Q3 2022 Streamline Health Solutions Inc Earnings Call
[music].
Hello, and welcome to the streamline health third quarter 2022 earnings conference call and webcast. At this time all participants are in a listen only mode. If anyone should require operator assistance. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to turn the call.
Over to Jacob Goldberger. Please go ahead, Sir Thank you for joining us for the corporate update and financial results review of streamline health solutions for the third quarter 2022, which ended October 31, 2022 at the conference call. Operator indicated my name is Jacob Goldberger, joining me on the call today are Tee Green, Chief Executive Officer, and Chairman of the Board Stilwell President.
And Tom Gibson, Chief Financial Officer.
Today's prepared remarks, we will open the call for a question and answer session. If anyone participating on today's call does not have a full text copy of our press release announcing these results you can retrieve it from the company's website at Www Dot streamline health dot net or from numerous financial websites.
Before we begin with prepared remarks, we want to be sure. We are clear for everyone on the record how certain information, which may be provided today as with all of our earnings calls should be viewed with airports significant records. Following statement statements made on this conference call that are not historical facts are considered to be forward looking statements within the meaning of the private Securities Litigation Reform Act of 90 to 95.
Subject to risks uncertainties assumptions and other factors could cause actual results to differ materially from those made discussed.
Please refer to the company's press releases and filings made with the U S Securities and Exchange Commission, including our most recent Form 10-K annual report, which is on file with the SEC for more information about these risks uncertainties and assumptions and other factors as always we are presenting management's current analysis of these items as of today participants on this call should take you to the company's risks and evaluating the topics we will discuss.
Please note streamline health is not undertaking any commitment or obligation to update or revise any such forward looking statements made today.
On today's call, we will discuss non-GAAP financial measures such as adjusted EBITDA looks at ACC and unaudited figures related to our acquisition of Abbvie management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures. So these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures.
Shelby compare these results on consistent terms, please refer to our website at www Dot streamline health Dot net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.
I would now like to turn the call over to Tee Green Chief Executive Officer.
Thank you Jakob.
Thank you all for joining us this morning.
Following my opening remarks, then stilwell President will provide an operations and sales update.
Followed by a financial update from our CFO Tom Gibson.
As a reminder, on August 16th 2021 we acquired I believe.
And their financial performance will be included in our GAAP results from that day.
With that I'll get started.
Beginning with the financial overview as of October 31, 2022 bookings for the nine months ended October 31, 2022 totaled $15.9 million.
$14 $1 million of which was attributed to attributable to our SaaS products as a reminder.
We estimated we would average $3 million to $5 million of T. C V per quarter in fiscal 2022.
Our continued booking success is a credit to the strong direct sales channel, we've built and the value our products provide our clients.
Macro headwinds associated with our hospital clients.
Asking in backlog about projects continued to hinder conversion of our new bookings to revenue. However, we successfully grew total revenue, 13% to $6 $2 million during the third quarter and our SaaS revenues were up 14%.
Or $24 million.
Last quarter, we began reporting a new metric.
Brooks SaaS ACD.
Which is the annualized contract value for all agreements that are being recognized into revenue as well as bookings that have not been implemented.
As of October 31st booked SaaS, ACB was $14.9 million as compared to $10 3 million as of January 31st 2022 subs.
Subsequent to the end of the quarter, we successfully closed two large deals and as of November 30th 'twenty to 'twenty two.
Total books, SaaS ACB was $15.9 million.
We remain confident in our achievement of $17 million of books SaaS HCV by the end of fiscal 2022.
As of October 31, 2022, we had $11 $7 million of cash on our balance sheet.
That's pretty much the previously announced on October 25th we closed a registered direct offering that resulted in gross proceeds of approximately $8.3 million.
Notably more than 30% of the offering was raised from insiders, including each member of the company's board of directors and key members of the company's management team.
We have begun to make the initial principal payments on our term loan as of October 31, the balance of our term loan was $9.8 million.
We believe our cash on hand is sufficient to achieve positive adjusted EBITDA less capitalized software development.
Finally on November 29, 2022, we expanded our relationship with bridge bank to allow access to an additional liquidity there was $2 million non formula line of credit.
Late in the quarter, we announced a strategic alignment of our business to enhance growth and profitability.
By combining the Abilene and evaluate our operations.
Expect to accelerate our progress within our innovation and service functions, while increasing the effectiveness of our sales force as they evaluated in Abilene software solution share a common call point.
