Q1 2023 Phreesia Inc Earnings Call
Good afternoon. My name is Emma and I will be your conference operator today at this time I would like to welcome everyone to the free job fish skull first quarter 'twenty 'twenty three earnings conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press to Starwood. Thank you, but largely Gandhi you may begin your conference.
Thank you operator, welcome to Frejus earnings Conference call for the fiscal first quarter of 2023, which ended on April 30 of 2022.
Joining me on today's call are high mandate, our Chief Executive Officer, and co founder and Randy Rasmussen, Our Chief Financial Officer.
A complete discussion of our results can be found in our earnings press release and in our related form 8-K submission to the SEC, including our quarterly stakeholder letter both issued after the market closed today.
These documents are available on the Investor Relations section of our website at IR Dot Freesia Dot com.
As a reminder, today's call is being recorded and a replay will be available on our Investor Relations website at IR Dot freeze your dot com following the conclusion of the call.
During today's call we may make forward looking statements, including statements regarding trends, our anticipated growth our strategies predictions about our industry and the anticipated performance of our business, including our outlook regarding future financial results.
Forward looking statements are subject to various risks uncertainties and other factors that may cause our actual results performance or achievements to differ materially from those described in our forward looking statements.
Such risks are described more fully in our earnings press release, our stakeholder letter and our risk factors included in our SEC filings, including.
Including in our quarterly report on Form 10-Q that will be filed with the SEC tomorrow.
The forward looking statements made on this call will be based on our current views and expectations and speak only as of the date on which the statements are made we undertake no obligation to update and expressly disclaim any obligation to update these forward looking statements to reflect events or circumstances. After the date of this call or to reflect new wins.
[noise] formation or the occurrence of unanticipated events.
We may also refer to certain financial measures not in accordance with generally accepted accounting principles in order to provide additional information to investors. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results a reconciliation of GAAP to non-GAAP results.
May be found in our earnings release, and stakeholder letter, which were furnished with our form 8-K filed after the market closed today with the SEC and May also be found on our Investor Relations website at IR Dot Freesia Dot com.
With that out of the way, let me hit a couple of the highlights from the quarter. In case, you have not had a chance to review the earnings release and the quarterly letter first our investments continue to drive strong growth in our network in the first quarter average health care services clients were up 33% year over year second.
Payment processing revenue in the quarter reflected patient utilization trends.
And below our expectations based on our prior experience. We think this trend could persist in the remainder of the year, which is the main reason, we're maintaining our revenue outlook for the year at $2 $71 million to $2 $75 million. This range implies growth of 27% to 29% year over year.
Life Sciences' growth was up a strong 51% year over year and revenue was down a slight $563000 sequentially Q4. This sequential trend is consistent with historical periods, where you see Q4 to Q1 flat to down due to seasonality. We continue to be pleased with our team's performance in this area.
Yes, we expected at this team's continued performance to contribute to our overall growth in fiscal 'twenty three and last highlight we began to see strong operating leverage across all of our investments over the past year, which is why we've taken up the adjusted EBITDA outlook for the year to a range of negative $126 million to negative $1 22.
$2 million, which is up from our prior outlook of negative $1 $54 million to negative $149 million and before jumping into the Q&A session. Let me hand, it over to our CEO Hi, Mindy.
Thank you biology, and good evening, everyone and.
Thanks for participating in our fiscal first quarter earnings call.
I'm very proud of our team for their commitment to our clients and their mission.
Internally, we think of ourselves as operators provided amazing experienced across over 100 million patient visits a year it impacts the entire health care ecosystem.
We're able to do this because of our outstanding and committed product and engineering organization and I want to say, thank you to all of them.
For 17 years, we have felt strongly that if we build great product and put it in the hands of our clients. We will produce a great return and they will remain happy clients. It's been wonderful to see the net effect of our product and engineering teams working with our go to market teams and we know it will continue to aid <unk>.
For all of our stakeholders in the years to come.
