Q3 2022 Allscripts Healthcare Solutions Inc Earnings Call

Greetings and welcome to Allscripts third quarter 2022 earnings conference call.

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 as a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Jenny Jealousness. Thank you you may begin.

Thank you very much good afternoon, and welcome to the Allscripts third quarter 2022 earnings Conference call. Our speakers today are Rick Poulton Allscripts, Chief Executive Officer, Tom Langan, President and Chief Commercial Officer, and Leah Jones, our Chief Financial Officer, we will be making a number of forward looking statements during the presentation and the Q&A.

Of the call. These statements are based on current expectations and involve a number of risks and uncertainties that could cause our actual results to vary materially we undertake no obligation to revise these forward looking statements in light of new information or future events. Please refer to our earnings release and SEC filings.

Regarding the risk factors that may affect our results.

Please reference the GAAP and non-GAAP financial statements as well as the non-GAAP tables in our earnings release that are available on our Investor relations website, and with that I'm going to hand, the call over to Rick.

Okay. Thanks, Jenny and thanks, everybody for joining us on our third quarter call today.

Five weeks ago, we hosted our Investor Day in New York City.

Many of you were able to join us either in person or virtually.

And her directly from key members of our leadership team our strategy for creating value across our three sided network of providers payers and life Sciences clients.

So those of you who were unable to participate I do encourage you to view the webcast, which can still be accessed on our investor Relations website.

Over the course of that presentation, we laid out our business strategies in great detail. So I'll keep my prepared remarks, particularly brief today and just share a few thoughts on what I think investors and analysts should be focused on as they digest, our third quarter results.

First our team executed fabulously during the quarter.

Our business continues to generate meaningful top line growth.

25, plus percent EBITDA margins.

And free cash flow conversion year to date of more than 20%.

In terms of momentum both gross profit and adjusted EBITDA margins expanded meaningfully on a year over year basis, as well as sequentially from the second quarter.

And our $34 million of free cash flow during the quarter brought our year to date total over 90 million.

As far as we know the highest of any company in health care services with an enterprise value below two and a half a billion dollars.

We are proud of the fact that we laid out ambitious financial goals early this year.

Have maintained them all year long, despite some bleak macroeconomic overhang.

And our delivering results consistent with those goals through the first nine months of the year.

Second we are generating these results atop a rock solid balance sheet and have approximately $290 million of net cash as of quarter end.

When I say approximately $290 million of that cash obviously, our gross cash on hand is considerably higher than that but embedded in that figure is our assumption that we will pay off the principal of our outstanding convertible bonds in cash when they come due.

Third the new GAAP pronouncement that we recently adopted related to convertible bonds. It ignores this assumption about ultimately paying off the bonds in cash and our results in a significant increase in diluted share count relative to basic share count compared to what we have previously reported.

Users of our financial statements for calculating common valuation metrics, such as enterprise value to EBITDA.

Be careful to use the correct balances for cash and debt that correspond to the appropriate share count assumptions.

<unk> that our stock currently trades at an unexplainable valuation discount to many of our peers in health care services.

And as such we expect to significantly increase our share repurchases in the fourth quarter compared to the levels, we executed in Q3.

So with that let me turn the call over to Tom Langan, our President and Chief Commercial Officer.

Thanks, Rick.

Echo <unk> comments about the performance in the third quarter, we've built upon our solid second quarter, and we're gaining momentum in the market.

At our Investor day, we outlined our business strategies.

Today I want to highlight some of those strategies inaction by sharing details on some noteworthy wins in our <unk> payer provider in life Sciences business.

Let's begin with our payer business unit, we're capitalizing in this space through our comprehensive end to end portfolio we.

We continued assigned new health plan customers and expand our data and analytics solutions to current customers.

Our pair team added two large blue plans blues plans during the quarter. The first is a midwestern blue managing one of the nation's largest Medicare advantage plans.

They acquired our core risk adjustment analytics and provider engagement solutions.

