Q3 2023 CareCloud Inc Earnings Call
Okay.
Speaker 1: Welcome to the Care Cloud Inc. 3rd quarter 2023 result conference call. At this time, all participants will be in a listen only mode. Later, we will conduct a question answer session.
Welcome to the Coeur Cloud, Inc. Third quarter 2023 results conference call.
At this time, all participants will be in a listen only mode.
Later, we will conduct a question answer session.
Speaker 1: I will now turn the call over to your host, Natalie Garcia, Care Clouds General Counsel. Miss Garcia, you may begin.
I will now turn the call over to your host Natalie Garcia care Cloud General Counsel.
Garcia you may begin.
Good morning, everyone welcome to the care club third quarter 2023 conference call on today's call are Mahmud Haq, our founder and executive Chairman.
Speaker 1: Good morning, everyone. Welcome to the Care Cloud 3rd quarter, 2023 conference call. On today's call, our Mahmoud Hawk, our founder and executive chairman, Holly Toudry, our Chief Executive Officer, President and Director, and Larry Stinvordan, our Chief Financial Officer.
He choudhary <unk>, our Chief Executive Officer, President and a director and Larry seen Ford and our Chief Financial Officer.
Speaker 2: Before we begin, I would like to remind you that certain statements made during this conference call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Before we begin I would like to remind you that certain statements made during this conference call are forward looking statements within the meaning of section 27, a M best.
Securities off of 1933 as amended and section 21 E of the Securities Exchange Act of 1934 as amended.
Speaker 2: All statements other than statements of historical fact made during this conference are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook, and potential organic growth and acquisition.
All statements other than statements of historical fact made during this conference are forward looking statements, including without limitation statements regarding our expectations and guidance for future financial and operational performance expected growth business outlook and potential organic growth.
And acquisition.
Speaker 2: Forward-looking statements may sometimes be identified with words such as, will, may, expect, plan, anticipate, upcoming, believe, estimate, or similar terminology and the negative of these terms.
Forward looking statements may sometimes be identified with words, such as will May expect plan anticipate upcoming believe estimate or similar terminology and the negative of these terms.
Speaker 2: Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. These statements reflect our opinions only as to the date of this presentation, and we undertake no obligation to revise these forward-looking statements in light of new information or future events.
Forward looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward looking statements. These statements reflect our opinions only up to the date.
This presentation and we undertake no obligation to revise these forward looking statements in light of new information or future events.
Speaker 2: Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to defer materially from these forward-looking statements.
Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward looking statements.
Speaker 2: For anyone who dialed into the call by telephone, you may want to download our third quarter 2023 earnings presentation. Please visit our investor relations site, ir.carecloud.com, click on news and events, then click IR calendar, click on third quarter 2023 results conference call and download the earnings presentation.
For anyone who dialed into the call by telephone you may want to download our third quarter 2023 earnings presentation. Please visit our Investor Relations site I are Dr. Kerr cloud dotcom click on news and events, then click I our calendar click on third quarter 2023 result.
<unk> conference call and download the earnings presentation.
Speaker 2: Finally, on today's call, we may refer to certain non- GAAP financial measures. Please refer to today's press release announcing our third quarter 2023 results for a reconciliation of these non-GAP performance measures to our GAAP financial results.
Finally on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our third quarter 'twenty to 'twenty three results for a reconciliation of these non-GAAP performance measures to our GAAP financial results.
Speaker 2: With that said, I'll now turn the call over to our CEO , Hadi Childry. Hadi.
With that said I'll now turn the call over to our CEO Howdy Chowdhry Hardy.
Speaker 3: Thank you, Natalie. And thanks to all of you for joining the W3rd quarter, 2023 earnings call.
Thank you Natalie.
And thanks to all of you for joining our third quarter 2023 earnings call.
Speaker 3: I have several meaningful updates to provide from the quarter, but first we will start with a quick review of the quarterly results.
I have several meaningful updates supervised from the quarter, but first we will start with a quick review of the quarterly results.
In the third quarter revenue came in at $29 $3 million and adjusted EBITDA came in at $3 $2 million Lady.
Speaker 3: In the third quarter, revenue came in at $29.3 million and adjusted EBITDA came in at $3.2 million.
Speaker 3: Larry will dive deeper into these numbers later in the call. Overall, our recent progress on several fronts gives us confidence that the fundamentals of our business are intact and Care Cloud remains on track to return to growth next year.
Lady will dive deeper into these numbers later in the call overall of our recent progress on several fronts gives us confidence that the fundamentals of our business are intact and Gaslog remains on track to return to growth next year.
Speaker 3: As an example, we are pleased to report that after the close of the quarter, we find the credential in contract with an existing force customer that we believe has potential to be quite significant. Implementation of this is already underway, so we can expect to recognize a portion of that revenue before we end.
As an example, we have.
We used to report that after the close of the quarter.
Signed a credentialing contract with an existing <unk> customer that is.
We believe has potential to be quite significant implementation of this is already underway. So we can expect to recognize a portion of that revenue is what you get.
Hey.
This quarter, we continued to make meaningful progress on several ongoing projects and goals, including.
Speaker 3: This quarter, we continue to make meaningful progress on several ongoing projects and goals, including
Speaker 3: The launch of a regenerative AI solution, the stabilization of MERSR, our project-based professional service business.
The launch of our Virgin <unk> solution.
The stabilization of Medisoft I would project based professional service businesses.
Speaker 3: And the decisive action we took to align over cost infrastructure to our highest value business opportunities.
And the decisive action, we took to align our cost infrastructure build their highest value business opportunities.
Speaker 3: Digging deeper into our progress in the third quarter, I will start with an update on generative AI. We recently launched our Cirrus AI solution, which incorporates generative AI technology.
Digging deeper into our progress in the third quarter I will start with an update on Gen <unk>.