I'm sure, we'll get deeper into the highlights <unk> touched on as well as other Jonathan Let me add it's been great to be out there meeting in person again, if I had the opportunity to meet with Suzhou colleagues clients and shareholders in person over the past few months. It really does it makes a difference we look forward to seeing many of you.
Over the summer and amongst that follow operator, we could open up for Q&A now.
Thank you at this time I would like to remind everyone.
Order to ask a question press Star then the number one on your telephone keypad.
Your first question today comes from the line of Anne Samuel with Jpmorgan. Your line is now open.
Hi, guys. Thanks for the question and congrats on the strong level of growth this quarter.
I was hoping maybe you could touch on some of the dynamics around revenue per provider client and what caused the decline there.
So it gives.
Youre talking about total health care services revenue.
Yes.
So the revenue per client you are talking about the.
The $19 two.
Yes.
Yes.
Right.
Yes.
For the year over year, Yeah, I think from.
<unk>.
We've talked about this in the past, where we're doing a big land and expand as we get this.
Clients often they come in in the first.
Dollar of revenue comes in and as we expand into other areas. If you look at it quarter over quarter. There was nice expansion on that.
The revenue per client.
And I think.
In the table I think we also said to you. If you look at the subscription per provider client, it's been consistent at 11 and a half.
Perfect for several quarters now so yes, we see that continuing to go.
So at that level or higher as we move into future quarters.
And in any event.
I was just going to have any brought up a good point, which is.
Talk to a lot of people about those two lines independently. So if you actually look at subscription per client in payments per client you sort of see that story that Randy talked a whole lot better.
Okay very helpful.
And I was hoping maybe you could touch on EBITDA you raised your EBITDA outlook by more than you beat today.
You've now got an improved timeline for profitability.
Was hoping maybe you could talk about what some of those profitability levers are coming in better than you expected.
Yes, I think so.
We made some significant investments in fiscal 'twenty, two and I think DNA is a really good example, where we made some investments we went.
Went live with our new ERP system last year, and we're seeing the benefits of that this year and I think they the leverage on those investments is accelerated versus what our expectation is.
There is also when.
When we did guidance for for the year a couple of months ago. There is still some questions about Ukraine and some of our third party providers and I think we have more clarity there. So that's also helped us.
Revise our expectations for the year.
Great and then just one housekeeping question I didn't see in the letter I was hoping you could provide how many str's you have now.
It's the same as it was that at year end net debt to 32.
Great. Thanks, very much guys.
Your next question comes from the line of Ryan Daniels with William Blair. Your line is now open.
Hey, guys. Congrats on the strong start to the fiscal year. Thanks for the questions.
I'm curious what you're seeing in regards to patient utilization trends I know you mentioned in your prepared comments. It was lower than anticipated is that more of a dynamic of COVID-19 related issues with patients coming in or is it some of the challenges in your client base is seeing in workforce.
Just retaining or maintaining productivity of the health care workers.
Hey, Ryan.
Yes.
I think youre hearing it's a mixture.
Covid hit.
Hitting their staff.
Obviously their patients, but also just staff staffing levels.
We're seeing that as a combination through I don't think there's any one answer and I think we've seen it fluctuates throughout the entire health care ecosystem.
Okay. That's helpful.
<unk> to us.
Our providers, which is trying to make sure that we.
We're providing them all the tools that they can treat patients they will need to be treated.
Yes, absolutely and then I guess my follow up I'd love to get an update on your offering for social determinants of health, you've specifically called that out in some detail initial letter. It's a topic. We've focused on a lot of late and I think regulators and payers and providers are all focused on it. So I'm curious what kind of traction youre seeing there.
What may be future investments or growth outlook for that specific product offering is thank you.
Yeah.
Brian .
<unk>.
Social determinants of health are not just.
Impacting People's health and wellness and how they get treated there are also things that people, we found working with providers.
They're often have a hard time, bringing up that they work to address whether it's security or domestic violence or having a safer.
Place to sleep.
And we've really focused on is not monetizing social determinants of health, but empowering our providers.