In addition to the operational benefits from the alignment we expect to realize a total $3 million of annualized cost savings of $1.5 million of which was executed on November the first and the balance balance of which we expect to execute through the course of the next fiscal year.
Yeah.
The cost savings was attributable to the elimination of redundant management positions.
Ireland, Terry reduction of executive salaries and certain other contractors.
We remain confident in our growth prospects going forward, the macro environment, where our hospital clients result in a higher demand for our products and services.
Our team is dedicated to delivering improved net revenues through our hospital clients through automated prebuilt solutions like Rabbi D and evaluated.
Which enable them to capture and bill accurately all the care they have provided.
This has never been more critical to our industry than it is today and we believe our bookings will continue to accelerate as a result.
In conjunction with the alignment divide shake was appointed Chief strategy Officer, and Ben Steel was promoted to president of our organization Dubai has made a seamless transition to focus on thought leadership and strategy, while maintaining his successful relationships with our channel partners and large hospital systems.
Prior to his promotion to president bandwidth CEO of evaluate your business then developed a world class client success organization, which has become a primary differentiator for us in the market.
I am thrilled to have him lead the operations of our combined organization going forward.
Dan.
Thank you T V.
Very excited to lead our team into this next chapter of the streamline story and I appreciate the opportunity to speak with you all this morning.
Building on <unk> comments on the macro environment, our individual client conversations lately have been focused on increasing denials and the need for automation within the revenue cycle.
Just last month, one of our clients expressed the need for automated solutions like rough idea and evaluate or to reduce revenue leakage. So that they can afford to invest in their patient care priorities, including expanding outpatient services in their community.
Within innovation, our primary focus remains on improvements to the backend architecture of our Abilene suite.
By making these investments today, we can ensure that the abilene tools are ready for significant growth led by our deployment of these tools within large organizations.
We will implement value driving client features into abbvie tools similar to the dashboards and reporting tools evaluate or that our clients have come to expect.
Additionally, we are making improvements to the Abilene architecture that will reduce the effort associated with our implementations and improve the user experience.
We continue to make incremental improvements to the evaluate our system as well expanding our rule set and overall, making this solution more effective overtime.
As Tim mentioned the client centric service organization, we developed within evaluate or has been a true differentiator for us.
Driving additional value for our clients and ensuring their success on our platform.
We are maintaining our cadence of monthly education, and quarterly executive client meetings to establish the value of the tools we are providing.
In light of industry wide administrative staffing shortages. We've also expanded our consultative services, whereby we staff our solutions for our clients.
This is an extension of the new evaluate or concierge, we mentioned last quarter, an auditor, who starts off directly integrated within the client's team, allowing us to rapidly learn about and react to potential pinpoints.
Well its position us with the insights we need to speed adoption and maximize client resources.
As we have discussed previously administrative staff within hospitals remain underinvested in understaffed at this time, especially within their it departments.
This has delayed implementation timing for our solutions as a result, our implementation teams are working hard to ensure that we are never the bottleneck within evaluate evaluate are we have been very successful and I am confident that as a result of our investments into the Abilene products, we will be able to say the same about RFID and compare and the near term.
Our combined growth team led by Chief growth Officer, Amy said route has accelerated through the realignment and we were thrilled to report T. CV SaaS bookings in excess of $14 $1 million as of October 31.
In line with our expected average up $3 million to $5 million of TCP SaaS bookings per quarter.
We are maintaining the organized organization overall structure with four regions for direct sales and augmented by select channel partnerships.
Under his leadership, we've expanded infrastructure beyond individual regional Vice presidents to include dedicated business development resources.
Sales enablement team and a more intentional approach towards marketing.
If you go to our website and Linkedin page today, you'll notice that we have a new look and feel not only as it pertains to logos, but the presence of thought leadership via podcasts and other content.
As of today, our RVP positions are fully staffed as.
As Tim mentioned, we remain confident in our achievement of $17 million to booked SaaS HCV by the end of fiscal 2022 and expect to exit fiscal 2023 with $30 million of book SaaS ACB.
Before I turn the call over to Tom I would like to thank all of our hard working team members, who are supporting our mission to ensure our health care providers are paid for all the care they provide.
I'm very excited to lead our talented team and believe strongly that our innovation plus service equals growth formula will yield tremendous results for all of US as we continue to execute and expand.
