Q1 2024 Doximity Inc Earnings Call
Hello, and welcome to Doximity, it's physical first quarter 2024 earnings call.
Well now passed a call over to Doximity as Vice President of Investor Relations Perry Gold. Please go ahead.
Thank you operator.
Welcome to Doximity physical 2024 first quarter earnings.
On the call today are just heavy cofounder Z O doximity.
Co founder and C. S O.
Seattle.
Complete disclosure about results can be found it or press release issued earlier today as well as in a related form 8-K, all of which were.
Available on our website and investors Dot Doximity dot com.
As a reminder, today's call is being recorded and replay will be available on the web site is part of our comments today will be making forward looking statements.
Savings are based on managers current views expectations and assumptions and are subject to various risks and uncertainties.
Actual results may differ materially and we just claim any obligation to update any forward looking statements or outlook. Please refer to the risk factors in our annual report on Form 10-K.
Subsequent form 10 cues and our other reports in filings with the S. E. C that may be filed from time to time, including your upcoming filing on Form 10-Q.
Looking statements are based on assumptions that we believe to be reasonable as of today's date August 8th 2023 of note. It is dark seventies policy, neither reiterate or just the financial guidance provided in today's call unless it is also done through a public disclosure such as a press release through the filing of a form 8-K.
Today, we will discuss certain non-GAAP metrics that we believe eight and your understanding of our financial results.
Historical reconciliation two comparable get metrics can be found in today's earnings release.
Finally during the call we may offer incremental metrics to provide greater insights into the dynamics of our business.
Tales, maybe one time in nature, and we may or may not provide updates on this matrix in the future I would now like to turn the call over to our C E O and cofounder Jeff Jeff.
Yep.
And thank you everyone for joining our first quarter earnings call. We have four updates today are Q1 results docks G. P. T for enterprise guidance revision and a new self serve platform for clients and agencies.
Okay I'll start with the good news or Q1 results were strong Ah revenue grew 20 per cent year on year to $108.5 million, beating the top end of our guidance.
Our top 20 clients, who know and measure US best continue to be our fastest growing with a net revenue retention rate of 124%.
Our bottom line was also good with an adjusted EBITDA margin of 43% or $47 million a full 16%.
High end of our guidance.
Free cash flow was better still at $56 million up 31% year on year.
Meanwhile.
Our physician cloud has never been more used or more useful in.
Q1 are active workflow users grew to a record 525000 plus prescribers.
Telehealth alone top 385000 users.
In terms of enterprise paid subscriptions, we reached a record 44% of all U S physicians.
And our overall Q a U M. A U W. A U D. A U that is quarterly monthly weekly and daily active users all hit record highs last quarter.
Q1 also marked a major product milestone for us as we signed our first Fox G. P. T enterprise deals with three top health systems.
You may recall that docs GPT is our AI medical writing tool that was launched in February to help doctors right and fax ensure appeal letters for their patients.
With our enterprise version, we have now added Hippus security and administrative guard rails that'll, let doctors do even more.
We believe the time savings could be significant.
A recent survey of 322, a I using doctors predicted that in a few years I will save them. Each 13 hours per week six in there E H R and seven and there are other office work.
Focus on serving the latter half the non E H R workflows.
Service animal letters to teacher notes, we're proud to help busy physicians help their patients.
We're also excited to deepen our health system partnerships as we expand our AI and enterprise level offerings.
Okay, turning now to our guidance revision as.
As a reminder, our clients include all of the top 20 pharmaceutical companies and all of the top 20 hospitals roughly two thirds of our revenues contracted during the winter annual budget season, or what markers call. The upfront. This is one form of markers look back on the year measure their Ottawa by tactic and renew annual programs like ours.
During the summer, it's upsell season for us that is.
Clients typically spend the remaining one third of their budgets to expand program reach modules or content personalization.
Until last year are upfront and upsell seasonal growth rates were highly correlated for upfront grew well that are <unk>.
Despite a record upfront. This winter are upsell closed rate fell short in June and July so after growing steadily for a decade or upsells have now slowed for two years in a row.
Dug into this spoke to our customers and industry experts and found two core reasons.
First in part it's the market far.
<unk> shifted digital has slowed.
Post Covid travel agency swaps are smoking a budget, while budgetary caution rules of the day.
