Q1 2022 Definitive Healthcare Corp Earnings Call
Greetings and welcome to definitive healthcare first quarter 2022 earnings conference call.
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I would now like to turn the conference over to your host David Samuels General Counsel.
Thank you.
Over to you.
Good afternoon, and thank you for joining us today to review definitive Healthcare's first quarter 2022 financial results. During the call today are adjacent krantz definitive healthcare's, founder and CEO , Robert Musselwhite definitive healthcare's, President and Rick Booth definitive.
Healthcare's Chief Financial Officer. During this call, we will make forward looking statements, including but not limited to statements relating to our markets and future growth opportunities.
The benefits of our health care commercial intelligence solutions, our competitive position customer behaviors, our financial guidance, our planned investments and the anticipated impact from the COVID-19 pandemic on our business and results of operations as well as on our clients the healthcare industry generally and the.
<unk> environment.
Any forward looking statements are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of $19 95.
Forward looking statements involve a number of risks and uncertainties, including those discussed in the risk factors section of our filings with the SEC.
Actual results may differ materially from forward looking statements.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect events that may arise. After this conference call, except as required by law.
For more information please refer to the cautionary statements included in the earnings release that was just posted to the Investor relations portion of our website.
Additionally, we will discuss non-GAAP financial performance measures on this conference call references on this call to profitability on an adjusted EBITDA basis. Please refer to the tables in our earnings release on the Investor Relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measures.
With that I'd like to turn the call over to Jason.
Thanks, David I would like to thank all of you for joining US this afternoon to discuss definitive healthcare's first quarter results.
Before we go into more details on the quarter I want to comment quickly on the news that went out today at the same time as our earnings press release.
As you've likely read by now I'm excited to announce that Robert Musselwhite, Our current president will become the Chief Executive officer of definitive healthcare effective August one 2022.
At that time, I will move into the role of executive Chairman.
This transition is exciting for the company and for me.
For the company Robert brings a wealth of healthcare industry expertise and a deep familiarity with running a public health care focused <unk> company. He is the perfect person to lead definitive healthcare through our next period of growth.
On a personal level transitioning to the executive chairman role well, let me focus my attention on parts of the business I'm most passionate about.
Specifically product development and strategy, while still partnering with Robert on broader long term company strategy and mergers and acquisitions.
Robert I have developed a fantastic partnership over the last almost year working together and I'm excited about continuing our partnership to take definitive health care to the next level.
Now, let's get back to our Q1 results.
We got off to a strong start in 2022 with important wins across each of our core markets and continued progress on our innovation roadmap.
Our performance demonstrates the significant market opportunity for health care commercial intelligence, which we deliver through our comprehensive SaaS based platform, our industry, leading data and our proprietary data science based analytics.
We are at the very early stages of a $10 billion and growing market opportunity and we believe that we're in a great position to generate strong growth and significant profitability for years to come.
Let's start today by quickly reviewing our financial results for the quarter, which was highlighted by the company crossing $200 million in annualized revenue for the first time.
Our total revenue was $50 1 million, which represents 36% year over year growth.
And our adjusted EBITDA was $14 million, which translates into a 28% margin.
These impressive results reinforce our ability to generate high growth and substantial profitability, while at the same time investing organically and inorganically to support our long term objectives.
I'm now going to hand, it over to Robert to talk more about some of the drivers of the success as well as to highlight some key customer wins during the quarter.
Thanks, Jason before I comment on our business strategy and customer wins I wanted to say that I'm tremendously excited to move into the CEO role at definitive healthcare I'm passionate about the company's mission to transform data analytics and expertise in the health care commercial intelligence and I'm, a big believer in the company and the culture that Jason and all the employees of <unk>.
Built.
We have a fantastic opportunity in front of us.
I also want to take a moment, thank Jason for his outstanding leadership over the past 11 years.
It's the rare CEO , who can start a company and lead it past $200 million in annualized revenue and through an IPO I look forward to continuing to partner with Jason in his new role as executive Chairman to take definitive health care to the next level.
Now I'd like to spend a few minutes, providing some details on the deep competitive differentiation. The definitive healthcare has developed over the past 11 years.
As we've discussed in the past the four trillion dollar U S health care market is incredibly complex and difficult to navigate effectively.
