Q2 2021 Soc Telemed Inc Earnings Call

[music].

Good evening and welcome to S E Telematics second quarter 2021 earnings conference call and webcast all participants will be in a listen only mode. Please note also that today's event is being recorded.

I would now like to turn the conference over to Steve Rubis, Vice President of Investor Relations. Please go ahead.

Good evening and thank you for joining our conference call.

Today, we will provide an update on <unk> business as well as review our financial results for the second quarter of 2021.

The news release detailing these results is available on the company's website.

A replay of this call will also be archived on the company website.

During the conference call the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance.

Details on the relationship between these non-GAAP measures to the most comparable GAAP measure and reconciliations thereof can be found in the press release that is posted on the Investor Relations page of the company's website.

Also please note that certain statements made during today's call will be forward looking statements as defined by the private Securities Litigation Reform Act of 1095, such forward looking statements are subject to risks uncertainties and other factors that could cause actual results for SEC tell them that 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.

This evening, we're joined by John <unk>, Chief Executive Officer, and Kris <unk>, Chief Financial Officer, who will be available to answer questions. After the prepared remarks, I will now turn the call over to John.

Thank you Steve Good evening and thank you all for joining our call.

Today, I will walk through our second quarter performance provided an overview of the secular growth trends impacting our business our sales performance during the quarter an update on that dispositions and then close with how Tom and IQ platform is differentiated from our competitors.

Year over year basis in the second quarter, our total console volume increased 98% or 49% on a pro forma basis, including ACA expositions revenue increased 84% and bookings increased 136%.

Our bookings performance for the first half of 2021 was greater than bookings performance for the entirety of 2020.

Notwithstanding our strong performance in the second quarter and year to date.

We've revised our 2021 financial guidance lower to reflect near term disruptions stemming from the COVID-19, Delta variance, which has led to temporary delayed decision, making and slower implementations at hospitals.

The COVID-19 Delta variant displacing significant pressure on hospital emergency departments, especially in states, such as Florida, and Texas the.

The increased pressures stemming from COVID-19 creates a significant distraction for both our current and prospective hospitals with health system customers, resulting in longer sales cycles, and delayed implementation timelines associated with new business and cross selling opportunities.

Finally, we've modeled a weaker than normal upcoming flu season.

Representing additional headwind.

Looking beyond COVID-19, we remain optimistic in the growth trajectory of our business is bookings remained on track to more than doubled full year relative to 2020.

The current bookings trajectory illustrates our market leadership position as well as the significance of longer term growth opportunity for the business.

<unk> Thomas and growth in adoption remains in the very early innings are broad and flexible solutions continue to gain traction as evidenced by growth with our current customers, which I will discuss shortly.

We see firsthand how come that IQ value proposition increasingly resonates with hospital cision makers seeking to standardize are telling us and needs on a single platform.

There are several secular growth tailwind that continue to drive momentum for our business. The first revolves around the shortage of specialty physicians in June The association of American Medical College.

Alex its seventh annual study. The report suggests that the U S will face projected shortage of up 77000 specialty positions by 2034.

Access to specialty care will remain a prominent issue at 40% of physicians are currently 65 or older.

Today. These shortages are more severe throughout the middle of the country.

But rapidly approaching the coastal regions as well.

Telemedicine tools, such as <unk> are uniquely positioned to help both rural and urban hospitals.

In health systems, Bruce, especially physician access GAAP regardless of location.

These trends highlight the need for tools that come out of Q that can still this resource GAAP.

Fractionally and democratizing.

<unk> clinicians for hospitals and health systems the SEC.

As network integrity.

Network integrity for our hospital health system is the ability to keep patients within their defined network of providers are network integrity value proposition revolves around our comprehensive platform.

Shifting of 11 clinical service lines as well as the expanded provider network availability through telematic managed services the.

The telematics platform other hospitals and health systems, a tool to increase clinical capacity.

And maintain network integrity that not only keeps patients in the network and Optimizes revenue, but also proves clinical quality.

