Q1 2022 Computer Programs and Systems Inc Earnings Call
And your telephone keypad.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host to understand to go ahead now.
Thank you good afternoon, and welcome to the C. P. S. I first quarter 2022 earnings conference call.
During this conference call, we may make statements regarding future operating plans expectations and performance that constitute forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
We caution you that any such forward looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance.
Actual results might differ materially from those expressed or implied by such forward looking statements as a result of known and unknown risks uncertainties and other factors, including those described in our public releases and reports filed with the Securities and Exchange Commission, including but not limited to.
<unk> our most recent annual report on Form 10-K.
We also caution investors that the forward looking information provided in this call represents our outlook only as of this date and we undertake no obligation to update or revise any forward looking statements to reflect events or developments. After the date of this call.
At this time I will turn the call over to Mr. Boyd Douglas President and Chief Executive Officer. Please go ahead Sir.
Thank you drew good afternoon, everyone and thank you for joining us today.
After my brief comments I will hand, the call over to Matt <unk>, Our Chief Financial Officer, who will provide the details regarding our first quarter results.
Then Chris Fowler will share his opening thoughts before the three of US along with David Our Chief growth Officer will take your questions.
Ill begin by noting how exceptionally pleased we are with the strong start to the year Matt.
Matt will go into the details, but I would like to highlight a few key takeaways from the past quarter.
Total revenues of $77 $9 million were impressive, but particularly encouraging is the quality of those revenues is the revenue mix increasingly leans towards recurring revenue, which now makes up roughly 92% of total revenues.
Adjusted EBITDA of $16 $2 million is very close to a company record.
Third a particularly strong start from our recently acquired RCM solutions business HR G and our RC M teams are often running in terms of the <unk> integration.
Lastly.
And we have an all time high sales pipeline across all business lines.
Central to the notable first quarter results as the performance from true bridge in terms of both financial performance and bookings.
A key factor that led to the impressive first quarter revenue performance of $77 9 million.
Included better than expected patient volumes for true Bridge Hospital customers. In addition, the momentum in E surrounding the integration of the <unk> business enabled the combined talented sales teams to execute on the opportunities for growth in both cross sales into our EHR base and the net new market.
<unk>.
While there is a lot of work remaining this year. We are very encouraged by the first quarter results and remain steadfast in our determination to deliver on our three year plan to provide outsized shareholder returns and $80 million and adjusted EBITDA in 2024.
We will continue building a solid foundation to support core growth margin optimization and tangible upside growth through digital innovation.
And now before I hand.
The call over to Matt I would like to make a few personal comments regarding the announcement yesterday of my retirement as CEO and president of <unk>.
As you can imagine given the decision to retire a great deal of thought and consideration over the past 18 months or so.
It was very important to me that the timing would be right for both me personally and for the company.
As all of you know <unk> is near and Dear to me is I have thoroughly enjoyed every bit of my 34 year career here at the company.
It has been both an honor and a privilege to be fortunate enough to be the CEO for the past 16 years we.
<unk> had a tremendous amount of success over the years, but I would be remiss to not give full credit where it belongs to our fantastic and thoughtful senior leadership team and a 2500 employees that make <unk> great our.
Our employee base undoubtedly makes <unk> the great company that it is today and to all of them I am truly grateful for all they have done for me and for our company.
<unk> <unk> positive impact on health care has been a true team effort and I'm, particularly proud of all that we've accomplished together.
Additionally, David Chris and Matt deserve a special shout out as all three of them have been great partners friends and leaders over the years.
With that being said the timing is right.
Company is on a solid foundation and is a very exciting future ahead.
I'm thrilled to my good friend and longtime business partner, Chris Fowler has been named the new President and CEO of <unk>.
The board conducted a comprehensive evaluation of internal and external candidates and unanimously chose Chris to be my successor. There is no doubt that the company is in great hands with Chris as CEO as we continue with the transformation that we started 18 months ago.
