Q2 2022 Consensus Cloud Solutions Inc Earnings Call
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Good day, ladies and gentlemen, and welcome to consensus Q2 2022 earnings call.
My name is Paul and I will be the operator, assisting you today.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
This call from consensus would be Scott to Rekey, CEO , John Nebergall, CEO , Jim Malone, and CFO and Adam <unk> Senior Vice President of Finance.
I'll now turn the call over to Adam <unk> Senior Vice President of finance at consensus.
You may begin.
Good afternoon, and welcome to the consensus Investor call to discuss our Q2 2022 financial results.
Other key information and reaffirmation of our 2022 guidance.
Joining me today are Scott <unk>, CEO , John <unk>, CFO and Jim Malone CFO .
The earnings call will begin with Scott, providing opening remarks, John will give an update on operational progress since our Q1 Investor call and then Jim will discuss Q2 2022 financial results and 2022 guidance.
Yeah.
After we finish our prepared remarks, we will conduct a Q&A session.
At that time, the operator will instruct you on the procedures for asking a question.
Before we begin our prepared remarks allow me to direct you to the Safe Harbor language on slide two.
As you know this call and the webcast will include forward looking statements.
Such statements may involve risks and uncertainties that could cause actual results to differ materially from the anticipated results.
Some of those risks and uncertainties include but are not limited to the risk factors outlined on slide three that we have disclosed in our 10-K SEC filings as well as a summary of those risk factors that we've included as part of the slideshow for the webcast. We refer you to discussions in those documents regarding safe Harbor.
But a language as well as forward looking statements now let me turn the call over to Scott.
Thank you Adam.
This is a very good quarter in light of high inflation and the risk of an impending recession.
We were able to produce a record quarterly revenue by growing 6% versus Q2 2021.
In addition, we continue to operate at healthy EBITDA margins, 54% at the high end of our stated range of 50% to 55%.
These results were driven by continued strong performance by the corporate business, which grew 17, 1% versus Q2, 2021 and I would note 11, 1% organically.
In addition, this is the eighth consecutive quarter of corporate revenue growth and its eighth straight quarter of ARPA growth up more than 19% versus Q2 2021.
With clarity tracking to produce revenue in Q3 additional features in J sign the introduction of unite light the integration of certain of summit's technology, resulting in consensus conductor.
The corporate channel is well positioned for continued growth driven by the revenue from the health care sector.
All of these initiatives, including our core digital fax product have produced significant momentum in our corporate channel and we have a rich pipeline of opportunities for the second half of 2022.
Our so channel had a good result in light of three factors impeding its performance in Q2.
First early in the quarter, a geo compliance regulation in Japan resulted in the cancellation of approximately 3500 accounts.
Also during the quarter, we began to test a price increase to new customers and a portion of the Soho base.
Which was done in lieu of directly charging state sales taxes.
Finally currency headwinds continued affecting the Q2 results by approximately $1 $1 million versus Q2, 2021, most of which is allocable to our Soho revenue streams.
We believe these FX headwinds will continue throughout the year. However, the other two factors are substantially behind us.
Jim will provide more detail on the financial performance for the quarter as well as for each channel of revenue.
We made significant progress on the EC facts system for the VA.
We continue to work with cognizant in the VA and expect a 40 to operate by the end of September .
Initial rollout is scheduled for late September early October .
I would note we do not expect this rollout to contribute meaningful revenue this fiscal year.
As we stated last quarter. We are also seeing additional early interest from other federal government agencies.
John will provide additional details on each of these areas in his portion of the presentation.
Despite the tight labor market, we have continued to make progress in our overall hiring with a focus on our technical team and filling out our staff as a standalone company.
We ended the quarter with 540 employees and I would like to welcome all of our new employees, who have joined US since the last earnings call.
As we come to the one year anniversary of the spin we have substantially completed the separation from <unk> Ziff Davis, our former parent.
We made a payment of $11 $5 million during the quarter for fees and expenses related to the spin and ZIP cash that we were holding.
