Q4 2021 Sharecare Inc Earnings Call
[music].
Good day, and welcome to the share care fourth quarter and fiscal 2021 earnings conference call.
At this time all participants are in a listen only mode.
After the Speakers' presentation, there'll be a question and answer session.
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Let's turn the call over to Evan Smith, SVP Finance Investor Relations you may begin.
Thank you good morning, and welcome to share carrots fourth quarter and fiscal 2021 earnings conference call and webcast.
This is Evan Smith as the operator indicated.
I'm SVP of finance and Investor Relations. After today's presentation there'll be an opportunity to ask questions leading today's call are Mr. Jeff Arnold Chairman and CEO and Mr. Justin for Arrow, President and Chief Financial Officer.
Note today's call is being recorded and an archive of the recording will be available later today on the Investor Relations section of our website before we begin we would like to remind you that certain statements made during this call will be forward looking statements within the meaning of the safe Harbor.
Asian of the private Securities Litigation Reform Act of 1995, which includes our first quarter and full year 2022 guidance. These forward looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs assumptions and information currently available to us. Although we believe these expectations are reasonable we undertake no obligation to revise.
Any statement to reflect changes that will occur. After this call descriptions of some of the factors that could cause.
Actual results could differ materially from these forward looking statements are discussed in more detail in our filings with the SEC, including the risk factors section of our filings. In addition, please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance details on the relationship between these non-GAAP measures to the most comparable GAAP measures and.
Filiation of the historical non-GAAP financial measures can be found in the press release that is posted on the company's website I would now like to hand, the conference call over to Mr. Jeff Arnold. Please go ahead Jeff.
Yeah.
Thank you Evan and thank all of you for joining us this morning.
2021 that was an incredible year for sure care, we accelerated our growth and enhance the capabilities of our digital engagement platform, both organically and through M&A activities, we strengthened our operational leadership sales and technology teams and grew revenue year over year by 26% to 413.
And delivered $27 million and positive adjusted EBITDA.
Sure Kerry ended the year with a strong balance sheet with no debt and over $300 million in liquidity to support for future growth and profitability.
In 2020 , one we expanded our digital first wellness benefits and health navigation solution to a fully integrated digital front door with a connected suite of virtual care and higher touch offerings.
Specifically, we integrated additional digital therapeutic programs, creating new revenue opportunities for current and new customers.
Introduce share care, plus our digital first payer agnostic advocacy solution to seamlessly enable high touch navigation and clinical resources.
And integrated the acquisition of Kerr links our tech enabled home health solution, providing care collecting valuable data in the home and providing a key differentiation of our advocacy solution.
With these expanded capabilities, we're even more excited today about our future as we are in a very strong position to support our long term growth.
Our core digital platform drives engagement consolidate point solutions informed caregivers and advocates with real time and comprehensive data and extends to the home.
This helps enhance the member journey lower costs and improve outcomes. The increased breadth of the platform positions share care to drive larger higher P. M. P EMS and more strategic multi year deals with our current and future customers.
While strengthening the platform. We also took a hard look across our portfolio of solutions and we determined that our vaccine and health passport solutions and our patient centered medical home solution did not meet our long term growth hurdles and are taking actions that we believe sets us up for even greater success I will get into these details in a minute.
First a brief update on our core business share cares platform helps nearly 10 million employees plan members and patients better understand their health.
Optimize their benefits discover and address critical care gaps and improves health outcomes, while helping to lower the cost of care.
We have an extensive roster of clients, including leading employers payers and health systems and governments.
Our benefits and health navigation capabilities built on deep data analytics provide dynamic visibility until the cost of care and identify cost avoidance opportunities.
This enables us to efficiently develop personalized care plans that determine the next best action to address gaps in care and health and social risk.
Packing individuals' wellbeing.
We are building on this engagement platform and reach with our new payer agnostic advocacy platform share Careplus, which was built and commercially available in under a year and includes health benefits and care navigation all in one place a.
Our library of clinically validated NCQA accredited digital therapeutics.
A team of personal health and clinical advocates providing high tech high touch concierge level service, which can be extended into the home.
And our holistic customer 360 degree care console with clinical and customer engagement insights for health advocate and employers.