For our clients network Integra is about keeping patients within the local community and at the same time, improving ROI through reduction of Peach and transfers to other hospitals or health systems.

Third our platform provides hospitals a tool to optimize our scarce specialist resources through fractional nation and load balancing of these resources to deliver the most cost efficient clinical coverage solutions.

Medical claims share provides a unique lens to assess where we currently stand on telemedicine adoption curve.

Just like the early days of E Commerce adoption, Thomas and claims share represent a relatively small portion of total medical claims we.

We expect to achieve significant.

Medical claims share expansion over the next several years.

Current estimates from Fair House suggest telemedicine claims represent just 5% of our medical claims while 5% may seem relatively low we believe such share illustrates mainstream adoption of telemedicine.

Vividly illustrates the significant multi year growth opportunity for acute care focus telehealth services.

In the second quarter, we added several new logos and benefited from several cross selling opportunities. Our go to market strategy focuses on four opportunities new logos multi.

Multi asset expansion.

Multi specialty expansions and enterprise deals.

An important partnership expansion in both S&P health or Telnet IQ managed services platform.

In May we announced in conjunction with S&P health.

Tom that our Q will serve as the engine of Sep's telemedicine expansion. The multiyear partnership includes annual escalating commitments over a five year period.

Agreement provides SCP the ability to deliver hybrid clinical approach designed to optimize sep's clinical workforce, enabling their hospital partners sufficiently provide excellent patient care.

As a reminder, FEP operates a portfolio of 7500 providers across 30 states and 400 healthcare facilities, reaching over 8 million patients importantly, our second quarter bookings the annual recurring revenue represents only a small portion of the overall contract value.

We benefited from several multi state expansion in the quarter as well, including Unity point health among others. These multi site expansion opportunities are primarily driven by proven success through our Tulsa character offer leading to a better appreciation of our overall value proposition.

Currently we averaged roughly two service lines per facility within the existing client base.

Full adoption of our 11 clinical service lines across our existing 1000, plus facility client base represents an approximate $3 billion market opportunity.

Keeping full clinical service client adoption across the entire 5700 hospital market increases the market opportunity to nearly $7 billion.

Joining me point expanded their use of telemedicine offering across four hospitals in the morning in Cedar Rapids market. That's set to go live in the second half of 2021.

The multi site expansion stems from proven success with our Tulsa character offering at unity point.

Alan Hospital, which resulted in reduced average length of stay by nearly 12 hours.

And avoided more than one $7 million in annualized 40 costs.

And it generated an annual ROI of 281%.

In April two customers implemented our comment on <unk> platform to maintain network integrity in rural markets entrepreneurs Mercy lowered hospital implemented our ICU service line or.

Our platform affords box of course was $24 seven axis intensity.

As the only hospital in the region with 24, seven Axis Intensivists sponsored course can maintain network content and network integrity and keeping higher acuity patients at their facility.

As one final example, the data's regional medical center implemented are telling urology until stroke offerings.

Implementation of talking about acute platinum allows deepest regional medical center to maintain network integrity and keeping more patients within the hospital as it can better manage complex neurological cases. Additionally, tomo acute combined with the physician services, we deliver to help improve outcomes and drive higher quality of care throughout its community.

Now regarding access positions, we continue to work through the integration process and we remain excited about the opportunity. The team is focused on deepening our relationship across both organizations and building the best team.

Our early focus has been and identifying adopting best practices, a solid associated with sales processes and sales opportunities across the combined platform.

Additionally, we've identified a significant number of cross selling opportunities that are active in our pipeline.

The cross sell opportunity revolves around moving single facility clients to multi facility client <unk>.

Expanding service line utilization from roughly two service lines currently to fully full penetration of 11 service lines.

And lastly, driving full penetration across the combined legacy client base.

At the same time, we've identified some initial operating synergies for example, we have successfully completed the transition of the maternal fetal medicine service line. After the Telenet acute platform and have gone live with a very poor sites.

Our significant cross selling opportunity across the combined legacy SLC and access positions platform remains intact and will be a key driver to future growth.

Our late stage pipeline is up roughly nearly 30% since the end of the first quarter.