We expect a final payment before Q3 quarter end. In addition, during the quarter, we assisted in the marketing of two 3 million shares or about 58% of Zips holdings in consensus.
This transaction was beneficial to us in several respects first is eliminating a large piece of the ZIP overhang on our stock.
Two it allowed us to market the consensus story in a manner similar to an IPO and three it provides us the opportunity to gain additional research coverage.
While the sale of this large amount of stock put temporary downward pressure on our stock price, we were able to take advantage of this opportunity by repurchasing in the open market approximately 189000 shares at an average cost of approximately $40 per share.
Before handing the call over to John one final thought on the economic environment as.
As I mentioned at the beginning of my comments the economy remains fragile with high inflation and a recession that is either upon us or just around the corner.
We remain liquid with more than $75 million of cash on our balance sheet and the Undrawn line of credit that we put in place last quarter, we remain well positioned for these weakening economic conditions due to the fundamental necessity of our services the subscription nature of our business, which has approximately 70% fixed revenue and the inquiry.
<unk> percentage of our business that maps to the health care space, we remain confident in our business prospects and reaffirm our financial guidance for 2022 ill now turn the call over to John .
Thank you Scott.
I am excited by the performance of our corporate sales program, delivering another record quarter and bringing in $5 $2 million in ACB and license bookings.
As you recall, our corporate sales team is comprised of enterprise field sales.
And inside sales team focused on small and medium businesses and the channel program targeting telcos EMR and resellers.
Sales bookings for Q2 grew 4% over Q1 and represents a 41% increase over Q2 of last year.
Leading the way was our enterprise sales team, who closed major facts deals with cover my meds or large national medication prior authorization service provider and with three M.
Unite sales team also had an impressive quarter delivering 43% increase over Q2 'twenty two.
The pipeline is strong in cloud fax J sign and clarity our advanced products accounted for 20% of our quarter sales volume.
The Soho channel faced pressure on several fronts has a number of events impacted the business.
Domestically, we executed the price increase as part of our plan to address the sales tax remittance project, we mentioned last quarter and saw accelerated churn as notifications were sent out as well as a dip in new accounts, both within our range of expectations.
In Japan, which is our second largest soho market, a strict geo compliance regulation on phone numbers forced us to terminate a number of accounts and resulted in a churn rate that was 250% greater than the historical rate in Q2.
But has since returned to normal levels.
Generally we are seeing increased levels of credit card declines primarily associated with new decline codes that disrupted our normal decline recovery process.
While overall churn rates are trending back to normal levels. It remains monitor moderately elevated.
Finally, we are executing a targeted account based marketing program to upgrade so how health care customers to corporate SMB products and while that is an overall benefit to the business Soho account levels are impacted.
The channel program has continued to deliver accounting for 15, 3% of overall corporate revenues and signing a partnership agreement with spectrum you cast this quarter.
Interest from telecom providers continues to accelerate with the implementation of FCC order 19 Dash 72, a driving traditional parts or plain old telephone service copper lines out and replacing it with voice over Internet protocol or Voip service.
The consensus cloud system is in a strong position to be the de facto replacement and telco providers continued to be a very active part of our pipeline.
Progress on EC faxes on schedule and has been certified as an in process fed ramp vendor.
This is the final step before receiving authority to operate or Ato.
And is solidly on target for our September go live as planned.
As an in process vendor EC facts gets listed on the federal approved vendor registry and as a result, there have been three other federal agency inquiries to explore use of the system.
We have been working on our first implementation of clarity and expect that delivery to be complete in Q3.
The experience is invaluable for our implementation team and we are already developing best practices that will improve our deployment process for subsequent engagements.
<unk> capabilities were expanded to include intelligent handwriting extraction was late request from our customer under implementation.
Based on customer feedback, we have launched a lighter version of unite that caters to practices that do not require workflow or patient record query capabilities.
The release was late in the quarter and did not impact Q2 results.
The product and engineering teams have been focused on the VA project as well as some key enhancements to both J sign and clarity.
