Q3 2021 Tabula Rasa HealthCare Inc Earnings Call

[music].

Good morning, ladies and gentlemen, and welcome to the Q3 2021 Tabula Rasa healthcare incorporated earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given will follow at that time.

If you're in the West you require any assistance during the call. Please press Star then zero on your touch Hum as a reminder, this conference call is being recorded I will now.

I'd like to turn the conference over to your host Mr. Kevin Dill General Counsel Sir Please proceed.

Yeah.

Thank you and good morning.

I'm, Kevin Dill corporate counsel for Tabula Rasa healthcare.

The company intends to avail itself of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Certain statements made during this call will be forward looking statements within the meaning of that law.

These forward looking statements are subject to risks uncertainties and other factors that could cause tabula rasa healthcare as actual results could differ materially from those expressed or implied by the forward looking statements.

These risks and uncertainties include the developing nature of the market for technology enabled healthcare products and services.

And potential changes to laws and regulations that may impact our clients.

For additional information on the risks facing Tabula Rasa healthcare please.

Please refer to our filings with the SEC, including the risk factors section of our 10-K filed on February 26 2021.

A recording of this call is accessible through a link on the Investor Relations page of our website and it will be available for 90 days.

I'll turn the call over to Dr. Calvin Knowlton, CEO, chairman and founder of Tabula Rasa healthcare.

Thank you Kevin.

I wanted to open the call with a summary of our third quarter results, including the <unk>.

Key theme, which is our organic revenue growth is improving.

Three points.

Third quarter revenue grew 23% year over year.

The $86 6 million.

This compares to 4% revenue growth last year.

And 6% revenue growth in the first half of 2021.

This trajectory bodes well for us as we get close to 2022.

Second.

Third quarter organic revenue growth of 17%.

Compares with 1%.

During the first half of 2021.

Third.

Midwives health care software subscription revenue of $11 8 million increased 16% year over year.

And 17% on a sequential basis as compared to the second quarter of 2021.

The focus.

Our board meeting earlier this week on Monday, and Tuesday was.

Maximizing long term value for our shareholders.

In the near term.

We are doing three things.

First organizational leadership changes to better align strategy product and sales.

And this will go into effect next week.

Second.

Evaluating options to unlike unlock.

<unk> value.

And noncore assets.

And third exploring new strategic and transformational relationships.

We will provide greater detail in the coming weeks and months as our strategy execution progressive.

At this time I will turn it over to <unk> to discuss our care mention division, which houses five offerings in pace.

After which Kevin will discuss our med Wise Division and then Brian will discuss the financials.

Firstly.

Thank you during the third quarter, our net census growth for the program.

Care for the elderly.

And the range of 1% monthly sequential growth.

Pace population has benefited from the high level of vaccination administer to seniors across the U S.

Vaccination rates among their 65 and older at 84, 5%.

As per October 'twenty, one premise CDC in short we feel good about the future trajectory with pace enrollment and our caravan health care business.

As part of our normal annual reporting we will provide detailed net pace metrics in conjunction with our fourth quarter earnings call.

Is the highlight a few trends.

Our average per member per month or P. M. P. M revenue continued to grow at a healthy rate during the third quarter up 4% versus the second quarter and up 9% versus the first quarter as we benefit from a growing base of care kinesis client their pharmacy services and medication risk mitigation utilizing.

In fact, the number of pace participant served by care Kinesis is up 15% at the end of the third quarter versus a year ago.

Second pace crosstie revenue recognized through the first nine months of 2021 is 12% higher versus the same period, a year ago and exceeds the total revenue recognized for the for the full year of 2020.

High growth, new startup and expansion activity are encouraging with existing states, including Florida, Massachusetts, North Carolina, New York, Louisiana, Ohio, and Maryland.

Banning pace and new state includes Washington, DC, Kentucky, and Illinois, and those looking to add pace startup organizations are relying on the expertise of Kevin can help cure, helping them enter the market with confidence as of September 30 of 2021, ERP implementation backlog stands at 47.

Even with 17 projected to go live during the final quarter of 2021, and the remaining 30 scheduled for 2022 and 2023.