There are three drivers of the cross selling opportunity across the combined companies with the bulk of back office contract and more complete customers can more easily adopt additional service lines second customers already understand the value of telemedicine and then lastly, the sales process becomes more strategic and consultative.

In nature.

The combination of 11 clinical service lines, coupled with tomo acute platform enables us to meet multiple leads at the health system and hospital leadership level, rather than the individual service line leadership.

The addition of several new service lines, such as cardiology infectious disease maternal fetal medicine, among others helped strengthen our value proposition among hospitals, providing a vast array of specialty that allows our clients to easily expand their service lines on the telenet a key platform to meet their acute care telemedicine with men.

<unk> operational disruption as our clinical resources change overtime.

One additional driver of our cross selling opportunity is vendor fatigue across hospitals and health systems.

<unk> can provide a full suite of clinical services and back office support, including Credentialing and privileging.

As hospitals and health systems space constraints, our algorithm simplifies and automates complex management associated with licenses of credentials at both the state and the facility level, which is an extremely attractive to current and potential customers.

While increased fleet provides a strong validation of our strategic rationale and growth opportunity associated with the access physicians deal visibility the conversion timing remains limited given the renewed COVID-19 environment.

Hospital decision makers patient another wave of new demand and we're already seeing in person meetings revert back to remote work being delayed as an example.

So she told him that remains a multilevel growth story. The first lever revolves around cross selling into our extensive set of current customers through multi site multi service line expansion.

The second lever in both attracting new logos and adding new customers over time.

Third lever involves driving adoption of our <unk> managed service offerings that allow hospitals to build out their service lines load balancer current clinical workforce and.

And supplement capacity needs and then lastly is the only scaled player in acute care telemedicine.

We will continue to be opportunistic about aggregating small competitors over time.

Investors often ask us how telenet IQ platform is differentiated from other offerings. The competitive advantage lies in the flexibility of our platform underlying technology.

The flexible workflows driving the secure platform were designed for optimization of clinical resources and acute care.

Many of our competitors are trying to take system designed for ambulatory or outpatient settings and bring them to the acute care space.

Due to the higher acuity workflow complexities and limited panels associated with acute care.

Other offerings are simply too and flexible to meet the workflow assurances needed for acute care.

We provide life saving medical care.

Furthermore, these competing solutions lacked industrial strength security of the platform might come out of Q.

The tone that IQ workflow aggregates and ranking counters by acuity in real time.

Specials are ranked by availability most of the pullback there is available for license in the state and privilege at that very specific facility. The result is finding the right doctor for the right patient at the right time.

Our telenet acute platform accounts for a greater level of sophistication relative to our public and private competitors acute care solutions require additional layers of credentialing and privileging for doctors relative to the direct to consumer space.

And acute care physician must be licensed in a specific state.

And then credential and privileged to practice medicine at each specific facility.

As of the second quarter, we manage 3400 licenses and 15000 privileges at Standalone SLC.

Furthermore, we continue to implement fire based to wait EMR integration with epic and Cerner. This year alone. We've gone live in 36 hospitals across both health system.

Such integration Embeds, our tomo system within the epic and Cerner ecosystem.

Through a single sign on medical practitioners can submit a tele medicine console requests within seconds directly from the EMR.

Additionally, clinician notes captured during the council will become available in the EMR as soon as potential as complete as.

As you can imagine customers are quite interested in this type of EMR integration that facilitate seamless workflow frictionless Dab exchange.

Finally, and in summary, four key elements to differentiate <unk> from other Thomas and providers in the market first.

The acute care market, where the clinical need we address have greater complexity and risk than direct to consumer telemedicine.

We manage credentialing and privileging for the doctors and hospitals on our platform.

Third the SEC talking about acute platform allows hospitals to rationalize sketch provided provider resources and improve network integrity Lastly, our high Trust CSF certification represents a testament for our commitment to the highest security standards with our Telenet IQ platform.