We are already in contract with two large employers covering nearly 70000 lives with share care plus both are anticipated to launch in 2023, we have a strong pipeline and are in active discussions with many other employer and payer clients.
Additionally, we strengthened our partnership with anthem, establishing a collaboration agreement and developing a multi carry advocacy solution to be offered to national employer groups and health plans.
Home care is proven to lower cost of care create savings for health plans and significantly improve patient and member satisfaction.
This is made home health carrying must have any integrated solution, providing sure care with a unique competitive advantage.
As a quick refresher, we acquired care lengths last August and it's delivering above our expectations Carolina Leverages a network of 450000 caregivers as a single source nationwide home care platform that provides intermediate on demand personal care services in the home of patients while leveraging <unk>.
Technology that facilitates rich data capture population health analytics, and the enabling of real time care coordination with remote clinical teams via share care.
Caroline's expanded rapidly in 2021 and into 2022 now serving more than 400, Medicare advantage plans, including several of the nation's largest payers as a free in home personal care benefit to more than 1.5 million Medicare advantage members.
We expect this growth to continue along with the high demand for traditional home care services from our payer clients.
<unk> delivers a complimentary personal care service, which is a critical link in their homebase strategy.
And these services are a significant benefit to employers to reduce absenteeism and improve productivity.
All of these activities underscore our commitment to manage our solutions with a focus on digital first and tech enabled capabilities that will deliver the best long term value for our customers their populations and shareholders. So let me radiant reiterate our focus is on expanding in our core platform to drive higher P. M P M and broader patient engagement.
<unk> platform engagement to drive better value to our customers, which lead us to let us to the decision to suspend support of our vaccine assistant and health passport solution, which is part of our health security portfolio and traditional trade.
Tried to transition our legacy patient centered medical homes or P. C M H business to a more tech enabled model.
During Covid is it a digital health care leader, we felt it was important for sure could have leverage its development and platform capabilities to support its customers and communities we serve.
Therefore, we quickly mobilized to develop our vaccine assistance and help passport solution.
Having successfully responded enabling over 5 million vaccine registrations and supporting over 80 vaccination sites, we achieved our objective, but today the outlook has changed and thankfully people are moving back to a normal lifestyle.
Therefore, the solutions not meet our performance hurdles going forward and we've made the decision to suspend our internal support.
In addition in conjunction with the renewal with one of our largest payer clients, we will be working collaboratively to transition and streamline our legacy patient centered medical homes or P. C. M. P. C M H business to a more tech enabled model that when redeployed will drive improved productivity increased coordination with <unk>.
Nicole teams and community and enhance member engagement.
We will continuously review our portfolio with the objective of optimizing our capital allocation and resources to deliver the highest long term revenue growth profitability and shareholder value and ensure that we continue to simplify our story to.
To make it easier to track our progress.
Before I close let me give a few more highlights on our 2021 performance.
We are focused on two objectives for our enterprise business one to increase the number of covered lives on our digital engagement platform and two to integrate new digital and tech enabled capabilities into our platform to drive larger engagements and help our customers activate and engage their populations improving health outcomes by focusing on the <unk>.
Cost quality and access to care.
During the year, we grew eligible lives on our platform to approximately $9 7 million.
Expanding our relationship with existing customers, while activating new customers like Aflac Delta 17, Humana and several others, leading employers and payers.
And more recently, we signed an agreement with Centene to expand into Louisiana.
As a result of our success, we increased our potential serviceable lives to 91 million across the existing contracted client populations presented on material upside opportunity to grow within our current client base.
And our record retrieval business for payers and providers, we retrieved approximately 5 million records in fiscal 2021, a 19% increase over the prior year.
Payment integrity, we processed over $6 billion in claims and identified over $100 million in overpayments and continue to expand our pipeline and add new clients, including two new Medicare supplemental insurance companies.
And in life Sciences, we delivered strong growth leveraging the strength of our award winning content Library and first party database of over 100 million users, providing digital patient engagement solutions for life Sciences brands to improve consumer activation and potential health outcomes. During the year, we increased our penetration with top two.