Our mission is to simplify this complexity for any company doing business anywhere within the health care ecosystem and we believe we do this better than anyone else.
We believe our differentiation stems from three key factors.
The first is that we are the only company that can provide complete coverage of the entire health care ecosystem.
Over the past 11 years, we have leveraged powerful data science and engage in extensive proprietary research that has enabled us to have nearly 100% coverage of all aspects of the health care market physicians hospitals imaging centers clinics home health agencies and other entities.
We have built a sophisticated data ingestion engine powered by proprietary artificial intelligence that enables us to collect data from more than 270000 distinct companies 125000 public sources and 25000 government sources.
All of which has been augmented in enhanced through more than 4 million personal interactions each year with participants in the health care ecosystem.
We also opened a large volume of claims data to our proprietary data sourced from our increasing number of relationships with third party data providers.
Each of these datasets has different rules structures and schemas are automated platform can understand all of these formats and clean standardized and curate the data and then we used advanced data science to discern new relationships between the different pieces of data, which in turn become new data and intelligence for our customers to use.
Our second point of differentiation is our proprietary affiliation mapping.
With our expansive view of the market and comprehensive datasets, we are uniquely able to provide insight into the interconnected multi tiered affiliations that exist among physicians physician groups hospitals imaging centers ambulatory surgery centers and other players in the health care ecosystem.
Many of the legacy vendors in the market offer only claims data.
This claim centric approach provides an incomplete and often skewed view of the market in.
In fact, nearly half of health care facilities in the U S do not file claims.
If a company is developing a new drug it can use claims to identify the volume of potential patients.
However, it is equally important to understand the hospitals and physician groups, where these patients received care in order to understand how this volume aggregates across organizations, how a patient moves through the health care ecosystem and when a patient receives care outside of our network.
Our affiliations data helps to answer all of these essential questions.
Our affiliations data is expressed through our proprietary definitive idea, which helps our clients understand the complex interconnections of the health care ecosystem.
Similar to a dun <unk> bradstreet number which assigns an industry standard unique identifier for a commercial legal entity in the United States, we assign a definitive idea to every participant in the health care ecosystem, including physicians facilities integrated delivery networks and GPS.
The definitive idea as the industry standard for organizational structures in the U S health care market.
Our third vector of differentiation is our ability to continually accelerate innovation by creating new intelligence that doesn't exist elsewhere.
With more than half a petabyte of historical data collected over 11 years. We believe we have by far the broadest and most comprehensive health care commercial data set in the market.
This data set provides us with an unmatched ability to perform sophisticated data science to quickly create new unique intelligence for our clients.
A great example of this is our physician prescribing behavior analytics capability, which helps our customers determine the physicians that are most likely to influence new prescription volume or when and if they may look to switch to a new brand.
Another one is the telemedicine propensity score that we were quickly able to introduce after the onset of COVID-19, we were able to rapidly provide an easy to understand metric that showed customers, which physicians and facilities had already adopted telemedicine and which ones are highly likely to do so in the future.
What makes these two examples so powerful is that these types of analytics are only possible because we have 11 years of longitudinal data that we can leverage to create new intelligence not found elsewhere.
Our scale across depth and time is not something that can be easily or quickly replicated.
When you put all this together the result is the only true 360 degree view of the health care ecosystem, which provides clients with not only a strategic view of the overall market, but the tactical intelligence that they need to find the right person or institution to target there.
This helps our clients win in the health care market, whether that means accelerating their drug development processes identifying the right patients for new medical device or figuring out, which hospitals are expanding and need certain construction equipment.
Now I'd like to spend a few moments highlighting some of our key wins in the quarter, which are great demonstration of the variety of ways, new and existing customers are utilizing the definitive healthcare platform and continue to provide tangible evidence of our differentiation.
We had several big wins in our life Sciences sector in Q1, and the one that I'd like to highlight is a 10000 employee global medical device company focused on interventional urology wound care and Ostomy in.
This client signed a multi year enterprise deal to segment the market and understand the specific physicians and integrated delivery networks that prescribe it devices.
It will use definitive healthcare claims data affiliations data and analytics to search for specific H C. P. C S and CPT codes across all three product lines, and then track the patient journey for its products across multiple facilities and providers.