All we estimate digital pharma has grown it has the low teens growth rate that we in E marketer predicted last year.
Second and more importantly, it's the friction of our full service White glove sales model simply put during summer upsell season clients no longer have the time to schedule all of the meetings legal reviews reports and Qbr's.
Post COVID-19 they work from home most of the week and they'd rather log into a self service platform 24, seven to monitor their program results insert budgets.
Indeed, a recent channel checks showed that banner ads or programmatic in industry parlance got the incremental spend the summer.
Given the new entrants into the Doctor banner AD market, we don't expect our upsell results to improve this year.
Due to these recent challenges and the need to streamline client workflows, we've made the difficult decision to let 10% or roughly 100 of our talented employees go.
These reductions are heaviest and our operations and client service teams.
<unk> live client visits printing and manual issue <unk>.
Just less needed that in the past <unk>.
Affected employees will receive severance stock vesting career services and extended health care coverage totaling approximately $8 million to $10 million.
The net result of these changes is that today, we are lowering both our annual revenue and EBITDA guidance by 8% to 9% to a mid point of $460 million in fiscal 2024 revenue in $201 million and EBITDA.
A revised guidance equates to 10 per cent year on your growth with a 44% EBITDA margin.
We've learned that our post COVID-19 upsell weakness has been as much due to technology and operational inefficiencies as macro malaise.
The good news is this is curable and we're treating it.
Longer term, we remain incredibly Polish.
We plan to use or more than $230 million and remaining share buybacks as of July 1st to help return value to shareholders.
Okay, turning now to the addition of our new self serve AD platform.
As a physician first company, we've historically put 90 per cent of our engineering resources into physician facing products.
We pride ourselves on staying in tune with physician needs and we built a physician digital platform like no other.
That's it in the past few years or pharmaceutical clients have become more digitally savvy and it's now time to put more than a 10th of our engineering resources into our interfaces with them.
For comparison, we're told the Google spends roughly half of its engineering effort on client facing technologies.
During upsell season, our clients increasingly prefer to deploy incremental budget swiftly and they want to expand and adjust their programs on to activity with a click of a button just like they would on Linkedin, Facebook Amazon or Google.
Our agency partners, similarly need to test and optimize creative throughout the year and a self Sir platform will make it easier for us to a line with him content templates and medical legal review or M O R.
Piloted this with a handful of creative agencies. This year and found they got MLR approval several weeks faster than us, while delivering a slightly higher R y.
Thankfully, we've already built much of the plumbing for this platform for our smaller hospital clients with early success. Indeed last quarter awful two thirds of our 200 plus hospital marketing clients independently logged into our self serve AD platform to download thousands of reports check.
There are y and optimize their programs.
This hospital Seltzer pilot was much more popular than we expected and created huge efficiency gains for a client success teams.
Finally, we believe that by following the well test itself serve AD platform playbook of other tech companies will lock SMB clients that we've never had before and enable better auction base price discovery based on R y.
While this won't happen overnight, we believe it will also allow us to operate more efficiently as more programs run with a click of a button rather than through our white glove team of creative technical and legal resources.
In closing, we believe the opportunity to digitize physician marketing is as large as ever.
And overall, we're excited to see it finally shifting from the traditional magazine and journal purchasing model.
Measurable dynamic online model.
Over the last three fiscal years 2020 to 2023, we've averaged over 50 per cent top line growth.
We think pharma is overcorrected this year, just single digit market growth.
Our 10% growth guide this year implies a fiscal 2020 to 2024, <unk>, a 41% top line growth.
As we look over the horizon to more self serve marketing better agency alignment auction based pricing and more rep digital integration, we continue to see longterm growth rates north of 20 per cent.
On our path to greater than $1 billion in revenue in fiscal 2028.
And with that.
Handing it over to our CFO , Anna Bryson to discuss our financials and guidance Anna.
Thanks, Jeff and thanks to everyone on the call today.
First quarter revenue agree with you 108.5 million up 20% year over year and exceeding the high end of our guidance range.
Oh, no our subscription revenue, which comprises 93% of our total revenue continued to reaccelerate to 21% year over year growth in Q1.
Similar to prior quarters are existing customers continue to lead our grass.
We finished the quarter with a net revenue retention rate of 118 per cent.
For our top 20 customers net revenue attention was higher at 124%. So our biggest less sophisticated customers are still our fastest growing.