In closing I would like to thank all of our clients for the unwavering drive and determination to deliver the highest quality of care to the patients in their respective communities. The challenges they have faced over the past two years are unprecedented but time and again they have risen to the occasion and delivered high quality compassionate care to the.
Patients they serve.
<unk> would not be in the position we're in today without the feedback advice partnerships and relationships that we have formed with our clients over the past 40 years and for that I'm truly grateful.
That being said I'll turn the call over to Matt for comments on the financials.
Thanks, Boyd and good afternoon, everyone on today's call I'll provide a high level overview of the quarter, including some additional detail on bookings performance and a brief walk through our first quarter financial results, but before we dive in I'd like to take this opportunity to say what a pleasure it's been to work alongside Boyd These past several years.
<unk> his clarity of focus strategic vision and dedication to serving the needs of all stakeholders as chief among many reasons CBS is well positioned for success in the years ahead.
Between Yesterdays announcement around boys voyage retirement, our acquisition of <unk> in early March and today's announcement of the refinancing of our credit facilities.
A lot of headline grabbing events over the past several weeks.
Not to be outdone this quarter stellar financial results shouldnt be crowded out from that headline.
Coupled with one month of <unk> activity, the resiliency of our customer base. During the pandemic last gas continues to provide organic momentum that has true bridge sorting to new heights, driving near record metrics across the board and furthering our excitement for the organic growth potential of true bridge and our ability to accelerate.
That growth with responsible M&A execution.
Speaking of M&A. This quarter's results included one month of activity for <unk> with revenues of $3 $8 million and adjusted EBITDA of $600000.
Full quarter pro forma results for <unk> were $10 $1 million of revenues and $1 1 million of adjusted EBITDA, putting <unk> on track for the expected $40 million of revenues and $5 2 million of adjusted EBITDA that we stated in the press release announcing the acquisition.
Our other recent acquisition <unk> contributed $3 4 million of revenues absent purchase accounting adjustments and adjusted EBITDA of $1 8 million both down slightly from the first quarter of 2021 pre acquisition amount as customer conversions from term licenses to SaaS arrangement.
<unk> injected some timing noise into revenue recognition.
Before we dive into the detail, we'd like to call your attention to some enhanced disclosures in the earnings release.
A couple of quarters ago, we began disclosing the recurring versus nonrecurring revenue mix within our EHR businesses.
To provide more clarity around the shift in revenue mix.
Beginning with today's earnings release, we've added a table breaking out the adjusted EBITDA contributions from each of our three reporting segments Trowbridge acute care EHR and post acute care EHR.
We think you'll find these disclosures valuable and informative, giving investors a better grasp of where we are and what the future may hold.
Moving onto bookings. The addition of <unk> added considerable talent to our <unk> sales force and is expected to accelerate our ability to generate meaningful revenue growth from outside of our EHR base target cohort, we label as true bridges net new market.
<unk> contributed $2 $9 million to the quarter's bookings since the date of acquisition, adding to successful execution from our existing sales teams and driving overall bookings to a 31% sequential increase and a 132% improvement over the first quarter of 2020 once levels you may recall.
That the first quarter of 2021 bookings were anemic and made for a particularly easy comparable as the pandemic attack bookings and created a stingy decision environment, the likes of which we hadn't seen before.
True bridge bookings increased 38% sequentially and nearly three fold over the first quarter of 2020 one's amounts as HRD drove net new <unk> bookings to $4 4 million compared to well below $1 million during the first and fourth quarters of 2021.
Sustained performance in this net new Trowbridge market has a real potential to accelerate growth above and beyond the expectations. We laid out when we announced our multi year growth strategy in February of 2021.
The organic growth plan, we've been executing against has a heavy reliance on cross sell success with an initial target of $60 million in incremental annual cross sell revenues by the end of 2024 compared to a target of only $25 million from the net new true bridge market.
With nearly 4000 hospitals across the U S with 200 beds or less the total net new market size for true bridge is nearly four times the size of our cross sell base. So the potential upside from this initiative is enormous.