We successfully launched the multi document envelope capability for Jay signed in Q2 delivered the ability to interchange a document between facts and digital signature and began work to have Jay signed joined FX has a high trust certified platform.
I am pleased to report that the technology integration of facts into the summit exchange interface has been renamed conductor.
The conductor platform has also been expanded to execute complex routing rules for facts HL seven fire and direct secure messaging.
Overall, the operating progress in Q2 was substantial and in line with our 2022 execution plan.
I'll now turn it over to our CFO , Jim Malone for a deeper dive into the numbers.
Thank you John moving to slide seven corporate revenue Q2, 2022, corporate revenue of $49 1 million increased $7 1 million or 17% over the comparable prior year period.
Corporate revenue grew seven 4 million or 17, 8% on a constant dollar basis.
The number of accounts of 46000 was flat year over year, however, taking into account <unk> migration.
Which began in Q2 2021, we were actually up 2000 accounts or four 1%.
<unk> revenue per account increased by $58 53.
Or 19, 6% over the prior comparable period, primarily relating to increased usage of new larger customer acquisitions.
Paid ads 4000, or 13, 7% increase over Q2 2021 also contributed to the corporate revenue growth.
Monthly churn of 188% was favorable to Q2 2021 by 126 basis points churn was was virtually flat if we normalized for Q2 2021.
For <unk> migration.
Moving to slide eight Soho.
To Soho revenue of $44 $44 million.
Or negative 4% to the comparable prior quarter was impacted by a negative foreign exchange impact of $800000.
Measured on a constant dollar basis.
But a negative 2% in line with our expectations of negative 1% to negative 3%.
The number of accounts in the quarter count compared with the comparable prior year period decreased by six 6% or 72000 accounts sequentially versus Q1 'twenty two.
The base decline 2000, 6000, primarily primarily related to the Geo components, New credit card code to clawing protocols and notification of price increases.
<unk> adds were down 12, 8% and year over year churn was unfavorable by 67 basis points. However, average revenue per account per account increased one 5% or 19, driven primarily by increased average variable usage per account.
As stated in Scott's opening remarks effective in the third quarter, we are rolling out a soho price increase to a portion of the Soho piece, which was done in lieu of directly charging state sales tax.
Moving to slide nine for a Q2 results.
Q2 revenue of $93 2 million was five four or $6 one.
Favorable to the comparable 2021 quarter.
However, considering the foreign exchange fluctuations compared to last year Q2, 2022 grew $656 5 million or 757, 5% on a constant dollar basis, we ended the quarter with a cash balance of suddenly $6 million of cash is discs.
As in prior quarterly calls Q1, and Q3 are the strongest cash producing quarters.
They are not burdened by semiannual interest payments of 26 billion paid in Q2 and in Q4.
Moving to adjusted EBITDA Q2, EBITDA of $50 3 million was favorable by 300000 or 60 basis points compared to the comparable prior year period as footnoted in Q2, Powerpoint deck distributed today 2022 results reflect actual cost where the prior.
Year periods have been consistently presented on a pro forma basis.
Including Standalone public cost to facilitate a basis of comparison.
Q2, adjusted EPS of $1 45 was <unk> <unk>.
Or 7% favorable to the prior comparable period, using a share count of approximately $20 million for both periods.
Moving to guidance.
As noted on slide 10 of the Powerpoint deck, we have provided guidance of revenue adjusted non-GAAP EBITDA and adjusted non group EPS, we anticipate that our full year results will be within the guidance ranges provided in the schedule.
That concludes my formal remarks, I will now turn the podium back to the operator for Q&A. Thank you.
Thank you.
Ladies and gentlemen.
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One moment, please while we begin.
And the first question is coming from Jon <unk> from CJS Securities. Your line is live. Please go ahead.
Thank you this is Dan Moore filling in for Jon Good afternoon appreciate.
All the color.
Maybe start with you.
If you could just talk about the assumptions for foreign exchange rates as well as wage inflation and general inflation.