During the third quarter of 2021, we competed for implementation, bringing the total as of September 32021% to 19.

We continue to be pleased with the growing support for pace, which remains the gold standard for value based care and.

In September HHS published a report titled comparing outcomes for dual eligible beneficiaries and integrated care.

This concludes the pace program stands out from our analysis as a consistently high performer.

The report found that dual eligible beneficiaries in pace has better outcomes compared to regular Medicare advantage enrollees and this study evaluated.

Dual eligible beneficiaries enrolled in three mutually exclusive franchise comparing them to pace.

I'd like to turn the call over to Kevin Boesen, Our Chief Scientific Officer.

Right.

Thank you Ursula and this is Kevin Boesen Chief sales officer. Thanks Ursula.

I appreciate it.

I appreciate the promotion.

As part of our effort to provide greater transparency into our financial model.

I'll start reporting on our actual bookings figures, excluding sales related to COVID-19 testing in 2020.

Overall care mentioned healthcare and med Whitehouse care Q3 bookings increased 87% compared to a year ago and totaled a record $15 million led by our <unk> segment.

Notable third quarter deals included two blue's organizations self insured employer groups, several health plan, serving Medicare and Medicaid and an exciting partnership with Ehealth.

<unk> health is one of the leading private online marketplaces for health insurance and a key driver in our Q3 record results.

In August we went live with our Ehealth sponsored Medicare plan Finder solution and this relationship has increased our retail pharmacy footprint by almost 1000, new community pharmacy rooftops during the third quarter. This is the largest growth in new community pharmacy customers in a single quarter since the 2019 acquisition of prescribe.

Walnuts.

At the end of Q3, our retail pharmacy footprint is close to one out of every four rooftops across the country are prescribed wellness network represents an incredibly valuable asset as pharmacist play a more integral role in overall medical care.

Growth in our pharmacy network is an important part of our payer sales strategy.

The larger our network the more opportunity to enhance payer engagement for payers through the local pharmacist patient relationship.

I'm also excited about our collaboration with Mckesson Health Mart, which officially launched in October to 5000 community pharmacies and will begin contributing meaningful revenue during the fourth quarter of 2021.

<unk> digital portfolio is a new solution powered by the prescribe wellness platform and provides pharmacies with a suite of digital tools and services, including our consumer web portal and mobile app with the goal of strengthening critical interactions between a pharmacist in patient.

We also have a subscription based premium offering with a number of important features and functions for 2022 and beyond.

Turning to our year to date performance through the first nine months of 2021, our overall bookings across both the care mention and midwives healthcare segments totaled $25 5 million, an 8% decline as compared to the same period in 2020.

This bookings period figure is a good proxy for annual recurring revenue or <unk> as less than 2% of the $25 million represents a one time or nonrecurring revenue.

As of today, we estimate 54% or $13 7 million of our 2021 bookings year to date will be recognized as revenue in 2021 are in year revenue target as part of our 2021 guidance was $21 million or seven percentage points of growth.

Given that we have less than two months of selling remaining in the current fiscal year and our ability to convert bookings into recognized revenue decreases every month as we get closer to December 31, we will not be able to close the remaining $7 million gap.

The lower sales and lower conversion rate of bookings to recognize revenue are key factors in our Q4 guidance. The shortfall is due to several factors one contract delays that pushed key wins to later Q4 starts and too short term hiring challenges, which our peers have also commented on that.

The pandemic has elevated the role of retail pharmacies and created strong demand for pharmacists and pharmacy technicians.

As we head into 2022, we are in a better position than we were a year ago first our sales team continued to expand during the third quarter and as of September 30, we are close to our target of 50 individuals across divisions with the largest headcount supporting our community pharmacy and payer markets. The med wise health care segment.

Second we feel good about the overall sales pipeline and the level of late stage activity as we head into 2022, our payer pipeline has continued to grow as a direct result of the increased head count and a key return of live Tradeshows in recent weeks, including health Smbs Ketamine of managed care pharmacy, and leading H to name a few in <unk>.

We remain confident in the long term growth for med wise in our payer division.

<unk> a proven outcomes from our recent midwives publications as well as our proven results around star ratings.

