Q3 2021 NantHealth Inc Earnings Call

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Greetings and welcome to the net until 2021 third quarter financial results conference call. During the presentation. All participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your telephone.

If at any time during the conference you need to reach an operator, Please press star zero.

A reminder, this conference is being recorded Thursday November 4th 2021, I would now like to turn the conference over to Robert Jaffe Investor Relations Fernando. Please go ahead.

Welcome everyone and thank you for joining us today to discuss <unk> 2021 third quarter financial results.

On the call today are Ron Lukes, Chief operating Officer, Bob Petrou, Chief Financial Officer.

This call is being broadcast live at Www Dot <unk> Dot com.

A playback will be available for three months on <unk> website.

I would like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the safe Harbor provisions of the litigation Reform Act.

The company's discussion today will include forward looking information, reflecting management's current forecast of certain aspects of the company's future.

And actual results could differ materially from those stated or implied.

In addition, during the course of this call we may refer to non-GAAP financial measures that are not prepared in accordance with U S. Generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies.

Investors are encouraged to review <unk> press release announcing its full 2021 third quarter financial results for the company's reasons for including those non-GAAP financial measures.

Its financial results announcement.

The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the company's earnings press release issued earlier today.

In a moment Ron will provide a brief overview of the quarter and discuss the business followed by Bob who will discuss the financial results in more detail.

We will then open the call for questions with that said I will now turn the call over to Ron books right.

Thanks, Robert Good afternoon, everyone and welcome to <unk> 2021 third quarter financial results Conference call.

Hope all of you and your families are safe and well.

I'd like to start today by welcoming three new members to our senior leadership team.

With the addition of Jerry Megan Senior Vice President Global sales and marketing yield Carpenter as senior Vice President of strategy and are installing senior Vice president of human resources, we have strengthened our team with highly experienced and talented executives to head up the strategic content. We're excited to have him on board as we look to leverage our investments and other capabilities and enter our next phase of growth.

Our financial updates will be highlighted by Bob later on.

Let's discuss this offered services business I'll.

I'll begin with our <unk> business on recent calls we discussed our efforts to develop applications for avid connect beyond oncology I am.

Very pleased to report that during the third quarter, we signed and are preparing to launch the first ever reconnect program brought immune diseases.

We're seeing strong customer interest in the autoimmune program, which is especially encouraging as we continue to develop additional applications for Iot connect beyond oncology.

So during the quarter, we continued the expansion of our client base, adding two health plans through a channel partner Alere.

Adding clinical solutions provider, we expect to continue expanding our base in the fourth quarter was the addition of a large multistate customer owned health insurer.

We signed an agreement with care continuity incorporated a leader in network integrity and care navigation together, we'll work to improve care logistics management for complex high risk in chronic diseases initially focusing on extending care pathways revenue connect customers and their members followed by navigate care pathway opportunities.

And we launched avid connect eight six which includes more robust savings and ROI visualizations for payer customers. The expanded reporting that is enabled by our largest data analytics capabilities.

Turning to payer engagement.

Tober, we signed a multiyear agreement with a new third party administrator that will use navigant open to enhance the services. It provides to self insured health plan customers.

We signed a three year renewal with a long term partner and leading provider of drug authorizations, and enabling electronic submission of prior authorization for any drug under any planning for Medicare and Medicaid.

And we introduced new authorization submission API, so a lot of providers to automate and streamline prior authorization requests to connect navigate payer customers.

Turning to our recently acquired network monitoring business open NMS, we renewed agreements with 12 key customers and expanded services with one of the largest telecom providers in the U S.

And we continued development in preparation for fourth quarter launched zero touch appliances.

To sum up we expanded the senior team with three seasoned experienced executives in sales strategy and human resources. All are highly experienced in key additions as we begin the next stage of our growth no doubt.

We initiated the first implementation of our early connect solution into a new disease state autoimmune with a key customer.

Importantly, we are seeing strong customer interest in this offering and we believe the investments we are making to build out our capabilities products and services are laying the foundation for new growth opportunities with that overview of our business I will turn the call over to Bob will discuss our financial results in more detail Bob. Thank.

Thank you Rod for Q3, 2021 total revenue was $14 4 million compared with $18 8 billion in the prior year third quarter. The decline was primarily due to the lower amortization for professional services as previously discussed and the timing differences between the expiration of certain contracts and then there.

Jason of others through Q3 2021.

Q4 revenue is expected to return closer to our average run rate for the first half of 2021.

Gross profit was $7 5 million or 52% of revenue a decrease from $11 2 million or 60% of revenue for the same quarter in the prior year. The decline is tied to the lower revenue in the quarter gross margin will improve in Q4 as revenue will recover.

Total operating expenses increased 3% to $18 6 billion from $18 1 million in the prior year third quarter. This was driven by our continued investment in our products and the acquisition of open on the mess in 2020.

Quarter on quarter total operating expenses increased as we continue to fund the development of our open animus business at other product offerings. We anticipate continued marginal growth in operating expenses as our investments continue over the next quarter and into 2022.

For Q3, 2021 net loss from continuing operations was 10.8 million or nine cents per share compared with 11 million or 10 cents per share in the prior year third quarter.

On a non-GAAP basis net loss from continuing operations in Q3, 2021 was $11 5 million or <unk> 10 per share compared with $7 2 million or seven cents per share in the third quarter of last year.

Finally, cash and cash equivalents were approximately $45 5 million at September 30, 2021 compared with 52 million at June 32021 usage of cash was approximately $6 4 million in the quarter with that I will now turn the call back over to Robert.

Thanks, Bob Operator, we've completed our prepared remarks, and we'd now like to open up the call to questions.

Thank you so for questions you can press the one followed by the four on your keypad, you'll have three tone prompt that acknowledges you've request. If your question has been answered and you'd like to withdraw your registration press. The one followed by the three so again for phone questions at one four.

Nothing just yet but as a reminder, it's one four on your keypad for questions.

You have no questions I'll now turn the call back to management for any closing remarks.

Thanks, Kevin we look forward to sharing our progress on our next scheduled conference call. Thank you all for joining us today.

And that does conclude our call for today, we thank everyone for participating and you may now disconnect.

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