Q2 2021 Sharecare Inc Earnings Call

August 11, 2021

[music].

Yeah.

Good day and welcome good to share Akira second quarter, 2021 earnings conference call and webcast.

All participants will be in a listen only mode.

After today's presentation there'll be an opportunity to ask questions.

To ask a question. During this session you will need to press. The Star then the one key on your Touchtone telephone.

Please note this event is being recorded.

Leading today's call are Mr. Jeff Arnold.

Chairman and CEO.

And Mr. Joseph <unk>, President and Chief Financial Officer.

Before we begin we would like to remind you that certain statements made during this call will be forward looking statements within the meaning of the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

These forward looking statements are subject to various res and non synthes and like our current expectations based on our beliefs assumptions and information currently available to us.

Although we believe these expectations are reasonable we under.

Take no obligation to revise any statement to reflect changes that occur after this call.

A description of some of the factors that could cause actual results to differ materially from these forward looking statements are discussed in more detail in our filings with the S. E C, including the risk factors section of the perspective of our business combination filed with the S. E. C. On June three 2021.

In addition.

Please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance.

Details on the relationship between these non-GAAP measures the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press release that is posted on the company's website.

I would now like to hand, the conference over to your speaker.

Welcome and thank you for joining us for our first earnings call as a public company.

Joining me today is Joseph <unk>, our President and Chief Financial Officer, We've had the pleasure of meeting many of you over the past few months.

But for those of you who are new to our story I'll provide a quick overview on share care before getting into our second quarter performance and the acquisition we announced this morning.

Share care offers the most comprehensive digital health platform in the market.

And we make it easy for our diverse customer base to buy implement and engage with their populations to improve their overall wellbeing, which lowers our healthcare cost.

Our solution is focused on data interoperability and delivering a user friendly experience, enabling our clients to efficiently manage the health and wellness other employees and members.

We've been successful in broadly deploying our platform and services to multiple customer segments.

<unk> plans large employers government.

Health systems life Sciences, and the consumer building.

Building a high tech business that is diversified and revenue and scale and is profitable.

And we continue to innovate.

We operate across three channels enterprise provider and consumer solutions and I'll take you through quarterly highlights for each but before I get there I want to provide a high level review of our second quarter financial results, which Justin will discuss in greater detail.

We delivered strong financial performance in the second quarter with revenue of $98.5 million, which was on the high end of our guidance range, representing 26% year over year growth, we delivered adjusted EBITDA of $6.6 million, which also was ahead of our guidance.

We are committed to profitable organic growth, which was the $400 million of cash raised from our recent business combination enables us to invest in innovation and new growth opportunities.

To bring this to life, we're already integrating the artificial intelligence technology and products from our February acquisition of Doc AI across our entire solution set.

Another example, the acquisition of care lengths from Generali announced today will bring a tech enabled network of more than 450000 caregivers to our digital platform, enabling share care to scale into the last mile of health care the home.

In our enterprise channel, we service nearly 9 million lives representing several large health plans dozens of direct large employers and 10 public sector clients, which equates to about 60% of our total revenue.

These organizations utilize our comprehensive digital platform and services to help their members and employees efficiently manage the health care benefits and take a holistic approach to their wellbeing.

Platform is designed to deliver each person a data driven and individualized journey to SaaS and lower their health risks and measurably improve their well being focused on going from episodic to everyday management.

In addition to benefits navigation, we also offer integrated access to digital therapeutics for specific conditions such as anxiety.

Weight loss tobacco cessation diabetes pre diabetes, MSA and pregnancy, along with a number of other member specific products.

In an effort to improve the quality and lowered the cost of care in real time, we are integrating AI distributed architecture technology and to our flagship platform to turn dynamic and siloed data into actionable insights.

In the second quarter, we expanded our relationship with key enterprise clients. In addition to landing new clients.

We launched several new government sponsored health plans, including <unk> Peach State Health plan Medicaid line of business and your managed care plus and their Medicare advantage population.

<unk> partnered with share care to focus on their childbearing members and improve maternal mortality rates in the state of Georgia.

Which ranked 50 out of 50 in the U S. Additionally.

Additionally, with one health net Medicare line of business for both California and Oregon.

Which we believe represents an opportunity to add an estimated 800000 new members.

We added new large employer customers, winning several competitive rfps, such as Nordstrom and.

And successfully renewed current clients such as Lockheed Martin and Georgia State Health benefit plan.

We also expanded several contracts with current health plan clients to offer digital therapeutics to their entire eligible populations. We continue to see increased engagement in our deployed digital therapeutics and view this as a significant growth driver over the next few years as we increase penetration and expand our total market opportunity.

Also in the second quarter, we closed our $50 million investment from anthem to co develop a next generation multi payer advocacy solution to bring to market across our combined customer base and beyond.