We have stated before and continue to believe the acute care telemedicine space of the post COVID-19 opportunity as evidenced in the year over year bookings acceleration, we look forward to sharing more and new customer customer success story in the near future and with that I'll turn it over to Chris to walk you through our financials Chris. Thank.

Thank you John I will discuss our second quarter results in more detail.

Overall, we are pleased with our quarterly operating results led by solid Systemwide Council volumes.

For the second quarter, we generated $6.7 million in bookings up 136% year over year, our bookings performance for the first half of 2021 is already greater than our full year performance for all of last year, we remain on track to more than double.

Our prior year bookings in 2021.

And our late stage pipeline growth of 30% further illustrates our bookings outlook.

Total system wide council to approximately 100, 3200 up 98% year over year, driven primarily by the access physicians acquisition.

On a pro forma basis total system wide Council grew 49% year over year, primarily driven by truths in psychiatry and neurology.

As a reminder, total system wide Council include core council to both legacy SFC and access positions as well as counsel from the Tellement IQ managed services platform.

System wide core council totaled approximately 69500 up 130% year over year or an increase of 34% on a pro forma basis. As a reminder, we define core counsel.

As those council performed by our panel of physicians strong core council volume growth can be primarily attributed to the acquisition and strength across psychiatry and neurology.

Our SEC Tellement Standalone core console totaled approximately 37800, while access positions contributed 31700 core counsel in the quarter.

Strength in core commercial volume resulted from moving full growth and both psychiatry and neurology service lines.

<unk> volumes associated with these service lines exhibited a faster than expected recovery to pre COVID-19 levels for psychiatry.

And nearly back to pre COVID-19 levels for neurology.

Excess positions core counseled poor council volumes were impacted by weakness in pulmonary and ICU service lines.

Noting from very limited flu cases, and a significant reduction in COVID-19 cases during the quarter.

Revenues were $25 million up 84% year over year, driven by new client.

Implementation. The addition of access positions and growth in core council volumes in psychiatry, and neurology as well as in cardiology in the maternal fetal medicine within our emerging service lines access positions contributed $8.4 million of revenue for the quarter.

Our adjusted gross margin was 37% versus 40% in the second quarter of 2020 gross margin was negatively impacted primarily by an increase physician incentive payments related to the rapid increase and volatility we experienced income.

Volumes, resulting from the recovery in psychiatry, and neurology as well as increased physician fees attributable to the access physicians acquisition.

Operating expenses were $19.5 million compared to $9.8 million a year ago. The increase in operating expenses results from investments in our go to market functions.

Stock based compensation.

Added costs associated with being a public company and the acquisition of access positions.

Adjusted EBITDA loss in the second quarter was $5.4 million versus a loss of $1.6 million a year ago.

Finally, despite solid utilization trends during the second quarter, we are starting to experience headwinds from the COVID-19 Delta variant, which continues to drive limited visibility in the core console demand.

It also serves as a distraction to our prospective clients.

They worked through vaccine mandates some staffing issues affecting their support services.

While the number of Covid, while the number of daily Covid cases reported to the CDC bottomed out in June to approximately 8000.

Since then there has been a significant acceleration in the number of daily cases to know roughly 110000, a day, that's nearly 15 fold increase since June.

Given these current trends we are experiencing a leveling off of daily volumes in both the psychiatry and neurology service lines.

As individuals get again become hesitant to visit the emergency department unless absolutely necessary.

On the access position side console volumes in pulmonary and ICU service lines experienced lower than expected utilization in the second quarter, resulting from the reduction of Covid cases, and Lumiere nonexistent now.

Non existence of flu cases. Additionally, a change in the go to market strategy for access physicians hardware sales represents a short term headwind to revenues, but results in a longer term better outcome.

Access physicians previously offered hardware.

Only as a capital purchase which we are just due to better reflect the needs in the market through our operational hardware as a service model whereby customers pay a monthly fee to utilize our hardware. We will continue to evolve our hardware our go to market strategy as we work through the access positions immigration.

And the leads in the marketplace.

Lastly, as John mentioned.

SCP health deal, we announced in May as overall neutral to 'twenty to 'twenty one revenue.