They recently launched a world citizen AI solution, which incorporates gen politically I technology.
Speaker 3: Just two weeks ago, we had the opportunity to demonstrate this solution at a Google-sponsored conference that brings together thought leaders across the healthcare industry.
Just two weeks ago, you had the opportunity to demonstrate the solution.
Sponsored conference that brings together thought leaders across the health care industry.
Speaker 3: to kick off our go-to market strategy for this solution. Through the end of the year, we will be offering it to our client base for your charge.
To kick off our go to market strategy for this solution to the end of the year, we will be offering it to over to client base free of charge.
Speaker 3: The trial period will allow them time to better understand the benefits and how they can leverage them in their specific practice.
The strike period will allow them time to better understand the benefits and how they can leverage them in their specific practice.
Speaker 3: They will then have the opportunity to purchase the competitively priced solutions starting in 2024. In total, we have launched three AI solutions, two for EHR and one for RCM. And that is just the tip of the iceberg for us. We believe that our ability to stay ahead of the curve on the latest technology will give us a competitive edge in the market by improving the commercialization of our solution and are actively working on additional features.
It will then have the opportunity to purchase the competitively priced solutions starting in 2024.
In total we have launched three AI solutions to for EHR and one for RCM embedded just the tip of the iceberg for us.
Leave that to the ability to stay ahead of the curve on the latest technology that gave us a competitive edge in the market improves.
Proving the commercialization of our solution and are actively working on additional features.
Speaker 3: Over the past few months, we have taken effective steps towards stabilizing our medical professional services business.
Over the past few months, we have taken effective steps towards stabilizing couple Medisoft professional services business.
Speaker 3: We have continued to strengthen our relationship with Meditech, one of the dominant EHR provider, and over the past two years, Medify has evolved from a consultancy firm that mainly relied on short-term staffing projects for a single vendor to a more diversified and sustainable revenue model.
Continued to strengthen our relationship with magnetek, one of the dominant EHR provider and over the past two years Medisoft had award from a consultancy firm that mainly relied on short term staffing projects for a single vendor to a more diversified and sustainable revenue model.
Speaker 3: Our RCM practice has grown by almost 300% since 2021. And we also see a strength with our technology transformation practice.
But RCM practice has grown by almost 300% since 2021, and we also see a strength of our technology transformation practice.
Speaker 3: We are optimistic for 2024 as we see a significant shift in our professional services, MedSR, pipeline makes towards RCM and tech transformation and a strong demand for these solutions. In addition, today we have $30 million in active pipeline opportunities versus $12 million entering 2023.
We are optimistic for 2024 as we see a significant shift in our professional services made it's our pipeline mix towards RCM and tech transformation and the strong demand for these solutions. In addition, today, we have $30 million in active pipeline opportunities versus 12.
Yeah.
Entering 2023.
Speaker 3: We are confident because of the pipeline size and mix that we can leverage our expertise and reputation to capture opportunities and deliver value to our clients and shareholders.
We're confident because of the pipeline size and mix that we can leverage that expertise and reputation to capture opportunities and deliver value to our clients and shareholders.
Speaker 3: Lastly, as we announced in an eight-kane early October , we are actively working on improving profitability and positive free cash flow by aligning costs with highest return opportunities. We expect most of the positive impact will be realized in 2024. Larry will discuss this in more details in a few minutes. All of these factors just discussed give us increased confidence that we can return to profitable growth next year. Th cluster Cash toll.
Lastly, as we announced in an 8-K in early October you had actively working on improving profitability and positive free cash flow by aligning costs with the highest return opportunities.
We expect most of the positive impact will be realized in 2024.
Barry will discuss this in more details in a few minutes.
All of these factors just discussed give us increased confidence that we can return to profitable growth next year.
Now turning to an update on our business opportunities.
Speaker 3: As discussed earlier this year, we revamped our website when hands-to-user experience and highlight all of our solutions. Our next generation end-to-end therapy solution is life on our upgraded website. And we recently launched a marketing campaign to highlight this offering. We are confident that this campaign, along with the new website, will go along by in raising the awareness of this solution in the physical therapy market.
As discussed earlier this year, we revamped overburden side to enhance the user experience and highlight all of our solutions.
And the next generation and Duane therapy solution is life on our upgraded website and we recently launched a marketing campaign to highlight this offering.
We're confident that this campaign along with the new website will go a long way in raising awareness of the solution.
Physical therapy market.
Next.
Speaker 3: I will provide an update on our opportunity in the Middle East. We are pleased to announce that we are making meaningful progress on our global expansion efforts in that region.
I will provide an update on our opportunity in the middle East. We are pleased to announce that we are making meaningful progress on other global expansion efforts indexation.
Speaker 3: We have been strengthening our business development and establishing a permanent presence in Dubai UAE near the innovation and technology hub of Dubai Internet City.
We have been strengthening our business development and establishing a permanent presence in Dubai UAE near the innovation and technology hub off the by Internet City.
Speaker 3: Our product teams have been ensuring that our system adhere to the UE Health Data Law, which requires that health data is stored within the country. And at the same time, we are working diligently to integrate our system with the national database, which operates similarly to a health information exchange. We are also excited to present our solutions and services at Arab Health Conference in Dubai in Q1 of 2024.
Our product teams had been ensuring better where system that here to the U E health data law, which requires that health data is stored within the country.
And at the same time, we are working diligently to integrate our system at the National database, which operates similarly to a health information exchange.
We're also excited to present, our solutions and services that are upheld conference in Dubai in Q1 of 2024.
Speaker 3: Arab health is one of the largest healthcare conferences with over 100,000 expected attendees from 180 countries. We look forward to providing you an update on our earnings call next year.
Our own health is one of the largest health care conferences with over 100000 expected attendees from 180 countries.
Look forward to providing you an update on our earnings call next year.