With that I'll hand, the call over to our CFO Tom Gibson.
Thank you Ben Congratulations on your recent appointment it is indeed well deserved.
As Tim mentioned in his opening remarks, we acquired Avalere on August 16, 2021, all up all operations of Abilene are included in our reported GAAP numbers from that date.
We also provide pro forma numbers, then assume we owned heavily from the beginning of the prior period.
We solidified our balance sheet during the third quarter with an $8 $3 million registered direct capital raise more than 30% of the raise was funded by insiders and we completed this offering without an underwriter I want to thank all the investors that participated in this.
Most recent round.
Subsequent to the third quarter the company expanded its bank relationship to include a new 2 million dollar non formula revolving credit facility.
Between the capital raise and the extended bank relationship. We believe we have a clear path until the company generates cash from operations a metric that we define as adjusted EBITDA less capitalized software development costs.
Total GAAP revenues for the third quarter of fiscal 2022 were $6 2 million, a 13% increase over the comparable period of last year.
For the nine months ended October 31, 2022, total GAAP revenue increased 60% to $18 1 million $5 $8 million of the revenue growth was attributable to the acquisition of Abilene.
During the third quarter of fiscal 2022, SaaS revenues grew $4 million or 14% compared to the third quarter of fiscal 2021 <unk>.
During the nine months ended October 31, 2022, total SaaS revenues increased $3 $8 million or 72% compared to the first nine months of physical 2021.
$3 $6 million of the growth in SaaS revenue was attributable to the acquisition of athlete.
Total revenues for the third quarter of fiscal 2022 and year to date were $6 $2 million and $18 $1 million compared with pro forma revenues of $6 $1 million and $16 $6 million, respectively for the year ago.
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We have been impacted by headwinds that face our hospital clients hospitals are overcoming personnel shortages and significant.
Backlog of projects.
[noise] over effect from Covid.
These headwinds impacted our contract implementation timeline also known as first recognized revenue we.
We do not know how long these delays impacted our clients and accordingly, our recognized revenue.
We have $4 $5 million of annualized contract value that is unimplemented.
As of November 32022.
As these contracts are implemented in the coming quarters, our investors will see double digit growth on a sequential and year over year basis.
We're expecting to see revenue growth in the fourth quarter of 2022.
Which will accelerate in fiscal 2023.
Third quarter 2022, operating expenses totaled $9 $4 million compared to $9 3 million for the prior year period.
The company increased it spend and innovation during the quarter by approximately $400000 and experienced higher severance bonus and travel and entertainment expenses than that of the previous year.
The third quarter of fiscal 2021 included $1 $9 million of acquisition related costs.
For the nine months ended October 31, 2022, total operating expenses were $27 $1 million as compared to $20 million during the prior year period.
$9 7 million of the expenses for fiscal 2022 were attributable to the acquisition of Avalere.
We have higher costs in fiscal 2022 from higher head count.
Severance bonus and travel and entertainment as compared to fiscal 2021.
Some of this higher cost will be normalized.
By the previously announced alignment.
Net loss for the third quarter of fiscal 2022 was $3 $1 million as compared to a net loss of $4 3 million during the third quarter of fiscal 2021.
Net loss in the third quarter of fiscal 2021 included $6 million of interest expense and expenses related to the valuation adjustment.
On the acquisition liabilities associated with that belief.
Net loss for the nine months of fiscal 2022 was $9 $2 million as compared to a net loss of $6 $9 million. During the first nine months of fiscal 2021.
In fiscal 2021, we had the benefit of the PPP loan forgiveness in the amount of $2 $3 million offsetting the loss from operations.
Adjusted EBITDA for the third quarter of fiscal 2022 was a loss of $1 $2 million compared to an adjusted EBITDA loss of <unk> $3 million in the third quarter of fiscal 2021.
Adjusted EBITDA for the nine months ended October 31, 2022 was a loss of $3 6 million compared to an adjusted EBITDA loss of $1 7 million for the nine months ended October 31 2021.
The higher EBITDA loss can be explained by investments in the architecture of the Abilene technology higher head count salaries for upgraded sales function administrative costs, such as performance bonus and travel and entertainment in fiscal 2022 as compared with fiscal 2021.
Certain of these costs have been curtailed with the previously announced alignment we have targeted bonuses for certain company staff for the successful combination of Abilene evaluated business units and to achieve certain physical 2022 performance targets.