NT pharma companies as well as expanded our revenue with a top 50 pharma brands.
I am proud of our team and their significant accomplishments in 2021 to expand the platform, placing us in a very strong position to sell larger integrated digital platform engagements, which will solidify share cares role as a strategic long term partner to our customers.
We will continue to drive growth by Upselling complementary tech enabled solutions growing eligible lives with both existing and new clients and cross selling services. We are confident we can deliver sustainable long term growth and improved profitability going forward now.
Now, let me turn the call over to Justin who will review our financial results for the quarter and the fiscal year and share our financial outlook and assumptions for fiscal 2021 .
Justin.
Thanks, Jeff and thanks to everyone on the call for your interest in <unk> care is.
Jeff indicated we delivered strong results for the quarter and full year fiscal 2021, with both revenue and adjusted EBITDA.
Our fourth quarter revenue grew 34% to $118 5 million from $88 4 million a year ago for.
For the full year, our total revenue grew 26% to $412 8 million from $329 million a year ago.
Fourth quarter and full year 2021 financial results were impacted by approximately $2 million to $3 million in expected revenue related to the timing of contingency payments in our payment integrity business, which is now expected in our fiscal 2022 financial results.
Revenue growth for fourth quarter, and full year was primarily driven by life Sciences care lengths health security and new client wins across the entire platform.
Adjusted EBITDA for the quarter was $5 4 million and $27 million for the full year.
Adjusted EBITDA reflects positive performance across the business as well as increased investments in product and technology and sales force expansion as well as the impact of a one time increase in COVID-19 related employee healthcare expenses of approximately $1 5 million.
We expect these investments to support our long term growth and drive additional operating leverage as we gain greater traction for the share care digital platform with existing and new customers.
I'll now turn to our guidance for the first quarter and full year 2022.
Guidance reflects the actions, Jeff mentioned with our health security portfolio and our patient centered medical homes business. Combined. These two actions represented approximately $65 million in revenue and $20 million and contribution margin, which was included in the 2022 guidance, we provided in connection with the initial spike.
Transaction are.
Our Q1 guidance for revenue was 95 million to $98 million, an increase of approximately 7% over fiscal 'twenty, one using the midpoint of the range and adjusted EBITDA is expected to be approximately breakeven again. This includes the two items I mentioned as well as the seasonality in our life Sciences business whereby the.
First quarter is our lowest quarter and ramps as we move through the year for.
For the full year revenue guidance is 470 million to $500 million, an increase of approximately 15% to 20% over fiscal 2021, and adjusted EBITDA is expected to be 30 million to $36 million.
While we continue to invest in the platform expand our sales force and support the rollout of share care plus we anticipate adjusted EBITDA margins in line or better than 2021, as a result of the inherent operating leverage.
Similar to the prior year, we expect revenue to be split approximately 40% in the first half of the year and 60% in the second half of the year.
In addition, because of the step up in revenue in the second half we anticipate a majority of our adjusted EBITDA guidance will occur in the third and fourth quarter.
While the product line suspension and streamlining of our PC MH business impacted our guidance for 2022.
We believe the redeployment of resources and the addition of large new client relationships combined with the expansion of our platform places the company in an even stronger position to accelerate growth in fiscal 'twenty three and forward.
Sure care remains uniquely positioned in 2022 to generate strong revenue growth positive adjusted EBITDA.
And be cash flow breakeven by year end.
Our full year guidance assumptions reflect the following <unk>.
Increase in eligible lives from $9 7 million at year end 2021 to approximately 12 million lives by year end fiscal 2022, a 24% increase over fiscal 2021.
Enterprise revenue growth of approximately 15% compared to fiscal 2021.
Which includes the impact of suspending support for the majority of our <unk> security solutions and transition of our P. C M H business.
<unk> revenue growth of approximately 30% compared to 2021.
This reflects an expected increase in records retrieved to 6 million records, an 18% increase over fiscal 2021 and additional growth in payment integrity.
Life Sciences revenue growth of approximately 11% compared to fiscal 2021 which reflects continued market penetration.
The channel is expected to have similar seasonality patterns, including approximately 35% of annual revenue expected to be reported in the fourth quarter.