Underpinning your reaffirmed guidance and where we are.
We sit today within those ranges.
Yes so.
While we do just as a matter of course.
Each quarter and we look at the FX rates historically FX has not been a major element positive or negative for the company. However, the two currencies the standout for the euro and the Japanese yen.
And so when we looked at the end of the 630 period I want to say the day, we caught it was very close to one to one on the Euro I think 0.0072 on the yen.
So what we do is we assume those rates will persist for the back half of the year, obviously that will not be the case, they will float against there.
But to give you a sense when we did the original budgeting and we announced our guidance on the February call of this year.
Given the two updates that we've done on FX. They both gone the wrong way theres about $2 $8 million of headwind from when the time, we did our original budget $2 1 million of that goes to Soho 700 Grand goes to court and as I mentioned half of that is historic because we crossed the six month threshold and then.
There's of course, a portion that is prospective and projected.
And we will continue to keep you updated on that but that's how we do it we don't currently hedge our currencies from either a revenue or profit standpoint. So we take the twos in the flows of the FX. There is some profit implication because while we do have costs in euros and yen.
Obviously, a very profitable. So you can say assume roughly 50% EBITDA contribution that we are either gaining or losing as our currency assumptions are proven to be.
Bearing degrees are accurate.
In terms of your second question on the inflation within sort of wages.
We see two things that have occurred in the six months.
One is I think this is really important when we entered the year, we had a fairly robust plan for hiring primarily in two areas.
First we've talked about is a multiyear plan for our engineering and technical group.
We actually internally call at Genesis.
Because it is a rebirth if you will of our technology efforts, while the fruits of which you have heard John talk about earlier in this call and on previous calls.
We are somewhat lagging behind in terms of the number of heads. However, as you can imagine given the environment and the people we are hiring as well as the core employee base are costing us more so we are actually a little bit ahead.
In terms of our cash outlays, whether you look at it on an accounting basis or just strictly cash out the door for our employee costs for the first six months of the year, but we are lagging somewhat behind in terms of the overall hiring plan our view going forward and what we've assumed as we look at the balance of the year as we will continue to.
Higher.
I don't think we'll get back on track, but the goal would be actually to hire another 60 to 70 people net from where we sit today.
It's baked into our thinking on the re forecast.
As we come up with the reaffirmation of the guidance range.
My guess is thats aggressive I don't know if it will be able to hire quite that many on a net basis.
That is our goal.
And we fully accounted for that in terms of how we thought about the back half of the year and how it rolls up to the full year guidance and just so everybody understands.
<unk> essentially with all of these puts and takes when you are talking FX on the one hand or salaries and compensation or the other we continue to track basically towards the midpoint of the range of guidance that Jim just gave you the range of guidance that we've given you since February .
Very helpful.
I will sneak one more in just any additional color you might have on the expected ramp of the VA project I know minimal this year, but.
What are your expectations as we start to think about 'twenty three thanks again, yes, although I think a lot more when we talk again in November .
The Q3, because as John mentioned, we are knocking on the door of course, it's kind of a <unk>.
Quiet time of the year for federal agencies now that we're in August but once September kicks in we are expecting to get that authority to operate certainly before the end of that month of September the end of our quarter at the end of the government's fiscal year.
We actually think we may be able to seek a rollout in just around quarter in for us, which means there will be some revenue production in Q4.
It's unclear to us even right now how to estimate it we do think that piece will be de minimis.
So it's not really formerly contemplated in how we're thinking about Q4 quite frankly Q4 is really important for us to understand the rollout as we look forward into 'twenty three.
And as we prepare our 'twenty three budgets and ultimately our 'twenty three guidance, but I think.
Yes.
I'd be shocked if we got 100 data revenue in Q4.
Somewhere between tens of thousands to 100 Grand so clearly not relevant to us not important in terms of our overall thinking but it is beyond brand to what I think will be more meaningful revenue in 'twenty, three but we're not quite ready to disclose what that is because we've got to get a little bit more work done.
