Q4 2021 Allscripts Healthcare Solutions Inc Earnings Call

February 24, 2022

Greetings and welcome to Allscripts fourth quarter full year 2021 earnings conference call.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

If any much require operator assistance during the conference. Please press star zero on your telephone keypad.

Mind you This conference is being recorded.

I would like to turn the conference over to your host Jenny Jelen F. Thank you you may begin.

Thank you very much good afternoon, and welcome to the Allscripts fourth quarter 2021 earnings conference call. Our speakers today, all Black Allscripts, Chief Executive Officer, and Rick Poulton, our President and Chief Financial Officer.

We will be making a number of forward looking statements during the presentation and the Q&A part of the call. These statements are based on current expectations and involve a number of risks and uncertainties that could cause our actual results to vary materially.

We undertake no obligation to revise these forward looking statements in light of new information or future events. Please refer to our earnings release and SEC filings for more information regarding the risk factors that may affect our results.

So please reference the GAAP and non-GAAP financial statements as well as the non-GAAP tables in our earnings release.

And the supplemental workbook that are both available on our Investor relations website, and with that I'm going to hand over the call to Paul Black Thanks, Jenny and good afternoon, and thank you all for joining us today I'd like to start by recognizing my colleagues at all scripts for delivering such strong results I want to thank our associates have continued to demonstrate what seems to be all.

In this spirit has driven us forward to success. Despite all the bizarre unprecedented and certainly unplanned events that have occurred over the past two years.

Looking back over the past 24 months globally, we have experienced what we hope to be a once in a lifetime event. We began 2020 like everyone blindsided by the global pandemic, but needing to quickly respond to our clients and our associates needs. We had a massive pivot during the course of February through June of 2020.

There was a substantial amount of work performed a great focus on unique programs and a new ways of running the business. The outcomes. We discussed today re created by all of the dedicated Allscripts associates.

Nowhere however for the changes to the daily life sell more directly than with clients, who serve on the frontline of pandemic.

And in the research labs, where the scientists were studying clinical trial results in an effort to safely but rapidly create a vaccine can we cure the pandemic.

Working from home became the norm for most of the functions inside of our business supporting selling collecting installing running operating and upgrading our solutions across all clients across the globe.

Now I'll move to remote virtual environment in most cases, except for the people that were on site at the client that.

That are part of the managed services organizations.

Those were two difficult years I'm very proud of this executive management team and our ability to see through the fog, making the decisions to position Allscripts for the success. We are now all collectively realizing.

Yeah.

We invested in the core focused on creating value and unlocking value.

One year ago, we discussed the prior year of reset at all scripts, where we reset our client priorities reset our cost base reset our portfolio and reset our balance sheet and capital structure.

We also highlighted our 2021 priorities focusing on delivering.

And this team has delivered consistent results.

Executing the plan on the Allscripts financial flywheel, our performance delivered as advertised highly recurring revenue significant improve adjusted EBITDA margins improved free cash flow conversion and a continuous focus on returning capital while investing for growth in the existing business I.

I am pleased with our solid 2021 full year results, which continue the forward momentum at all scripts into 2022.

We've made multiple investments over the years to create strategic platforms to distinguish allscripts and make us relevant in today's marketplaces.

These EMR agnostic platforms expand expand the breadth and the depth of our solution portfolio Rick.

Rick will highlight how these investments in payer data analytics life Sciences, and research marketplaces reflect the relevance that we have established around the globe.

These investments were supported by our board and remains strategically important to us and clearly have allowed us to reposition the company to where we are today.

We've also continued to make deliberate investments in our core EMR platforms. This has driven cross sell opportunities and hosting cloud telematics cyber interoperability white space outsourcing and revenue cycle few.

A few highlights for the fourth quarter in the United Kingdom Midway NHS Foundation Trust agreed to expand its allscripts patient administration system footprint by deploying Sunrise Clinical's. Its aim was to deploy the solution faster than any other UK client with a phase one to be live before the end of 2021.

Our collective teams met that challenge and a COVID-19 altered virtual deployment that was completed in just under five months Medway NHS Foundation Trust is now live with Sunrise version 21 Dot one day.

The documented more than 500 clinical notes in the first 24 hours of deployment.

Also in the United Kingdom, the Premier cardiac trust.

Liverpool heart and chest.