Moving to the balance sheet as of October 31, 2022, we had $11 $7 million of cash on hand, compared to $9 $9 million at January 31, 2020 to.
The company completed the registered direct offering during the quarter, which resulted in gross proceeds of approximately $8 $3 million.
The company completed the acquisition of I believe using approximately $12 $5 million of cash and $6 $5 million of restricted stock at closing.
Under the acquisition agreement the company will provide additional consideration that on each of the first to 12 month anniversaries of the closing date.
These are paid to the sellers and cash and stock and are valued on the balance sheet at approximately $8 6 million.
These liabilities are referred to as acquisition earn out liabilities and are an estimated present value of the future amounts that will be paid in cash and restricted common stock.
The first payment was made on November 22nd 2022, subsequent to the end of the quarter and totaled approximately $5 million in total value.
The first payment consisted of $2 million in cash and $3 million in restricted common stock.
Subsequent to the closing of the Avalere acquisition, we entered into a five year $10 million term loan with bridge Bank. There was no repayment of the term loan required in the first year. Following the close $500000 is required in the second year, following the close which equates to 41660 $7 million monthly.
Which began this quarter and the balance of our term loan as of October 31, 2022 was $9 $8 million.
As Tim mentioned, we recently expanded our relationship with Rich Bank to include a 2 million dollar non formula line of credit, which we can draw on if necessary.
We believe that our cash on hand is sufficient to achieve a positive adjusted EBITDA less capitalized software development.
But we are pleased to have access to this additional liquidity.
As Steve mentioned, we have introduced a new metric that provides an annualized contract value for agreements that are being recognized into revenue as well as in annualized contract value for agreements that have not been implemented.
We referred to this figure as our book fast ACB.
<unk> stands for annual contract value.
We believe both SaaS ACB will provide a proxy for our annual recognized revenue as this all executed contracts are alive and recognizing revenue.
Please note that the recognition of revenue from our signed contracts are.
Our subject to the timing of implementations.
Implementations may sometimes be delayed by clients due to competing projects.
Or be timed after a larger implementation of another system generally we have recognized revenue from evaluated projects and 90 to 120 days from contract signing well.
Believe products due to the complexity of the implementation, maybe 100 to 150 days.
Our book SaaS ACB as of November 32022 is $15 9 million and $4 $5 million of that booked SaaS ACB has not been implemented.
We remain focused on continuing growth of SaaS revenue.
On its current cost structure, we believe our overall business will achieve breakeven at a book SaaS ACD at $17 million. We are confident that we will reach this level of bookings in Q4 of 2022 and have this revenue fully implemented by Q.
Three of our Q4 2023.
The company is realizing incremental gross margins above 80% since I have joined the company in September 2018, we have not experienced our current level of growth nor the near term visibility to cash generation.
I am proud of the progress we've made to date and want to commend our staff on our recent success.
That concludes my review I will now turn the call back Tee Green for his closing remarks T.
Thank you Tom.
We continue to enable health care providers to proactively address revenue leakage and improve financial performance.
It's taking major steps forward to drive recurring revenue streams that better position, our company for growth and to deliver significant shareholder value over the long term.
The alignment has enabled us near term visibility to cash flow without losing momentum in growth or innovation.
Before we begin our Q&A session I'd like to thank my entire streamline team once again for all their hard work and dedication.
Their contributions are central for us to support our health care, providing clients and ensure they have the necessary tools to free up time and resources to provide quality care for the communities they serve.
Thank you all for your support of streamline health and our vision.
Now I'd like to open the call up to your questions operator.
Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
You May press star two if he'd like to remove your question from the Q1 moment. Please while we poll for questions. Our first question is coming from Brooks O'neil from Lake Street Capital. Your line is now live.
Thank you very much good morning, everyone. I appreciate all the commentary, but I have to confess.
Little confused about a couple of items. So I just wanted to ask a couple of questions. The first one really relates to a comment.
Made here at the end of his prepared remarks, I think he said.
You could get to where you could achieve breakeven at $17 million of booked SAS revenue.
But I think he also said that $4 5 million of that book that revenue would not be implemented.
And hence it's I guess my sense that perhaps you won't be generating revenue.
Related to that $4 5 million. So could you help me understand.
Hey, exactly what's going on there and how I should be thinking about that.
Absolutely Brooks how are you doing today.
Great. Thanks.
Good good. Thank you for your question.