October CMS released its 2022 star ratings and our clients continue to outperform.

Our existing Medicare advantage clients seven contracts improved from a three to a five or four to a five star plan, bringing the total number of five star contracts to 38, we're effectively one out of every four contracts. We serve this compares.

Favorably to 16% of total Medicare advantage contracts that attained a five star rating I'll now turn it over to Brian Adams.

Thanks, Kevin.

As Kevin mentioned earlier, although we continue to see a healthy acceleration of our growth rate from the first half of the year, we're not satisfied with the progress and we're taking actions to further enhance our growth.

Before commenting on guidance I want to dig into our med wise results as expected we saw the benefit of a large new contracts go live during Q3 with the leading private online health insurance marketplace.

Which led to 16% software subscription revenue growth and 7% revenue growth for them. That's why it's health care segment.

Unfortunately medication safety services fell short of our internal projections declining by 4% with.

With the primary factor being hiring challenges within our telephone embassy call centers, leading to a lower number of comprehensive medication reviews or <unk> being.

Compared to our target during the quarter.

As of today, we are adequately staffed to deliver on our fourth quarter medication safety services revenue projections.

And at the end of September our call Center head count excluding in turns was 19% higher as compared to June 30, with strong hiring in both August and September.

It is important to note that the one large client loss in 2021 and the reduced fees for MTM program. This year accounted for 14% of revenue last year and this headwind offset strong growth from new clients in 2021.

<unk> Spring health as one example, and continue continued gains at two major health plans, where 2021 third quarter revenue more than tripled versus a year ago and now accounting for 18% of total medication safety services revenue in the quarter.

Now turning to Q4 and the full year outlook.

When we provided our initial 2021 guidance back in February we highlighted five key assumption bridging our actual 2020 results to our projected 2021 results.

I want to revisit each of these and provide you with an update.

First our pace census growth is tracking to plan our October 'twenty, one monthly sequential census growth procure kinesis was in the range of 1% and enrollment is up 9% versus a year ago.

As a reference point the latest the pace data from CMS showed October enrollment up 5% versus a year ago. So we continue to grow well above the overall market.

Second persona code is right on target contributing five percentage points of inorganic growth.

<unk> new client contracts were expected to add three percentage points of growth during 2021, and we are behind primarily due to the delayed launch of Mckesson Health Mart, which has now gone live as Kevin mentioned.

Fourth is new business and as Kevin discussed we are behind our sales plan and the weaker revenue outlook for the fourth quarter and full year is entirely related to the midwives medication safety services line.

Unfortunately, we have experienced contracting delays expanding our relationship with a material existing customer for a program that was expected to be implemented during the fourth quarter and that is a major factor leading to the weakness in our medication safety services revenue at the end of the year.

Lastly, revenue attrition is as expected.

The reduced revenue outlook is having a disproportionate impact on our adjusted EBITDA guidance given the ongoing investment in the business, albeit these investments are at a more measured level heading into 2022.

Our fourth quarter 2021 revenue guidance reflects growth of 9% to 12% all organic as compared to a year ago, we expect care bench and healthier to increase at a faster rate than the overall growth range of 9% to 12% as we benefit from the growing pace participant base, we expect.

<unk> health care revenue to increase in the low to mid single digit range with continued strength in software subscriptions.

Last we plan to provide formal 2022 guidance in connection with our fourth quarter 2021 earnings release, but wanted to offer some preliminary thoughts for next year.

For some history.

I'll remind you that in 2020, we experienced organic revenue growth of 3% in 2021, we are projecting 7% and our exiting the year in the range of 9% to 12% for the fourth quarter we.

We expect organic revenue growth to continue to trend positively in 2022, and we feel comfortable we can generate 12% to 14% organic revenue growth in 2022, which includes 2% to four percentage points of growth from future unsigned contracts that we expect will be converted into revenue next year.

If you exclude the revenue loss attributable to the planned end of the MTM pilot program of 3% our growth rate next year would be 15% to 17%.

Regarding adjusted EBITDA, we are committed to driving margin expansion in the range of a 100 basis points as compared to 2021 current guidance reflects a range of five 8% to six 1%.

With that I'll turn it back over to Cal for closing comments.