In the provider market, we had a significant win with an integrated delivery network that includes 39 hospitals and 163 ambulatory and post acute facilities across multiple states.
This customer sign a multiyear enterprise D L to use definitive health care data and analytics and its corporate strategy group, It's nursing Collyn transportation team and its newly formed group purchasing organization.
The organization subscribed to multiple modules and the definitive health care platform.
As usual, we also sold to all sorts of diversified customers, who seek to sell their goods or services into the U S health care market, we had a big win at the commercial division of one of the largest security services companies in the U S and we added a new customer which specializes in floor cleaning and sterilization and is now expanding into cleaning surgical robots.
We also had many wins that staffing agencies, both large and small that are sourcing physicians to meet the needs of the white Hot labor market for health care providers.
Finally, we started to see an emerging trend of pre commercial international companies purchasing a definitive healthcare subscription to help them enter the United States market, including a pharmaceutical company based in the Netherlands that is developing a new drug for sepsis.
On the upsell side, we had another successful quarter across all of our markets.
One of those wins significantly expanded our footprint in a fortune 10 company, which is building a substantial franchise for kidney care and dialysis.
This client added our medical claims and pharmacy claims products, along with our hospital data to its existing subscriptions to our physician and physician group products.
With this enhanced dataset. This client can now fully understand the market for its end stage renal disease, and dialysis products, including which facilities and physicians make up the best targets.
We also had a major upsell win it the second largest pharmaceutical company in Japan that does a significant amount of business in the United States.
This company already subscribed to our hospital and physician data modules and in the first quarter. It added our medical and pharmacy claims.
The company develops treatments for breast cancer, and acute myeloid leukemia and wanted to search physicians and hospitals treating specific claims codes.
Armed with this intelligence that will analyze the density of physicians and referral patterns and each sales territory and then use the results to optimize its territories.
We are incredibly proud of the amazing and unique asset we have built a definitive healthcare and the value we deliver to customers and we're just getting started.
Like to turn it back to Jason to talk about some of our recent exciting product innovations.
Thanks, Robert we had a very active first quarter on the product development front, most notably with the introduction of the passport analytic suite.
Built on the powerful analytics engine, we acquired with analytical Wizards in February we believe the passport analytics suite as a game changer to the life Sciences customers.
For the first time life sciences customers can optimize their entire commercialization process. All the way from early stage business planning to real time product performance and marketing optimization to drive superior post launch results.
One of the most exciting aspects of the passport analytic suite is that we now enable life sciences customers to integrate virtually any internal or third party data source into our platform and run on demand analytics at scale.
This week can integrate internal sales and marketing data as well as third party big data on claims EMR lab data diagnostics data as well as data from definitive health Care's proprietary platform, including the definitive I D and our industry, leading provider reference an affiliation data.
The passport analytic suite is comprised of two modules planning and performance and promotional analytics.
Passport planning and performance optimism is the pathway to FDA approval and subsequent commercialization by improving market opportunities selection accelerating clinical trials and informed business decisions.
Passport promotional analytics helps life sciences organizations maximize revenue and profit by improving customer segmentation maximizing impact of promotional tactics and effectively allocating omnichannel budget.
We have gotten off to a strong start with analytical Wizards, which continued its impressive track record of success as it wasn't a big deal at a large 10000 employee pharmaceutical company.
This company purchase passport promotional analytics to consolidate data about its global marketing spend into a single location and then run on demand analytics to better allocate its investments and maximize the marketing return.
Analytical Wizards also up sold incremental business to several of his existing biopharma customers, including a new subsidiary focused on HIV treatment at a top 10 Biopharma company.
I'm very proud of the definitive health care and analytical Wizards teams for working together to seamlessly bring this innovation to market so quickly.
The passport analytics suite is a great example of our innovation flywheel at work and our ability to leverage our proprietary assets to expand our value proposition and create future upsell opportunity.
We are looking forward to sharing more detail on our product innovation roadmap next month at our second annual user conference definitive live which will be held virtually on may 17th.
I invite all of you to listen to our keynote addresses and panels to get a deeper understanding of our product portfolio competitive differentiation in key R&D priorities for the future.
Before I turn it over to Rick I want to reinforce just how powerful and differentiated the definitive health care platform is.