Has achieved HIMSS level six designation as our first HIMSS stage six client in United Kingdom. This is a major milestone for our company and a significant achievement for the teams who have supported this liver pool trust throughout the journey through patient safety and Digitization.

Our longtime client north while health expanded its partnership with Allscripts by selecting Sunrise perioperative solution for their 20 hospitals.

Our solution will be replacing a third party solution.

All of these wins are important examples of investment in our core that create a white space opportunities for Allscripts and deliver a single unified patient record for our clients.

The investments that expand our addressable market and simplify business for the client.

SUNY downstate in Brooklyn signed to migrate to Azure cloud and Sunrise platform of health moving to the cloud allows <unk> to participate in lower cost of ownership, while also improving EHR experience for their clinicians and patients.

And long term client journey Stewart Health, a community hospital in Kentucky signed to move to the Sunrise community care platform from their existing Paragon incidence in Iowa Ringgold Hospital. Similarly selected Sunrise community care to replace their Paragon incidence.

Hospital leadership in both instances site, the comprehensiveness of our solution and their ability to maintain local control of clinical and financial deployment decisions as key factors in the sun comp decisions.

We're proud to also partner with next level urgent care, who has selected Allscripts touch works on the Azure platform to improve connectivity better provide better EHR workflows and greatly advanced analytics and all of its locations.

Now onto our communities a distinctive part of Allscripts as our carrying culture of giving back to the communities where we live.

When communities are need people show up Allscripts shows up.

I'll refer to this as the soul of our company.

In December Allscripts Associates participated in disaster relief fund raising for the southern Southern and Midwest Red Cross.

In support of those affected by the tornadoes that devastated these communities across eight United States.

Im extremely proud of our response.

We raised thousands of dollars for relief and recovery efforts.

Over the past few months, we have been successful at introducing three new enrichment programs inside of all scripts Allscripts Black Alliance veterans and allies in the Hispanic outreach for Latinos at all scripts.

This is in addition to two long standing enrichment groups Allscripts women's engagement and generation next.

These enrichment groups open to all associates helped build a sense of community and foster an environment in which every voice is heard and valued.

In closing, we remain optimistic about our market and our company with the investments that we've made in expanding and new solution platforms. We believe allscripts is distinctly positioned to continue to deliver mission critical outcomes for providers payers pharma and research organizations.

New client prospects are recognizing our distinct offerings selection decisions are increasingly driven by appreciation for our agility, our methodology and our solution driven capabilities.

These as these attributes should position us well for 2022 and beyond.

Now I'd like to turn the call over to Rick Poulton, Allscripts, President and CFO .

Okay. Thank you Paul and thanks, everybody for joining us today.

Just one more reminder, is Jenny indicated additional financial details are available in the supplemental financial data workbook that is posted to our Investor Relations website.

In summary, the fourth quarter was by far our best quarterly performance in years and it was driven by both our continued discipline in managing our cost structure, along with the traditional seasonal strength that we experienced in Q4 for both sales and revenue.

This combination of forces resulted in significant operating leverage and very very strong sequential and year over year growth and margin performance adjusted EBITDA earnings per share and free cash flow.

So with that overview, let me highlight a few items, starting with our bookings and revenue performance.

We reported $219 million of new bookings in the quarter, which was up 21% year over year and revenue in the fourth quarter was $392 million, which was up 1% year over year.

Like the fourth quarter of 2020, we had a very good revenue mix during the quarter with strong contribution from software sales and Wink and workflow linked revenue both of which are high margin contributors.

As has been the case for several quarters now our revenue results continue to be a tale of two different stories with our hospitals and large physician practice segment being down 2% year over year and while our paradigm segment grew by 9% year over year.

As I've stated many times now on these earnings calls our goal is to enhance your understanding and bring greater transparency to investors with what we are doing at bedtime.

In addition to the segment reporting that we initiated last quarter for several quarters now <unk> been providing examples of commercial deals that we executed during the quarter that will be part of driving our future reported results.

In the fourth quarter of 2021, we signed a deal with Madonna to provide research consulting and data analytics services for eight separate real World database studies focused on gaining a better understanding of the impact of different aspects of <unk> COVID-19 vaccine in the U S population.

These studies will be conducted using clinical electronic health record data linked to health care claims data and this project will contribute significantly to the world's deeper understanding of the railroad impact of COVID-19 vaccines.