Secondly in northeast based Blues plan, covering Medicare advantage and the Affordable Care Act business lines joined our clinical data exchange network.

These deals covered over to five 2 million total lives and continue our expansion into the blues market and our focus on new business.

We're seeing significant interest in our data submission and reconciliation offering for a health plan customers.

This solution provides our clients full and 10 visibility into the data submission process for government programs.

We wanted to opportunities with a combined total contract value in excess of $5 million to move from a legacy partner solution to our own submissions platform.

Adding these capabilities extends our product penetration with these existing customers to now provide a full complement of analytics and risk adjustment solutions.

I'm pleased about our success in the payer market. This is a very competitive market and our ability to compete in within the space is a testament to our strong solution portfolio an experienced team.

Turning now to our life Science business, we had an excellent quarter is R. D identified dataset one of the largest outpatient datasets available continues to attract interest in new business, Ciara director farmer partnership and marketplace sales channels.

In the quarter, we partnered with a major Biopharma company will be using our Veradigm real data for Covid research among other use cases.

This opportunity represents more than $4 million in total contract value.

Beyond our D identified data assets, we're seeing value in the mining of clinically relevant details and our unstructured notes assets through the application of natural language processing.

This relatively untapped market opportunity provides additional insights into the clinical patient journey.

We believe this will be an area that can be of significant interest to our biopharma in our health plan clients as we anticipate widespread application and commercial and research base use cases.

Turning now to our provider business unit, which focuses on supporting independent providers are provider segments saw growth in both of our practice fusion and our veradigm ehr's as well as our financial solutions.

R E H R platforms provide practices a choice based on their specific needs in size.

Clinical platforms are complemented by our robust financial platforms, including practice management clearinghouse revenue cycle management, and our patient engagement offering fall on my health.

This suite of solutions provides the necessary capabilities for an independent practice to successfully operate a practice in today's environment.

During the quarter to provide further to further provide our practices the necessary tools for success, we announced an expansion of the Veradigm network via partnership with Vitalize Health Ah Medicare accountable care organization.

This partnership enables our practice fusion clients the ability to remain independent yet participate in a value value based care model.

Finalized provides care coordination clinical support and data analysis to enable better patient outcomes for Medicare patients with chronic conditions.

Participation is completely optional, but by bringing this to our users we believe we're adding value to their user experience.

It's still early in the partnership and we're encouraged by the level of interest in our client base. So learn more about how participating in an ACO could help improved outcomes lower costs and improve the quality of care for patients.

We continue to see momentum and our revenue cycle portfolio as providers experience staffing shortages and their need for expertise in the business operations side of their practices continues to grow.

The breath of our financial management solutions from our practice management platform to our clearinghouse solution to our revenue cycle offerings and patient engagements solutions is compelling and is resonating with our current and prospective clients year.

Year over year, the number of revenue cycle management deals has increased over 200%.

And the following deal signed during the third quarter are emblematic of what we're seeing.

We signed a three year deal with a pediatric behavioral health startup provides both virtual and in home services nationally.

Their focus is on providing improved actor access to care for children with autism and other behavioral disorders.

Burdine will provide automated tools for insurance and patient billing through our practice management clearinghouse and billing service offerings.

This new relationship reflects a growing trend for behavioral health companies seeking more advanced solutions to accommodate both growth and more complex business models.

Another new climb when in the quarter was a 20 provider relocation orthopedic practice located in the southwest returned to Veradigm due to the difficulty of finding experienced and trained staff that new ambulatory billing keep.

Keep keep people retired and other staff left the practice that were difficult to replace in the current job market. The Veradigm team demonstrated the right solution with our comprehensive full services revenue cycle management platform that will help to stabilize the current situation at this practice.

This movement towards outsourcing of financial management capabilities as directly in our wheelhouse and we look forward. We will look to continue our recent success in this space.

To close I'm pleased with our performance of this past quarter across all our business units and especially pleased at the momentum. We are generating we continue to focus on expanding the veradigm network and providing value to our clients through our unique combination of offerings across our payer provider in life science portfolios.