This solution will leverage the AI driven technology capabilities acquired with Doc AI debt.

Further enhance our digital platform, which we expect to be very valuable to our enterprise clients.

We will discuss this strategically important offering and its potential impact in more detail over the coming months.

As part of our enterprise offering where you have several initiatives focused on health security with.

With the continued uncertainty of returning to the workplace, we are helping our public and private sector clients creatively expand.

Biometric screenings and flu vaccinations into the home also related to the pandemic, we launched our health security solution in 2020 to help organizations safely return to their place of work and enabled government agencies to manage and streamline vaccination distribution and adherence this extension of our business generated.

Thousands of new customers, providing us with new opportunities, including working with additional government agencies and hospital systems.

As an example, we added another health plan client as a customer to our platform partnering with care source and the state of Ohio on immunization drive to track and reward care sorts members for receiving the vaccine.

We're also working with the state of Arizona, Michigan, and Colorado on recent digital vaccine contract Awards.

Our provider channel with.

Which services approximately 6000 physician practices hospital systems and health plans include solutions for medical record retrieval payment integrity remote patient monitoring patient engagement and value based care.

In Q2, we added new logos, including Arizona oncology.

Connecticut, Orthopedics and Ortho Carolina.

Given this channel is expansive client base. We also took a land and expand approach for example, existing clients of our medical record retrieval services capital Ortho and Florida Orthopedic Associates recently bought our value based care offering.

We also see a significant opportunity to sell our enterprise solution to our health system customers for their employees.

To truly deliver on our vision of all your help in one place supporting the Doctor patient relationship is critical and we currently serve over 1 million positions. Our ultimate goal is to share care enable providers. So they can prescribe share care to their patients to foster continuous connectivity, meaning a person can share there.

Data with their provider and in turn received automated support and care plans from their doctor all through our platform.

To that end, we recently started working with well start one of the largest healthcare systems in Georgia, which not only rolled out our enterprise solution to their 20000 employees, but also is collaborating with us to develop a personalized care delivery population health and a consumer engagement model to better support their patients and communities.

This partnership allows wildstar and share care to accelerate transformation in our value based care world and optimize expand and re imagine the health care experience.

Finally, our consumer solutions channel focuses on leveraging our platform to implement targeted audience specific messaging campaigns on behalf of pharma and life Sciences companies to educate people about treatments that could help address a variety of diseases and conditions.

This targeting capability is a strategic differentiator for share care as we use it with health plan and employer clients to efficiently engage their members outside of traditional direct and E mail channels.

The consumer solution channel had a very solid performance in Q2 and its significant growth is reflective of share <unk> ability to deliver strong results against brand goals and the power of our 108 million first party database.

Additionally share care earned 23 awards for our extensive content and engaging social platforms of over $2.5 million followers.

Another differentiator of the share care platform.

Looking ahead, the consumer solutions channel has started selling its suite of 'twenty two.

<unk> 2022 client solutions, featuring immersive content experiences and new advanced targeting capabilities, which leverage insights from social determinants of health and share cares community Wellbeing index. The team is also commercializing a new product from the Doc AI acquisition Smart Omics, expanding the consumer channel footprint.

Into the clinical research space with life Sciences medical device and CRM customers.

Moving forward across all our channels, we have multiple avenues to drive growth, including signing new clients.

Cross selling additional solutions to our current customers.

Expanding our digital therapeutics and value based care offerings, and launching new products like health security.

We are committed to growth organically and will further enhance share care capabilities through strategic acquisitions.

And with that I'm pleased to announce our acquisition of care lengths from Generali <unk>.

<unk> is a nationwide tech enabled home care platform that delivers on demand personal care services in the home of patients while facilitating rich data capture population health analytics, and real time care coordination with remote clinical teams.

Regulatory and macro changes are driving the shift to home based care and Covid further accelerated the adoption of telehealth and home based services.

Payers and providers need scalable and home care provider solutions to manage the total cost of care.

<unk> has a multi channel strategy to provide care solutions to families and is positioned to serve patients' needs across the entire care continuum from personal care to clinical care at home.

Their digital platform includes in home monitoring digital care plans and population health portal for enterprise clients.

Through its network of over 450000 Tech enabled caregivers care lengths will bring a human touch to share cares digital solution.

Strengthening our platform by helping customers manage the last mile of care.

We'll systematically enroll care links users into the share care platform and ultimately offer our integrated app to all care lengths members families and caregivers.

With an exclusive offering for AARP members and our partnership with the VA and three of the largest health plans in the United States over 1 million Medicare advantage members have access to care lengths through their health plan.

<unk> has shown impressive organic growth to date and we believe share care is very well positioned to continue that trajectory in fact care lengths can be sold into all three of our channels and we have already have a number of customers actively looking for this type of solution.

Additionally, this capability will be a unique component and our multi payer advocacy solution. We believe this acquisition can expand our tam by more than $7 billion for homecare and potentially over $100 billion.