Our customers continually tell us that there is nothing on the market that can provide the critical health care commercial intelligence that they need to drive profitable growth across the entire commercialization value chain.
Incredibly proud of what we've built that definitive healthcare and I want to thank all the employees for their hard work.
Our world class team that is doing great things for our customers every day.
With that let me turn the call over to Rick to review, our financial results in more detail Rick.
Thanks reason Q1 was another strong quarter highlighted by rapid revenue growth and strong profitability.
I'll start my remarks, with a quick overview of our business model from a financial perspective.
Then provide a detailed review of our quarterly results.
Before finishing with our outlook for Q2 and full year 2022.
As always in all my remarks, I'll be discussing our results on a non-GAAP basis, unless otherwise noted.
Let me remind everyone of some of the key attributes that make definitive health care's business models. So compelling we are a high growth subscription business selling into a 10 billion and growing total addressable market with low single digit market penetration, we have excellent forward looking visibility through our multi year contracts and high net.
Dollar retention rates were.
We operate profitably with high gross margins and a very efficient customer acquisition engine.
We innovate efficiently by building on our proprietary data assets and data science platform and.
And finally upfront billings and low capex requirements help us translate profits directly into cash flow and shareholder value.
Our Q1 results illustrate how this business model plays out in practice.
Highlights include 36% revenue growth compared to Q1 'twenty one.
28% adjusted EBITDA margin.
A 34% Unlevered free cash flow margin over the prior 12 months.
And revenue growth plus trailing 12 month unlevered cash flow margin was 69%, putting us well above the rule of 40.
We believe this combination of high growth high visibility and attractive profitability positions us well both in current conditions and for many years ahead.
Turning to our results in more detail.
Revenue for the fourth quarter was $51 million up to 36% from prior year and 4% above the midpoint of our guidance.
Our revenue growth continues to be driven by strong sales momentum, particularly among enterprise customers.
We ended the quarter with 447 enterprise customers.
Which we define as customers with at least $100000 per year of annual recurring revenue.
This was an increase of 127 customers or 40% year over year and up 30 from the previous quarter.
As a reminder, enterprise customers represent the majority of our IRR and are a key focus of our go to market programs are.
Our total customer count, which includes smaller customers was 2944 at the end of Q1 up from 2000 and 635 in Q1 of 2021 wells.
We also continue to have success upselling into our existing customers, which is a core component of our growth strategy.
We have best in class retention rates, among enterprise customers and multiple avenues to increase their spending with us over time through both the adoption of additional modules.
And expanding usage to additional users and new areas within their organizations.
<unk> profit.
Was $44 1 million up 36% from the first quarter of 2021.
Gross margin of 88% was unchanged from prior year, because investments to add prescription claims data and the acquisition of analytical Wizards offset our natural scale effects in the short run in the remainder of 2022, we expect to see a further 100 to 200 bps downward impact on.
Gross margin as we add additional prescription data sources and as analytical Wizards grows.
Prescription data represents a significant opportunity to innovate and expand our upsell opportunity within life Sciences, and we fully expect to realize operating leverage from these investments over time as we did with medical claims.
Sales and marketing expense was $17 5 million or.
51% year over year.
And as a percentage of revenue sales and marketing expenses were 35% of revenue.
From 31% in Q1 of 2021.
We're committed to investing for growth, specifically, expanding our digital marketing capabilities and building out our sales and customer success teams.
We have a highly efficient and scalable go to market model.
With a 10 X LTV to CAC ratio.
And we will continue to invest incremental resources into our growth initiatives to capture more and more of this $10 billion market for as long as we continue to generate strong returns.
Product development expense was $5 5 million up 49% from Q1 of 2021.
And as a percentage of revenue product development expense was 11% of revenue.
From 10, 1% in Q1 of 2021.
Investing in our platform and using our existing data assets to launch or enhanced multiple products is a highly effective and efficient way for us to increase the value we deliver to customers.
We will continue to invest in our product development efforts given the number of exciting opportunities we have identified in our long term product roadmap.
G&A expense was $7 3 million.
Up 117% from Q1 2021, when we were a private company.
As a percentage of revenue G&A.
G&A expenses were 14, 6% of revenue.
From 9.1 in Q1 2021.
The increase in G&A expense reflects incremental public company expense.