We ended the quarter with 296 customers contributing at least $100000 each and subscription based revenue on a trailer 12 month basis.
This is a 12% increase from the 264 customers that we have in this cohort year ago and these customers accounted for 88% of our total revenue.
Turning to our profitability non-GAAP gross margin in the first quarter with 90 per cent versus 88% in the prior year period.
Justin EBITDA for the first quarter was $46.6 million and adjusted EBITDA margin was 43 per cent.
Compared to $33.5 million and a 37% margin in the prior year period.
Now turning to our balance sheet cash flow and an update on our share repurchase program.
We ended the first quarter with 873 million of cash cash equivalents and marketable securities.
January to free cash flow in the first quarter of $55.6 million compared to $42.6 million in the prior year period, an increase of 31% year over year.
Additionally, we repurchased $21 million worth of shares at an average price of $31.79.
July 1st we have $33 million remaining a large share repurchase authorization and an additional $200 million from our authorization announced that yesterday.
Now moving onto our outlook for the second quarter of 2024, we expect revenue in the range of $108.5 million to $109.5 million, representing seven per cent growth at the midpoint.
Expect adjusted EBITDA in the range of $44 million to $45 million, representing a 41% adjusted EBITDA market.
For the full fiscal year, we have revived it a revenue range to $452 million to $468 million, representing 10 per cent growth at the bitcoin.
We now expect adjusted EBITDA in the range of $193 million to $209 million, representing 844% adjusted EBITDA margin.
After a record annual buying cycle are major up cells have materially Underperforms and we expect this to continue in the near term.
As we have mentioned before major budget started walking for our customers in June .
Estimated would see a similar percentage of major up sells his last year, which was about half of our historical right. However.
However, we have seen a further decline this year.
Given these major upsells convert to revenue very quickly. This decline has led to a sizeable impact starting in detail.
As Jeff mentioned, we believe this is the result of several factors, including a slower digital marketing growth rate and a shift towards more self service automated solutions.
Additionally, as digital becomes a core strategy for our customers.
Several high impact payment agency transitions currently affecting three of our top five customers.
While we are excited about the added investments our customers are making a digital transitions have slowed things down temporarily.
As we have emerged from the pandemic visibility into our business has become more limited and it has been historically.
While our chorus strong the business we drive after our annual upfront has become more variable.
Clarify we continue to have trouble visibility into the roughly 65% of revenue book to start the year with the remaining 35% has become increasingly difficult to predict.
Because of this we are adjusting or guidance philosophy to give wider ranges and bacon more variability for the portion of revenue, we do not have contracted upfront.
This includes mid Europe cells, new customers and volume expansion in our annual buying cycle.
Well, we are obviously disappointed with our new guidance. We believe we are making the right adjustments to best align ourselves with our customers.
We believe that our new self service platform and heightened focus on automation will allow us to scale more effectively get programs lie faster and unlock more incremental budget throughout the year.
It should also make our operating model, even more efficient as we remain committed to profitability.
As a company we have succeeded in getting our positions where they are working closely with them to develop the solutions they need which is evident by our record engagement today.
Now we are excited to further extend the service to our customers and deliver them the solutions day desire in a way that better maximizes our opportunity.
With that I will turn it over to the operator for questions.
With a smile open the line for questions. We have 30 minutes for Q&A I'd like to remind everyone in order to ask a question at this time. Please press star one to withdraw your question Press Star one again.
Your first question comes from Brian Peterson with Raymond James Your line is open.
Hi, Thanks for taking my question. So I wanted to start on self serve and I. Appreciate all the comments there, but you know what.
Thinking about you know is quicker and it's lower cost to you I'm curious how that compares in a pricing perspective for customers.
How do you think about our wide levels that you're thinking about self services. The white clubs offering that you provided in another scenario.
Oh, thanks for any other suggest so we are excited about self serve I think the more we are measure the better we will do in this industry and self served with real time, dashboards and data as a opportunity to take us to a new level here.
Specifically, we are purchasing prescription data to integrate into the platform, which will allow our clients to measure their R Y more real time, which we think will be a key unlock and and helping them grow not only through the upfront season, but also the upscale season.
So faster launches better pricing easier up cells, and then also newer SNB clients I think are the four key benefits of self serve and where we can take it in terms of pricing you really clients look at this on an R Y basis, and so again I think it's it's about our resolve.