Capital expenditure expenditures of approximately $35 million to $40 million free cash flow between negative 50 million to $60 million, which reflects increased working capital needs and investments to support growth, but excludes any nonrecurring items, which may occur during the year.
Appreciate you and the name or <unk> of between 40 and $50 million.
We remain confident in 2022, delivering strong year over year revenue growth and solid adjusted EBITDA performance, while building a strong runway for fiscal 'twenty three.
With that we will move to the Q&A.
As a reminder to ask a question. Please press Star then one if.
If your question has been answered and you'd like to remove yourself in the queue press the pound key.
Our first question comes from David Larsen with P. P. I G. Your line is open.
Hi can.
Can you talk a little bit more about the vaccine assistant and health passport you know decision to basically migrate away from those businesses. It seems like they were generating revenue and earnings and we're not really through the pandemic, yeah, just any color or thoughts there.
It would be really helpful.
Yeah, sure Hey, David its Jeff.
So you know what was driving a lot of the revenue for the VAT.
For the health security portfolio was the vaccine.
Vaccine assistant so you know when the pandemic hit we said, let's build a platform for our clients our government clients that would help them do mass vaccinations. So.
That's my Dolphin Stadium for example, we were registered in people there in 79, other site and and so with a pandemic winding down in and being able to get vaccinated through your doctor in other places we saw that trend ending.
And although we have a great platform. So we repurpose the platform for the passport.
And we saw a lot of a lot of opportunity there as well as you might remember there was a bided mandate for employers over 100, but you know that they were going to have to show the vaccine card or are a recent cap.
We sold some six figure deals in the fourth quarter.
But we saw that that not being core to our business going forward. Although it was good revenue although it was good EBITDA.
Listening to feedback that we're getting from investors that Hey, your story is a little complicated and you've got a lot of things volume going down could you get more core to your enterprise platform and your other assets. So that it's easier for us to model you your business and understand your business and we looked at our kind of our growth hurdles and set long term.
It's a business that you know, we're gonna began as theyre going to meet our growth rate because they're going to meet margin is going to drive profitability.
And so we made the decision that that now is the right time to say, let's stop pursuing that let's redeploy our resources not that we couldn't pull it off the shelf if it was needed again.
Mhm, Okay. As we look at the number of Covid cases on a daily basis declined very significantly it seems to me like that's the right decision as we as we get past omicron and it does seem like all these mandates are lifting so quite frankly, it seems to me like you know that that strategic decision makes.
A lot of sense and then with regards to the patient centered medical homes transitioned if you.
You're moving from a more service heavy sort of concentration to a tech enabled solution.
I would think that that would benefit EBIT jaw.
So.
Why wouldn't I mean, why is there such a material impact to earnings contribution in 'twenty. Two if you move into a tech platform just any any thoughts there would be helpful.
How about just I'll give you gave the color on that.
So you know we have been in the patient center medical home business for a decade we.
Inherited that through our Healthways acquisition, and it's part of a contract to our biggest client which is one of the big Blues and the mid Atlantic and we just went through a big renewal process.
On the digital piece of our contract.
And in any one that that was a that was a big deal for us.
When the digital component and once we got through that and we said, let's focus back on this patient centered medical home model that.
It was a high revenue driver for us in 19, and 20, but when Covid hit and we can no longer get into the doctor's offices that model started losing money for us.
We just got into the negotiations with the client in a very friendly partnership way.
We can't lose money on this business going forward. So how do we retool this and so that where theres still revenue opportunity, but we but we don't lose money and that's a very recent conversation you know early you know 2021 that you'll start to see the impact in the second half of 'twenty two.
Same thing with regard to that Justin.
I would just suggest that that is so I think Jeff hit it on the head there.
Historically it has had pressure.
EBITDA contributor.
And streamlining and get over the year. We are we do believe it will come back as an EBITDA contributor.
But it's been.
One.
So within the patient centered medical home business. It sounds like there was very significant EBITDA margin pressure you may be making some money from it but it was very lean or where you're losing money on the P. C MH business.
We started to lose money on it.
So yeah, so as you know.
<unk> hundred 40, caregivers that we manage on behalf of our client.
So.