If we expand further into home health.

And now I'll turn it over to Justin for a more detailed review of our second quarter financial performance testing.

Thanks, Jeff and thanks to everyone on the call for your interest in the share care story.

As Jeff indicated we delivered strong performance in the quarter with revenue coming in at the top end of our guidance range and exceeding our guidance with respect to adjusted EBITDA.

We continue to gain momentum in the business delivering strong sequential revenue growth and positive adjusted EBITDA, while continuing to invest heavily to support future growth in our brief time as a public company. We have already made several key hires to bolster our already talented management team and are poised to significantly add to our sales.

Force as.

As many of you know on July 1st we completed our business combination with Falcon Capital acquisition Corp, and on July 2nd began trading on NASDAQ as a public company.

With more than $400 million of cash raised from our recent business combination we are in a strong position to invest in new opportunities to further support and accelerate our growth and profitability.

Digging into the quarter. Our total revenue grew 26% from $78.2 million a year ago to $98.5 million driven by increased client penetration new client wins and approximately $5 million from the <unk> acquisition completed earlier this year.

On an organic basis, we grew total revenue by approximately 20% compared to the second quarter of last year.

Adjusted EBITDA for the quarter was $6.6 million, which was ahead of our previous guidance and included additional growth investments to support product innovation and the rollout of new products like our health security solutions as well as expanded sales initiatives. These investments establish a solid foundation for long term growth and improve.

Financial performance as we gain additional operating leverage from a share care digital platform.

We believe <unk> will be an accretive acquisition for our shareholders.

<unk> is growing from $5.1 million in revenue in 2020 to approximately $20 million expected in 2021 day.

The 65 million acquisition value is comprised of roughly $55 million of cash and the remaining $10 million in stock to management.

We've also arranged for an incremental performance based earn out through 2025 for the <unk> management team to achieve a minimum of 40% annual organic growth.

I'll now turn to our guidance for the third quarter and full year.

Looking forward, our Q3 guidance for revenue is $103 million to $105 million, which includes approximately a $2 million contribution from the <unk> acquisition as of August 11th.

The Q3 guidance for adjusted EBITDA is expected to be $6 million to $7 million, which includes an approximate $1 million negative impact from <unk>.

For the full year 2021, we are updating our guidance to reflect the impact of the <unk> acquisition.

Revenue of approximately $414 million to $415 million, which includes approximately $6 million to $7 million for the.

The newly acquired <unk> business.

Adjusted EBITDA of approximately $28 million to $30 million, which includes an expectation that the <unk> business will have a short term negative $2 million to $3 million impact to our previously provided adjusted EBITDA outlook for.

With 97% of our business booked we remain highly confident in our full year outlook.

As you think about the cadence for the remainder of the year I want to reiterate a few factors that play into why we expect the fourth quarter to be our largest quarter of the year.

As we stated in previous communications based on the momentum with existing clients and new client wins year to date in both the provider and enterprise channel, we will see sequential revenue growth in the quarter as various initiatives continued to ramp.

Also our consumer solutions channel as a result of seasonality generates more than 30% of its revenue in the fourth quarter as life Sciences companies typically increase their spend before the end of the year now I'll hand, it back to Jeff for some closing remarks.

Thanks, Justin.

As you can tell we had a very exciting second quarter and expect our momentum to continue throughout the back half of the year we.

We have strong runway ahead of us in terms of new business opportunities and cross selling existing clients and we have the cash on hand to continue to innovate and grow.

None of the work we do at share care would be possible without our dedicated team. So I want to thank everyone for their hard work.

To help people no matter, where they are in their health journey live their best lives again I want to thank everybody on the call today for your continued interest in share care. We have an exciting runway ahead of us I look forward to continuing to update you on our progress with that well open up the call for any questions operator.

Thank you, ladies and gentlemen, as a reminder to ask a question on the phone line you will need to press. The Star then the one key on your Touchtone telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.

And our first question coming from the line of Richard close with Canaccord. Your line is open.

Great Congratulations on completing the transaction in the first.

Ah.

Report as a public company.

I had a couple of questions I was wondering if you could just go into the pipeline.

Opportunities essentially.

With payers like Centene like anthem, obviously, you made some progress that you noted with Centene.

If you could just.

Just give us a little bit of a feel of the <unk>.

<unk> dynamics there in.

The pipeline.

Sure Hi, Richard This is Jeff Thanks for the question.

We're very focused on continuing to grow the clients that we have so as you know we have many large clients several blues plans.

In particular anthem.

As you know anthem has 44 million members and we have just about 1 million members today, there have been penetrated through that account and with the large investment that they made and share care in April I think we probably have about 80 people stacked against building out this multi payer advocacy solution, which we expect could be.