Thanks, Brian to close this management team and all of our team members are working incredibly hard to create value for our clients and our shareholders.

The three initiatives that we've launched.

Second earlier, the organizational leadership changes the evaluation of options, but unlike unlock value in noncore assets and exploring a new strategic and transformational relationships.

Bode well for increasing performance and shareholder value.

As you heard our <unk> engine Division is back on track for a wholesome 2022.

And our midwives division is headed in the right direction.

Would you kindly open the call for Q&A. Please.

Sure.

Yes, ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone telephone.

If your question has been answered or you wish to move yourself from the queue. Please press the pound key.

Your first question will come from the line of Ryan Daniels with William Blair. Please go ahead with your question.

Yes. Good morning. Thanks for taking my question. This is Jared Haase in for Ryan.

Certainly one of the themes here for the quarter is that the hiring challenges and the way that that.

Sort of impacted the results in Q3, so I just wanted to kind of stick on that theme for a minute I mean I guess.

The question is can you.

Sort of talk about what specifically the hiring challenges were was it sort of just falling short.

Some of your hiring goals did you see an increase in sort of attrition or hypertension issues in the call centers, just sort of curious what.

What gives you comfort that that at this point you know those issues are kind of alleviated as we go into Q4, and then into FY 'twenty two.

Yeah. This is Kal you had a number of different issues with hiring but as many people did but the one thing that really hurt US was we usually have a few hundred students pharmacist working with us from the different schools of pharmacy.

And I think because they are not in class, but their remote exclude cut down in less than half of what we normally have get every year signed up we were well under $1 50.

We do have a new initiative that we launched in two over the new.

The Aegon.

Full time liaison to the schools and colleges of pharmacy in the country that we work with to try and bolster that so that was that was a big hit on the on the Midwest side for us.

I'd just add onto that Jared.

Under Kelly <unk> New leadership.

We've adjusted our staffing model in order to continue to evolve that going into 2022 with more full time individuals.

And so.

You can see just based on the head count change from the end of the second quarter to the end of the third quarter that we have made progress against that we feel like we're very well positioned to adapt to satisfy any of the future contracts, but it is Cal described.

Students.

And recruiting those which happens typically twice a year and there's heavy churn there will be a challenge in this past quarter until we've made some adjustments to the model.

And so we're.

I'm excited to continue to promote that.

Got it thanks for that color and then I guess, just maybe a quick follow up so in terms of some of the sort of contract delays or the timing issues with closing contracts. That's impacted the outlook I think that's been a theme that's cropped up maybe a couple of times.

So I guess I'm, just sort of curious what specifically with this with this large renewal whats specifically delay that is any of it related to COVID-19, where it's just harder to kind of get people's attention on certain projects or maybe harder to travel things like that.

Curious.

To what extent does this might be an issue that crops up in the future.

Yes. Thanks.

You get that question. This is Kevin and I will take that.

The the contract issues and where we were confident in being able to add.

Close these earlier do closer starts our existing contracts, where we're looking to add more simple amendments, but what we've found is that even simple amendments are difficult in one of our largest customers is our retail community pharmacy that.

Really struggled with bandwidth with Covid testing the employer mandates for Covid vaccines, and we just found that.

We were definitely over optimistic in our ability to get some of the share time for legal teams to get things done.

As quick as we thought we could get them done.

Okay, Thanks for that and I'll hop back into queue.

Your next question will come from the line of Sean Dodge with RBC capital markets. Please go ahead with your question.

Yes, thanks, good morning.

Want to go back.

I would tell you made at the beginning of the call and the strategic focuses for 2022.

One of the things you mentioned evaluating options for non core assets I guess can.

Can you just give us a little bit more.

Detailed areas, maybe some sense of what you'd consider to be noncore right. Now and then you also mentioned some leadership changes to come out I was wondering if you or anything more you could share.

On on that as well.

They are not well.

To be very honest I can't really share the non core assets yet because.

We have employees there.

Don't know about what we're doing so I don't want to.

I don't think I can do anything on that right now, but you will hear about that shortly.

Sure.

On the leadership changes we've added Kelly she has been here 90 days very experienced midwives and we're going to make.