Additionally, we recently signed an agreement with the social Security administration, whose objective is to improve the speed and quality of the disability determination process through more efficient and effective health record acquisition.

And subsequent data integration processes.

Not only do we expect this contract to be a meaningful financial contributor.

It will also be a catalyst for us to evolve our capabilities to a point, where we will have near real time chart extraction.

Having near real time.

Having near real time chart extraction will benefit both providers and payers as we expedite the ability to close care gaps and manage at risk contracts.

Overall, the <unk> provider platform continues its growth trajectory, adding approximately 500, new practices and 5600 prescribing physicians during the quarter.

So now let me turn to the overall margin performance in the quarter consolidated non-GAAP gross margins was 45, 2%, which was up 120 basis points year over year, and almost 300 basis points sequentially.

This was driven largely by the revenue mix benefits that I described earlier.

Further down the P&L, we continue to manage our operating expenses tightly and this helped drive very strong 22% year over year adjusted EBITDA growth in the quarter and it resulted in adjusted EBITDA margin of 23, 9%.

We also had an excellent quarter of free cash flow generation as we generated $66 million of cash flow from continuing operations and $48 million of free cash flow.

Alongside our earnings we had strong working capital performance as well and ended the year with the lowest days outstanding in the company's history.

So I really want to thank publicly Chad <unk> and the rest of our cash team for their tireless work improving this measure.

Below the operating line, we recognized a $61 million gain on the disposition of a minority interest that we held in our investment portfolio.

And this also resulted in equivalent inflow of cash from investing activities during the period.

This cash inflow plus the free cash flow generated from operating activities allowed us to repurchase $108 million of our common stock during the quarter or $6 5 million shares with essentially no change in net debt outstanding compared to the end of the third quarter.

On a per share basis, we reported non-GAAP EPS of <unk> 79 per share, which was up 295% year over year, reflecting both our strong income statement performance as well as our lower share count.

So now I want to wrap up my prepared remarks by commenting on our outlook for 2022.

Our consolidated revenue outlook for 2022 is between 1% and 2% growth year over year.

And our consolidated free cash flow outlook for 2022 is a range of $165 million to $175 million.

Lastly, I would like to remind everybody that our board approved a new $250 million repurchase authorization in January and we would expect to begin to utilize that throughout the year.

And so with that I'd like to open up the call for any questions.

Thank you at this time, we'll be conducting a question and answer session.

To ask a question. Please press star one on your telephone keypad.

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For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Okay.

Our first question comes from Michael Cherny with Bank of America. Please proceed with your question.

Good afternoon, and congratulations on a really strong end to the year I guess, Rick maybe just a guidance question to start.

Got it on revenue growth and free cash flow generation. It seems like the free cash number is roughly in line slightly above where consensus.

As for the year is it safe to say that when thinking about some of the other moving down the P&L metrics that a sustainable level of EBITDA expansion is likely to continue based on what you've generated over the last couple of years.

Okay.

Yes.

First of all thanks, Mike for the comments.

Yes look I mean, the range $1 65 to 175 is mid.

The mid point of that is right on top of where we came in in 2021.

We think we will continue to see very similar trends.

And.

We will continue to have a little bit of I think cost improvement that will.

Make up for some of the.

A little bit of one time, good guys that we thought we had in 2021 on the cash flow side. So all in all I think the free cash flow is a good proxy for what we're expecting on an EBITDA basis.

Got it certainly helpful. And then maybe a big picture question, probably for Paul and Rick.

2020 was the year of getting things started and a lot of the portfolio cleanup in capital.

Realization with the divestitures 2021 was about cost base and driving significant margin expansion as you think about kicking off this year what is the theme or the story for 2022 relative to that next pathway of value creation.

Yes.

I'll start and see if Paul wants to add anything I think Mike first off I Wouldnt say were done thinking about the portfolio and making sure we continue to optimize the portfolio.

Nor are we done.

<unk> to wring out efficiencies from our cost base. So.

I agree those were headline themes, but those are not in the past by any means for us.

I think what we're really continuing to emphasize and what you hear through some of our increased cadence around discussing paradigm is.

That's a very real adjacency.

A real market opportunity, we think it's a large tam that we are.

Expanding into and we're not just talking about it we're actually building on what his years of investment and years progress in creating the scale that we have.

So I think value creation off of Adjacencies continuing to win wallet share with our clients. We have are how we will continue to grow.