End market in 2022 with clients and then fully scale. It by 2023, we think that has about a 12 million member.

<unk> for us.

So thats anthem on the <unk> front as you know.

Pam Shipley, who is our COO joined us from <unk> and has been really helping us tailor our product to meet <unk> needs, we started off with them as our first accounts and.

In Georgia.

And this last quarter we were.

Lucky enough to win their RFP, and California, and Oregon for 800000 of their members, which is I believe they are largest.

Population and so we're off to a great start with them.

Nice launch in Georgia, and we just won that Big 800000 person accounts. We just won care source, which is a new payer for us in Ohio.

The managed care side of the house similar to <unk> as well as we wanted Blue Cross Blue Shield of Idaho, which now joins Blue Cross Blue Shield of Minnesota Blue Cross Blue Shield of Arizona Blue Cross Blue Shield of Maryland, Bluecross, Blueshield of Pennsylvania, with Highmark and anthem, and some others and so.

So we're real focused on those large accounts and we're doing really great with the ones that have already been onboard with us and we're continuing to land and expand with anthem and <unk> of the world.

And maybe Richard just one other item I would add is that we really have a two pronged model there with the with those plans are not only expanding as Jeff took you through but also upselling, our digital therapeutics into those customers as well. So there is significant upside to now expand with the user.

The member base, but also with additional services.

Okay, that's helpful and as we.

I appreciate the comments on anthem and Centene.

Curious Justin.

Covering other advocacy.

Type companies navigation type companies and in some cases like if you win new business.

Let's say with a new payer.

Converting that essentially quote unquote booking to.

Revenue in terms of launching what are you what are your timelines with respect to launching so if you won business within anthem Centene when does that ultimately launch just so we have a better feel for that.

Yes, so typically most of our launches are in on the first of the year.

April July or October with the majority being in Q1.

What's great about our share care business is think about our core digital platform is like our Trojan horse and so all of those accounts are buying our share care core platform for all of their members and then just like we turn on digital Therapeutics, which we can do at any time throughout the year, it's literally like turning on Wi Fi is we can turn on advocacy.

And so that's why we're always super focused of selling in our core digital platform because we can get that deployed to the entire membership base, usually we need about 60 to 90 days implementation. So it's not that long to actually standard up and and have the payers start rolling this out to their members and then the way we've architected the platform, we can turn on or off services.

In the background based on what they bought from Us and who is eligible for the product.

Okay. That's helpful.

And then my final question would be on the acquisition congratulations on that.

Uh huh.

How is that sold maybe I didn't understand them.

And in the prepared remarks, but.

Is that do you sell that into your existing base or is that a different.

Different customer channel or how are you thinking about carrier links and.

And driving that.

We're seeing it has some complementary new clients, which we're excited about so they do a lot of work with three big players.

That would be complementary to our payers that and so we're hoping that because how happy they are with Carolina it'll be a great introduction to share care. So that's one and.

And adjusted noted and I think I said as well.

Exploding from an organic growth standpoint, right now.

But we have.

We've known this company for four years.

I have worked with Sherwin, who was the founder who's on the call with Us and we've started introducing sherwin to our clients and the reception has been.

Really great.

So we're already in market with Sherwin.

Talking to clients and believe that we're going to be able to successfully penetrate those clients with these new services.

Okay.

That's helpful and then.

Just maybe on the financial profile, obviously, it's a drag.

Here initially.

Adjusted EBITDA, but.

Yeah.

As businesses mature what is the margin.

Margin profile of <unk>.

So yes, so we're starting from the model that we've taken on the Sherwin is has built is in the low thirties margins, but.

We're now expanding this into our enterprise clients and see how long term gross margins north of 50%.

So very similar model on a <unk> basis.

We expect in the.

By 2023 that this could be a 10% to 15% EBITDA contributor.

Okay.

Thank you.

Yeah, Okay. Thank you.

Thanks.

Sure.

And our next question coming from the line of David Larsen with <unk>. Your line is open.

Hey, congratulations on a good quarter here.

Can you please talk a bit about your anthem relationship. So suggest you had mentioned that you will be in market in 2022 with clients and then fully scaled in 2023.12 million life opportunity up from one now can you maybe just sort of.

Give a little more detail on what exactly that means it sounds like there is a very very clear roadmap for growth here with anthem. Thank you.

Now my pleasure.

Yes so.

Anthem saw a need and there are product capabilities to be able to offer a multi payer advocacy and what that means is when they have an account say a large national employer and which they don't have 100 per cent of the members. So maybe either 80% or an anthem and 20% are on somebody else or some other mix and so they needed a.

A third party that can act as that advocate for both anthem members in that other health plans members and so that was the strategic reason why they invested in share care.

And since that investment we've been hard at work on two things one is actually building the product.

<unk> non Doc AI, because they have a history of working with anthem.

Product and tech teams and anthem day I T.