Figure out who need help and how they need help and making sure we do it at scale in a non judgmental way.
That's just an important part of doing the right thing.
And I don't know what the.
Economic benefit of social determinants of Orion, but I know it is just the right thing to do and people go on to health care to do the right day.
We will keep doing that as an organization.
Okay, I appreciate that and congrats on the <unk>.
Announcements on your best places to work I know culture is important for you so kudos on that thanks.
Yes.
Obviously, we've got this amazing companies too.
Amazing group of people that are committed.
I'm really proud to work with them.
Your next.
Question comes from the line of Jessica <unk> with Piper Sandler Your line is now open.
Hi, Thank you so much for taking my question and congrats on the strong EBITDA.
So I just had a couple of questions on that.
Connect offering.
First off I think we know patients are typically engaging with the intake management interface and self scheduling but curious.
Primarily interfacing with connect.
The pace and with the fact that that man or the provider themselves.
And then just a provider where disconnect kind of fit in the context of the EHR and the providers practice management.
Integrate that.
Jeff So it looks like a very long question I think I got it.
So you're right up there.
Alright, So let me see if I can so you think connect is all seem like we do okay.
Herd.
Yeah.
And you are trying to figure out who uses connect and as you can see.
So.
Over a long period of time, we do envision generic really beating.
Tied to the patient right.
It's how they book their appointment.
But right now the vast majority of the connections.
<unk> connect are between the provider staff.
And the other providers steps.
Did I answer the question very rarely the actual provider themselves.
Got it and so the vision is eventually though the patient might be able to access that through the self scheduling our intake.
Sure Brian .
But we are very good.
Sure.
Got it and then just and are the provider clients, who are potentially exclusively participating in the connect referral network included in the total provider counts.
Or does it provider has to be a free shot intake management and scheduling customary Arctic cat access.
For acquired to be counted you got to pay us money.
And so if there are clients there are clients.
Alright.
<unk> first dollar comes in.
That's helpful. And then just finally in terms of revenue recognition and seasonality of the connect offering.
<unk>.
Where is that revenue recognized and then I would imagine expenses correlated to the sequential recovery in payment volumes, but.
I want to confirm that that's true.
Yes, I don't think there is a correlation between that and payment volume right now is from a revenue perspective its in the subscription number.
Got it alright, thanks, that's helpful.
Your next question comes from the line of John Ransom with Raymond James Your line is now open.
Hey, good afternoon team.
This is sort of analysts 101, but a couple of.
Net.
First of all is there anything to call out in the quarter the rhythm of.
Smaller clients versus larger clients in your customer growth year over year, and then secondly, if we think about it.
Rest of the fiscal year.
How should we think about that.
Components. The three revenue components is there anything I know you said life sciences seasonal but is there anything to say.
About in terms of how the three <unk> the same or.
Thanks.
Alright.
I'll answer the first part which is why we picked up outside of the client.
I've said this a couple of times, but I appreciate you, making you say it again, we care about our clients big and small.
Yes.
Okay.
The long view.
You'll need help we'll be there to help you.
I think we have.
Historically <unk> seen the plethora of that happen across our growth in our network.
What was the other question 10% of revenue.
Sure.
Thanks.
Alright.
I think mentioned in the letter I mean, I think in the life science business.
Typically.
The way that the advertising budgets are all year over year.
Going from Q4 to Q1 is typically flat or slightly down.
And then that that builds during the year.
I think.
Payments also has some seasonality to it based on the patient responsibility, which is typically paid earlier in a year, but I think the patterns are similar to what we've seen in other years.
John .
I think in terms of what we communicated back at the end of March for the year I think the only thing to consider is that.
The reason, we're keeping the guidance where it is is because of this.
The payments trends that we saw in the first quarter, but otherwise nothing different from what we saw 60 days ago.
If I could like reset that first question I was asking why it is important to say as I said the customer adds that you had.
Was there anything to call out between the mix of larger versus smaller.
And that and that change I didn't ask I apologize.
I thought you drove.
Slide one more than the other.
Thanks.