And the and utilization of these largely fixed costs will provide operating leverage throughout the upcoming year and beyond.
Operating income was $13 2 million down 2% from Q1 of 2021.
As a percentage of revenue operating income was 26% of revenue compared to 36% in Q1 of 2021.
The year over year change in margin is related to three key investments.
<unk> three.
350 bps of continued investment in sales and marketing.
Second 100 bps of innovation investments in prescription data and in development.
And third 550 bps of increased G&A costs required to operate as a public company.
A brief comment on operating income in the quarter.
We set very aggressive hiring goals, we're getting really great people and were fully staffed with quota carriers.
But the pace has been running slower than anticipated in some technology roles, which drove short term favorability in margins with.
With the ability to recruit talent in more markets via both analytical Wizards and then virtual roles, we plan to make up the shortfall in the remainder of the year.
Adjusted EBITDA was $14 million consistent with Q1 of 2021.
As a percentage of revenue adjusted EBITDA was 28% of revenue compared to 38% in the prior year due to the investments outlined earlier.
As we move through the year.
We will see adjusted EBITDA and adjusted EBITDA margins expand as we drive operating leverage from these largely fixed investments noted previously.
Net income in Q1 was $7 $8 million or five cents per diluted share based on $154 2 million weighted average shares outstanding.
Turning to the cash flow definitive high margins upfront billing and low capex requirements provide substantial free cash flow generation we.
We focus on trailing 12 month cash flows due to seasonality.
Unlevered free cash flow was $64 million or 34% Unlevered free cash flow margin on a trailing 12 month basis.
Converting more than 100% of our TTM adjusted EBITDA of $56 million into cash.
We expect this ratio to return closer to 100% on a TTM basis by the end of the year as we make payments to acquire additional sources of prescription drug data.
On the balance sheet, we ended the quarter with $339 million of cash and investments and with only $269 million of debt and strong profitability. We are well positioned to fund both organic and inorganic growth initiatives.
To hedge the risk of rising interest rates on our debt we entered into a swap to fix the interest rate on $136 million of our term loans through March of 2025.
Full details of the terms and the resulting rates are in the supplemental slides up on our website as well as in our 10-Q.
Current revenue performance obligations of $160 9 million were up 35% year over year and total revenue performance obligations were up 40% year over year.
Deferred revenue of $94 million was up 31% from $71 6 million in prior year.
And this increase in deferred revenue was slightly smaller than normal because several million dollars of contracts were signed in the last day of the quarter, but not invoiced until April .
Revenue performance obligations are unaffected, which underscores why we focus on that metric.
We view, our strong balance sheet and ongoing profitability as a strategic asset in today's dynamic environment.
Turning to analytical Wizards is early days and there are small tuck in so I won't spend much time on them other than to say that their performance is well aligned with expectations. Our sales teams are bullish on the new capabilities and we're moving swiftly on immigration.
I'd like to wrap up by providing our guidance for the second quarter and full year.
As always.
Guidance excludes any new M&A, where changes in capital structure.
And in general to the extent that we over perform on revenue, we will seek to reinvest upside and incremental growth opportunities rather than maximizing short term profitability, although that will vary quarter to quarter.
In the second quarter, we expect total revenue of $53 million to $54 million for median growth rate of 34%.
non-GAAP income from operations of $13 million to $14 million.
Adjusted EBITDA of $14 million to $15 million for 27% median EBITDA margin and non-GAAP net income of $7 million to $8 million or $4.05 per diluted share on 154 8 million weighted average shares outstanding.
For the full year 2022, we're raising full year revenue expectations by $2 5 million.
To a range of $225 million to $224 5 million for median growth rate of 34%.
We are reiterating the profitability guidance, we laid out on their last call.
Which called for non-GAAP income from operations of $57 million to $63 million.
Adjusted EBITDA of $61 million to $67 million.
For full year media margin of 29%.
non-GAAP net income of $35 million to $41 million.
And earnings per share of <unk> 22 to 26 cents.
$155 1 million weighted average shares outstanding.
We're pleased with our over performance on both topline and bottom line and are confident in our full year outlook.
Nonetheless, reiterating and not raising our profitability guidance provides flexibility to respond to attractive opportunities to expand our vision on prescription drug data.
Drive product innovation for providers and.
And continue to support sales and marketing.