Now I'd like to turn the call over to Leah Jones, all scripts financial Chief Financial Officer.

Thank you Tom.

Both Rick and can mentioned, we are again pleased with our consistent and strong financial performance in the third quarter.

I noted last quarter, we are now back to clean Europe , 93, with only adjustments purchase accounting amortization.

Stock based compensation and normalized tax rate, representing the differences between our gap.

So with that overview, let me highlight a few items.

We found ninth year over year growth in revenue gross profit.

EBITDA and non-GAAP earnings per share as well as an over all of them.

Margin consistent with our expectations.

Because the airline business segment sigh year over year revenue growth of 6% during the quarter.

On a consolidated basis revenue growth was 5%.

If they're dying provider business has a top line growth at 5% slightly above our expectations.

This growth with field by not only adding over 450, new practices during the quarter.

Also as time mentioned, we obtained nice momentum and our revenue cycle business.

At providers continue to experience staffing shortages as well as practice growth our offerings and <unk> continue to experience increased demand.

<unk> and my Sciences business had some nice length and a quarter drive in a year over year revenue growth at 10%.

This top line growth also 30.

And non-GAAP gross profit margin.

Margin over 1200 basis points over a year.

non-GAAP gross margin was 55.6% at 630 basis points year over year, yielding another quarter at solid operating leverage.

As we move down the P&L consolidated non gas expenses and the third quarter remained relatively flat compared to both the first and second floor.

Again, we generated strong operating leverage with Veradigm reporting 27% year over year adjusted EBITDA growth.

In the quarter.

This performance.

EBIT margin as 31% an increase of 500 basis points here over a year.

As a result of our strong margin performance along with a lower share count we reported a third quarter gap EPS at 12 cents per share.

And are non-GAAP EPS was 2023 cents per share.

Which was at 10% year over year.

Moving onto cash.

We add another solid quarter at free cash flow as we generated $42 million of cash flow from continuing operations and $34 million at free cash flow overall.

Year to date, we have generated $90 million at free cash flow.

Our trailing 12 months of free cash flow as a percentage of revenue is now running in the mid to high teens.

Consistent with our prior messaging on capital deployed in the third quarter, we repurchased $34 million of common stock through open market repurchases, leaving us with a net cash position of $286 million.

Now turning to our outlet for T four and full year 2020.

We are maintaining our revenue guidance for four years.

<unk> at the prior year comparable as well as the cyclical buying patterns in our market.

I would like to provide more clarity in terms of the expectations by business unit.

With a provider business, we have a tough cop related to key four of 2021 due to a large license. So at the end of the year.

As a result, we anticipate a softer key four year over year growth performance and the provider business unit as compared to prior quarters.

With Empire in life Sciences business, we expect to see much stronger buyer patterns and key for which will rebound year over year growth as compared to keep three.

With that background, we are reaffirming the full year guidance for Veradigm revenue adjusted EBITDA and free cash flow.

<unk> revenue is anticipated to grow 6% to 7% year over year.

The adjusted EBITDA to grow 10% to 15% year over year at our consolidated free cash flow from continuing operations to be between 110 and $129.

The rapid App, we're very pleased with a financial results across the business in the third quarter and we look forward to maintaining this momentum as we finish up the year.

Now I would like to open it up for questions.

Thank you at this time will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

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For participants using speaker equipment and may be necessary to pick up your handset before pressing this darkies one moment. Please while we poll for questions.

My first question comes from Stephanie Davis with SBB Securities. Please proceed with your question.

Oh, yes, thanks for taking my questions in class on file in Florida.

Thanks Stephan.

<unk> you have been dead set on trying this off at around and getting the street to know again accurate and fair comment I've seen it at the Investor day.

With that setup and mine can you tell us about the convert pay off and can you tell us what other tricks you might have up your sleeve to kind of get folks to notice.

[laughter].

Well [laughter].

For the first time I've ever had yeah.

Alright Oh.