<unk>.

And building a go to market really trying to identify where are those 12 million lives where are they in the buying cycle.

And how do we get this fully scale by 2023, and where we're coming out is.

Picking a handful of high profile clients for 2022.

That could become our best references going forward and so we're in the middle of many of those conversations and expect that to happen next year and.

And while we are building out before kind of go to market and we've made some some exciting hires recently as well.

And with sales reps and account management folks to manage the rollout of this.

Mhm, Okay. So it sounds like share carrier as a core part of anthems longer term digital health strategy that they've been talking about on their earnings calls.

Yeah, and so as you know Rajiv who runs <unk>, who runs their digital and transformation is on share cares board of directors and.

I've talked to them multiple times, a week of Canadian to understand whats the role that share care can play in helping anthem rollout their digital capabilities and we've got a great working relationship and.

I think we're off to a great start.

Okay, Alright, and then can you just remind us just at a high level like where the <unk> rates are now for your existing plans.

Over time, what could that get up to.

Okay, well this adjusted I'll start.

It really depends as we've talked about Dave.

The size of the customer so.

When we're dealing with large health plans it could be in the dollar <unk> range, maybe even a little bit less.

Depending on the size of the plan.

To where we work with.

Self insured employers.

Often in the two to $3 <unk>, but I think you know our model is that's for a number of the front end adjusting the claims data the risk stratify the population.

And then providing incentives management et cetera, We then identify those members and drive them into our digital therapeutics, which is often a much more significant.

<unk>, so we've talked about our DPP solution being at $800 product per year. So.

But thats been holding steady the PM Pms, but we're really excited now about introducing our advocacy.

Program and I'll, let Jeff touch on that.

I think Jeff Hey, great job, we sell our core digital platform, we have our digital therapeutics and we see a range on our advocacy products of adding an additional five to up to $25.

P P M.

Into into the model and that's what we're working on right now and our go to market, what's our accounts here Concierge care management services and what's our custom advocacy solutions.

Debt forgiveness of more robust services that we think we're going to be able to uniquely offer because of the relationship that we have with anthem.

Okay, great. So not only is there.

Incremental life potential obviously the number of services that you can provide your members could also increase that <unk> substantially from like two bucks or a backup to five or 10 or even higher.

Okay.

Very helpful. Thank you very much and then can you talk a little bit more about care links like obviously the whole market is moving towards these lower cost channels of care, including home health, what exactly does care links to if you don't mind, if you could expand there that'd be great. Thank you.

Sure Hey, Sharon why don't you introduce yourself quickly to the group because I want to thank you Jimmy Choo anyways until an answer that question. If you don't mind.

Yes, I appreciate the really excited to be here.

Our team is excited to be part of the share care family. So the best way to be thinking about care links as we've aggregated a network of 450000 tech enabled providers and what we're really doing is serving as an extension of remote clinical teams, primarily working with several largest health plans in the countries. They are having supplemental benefits Karen.

Agent programs, where they're paying on a P. M. P M basis us going into the home to help the members with their activities of daily living breathing grooming meals transportation med reminders to real life needs of our member which is getting the members to open up the door then while were in the room, we're identifying true GAAP.

<unk> of care and now that we have the physical labor in the home we can identify those got sick care and then close those gaps in care. While we're there we're capturing over 170 data points on behalf of the remote clinical teams with real time coordination with those care managers to just continue to keep patients at home, which is the lowest cost care settings avoid.

<unk> unnecessary utilization of acute care and then eventually also.

Post acute care, so think about us as world continues and digital health continues to evolve in members really embracing telehealth with health care moving to the home you still need that physical support just as you go into the hospital, it's not the clinician that's providing the healthcare it's the nurse, that's really bedside with that pace.

<unk>, that's what <unk> is doing now is an extension of our enterprise clients being the eyes ears and arms in the home.

Okay. So it sounds like Youre like that last mile of care in the home you prevent those high cost hospital admissions, it's exactly I think where the market is moving do you work with like telehealth vendors. So if somebody has a telehealth visit and they need some sort of service at home you can basically fill that need.

We do have a partnerships with like Doctor on demand.

In just like that's out there, but majority of the time, we're working with the enterprise care management teams at large health plans, who had been trained to engage with their members through telehealth RPM struggling to really engage with those highest cost members, which have multiple comorbidities functional limitations.

How they're using us is a trojan horse going in and helping those members with their real life needs and then while we're there truly acting as an extension of that clinical teams have struggled through telehealth to engage them.

Okay, great. Thanks, and then Tom Jeff or adjusted can you maybe talk a little bit about the provider side of the business obviously.

Good momentum with Centene, and Humana and health net and anthem, how about on the hospital side any progress. There I think there were 4000 additional sites of care that you had.

The potential of selling too.

Yeah, I mean, I can start and Jeff, but we had a fantastic Q2.