While exiting the year with Q4, adjusted EBITDA margins of 30% or more.
So to summarize.
Q2 was a strong quarter for definitive healthcare and we're well positioned to carry that strength into the remainder of 2022 and beyond.
We have developed a clear leadership position in the large and attractive market that we believe will support high levels of predictable revenue growth and profitability for the foreseeable future.
We believe we have built a unique business that can deliver strong growth at scale and do so in a capital efficient manner.
Oh very good about the opportunity definitive healthcare has to become a much larger more valuable business for our shareholders over time.
And with that we can open the call to questions.
Yeah.
Thank you.
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One moment, please while we poll for questions.
The first questions.
Comes from the line of Great hidden bet with Morgan Stanley .
Please go ahead.
Yes. Thank you I appreciate the color on new customer wins and activity can you just maybe expand upon that particularly on the upsell efforts and as it relates to your increased sales coverage. So as sales are able to focus on a small number of accounts as they go forward how are you.
Think that plays into the ability to.
Increased upsell traction with customers.
Yes, thanks for the question I appreciate it.
We have as you know so we verdict last our teams about three years ago, and we Verticalizing our account executive team and our customer success team, who works with existing accounts about a year and a half ago now which is an important transition for us and at the same time, we as you said, we've reduced the number of <unk>.
<unk> that each of themselves.
So we are we're finding that to be.
Very very helpful from an upsell standpoint, so they are able to understand the customers better and then spend a lot more time working with different functions and different therapeutic areas within life Sciences companies in particular.
So we're in the early stages of that but we're seeing benefits already and we think as we continue to innovate and create new opportunities to expand with those customers that strategy is going to pay off.
I appreciate that just as a follow up one area of concern that we have heard is just the funding environment in biotech given the lack of capital markets activity can you just touch on kind of how that potentially plays into your business and any influence you're seeing in terms of bookings and engagements.
On the biotech side.
Sure.
As Rick said, we had an extremely strong Q1 and that strength was really across all customer segments.
What I think is really great about our business as we sell to anybody that wants to sell and compete in health care. So we sell to life Sciences, but we also sell to HCI providers and then all of the company's diversified companies that sell to many industries, including health care. So.
So we have a tremendous amount of diversity in our client base, which is great, but we've seen strength and all of the areas. Both on the new logo side as well as up sell side. So we're excited about where we're going really across the entire business.
Got it thanks.
Thank you. The next question comes from the line of DJ Hynes with Canaccord.
Please go ahead.
Hey, good afternoon, guys, Jason Robert Congrats to you guys on the expanded roles, but maybe that's a good place.
To start.
I'd love to get just any additional color on kind of thinking that went into the transition and why was now the right time to do it.
Yes. Thanks, Great question I think now is actually the the perfect time to do it. So obviously, we were lucky enough to have Robert and to start to build our partnership with him over the last year or so.
Robert is an amazing leader with tremendous experience in SaaS based businesses within healthcare. So we're really excited about that the business is performing fantastically right. Now we've got we're doing well we have a great strategy. We've got a really good product vision to continue to execute upon.
So all of that makes for a really great time, and then from a management structure across the entire company. Our ELT is really strong we've built that up over the last three years or so and we've invested heavily in management throughout the entire organization. So it puts us in a great position to make this transition.
It allows me to spend more of my time on areas that super passionate about product development and strategy definitely lean in more on M&A as that becomes a continues to be an important part of our business overtime.
There are some real upsides as we get to partner in a slightly different way over the coming years.
Yes that makes sense and great to hear maybe a follow up thanks analytical Wizard so.
The press release, and you've talked about in the past some really big customers soccer rights of Kantar pharma for the seven top biotechs, where most of these customers already pulling definitive data into analytical analytical wizards before the deal or does the acquisition kind of.
Materially change your opportunity with these large customers.
It really varies some of them do and some of them don't and that's okay. What analytical Wizards brings to us is our ability to be data agnostic and be able to take data from all different parts of the health care ecosystem.
And clients can choose to pull in definitive data with that many of these clients obviously use our best in class affiliations data in our reference data and increasing their claims data as well.
Yes.
To expand over time, but the fact that we can bring in other data internal data and third party data.
Tremendous new capability for us as we look to increase our presence in large pharmaceutical companies.