Understood. Thank you again.
Oh.
Thank you and the next question is coming from Ian Zaffino from Oppenheimer.
Your line of sight.
Hey, good afternoon, everyone. This is Isaac.
On for Ian.
Just first question on the Soho business could you just talk about the level of price increases that will be implemented and maybe just remind us. If there has been a typical cadence of price increases in the Soho business in general.
So in answer to the second question no because it's been many many years and this has been a pricing increase historically, if you go way back in our history.
This increases were done about every three years for a period of nine or 10 years, concluding in 2008.
In the period.
Basically 2000 2008, there were a series of three price changes in.
In each instance, they were done differently and what we're doing now is very different than what was done back then but in the anywhere from the teens to 20% lift versus the then pricing now.
Now we jump forward a number of years to this price change and it is very different first of all to understand its purpose.
As both I mentioned, John mentioned, and Jim mentioned and I want to emphasize it for the fourth time. This price change is not so much about raising additional revenue <unk> profit.
It's a means to an end of how to deal with the sales tax accrual issue.
You may recall that in the Q4 call of last year, we booked an accrual of I believe $8 6 million, which was an accrual of a number of years of sales tax owed to a variety of states.
Over a four to five year period.
Because we had no way historically are charging so it was neither quantified the charge north.
So we booked it in Q4, but we knew we had to address it this year and there were two fundamental ways, particularly for the Soho channel to do that one was to actually go through all process, which will include the engineering process of changing our billing.
So actually then accommodate each state sales tax where applicable for each bill.
We view that would be timely it would be cumbersome.
And so we looked at an alternative mode, which is you just raised price. So in answer to your first question.
Because we do have different prices within our portfolio.
Although channel.
Between one and $2 price increase but they don't affect all customers. So please don't do the math and say, it's $1 50 times 1 million times 12, if you look forward that would be bad math and let me explain to you why.
So the 1 million customers that we have today roughly 10% are outside the United States and the sales tax issue taxation was not applicable.
So currently they are not being affected because once again this is not a price raise to generate revenue to price right to deal with a different element.
The 900000 that remain in this current wave.
Third well over 300000 are in the process of being affected between that 1% to $2 left.
And of course, we expect some incremental cancel we tested board. This is a net positive transaction. If you go to the next question, which I anticipate this should generate for us somewhere between two and maybe high twos of revenue this year, which coincidentally happens to offset the FX headwinds installed it's coincidence.
We have.
Another 20% of the base roughly that our annual customers. So they will actually be price affected over the next year.
They come up for renewal.
And then we have another three that are currently in the <unk>.
Reason that they are exempt.
Is because either they're very young so if you just came in as a customer we didn't feel that was the right thing to do to suddenly raise your price. We also have a portion of the base that are already on what we would call premium programs. So even though you can go to our website and you can see an array of prices for.
For various services and various included pages.
We have customers in the base that have separate programs outside of those those people are not being price effective and it's roughly low 30% of the base close to a third that would currently be exempt.
So thats why when you run the math you.
You'll see it you'll get a couple of million dollars of benefit. This year, obviously it will be more next year as we talk about a 12 month cycle, but in terms of this year. It's in the low twos to maybe mid to high <unk>.
Revenue benefit.
Okay, Great. That's very helpful. Thanks for that.
And then just a quick follow up in terms of the full year revenue guidance that was reaffirmed in I guess could you provide some color around the original 17% to 20% growth in corporate revenue I guess, it seems that the strength in United Advanced products is driving some of that growth already.
I guess, what other areas. So it gets drawn and how does that sort of played out compared to your expectations.
For the traditional data for guidance.
I'll actually I'll give you sort of a high level.
Yes, John .
Overwhelming with detail.
So in general I think there's three.
Key drivers.
Of the revenue growth coming into 2022 for the corporate channel.
One and I would say this remains the key driver in terms of sheer size.
Is the core digital fax business in its penetration to the health care space, winning new customers John mentioned stone.
But there's many others that.