I don't have a lot to add to that.

Very good summary.

Awesome. Thanks, so much.

Thanks, Mike Thanks, Mike.

Our next question is from Sean Dodge with RBC capital markets. Please proceed with your question.

Hey, Good afternoon. This is Thomas Keller on for Sean Thanks for taking my questions.

So starting off on the booking was a good quarter can you give us a little more visibility on maybe the composition of what's there.

Bare die unrelated in the core business, maybe the relative proportion that are coming from competitive wins.

Well first of all hi, Tom Thanks for joining the call.

We haven't we haven't ever broken out bookings at a segment level or product level, and we're not going to start now.

We it was a good quarter.

We like the year over year growth was our fourth quarter.

In a row, where we had some year over year growth there so.

I think that's a nice sign of recovery off of what was the low point of 2020.

But.

It's a mix across the business there is no one place thats driving it entirely.

We are getting business across a lot of our we're still skewed heavily towards provider centric revenue, we're getting a lot of revenue and bookings off of providers.

But our adjacent markets and the per life science space are.

Becoming nice contributors there as well.

Yes.

Yes fair enough and then on the very done very impressive EBITDA margins in the quarter.

It generated any more detail on that 33% the drivers and how we should think about that versus any sort of longer term targets.

Segment.

Well I guess I want to start by answering that by just reminding you I mean fourth quarter is a nice mix quarter. It's always the best mix of the year you tend to have some year end spending by some clients and that really gives you a significant leverage so you'd see pattern recognition of Q4 tends to be.

The best quarter and.

And you try to build off of.

So you have to you have to start looking back at a year over year basis as opposed to just always sequentially.

<unk>.

It's a nice it's a good business I mean, we're very excited about our opportunities there, it's a little lower capital intensity and a.

A nice margin profile and we really think we'll get good operating leverage as we continue to grow there.

Okay, great Thanks, and congrats on a good year.

Thank you Tom Thank you.

Our next question comes from Charles <unk> with Cowen. Please proceed with your question.

Yes, thanks for taking the questions and congrats on the ended the year here.

Rick just looking at the the hospital business here and obviously.

<unk> had to work through the challenges of.

Some cuts or customer attrition, particularly in the academic centers is it fair to think and sort of the attendant runoff in revenues from from those losses.

At this point, what do we have left or have we is it right to think given the the revenue guide for the year, we've kind of turned the corner here and we've kind of run off most of revenues that we would expect to two two.

Uh huh.

Go away and.

And maybe a sense for what the underlying growth for the remaining business has looked like in this segment.

Yes.

Hi, Charles Thanks for joining us.

Yes, I guess, here's how I'll try to I'll try to steer you towards thinking about that answer.

Look if you can see by the segment presentations that we've given you that the hospital business was down 3% year over year in Q3 and more like 2% in Q4.

See you saw that kind of pattern there.

The way I like to think about attrition or talk about attrition, particularly when you're talking about larger health systems or large practices, which don't transition on any kind of knife edge. Its a long process is I use a metaphor of like a funnel how much is going into the top of the funnel.

And then it takes a while to kind of come through and ultimately comes out the bottom and when you see it in the P&L when it's coming off the bottom.

We.

In 2021 had had very little go back into the top of the funnel. So in that regard I feel pretty good about that.

But we still had some trickling through the bottom and we will still have some trickling through the bottom in 2022 as well.

So you can see by our revenue guidance on a consolidated basis and.

You can see some trends that we've had at <unk>. Some trends you've had at the hospital segment. When you think about the weighted average I think you can see that we're not we're not 100% done with that.

Runoff.

That's fair but.

Do you think this coming year, we should get through the bulk of it then.

We would obviously.

We don't want too much about even beyond 'twenty two but.

Just kind of.

Growth.

Would you expect to see maybe some continued acceleration as we think further out into the future.

Yeah, I mean, I think what I I.

I think what we feel comfortable saying Charles is that.

The kind of.

The.

Image, if you will or the sort of profile of the customers that we've lost a lot of academics as you mentioned.

We've kind of run most of our course there.

So we don't anticipate a lot of new going again, staying with the metaphor of going into the top of the funnel.

And so most will have a lot run out in 2022, there may be a little bit of residual left at the end of the year, but.

But that's our best outlook right now, while we can't really predict of course is what could happen in terms of continued consolidation and mergers in the industry.

