioned on our prior call half of our business is rural Bye Bye site the location, but half of his urban so it is across all state regardless of location and regardless of specialty.
So our element now and I'm not I don't think the deal speed will pick up any more than it has because of hospitals have to work for the same processes that the they always have the on.
On the finding that opportunity activating our clinical our new commercial organization and then individuals like better Gallagher, joining our direct leadership team being able to leverage as of cardiologists that discussion on what he he has on himself with telemedicine in that space. Just brings a really unique addition to the team that has been.
Great on the early days here.
Great. That's very helpful. Thank you and then.
With regards to the bookings I think that we know what the one each 'twenty bookings, where I think they were $5 7 million I would guess that the <unk> 'twenty bookings were probably around two 9 million is that.
Is that right and then.
What was the growth rate in bookings on a year over year basis, I mean, it seems like it was actually <unk>.
Healthy if we like just any color there would be great. Thanks.
Yeah, I think your numbers right on the bookings on too.
2.9, I believe is the right number for Q1 last year actually had the here and that is correct.
And so the growth was tremendous.
Of the eight in the half just if you look at the eight and the half just sequentially Q4 for Q1, it's nearly 120% growth sequentially. So on a year over year basis.
Almost nearly 200% growth of 193% year over year. So the.
The just the interest in the.
Yes.
S.
As John said, we intentionally went out to do M&A that was going to expand our breadth of services. Because we were hearing from the market that there is a need for a wider breadth of services and the hospitals are looking for.
The single partner to help them throughout their system or their hospital, because it's difficult for them to manage multiple various systems and processes and contracts and things of that nature. So.
We're seeing the huge interest in what we now have the offer and even prior to the transaction being announced our pipeline was up 30% during the quarter just on a legacy.
Business alone so.
The.
It does take time as John mentioned for Us to go out and sell and negotiate contracts and implement but as I look down the road. The long term future is very bright.
Great.
On a half million how much was access physician how much was legacy SFC telematics was it the legacy.
Air Force.
Not quite half and half of it was a little bit more skewed towards.
Towards the access because of the broader set of services that they're offering which is exactly why we were interested in the business.
So it looks like the core legacy business bookings were up at least 30% probably closer to 40% or so on a year over year basis.
Core bookings were up.
The core bookings were up out of land for sitting in front of me, but yeah, we were definitely up.
Great. Thanks, very much congrats on a good quarter.
We appreciate David.
As we have no further questions. This concludes our question and answer session I would now like to turn the conference back over to management for any closing remarks.
Look we're right at the top of the hours of I'll make the short. Thank you for everyone for listening in and just the giant thank you.
To everyone within our access positions in the Soc top of my larger family now it's been a tremendous.
Coming together, we look forward to just an exciting future I think we all see what we can do together and acute care telemedicine and we're excited to bring the those results from the future so with that.
Have a great night everyone.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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