So, yes, but we have a strong vision for it we think connecting it to the core digital platform.
Two of the primary care doctor until the specialists.
He is a great service that will drive down costs and add a lot of value, but in partnership with our client. We said look we go into 2022.
This can this doesn't meet those growth hurdles that we've talked about it doesn't meet our growth rate. It doesn't mean, what we're trying to do for EBITDA and getting to cash flow breakeven et cetera, and we need to take this but these losses out.
Okay. So it sounds to me like it was your decision to basically transition the patient centered medical homes piece to attack solution with that client it's not like they told you that hey, we want to change the nature of this contract. It sounds to me like it was your decision and then longer term.
<unk>, we should see EBITA margin lift as a result of that proactive decision on your part.
Yes, it that it was a proactive decision on our part.
You know these large payers are partners of ours and so we wanted to do it in a.
Coordinated.
And accordingly, the way that add value for everybody in and we've been able to achieve that renew the digital contract now address this piece that has started to lose money and needs to be tech enabled and want a good place and but yes. It was our decision but very much.
Partnership in support of our clients.
But of course, you there to support the clients members you want to make sure that they're taken care of absolutely totally understood. So in terms of the 665 million in revenue and $20 million in earnings contribution for 2022, it sounds like a lot of that or most of that is coming from the vaccine assistant and health passport business is that correct.
<unk>.
If you were sort of breakeven.
Okay.
Okay.
That's correct that's correct, yes, that's correct.
Okay.
Helpful really appreciate it I'll hop back in the queue.
Thank you.
Yes.
Our next question comes from Richard close with Canaccord Genuity. Your line is open.
Yeah, Thanks for the questions.
Just to make with respect to the two to 3 million associated with the contingency revenue that's pushing from fourth quarter into 2022.
How much of that if you had it in the fourth quarter, how much of that two to 3 million would have dropped down to adjusted EBITDA.
Almost all of it had had we.
<unk> gone with an accrual based accounting methodology for those contingency pace.
Payments.
Other than what we ultimately did which was.
Closer to cash based accounting then all of that is that two to 3 million would have dropped to the bottom line you coupled that with a million and half dollars of.
Increased health care expense around Covid and we.
We exceeded all of our targets.
Okay great.
<unk>.
I was gonna here, that's not those COVID-19 costs.
And then as we look forward I'm curious on the 12 million lives that you're expecting.
You know I guess.
Helped drive the enterprise 12 million lives that are live for 2022.
Should we think about when those new lives a launch during the year and then you know.
Or is the entire delta between the two.
Nine seven in the 12 million lives.
All of that side, that's not business you need to go get it or or is it.
So we'll see those lots come on throughout the year very similar to last year. How we grew from 8.8 to nine seven so that target of $12 million like denied seven which we would end the year with $9 7 million lives, which we did and so we expect lie.
I've said come on throughout the year and and somebody that is although we are.
Well on our way.
To achieving that target, but some of those won't come on in the second half of the year.
Just to add.
Remember they are also now as the <unk> slides in that number.
Could you repeat that last part.
Yes.
That was even and he was commenting that we had now have care lengths who.
We add those eligible lives into our total lives.
Just making sure that care lengths as part of our enterprise business and so we're including eligible lives that we bring onto the platform through care lengths and that that number as well.
Okay. So how much how should we think about the number of carrier wigs lives that are contributing to that.
<unk>.
$2 3 million increase year over year.
I would go around half.
Okay.
Okay.
And then just to be clear on that.
The remaining lives not including care legs are.
Are those contracts early sign like business that you signed in 2021 that you're implementing them through.
Currently.
And so the contracts are early sign it's not like you have to win new business.
Yes, they're either side, but the lion's share of the additional lives are signs yeah. We've talked about that it's Q Q1 is a big part of that.
We we onboard them theyre not always on boarded immediately in Q1 that can come in in Q2 as well and then there is a there's a.
Youll see left in the back half of the year, we talked about the cadence of our revenue and a 40% front half 60% back half. So we expect lives to come on as well in the second half of the year, but yes. It's a large number of those have come on in the first half.
The Carolyn slides will will come on throughout the year, and we expect something second half.