System sales and support bookings increased 24% sequentially and 68% compared to the first quarter of 2021.
The year over year improvement can be mostly attributed to a vastly improved sales climate with more normalized decision timeframes, while the improvement over the fourth quarter of 2021 has been mostly the product of improved add on sales to existing EHR customers.
The net new EHR environment continues to be dominated by SaaS license models with the first quarter of 2022, marking the fifth consecutive quarter with a 100% SaaS mix for new hospital EHR contract signings.
Including add on bookings SaaS bookings made up 59% of total system sales and support bookings during the past quarter compared to 54% in the fourth quarter of 2021 and 31% in the first quarter of last year.
Turning to the financials <unk> $3 $8 million revenue contribution drove total revenues to their second highest level in company history surpassed only by the fourth quarter of 2017, when more than $12 million in nonrecurring IMMU three revenue created a momentary revenue spike.
The past quarter showed a 5% sequential increase in revenues, while the combined seven $2 million in revenues from <unk> and true code drove topline growth over the first quarter of last year to 14, 5%.
And while total revenues didn't quite eclipse our prior record the quality of our revenues continues to improve as the revenue mix tilts more heavily towards recurring revenue sources.
Occurring revenues made up 92% of total revenues during the past quarter, increasing 4% sequentially and 16% over the first quarter of 2021.
Organic recurring revenue growth was five 6% over the same period from a year ago.
Similar to the top line performance, our profitability metrics of adjusted EBITDA and non-GAAP net income were at near record levels as well.
Adjusted EBITDA improved 13% sequentially and 37% over the first quarter of 2021 with adjusted EBITDA margins expanding to 27%.
Adjusting for the <unk> and <unk> acquisitions organic EBITDA growth was 9% sequentially and 16% over the first quarter of 2021.
Similar to adjusted EBITDA, non-GAAP net income increased 15% sequentially and 28% over the first quarter of 2021.
Looking deeper at our segments true bridge revenues increased 11% sequentially as <unk> added $3 $8 million to the top line.
Organically the sequential revenue growth from Trowbridge of only 1% includes a $700000 decrease in <unk> revenues as the timing of patient engagement licenses inject some volatility into the <unk> revenue line.
We call this out because the timing related decline in <unk> revenues clouds up a nice organic growth story for <unk> during the first quarter as outside of <unk> and <unk> revenues increased three 5% from the fourth quarter of 2021.
On the margin side relatively lower margin HR G broad gross margins down by 130 basis points to 54%.
Compared to the first quarter of 2021 through bridge revenues increased 36% on the backs of the true code and <unk> acquisitions organically Trowbridge revenues grew by 14% over the first quarter of 2021.
Gross margins improved 30 basis points from the first quarter of 2021 as margin improvements earned through the <unk> acquisition and our margin optimization initiatives were mostly offset by the relatively lower margin <unk> revenues.
Next system sales and support revenues were down 1% sequentially due to the timing of software subscription renewals, while gross margins expanded 440 basis points due mostly to the timing of certain third party licenses.
Compared to the first quarter of 2021 revenues decreased 4% as a result of the continued trend in declining nonrecurring revenues and as we advance recurring revenue licensing models and new EHR arrangement.
Despite the topline pressure from the continued transition to SaaS gross margins remained relatively flat versus the first quarter of 2021.
We currently anticipate eight new client facilities going live with our thrive solution in the second quarter of 2022, and all are expected to go live in the cloud or SaaS environment.
Moving onto operating expenses product development costs were down $700000 or 9% sequentially and $1 3 million or 16% from the first quarter of 2021 due to increased labor capitalization.
Sales and marketing cost increased $900000 or 14% sequentially and $1 7 million or 33% from the first quarter of 2021 as improved bookings and revenues drove commission cost higher while recent acquisitions brought incremental spend.
General and administrative costs increased $1 $3 million sequentially due mostly to the seasonal dynamics related to our 401K match expense and the timing of our annual audit.