Okay.
[laughter].
But the answer is no John we're not seeing any material shift in the mix.
Okay.
Thank you thank.
Thank you Andrew is the secondary.
Much better okay.
I'm working very hard three this is like I'm, almost three years and maybe one day I'll begin.
I know you are that nobody questions that.
Thank you.
Your next question comes from the line of Joe <unk> with Baird. Your line is now open.
Great Hi, everyone.
A question on going back to the subscription revenue per client.
There.
It makes sense just given the magnitude that's been onboard Ed new over the past really five quarters now that you kind of expect.
Sequentially stable trend.
It also follows that will reach a point, where we should start to expect some <unk>.
Spansion out of this cohort.
Any updated guidance, yes, I think it's been a couple of years maybe.
Dollar based net retention figures were provided but maybe how that should look as we think about kind of a mature customer base that is looking to grow.
And then I think last quarter, we talked about.
The low levels of churn that our current customer base is very sticky.
I think we continue to have success in upsell and cross sell.
Kevin.
Net revenue retention numbers.
Apio.
Our strategy is still a land and expand sales so that's going very well for us.
And I think the other thing Joe is you could look look at where we were when we were public three years ago.
Subscription revenue for clients and look at where we are at this quarter. It has grown meaningfully it's just sort of got that step function.
Aspect to it and in terms of the opportunity. We still think the Tam is 126000 per client on average and that's all types of clients and so I think it's close to three times in terms of the opportunity we still feel good about that.
Okay. Thanks.
That help.
<unk>.
And then last one from me in terms of the.
The sequencing of maybe quarterly investment for the remainder of the year, obviously, the guide kind of entails just annualizing the <unk> EBITDA.
What is the right way to think of that.
Kind of stable with one Q opex stable with <unk>.
Cost of sales or is there anything timing related where things are maybe a bit lower <unk> and sort of sequentially. There is still a bit of a step up to go.
Okay.
Yes, Randy maybe you want talk about the gross margins that we think about that.
I think if you look at the gross margins. We expect this to expand in the second half of the year and then I think there are certain.
Managers that do have timing such as corporate events our marketing.
Also.
We are internally capitalized software, so sometimes that fluctuates from quarter to quarter. So those things all affect the timing.
Okay. That's great. Thank you.
Your next question comes from the line of Glenn Santana Sant Angelo with Jefferies. Your line is now open.
Yes, Thanks, and good evening, guys, Hey, I just wanted to follow up on that sequential EBITDA question previously.
If we take your annual revenue guidance kind of implies about 6% sort of sequential growth here for the remaining three quarters. So I guess the assumption is that.
Your opex is going to grow maybe even faster than that if you talked about some gross margin expansion in the back half of the year.
It was my understanding but I just wanted to get an update on the hiring needs of the business. It sounds like we were largely through the investment phase that we talked about on the previous.
Two or three calls I was wondering if you could update us on that investment phase.
How we should think about the operating expenses on a sequential basis from here relative to revenue growth.
Sure.
Alright.
Let me try to unpack that so are we through the investment phase and the answer is no.
We're continuing to invest we're just now starting to see.
Really good leverage off these amazing people that we brought onboard.
They're doing amazing work can we expect like we're continuously investing in them and our clients.
But will we see the ramp of the number of people that we bring on the organization in the next in the near term at the same pace that we had.
Thats the plan Okay Greg.
Did I answer the question.
Yes, I mean, I guess, you did right I mean, but what we're looking at right now.
A loss this quarter of about $31 million in EBITDA, right and Youre guiding basically.
Previous question kind of implied right $125 million for the year, so that would imply.
The negative $30 million in EBITDA at each of the next three quarters roughly speaking so.
Suggest that expenses are growing essentially in line with revenue.
I get it we don't have all the details I just want to make sure we're sort of thinking about that right.
Yes.
Yes, and I think Randy talked Glenn about like timing of certain things so.
Maybe we could try to be helpful and following up in terms of the cadence of this but.
It's a pretty tight range.