Yep sounds good thank you guys.
Yeah.
Thank you.
Thank you.
Question comes from the line of Jonathan Young with Credit Suisse.
Please go ahead.
Hey, Thanks for taking my question and congrats Robert adjacent tables as well.
Just in relation to following up on Craig's question just in relation to the current macro environment based on your results. It doesn't look like things are slowing down and still looks pretty strong I guess have conversations evolved with new and existing customers.
And its gasoline into kind of new or expanded opportunities or more or less just any commentary there.
I don't think we've seen a tremendous change.
In addition to selling to a wide variety of customers our customers are using our data to drive growth and to figure out ways to do that more effectively and efficiently and we.
We have a tremendous ROI with our clients. So I think that exists in all different market environments, especially in healthcare.
Interesting if you think back to 2020, so COVID-19 hit and that essentially shut down health carriers. We know it in all of our clients are involved in health care in that way and in that year I think we grew at 38% in that year.
Just give us a sense of the must have.
The nature of the data and the intelligence that we provide.
Its attribute to what we're doing and I think it bodes well as we go into various different environments in the future.
That's really helpful. And then just going back to the analytical lasers I guess, it's early days.
They did get a nice big win there, but I guess how has the pipeline been developing since the close has there been any openings on cross sell opportunities or things of that nature.
Yeah.
Been really great since closing we've been thrilled first of all with the team and the expertise they bring around analytics and the.
Integration is going quite well, we feel like the teams have worked together really cooperatively on the pipeline question, where we're seeing a ton of interest it's used cases around advanced analytics for targeting <unk>.
Things like brand optimization use cases.
Being able to pull various data points to measure campaign effectiveness across multiple channels things like that so I'd say the.
The pipeline creation has been a whole new level of.
Analytic requests for us and especially our larger biopharma clients.
Nice to see.
Great. Thanks.
Thank you.
Again, if you would like to ask a question. Please press star one on your telephone keypad.
The next question comes from the line of David Grossman with.
Stifel.
Please go ahead.
Thank you.
I think this question has already come up a couple of times. So I thought I would just maybe ask it a little more directly is that.
Over the recent past or than the historically have you ever seen any cyclical components in your model and if you have.
How would you rank them in relative importance.
We have not seen cyclical pro cyclical.
Typically those things happening within our business to date show over the last 11 years, obviously, we've been growing very fast every single year throughout that including as I mentioned in 2020, we grew 38%.
So we haven't seen anything so I think as you think about the tailwind of our business first of all you have health care, which is a growing market continued aging population. So it's just tremendous tailwind with the SEC.
Is the move towards more digital.
People are trying to use data in more effective ways to drive sales productivity and drive marketing productivity and reach their customers in better more effective ways.
All of those trends I think are really accelerating.
In different macro environments, I think we're going to continue to see those trends as tailwind as far as that will offset any short term.
Sure term changes that might be happening in the macro community.
And kind of similar to current inflationary environment and then a renewal time. The majority of time, we will actually renew our clients for a higher dollar amount and it's really reflective not only of just kind of inflation in general, but we just we keep investing in the platform, bringing a new data says, creating new more.
Powerful analytics and.
Insight for our clients and we're able to charge more as a result.
So that that seem and that focus of our organization will continue through this environment on.
On the cost side.
We've talked a lot about our amazing culture. This is the sort of time when it really pays dividends and we we pay a lot of attention to the labor situation as you point out we're scaling quickly.
And our outlook includes the impact of any expected inflation.
Alright, great very helpful. Thank you.
Thank you.
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Again.
If you would like to ask a question. Please press star one on your telephone keypad.
Just the last reminder.
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S. As we have no further questions, ladies and gentlemen, we have reached the end of question and answer session.
And I would like to turn the call back to Jason grants Foreclosing remarks. Thank you.
Thanks, once again I just want to thank everybody for joining us today and listen to the earnings call.
Once again, we couldn't be more excited about what we've created we have a a highly differentiated product that we continue to invest in and deepen that competitive mode over time and planted a big market $10 billion plus market with that type of product is this up and we're excited about so we think we're in a great position to continue to.
<unk> results like we did this quarter, where we can drive longterm growth and profitability and I want to thank everyone for their support and look forward to talking more with you.
Okay.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.