And what that effect would have but looking at the profile of what we have today.

I think it's fair to say we're on the on the on the.

<unk>.

We are in the back half of the backswing are almost done with the March through our client base of attrition.

That's helpful. And then just to follow up on something one of Mike's question, which is you mentioned about the 'twenty two free cash flow as kind of a good proxy for EBITDA you kind of you made some mention of some good guys in 'twenty, one anything that you'd want to really call out to make sure as we're modeling to take into account.

Yeah.

Well.

I think it wasn't it wasn't big numbers, Charles but we you may recall, we talked I think it was Q3 that we had a recovery of some funds from one of our insurance companies.

That would've been an unusual but this is single digit million dollars Im talking about so 2021 had a little bit of gyration, but not much and.

Again midpoint of our range for 2022 is really on top of what we saw in 2021, and so I think you can think of it as the little bit of impact of the onetime goodness. We had in 2021 is offset by business improvement in 2022.

To get in place.

That's helpful. I appreciate it thanks and congrats again.

Thank you Charles.

Our next question comes from Jeff Garro with Piper Sandler. Please proceed with your question.

Yes, good afternoon, congrats on the quarter and thanks for taking the question.

Maybe I'll ask one more about business mix from a different angle I was hoping you could discuss the recent international trends and go forward expectations for U S geographies.

Sure we've had some good wins there that those are all if you will preceded by some good deployments, which is great.

Meaning the reference ability of the clients outside the United States as inside the United States, but specifically outside of the United States is quite high.

And as those people other people the other trusts.

Kingdom folks in Canada other people in the Asia Pacific Rim are looking for a partner. It helps a lot that we have good solid references outside of the United States as we've talked about in the past there are some.

Larger opportunities that are out there that we have been participating in and working on for a long period of time those come in however, it lumpy and somewhat unpredictable.

So we want to be in and so that we can win them, but it's very difficult for us to forecast and predict them, especially given what's going on with the pandemic announced some other.

Things that are happening throughout the rest of the world. So at a global basis outside of the United States decisions are made at the Ministry of health level typically at the government level and Thats typically a longer sales cycle, but theres a business there.

So we've had other expansion so inside of some of our organizations as we said in the United States they'll buy more solutions from us as we make them available like a perioperative suites and many other.

Adjacent.

Clinical arenas that they're interested in it as well as we'll be announcing some additional <unk>.

<unk> that have.

That helps.

Assimilate in certain geographies.

It will go if you will geography wide with certain solutions and we expect to participate in that as well.

Okay, Great that's helpful.

One more for me, maybe you could just help us reconcile some of the the different moving pieces in the <unk>.

Revenue guidance for next year, and just really thinking about the the strong bookings growth this year.

Sure.

Not quite the same level of revenue growth expected next year as well as the sequential drop off in backlog. So just how the different contributors.

Factor into the revenue growth and the timing of different contribution.

Well I mean, Jeff there is.

You can have a very direct line between backlog bookings and in year revenue.

As Youll recall bookings is.

We kept what we count in bookings at least what we count.

Is new business and it's it's.

An aggregation of the contract value of a new deal so.

If you have longer term deals youre, averaging multiple years there and.

Are you, adding multiple years, there I should say and.

It begins to come to revenue when a solution actually goes live and so you can have.

Gaps in time between a contract and when you go lives. So so there's always a little bit of gap on bookings relative to revenue backlog, though on the other hand includes everything thats just renewal business as well so.

When we renew a large let's say managed services contract or something like that.

It will have zero effect on bookings, but will go into backlog for its full contract value.

And then book and then in that instance, backlog can move around depending on where you are in renewal cycles for large contracts. So.

You have to just recognize that maybe over a long term theres a good connection but in near term periods, it's hard to draw a straight line between those couple of measures. So our outlook for revenue for next year is takes into account what we've done in terms of bookings.

Back half of 2021 as well as what we expect to sell early in 2022.

Those will be the areas that have the most direct impact on the 2022 revenue. So we factored that in and we factor that in across both segments of our business to come up with our consolidated guidance.

Got it that's helpful and just to clarify on the backlog the sequential down tick.

Is that attributable to the renewal activity you discussed or anything one off there that we should be considered.

Yes, I would just I would say, it's just a point in time relative to contract renewals. So.

If you trace back we had a large very large uptick in backlog.