As it is.
We obviously expect to get better as time Anthony. Thanks for example, but I mean, the capitalized software is just location of cash flows is less than one and operating in.
So I think we're just.
We are thoughtful about how do we forecast that I think is somewhat based on the investments and what the.
The engineering teams are working for.
Yes, perfect. The last question a lot of people are always asking about the balance sheet and the cash needs of the business and.
If you look at sort of your cash balance at this point, you're at let's call. It $2 69, I think right.
As taking your EBITDA guidance of call. It minus 125 rate that's all malls.
Call it half the cash, but rough numbers, it's kind of half the cash and based on your fiscal 'twenty five guidance I think you sort of imply that you will reach profitability in fiscal 'twenty five is that in one specific quarter in fiscal 'twenty five and so how should we think about the cash needs of the business relative to I'll call. It the three year fiscal plan.
You've laid out in terms of revenue.
And profitability in fiscal 'twenty five.
Yes, that's a good question.
Phil.
The current cash balance in our line of credit is sufficient to finance our plan to achieve our fiscal 2025 targets.
Yes.
If you look at it.
All of being profitable in 2025.
Implies that revenues grow at a CAGR of 28% and that our expenses will grow.
Sure.
10% to 11% of our last two to achieve that profitability.
Okay very helpful. Thank you.
Your next question comes from the line of Richard close with Canaccord Genuity. Your line is now open.
Yes, thanks for taking the questions congratulations maybe.
A follow up to I think it was.
Yeah.
Okay.
Okay.
Forget whose question it was but.
There is in Asia.
<unk> survey out there said something like 35% of health systems have vacancies on the upfront staff.
Schedule wing registers and whatnot I'm just curious.
How much do you think that is driving demand for your products and then when you guys go to market.
How important is it showing that <unk> enhancing productivity, maybe they don't need that to fill those vacancies going forward just any thoughts there.
Alright.
Richard.
I don't know if <unk> question you following up on but why don't I give like a random statistics.
I think Karen drove news runs our marketing organization.
Okay, Barrhead Crs last year made $2 million.
<unk>.
Into health care organizations.
I think the reason we saw the uptick in clients is not just because they have a need but we got in front of them and we had a proposition we had a great product that provided a phenomenal amount of value but.
Whether it's <unk>.
Tianjin nature of the healthcare ecosystem, whether it's demand changes.
The reason I think we're doing loans, because I got a great product and we get it in front of prospects.
In a very thoughtful and efficient way and we do it with an amazing group of people.
But I don't think.
Evan often says Fisher and jumping in our boat alright, and nowhere to fish.
Okay. That's helpful.
And then Randy maybe with respect to fiscal 'twenty five.
<unk>.
I think you said you have multiple levers there to reach the targets I'm wondering if you could just dive in a little bit deeper.
On specifically, what youre, meaning there.
Yes.
I think I talked about the investments that we've made I think G&A is a good example, where we grew that organization to support public company and where we're at that level now and I think as we continue to become more.
Productive we realize the.
Benefit of that.
Also from.
A multiyear perspective, we haven't invested where remote organization, we haven't invested in our corporate headquarters, we haven't done really large transformation.
Acquisitions so.
<unk>.
That enables us.
To be flexible and not have huge fixed cost in our in our cost structure. So.
All of that helps us levered towards profitability in 2025.
Okay.
And then final question would be on payment facilitation that ticked up a little bit can you just go over that number in terms of how we should think about that the rest of the year is that just <unk>.
Basically the mix of new clients that have come on over the last several quarters that drove that up just thoughts around that would be helpful.
You're talking about the fact percentage 80% yes.
I'm sorry.
I mean, I think if you look at the last couple of quarters has actually been fairly stable.
Thank you.
It depends on client mix.
And if they take our payments are not of course some of the larger health systems may have treasury functions were.
Likely to win that business, but we try with every client to win that business and it's.
It's been fairly stable.
I don't expect that number to move a whole lot.
In the next couple of quarters.
Okay. Thanks.