Costs were flat from the first quarter of 2021.
Closing out the income statement, our effective tax rate for the quarter decreased to 14% compared to 23% in the fourth quarter and 19% in the first quarter of 2021, we're expecting a full year effective tax rate of around 18%.
From a cash flow standpoint, operating cash flows of $11 $8 million were down $1 $5 million sequentially and $1 $9 million from the first quarter of 2021, mostly due to the timing and scale of annual bonus payouts like most companies Cps side pays annual performance bonuses during the <unk>.
First quarter of each year.
The pandemic impact on our 2020 financial performance kept to the related payout in early 2021 to a minimal level, whereas successful execution during 2021 led to above target bonus payouts.
Cash outflows related to bonuses bonus payments increased to $4 $7 million from 200.
$1000 in the first quarter of 2021.
On a trailing 12 months basis operating cash flows totaled nearly $46 million or 88% of adjusted EBITDA over that timeframe.
We're also pleased this afternoon to announced the refinancing of our credit facilities with the major changes being a $50 million increase in revolver capacity a step up in maximum leverage following an acquisition a transition to a sofa as the benchmark rate and tweaks to the credit agreement EBITDA measure to better.
In line with how we report adjusted EBITDA to the investing community.
These adjustments were in furtherance of our capital allocation strategy, which prioritizes flexibility to have Cps Si optimally positioned to opportunistically deploy capital through a combination of M&A internal investments and value based share repurchases.
Our recent acquisitions of <unk>, and HR Gee, bringing pro forma leverage to roughly two times well below our target of two five times, ensuring that we remain well positioned to respond quickly to other opportunities that may arise.
We continue to groom our pipeline of potential M&A opportunities that fit our programmatic M&A strategy and feel there is tremendous opportunity to enhance and supplement through bridge service offerings with reasonably valued roll ups and tuck ins.
Capital allocation decisions generally involve some trade offs and as a result share repurchases were limited to $1 7 million for the quarter and were all related to tax withholdings on employee stock Awards.
However, we'd like to remind investors that the cadence and volume of our repurchases have been and will continue to be influenced by a number of factors certainly considering value, but also considering capital needs and availability potential M&A cost of replacement capital and other capital allocation alternatives these alternatives and priority.
And capital allocation, our ever evolving so a lack of per repurchase activity in a given quarter may not reflect our views on the intrinsic value of our stock.
Before I turn things over to Chris for a few remarks I'd like to briefly touch on our guidance and near term expectations, while the first quarter surpassed our internal expectations. We cautiously believe we'll be giving some of that back in the second quarter.
The second quarter, we'll see some seasonal costs as we host our first in person client conference since 2019 on.
On the top line, it's no sure bet that the record volumes for true bridge will extend through the second quarter, and we expect license timing for <unk> and <unk> to call. It a slight pullback in those high margin businesses in short we're a bit ahead of plan as of March 31, but expect to be back on target for our year to date plan numbers, but.
The end of the second quarter and don't see a need to update or change our 2020 to annual guidance at this point.
In closing my remarks, I'd like to congratulate Chris Fowler on yesterday's announcement that he will be taking the reins as CEO and a couple of months.
Look forward to continuing to work with Chris and his revised role as we strive to help our customers with products and services that make their jobs easier.
To build a corporate culture that our team members can take pride in and provide our valued investors with quality returns and with that I'll turn things over to Chris for a few remarks. Thanks.
Thanks, Matt and I'd like to start by saying, thanks to both you and Boyd for the for the very kind comments.
It also beyond that just a special thanks to both you Boyd and also David for the relationship that we have had over the last five years, specifically as we've run the company.
It's been a great opportunity and I think that it's really come through is how we continue to execute and iterate on what the company looks like today, obviously, what we do could not have been done without the valued work and the strong work of the 2500 strong team members that we have at CPI Sai here.
Look forward to continuing to work with each and every one of them as we grow the company going forward.