There are folks out there who do look at your cost per impression we don't even provide impression data to our clients were more like Google we focus on the the cost per click or the cost per deep engagement and on that front, where we're very competitive so I think even though some of these platforms do trumpet low.
Cost per impression numbers the reality as we all know that there's a lot of banner blindness [laughter]. There's a lot of websites you really don't want your banners on.
And we're confident that well banners are certainly much easier to buy than we are I think you know our our wise is much more improvement.
Great. Thanks for that and it made me just a follow up I I know you mentioned the free enterprise deals for dogs GPT can you talk about early pipeline for that or is it really commonality in terms of use cases that you guys are saying with those deals. Thanks, guys. Yeah. Yeah. Thanks, Bryan Yeah. They use case, so I'm glad you asked about this I'm excited about.
Seven doctors, a lotta time already and we love to do that you know if.
If you are a forward thinking C. I O C M. I O at a major health system, you probably have heard doctors, sending an E mail, saying, hey can I use this new chat G. P. T thing to help out with all of my Scutwork All my paperwork.
And unfortunately, the answer they've had to give them and they've had to send out lots of emails, saying no you cannot use this because it is not HIPAA secure you know the information goes back to open I I over the open web in.
There's no way that you can handle.
Medical grade and Christian with.
With the consumer base services out there. So we're excited to take that and make it a hip a secure environment with a business associate agreement that we already have in place with over 200 health systems and really ruled it out to a lot of them in terms of pricing. We're gonna land grab mode right now to be perfectly Frank sorry, I don't think would expect more than a.
A few million dollars in revenue from it this year, but once we get out there and have more doctors using saving their favorites tuning their preferences, putting in their letterhead, which actually is a key piece of the product right. Now is having that letter had baked in so that I can send that insurance appeal letter with with everything pre templated we.
Think that there's a longterm opportunity here to to add more value and and ultimately to have it grow to be a much bigger business.
Thanks, Sir.
Your next question is from Scott bag with me that My company. Your line is open.
Hi, everyone. Thanks for taking my questions and good afternoon.
I guess a couple for me if we look at sales Ah Cross kind of your entire product suite. Your guidance suggests that you're seeing weakness really across all product areas.
Kind of a two part question in there one can you confirm that and then too I know you. All we're really excited about some of the new products and workload tools come out over the last you ordered two or things like your new video Oprey. So can you give us some sense on on how those are performing very early in your.
Yeah.
Hey, Scott I'll take that first part of the question so as far as what we're seeing today in our business. The weakness really is and our mid tier upsells, which is the part of our business. That's always been a little bit more variable we are not yet seen any weakness from a renewal perspective, we still feel very confident in renewal cycle that we're gonna happen Q3.
But I think what this year has showed us in particular is that we need to just the way we think about guidance as a company and think about what variability there could be in the amount of our forecast that has not yet so we're not necessarily seem issue sorted all prospective however, as we think about what's not books for the rest.
The year, we are being more conservative from a mid Europe , south new business and renewal volume expansion perspective.
[noise] got it helpful and then from a.
I guess from a modeling and margin perspective on.
It looks like your cue to just leave it as soon as roughly 40% margin by my math full years still 44% kind of within your historical trends if growth stays in this kind of single digit range, which it looks like your forecasting based on the guidance revenue guidance for the rest of the year.
Would there be any opportunity to drive some material upside that those margins cause you're driving those margins growing 25, 30, 40% a year would it be safe to assume that we can see some additional leverage upside of those levels of growth doesn't return it in the near term. Thank you.
Yeah. So a couple of things on that one so first as far as the the rest of that Jack had mentioned before we expect that to save us about $20 million in annualized savings of ear. So that should kick in perhaps there this year, but that should also kick in going forward and then secondly, I think for a margin perspective.
Really turning our focus is a company to automation and building up more self service.
The White club offering them more self service offering and so as we continue to pivot towards automation I think our margins should be able to be stable are still in that 45 per cent plus range that we talked about other rest of your day.
[noise] excellent thanks for taking my questions.
Your next question comes from Sandy Draper with Guggenheim Securities. Your line is open.
Yeah, Uhm, thanks, very much I guess.
The first question.
I think I heard you say that you you still are sort of you're not revising revisiting. The target you said at the Investor day for for $1 billion in longterm and just wanted to understand given the magnitude of the of the.