Added dozens of new customers.

So kind of that core business is continues to organically grow at an impressive level.

We are now making significant traction on the value based care and payment integrity side of the business of land and customers here in the past 90 days that will be onboard in Q3, and we expect a big uptick on those lines of business as we go into Q4, so real happy with the performance of the.

Provider team.

We're also starting to see some great cross selling which I know we've talked about in the past but.

We have two of our biggest health plans, who have now bought or our medical record retrieval services net.

Both have and so we're seeing great cross sells and as we've mentioned in the past. They are we see we have actually 6000 over 6000 clients is a great opportunity to turn those employers and two members on our enterprise side and so Ameren for example.

A recent win for US where there are 25000 employees are coming on is as enterprise clients.

Okay, Great and then just just one or two more quick ones for me I know that Covid was a bit of a drag in 2020, I think there was actually about 8% revenue drag in 'twenty.

Any thoughts on what impact Covid had in the quarter our visits.

Visits at hospitals and talk office is picking back up.

And in my mind that 8% drag should turn into an easier comp and become a tailwind going forward do you have any thoughts there the impact of COVID-19 in the quarter.

Yes, we kind of look at it there was definitely a drag.

And.

As we've talked about Dave and.

<unk> 2020.

Some of the customers.

Brought especially on the on the provider side of it they brought those services in house and other customers that we lost due to Covid haven't come back yet so I don't see as we sit here today Q2, I feel like it's somewhat of a wash like we truly did 20% organic growth.

And 26% when you include the acquisition.

Going forward I think that some of those customers will come back and you are correct that it will ultimately be a tailwind, but I think it's true, 20%, 26% growth quarter over quarter, and we expect to see a tailwind as we as we move forward.

Okay and then just the last one for me on the consumer side and on the life Sciences side, just any color there on your expectations for digital AD spend for the fourth quarter and progress that you might be making on the life Sciences side.

Yeah, our consumer division is doing great as I mentioned, not only are they driving revenue, but producing amazing content winning awards growing our social and Q4 is always our biggest quarter and and we feel great. We feel like people are going back to the doctors and digital marketing spends are up and we.

Where the quality play and as cookies and other stuff starting to go away, it's going to be a big deal that we have 108 million people in our first party database to market too.

So I think thats, where youre going to see a big tailwind for share carriers like we have all of this first party data over 100 million people and as advertising changes with cookies going away and that's going to be a big deal for us.

Okay, Great and then just the last one from me can you talk a little bit just about the investments youre, making in the sales force I know theres, a little bit of pressure on EBITDA.

Any color there and your expectations as we head into next year. Thanks.

Yes, definitely and first I would say that.

Relative to the.

Number one just as we laid out through our pipe process in the analyst day et cetera, we are executing on growing our sales force and product and tech and so we've made a number of new hires.

In Q2 to bolster that sales force as you know our targets of 120 new sales.

Sales over the next three years and <unk>.

We're tracking to that 40. This year alone. We also gave guidance that we had higher an additional 120 on the product and tech side.

Ben.

<unk> heavily youll see that in our product and tech growth from.

Q2 over Q2 of last year. So all of our investments that we said that we're going to drive to continue to drive our growth and profitability are well underway and we don't see really pressure on our EBITDA.

Because comparing it to last year is really an anomaly or guidance for this year was $6.5 million for this quarter was $6.5 million and we exceeded that with all of those investments when you compare it to last year for $7.9 million, we decided not to take the PPP loan and instead, we furloughed.

<unk>, we cut back staff.

We as a management team all took pay cuts and so the EBITDA target year over year of $7 nine compared to this one is.

Is significantly higher than it would have been because we were taking steps.

When we didn't take the PPP loan I believe that debt seven nine would have been closer to four to five last year had we not taken all of those cuts. So it's actually an EBITDA growth for us.

Okay. That's one other things I like about your story are you focused on growth and also earnings momentum and and longer term you would still expect a 25% EBITDA margin is that still sort of the goal longer term absolutely yes. Okay.

Alright, excellent nice quarter congratulations.

Hop back in the queue.

Great. Thank you.

And we have a follow up question from Richard close with Canaccord. Your line is open.

Yes, Jeff I was wondering if you could talk a little bit more about Doc AI I know you mentioned.

<unk> highlighted it a little bit, but can you talk about how.

Youre thinking about integration.

Of that into the overall platform, where do we stand and what should we be looking for over the next couple of quarters in terms of.

How that gets blended into the overall platform.

Sure. Yes. So there is basically kind of core areas that we focus on rate currently with Doc AI.

And the first area is.

Over delivering on anthem.

We have a large contract with anthem and so we're developing.

All of this intellectual property.

Around AI modules.

Platform, we called tonic, which looks at cost of care Smart Opex, which is our research platform.