Other.

Leadership changes there to help us bolster.

The <unk> team.

And.

You'll hear about that.

Next week actually.

And Thats really come back I'm, sorry, Kelly Kodak, we brought her and she's been here almost 90 days, but we are going to make one more fairly substantial seat very senior leadership change.

And Sean I'd, just echo <unk> comments on Kelly I mean, she's been.

Here for 90 days has some really exciting observations related to the business and changes that she wants to implement that I think are going to be really meaningful going into next year. So very pleased to have her on board.

Is there.

So I guess I appreciate not mean noncore assets specifically.

Is there anything more you can give on kind of what evaluating options means are you.

You're looking at divesting or shutting down or doing something else with.

Shown are pushed out I think we could share more at this point.

Okay fair enough.

Maybe then.

The third leg of the stool you mentioned was.

We're looking at maybe potential partnerships is there any any examples or some idea you can give us of what that what youre thinking there.

I think what I would say on that front shown at this point is we've been looking at a couple partnership.

<unk>.

Would really put us in a position to align our growth strategy with some other businesses that are in certain markets that we're targeting.

And.

Hopefully, we'll be able to hear about those in the coming months.

But they have been underway for some time now.

Interest expense okay.

We've expanded from there, but yes, I am sorry, we cant get into the weeds on that too much because.

Alright.

Understand thanks again.

Thanks, John.

Okay.

Your next question will come from the line of Sean Wieland with Piper Sandler. Please go ahead with your question good question.

Hi, Thanks, very much good morning.

So.

Going back to the guidance that you gave in February.

My notes say that.

This is conservative we need to do about $20 million of new business to hit it.

Compare and contrast, the $20 million needed to hit the.

The guidance from February to the $20 million cut that you made today.

Yes, Sean so big.

A big piece of it is.

The new contract that we had hoped to win.

But not hope to win but it's currently.

In contracting with an existing customer that is a material piece of the.

The adjustments.

Kevin referenced I think I did as well we did have some delays implementing contracts that were secured last year.

Typically the health Mart contract that was delayed until really the fourth quarter.

And that had a meaningful impact for this year, we did have some some delays with a couple of the contracts.

<unk> did not come on line as we had hoped.

Most of that happening in the second half of the year.

And then we had a couple of million dollars myth.

In Q3 related to some of those hiring challenge so.

A lot of it is that.

<unk>.

Weighted.

And the.

The most material is.

This contract with a very large chain pharmacy.

We have an existing relationship with that with looking to expand.

Clinical programs.

And we have that contract.

Underway, but it has not been executed yet so.

That's the most meaningful pace heading.

Heading into the year.

This contract that are that the expansion is delayed.

Can you quantify the impact of that and second was it was that contra.

Contract expansion.

In part of the $20 million.

Of revenue that you needed to to win or was that part of the what you thought you had visibility into.

That was in the 20% that we needed to win.

And.

A pretty meaningful piece of that.

I think that's what I can say at this point I don't know, Kevin if you would expand on that at all.

Yes.

It is it is meaningful it is something that we anticipated. It was part of what we was a new win.

Something that we expected would have launched sooner.

But I think what we've learned.

Over the course of this year is that.

While we've been able to shorten many aspects of the sales cycle by some of the folks that we brought in the backend aspects of that sales cycle continue to be.

That's a challenge and we need to be much more conservative in terms of some of those timelines.

Yeah.

So it just looks like.

Comparing that the original guidance to where we are today it looks.

Uh huh.

Like you didn't win any business throughout the year and that's just I just don't.

See how that is that right.

No we had.

As we reported from a transparency standpoint is we do have <unk>.

<unk> 5 billion in new business wins.

<unk> 14 of that contributed that 2014, our 2021 revenue.

So there are some of the other factors.

That Brian mentioned relative to staffing challenges that we faced in Q3 that cost estimates a little bit and then the.

Yes.

Slowness of the health Mart launch, which we're very excited that it launched but it was much later in the year than we anticipated.

Okay. Thanks very much.

Thank you Sean.

Your next question will come from the line of Stephanie Davis with SBB Leerink. Please go ahead with your question.