In terms of upcoming milestones <unk> cloud is preparing to launch their cloud crime are state of the yard cloud based electronic health record platform designed to meet modern physicians demands.
Speaker 3: In terms of upcoming milestones, CareCloud is preparing to launch CareCloud Prime, a state-of-the-art cloud-based electronic health record platform designed to meet modern physicians' demands.
Speaker 3: Formerly known as CareCloud Go, this project was a significant goal following CareCloud's acquisition a few years ago.
Formerly known as care Cloud go. This project was a significant goal following care clouds acquisition, a few years ago.
Speaker 3: Keklau Prime offers advanced features, such as cloud-based accessibility, seamless interoperability, user-friendly design, improved patient engagement, and AI-powered clinical decision support.
Prime offers advanced features such as cloud based accessibility seamless interoperability user friendly design and improve patient engagement and AI powered clinical decision support.
Speaker 3: It includes tools like Syrus Jack for staff interactions, global search for navigation, and unified patient records for proficient data exchange and presiding efficiency.
It includes tools like citizen Chad for staff interactions global search for navigation and unified patient records for fishing, they they exchange emphasizing efficiency.
Speaker 3: It also provides health providers with customizable templates, as well as provide support for value-based care model tools, such as proactive care management, remote patient monitoring, and seamless telehealth integration.
It also provides health providers that customizable templates as well as provide support for value based care model tool such as proactive care management remote patient monitoring and seamless telehealth integration.
Speaker 3: Take low prime is more than just another product in our portfolio. It represents our commitment to continually improve and innovate to better serve over clients evolving me.
<unk> Prime is more than just another product and number of portfolio it should be.
<unk> commitment to continually improve and innovate to better serve our clients' evolving needs.
In summary, although we faced some headwinds this year, we entered the fourth quarter feeling confident after the steps we took to stabilize the business and re prioritize cost structure because of these strategic actions. We believe we have made it faster with low point and on an upswing.
Speaker 3: In summary, although we say some headwinds this year, we enter the fourth quarter, feeling confident after the steps we took to stabilize the business and reprioritize cost structure. Because of these strategic actions, we believe we have made it fast, at a low point in our own upswing.
Speaker 3: The steps we have taken and the progress made this water give me confidence in re-creating our full-year guidance and our ability to return to growth in 2024.
The steps, we have taken and the progress made this quarter give me confidence in reiterating our full year guidance and have an ability to return to growth in 2024.
Speaker 3: Now, I will turn the call over to Larry to give you a closer look at the numbers. Larry.
Now I will turn the call over to Larry to give you a closer look at the numbers.
Larry.
Speaker 4: Thank you, Hadi, and good morning everyone. Before I review the third quarter results, I want to share a little more detail on our recent cost realignment initiative.
Thank you Heidi and good morning, everyone before I review, the third quarter results I want to share a little more detail on our recent cost realignment initiative.
The third quarter was my first full quarter as carrier cloud CFO.
Speaker 4: The third quarter is my first full quarter as Care Cloud CFO .
Speaker 4: I took a fresh look at our cost infrastructure and along with Hadi and the board, we made some tough but necessary decisions to pare back in certain areas of the business.
Took a fresh look at our cost infrastructure and along with how do you and the board we made some tough but necessary decisions to pair back in certain areas of the business.
Speaker 4: As you know, transformation decisions are difficult, but the goal was to ensure the company continued investing in growth, while also establishing a sustainable foundation for improvement and positive free cash flow and profitability.
As you know transformation decisions are difficult, but the goal was to ensure the company continued investing in growth. While also establishing a sustainable foundation for improvements and positive free cash flow and profitability.
Speaker 4: Most of the actions are scheduled to take place in the fourth quarter, but I anticipate some will carry over into 2024.
Most of the actions are scheduled to take place in the fourth quarter, but anticipate some will carryover into 2024.
We.
Speaker 4: We expect these changes in our expense profile to result in approximately $10 million of annualized free cash flow improvement. Approximately $5 million are related to operational expense savings and the other half includes the completion of R&D investments, specifically our next generation Care Cloud Prime platform that Hadi just discussed.
These changes in our expense profile to result in approximately $10 million of annualized free cash flow improvement.
Approximately $5 million related to operational expense savings and the other half includes the completion of R&D investments specifically, our next generation care cloud Prime platform that how do you just discussed.
Speaker 4: This has a two-fold benefit for us. First, we will see a notable reduction in our capitalized software going forward. And second, we now anticipate realizing the ROI for these investments.
This has a twofold benefit for US first we will see a notable reduction in our capitalized software going forward and second we now anticipate realizing the ROI for these investments.
Speaker 4: Now turning to the third quarter results, revenue of $29.3 million was leveled sequentially and compared to $33.7 million year over year. The primary reason for the year-over-year decline was a loss of the two customers due to health systems mergers.
Now turning to the third quarter results revenue of $29 $3 million was level sequentially and compared to $33 $7 million year over year.
The primary reason for the year over year decline was a loss of the two customers due to health systems mergers.
Speaker 4: Our wellness offering continues to gain traction, showing growth in the monthly sequential number of patients.
Our wellness offering continues to gain traction showing drove in the monthly sequential number of patients.
Speaker 4: Adjusted EBITDA for the quarter of $3.2 million reflects a margin of 11 percent.
Adjusted EBITDA for the quarter of $3 $2 million reflects a margin of 11%.
Speaker 4: This compared to an adjusted EBITDA of $4.8 million a year ago.
This compared to an adjusted EBITDA of $48 million a year ago.
Speaker 4: The decline in quarterly EBITDA was a combination of lower revenue and related margins partially offset by lower selling, marketing, general, and administrative costs in the current period.
The decline in quarterly EBITDA was a combination of lower revenue and related margins, partially offset by lower selling marketing general and administrative costs in the current period.