So.
Today, we stand at $15 $9 million of total book SAS ACB.
With $4 $5 million of that Unimplemented.
Once we reach 17 million of recurring revenue.
Which that means yes, all will have to be implemented.
We will be at breakeven for the business.
Yeah.
Yes, and I think you also heard in my remarks, I think will be fully implemented on that $17 million of books as a C. V. By Q2 Q3 of 2023.
Okay. That's great that's really helpful and then.
So maybe a little bit broader question when.
When you guys evaluate the environment right now would you say.
Generating contracts.
Your.
Biggest challenge or is getting these contracts implemented a bigger challenge today then.
The demand environment, you see in the marketplace.
Yeah Brooks Tee Green, Thanks for the question and.
The environment certainly changing from you know.
A year ago trying to get the attention of the finance Department.
Yeah Bose the backlog of <unk>.
Contracts and just things they had to get off their plate coming out of Covid.
And now you're seeing that the Cfo's office entertaining.
Contracts.
You know our ROI analysis.
More and more questions about how they can use the technology to improve operations and then you get contract Red line back and forth and we've actually kept contract side.
And then the I T Department has backed up.
So that is from the service side of our business. We are trying to evaluate how do we create.
Whether you look at it as incentives or additional services that we can help our health systems.
You know get through there at T backlog, so that that is something we're seeing across the country I don't know what magnitude. It is but when you talk about four and a half million dollars a backlog that backlogs were slated to add resources in the health system.
So those will be things that will have to wash through the system like everything else who's had to done their way understaffed. So.
We're certainly looking at other ideas and other partners that can help facilitate a smoother Quaker implementations.
Obviously yesterday.
Clients don't implement our technology as it is real dollars are losing and the Cfo's office knows that is getting the Cio's office.
All our tests that.
Sure.
This is just a little follow on is my sense is historically you guys have done a fantastic job implementing.
Evaluated, but perhaps it takes a little longer and it's a little more complicated.
Men.
Rabbi D do I have that right and do you think you can narrow the gap between those two over time.
Yeah, you have it you haven't accurate, but there's reasons for that and if you go back several years ago, we couldn't implement evaluated.
That's correct.
Correct.
He had to rebuild that innovation platform and that enabled our service platform led by Ben and his team to build the processes that we're efficient and in.
And delivered the rollout and evaluate it to our clients and that's why you're seeing growth in that side and you're seeing the service on the implementation side, so smooth and inefficient.
It starts with having a rock solid innovation platform. So we knew coming in the Abilene, we had to do some architectural.
Architectural improvements on Rabbi day to get it to the same enterprise.
How do you weight or is and so we're still in that process. So it's it's you know each brand each quarter, it gets better and better but you know I would expect it.
Mid 'twenty 'twenty three we should have the the Rabbi D platform in the in the in the same shape, we have evaluated platform.
Great that's perfect let me ask two more.
Awfully quick ones.
One is my sense is.
Cerner and epic are two of the big.
Electronic medical records vendors out there can you talk about where you stand with those two and anybody else you consider significant it would be interesting to hear a little bit about it as well and then secondly can you just talk a little bit about whether you feel.
Today, you have what we might describe as a complete.
Solution combining your two flagship products are there obvious things that you think could be added to your platform that would make your solution a more complete and more.
High demand.
For for for Health care.
Sure and yeah, you're correct, cerner and epic or the.
The grille is in the industry that's for sure. Fortunately, we havent really style strong tight partnership with Cerner on the coming from the Abilene whereby these side, we're working on getting to evaluate and that's in the Cerner toolbox, which will be really exciting for us.
Epic you know it's.
That's a different animal where you know they they have the epic.
The integration App Orchard, there's a new term now for their integration platform I don't remember what it is but so yeah. We're.
We're continuing to work with and we want to work with all of the epic customers, but there's there's epic actually.
Endorsed and resell products from from third parties like Us know, but certainly there does so that that's you know that that's that's very positive on the cerner side, the ethics that what we've learned over many many years working in this world is you have to have epic customers that use your platform and and they're seeing great results.
Which you know they they are and we'll and that enables you to get more epic clients and that's the way that the epic model works by referrals.
Okay.
Solid epic customers that you know enable you to talk to more epic customers.
And then the complete solution.
Your second question the mhm.
We have components of the revenue cycle. It is a very very large industry.