The pounding the table, Yeah, I guess I'll, just have to get more and more aggressive with that part of it but uhm I'd Wanna <unk> I want to make sure we don't Miss it lead anybody when you know we're not <unk>.

Looking necessarily the early payoff the converts they still have a couple of years left on their term, but you know we're operating with an assumption that that's how will redeem them. So what's important to understand is you know when you talk about either gross cash on that cash you just have to line that up with the right number of shares if you're doing any of these.

<unk> valuation metric calculations, so that that was my real point, there's no other message there per se yeah, if we get an opportunity to bring those bonds in at a fair price, we'd we'd certainly do it early we picked up $10 million bonds, a coupla years ago for about a year ago, I should say and redeemed them early so we might do something like.

That again, if the opportunities there, but right now I don't see that they trade above par.

Trade above intrinsic value and we're certainly not gonna go spend money, we don't need to for them, but it is important that everybody keeps straight chair count and that in cash.

After the second part of your question Stephanie.

We're we're just we're trying to make sure everybody sees us for who we are mostly a reliable generator of above average margins above average free cash flow I'm, saying this compared to others in our space.

Growing nicely and I think with you know more interesting on market opportunities than most others as well. So we're hoping people start appreciating that in the interim while they don't appreciate it will busy gobble up you know as much stock as we can.

Okay Dovetailing on that last time by the market out there can be there is a little bit of anxiety around the farm I T. Wallet recently is there any commentary you would have on that.

Yeah, that's understandable I mean, you know certainly other industries have seen a falloff in some of the media spend you know some of the Big Tech companies reported some soft numbers. So I could see where the anxiety comes from all I can tell you is so far you know we're here the first week of November so far we have not seen any.

Trends that scare us so that's why we're really affirming our numbers for Ya.

Alright sounds good I'll hop back in again, you think that.

Stephanie.

Our next question comes from Charles Right with Colin. Please proceed with your question.

Yeah. Thanks, Thanks for taking the question guys you know Rick obviously right now at the current valuation buying back stock.

It's probably the most creative use of cash how can you also talk about what you're seeing in the market in potential other capabilities you could add to veradigm here either in the provider side or the pan lifestyle sorry.

Yeah Yeah.

Yeah. Thanks for the question Charles [noise], Yeah, We certainly you know I made the point on the second quarter call about how we really felt like with our capital Foundation cash on hand, the cash for generating for the business that you know it was not going to be an either or for us we could aggressively buy back stock and.

Still consider tuck in type acquisitions that made sense for a longterm growth <unk> I <unk> I still feel that way didn't amplify that as much today because of what I see is a particularly big disconnect in our share price, but we are doing work on opportunities Charles we're looking at them.

We're just gonna be really selective we're gonna be value buyers. We're not we're not interested in overpaying for anything and so we'll keep watching you know we think you know there'll be a window coming up where time will be on our side you know as we all know deaths getting more and more expensive. So that's creating more and more challenges for people.

<unk> that are out there and we think that'll bode well for us.

Have you seen valuations certainly I think like last year I know, there's a lot of commentary that even as the public markets. We're retracing private valuations were still fairly elevated have you started to see any kind of you know a lineman we're probably valuations are kind of coming back closer to with.

Valuations are.

I would say all reviews today would suggest you know the the evaluations of correct. It a lot quicker on the public side than the private side, Charles which is in part why we're moving slow.

Understood and maybe one question for Leah obviously, the margins look right. What do you look at the gross margins here on the corner is it fair to think that this is a good kind of jump off point to continue. These are would you say these are truly sustainable as we go forward.

Absolutely there in line with where we anticipated 40 year and we do not see any reason that it's but it's not it's gonna. It's gonna continue into the future. So I would say, yes, confirming it took a <unk> <unk>.

Alright, Thank you guys.

Thanks Charles.

Our next question comes from Sean Dodge with RBC capital markets. Please proceed with your question.

Hey, good afternoon. This is homeschooling room for Shawn save your questions. Just one for me on the provider side of the business can you just talk about the cures Act and the impact of any upcoming deadlines is your <unk> configuration complaints of my clients are are really asking about just trying to understand whether you're switching decisions are being made around it or.