When we renewed our large managed services agreement with north well.

And obviously that.

You put it all in and then you start to choose.

Chiseling away as time goes on so.

That's just one example, but you should think of backlog run down as a function of renewal cycle on contracts.

Understood. Thank you.

Thanks, Joe.

Our next question is from George Hill with Deutsche Bank. Please proceed with your question.

Yeah.

Hi, Nexium for George Thanks for taking the questions.

So we started seeing a lot of the headlines in the health care technology trade price around the new menu EMR systems, given the last person cycle ending in 2015 and 16.

A lot of these appointments are already six or seven years old.

Are you seeing increasing demand in the market right now and typically what functionalities are driving most of the interest.

I mean, if we understood. Your question right, you're asking about trends on perhaps the replacement market given people have been using these systems for several years now.

Yes, I mean, there is.

There is certainly a replacement market opportunity out there. It's one we participate aggressively in.

Paul referred to some momentum and some wins in his comments earlier.

Those would be largely coming out of the replacement market certainly here in the U S that would be coming out of the replacement market.

International wins are not always replacement, there's a lot of those times, that's first time adoption, but.

Yes, I mean, it's a.

There is definitely a demand market out there I wouldn't say, we've seen a significant change in the profile or volume of demand right now.

In the large health system space.

Ambulatory market has its share of churn I would say the same thing thats not not as significant.

Change relative to what we've seen in the last year to two years.

Okay, great. Thanks.

Thanks for the question. Thank you.

Our next question is from Stephanie Davis with SBB Leerink. Please proceed with your question.

Thank you for taking my question guys and congrats on not just a good quarter, but it clean good quarter, which saw.

Well I'll comment thank you.

Right.

Yeah. Thank you big wins on the <unk> side that you called out in the quarter.

That might be helpful. Just to refresh us on the maritime business.

Oh.

How should we think about the recurring <unk> of these revenues.

And I guess my follow on to that one if you think about this is it mostly recurring revenue stream.

Is improving the topline growth rate going to be a question of improving paradigm growth getting to that low double digits or is this going to be more of like stopping the hospital bleed.

As Rick has something completely else I'll just leave that.

Yeah.

My mindset I can't tell you all metrics.

Yes, so I guess, maybe I'll take some of that in reverse order.

The <unk> business opportunity.

Is doesn't feed very heavily off of our hospital base or even large physician practice space. There is there is a little bit of link some of our larger physician clients, but very little to hospitals. So whatever trend lines are happening in hospital business doesn't really have a bearing on what we're doing in <unk>.

The profile of the deals.

We've continued to.

Provide a few different anecdotes of illustrations of some of the business were doing there.

They'll do.

The projects that I've mentioned are kind of.

The way I would think about it Stephanie is there recurring customer relationships, but frequently in the case of like the Maduro example, I gave you recurring customer relationships with solving a little different study. So these are different studies that are kind of top of mind, a very topical to them that we'd be working on.

And theyre not necessarily long term recurring.

The example, with social Security administration I would expect to think of that you should think of that as recurring business that'll be a long term.

Type of activity, we're doing every quarter for them.

<unk>.

So.

That's what I would describe the current profile as it pertains to our payer and life science clients. There is a it's a good mix of both recurring and sometimes nonrecurring business.

The <unk> business is.

No.

Sure.

We've shared a little bit in the past as a mix today of about.

80% revenue that comes from providers and 20% coming from payer and life science.

Entities or end markets and.

The growth on the payer and life Sciences side is.

Significantly higher than the growth on the provider side, but provider side is growing and that's a foundation that really gives us the assets that are interesting to the <unk>.

Payer and life Science end markets. So we keep a strong foundation on the payer side on the provider side excuse me and that allows the.

<unk> growth opportunity on the other side so.

It's very much a three legged stool and.

Very self reinforcing so.

That's why we're talking about it more and that's why we're continuing to invest there and.

We think again these are very large end markets. So our opportunity to continue to grow in them.

<unk>.

Has a lot of runway to it from where we sit.

Continuing on that thought then if do you have a lot of opportunity and bare die and tend to be more recurring revenue, which I'm assuming that comes on at a healthy incremental margin is there.

Is there any reason to believe that the margin expansion pace should slow down meaningfully.

No I think.

Think we're going to get nice operating leverage Stephanie and so I think when we talk about EBITDA margins.

Those should continue to.