Speaker 4: Turning to the balance sheet and cash flow, at the end of the third quarter, we had a $6.4 million in cash and net working capital of $5.5 million.
Turning to the balance sheet and cash flow at the end of the third quarter, we had a $6 $4 million in cash and net working capital of $5 5 million.
Speaker 4: Cash provided by operations was $4.3 million and there was $3.2 million in net cash used in investing activities.
Cash provided by operations was $4 $3 million and there was $3 $2 million and net cash used in investing activities.
Speaker 4: Finally, we are reiterating our 2023 guidance for revenue between $120 and $122 million and adjusted EBITDA between $15 and $17 million.
Finally, we are reiterating our 2023 guidance for revenue between 120 and $122 million.
Adjusted EBITDA between 15 and $17 million.
Speaker 4: A combination of factors, including the credentialing contract, Medisor's meaningful contract ramping, and continued solid execution in our core revenue cycle business provides the pathway to achieving our full year expectations.
The combination of factors, including the Credentialing contract.
<unk> has meaningful contract ramping.
Continued solid execution in our core revenue cycle business provides a pathway to achieving our full year expectations.
Speaker 4: In conclusion, we have taken tough but necessary actions to realign for growth and steady improvement in our financial performance.
In conclusion, we have taken tough, but necessary actions to realign for growth and steady improvement in our financial performance.
I believe will not only in the year from a position of strength, but be better positioned going into 2024.
Speaker 4: I believe we'll not only end the year from a position of strength, but be better positioned going into 2024. And that's what we're going to do in 2024.
Speaker 5: With that, I'll now turn the call over to Mahmoud for his closing remarks. Mahmoud. Thank you, Larry.
With that I'll now turn the call over to my mood for his closing remarks.
Mood.
Thank you Larry.
As expressed earlier.
Speaker 6: We feel that our solutions are very well positioned in the marketplace.
We feel that our solutions are very well positioned in the marketplace. The team is ready and fully engaged to drive future success and shareholder value.
Speaker 6: The team is ready and fully engaged to drive future success and shareholder value.
Speaker 6: I would like to thank our employees, customers, and shareholders for all they do to support CareCloud's mission.
I would like to thank our employees customers and shareholders for all they do to support their cloud submission.
Speaker 6: Let's open the call to questions, operator.
Let's open the call to questions operator.
Speaker 1: Thank you. We will now begin the question answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request.
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Speaker 1: The first question comes from Jeffrey Cohen with Latimburg-Allman. Please go ahead.
The first question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.
Speaker 7: Oh, good morning and thank you very much for taking the questions.
Oh, good morning, and thank you very much for taking the questions. Just a couple for me and I guess firstly on for.
Speaker 7: a couple from our end. I guess firstly for Larry, could you maybe equate the guidance and the adjusted EBITDA to free cash flow or cash production or net income?
Larry could you maybe equate the.
Guidance and the adjusted EBITDA to our free cash flow or cash production or net income.
Speaker 4: Uh, we would have to, uh, put that out separately. Definitely. Absolutely. You can can do that as a follow up.
We would have to put that out separately definitely I, absolutely can do that as a follow up.
Speaker 7: Okay, perfect. And then could you talk a little bit about the, the serious AI arrangement with with Google and which offering specifically that's going to pertain to and if that also ties over to the pride platform that you plan to introduce?
Okay, perfect and then.
Could you talk a little bit about the.
Cirrus AI arrangement with with Google and which are offering specifically, that's going to pertain to and if that also ties over to a party platform that you plan to introduce.
Speaker 3: Good morning, Jeff. Thank you. Thank you for the question. And generative AI, I think one of the biggest, the highest discussed topic nowadays in any industry. So for us too, as we mentioned earlier in the year, we started focusing towards how we can leverage this generative AI technology into our platform to help the health care market segment, the health care industry. So we are working on a number of other various different features to be incorporated. And we will keep on announcing as those features will be incorporated. But we started with, for now, we looked at on both fronts, the back end improvement, how we can leverage the generative AI from where we can improve the revenue cycle management work by our employees, which later on will also be available in the SAS model. As you know, one of the complex procedure is the appeals process, where you need to appeal certain decisions of the insurance companies, and especially into the out-of-network space or the worker comp space.
Hey, good morning, Jeff. Thank you. Thank you for the question and generally we either I think the most one of the biggest the highest discussed topic nowadays in any industry. So for us to as we mentioned earlier in the year, we started focusing towards how we can leverage the <unk> technology into our plan.
Form to help the healthcare market segment, the health care industry.
Where do we are working on number of the various different features to be incorporated and we will keep on announcing as those features there'll be incorporate days, but we started with for now we looked at on the both fronts. The backend improvement how we can lever the generating we I from where we can improve the revenue cycle management.
A buyable employees, which later on will also be available in the SaaS model S.
As you know that one of the one of the complex procedure is the appeals process, where you need to appeal certain decisions of the insurance companies and especially into the outlook netbooks phase or the worker comp space. So with the help of the generating the I know assistant can systematically generate appeals and <unk>.
Just on the internal testing, we yes, we have a.
The Brazil seems to be very promising and we believe over the payment processing cycle as well as the the collection of two those appeals should improve with the help of that on the front end, which is more important the focus on retard. The most important thing for any physician is the clinical decision.
And so.
When the patient walks in.
Often in order to record the compete session, where the Doctor has to look at for example, the mitigation by lab history. The diagnosis. So many different pieces of information the provider has to look at and then come up with the next diagnosis and the test and the like so think about this as the as the either.
Speaker 3: So many different pieces of information the provider has to look at and then come up with the next diagnosis and the test and the like.
Speaker 3: So think about this as either it's a second opinion or it will system will suggest to the provider these could be the potential diagnosis procedures. These probably could be the suggestive orders, the lab tests that the provider should order. And based on all that gives them a recommendation. Now it's up to the provider to accept it as is or just look at it if there is certain aspects that needs to be changed, removed and added and can complete that. And it also even suggests the medicine, the medication.