I guess, if there's any notable impact on competitive dynamics.

Yeah, well I'll start and then Tom can fill in I'm Gonna care Zac, you know put some obligations on us as EHR providers to bring in firebase standards things like that and those of course those modifications have to go through certification we are well.

Down that path and you'll actually should expect here are some formal announcements from us soon on that front, but you know we we I guess it would ultimately say you know that to me is.

We think of that as you know a bit of an anti to stay in this business, you know and where we've been working on it for quite a while and we expect to be fully compliant with all those requirements. So Tom what else would you add anything I would just say to your <unk> just echo what Rick said I mean, it's it's kind of table Stakes if you're in the space.

<unk> you know from a requirement perspective, if you're going to be in the H R and the and the provider market you have to be compliant that's a top priority for us to your question about market dynamics and other other competitors or just the market. We're not really seeing any noise about that but I would say that you know we're on it and we're focused on.

Yeah, It's Thomas <unk>, you know they'll just one last point I mean, maybe to the heart of what you're getting at I think between the big providers Big provides like send some of our competitors you know I don't really think it's competitive differentiator again, we see this table Stakes. However, there's you know it is still a very fragmented industry and so further down the long tail of folks that are out.

There with tools in the marketplace.

Some of those sponsors may have a hard time you know.

Fulfilling the requirements and getting the certification so that it could lead to a little more industry concentration and will we would of course be a beneficiary of that.

Alright, perfect. Thank you all for me.

Thanks for the question.

Our next question is from George Hill with Deutsche Bank. Please proceed with your question.

Afternoon, Rick I. Appreciate you guys, taking the questions that I have this impression wreck of you you buying back stock <unk> a market that's not paying any attention to you, which I think is absolutely. The right thing to do on that topic. I guess are you able to provide any color around the expectation for the amount of stock that you guys will repurchase in Q4, and then I have a couple of quick follow ups.

Thanks George.

Look I can't you know, we don't know what that's the stock will try it out next week of course, you know so I'm not gonna box myself into a number but I would just you know my attitude at coming into this call and through this call is we will ramp up significantly from where we are in Q3. You know you may recall, we had a.

We got an authorization announced early this year that was for $250 million with chewed through you know maybe 65, 70% of that but you know the board is active and we can continue to talk to the board too. So a lot of it is also I'm gonna be a function of what the mark.

<unk> does for the next balance of the year, George but you should you know if I'm a betting man I'd expect a higher number significantly higher number than we saw in Q3.

Okay. That's helpful. And then Tom you talk a little bit about the RCM strength and I guess this is kind of a two pronged questionnaire.

<unk> called the provider facing businesses I guess, if you could just talk a little bit more about which driving mercy M and competitive environment that you're seeing.

Market and then one of the things we're seeing in the Provider's facing space is a lot of the larger companies are trying to use this current market as an opportunity to take price I wanted them in advance of their CPR related agreements I guess I would just ask kind of what you're seeing there and kind of what your strategy is related to that and if you.

I see an opportunity there for them to I'll call back in the queue.

So I mean to your first question, but it's just the the overall environment from a revenue cycle perspective, I mean.

We're seeing significant opportunities as I as I commented earlier, both <unk>, both in primary care and other specialties to leverage the portfolio that we have.

And <unk> and that's what we've seen from a year over year growth perspective.

As far as like CPI to your second question, we're always looking.

You know, we think obviously with inflation and everything going on right now that it's appropriate at times from a price perspective to look at our pricing and evaluate it.

George where it where you know we're no different anybody else you can't be in business right. Now everybody's costs are going up you know so you can't be in business without thinking about price increases the provider client base is you know kind of feels a lot of the pain of today, so they're not always the most flush and so.

We want to make sure we don't.

Do anything that ruins longterm relationships, but.

There's no question that we're thinking about pricing on every solution, we bring to market right now.