We've developed with them are back to work passport that I believe 900 employers have now adopted I think I saw Bloomberg was the most recent.

And so we have a host of intellectual property that we're developing at Doc AI that anthem is buying those products as well as we're developing services as well as we're using that team as kind of the backbone for the advocacy build and so they are deployed on data engineering engineering design product and UX. So.

You think about it in kind of four boxes the first boxes.

Over deliver for anthem, and so huge contract and and we work really well together and we can then take those products and sell it to others and then there is the share care integration piece and so again a lot of things that we talk about when we make acquisitions is that we're not a collection of assets, where our platform and so there's a lot of work going on right now like how do we take all of their AI modules.

And and build it into the core share care platform that will happen. This year. So our clients will start to see the smart <unk> and the medication therapies and the predictive models inside the share care platform for our customers that will happen by the end of Q4. This year and then the third area is really exciting for our consumer group.

<unk>, which is.

How do we take omics and accelerate and automate decentralized clinical research and so they built this really great product.

We are calling internally our operation Warped speed. So how do we accelerate research to care and where that goes hand in glove as with our consumer division because we have all these life science clients, we do $65 million a year with pharma and biotech and now we have this great New tech and we've all been inspired by the <unk>.

Feed other vaccine being developed and so we're starting to introduce that capability to our pharma clients. So this is going to be a huge new product offering for Laura who runs our consumer Division and then lastly, it's just AI everywhere all the time and so how do we keep.

Infusing AI.

Into our core customer base, so the way what that looks like as.

We already have lots of data right. We've got self reported data device data claims data.

Data and medical record data, how do we put this onto tonic and so we can give our customers a view of what's the total cost of their population and what's the best next action and so you can we can show on the data and then say not only are we just identifying where the problem is but now we're also giving you the share care platform.

We can customize to an individual level to make sure. They go on the right road and so if they go on the wrong road, it's going to have this kind of cost impact if we can get them on the right Road. This is the type of savings that could happen plus the outcomes and so that's now becoming very regular in our in our sales presentations and we expect to have similar.

<unk> that we've had with anthem selling those services to all our health plan clients.

That's really helpful.

I was wondering if you guys could just talk a little bit I appreciate all of the health security.

<unk>.

Highlights and updates.

Quarter.

How are you guys thinking about.

The duration or.

Sustainability of that type of revenue longer term.

Well I think personally I think health securities like cyber security.

Going to be here forever forward and what we've done is we've stepped in and said how do you step and repeat best practices and health security So that your employees and guests feel safe to return.

And you need you need this you need a tech enabled because it's literally can't step and repeat it and binders and and we've had if all the things we've developed in our career. This has probably been the most viral application.

It's been deployed in 80 countries I checked in a hotel in New York and there was a share care verified black at the front desk. This week and so it's been adopted in 80 countries. We were we did the first cruise ship that left America on the celebrity cruise.

Share care verifying live arenas and generated over $3 billion in media impressions for us already this year. So it has great brand building its tech enabled its safety.

It's affordable if youre, a hotel or an arena or hopefully soon schools.

And I think it's going to be here forever and I think it fits perfectly into our three pillars of community wellbeing health security and resilience, which is our core platform and the credibility that we get every time, we put out a press release or somebody puts it out on our behalf that they've become share care verified gives us a lot of create credibility as we are trying to win the state accounts.

And we mentioned that we got Michigan.

<unk> in Arizona since the last time, we spoke.

We're still we're signing contracts now two year contracts for vaccine work that hasn't even started yet.

And so we.

We see this and then it's going to get into can we be can we do this for flus and can we integrate with shot registry databases.

And you have.

The whole.

Cares Act coming in so we think that debt. This is going to be a core pillar of ours alongside our community Wellbeing index and alongside our core platform.

That's really helpful and just like on the Hotel example that you just gave about your checking in.

Remind us how.

What's the revenue model is that in terms of.

Is that a onetime shot.

It's my understanding that it may be that recurs on an annual basis or just help me out there.

So for stadiums, it's an annual fee I think it's like $25000.50000 per arena and then for hotels is $2000 per year.

We've been pretty aggressive in rolling it out first year, one as the hotels were crushed as you know and don't have any money because they are so bad during COVID-19, but we partnered with inner Nova which pre COVID-19. It was doing $40 billion in travel bookings I think the largest or one of the largest travel companies in the world and they sent out to 50000 hotels mandating that.

They wont book at a hotel unless the hotel share care verified because all the <unk>.

They have 65000 travel agents and I were having to call. All of these hotels every time somebody wanted to book and say Hey, what's your Covid practice and so now they could have a standard and say its share care verified and so our goal is to get as many of those 50000 hotels as possible on boarded and then charged $2000 per hotel per year and thats not in any of our <unk>.

<unk> by the way, but it's not reflected in any numbers, but but we think that we are we think that's potentially very viable in the hotels love it as I said there.