Now why not pull those or what what gives you the confidence I guess that because you not only have to grow 20 per cent compact you're gonna have to obviously grow materially faster than that so I'm, just trying to understand and I know the market as big a lot of opportunity, but I was just a little bit surprised to hear you sort of reaffirmed.
Oh. Thanks, any this is Jeff uhm. So yeah. So we'd have to go out 21.5% per year. After this year. If we hit the mid point of our guidance and we do think we can do that so I will share to Scots. Prior question. Your hospital business is running at plan and that's where we do already have the self.
Or platform, but what were realized is that the seltzer platform really does have a lot of unlocks to it that we weren't.
Expecting or banking into our forecasts at our Investor day. So.
So we think about again, the ability to have faster lunches better pricing easier up cells and new SMB clients.
We think that the 21.5% growth.
Over the next four years is achievable to reach the 1 billion dollar Bill.
Okay got that that's helpful. And then one quick just related to the guidance for this year and the timing of the the the adjustment I know you said I think it was.
In June June July that things slowed down I'm, just trying to think of as you're having conversations going back to your comment about the white glove service.
Was it maybe a different way to ask you. What are you guys not asking the right questions of the clients and that's what causes surprise you know.
You just weren't in contact frequently enough or maybe.
They weren't telling you the right answers or they didn't know I'm just trying to understand from I guess it was June six or whenever investor day was today, how it change that quickly and just you know I'm trying to sort of take about that sir thank you.
Yeah no. Thanks, Sandi. So insured April may we're running at plan. They were you know over the prior year growth rates June however, when most of the contracts get signed and Ah you're right. We got to the end of the quarter and our clothes rate dropped.
And when we went back and started to inspect our pipeline and take a look at it.
We realized we had had fewer face to face meetings with their clients as they got busy and I think.
You know as we drill into it we think that we've effectively lost a bunch of sheer there cause some new market entrants folks who.
I have recently purchased yeah. Some of these Ah banner platforms and you know they really took our teeth to be honest so.
Yeah, we're we're working through that and I think from our end we.
We had a pipeline coming into June that got us there, but the pipeline didn't close at the end of the month in June and July as we'd hoped and we've really lost out too I think an easier to purchase online platform, which longterm.
We're extremely excited about because frankly I think if you look at the googles of the World you see that when you have an online platform that can measure ROI real time, that's when you have real opportunities to have your product shine and pick up a larger per cent of the market and I think that's all opportunity given that when you talk to your clients. We are consistently the highest R y.
Programmer tactic that they work with.
Thanks to match the comments.
Your next question comes from Jarrett has with William Blair. Your line is open.
Yeah. Good afternoon. This is Jerry Hoffman for Daniels and thanks for taking our questions. Just a quick one just start I'm curious could you speak to sort of riesen R wise or or sort of returns from from recent programs and I'm curious if there's been any kind of degradation, they're bleeding clients to prefer.
A little bit more of that self service option.
Oh, Hi, this is Jeff.
No short answers, we haven't seen the degradation and Roy remains above the median 10 to one that we've been reporting the past year or two we continue to do more studies in the space. So no that that hasn't been the problem again I do think it's just the ease of purchase.
And you know the need to to do things more efficiently that I think we've we've fallen a bit behind on if it takes four meetings to get something done as opposed to four clicks. It does make a difference to our clients.
Okay understood and then just one more on the revised outlook here. It just in terms of the sort of expected cadence you or should we still look for three Q to show a bit of a quarterly growth relative to the second quarter and if so if you are expecting that.
<unk> in three Q excuse me what would kind of give you the confidence that that you can achieve that just give us some of these moving parts here this year.
Sure as far as we think about the cadence for the rest of the year. It should look relatively similar to to prior years, maybe three Q.
Q4 will be a little bit more flattish just because we're not seeing as big of a step up I think in an environment, where everything is slowed down and not typical I think it makes more sense to focus on the first half and back half of the calendar year as it pertains to a ramp so if we're looking at this calendar year. The second half only applies about five per cent.
Gross versus the first task and for comparison last year. It was about 18 per cent growth and so we're confident that we have the backlogs to to get their the other thing I'll note. There is the client an agency transitions that we talked about our certainly swelling stepped down for US we are seeing more of our customers go through whole scale.