Yeah, I I I, just don't get along did you guys have kind of a CPI based escalators building <unk> and I guess you know.

I guess the question is is the C. P. S. CPRE based escalate a few guys Ah number with a foreign front I get a number with nine in front of it.

You know different contracts.

Evolved over time, George Yeah, I mean, if you had a pure CPI in every contract I mean, you know what C. P. I as you know what the number is but yeah a lot a lot of times. Some of those were subject caps. Some of them are not based on C. P. I. They were pre negotiated rate summit. You know you have it things all over the place but the good news is we don't you know the <unk> the contracts or not.

All longterm contracts and other tend to be shorter term contracts here now that we're out of the hospital business. So the opportunity to put appropriate adjustments, where where we think it makes sense is not that heavily constrained.

Okay I appreciate that thank you.

Thanks George.

Our next question is from Cindy Mutts with Goldman Sachs. Please proceed with your question.

Thanks, Thanks, a lot for taking my question I just wanted to get into some of the business segment, a little bit more Lia D provider segment. It actually looks like it did pretty well this quarter and I know you said that you know you have a tough cop. Obviously, you know fourth quarter of last year was tests and it might be a little softer but are you <unk>.

Talking about just in terms of gross or I would expect when we still see a little bit you know sequentially still a little up just looking for some clarification. There and then on the provider life Sciences. It looks like we are gonna see then a nice ramps based on your guidance for fourth quarter, and then would you expect that than to continue I know you're not giving.

Longer term guidance, but you know since you said that the costs you expect that you know sort of level to continue any color on future revenue for provider or Uhm life Sciences thing, where you gave guidance at the last Investor day. Thanks.

Hi, Cindy. Thank you for your question on the provider side, you have interpreted that right <unk> is what is causing us to call out that you will not see as much of year over year growth is is it comparable but we anticipate the business to still perform strong until I don't I don't think the businesses.

Softening for us I, just think that comparable as hard time trying to set expectations that where we've had strong growth over the last quarter of that you may not see that same number per quarter over quarter comparable does that makes sense yeah mhm.

Okay. So business is still strong I don't see it going down. So you should you can she couldn't send you to continue to see his post strong revenue numbers at just the comparable as hard.

And then on the pair in life Sciences side Uhm, Yes, we know they're cyclical buying we also uhm No day did you need from this current quarter. We added 10 per cent growth, we anticipate that that should be higher and key for than it was in key three in terms of next year, there's always cyclical buying.

I don't have a prediction on that to declare any guidance thus far.

Business is strong the momentum is there so I don't anticipate C. N N falling off so we will continue to see cyclical buying so too early to tell what Q1 is right now, but I can tell you the momentum of the sales force and uhm at that business in general is is ramping up nicely.

Okay. So basically you're this sort of reached that you talked about like 20 to 25 per cent for maybe that business, maybe not on you know every quarter basis, but on an annual basis might still hold and maybe four per cent or 3% to 4% for provider I think those were the brain tissue gave we <unk>, we can feel comfortable with that.

Yeah, those are our goals Cindy coming into the year and and is Leah said, we expect you know Q for to be higher than what you saw in Q3, we obviously had a higher you know year to date number before 232 and I would also you know where where we're gonna stop short of giving 20 twenty-three guidance on this call.

But I I do feel it's appropriate for you to walk away thinking that 2023 is gonna be a year also with growth higher than we saw in Q3 on that side of the business and you know that the range. We started this year with is not out of bounds. So we're still firming up our plan that looks for next year and what again will give.

Guidance later, but.

Directionally, we feel pretty good about what I just said.

Great second.

Okay, I was gonna say city, just reconfirm, our overall guidance still stands on revenue growth for the company as a whole.

Great.

Okay that makes sense.

Thanks <unk>.

Our next question is from my journey with Bank of America Merrill Lynch. Please proceed with your question.

Yes, Hi, this is Dan Clark on for Mike two from US. The first just wondering if you've seen any changes in demand our customer conversations uhm from the parents out of your business. After the unveiling of 20th 24 Star ratings, where we saw year over year decrease in forest our plans.