Generated $3 billion.

Media impressions without putting out press releases about their share care verification.

It is a recurring model just to address the laptop.

Part of that question Richard.

Okay. Thanks, Congratulations again.

And we'll see you tomorrow.

Okay, I look forward to it.

Okay.

Our next question coming from David Larsen Your line is open.

One more quick follow up here with these with these wins that you've highlighted like with Centene and these 800000 new members.

Health net Medicare line of business in California, and Oregon are those lives on the platform right now generating a PM TM fee or is it more of like a hunting license.

No it will be at <unk> starting in January.

Okay excellent. Thank you very much congrats on a great quarter. Thank you.

And I'm showing no further questions at this time I would now like to turn the conference call back over to Mr. Jeff Arnold for any closing remarks.

Great. Thank you.

I just would like to reiterate to everybody our appreciation for following share Karen joining the call today.

I'd like to leave you just with a few key points.

We have large enterprise clients that we've talked about today and we've put in our announcements.

We're hyper focused on penetrating.

This is our I believe 18th acquisition.

And what's great about share care is we're profitable and so we can take all of this capital that we just raised and make smart acquisitions that help service our clients and our members and so we intend to continue to be active in M&A.

As an example of what we did today.

We have high revenue visibility, we're 97% booked for the year, we're going to be going into 2022.

Very strong position and we're going to be in a strong position because we think we have that scale tech platform.

As I said, we're not a collection of assets were one platform that we've deployed in scale and we have some really exciting initiatives that are coming to market.

You can tell our enthusiasm about our multi payer advocacy solution, our enthusiasm and Louisiana, Some about our health security solutions and our enthusiasm about our community wellbeing assets, and we think thats going to create the perfect storm per share care, our clients, our users and our investors and we appreciate your time today and look forward to.

Talking to you next quarter take care.

Ladies and gentlemen that conference for today. Thank you for your participation you may now disconnect.

Okay.

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Good day, and welcome I'm going to share Care's second quarter, 2021 earnings conference call and webcast.

All participants will be in a listen only mode.

After today's presentation there'll be an opportunity to ask questions.

So that's a question during this session you will need to press. The Star then the one key on you touched on the telephone.

Please note this event is being recorded.

Leading today's call are Mr. Jeff <unk>, Chairman and CEO.

Mr. Justin Ferrero, President and Chief Financial Officer.

These forward looking statements are subject to various rates and on Synthes and like our current expectations based on our beliefs assumptions and information currently available to us.

Although we believe these expectations are reasonable we undertake no obligation to revise any statement to reflect changes that occur after this call.

A description of some of the factors that could cause actual results to differ materially from these forward looking statements.

Discuss in more detail in our filings with the S E C, including the risk factors section of the perspective of our business combination filed with the S. E C. On June 32021.

In addition.

Please note that the company will be discussing some non-GAAP financial measures that we believe are important in evaluating performance.

Details on the relationship between these non-GAAP measures the day.

Most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press release that is posted on the company's website.

I would now like to end the conference over to your speaker.

This is Jeff I'll note. Please go ahead Sir.

Welcome and thank you for joining us for our first earnings call as a public company.

Joining me today is adjusted for Arrow, our President and Chief Financial Officer.

The pleasure of meeting many of you over the past few months.

But for those of you who are new to our story I'll provide a quick overview on share care before getting into our second quarter performance and the acquisition we announced this morning.

Share care offers the most comprehensive digital health platform in the market and we make it easy for our diverse customer base to buy implement and engage with their populations to improve their overall wellbeing, which lowers their health care cost.

Our solution is focused on data interoperability and delivering a user friendly experience, enabling our clients to efficiently manage the health and wellness other employees and members.

We've been successful in broadly deploying our platform and services to multiple customer segments.

<unk> plans large employers government.

All systems life Sciences, and the consumer building a high tech business that is diversified and revenue and scale and is profitable.

And we continue to innovate.

We delivered strong financial performance in the second quarter with revenue of $98.5 million.

On the high end of our guidance range, representing 26% year over year growth.

We delivered adjusted EBITDA of $6.6 million, which also was ahead of our guidance.

We are committed to profitable organic growth, which was the $400 million of cash raised from our recent business combination enables us to invest in innovation and new growth opportunities.

To bring this to life, we're already integrating the artificial intelligence technology and products from our February acquisition of Doc AI across our entire solution set.

Another example, the acquisition of care lengths from Gen Rally announced today will bring a tech enabled network of more than 450000 caregivers to our digital platform, enabling share care to scale into the last mile of health care the home.

Platform is designed to deliver each person a data driven and individualized journey to SaaS and lower their health risks and measurably improve their wellbeing focused on going from episodic to everyday management.

In addition to benefits navigation, we also offer integrate access to digital therapeutics for specific conditions such as anxiety.