Uptick as well.
Okay.
Maybe look now.
Congress Yeah. What are you worried are booked or in contracting with all of them.
Okay.
And then let's just talk about the overall pipeline. If we can in terms of obviously, what youre doing now builds for 'twenty 'twenty three.
Can you talk about.
What youre seeing in the pipeline, how it shapes up versus.
Last year and it just any qualitative point that there would be helpful.
Yeah, Justin maybe I'll just set you up.
This is the strongest pipeline that sure cares ever had.
That is for a much bigger deals are higher P. M. P. M. We were successful in bringing 30 salespeople on last year like we talked about and.
And we are getting many many at bats, and our close ratio I think is really high.
And I think our clients are really buying into this idea that.
Advocacy is great, but when you add engagement, it's even better because an advocate that has engagement can get the best results and then when we add and that we can also extend that now into the home and help the people that need help in the home or provide carolina cause an employee benefit so that.
If I had to be honest phone call right now, but my mom needs to go to the Doctor.
I could use Carolina as a benefit and that I think we have a leading position in our social determinants of health work, where we can really show help risk and then you throw on the Doc AI AI in that one platform strategy is really resonating and the pipeline is growing like it never has before the salespeople are trained.
And maybe just and you can translate what that means and build pipeline numbers, yes, I think a richard.
We've never given exact pipeline dollars as a K P. I, we may do that going forward, but maybe I'll just tell you on a percentage basis is that our pipeline is full.
Four to five X year over year.
And so it is it is stronger by.
A multiple of four to five backs than this time last year, which puts us in a really good place as we move into 2023.
Excellent. Thank you for that and my final question is just on the life Sciences I appreciate the 11% expected growth.
If I was going to be back end weighted here for 2022.
What was the life sciences' growth, maybe I missed that.
For the fourth quarter in the year 2021.
I will start there and then I have a follow up on that.
Yeah.
Was significant so.
Like we talked about for.
The fourth quarter is always the biggest quarter for the life Sciences business.
And so that group to over $27 million in the fourth quarter, which.
Q3, it was around 11 million pardon.
Pardon me around $18 million, so $9 million and grows it's roughly a 50% growth from Q3 to Q4.
And then just hard numbers, probably easier for me to give US is that we grew from 61 million to $78 million from 2020 to 21.
So.
You know when you come off such a significant growth year like that in that business.
You know almost 30% growth.
We just wanted to be mindful of that when we gave our pro forma for this year. So currently we're projecting about 11% is around $87 million.
We're coming off such a large growth year last year that we want it to be a little conservative.
Okay. That's helpful. Thank you very much.
And Richard I would say just on that business is just as I know you know this but what's so great about that as you know we spent tens of millions of dollars in developing this award winning content.
We used to service those life science customers, but all of that content, we repurpose and our enterprise platform.
And we think that is what drives a lot of the engagement and it would be really hard for someone else to replicate.
If they couldn't offset the costs like we do in life Sciences.
Our next question comes from Eric Percher with Nephron Research Your line is open.
Hi, This is dolphin for Eric first though we appreciate the move towards some simplification.
On it.
You any of today's announcements affect the enterprise sales expansion.
And then if you could remind us the new sources like sales resources. They came in line with last year.
When do we see the productivity ramp over 2022.
Yes, so no it does not impact we're going to continue to invest heavily.
And sales expansion we.
As we talked about before our target was around 30 per year, we met that target.
We expect to do the same this year.
So we are we are continuing to make a significant sales investment across the platform, we expect that growth to start to bear.
Bear fruit in the second half of this year.
And especially as we go into 2023.
Thank you Andrew the pipeline the pipeline growth is we're getting more at bats, responding to more rfps, we have more feet on the street and that's why you're seeing.
The significant expansion in our pipeline that sets us up for four H two in 2023.
Great. Thank you.
And then on the digital within digital Therapeutics is there any any part that youre seeing higher demand for or getting greater traction with versus others at this point.
Yet digital therapeutics continues to perform.
We've talked about this in previous calls, but really it's the the prevalent C. I would say around diabetes and diabetes prevention tip.
Typically gets a.
No.