Team our agency transmissions that is certainly led to some overall delays now in the long run we think these investments and digital teams and operations will certainly help us but in the near term it is slowing things down for us from launching perspective.
Okay understood. Thank you.
Your next question comes from Allen, Let's with Bank of America. Your line is open.
Hey, Thanks for taking my questions I want to go back to the ups out I guess and you mentioned that you know ourselves, we're a little bit weaker than expected I think last year or two years ago. They were about 10% of revenue and then last year. They were about five percentage points of revenue did they grow year over year, both in absolute terms and.
Was it just weaker as a percentage of revenue just trying to understand that moving piece there and then any change to contributions from new modules in the guide. Thanks.
Sure as far as our Upsells are concerned I think you know Jacqueline I talked about this in the prepared remarks, but they declined on an absolute dollar basis. So we didn't see less upsells. This year on an absolute dollar basis than we saw last year. As you know we had initially assumed we see a moderately needed up.
So environment and what we are witnessing is a decline mostly due to two factors. One is the self service a trend that jeb talked about but the other factor that I don't think we've hit on my tongue is the fact that we are seeing less incremental budgets in general across all of our clients than we had seen last year. So.
Mental budget are more muted than they had been.
Last year as we look forward, though we you know we feel as though the self service platform will certainly help unlock more of those budget next year, even if they do remind you did.
Great. Thank you.
Your next question comes from Jessica Tassin with Piper Sandler Your line is open.
So I just wanted to kind of dig into what your expectations are in terms of both net new business for FY 24, and the revised guide and then just in terms of renewal of your existing subscription business. If you could parse that out or give us any detail there.
Sure I'd say, an order of magnitude of the revised guidance. The biggest impact has been the the mid Europe sell peace then new business, we are assuming a lower percentage from new business and we are similiar percentage from the volume expansion portion of our renewals once again it goes back to them.
And I was talking about earlier that we really have three lines, we need to change the way, we think about our our guidance philosophy and what we have that's unboxed. The good news is that as we sit here today, we have roughly 80 per cent of the remainder of the your books. So we feel really confident in this revised guidance, but we are just approaching the rest of the year with <unk>.
<unk> given what we're seeing.
Okay that makes sense, and then and that makes sense and then just in terms of kind of the F. Y 25 cadence then based on that renewal level and this year should we be expecting kind of a back half step up you know in 25, and then going forward just because there's a new.
Sort of philosophy to guidance and.
To the extent that you can answer that would be helpful. And then just kind of can you give us an update on the status of some of these new modules the point of care and and peer to peer. Thank you.
Sure I'd say, it's too soon for us to talk about F Y 25, but our best estimate is that it would look similar to prior years. It are self service platform should help us start to unlock that incremental budget niche here. So we'd like to believe we can see some some more success in our major Upsells next year.
Then we saw this prior year and then as far as our new modules are concerned one thing. We we've talked about before is that and we really believe the rambles start once we have those first R Y studies back and we're able to pitch them to our clients during our annual renewal cycle, so as far as a new products to concern we're really excited.
<unk> about what that means for us for fiscal 25 and beyond but you know we aren't assuming anything.
Materially different versus what we've had before in our guidance there.
Thank you again.
Your next question comes from Elizabeth Anderson with Evercore ISI. Your line is open.
Hi, guys uhm. Thanks, so much for that question.
So I guess it like if I'm looking at the rest of the year five guidance.
<unk> why you just add a comment obviously your <unk> I I'm, having trouble getting to your four years revenue numbers and last I take that at or below 110%, what am I missing that that or is that sort of the right way to think about how the business kind of and.
Yeah.
Sure I'll take that one Elizabeth yeah, our our estimate today is that like.
Like we've said, we think will end the year with about 10% revenue growth and let me think about and are are that would mean that should be 110%. I think we're really excited about what our renewal process could bring as we look ahead to the next year and your budget's become more robust, but I think that is.
The right way to think about and are are.
For that <unk>.
Okay. That's helpful.
And one of the earlier comment you guys spoke about better pricing on a self service model. What does that does that mean exactly is that like lower pricing versus what you have now and just if you could clarify in SF expand on that that would that would be helpful.
Sure Elizabeth This is Jeff I'll take that.