Our focus Brooks, who is on pre bill. So we're not trying utilization of the entire 360 revenue cycle. So it is a niche it is a very valuable niche that we're trying to penetrate now having said that are we looking for future opportunities like Abilene, absolutely and we can't wait to continue them.
Some of that.
Alright, that's very helpful. Thank you very much.
And Tom I appreciate all the color.
Thank you.
The next question today is coming from Matt Hewitt from Craig Hallum. Your line is now live.
Good morning, and thank you for all of the details on the quarter and for taking the questions maybe first off.
Regarding the I guess theres two different pieces, obviously that are impacting or creating a little bit of a headwind one you've got the hospital spending environment and number two you've got the implementation side. It sounds like that the bigger headwind from those two right now is coming from the IP side, but could you provide a little bit of an update on on.
It'll spending it sounds it seems like the Cfos are on board they want to get the product in there the products and floral.
What do you think it's going to take kind of maybe take that next step from a contract signing standpoint or have you kind of reached that point now where you're signing the contracts and you know as you get them presented it now it's more a function of that I T side.
Yeah, Matt key here. Thanks for the question, where you know that the hospital spend as is certainly.
Changed or pivoted more to what we do and what I mean by that and that at the macro level is.
Hospitals coming out of Cabot are woefully understaffed, especially on the administrative side of the business considering the revenue cycle side and so they have to look at technology, that's going to make them more efficient and you.
Using vastly fewer resources, meaning human capital because they're just not there you know builders auditors coders out many just left and they're not coming back and so we're cfo's may want to do.
Some advanced clinical and you know purchases right now they have to show up the revenue and the way the short the revenues they have to do things right in the beginning so they don't create work downstream on staff that they don't have anymore, which.
Oh, I hear come streamline with prebuilt technology like evaluated Rabbi D. So we think.
We think were in the suites and Anne Fergie.
The most important part is we deliver a tremendous return on investment immediately almost you know within a few months of implementation.
There's real value. So I think I think when you look at take even you know take their name out of it. If you just look at what the finance departments are looking at implementing.
You have to you have to does it enable us to run our hospital with fewer people, yes does it deliver a tremendous return on investment immediately yes is it quickly implementable. If we have a T resources. That's the second part of the question right. Yes. So you know when you look at street, we check all of those.
Boxes.
So I think that's pretty encouraging for bookings now you get to the other side of the question. The C O side of the business.
They don't they don't have resources, either Unfortunately, a lot of people left and went in you know did side consulting jobs and stuff.
We started working with a smaller company. So we do have we do have some work to do in the C O world, meaning how do we.
We know we provide tremendous value from a cfo's perspective.
How do we prove we provide tremendous value to the Seattle, but what are some of the things that we could do one how quickly our platforms can be implemented how.
Sure. They are how inter operable they are with Cerner and epic how much we can do in their environment without their resources. So those are some of the things we're working on.
That's really helpful. Thank you.
Maybe a question for Tom.
You were mentioning that the $5 9 million a C V as of 11 30 a M.
And the unemployed did basically was $4 5 million does not implemented yet how many customers make up that $4 5 million as you know just a couple that have several facilities or is it a multiple on that I guess it just kinda might speak to how quickly you can kind of get those turned on and once the resources are available.
Yes, Theres two.
I believe products wherever I D and compare customers and then there is.
Full five evaluate or customers.
With the value of their customers no matter, how many facilities. They are they usually only have one HL seven feet maybe too.
We have to connect to in order to get them live. So if it's a six facility hospital system or a two facility hospital system that is not.
That doesn't add a lot of complexity to the implementation.
Does that help yes very much. So thank you and then I guess the last one for me you know as as we look out to FY 'twenty three in your commentary that you'll be able to get that four and a half million of current backlog. If you will are implemented whether it's Q2 Q3 I mean it.
That implies that you're exiting next year.
You know somewhere in that 5 million per quarter in SaaS revenues is that kind of the the way we should be thinking about things.
Yes man I'm, sorry, I had to get off mute.
Yes, that's the way to think about that in kind of the middle of the year.
Fantastic Alright, thank you so much.
Yeah. Thanks, Matt.
We reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Thank you all again for your interest and support of streamline health. If you have any additional questions or need more information. Please contact me at Jacob Goldberger at streamline health Dot net we look forward to speaking with you all again, when we discuss our fourth quarter and fiscal year 2022 financial performance debate.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.
Yeah.