While I am giving thank you I'd also like to give one to Glen <unk>, our chairman of the board and also the board of directors for their confidence in selecting me to be.
At the head of the organization and continue to carry us through this transformation.
Before I get started in my comments. The one last thing I would like to say is again I know that Matt did this as well, but just an additional special thank you to Boyd and his leadership over the last 16 years, obviously his passion for the success of our companies are for our customers for our employees and for our.
Holders has been truly the basis of the success of our company and we thank him for his leadership and his guidance over the last 34 years and 16 years as the CEO I'd also like to personally thank him for his mentorship as confidence in the ability to see us through as we make the successful transition.
Over the next 60 days.
I guess you'd say coincidentally my 20, <unk> anniversary at Cps hours Sunday may the <unk> and as I reflected on that over the last couple of days, it's hard to sit here and believe that 22 years first of all the 22 years has gone by as fast as it has but more importantly that I think about this is what a one.
<unk> honor and humbling opportunity to have the opportunity to take over the range of <unk> and continue the great work that's been done up to this point so very much look forward to the opportunity in front of US as Boyd said the company is on very solid footing. We're very excited about the execution that we've had over the last.
Several years and specifically as we think about next 36, and where we are on that transformative journey.
Halfway through and we're on target, but we've got to remain focused on the execution. We've got to stay on top of the work that set out and what needs to be done.
And to remind all of you of what the key tenants of next 36 or three principles.
Again I'll go over real quick one that's to grow the core and while <unk> is obviously the focus of that as we think about it from growing that in our.
And our installed customer base and also into the net new market. We also need to make sure that we have a satisfied and happy EHR customer base for us to be able to truly unlock that $400 million of market opportunity in the installed customer base for true bridge. So we have to remain laser focused on <unk>.
Levering quality products and services to continue to see that that fulfilled second is operational efficiency.
You've heard of salt for the last several calls about how we're continuing to unlock value through automation and offshoring. Our efforts there continue to spur on additional momentum and we're excited to see how we continue to leverage that to deliver more scale and provide more value to our customers going forward and then lastly.
A few bets on some key adjacencies of how we can grow exponentially beyond just the core business that we have some examples of that would be get real health and our migration to the public clouds for our EHR business.
Obviously, we'd get real health, we've made some announcements over the last several calls that shows the true momentum behind the transformation of care to the digital age and allowing us to be positioned with the technology that we have there to capitalize on what that opportunity could be and from a cloud perspective, and us moving the EHR business into the pub.
Cloud is our ability to have our data position to where we can take advantage of new technologies that are becoming rapidly available in the healthcare space more easily and more.
And just faster as we go forward.
Beyond that beyond the <unk>.
Execution that we have to convert on as it relates to the next 36 will also be looking for additional growth and how we can accelerate that and I think Matt touched on it really nicely as we think about our measured and thoughtful capital allocation strategy, whether that's us focused on additional product investment to capitalize on opportunities.
Entities that we think we can deliver through our product and adoption of our products or whether that's additional M&A that we can execute on that looks a lot like the recent transactions of <unk> and <unk> and lastly, when prudent potentially share repurchases. So so we will be laser focused over the next short term and to continue to evaluate.
<unk> opportunities for us to take advantage of the capital opportunities for us to accelerate the growth beyond next 36.
Lastly, I would say we're very we're beyond excited to get started on this next chapter.
We look forward to working with all of you on the call as well as the team here at <unk> and our customers at large to help clear the way for care.
And with that Dana Please open the line for questions.
Yes.
Thank you Kevin.
We will be conducting a question and answer question.
I would like to ask a question.
On the telephone keypad.
The nation tone will indicate your line is open question Keith.
And then two if you'd like to.
From the peak.
Okay.
To pick up your hand.
Thank you.
Oh one question.
Jeff <unk> from Piper Sandler. Please go ahead.
Yes, good afternoon, good afternoon, and thanks for taking my questions.