It's a second opinion or it just it will system will suggest to the provider. This could be the potential diagnosis procedure. These probably could be the suggestive orders the lab tests that the provider should order and based on all of that gives them a recommendation.
Speaker 3: procedures, these probably could be the suggestive orders, the lab tests that the provider should order. And based on all that, gives them a recommendation. Now it's up to the provider to accept it as is or just look at it if there is certain aspects that needs to be changed, removed and added and can complete that. And it also even suggests the medicine, the medications. I think the thing is, this is in many cases, think about the rare diseases. There could be some instances where the provider may not be able to quickly diagnose and may have been able to diagnose after multiple visits.
And now it's up to the provider to accept it as is or dislocated. If there is certain certain aspect that needs to be changed or moved been added and can compete there.
And it also even suggest the medicine the mitigation. So I think that the thing is this is and in many cases I think about the rare diseases. It could be some instances there.
Speaker 3: So I think the thing is, in many cases, think about the rare diseases. There could be some instances where...
Speaker 3: The provider may not be able to quickly diagnose and may have been able to diagnose after multiple visits. Now, with this help and this generative AI, as the model will keep learning more and more, the results will keep on improving. So we should be able to diagnose or treat those diseases much earlier than they would have.
It provided it may not be able to quickly diagnose and may have been able to diagnosed after multiple visits now with this health in this agenda is the model will keep learning more and more results, we'll keep on improving.
It should be able to diagnose or treat those diseases much earlier than they would have so from the business standpoint.
Speaker 3: So from the business standpoint, so one is the adaptability. We need to make sure that the doctors and the users understand.
One is the adaptability, we need to make sure that the Doctor then the users understand.
And realize the importance of such features severe turning it on at least for now until the end of the year for your cost.
Speaker 3: There won't be any charge. It will be a risk-free trial. The clients can start using it, get accustomed to it. And then entering into the next year, we have a plan to start pricing it out on the license basis. We will announce the price once that gets finalized. And of course, the second thing is the market positioning, the marketability of our product. If you look at our competitor, I think all the competitors, everyone is trying to come up with some solution. So this is at the high level. And any further questions, I'll be happy to even connect with you offline to explain.
There won't be any charges will be a risk free trial. The clients can start using it get accustomed to it and then entering into the next year, we have a plan to stock price and get out or on the license basis, we will announce the price once that gets finalized and I'll go into the second thing is the the market positioning the mark.
The ability of other product if you look at it over a competitor I think all the competitors everyone is trying to come up with some solution. So this is at the high level and any any further questions I can I'll be happy to even connect with you offline to explain further.
Speaker 3: So this is at the high level and any further questions I can I'll be happy to even connect with you offline to explain further.
Okay.
Speaker 7: Thank you, Heidi. That's helpful. And then, lastly for us, could you give us a sense of your OUS business now and give us a sense of what you may anticipate going forward on the growth or aggregate revenue for OUS?
Thank you Heidi that's helpful. And then lastly for US can you give us a sense of your O U S business now and give us a sense of what you may anticipate going forward on the growth or aggregate revenue for our U S.
Speaker 3: Okay, so you probably are referring to our Middle East, the Middle East opportunity that we are focusing on. So we are making continuous progress. And for this year, as you went on the last call I mentioned, our goal is to at least being able to sign at least a contract or a few contracts and recognize some revenue into the next year. We will incorporate that, include that when we issue the guidance for the next year on the next earnings call. But in terms of our progress, so if you think about it on the UAE side, there are a number of steps. One is incorporating the entity, we have completed that. Second thing is getting the license to conduct the business in different categories. So we have completed that. Third step is onboarding at least the management employees and certifying them so they should be able to transact the business in the UAE. So we are in this third process. On the other side, two of the friends.
Oh, Okay, so you're probably referring to over the middle East.
The middle East opportunity that we are focusing on so we are making continuous progress and for this year is even on the last call I mentioned, our goal is to achieve being able to sign at least a contract a few contracts.
And recognize some revenue into the next year.
We will incorporate that include deck when we issued the guidance for the next year on the next earnings call.
But in terms of your progress if you think about it on the UAE side. There are a number of steps one is incorporating the entity. We have completed the second thing is getting the license to conduct our business in different categories. So we have completed that third step is on onboarding that piece the management employees and certify.
<unk> them, so they should be able to transact the business in the UAE. So we are in this process on the other side two other fronts. One we are actively working on at least three one large and two smaller opportunities there.
Speaker 3: One, we are actively working on at least three, one large and two smaller opportunities there. And on our technical side, IT side, they have to make sure that our product certifies to the local requirements, such as making sure the data stays within the UAE. And the secondly, once we have a client, we have to start working with authorities to get the EHR and the different other items off the platform certified. I hope that...
And are there.
Our technical say Daiichi side, they have to make sure that over product certify to the local requirements such as making sure the data stays within the UAE and secondly, once we have a client we have to start working with the authorities to get the EHR and the different other items off the platform certified.
I hope that answers the question.
Yes, perfect. Thanks for taking our questions.
Speaker 7: Yes, perfect. Thanks for taking our questions.
Thank you Jim.
The next question comes from Neil Chatterji with B Riley.
Speaker 1: The next question comes from Neil Chatterjee with B. Riley, you go ahead.
Go ahead.
Hi, good morning, and thanks for taking our questions.
Speaker 8: Um, just maybe just on the quarters, maybe just wanted to just, uh, see if you talk more about any, any seasonality you might have seen, you know, in 3Q and what kind of gives you the confidence. And, and I guess that kind of the sequential ramp or strength at the 4th quarter, uh, with reaffirming the full year guidance, uh, you know, was there any, you know, MedSR projects impact that, that might've shifted from 3Q to 4Q?