Expand as we grow in particular gross margins.

Some room, but I'm not sure that that will be changing as much but we will definitely get the operating leverage.

At the bottom line.

Awesome glad to hear congrats again.

Thank you.

Our next question is from Donald Hooker with Keybanc. Please proceed with your question.

Great. Good afternoon, Hey, quick quick detailed question given that the <unk>.

Sizable share repurchases what is your current share count.

Maybe.

Today.

I guess I'm trying to get at sort of the timing of the share repurchase during the fourth quarter with a sort of baseline going into this year as you can be repurchasing more shares.

So if you look at it on a fully diluted basis.

Not.

If you look at you look at our P&L and.

Look at the Q4 EPS calix.

Your year in that ZIP code I mean, that's pretty close to where we are so we got.

Yeah.

We got a lot of repurchase activity done early in the quarter.

So we didn't get the full weighting of it in the quarter, but we got a decent waiting to it so you're you're not far off when you use those numbers.

Got you and the bookings obviously were very strong you referenced that social security contract was that a big piece of that was there like a big lump sum in that.

<unk> bookings.

No no we had a couple of sunrise wins as well.

A few things I mean, the bookings came across.

The whole company.

Got you and last one for me I was a little bit just want to make sure I'm not confused here the free cash flow guidance for 'twenty. Two I guess, you are saying is going to be flat versus 'twenty one.

Are you, saying that EBITDA margins are also kind of kind of flattish as well does that kind of what we're supposed to imply from that.

Just to be clear I think you mentioned that in a couple of questions, but I just want to be clear.

I think you can infer that from what from what Ive given you so far yes.

Super have a wonderful evening. Thank you.

Okay. Thanks, Thanks, Tom.

We have reached the end of the question and answer session I would like to turn the call back over to Paul Black for closing comments.

Thank you very much Rob and I want to thank all of our associates, who are listening all the clients who are listening in.

Importantly, all the prospective clients who are listening today. We appreciate your time. We also appreciate everybody who's been on the call with ask great questions. Today, we appreciate that as well because we think it's important for us be able to communicate this but importantly for us to be able to tell the story in this environment. So thank you all have a good evening and we look forward to sharing you with.

You are results as soon as we can.

In 90 days thank you.

This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.

Yeah.

[music].

Greetings and welcome to Allscripts fourth quarter full year 2021 earnings conference call.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

If any much require operator assistance during the conference. Please press star zero on your telephone keypad.

Mind you This conference is being recorded.

I would like to turn the conference over to your host Jenny Gelling US. Thank you you may begin.

So please reference the GAAP and non-GAAP financial statements as well as the non-GAAP tables in our earnings release.

In this spirit has driven us forward to success. Despite all the bizarre unprecedented and certainly unplanned events that have occurred over the past two years.

Looking back over the past 24 months globally, we have experienced when we hope to be a once in a lifetime event. We began 2020 like everyone blindsided by the global pandemic, but needing to quickly respond to our clients and our associates needs.

Had a massive pivot during the course of February through June of 2020.

There was a substantial amount of work performed a great focus on unique programs and a new ways of running the business. The outcome as we discussed today re created by all of the dedicated Allscripts associates.

Nowhere however for the changes to the daily life sell more directly than with clients, who serve on the frontline of the pandemic and.

And then the research labs, where the scientists were studying clinical trial results in an effort to safely but rapidly create a vaccine that we cure the pandemic.

Working from home became the norm.

For most of the functions inside of our business supporting selling collecting installing running operating and upgrading our solutions across all clients across the globe.

Move to remote virtual environment in most cases, except for the people that were on site client.

That are part of the managed services organizations.

Those were two difficult years I'm very proud of this executive management team and our ability to see through the fog, making the decisions to position Allscripts with the success. We are now all collectively realizing.

We invested in the core focused on creating value and unlocking value.

One year ago, we discussed the prior year of reset at all scripts, where we reset our client priorities reset our cost base reset our portfolio and reset our balance sheet and capital structure.

We also highlighted our 2021 priorities focusing on delivering.

And this team has delivered consistent results.

I am pleased with the solid 2021 full year results, which continue the forward momentum at all scripts into 2022.

We've made multiple investments over the years to create strategic platforms to distinguish allscripts and make us relevant in today's marketplaces.

These EMR agnostic platforms expand expand the breadth and the depth of our solution portfolio Rick.