Hi team. Thank you for taking my question I do appreciate it takes a lot to own temporary shortfall. It can take a hard look at the business.

Happy to doing that.

Got two questions one of them very broad strokes on financials and long been pretty granular.

First off Brian.

Just in light of how the year has progressed how do you think your guidance philosophy has changed and how are you approaching guidance on a go forward basis, maybe looking even beyond 2022.

Yes. Thanks for the question because I think that this is it.

It is important to address.

Yeah.

Coming into this year I think we clearly were aggressive with our target.

And while we've been in the process of building out the sales team as Kevin mentioned.

Sales cycles continued to be a lot longer than were originally assumed in our.

Our guidance and so.

Going into next year, it's probably noted.

We're looking at a contribution of really 2% to 4%.

<unk>.

Of topline contributed from new contracts versus.

We were in the.

The equivalent of $6 million to $12 million versus the 20, plus that we were focused on this year, so coming off of a bigger base.

Got a much lower target in order to get to the numbers.

Forecasting.

Mentioned, we've got fantastic growth across the majority of the business and there is one area that we're working to correct that that growth rate.

And so we want to take a more conservative approach to our expectations related to new sales at this point, we're going to continue to update you as.

As we make progress against those targets, but.

We've got a significant.

A reduction in that assumption for next year.

That's going to continue to be our philosophy going forward.

And I think it's how much of the philosophy of <unk>.

The board has changed too.

On this on this matter. So I think we're pretty coherent now throughout the company and the board, how we're going to forecast.

As Brian said it was a little low.

A little aggressive.

We dialed that back.

Okay good to hear.

Now on a very granular question.

Fleet opposite of philosophy.

How should we think about your debt covenants and cash flow needs in light of the past few quarters.

Great Great question, we've been getting this from a few investors.

To be honest.

From a covenant perspective, no concerns on that front based on current business performance and what we forecasted.

I will note for you Stephanie is that we.

We have been taking actions even during this year to improve the cash burn and I'll give you an exam and to lower our operating expenses and I'll give you. An example, we recently outsourced.

A significant portion of our it infrastructure to Accenture.

Thats it.

Savings for 2022.

The transition is happening right now, but that is an action we did take earlier this year.

We expect to continue to we expect to continue to evaluate all areas of our operating expenses to see.

Where we can do things more efficiently and.

Even thinking about our footprint from from a rent perspective, there are areas, where we're really looking across the board to drive that down.

And also as Cal mentioned, we are exploring ways to unlock value.

Some non core assets.

Think could meaningfully contribute to our cash position in the coming months. So.

I think thats the way I would comment for.

At this point.

Given all these moving pieces in the near term is there.

A time, where you'd recommend you start taking a temperature check from when you guys should be wrapping all of these changes that.

So I would say.

Youre going to continue to hear from us on progress over the next three months or so.

As it relates to a lot of this activity.

Helpful.

Thank you guys.

Thank you.

Your next question comes from the line of David Grossman with Stifel. Please go ahead with your question.

Good morning, Thank you.

I'm wondering if we could just go back to the 2022.

Guidance or preliminary guidance.

Perhaps you could just help us better understand how much visibility you have today based on the 2021 bookings.

Things that plant starting up in the <unk>.

Fourth quarter, so that we can get a better sense of.

On that guide of 12 to 14.

Just how much visibility we have today, providing some caveats for risks around hiring and any other items.

Our imports.

Yes, so that's a good question David So we're sitting here today.

With about 10%.

That we've got very clear visibility into for next year, and then factoring another 2% to 4% related to.

To do sales and so there is a.

Lot of activity in the pipeline right now and as Kevin mentioned, we've got.

Some deals that are late stage that we would expect to convert.

2% to 4% of incremental revenue for next year.

Yes, so were.

You bet.

Yes, so over 80% of that number.

It's currently accounted for it.

Got it.

And and how much of that.

80% is.

Or maybe asked differently, how how much of the 20%.

Is that wise or medication safety, specifically I guess.

So.

Maybe I'll defer to Kevin in terms of.

The pipeline and how you'd spread.

<unk>.

The wins that we have projected for next year.