First off congratulations on a wonderful career and best wishes for your next steps and Chris Congrats on the new role so with that Chris I wanted to ask you. A question you've been involved in all facets of the business, but maybe been more focused on true bridge of late so I'm curious to get your updated thought.
And you touched on some of this but maybe to bring it together and really how you see Cps Si as being more valuable than just the sum of the different parts that you touched on.
Yes, Thanks, Jeff and thank you for the congrats and I am sure I speak for Boyd and say congrats. Thank you are there as well so.
I did touch on a little bit but to expand.
Obviously the growth plan for true bridge is twofold.
One it's into the external market, where we're continuing to see success. Obviously, the addition of HRD and the talent that we're seeing come in from a sales perspective and also just the scale.
An additional notoriety due to that deal we're continuing to see additional momentum for true bridge by itself, but over the next two years or three years our growth.
Accounts for or are actually the models that we have expect more growth from our install customer base. So there is a very close dependency between the success and the retention of our EHR customer base and the conversion of success for true bridge. So again I think the number.
I shared in the prepared comments was $400 million, which is what's what's left from an opportunity standpoint for trowbridge inside the installed customer base, both acute and post acute and then lastly, if youre thinking about the diamond in the rough that get real health, while it has a has some <unk>.
Minimum in both the international and domestic market Standalone. We also think that that is an opportunity not just to help continue to satisfy our EHR customers, but also a wedge opportunity for us as we're bringing in RCM opportunities and how we're positioning ourselves as the.
Greater entity of the Cps II so.
That's an area obviously, that's a hot topic in of demand.
For most all facilities right now.
And so hopefully that's something that we'll continue to leverage as an opportunity to bring our additional offerings, whether it's true bridge or true code in behind get real health.
Excellent really helpful comments.
Maybe one more from me on <unk>.
<unk> side of things and the <unk> acquisition I'm just curious what the initial feedback has been from clients and prospects. It seems like they really hit the ground running in terms of results and demand, but just <unk>.
Curious what clients and prospects are seeing whether it's anecdotally or.
Thats, all maybe already translating to a pipeline impact so far.
Yeah.
So what I would say first and foremost obviously as an organization our maturity from a M&A integration standpoint has obviously grown tremendously since 2016, when we did the health plan deal.
We have.
Put a lot of thought and the integration process and making sure that specifically like an opportunity with <unk> that the people integration comes first and I think that that's maybe one of the most important parts of this is we're not talking about an asset.
Our tech asset it really is a people people asset and that's that's what the <unk> customer base and also those new opportunities. We wanted to make sure that they saw and so the continuity that we've been able to keep in place as the as we manage through the pipeline and as we manage those customers.
And to see the team start to come together from both the <unk> and the <unk> side operationally.
I think has been the real secret in the source for the.
The success there.
Jeff David here, I would like to add a little bit to that in the from a timing standpoint.
Closing on the acquisition on March one I think we were fortunate in that the timing of that closing with the labor shortage issues that our hospitals are seeing and particularly larger health systems.
Resulted in some significant bookings from the <unk> side of the house in March. It is part of the reason why we Boyd mentioned the record pipeline that we have on the <unk> side of the business that exists.
<unk> had in place some safety net agreements with some larger hospitals and health systems that allowed for when they ran into or have run into issues with regard to labor in their business offices that they.
Immediately turned to <unk> and we've already seen benefit from that.
Yeah.
Just a follow up on that last part is is there how should we think about the timing related to that does that creates a new recurring opportunity or is it a temporary boost.
Yeah. So.
The initial bookings for those safety nets, and again just to be clear.
When you hear the terms safety net that's just us being the backstop for where they may have a shortfall of work being done whether that's insurance follow up whether it's medical coding whether it's.
Whether it's early out collections of patient balances.
It is booked as a one time opportunity, but the conversion rate of those turning into self to reoccurring revenue is upwards of 75%.
Excellent that helps I'll jump back in the queue for now congrats again.
Thanks, a lot Jeff.
Thank you.