Maybe just on the quarters, maybe just wanted to just.
See if you can talk more about any any seasonality you might've seen in <unk> and what kind of gives you the confidence in and I guess that kind of sequential ramp our strength at the fourth quarter.
With reaffirming the full year guidance.
Was there any med SRO project impact that that might have shifted from <unk> to <unk>.
Yeah, Gary so thanks for the question as we look at Q3 to Q4.
Speaker 4: Yeah, I mean, it's Larry. So thanks for the question. As we look at Q3 to Q4, the Q3 sees now really similar to Q3 last year. Again, the big impact just year-to-year comparison was the two large health system murders. Now, as we look at Q4, a couple key factors, one, certainly is the professional services metas are really great developments there on the contract wins. Also, we paid out the press release about the credentialing and the revenue that we're going to start to recognize the portion of that.
Q3, CS now really similar to Q3 of last year again, the biggest impact just year over year comparison was due to two large health system mergers now as we look at Q4, a couple of key factors.
One zero use the professional services medisoft.
You know really great development, there on sort of.
The contract wins.
Also we put out press release about the Credentialing and the revenue that we're going to start to recognize a portion of that.
Speaker 9: Q4, so.
Q4 so.
Speaker 4: We really, really are fully our guidance.
We reiterated our full year guidance.
The connection.
Okay.
Yeah.
Okay.
Yes.
Speaker 4: Yes, sorry, I wasn't sure if you were done. Oh, okay. Yeah, that's okay. No, sorry. It looks like the phone went off. Yeah, no, we were also. So just complete that. So the, the meta-s are really the key driver in Q4. And then also just our core RCM business will, with the solid execution will also support the, the confirmation for the full year guidance. So.
Yeah, sorry, I wasn't sure if youre done okay.
Alright, it looks like the one $1 million.
So just because we've got so the <unk> is really the key.
Driver in Q4, and then also just in our core RCM.
Business will.
With the solid execution will also support the <unk>.
The confirmation for the full year guidance. So all of that has really come together and it just gives us confidence also going into 2024 with our backlog. We commented on the nowhere. We are also with the professional services.
Going into the next year or so.
Really come together and you know as we looked at 2023, it's a transformation year from the health system mergers.
And just setting us up for.
For for growth into 2024, but we wanted to get there for the finished strong and then go into the next year from that same position of strength.
Speaker 10: within to 2024. But you know we want to get there for the finish strong and then go into the next year from the same position as strength. Great and just maybe just want to follow up on that. Just in terms of you know kind of on that metas our business. I mean just looking at the chart with kind of the mix you know look like you know MediTec and RCM were kind of thrown in the mix. What's driving some of that traction you're getting on that side? I think an MVO.
Speaker 10: Great. And just maybe just one follow up on that. Just in terms of, you know, kind of on that metastore business. I mean, just looking at the chart with kind of the mix, you know, look like, you know, Meditat and RCM were, it had kind of thrown in the mix. What's driving some of that traction you're getting on that side?
Great and then maybe just one follow up on that just in terms of thought.
You know kind of on that matter to our business I mean, just looking at the chart with kind of the mix.
Like.
That attack in RCM.
Getting thrown in the mix, what's driving some of that traction you're getting on that side.
Speaker 3: I think and we have the stuff like we have Dwight Garvin who's heading the Medisar business so that I can start and then he can he can finish the question. If you if you think about it, the overall industry, the largest players in the health system spaces, let's say over between somewhere between 40 to 50% market share. So that's the relation we lost. So until we acquired Medisar, the primary focus of the organization was
I think and we have just down slightly of Dwight Garvin, who is heading the mega solar business. So that I can start and then he can he can finish the question.
If you think about the overall industry the largest player in the health system space is let's say over between somewhere between 40% to 50% market share. So that's the relation we lost so until lead quiet made as far as the primary focus of the organization was from in terms of bringing the business end to end.
Speaker 3: from in terms of bringing the business and was that one the top most player in the market.
Was that one of the top most a player in the market. Once we lost that opportunity. So we started working towards the next in the line and Meditech is among the top three I would say in that space. So overland time over the last one year, we have been able to establish not unable to our relationship with Mediatek.
Speaker 3: Once we lost that opportunity, so we started working towards the next in the line and Meditech is among the top three, I would say in that space. So over the time over the last one year, we have been able to re-stab, let's not only of a relationship with Meditech, but in addition to that, our marketing strategy was more oriented towards finding the opportunities for Meditech. So that's one. The second one is the RCM.
But in addition to that they were marketing strategy was more oriented towards finding the opportunities for magnetek. So that's one.
Second one is the RCM.
Once when the when we acquired a marathon RCM related revenue was hardly a $1 billion out of $30 million roughly that they were doing that has improved improved by multiple forward now because that was also if you remember wonderful were negative a wonderful the reason for the acquisition that these health system relationship.
We should be able to leverage those.
Because those relationships, we can we cannot talk to the CEO. The CFO, there and should be able to cross sell and upsell of our RCM services. So those two are seems to be becoming the primary drivers of what were made at R. R.
Speaker 7: talk to the CEO , the CFOs there, and should be able to cross seven up-cellable R-C-M services. So those two are seems to be becoming the primary drivers of over-medicine or updated medicine, the business. Those are the two major contributors. But do I, if you would like to add anything, please go ahead. Sure, thank you, Hadi. And just the kind of experiment on what Hadi said. What we're seeing in our R-C-M space is really moving from that advisory model where you have short-term engagements and moving those advisories into more of a managed services. So now we can take our relationships, establish throughout all other practices, sell them to our advisory services and turn those...
David Meredith our.
Isn't it.
Those are the two major contributors, but the way to a few people lightweight anything. Please go ahead.