It kind of outweighs some of the others, but we're seeing traction across maternity M. S. K sleep hypertension other areas as well, but if you if you had to pick one it would be and the diabetes and diabetes prevention.
Maybe I'd add one thing to that Justin.
The company that we acquired.
<unk> Sciences.
Which is all based on mindfulness and you know we have programs for anxiety, we have programs for weight loss for smoking.
Barry Research heavy mindfulness space has become almost like a table stake in all of our sales now and so we own those assets at very high margin, we bundled in with our core platform and and so almost every deal that we're selling now you always see those therapeutics included and then as Justin said, we're getting really good at using the data.
To be able to inform our clients what are the right therapeutics for their population and then and then together via the platform, how do we target them and get them enrolled and because 80 million people are pre diabetic that's always a big driver.
Great. Thank you I appreciate the color.
Sure.
Our next question comes from Cindy mode with Goldman Sachs. Your line is open.
Okay. Thanks, Thanks for taking my question. So it sounds like basically what you are doing here is streamlining the business a bit and you gave the revenue sort of cadence for the year.
Just on the EBITDA as well I'm I'm guessing if we see breakeven first quarter and then to get to your numbers were going to see a pretty decent ramp, particularly.
Particularly in the fourth quarter. So that means we exited the year just I'm just putting out there maybe 11, 12% EBITDA margins does that set you up like for so essentially for 2023, I know, you're not giving guidance, but it would seem like we get back to maybe where you know at least we were expecting in 2023, you know not to put guy.
In your mouth, but if you exit the year at that.
Hopefully that would be something I'm thinking about it the right way that's the first question.
And just on if you could just give us a little color on some of the transition investments that you're making.
Notice that G&A was pretty high.
This quarter.
Is that something I mean is there like a retention bonus employee wage inflation is something going on there and I guess over time, then we see that also come down and also product and technology was up a little bit but.
Just if you could give any color there and I'll stop.
Yeah.
Yeah. So on the first question you're right on.
Back to be a double digit operating margins.
By Q4.
<unk>.
And then obviously, we think we're not giving guidance for 'twenty three as you said, so but it's.
We expect that to kind of continue into 2023 and beyond so you're you are right in line with.
Our expectations and just want to reiterate is that we're also focused on by the end of the year to get to cash flow breakeven, which we think is as you know.
Well one of the unique companies in our space to achieve that so that is your assumptions there are right on.
Okay.
And then and then on the P N T.
I think what we've talked about we added.
Over 70 resources and product attacked a lot of our calls we talk about besting in innovation, which is heavy on product and tech and we're investing heavily in sales and marketing.
So you're right the sales and marketing grew in Q4 P.
PMT grew in Q4, and then there's a number of things that grow that group kind of the corporate G&A.
But where we're investing in our senior team, which has been built out there were some you know we're investing heavily in our new assets like Caroline and advocacy. So all of those together drove the growth in our Opex.
Okay, and so and we were going to expect that there. So there's not like a one time like employee retention thing in there, but we're going to Oh.
Over time and Theres not expenses in there like some other companies that we've seen is transitioning the platform and it takes kind of a while that's that's not what's going on here it should be pretty straightforward.
I just I'm just looking for a little clarification there.
Yeah. There is we had a marketing expense.
And I talked about the one time.
The one time fee for Covid expenses being high so I would say that $25 million is high I wouldn't expect that to continue on into the first half of the year, but.
Yeah. So it's yeah. There were there were a couple of one time expenses, but the warrant best Amazing the bigger point is we're investing heavily across the board, but you could you could pull that back in the first half of the year, but you.
You know as we move out in the latter part of the year, we're going to continue to invest in our Abbott to see products and our Carolyn somehow products. So.
Year over year, our corporate G&A is going to grow from 2021 to 2022.
Okay Alright.
Alright, and maybe maybe some of that is like wage inflation that we're hearing from other companies as well, but it's not it sounds like it's manageable correct.
It's definitely manageable.
Okay, and then just you know I don't I don't recall, you, giving it but do you have any guidance at all on the P. M P M or any anything like that and just.
It's just that care lengths as I recall, I mean that guidance is still intact right with the revenue there I think you said.