But it will positively impact 2022, and beyond as the patient physicians Onboarding increase at S&P.

As we look forward to the balance of the year, we are taking a conservative approach and lowering our full year 2021 guidance Kirk.

Currently we expect full year 2021, GAAP revenue to be between 90 million and $92 million with that excess positions contributing roughly 30%.

Full year 2021 revenue.

We expect adjusted gross margin to be between 37% and 40%.

And we expect to generate an adjusted EBITDA loss of between $22 million and $25 million.

While we do not provide specific guidance on bookings we remain positive on the access positions acquisition acquisition.

And the longer term growth in the business as bookings are on track to more than double in 2021 as compared to last year.

With the access physicians integration well underway. The early focus has been on identifying and aligning the combined business on best practices from each organization.

We are in the initial phases of identifying synergies across the combined organization, we have executed on evolving and training the sales force on the combined 11th service line.

We are accelerating our cross sell strategy and deepening our penetration across a wider client base. Furthermore, we are continuing to work on aligning the back office functions and clues and are in the process of identifying associated cost synergies, which we expect to have some impact in the second.

Half of 2021, but a greater impact in 2022 and beyond.

We remain optimistic about our ability to execute on the significant growth opportunity in acute care telemedicine, which remains in the very early innings of acceptance and adoption.

As the scale player in the acute care telemedicine space, we are well positioned to help our hospital customers solve friction points around access to specialty care network integrity and load balancing of scares physicians resources.

And operator, please open the line for questions.

We will now begin the question and answer session.

I ask a question press Star then one on a touchtone phone.

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

To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

And the first question comes from <unk>, Zhang with Credit Suisse. Please go ahead.

Hi, This is actually Adam on for John today, Thanks for taking the question.

I was hoping you could just provide a bit more color on this change in go to market strategy with the integration of actions positions around the hardware sales, but was this anticipated at the outset of the transaction or did something happen down. The line. Since then and then maybe more broadly on the integration I mean at this point is there is there anything else that we should be keeping keeping in mind that.

What profit change and how youre, bringing access physicians to market outside of the hardware sales.

Hi, This is Chris I would say that.

We weren't certain if we would change the go to market strategy around the car sales or not we knew that they had done it differently on the access position side than what we had been doing.

However, as we look at refining and coalescing, our go to market strategy and our messaging to our customers and what the customers are looking for there are still always certain customers that would prefer to have a capital purchase upfront and we'll be flexible.

In approaching those customers and offering hardware as a one time transaction, but in our experience.

More of the exception than the rule and customers are really looking for a hardware as a service or really combined full service agreement that includes the hardware as a component of the service. So it is something we were aware of what we do.

We see that.

There is going to be better adoption in the future on hardware as a service basis and frankly it is a near term headwind to revenues because you don't take that upfront revenue for selling a 10 or $15000 part.

Baked that into your monthly recurring revenues and it.

<unk> has a much better economic outcome over the long term.

Okay.

Things to be concerned about that.

There are no other real business model differences.

That I can think of John anything to add there.

Got it and then maybe just a follow up on.

In regards to cutting guidance due to the impact of the Delta variance.

Are you only seeing the pressure in Texas and in Florida right now in your customer base or maybe are you also assuming that those.

Headwinds in the ER the expanded into some other regions in <unk> and <unk> now.

So, obviously, Florida and Texas It picked up a lot of National news right, but it is definitely more.

<unk> spread than just those two states. So I think as you can see even in the reports that came out later or later.

This evening, 90% accounting to the United States are considered high COVID-19 areas, So, obviously, Florida, Texas pickup or a banner amount of the news, but it is more widespread.

Okay. Thank you.

Thank you Adam.

The next question comes from Ryan Daniels with William Blair. Please go ahead.

Hey, guys. Thanks for taking the questions and the details thus far and I appreciate all the details in the press release, that's Super helpful.

Wanted to ask about the late stage pipeline you mentioned, it's up 30% on a sequential basis. It seems like a pretty big number for one quarter. So can you talk a little bit about how you define that meaning what that 30% actually is and then what a late stage opportunity.