Sure. Thank you Heidi and just to kind of expound upon that what he said and what we're seeing in our RCM space is really moving from that advisory model.
Speaker 7: Sure, thank you, Heidi. And just to kind of experiment on what Heidi said, what we're seeing in our RCM space is really moving from that advisory model where you have short-term engagements and moving those advisories into more of a managed services. So now we can take our relationships established throughout all other practices.
Do you have short term.
Engagements and moving those advisories into more of a managed services. So now we can take.
Our relationships established throughout all of our other practices.
Speaker 7: sell them to RCM advisory services, then turn those into long-term recurring revenue managed services models. And that's really what we're trying to target.
So there are some advisory services and turn those into long term recurring revenue managed services model and that's really what we're trying to targeting.
Speaker 7: I'm in the same time expanding on our Meditech business really making some very key hires in the development side this year and those have allowed us to really strengthen that partnership with the Meditech.
The same time, expanding our meditech business really making some very key hires in the business development side. This year and those have allowed us to really strengthen that partnership with them Meditech.
I hope that answer your question.
Speaker 8: Yeah, great. You know, thanks for that and I'll hop back into you.
Yeah great.
Thanks for that and I'll hop back in the queue.
Thanks, Dan.
Speaker 1: Once again, if you have a question, please press star, then one.
Once again, if you have a question. Please press Star then one.
Speaker 1: The next question comes from Alan, please with Maxim Group.
The next question comes from Allen Klee with Maxim Group.
Speaker 7: Go ahead. Yes. Good morning. For the Care Cloud Prime offering that's coming. Talk about how that compares to what you have today and how you think about would this be an upsell to existing clientele or new customers and would there be a price differential? Just to help us understand a little more about that. Thank you.
Please go ahead.
Yeah.
Good morning for the <unk> cloud.
Offering that's coming.
Talk about how that compares to what you have today and how you think about what.
This began to upsell to existing clientele or for new customers and with the be a price differential.
Help us understand a little more about that thank you.
Speaker 3: Thanks, Alan. Good morning. Thanks for the question. So there's a couple of, the aspect, the couple of ways we need to look at. One is every time, and if we go back, our first system was in 2004, 2005, our first generation of the entire solution. And then we kept bringing the new next generation solutions after every couple of years. And the reason that triggers is one is the compliance requirement or the regulatory requirements or the market expectation, what are the new features that's needed. And the other side is the technology platforms.
Thanks, Ed and good morning, Thanks for the question.
So there are couple of aspect a couple of ways you we need to look at one is every time and if you go back over for our system was in 2004 2005 over the first generation of over the entire solution and they'd be kept bringing the new next generation solutions offer every couple of.
Years, and the reason that traders is one is the compliance requirements of the regulatory requirements are than market expectation. What are the new features that's needed and the other side is the technology platforms. This is a very rapidly technology changing the world every after five six year the technology become.
Almost obsolete and in order to have a more viable reliable and effective product you need to bring the products to the next technology platform. So this on one on the technological perspective this will be on the new back end technology.
Second thing is it will have more features we are focusing to have it more features towards value based care models preventive medication.
<unk> healthcare and the like and number of other things more effective better chart sharing model versus.
Speaker 3: are sharing model versus the previous model. So I think all of those things together, and another key aspect is when we acquired Care Cloud Health, they were working on this platform for the last number of years. And for us, we have another platform which we call Talk EHR. So they, both of those platforms are in today's world, are active. We can sign up the client. They can service the client. We have both the platform or the certified platform. So this is going to be our next generation with ultimately over the next number of years. Both of those two sets of client, we expect V4C would be transitioned into this future respect platform. We're not planning on doing it.
The previous model.
So I think all of those things together and another key aspect.
The aspect is when required care cloud held they were working on this platform for the last number of years and for US We had another platform, which we call. It hockey HR Sunday both of those platforms are in today's world are actively began began sign of the client they can service decline.
Speaker 3: When we acquired Tier Cloud help, they were working on this platform for the last number of years. And for us, we have another platform which we call Talk EHR. So they, both of those platforms are in today's world, are active, we can sign up the client, they can service the client, they have both the platform or the certified platform.
Both the platform the certified platform. So this is going to be over next generation to make here over the next number of years both of those two sets of client we expect lead foresee would.
It would be transitioned into this futuristic platform, we're not planning on doing it.
Starting next month whoever would like to transition had been on and we would love to bring them onto this new platform as the seamless transition nor additional an extra cost for them. So this will become over flagship platform going forward with the next generation of health care features and capabilities and the <unk>.
Speaker 3: and the technology platform.
Acknowledging platform.
Speaker 7: Thank you. My other question is if you could just talk a little bit about the credentialing contract and what you're doing and how you think about the opportunity there.
Thank you my other question is if you could just talk a little bit about the credentialing.
Contract then what.
What what you're doing and then how you think about the opportunity there.
Speaker 3: That's a great question, Neil. And credentialing, and we have the car with us too, and he's the one who was working on this relationship. I can get started and then both turn the hand it over to car. So from the service or the product, for us, when we talk about our end-to-end revenue tech and able revenue cycle management services, the first piece into the revenue cycle, we believe it's start or begin with the credentialing. So if you do not credential, credential, credential, acclite effectively, we won't be able to generate the revenue or provider. Even if the provider see the patient, the reimbursement either will not happen or will not come at the level, the optimal level it should come.
Great question Neal.
Credentialing and we have.
Karl with two and he's the one who was working on this relationship I couldn't I didn't get started and then.
I hand, it over to Carl.
From the service on the project because when we talk about end to end revenue Tech enabled revenue cycle management services.
First piece into the revenue cycle, we believe it's doctor begins with the Credentialing. So if you do not credential at Prudential of client effectively you won't we won't be able to.