Your next question comes from the line of Ryan Macdonald with Needham. Your line is now open.
Hi, Thanks for taking my questions and congrats on a great quarter and maybe the first one for you.
Stakeholder letter you talked about the research you're doing them class in the report really focusing on sort of the misalignment between what patients want and what vendors currently have and I think one of the examples was around self scheduling just curious.
As you as you kind of have that report and kind of go out to existing customers. How do you try to drive greater adoption of those.
Additional modules around the self scheduling.
Two to expand sort of your penetration or wallet share with those customers and maybe close that gap of misalignment.
Yes.
What was very telling about this and we really we're pretty excited.
While you were talking I'm, sorry photo shuffling I was like move it around the paper. So I can look at the report which is out here to great report by the way.
Got it.
This is sort of a lens into how we think about.
Building and where we make investments in product and when we talk to clients also explaining to them what their patients are telling that right.
And so sometimes I think there is.
There is a push pull with what people think that they want based on what vendors are telling them.
Versus what patients are telling them are important to them.
<unk>.
No.
What we found is having data has been very very powerful and being able to best represents.
Yes.
<unk> is and how we.
Worked really well for us.
Over the last 17 years, and we continue to invest.
And we hope this is a lens into how we think about our product roadmap and our customers long term.
That's really helpful.
Maybe in terms of my follow up on the life Sciences business I understand sort of a return to normal sequential seasonality for fourth quarter and first quarter.
But as we think about your.
Your conversations with customers and what Mark digital marketing budgets look like for this year, you're seeing any changes or maybe a sort of a come back down to normal.
Marketing sort of campaign trends post pandemic.
As you think about this year and I think you used the term in our stakeholder letter that you continue to refine your campaigns.
Seeing any increased scrutiny around sort of the efficacy of some of the campaigns that you're pursuing with your customers. Thanks.
Yes.
I think we've always assume that there should be.
A ton of scrutiny around things we do.
The value they provide and that is yes.
Why are we almost all of them have their third.
Third party ROI analysis, why we provide regular reporting to our clients and why we worked with him so closely and I would say that.
No.
I don't want to speak for all of our clients. So I don't think there is a rush to return back to paper in <unk>.
Alright, thank everyone's questioning how many more ads you could put on.
Network TV.
Because most people are just streaming so I do think we've seen.
I think we've seen a real change in behavior and no debt.
We've gotten a lot of these clients using us at scale, we're starting to see the net effects of them seeing their results.
Very promising.
Okay.
Your next question comes comes from the line of Stephanie Davis with SBB. Your line is now open.
Hey, guys. Thank you for taking my question congrats on the client adds.
Can you guys have exposure to.
Overall patient days of market, how should we think about your volume exposure to more discretionary areas of medical such as derma with dental that could be impacted by a potential recession or inflationary pressures.
Without giving up too much data I don't think we have that much discretionary.
Sure Anthony.
Most of all.
I would say most of our large term groups, which are more focused on medical therm than they are in cosmetic.
And we buy chair dental footprint is.
Almost nonexistent outside of health systems or larger clients with extra HCS that had some dental practices, but I'd say, we are dominantly focused in <unk>.
Consider elective.
This point and if that changes, we'll probably communicate to our investors.
Helpful. Thank you and you guys touched on this a little bit on the margin outlook, but I was surprised to see that your adjusted sales and marketing was flattish quarter over quarter.
Could you help us tease out how much of that was efficiencies or how much of that was an add to the sales force build out.
I think most of it was just efficiencies.
I don't think we're communicating the end of our sales force build out I think it's more along the lines of.
We have a phenomenal group of operators who.
Our shareholders.
Tension to where they spend money.
So I, we trust them.
So when they look at how we spend money in baseband.
Where are the best place to allocate it for return.
So what happens when you have amazing people and trust them and do the right things.
So is it wrong to assume we flatline, but remember for the rest of the year.
I don't think we're saying whether.
No.
But we're fairly comfortable with.
EBITDA guidance in our revenue guidance and so eventually.