<unk> focused on about $35 million for the year and just those last two thanks.
Yeah. So.
We talked about we don't provide guidance on the P. M. P M. But you can back into it on our enterprise business, which as you know a little over $2.
What these larger deals the advocacy deals and others.
As we look out to 'twenty, three and beyond we think that that will that will expand.
Kerr legs is is continuing to perform right in line with plan if not ahead and feel like we we made excellent acquisition for the shareholders and it's performing.
It's performing ahead of plan.
Okay. Thanks, a lot to help.
Our next question is a follow up from David Larsen with BTG. Your line is open.
Hi, what was the revenue either for the quarter or the year in enterprise and then also provider and I think you said in consumer for the year. It was 78.
Yes.
You want you want to break out.
Each for the quarter and the year, so enterprise for the year was $243 million.
Which was up from 188.
Earlier.
Our provider business was $91 million.
It was up from $79 million a year earlier.
And then obviously I gave you $78 million.
On on the consumer piece, which adds up to right at $4 13.
Okay. That's that's very helpful. Thank you and then can you talk about the in sell or cross sell potential for <unk> in particular, it's my understanding that they they have a presence in some very very large health plans or are you talking with those plans about other ways that you can serve them.
The share care suite of products and Jim your thoughts on how those discussions are progressing.
Yeah, No. That's a great question, so like where where I think we've made so much progress as a company is in its full one platform. So when we first met we talked a lot about an engagement platform and the importance of that and how hard it is to get people to engage in their health and why we think we do well at that and then we.
Talked about the ability to up sell digital therapeutics, you know once you get the data and how do you enroll the person into the right program and put that on the one platform now in the last year I mean, what has taken some of the decade to build we've built a full advocacy solution in less than nine months.
In partnership with anthem, and we brought that to market and we've sold client and in sometimes 12 <unk> P. M. P. M that we were getting for Jesse engagement platform.
And in addition to that we know in every presentation. When we make the same way we added advocacy to the engagement platform. We've added Carolyn and so when we're in a finalist presentation for our large employer, we're saying you could add Carolyn says as an employee benefit if it's a commercial client and doing the same coming at it from the other side of that.
But which is the question you're asking from the Carolina sided they've.
They've made a lot of traction with a big you know one of the big payers.
And they kicked off.
Having great results in Q1 with another one of the big payers that complement the payers that we had and we're actively educating those clients on the share care capabilities put it all together put the engagement with the therapeutics with the advocate and with the homecare and so what <unk> does is it doesn't matter how you come into the platform are you out of Dell.
Employee coming in and eventually for walnuts are you a Medicare advantage member initially coming in food care lines.
But let's get them to buy all of the services because we think there's one platform.
Roche.
Is best for the member and most comprehensive one stop shop for the client.
Okay. That's very helpful. And then in terms of the salespeople how are they actually paid are they all commission based and just any color on the percentage of their contact is commission based.
Yeah. They are heavily incentive on commission.
And they all they all changed somewhat but they are they're all.
A little bit different but the from.
From the divisions, but ultimately these are we bring these.
These colleagues and at relatively low base.
And they can make a lot of money based on.
The number of sales that they make so it's really a line, we do better than they do better.
Okay. Thanks, very much I appreciate it.
There are no further questions I'd like to turn the call over to Jeff Arnold for any closing remarks.
Well listen closing out you know I'd like to reiterate that we had a I think a really strong two.
<unk> 2021 we've got the company public we made two really key acquisition, we showed 26% growth $27 million and adjusted EBITDA, we have incredibly strong balance sheet and what you are going to continue to be active in M&A and the company has never been in a stronger position.
A huge pipeline our value proposition is resonating with our clients. We are getting the outcomes that we want with our users and we're listening to the feedback that we're getting from investors that it's important that we simplify our story.
And and you hopefully you can see from the actions that we've taken with health security and PCM age that are that we're aggressively taking.
Taking those steps and we think that we can sustain these growth rates and meet our investment hurdles that make sure care great investment for all our shareholders and we appreciate your time today and look forward to talking to you in may.
Thank you.
This concludes the program and you may now disconnect everyone have a great day.
Yeah.
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