Wouldn't necessarily recognize the name they followed our SMB channel. So the continuation of knocking down that pipeline of opportunities whether they are on the smaller side, we call the SMB or the larger size and we call them enterprise is the key driver in reality and it was a key driver in terms of our expectation of building up the budget.
Then you have the category of the advanced interoperable solutions of which you'd put in unite clarity J side and then of course once we acquired summit some of the summit services or how we reiterated them, but I'll leave that to the side because thats the smaller piece of it and I think that as you noted.
And as John pointed out we gain really good traction with unite.
In this fiscal year.
It is so much so that we have a derivative product called unite light as we found certain customers. It was too overwhelming the multiplicity of functionality in unites we gave them a lighter version to get them on boarded.
Clarity not yet producing revenue, it's just around the corner. We think in Q3. So that's more of a timing issue than it is anything else, but we're seeing great traction with particularly this one customer that we're working with they're helping us actually evolve the product.
It's good news that the delays revenue, but the product becomes for the service becomes more robust. So I would say those have been the two.
Key core drivers as we mentioned we.
We didn't budget anything for the VA. This year, we'll get a little bit of revenue coming in from.
The Q4 rollout but.
That's not so much.
Yes, and I also say that.
When you think about.
The opportunity to grow and corporate.
I think we have a very solid and predictable operation and our inside sales team.
The way that they are able to perform.
Quarter in quarter out I think when you get to field sales just by the nature of the kind of sale. It is it tends to be lumpy. So you can very quickly have pay.
Our big customer come in and change things for you you can.
Have those kind of comps that are great to have and as I look at our pipeline.
And the advanced state of a few of the opportunities in that pipeline.
Have a positive outlook on the balance of the year, because we know that we have solid performance coming from that inside sales team and we feel confident that we're going to have some of these opportunities that are in the pipeline materializes.
I think just I would just add one comment.
And it's not directly.
It's responsive to your question, but it has a longer view and I think one of the things that we are observing is if you look at the advanced interoperable solution. So we go beyond the cloud fax.
The there's a ramping effect that takes place in terms of how customers are won and how revenue actually comes in if you go back far enough into the United history, and unite has obviously some noise in it because it was rolled out literally in the teeth of the pandemic in March April of 2020, but there is a <unk>.
Distant ramping effect <unk> been launching it in that environment to where we are today and I think that that's a realistic way of looking at when we release. These new services are clarity comes out it takes a while for customer acceptance. We will learn a few things will adapt the service and then youll start to see a ramp up revenue.
For it I think that will be true of harmony as well, we'll probably get some early stage harmony de minimis revenue sometime in early 'twenty, three but it'll be late 'twenty three 'twenty four before it ramps and I think part of it is that these are more complex solutions.
Touch more portions of.
Company systems. So there's a different degree of integration and of course, they are all targeted to the health care space and Theres always sensitivity in terms of the regulatory compliance High Trust certification and things like that.
But.
Very pleased with the portfolio that we have and how it is playing out and the success that our sales force is having both on inside sales NPL sales.
Okay awesome well, thanks very much for all the details I'll hop back in the queue.
No problem.
Thank you and just to reminder, ladies and gentlemen, you can press star one.
If you wish to ask a Q&A queue.
Next question is coming from Greg Burns from Sidoti.
Greg Your line of sight you May go ahead.
Good afternoon.
With the <unk>.
The price increase on the Soho side is that.
Pass through revenue or is there a margin on that revenue.
There'll be a little bit it depends where we fall in that range I will speak to this year.
As we get into next year, there could actually be some margin. The question will be what do we do with that margin. This year there could be a few hundred grand of.
Benefit however, we tend to we our goal is to reinvest that so we look at the back half of the year, we're expecting I don't know that we'll be able to do this but.
<unk> budgeted for six 700 grand of incremental marketing dollars and as I mentioned earlier, we're continuing our ramp up hiring.
So that would show up.