It's actually define that just put that in perspective for us.

Yes, Ryan I appreciate the question when we consider late stage and we are we do like obviously that growth. We look at it is where we are starting to exchange paper with organization. So they basically have given us a verbal but they are interested we realize that does not always come to fruition. So we have different stages within that space itself as we have a typical.

Sales process that we track all of these but when we think late stage its where a customer says yes, we're definitively interested in doing something let's start exchanging paper and see if the need matches, then we start getting into specifics around what's the absolute volume what are the hours, what's the type of coverage et cetera, that's taking place but at that.

Well look that the preferred option for them.

And is it defined by kind of our expected annual contract value to get the actual metric of 30% or is that just a number of papers in the works.

No. It does include an actual original estimated value not just the number of pieces of paper work you can imagine the contract deltas are quite different right. If we do a neurology deal and we're doing all neurology from a hospital contract even at a small hospital it can be quite larger than we are covering partial.

Coverage for our large hospitals. An example, so we don't look at that 30% of <unk>.

<unk> is the number of deals we look at it as the original estimate and.

And we have more work to do in fine tweaking. So we typically sit down and then at that point trying to really make sure. We have the clinical coverage that each of the customers and hospitals are looking for and that's what the work is in that late stage process.

We measure the pipeline in terms of.

There are for the contact center.

Or the customer opportunities within the pipeline.

Understood I just wanted to make sure Okay, and then given the volatility we continue to see it.

Surprise here, given what managed care companies and hospitals have said about the EBIT performance does that change at all your near term sales approach, where maybe you look at some of the access physician areas that aren't as impacted by volumes in the ear Covid and maybe try to push those more and take the throttle on some of the sales that are really specific.

I can't give telling neurology.

Hey, Ryan it's a good question from a volatility standpoint, we did see great strength in the second quarter as Chris mentioned, we came back to pre COVID-19 levels in psychiatry and near.

Pre levels in neurology for legacy Soc.

A big majority of that was in the emergency room volume place SLC, even before coming together with access physicians was starting to get pulled more into inpatient for neurology and psychiatry as well again into those hospitals and so we're already having that natural pivot as customers were getting more familiar with how to use telemedicine deeper into.

The hospital setting what's nice about access positions in SLC come together to your point the conversations on cross sell so thats whats driving that late late stage pipeline I want that youre hearing a good a good look at other specialties.

With our same customers those customers before we could sit down and have a conversation. They know who we are now they know the value that we deliver and we can start talking about bringing additional specialties into the inpatient floors. So yes, you will see the mix of impatient to EDI, just naturally evolving considering a number of other specialties that we're able to offer in general.

Perfect and then last one and I'll hop off just in the new guidance again, not overly surprising given everything were seeing but I'm curious how you've constructed that I know before the prior guidance assumed a gradual normalization throughout the year, you're just assuming volumes stay flat at this point or.

Decline in volumes from where we sat at the end of June given the weaker flu season, and Delta uptick just help us really frame, how you're developing your guidance. Thanks.

Yes, right Ryan.

The overall trend is largely flat, but we have assumed some slight declines in a little bit of volatility in the numbers because we're seeing that but you can think of it youre right. We previously had a linear progression throughout the over the balance of the year and that is really just flattened out which is <unk>.

Bolting and resetting the numbers.

Okay, and Thats flat same store volume, but you also get some new clients coming on which kind of help buffer that is that fair.

Yes, we put a little bit of a downward trend just in case. This thing goes sideways on us we don't expect it to do anything like it did.

Last year, if you will with the decreases.

So that'll buoy.

The numbers overall, but there is a little bit of pickup youll get from a bookings come in line.

Got it okay perfect. Thank you guys.

Thanks, Brian.

The next question comes from Vikram <unk> with Baird. Please go ahead.

Yes. Thank you for taking the question I guess first on the guidance reduction I mean can you talk about how much of that was related to delays in new project implementations that were expected this year and I guess going forward just looking at the new range, what does that assume in terms of new project implementations through the balance of this year.