Yes, thanks, Brian the majority of the head count that we have.

And in places on that midwife division side, So it's the community pharmacy growth as well as the payer growth.

I would say, what we expect and new sales continues to be on that.

On that <unk> side.

The pace side of the business there are as Ursula mentioned.

We do have a really really strong pipeline there.

We continue to grow in that business.

In terms of the wins there there is a mix between some of the new startups that give us gradual growth along with.

Transitioning some of the larger pace programs to our care kinesis pharmacy, which drives some of the larger wins, we are really conservative on some of those large pace wins as far as forecasting and really putting our energy into that midwives division. So.

That's how I would balance that as I would expect to see much more growth and wins on the payer side of the business yes.

Kevin maybe I could just rephrase that.

So a very good job of first time instead of.

The 20% that you don't have visibility on for 2022, how much of that are you.

You're expecting to come from.

No.

Acacia safety.

I mean I would say.

In terms of what we're shooting for that probably.

North of 50% of that so maybe in that 75 percentile. So it's really our focus is to continue that payer growth.

Got it.

Just you Brian.

Brian you gave several metrics for 2022 I'm sorry can you just repeat them I think I got the.

12% to 14% growth with 3% headwind from <unk>, but I think he can give a couple of other metrics for 2022 of them.

Hoping you can just repeat those really quickly.

Sure no problem so.

Just as kind of a little bit of history as I was mentioning before.

<unk> revenue growth in 2020 was 3%.

<unk>, 7% this year exiting at 9% to 12% for the fourth quarter.

And so as you mentioned, 12% to 14% organic growth for 2022, which includes two to four points of growth from future unsigned contracts. So that's the piece that we were just discussing that.

Kevin was giving you the breakdown on.

The MTM pilot program contributed.

3%.

Two to revenue this year and so thats a headwind going into next year and if you excluded that it would be 15% to 17% growth and then on adjusted EBITDA.

We are expecting to drive at least 100 basis points of expansion.

Which the current guidance is five eight to six 1%.

Yeah.

Got it.

And then just one last question you mentioned, Kevin Kovacs save a couple of times.

Some of the changes that choose.

Short period of time been able to identify.

Perhaps you could just highlight that.

The most important things.

On the potential impacts of those warehouse.

Hey, David I think I wanted to just clarify a point because I'm not sure that we're all.

Speaking the same.

Language here just in terms of what is.

What we have visibility into four.

For next year right. So.

<unk>.

I think we're seeing it.

Very small it's over 95% in terms of total revenue that we have visibility into.

And I'm not sure. If we were discussing earlier just to go get but I want to make sure that we're clear that our overall.

Target for next year, where.

We still need to sign some businesses.

It's 2% to 3% of total revenue so we've got visibility into morph with 95% sitting here today.

Alright, great. Thank you for that.

Okay, sorry, I just wanted to make sure that we're clear on that point.

And just the second question was really around Kelly called back I think you had mentioned several times in some of the changes things like that.

I was wondering if you could just kind of highlight the most important ones.

The impact it may have on the business.

Yes.

I'd say that.

A couple of areas of focus for her right now one is on obviously, the staffing model and making sure that we've got a scalable solution and she's made and implemented some changes already as.

As we were talking about.

The second is is really.

Full review of kind of contractual relationships and focusing on existing.

Customers.

To make sure that we're meeting all of their expectations.

And the third is really on growth and making sure that we've got models that are.

Being well received by customers.

Kevin would you add anything to that.

I think she's pushing big time on enhancing the relationship partners. We have with current clients. She felt the account management account management, yes, I'm sorry, yes. She felt that we were under.

Under the norm there.

She's already.

Boosted that to start with anyway.

That was an important observation.

Had a meeting with her 30 60 to 90 days after.

And the board.

Just to get opinions from what she is what she sees on that on that division and she was very insightful.

Working on I think it's going to make a big difference.

Yes.

Okay, great. Thanks, very much good luck.

Thanks, David.

I am showing no further questions at this time.

I'd now like to turn the conference back over to our host for today do you have any closing remarks.

But thank you very much. Thank you for everyone who attended.

Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.

Okay.

Sure.

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Good.

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