Rick will highlight how these investments in payer data analytics life Sciences, and research marketplaces reflect the relevance that we have established around the globe.

These investments were supported by our board and remains strategically important to us and clearly have allowed us to reposition the company to where we are today.

A few highlights for the fourth quarter in the United Kingdom Midway NHS Foundation Trust agreed to expand its allscripts patient administration system footprint by deploying Sunrise Clinical's gets aim was to deploy the solution faster than any other UK client with a phase one to be live before the end of 2021.

Our collective teams met that challenge and a COVID-19 altered virtual deployment that was completed in just under five months Midway NHS Foundation Trust is now live with Sunrise version 21 Dot one day.

The documented more than 500 clinical notes in the first 24 hours of deployment.

Also in the United Kingdom.

Premier cardiac trust.

Liverpool heart and chest.

Has achieved HIMSS level six designation as our first HIMSS stage six Klein the United Kingdom. This is a major milestone for our company and a significant achievement for the teams who have supported this liver pooled trust throughout the journey through patient safety and Digitization.

Our longtime client north while health expanded its partnership with Allscripts by selecting Sunrise perioperative solution for their 20 hospitals.

Our solution will be replacing a third party solution.

All of these wins are important examples of investment in our core that create a white space opportunities for Allscripts and deliver a single unified patient record for our clients.

The investments that expand our addressable market and simplified business for the client.

Our long term client journey Steward health, a community hospital in Kentucky signed to move to the Sunrise community care platform from their existing Paragon incidence in Iowa Ringgold Hospital. Similarly selected Sunrise community care to replace their Paragon instance hospital leadership in both instances.

Site, the comprehensiveness of our solution and their ability to maintain local control of clinical and financial deployment decisions as key factors in the suncor decisions.

Now on to our communities a distinctive part of Allscripts as our carrying culture of giving back to the communities where we live.

When communities are in need people show up Allscripts shows up.

I referred to this as the soul of our company.

In December Allscripts Associates participated in disaster relief fund raising for the southern Southern and Midwest Red Cross.

In support of those affected by the tornadoes that devastated these communities across eight United States.

Im extremely proud of our response.

We raised thousands of dollars for relief and recovery efforts.

Over the past few months, we've been successful at introducing three new enrichment programs inside of all scripts Allscripts Black Alliance veterans and allies in the Hispanic outreach for Latinos at Allscripts. This is in addition to two long standing enrichment groups Allscripts women's engagement and generation next.

These enrichment groups open to also help build a sense of community and foster an environment in which every voice is heard and valued.

New client prospects are recognizing our distinct offerings selection decisions are increasingly driven by appreciation for our agility, our methodology and our solution driven capabilities.

These these attributes should position us well for 2022 and beyond.

Now I'd like to turn the call over to Rick Poulton, Allscripts, President and CFO .

Okay. Thank you Paul and thanks, everybody for joining us today.

Just one more reminder, is Jenny indicated additional financial details are available in the supplemental financial data workbook that is posted to our Investor Relations website.

So with that overview, let me highlight a few items, starting with our bookings and revenue performance.

We reported $219 million of new bookings in the quarter, which was up 21% year over year and revenue in the fourth quarter was $392 million, which was up 1% year over year.

As I've stated many times now on these earnings calls our goal is to enhance your understanding and bring greater transparency to investors with what we are doing at Paragon.

These studies will be conducted using clinical electronic health record data linked to healthcare claims data and this project will contribute significantly to the world's deeper understanding of the real world impact of COVID-19 vaccines.

And subsequent data integration processes.

Not only do we expect this contract to be a meaningful financial contributor.

It will also be a catalyst for us to evolve our capabilities to a point, where we will have near real time chart extraction.

Having near real term, having near real time chart extraction will benefit both providers and payers as we expedite the ability to close care gaps and manage at risk contracts.

Overall, the <unk> provider platform continues its growth trajectory, adding approximately 500, new practices and 5600 prescribing physicians during the quarter.

This was driven largely by the revenue mix benefits that I described earlier.

We also had an excellent quarter of free cash flow generation as we generated $66 million of cash flow from continuing operations and $48 million of free cash flow.

Alongside our earnings we had strong working capital performance as well and ended the year with the lowest days outstanding in the company's history.

So I really want to thank publicly Chad Gina and the rest of our cash team for their tireless work improving this measure.