We generated revenue or provide even if a provider see the patient reimbursement either will not happen or will not come at the level. The optimal level. It should it should go we have been working on our site internally on building up a platform, which can help us at the back end help us track systematically mod.
Speaker 3: We have been working on our side internally on building up a platform which can help us.
Speaker 3: at the back end help us track systematically more effectively the applications that we have fired wherever the electronic submission is possible. System has the capability to do that. Now it flags the application that needs the follow up. And now also with the help of the different AI, many of the applications can be completed systematically without any human intervention, which improves the accuracy level and also the staff time. That's one. We also have been, and we mentioned in one of the last, when we announced this as part of that release.
Speaker 3: systematically, more effectively, the application that we have fired wherever the electronic application submission is possible, the system has a capability to do that. Now, it flags the application that needs to follow up. And now also with the help of the different AI, many of the applications can be completed systematically without any human intervention, which improves the accuracy level and also the staff time. That's one. We also have been and I may be mentioned in one of the last, one of the when we announced this as part of that earning.
Secondly, the applications that <unk> the electronic athletes submission as possible system has the capability to do with acknowledged flagged application that needs. The follow up and now also with the help of the different AI. Many of the applications can be completed systematic D without any human intervention, which improves the accuracy.
Level and also.
The staff down.
That's one that we also have been and I, maybe mentioned in one of the last one of the when we announced this is part of that earning that's part of the release, we are working on delegated Credentialing certification late establishing the CBO think about that CBOE is the insurance company has delegated their credentialing rule.
Speaker 3: We are working on delegated credentialing certification like establishing a CBO. Think about it CBO as...
Speaker 3: The insurance company has delegated their credentialing role to the company. So, I put that to the top in here for commercial insurance take at an average 20 days to credential provider. We believe internally we should be able to credential the same provider at let's say five days instead of the 20 days.
To the company, so hypothetically talking if a commercial insurers stake at an average 20 days to credential or provider. We believe internally, we shouldn't be able to credential. The same provider, let's say five days instead of the 20 days. So this is our overall credentialing capability.
Speaker 3: So this is our overall credentialing capability has become very much strengthened and we think that we can go out and start marketing this credentialing more effectively. So with that, this is our first large contract we have been able to sign in Vanuja Kau. Let's share some details please. Yes. So, um...
Does it become very much strengthened and.
We think that we can go out and start marketing this.
Credentialing more effectively so Wednesday. This is our first large contract we have been able to sign language called share. Some some details. Please yes. So.
Speaker 11: So the relationship met a need of the customer to make sure that their clients were credentialed so that when they were doing revenue cycle work.
So the relationship Madden need of the customer to.
To make sure that their clients work with <unk>, so that when they were doing revenue cycle work.
Speaker 11: they were getting paid for those services. So we were able to come in at a price point and a cost structure that was incredibly attractive to them, along with our existing resources that are trained and up to speed. And as Hadi mentioned, the delegated credentialing piece is huge and takes a long time to take care. We've really leveraged our offshore resources. So we've been doing credentialing for our own clients for many, many years.
They were getting paid for those services. So we were able to come in at a price point and a cost structure that was incredibly attractive to them along with our existing.
Resources that are trained and up to speed and as already mentioned the delegated credentialing piece is huge and takes a long time to care, we've really leveraged our offshore resources have been doing credentialing for own clients for many many years and this happened to really fit a need and have gone.
Speaker 11: And this happened to really fit a need and have gone further and that's actually opened up some doors for some additional discussions with some other large companies that need this on a back end. So I really think that there's a fun tap to market for this to come at it in a way that is much more cost effective than those companies that are dedicated credentialing companies. Also has the distinct advantage.
On further and that's actually opened up some doors for some additional discussions with some other large companies need to send it back and so we really think that there is an untapped market for this to.
To come at it in a way that is much more cost effective in those companies that are dedicated credential <unk> companies.
Also has the distinct advantage.
Speaker 11: you know, having one stop shopping. So if we're helping with RCM services or software services, credentialing is a very natural add-on.
Having one stop shopping so that we're helping with RCM services or software services Credentialing is a very natural add on.
Speaker 3: And I'll just to give you some idea in terms of the revenue from this opportunity. As we mentioned, it's at the tens and thousands of providers that we will be positioning or presenting the solution to with their help. Only at 5% penetration into that client base, we are expecting, I would say, something over a million dollars in annualized revenue.
Okay, and then just to give you some idea in terms of the in terms of the revenue from this opportunity.
As we mentioned that the tens and thousands of providers that we will be positioning of presenting this solution to with their help.
And only a 5% penetration to date client base, we are expecting.
I would say.
And something over $1 million in annualized revenue.
Speaker 3: So that's a 5% penetration. So there's a big opportunity there. And as Carl mentioned, this will become a good first case study or a model for us to go and sell the similar with other larger opportunities.
So that's a 5% penetration so there is a big opportunity there and as Karl mentioned this will become a good forest case study of a model for us to go and sell the similar with other larger opportunities.
Thank you very much.
Speaker 1: This concludes the this concludes the question and answer session. I would like to turn the conference back over to Natalie Garcia for any closing remarks.
Is this can include stick.
This concludes the question answer session I would like to turn the conference back over to Natalie Garcia for any closing remarks.
Speaker 2: On behalf of the company, I'd like to thank everyone who has joined the Sunday's call. We appreciate your participation and your interest in us as a company, and we look forward to speaking with you again. Thank you everyone and have a great day.
On behalf of the company I'd like to thank everyone, who has joined US on today's call. We appreciate your participation and your interest in us as a company and we look forward to speaking with you again. Thank you everyone and have a great day.
Yeah.
Speaker 1: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
This concludes today's conference call you may disconnect your lines. Thank.
Thank you for participating and have a pleasant day.
Mhm.
Hum.
[music].
Speaker 12: I P.
Hum.
Yeah.