Yes, we have we've definitely seen an increase in activity and demand from our health plan customers.

And so yes, we have seen market dynamics as a result of that.

Got it thanks, and I'd, just shifting gears a bit it looks like the implied EBITDA margin for four Q based on your guide is going to be down year over year. After you posted three straight quarters of EBITDA margin expansion is there anything that you'd call out there that that's driving that specifically.

Mmm Mmm Mmm I'm, not sure where you're getting that from down we're not we're not projecting.

<unk> are you talking about a gross number are you talking about the absolute margin per cent.

Just the absolute margin percentage I believe should be.

Comes out to like 31 per cent versus 33% and <unk> 21, just just curious if there's anything there.

It could just be timing, we were just curious.

Yeah, There's no story, there well I'll have to check you on the map that doesn't sound right to me, but I mean, you you might be staring at a level of detail, where I'm not but there's no story. There I mean these are solid numbers I mean look at our your today performance look at to you know.

The the numbers you're siting in the thirties are pretty darn good numbers. So we feel pretty good about where we are we will finish the year with a higher margin than last year and with good momentum is around the corner into 2023.

Got it thank you.

Our next question.

<unk>, Eric Percher with Nephron Research. Please proceed with your question.

Yeah, maybe I'll call actually pick up on that last question too loud and clear in terms of the margin stepping off point and.

Hello to improvement is there any seasonality, we should be thinking about <unk>.

Among the two businesses relatives.

Where where margins go from here.

Well when you say two business, Eric just to be just to be clear you're talking about the provider side preparing life science at.

Uh-huh.

Yeah.

So you know you you if you looked at trending last year, you would've thought that you know Q4 was clearly the highest margin quarter on the parent life science side and we that was also true on the provider side. So two four because of volumes buying patterns et cetera tend to produce the highest gross March.

<unk> and tend to also have tended to also produced the highest EBITDA margins.

Last year, the the tough comp anomaly that we talked about a little bit we had a very large license sale in the queue for a blast here you know it was a.

License sale pure profit you know that had an extra skewing to last year's Q4 numbers and so that might be at the heart of the last question and maybe yours as well in terms of a year over year comp, but you know we.

You know more broadly you're asking about seasonality and you tend to see the highest performance for the year in Q4, and you know we we wouldn't do anything to Disabuse you of that thinking.

Right. Okay. So we're looking for a step up not stepped down and and that seems to pencil out here by our math.

I guess the other question that would just be the dependency on Q4, I know, it's only been four or five weeks, but.

Have you seen visibility increase since Investor day, and how much of this is <unk> visibility step up across those businesses as you get through the Q4, alright, particularly in providers really end of the quarter last few days.

<unk>.

I left the answers you know a little bit of both right. How do we know more today than we did five weeks ago. When we saw you know talk to you from New York, Absolutely, we do and we've closed some good deals since that time, which as further encouraged you know in further support in our beliefs that holding the guidance we had to.

Out there is the right thing to do.

But yeah I mean, there's no question that particularly on the provider side, you know business kind of runs itself all the way to you know sometimes the last week of December .

It's part of the behavior, we've conditioned I guess over the last decade.

Okay. So your condition, maybe I'm provider, but pay your pay your side <expletive> and life Sciences shouldn't look at that turnout.

Clarity there you know grows earlier in the day I mean, you do get some you just get some late in the quarter.

Provider excuse me pair of business that around clinical data exchange that comes in a little late and some of our.

Digital health or media kind of business also comes in a little late Eric as well, but.

You know I would I would say that piece of the business on an overall basis has gotten clear since we met five weeks ago more so even than the provider sector.

Alright, thank you.

Okay.

We've reached the end of the question and answer session I'd like to turn the call back over to Rick potent for closing comments.

Okay, well, thanks again for joining us today, some really good questions. So we appreciate the thoughtfulness on those and we will be back in touch with you.

Soon so everybody take care and we'll talk to you soon.

This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.