Yes, Jimmy Choo Joy Zhang.
Okay.
Hey, guys congrats on the recorder.
I want to echo the congratulations for Chris on the new role and also on at which point a great retirement, it's been great Arsenal IDT cocky here.
I'll start with a question you're correct that as well.
You have not transitioned.
Yes.
Wondering if you can give us a preview of what your top priorities are for the year.
First 100 days.
Yes, that's a great question Joy I would say for me the biggest thing that we're thinking about is again going back to the key to our success is our employees is making sure that we are supporting our staff.
As again as labor is one of the main issues at any any article that you pick up right now it's got a chance at being in the very top section of it so making sure that we're doing the things to support our customers.
To support our employees and the way that they need to be supported to be successful for us and secondly, I would say, making sure that we're engaged with our customers to understand exactly what we think it is that we should be delivering and making sure that we're hitting on that.
And then obviously like I said last is from a M&A I'm, sorry from a capital allocation standpoint, making sure that we that Matt and I are dialed in on what those opportunities are for us to to best unlock potential for the company, whether again that additional investment in product or if thats.
M&A opportunities going forward.
Okay.
Great.
As a follow up on your labor cost comments.
We heard some of your peers. This week talk about the high labor cost environment for hospital, that's likely to persist for the next one to three years.
When you talk to your clients in a rural market are you getting a sense that they are also anticipating.
A more permanent headwinds and does that cause interest rate action when it comes to outsourcing of their lifecycle.
Yeah, I think David said that earlier that that's obviously a driver right now and what we're seeing and I think it goes beyond just the revenue cycle side I think it's an opportunity for us to set ourselves apart with the software that's being developed and it being a efficiency.
The opportunity and not something that inhibits their ability to do their job.
Definitely.
People continue to move away from healthcare it definitely is a stimulus for bridge and we're obviously seeing that come through loud and clear in the pipeline today.
<unk>.
Based on what we can see obviously, we can't read the future any better than you can but I don't think that thats, something thats going to be going away anytime soon so I think our approach whether it be through the automation work that we're doing or through our offshoring initiatives.
I think we will continue to be positioned well to capture that opportunity.
Have a sales summit going on right now actually kind of had a similar question. This morning.
We still see the biggest competition for RCI.
Hospital itself more.
More than 85% of the hospitals still manage their own business offices. So this will be a driver in unlocking that value that's actually there.
Great. Thank you very much.
Thank you Julie.
Yes.
Thank you.
Question comes from George Hill from Deutsche.
Thank you.
Hi, Good evening. This is progress I'm speaking on behalf of Jerry.
So cheap too.
Clos noted some steep EMR market share.
Footprint losses for the company in 2021 can you talk about how you expect that figure to look exiting 2022, and whether the company expects to be in.
Net flip.
Vince and.
Duane <unk> and the strategies you are going to take to get there.
Yeah. Thanks, it's David.
Certainly so from a revenue retention standpoint, as we've as we've remarked previously we were over 98% in 2021.
The losses in terms of customer count that are reflected in that class report are primarily those as we have been working with our.
Formerly health land centric clients and efforts to move them over to thrive.
In advance of the 2023.
As generally reflected in the attempt to convert those over to thrive and in those efforts, we're winning a little bit of around <unk> around 60% of those deals.
But thats the reason that you've seen the expanded numbers in the Klas report and we are confident that youll see better numbers exiting the year.
Alright. Thank you. Thank you.
Thank you.
Oh.
Mothball the question I would now like to turn the call back to Bob Baldwin for closing remark.
Great. Thank you thanks, everyone for being on the call today as you can tell from our remarks.
We're certainly excited about the great start we got to the year, we certainly realized we've got a lot of work left to do but but we're off to a good start with feeling really good about where we are as a company and where we're headed so I appreciate everybody's interest and hope you have a good rest of the day. Thank you.
Thank you.
This concludes today's conference you may now disconnect your lines. Thank you for your participation.
Okay.
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