Let's say, if we get $2 million of revenue it offsets the FX the FX $12 million of profit so there'll be a $1 billion of excess our view is we're going to probably reinvest all of that $1 billion. This year in a combination of people and marketing.
It actually plays out will be a function of course, whether those marketing dollars are effective and of course, the pace of hiring that we can do but we've assumed that as we think through the balance of the year as we look forward to next year.
Obviously, there will be revenue in excess of the sales tax and so that's a conversation we will have we get into budget.
Because as you know from the spin we came out thin from a people standpoint, we put a plan in place we didn't want to shop, the company and shocks the financials by hiring 200 people quickly would've been an impossibility I believe anyway.
So we've spread that out over a couple of years.
And we will do a deep dive we look at that in terms of what is the pace now that we're a year away from the spin we're standing on our own ways.
How many people can we realistically absorbed in the various departments I think as we get into 'twenty. Three we also start to talk about the hiring that goes beyond.
Just the technical team and G&A and more also to supplement the sales team and the marketing team.
And so those will be conversations that we'll be having we made.
Dropped less than the math would indicate.
The bottom line.
So my view is just starting to understand.
This is really important.
We have to set this company up because there is great opportunities over the next two to three years. So it's not about the next quarter excited about the next year.
It's getting the company right size in each of the departments to take full advantage of these opportunities are in front of us John glossed over it but theres. Other government agencies that are now interested in easy fast no surprise to us I think there'll be even more.
It begs the question about the internal resources that we should have to address government agencies right. Now we have the resources to address the VA, but that government as a whole channel or revenue implications of that so this is really where our focus is.
So necessarily drive incremental EBITDA, what we find is the bottom line, obviously, we cannot spend it effectively.
The bottom line, but it's not our primary goal.
Okay. Thanks, and then just what's the difference between <unk>.
Unite and conductor like is there a different use cases are different target customer segments. The two products or could you just.
Help me understand that a little bit better.
Very much. So so I think you can think of of unite as a.
Command center for the ability to send and receive facts direct secure messaging use advanced tools to query for patient records and geographic areas and.
And apply some workflow rules.
Faxes and.
Secure direct messages that come into.
That come into that dashboard, you can use it whether or not you have an EMR. So it can integrate into an EMR and serve as a communication hub or you can use it as a stand alone facility to be able to.
Be a traffic.
Traffic regulator for the information that will come in and out of your practice.
When you think of conductor you've got to think about an expanded capacity to help an EMR communicate to the world.
So as you think of the EMR systems that are installed across the country. They have a need to talk to other EMR systems or.
The CDC or state or to those kinds of things.
Use something called an interface to get that to accomplish that conductor is an interface that expands past. The typical interface that you find in healthcare, which generally transports HL seven messages buyer messages.
Goes beyond that into secured direct message and facts.
And gives you the ability to put much more complex routing commands, whether inbound or outbound on a piece of information that you want to send or receive so.
I think that.
Conductor.
Is something that is robust in the presence of an EMR unite is something a bit lighter can function with or without that EMR and is able to help people.
And smaller practices really.
Be able to.
Handle their traffic and route it effectively.
Okay, great. Thanks.
Okay.
Thank you and there are no other questions from the lines at this time I would now like to hand, the call back to Scott Drake for closing remarks.
Great well. Thank you everyone for participating in our Q2 earnings call. We put out our release a few days ago will be virtually tomorrow at the Oppenheimer conference. So there will be a presentation around middle of the day Pacific time that.
John and I will.
Provide some overview to the company some of those financial results. We just discussed and I think Ian we will conduct a fireside chat Q&A session.
Also another it's really targeted to bondholders, but wells Fargo conference coming up in September early September and then as we have other conference opportunities. We will make those publicly available currently we are anticipating.
That second week in November around the.
10, roughly when we would then released our Q3 results and have our Q3 earnings call. That's not a firm date, yet, but sometime within a day or two of that is the most likely right now thank you.
Thank you ladies and gentlemen that does conclude today's conference you may disconnect at this time and have a wonderful.
Thank you for your participation.