Yes, Vikram highest Chris good.

Take your question here, so the largest driver of the downturn as well.

<unk> volume impacts.

The biggest driver what we have seen though on implementations is.

Theyre extending right now on average about 30 days beyond where we had been trending so.

Previously.

On average we're running just over 90 days and now we're up back up to about 120 days. So that does extend the timeline for when we start to see revenue on the new deal still alive, but the bigger impact is definitely the volume trends come through the <unk>.

Okay, great. Thanks, and then I know in the past you've talked about the potential to convert some of the access physicians network from independent over to fully employed status similar to SSD tell them that I am curious if you can just give us an update on that front and what your expectations are there going forward. Thanks.

Our strategy remains the same as doubling our growth in a number of the smaller specialties that excess position pad. We can naturally bring on work we know predictably.

By a number of states, we have a volume to fully bring over and W. Two physicians.

Physicians clinics since we see strong interest in that actually.

From from individuals wanting to be come on and be signed in two SFC as W. Two well, we're obviously watching from volumes overall as we want to have good steady look at volumes before we start moving people into WTO fixture costs, obviously and that's the element that we can play conservative on it.

These.

What's happening both in Covid and then the near term and again, what we mentioned is we have steady business that clearly points we need.

Path wasn't a dozen two dozen more talking to us we will move in that direction that makes sense for our employment team our clinical team as well as our customers.

Great. Thank you.

The next question comes from Sean Dodge with RBC capital markets. Please go ahead.

Yes. Thanks.

Good afternoon.

John You mentioned.

Fatigue hospitals are feeling and having now the <unk> exits physicians.

That deal brings me.

More of a one stop shop.

<unk>.

With that deal hadn't been done for a little while now or are you noticing a shift at all in the conversations you're having with prospective clients and I guess is it is it just the distraction of the Delta variant that slowing conversion down or do you think it's going to take a little bit of time to kind of integrate it and get it all the gel and get the message out before that really starts to drive some some kind of meaningful.

<unk> inflection and traction there.

Yes benefits he was really something that came up and common discussions.

I think I mentioned that before it almost felt like folks went to a conference together mentioned in this particular space because when you're trying to run and <unk> across multiple states.

And you won.

System CMO to have someone that they trust and knowing they can talk to about clinical quality and clinical quality measures.

And the team.

That came up in spades and it still has I think the element that what we're seeing is especially if you just reflect back on the last six weeks early July we were still having a number of meetings live and that was with system Ceos and their medical team and they were putting us in touch with the regional leaders within their ibm's et cetera.

So those introductions were taking place because they did not want to be introduced to dozens of IP challenges dozens of vendor elements and again theres a lot of technical piece, we're very proud of the work we have on high trust from our technical security basis, because it keeps our hospital customers safe at scale as well.

You look where we are today meetings are being canceled the lightning or being canceled we're going back to assume and that discussion as folks get ready for hey, do we need to be prepared to be.

Offering up.

Additional vaccination for the public.

Obviously, we talked about Florida, and Texas, feeling the stress, but there are other states clearly you've heard Mississippi, Alabama and other states that are fueling this as well.

The meetings are being pushed on to virtual that piece. Obviously, then when you're talking about system that has multiple states. They're in very different elements are either getting ready for.

Elements to help their teams or their already hunkered down and we mentioned that is not just a few states. It's much more broadly nationally so for us the value proposition has come clear effect of one nice element for us having the number of specialties is come out of Q became a much more console.

A discussion it was where do you need specialist help immediately which we can provide and where do you have a mal distribution of your own specialists, where you can help yourself and then we can bring to tell them that IQ. So the fact of having two different strategic discussions.

At the same time actually enriched those discussions and we're wanting to bring that obviously for far easier to do when you are sitting around the table live enabled whiteboard out element and think strategically about how to go at a national campaign for an IV yet.

Does that help Sean, yes, and maybe just to kind of clarify that last point, where you are talking to clients about more kind of inclusive of end to end offering and it sounds like tell him that IQ as a standalone is that is that kind of offering both of those different parts of the organization or is that them kind of considering.