Eventually something's got to give.
Sure.
Alright.
The Pie chart.
So many ways.
Yes, I think randy's comment around expenses growing.
Yes.
Longer term I think you have to grow on.
Yes, 10% to 11% range so.
Okay. That's helpful. Thank you guys.
Thank you.
Your next question comes from the line of Joe Goodwin with JMP Securities. Your line is now open.
Great. Thank you so much for taking my questions.
Can you just talk about the pipeline for your for enterprise clients or larger health systems.
<unk> been making any adjustments to the go to market motion.
For these larger customers.
We don't tend to comment on the pipeline I think our go to market motion to the enterprise is.
<unk> been fairly consistent Joe for for a fairly for quite some time, which is build amazing products.
Show that it works.
When you <unk> them.
Continuously add value.
Add more value grow the account.
Do it again over and over again and never ever stop and do that for large clients and small ones.
Three of our clients.
The way they should be treated which is unbelievably well because they take care of all of our families and I think thats. The way, we think about all of our enterprise clients in our small clients.
Got it okay. Thank you for that and then I guess are you seeing clients land with more solutions from the get go and are you seeing any changes into what solutions. These new clients are actually landing with.
Yeah, So what I am hearing a lot from our team is that we're getting more clients landing with different things.
Bruce just intake.
Alright, so for landing with different products at our clients and that's great to see especially as our sales organization has gotten more comfortable.
And has had more reference accounts more successes with different product offerings. So yes, we've seen the plethora.
I still think quite well.
We are generally known for intake.
That's what we've been doing for so long so.
The vast majority of what the language.
And so it's a great product.
Great. Thank you.
Your next question comes from the line of Jack Wallace with Guggenheim. Your line is now open.
Okay.
Hey, Thanks for taking my questions and great job on the quarter.
Further the analogy from.
<unk> earlier.
Are there any ponds that are more well stock than others, where you've.
More or less success fishing.
Not necessarily the client size, but in some of the specialty areas or geographic regions. Thanks.
Yes, no I don't think there has been.
Any area I would say what it really comes down to is just work.
Work, we just need a lot of phone calls and send a lot of emails.
And <unk>.
<unk> tried to find people who had problems that we can help solve.
We are continuously find is that Bob.
People are so busy.
Try and take care of their patients.
<unk>.
Okay.
Good.
They're not necessarily looking for solutions.
No not in front of them and make sure that we can deliver solutions to just add that tremendous value and it's been working.
So this past quarter is another test range as we've had for many years.
It's using just hard work.
Got you that's helpful.
That front.
The efficiencies of the sales and marketing team.
Is there a.
Call back in some of the travel.
Entertainment that would be.
Say, a pre COVID-19 level, obviously, we we.
Hired a ton of people over the last year plus and now.
As we're seeing the expense line level out a little bit more efficiency on a let's call it a per rep basis.
Is there a.
Baseline level of lower level of <unk> <unk>.
Required to make the incremental sales so.
That's going to be carryover going forward are we still seeing some of that potentially coming back in the back half of the year.
Yes.
We want our people decide best travel say, we're big on the entertainment front.
<unk>.
Yes area spent a lot of entertainment.
It's mostly just traveling to and traveled to see each other because I think that is important.
Yes.
Okay.
As much as we can we're trying to make sure that we get together in person, where it's cost effective and reasonable.
But.
I think we're I think it mostly has to do with like as I said earlier to Stephanie's question, which is just making sure that we empower our team to make smart decisions.
Really good people and you empower them to make smart decisions or not it works out well for all of us.
Got it that's helpful. Thank you.
Sure.
There are no further questions at this time I would like to turn the call back over to Doug.
Alright, but largely driven I have to say really nice things to wrap up the call. So thank you everyone for participating and we look forward to talking to everyone. In a couple of months and if you have any questions or comments investors. Appreciate a dot com is a great place to reach US you don't know philosophy is no alright, great.
Hi, everyone.
This concludes today's conference call. Thank you for attending you may now disconnect.
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