Yeah, one of the challenges you run into each year, when we sit down and go through the years results R Y and talk about next year's pricing is that when it's a human to human sort of discussion you know, it's hard to raise prices above a certain certain percent. It's part of that long term relationship that we've fostered with our clients, but when it's an auction and when.
It's others, maybe smaller companies, who are bidding up certain segments of physicians I think it becomes easier to have price discovery. There take you to a better frankly more normalized R y than what we currently deliver so.
As I said in the past you know with the 11 to one medium or why we.
Could grow 20 per cent a year for four years.
And really just get back to a three X R Y which is what most of our clients are considered great results given the other tactics and other programs that they work with so we think that the software platform is an opportunity for us to get a little sharper on our pricing by cohort by segment.
And allowing us to have our our wise.
Alright.
Be more in line with what other.
Other partners in the industry provides.
So just to clarify you think I'm like a total basis do you think it actually provides an opportunity for positive pricing versus what you're experiencing now is that too absolutely.
Yeah, if you talk to the people who were early or Google when they made their transition to this sort of platform and others I.
I mean sure.
Answer as it it it made meaningful increases to to prices.
Got it thanks, so much.
Mmm.
Your next question comes from Jaylen dressing, Let's Trust Securities. Your line is open.
Thank you and thanks for taking my questions I actually wanted to go back to the restructuring comment.
What kind of cost savings are you, including from from that and your outlook for they see it in the second half and.
Just trying to understand is that the primary driver of second hop implied it'd be diet expansion.
Sure I can take that <unk>, so as far as the restructuring it should result in roughly.
Put $20 million, an annualized savings for us and personnel costs and so we do expect that to start kicking in on about August 15th here. So that is it's an implied in our guidance as we think about EBITDA for the rest of the year.
Okay, and then make a follow up on upsell appreciate all the color around what you're seeing in the market but.
She just to know like whether these up so what you're seeing a slowdown.
See any opportunity that these might come back later part of this year or fiscal year for you guys.
That's probably pretty much you have enough visibility that property for this is not likely to physically probably next to you might see any any bounce back on these try and just trying to understand like how much visibility do have for this fiscal year or you. Just like you are kind of what we're saying Hey, this is probably a.
More next you have a record of your <unk>.
Thanks, a lot of this is Jeff Okay. We're we're not taking in much for <unk>.
Upsells going forward until we have a cell phone platform until we can get more predictability there. So.
The short answer is yes, there may be some some upside there, but right now we're not we're not counting on that.
Okay. Thanks, a lot.
Your next question comes from David Larsen with B T. I G. Your line is open.
Hi, where they're.
Lower up cells in certain categories of products or certain brand products like for example, gene therapies or anything like that.
Then are the new products that you're like bringing to market have those all been cleared by the regulators I think the vertical video was going through some reviews are those all cleared and launching and so forth.
Hi, David This is <unk> I can speak to sort of the the interest that we've actually seen a lot of success for.
Clients interested in education around novel therapies, I think we're entering a heyday for instance for endocrinology uhm and it just so happens that endocrinology is our most highly engaged major specialty for our work flow towards we put out a telehealth report in late June and July .
R. R telehealth engagement by specialty in location and I think some of the specialties uhm that overlap with some of our newest modules are are well aligned with some of the excitement and innovation in the life Sciences Smith.
Great. Thanks, and then I think some of your new of products, we're going through a review by the regulators because that is that correct or not and I I don't have those <unk>.
Sure I can take that one David so as I mentioned that our Investor day, well, we do have approval for all of our new products now from our customers. So I'll put in care products are live however, several of our peer to peer programs, how 'bout, yet alive and I think peer to peer is just another example of us learning that we need to have.
Ah more automated offering to make it easier to produce and edit K well videos. So we're excited about what our self service offering will also bring it to our ability to get programs and products slide faster and then one more quick note I just wanted to clarify my comment I made earlier I think to to Justice question is about visibility we had 80%.
The yearbooks for a subscription based guidance. So I just wanted to clarify that comment from earlier that it's 80% of the year subscription based guidance.
Okay. Thank you very much.
Q and a portion of the call has now concluded I will now pass the call back to Doximity C E O Jeff Tangney for closing remarks.
Thank you we appreciate the questions and the feedback and especially from those whose channel checks that helped to inform our strategy here, we want to thank everyone for joining.
Thanks.
This will conclude today's conference call. Thank you for your participation you may now disconnect.
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