One over the other.

Is it kind of like a hybridization or.

And either or.

It's a total solution.

We have yet to have a conversation where and.

This is the difference between last year and this year by having multiple specialties. We are almost always being asked about helping with specialty coverage.

Some of the <unk> 11 that we can help cover within and then the conversation goes further and this is what we have been teaching our sales teams and working through the training on the sales teams.

Clearly probably have an over distribution of specials, a particular geography, how can we help that mal distribution in fractional as their time and that and that's an entirely different discussion, which is why we have folks on the team that are skilled at SaaS like discussions versus clinical type discussions and the team together.

That we're working with the customers. They are literally right hand left hand in that discussion, it's not a separate strategy a solution and you can imagine it fluctuate our ability to be in with the hospital and be their solution as their environment changes, whether it's the specialty they might.

Here are few of their own and then be able to use telnet IQ. Instead, there is always going to be a shortage right. The stat around the 77000 additional shortages of specialists, there's just simply not enough to solve so it's really trying to move individuals around maximize their time and help them all distributional specialists.

Okay interesting.

Very helpful. Thanks again.

Thanks.

Again, if you would like to ask a question Press Star then one to join the queue. The next question comes from David Larsen with BTG. Please go ahead.

Hi, I'm sorry. If this question has already been asked I joined the call little bit late but.

Bookings growth actually looks pretty good to me.

I think $6.7 million up 136%.

Can you maybe just comment on the selling environment and what drove that thanks.

Hey, David we are pleased with the bookings both in the second quarter as well as the first half of the year compared to all of 2020, we see strengthen that we think it shows that in this environment, where telemedicine is trying to be adopted it's being understood that it can truly be using this acute care space. So we do.

We see it as full as we see it both between the numbers that were put up in the first half as well as the late stage and the cross selling opportunities that we've been.

Getting after so we are bullish on the bookings side and Thats. Obviously, we have always said we are post COVID-19 play.

I think we would have never predicted there is going to be a third and then a fourth wave I think we can all agree that that's not something we have.

Wanting to put into any models any <unk> business in the world and so it is that pressure, but what it shows is there's true understanding that the shortage is not going to go away, while the immediate and the urgent COVID-19.

The long term urgent is going to be adding specialist to take care bye populations are getting older and thats, where we saw the long term strategy for hospitals, which is why we think the bookings is coming in so strong.

Okay does that bookings include <unk> and access physicians and is that sort of an organic growth rate or.

Like what's the breakout for pure <unk>, and what was that trend on a year over year basis.

So that number does include all of SLC legacy AAM access physicians legacy combined.

The elements of that.

Tell him that IQ as well.

Our clinicians offering in our what we call our council.

The one element that it does not include the Christmas comment to my comment the SVP contract was because it's a multiyear contract. It only represents a one year evaluation within that total bookings number that you've that you heard for the quarter. So it does not show the entire value of that contract over the five year period.

Okay.

Okay and then.

It looks like on a <unk>.

Total basis, the revenue per console Dickey.

<unk> declined a little bit, but the access physician revenue per console actually increased on a year over year basis, just any color on what drove those trends would be very helpful.

Yes.

The decline on the revenue per council on the FMC side is driven by as we've discussed before.

Throughout the heavy Covid period, we had been operating below minimums.

Primarily on the SEC side, so customers had been paying for a minimum number of counsel.

But we had been performing fewer than those so there is a period of time, which we fill that minimums bucket and that drives down your revenue per console because as you fill the minimums bucket you are effectively doing those additional consoles at.

At the same price you were doing before so thats, what drove that down and then on the access position side, it's sort of the inverse we saw a decrease in council and poem pulmonary and ICU, which then kind of increase the revenue per council.

Okay, great. Thanks very much.

This concludes our question and answer session I will now turn the conference back over to John Calix for any closing remarks.

I'll just quickly thank everyone for joining Tonight, we look forward to connecting more ensuring details on additional customers additional growth moving forward. Thank you everybody.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Okay.

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