Q4 2023 American Well Corp Earnings Call
Good afternoon, My name is <unk> and I'll be your conference operator today at this time I would like to welcome everyone to the <unk> Q4 2023 earnings call.
Operator: Good afternoon. My name is Brianna, and I will be your conference operator today. At this time, I would like to welcome everyone to the AMWEL Q4 2023 earnings call. All lines have been placed on mute to prevent any background noise.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press the star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, press the pound key. We ask that you please limit yourself to one question.
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Sue Dooley: Thank you. I would now like to hand the call over to Sue Dooley, Head of Investor Relations with Amwell. You may begin. Hello, everyone.
I would now like to hand, the call over to Sue Dooley head of Investor Relations with an well you may begin.
Hello, everyone welcome to <unk> conference call to discuss our fourth fiscal quarter and year end of 'twenty two 'twenty three.
Sue Dooley: Welcome to AMWL's conference call to discuss our fourth fiscal quarter and year end of 2020, and Sue Dooley of Amwell Investor Relations. And joining me today are Amwell's Chairman and CEO, Dr. Ito Schoenberg, and Bob Shepardson, our CFO. Earlier today, we distributed a press release detailing our, Our earnings release is posted on our website at investors.animal.com and is also available through normal news sources. This conference call is being webcast live on the IR page of our website, where a replay will be archived. Before we begin our prepared remarks, I'd like to take this opportunity to remind you that during the course of the call, we'll make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to the risks and uncertainties described in our filings with the SEC, and actual results or events may differ materially. Unless required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we'll refer to both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings. With that, I'd like to turn the call over to Ido. Thank you, Sue, and hello everyone.
This is sue Dooley of ammo Investor Relations and joining me today are animals, Chairman and CEO, Dr. Sean Burke and Bob Shepardson, our CFO.
Earlier today, we distributed a press release detailing our announcements our earnings release is posted on our website at investors got ammo Dot Com and is also available through normal news sources.
This conference call is being webcast live on the IR page of our website, where a replay will be archived.
Before we begin our prepared remarks I'd like to take this opportunity to remind you that during the course of the call. We will make forward looking statements regarding projected operating results and anticipated market opportunities.
Forward looking information is subject to the risks and uncertainties described in our filings with the SEC and actual results or events may differ materially.
Except as required by law, we undertake no obligation to update or revise these forward looking statements.
On this call, we'll refer to both GAAP and non-GAAP financial measures a reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release with that I'd like to turn the call over to Ido.
Thank you Sue and Hello, everyone Q4 marked the close of the strategic key of one mill.
Ido Schoenberg: Q4 marked the close of the strategic year for America. We advanced the breadth and maturity of our offering and migrated a big part of our installed base to our new platform, Convertible. We have had an excellent reception for our solution. A sizable market is weak, powerful client validation, and we documented compelling proof. Also, we improved focus and efficiency in our company and are committed to continuing optimizing our organization to streamline and propel growth. Based on these 2023 achievements, we begin with high conviction regarding our path to perfection. So tonight, in our guidance, we will provide new transparency into how we are completing this re-platforming period, returning to Google, and how our path to profitability will play out. To begin, here are a few highlights of Q4. The standout event of Q4 was the previously announced win with the Leidos Partnership for Defense, together as described in the $118 million tax.
We advanced the breadth and maturity of our offering and migrated a big part of our install base to our new platform converge, we've had an excellent reception to our solution.
Sizable market wins powerful client validation and we documented compelling proof points.
Also we improved focus and efficiency company.
We are committed to continue optimizing our organization to streamline and propel growth.
Based on these 2023 achievements, we begin 2024 with high conviction regarding our path to profitability.
So tonight in our guidance, we will provide new transparency into how we are completing this re platforming period.
Turning to growth and how our path to profitability will play out.
To begin here are a few highlights of Q4.
Standup you've entered Q4 with the previously announced win with a lighter <unk> partnership for Defense Health.
Together as described in the $118 million on our task order.
Ido Schoenberg: We will modernize and provide digital care enablement for the Defense Health Agency, benefiting that organization's 9.6 million beneficiaries. We are progressing well with deploying our solution for the US military, enabling the DHA's digital first initiative. I'm pleased to report that we have achieved the first milestone as planned and on schedule and launched our digital behavioral health programs for the initial five. In Q4, we also prepared for large payer migrations that had already taken place in Q1. The percentage of Q4 visits on Converge were relatively similar to Q3 when we met our goal for the year a quarter earlier. In the first days of Q1-24, we successfully migrated our strategic lines, elements, and high-end. As a result, visits from Converge today approach nearly 70% of Platform is scaling and performing well. I would also like to mention a sizable Q4 win with Ampler, part of Medibang.
<unk> modernized and provide digital care enablement for the defense Health agency benefiting that organization was nine 6 million beneficiaries.
We are progressing well with deploying our solution for the U S military enabling the Dha's digital first initiatives.
Im pleased to report that we have achieved the first milestone as planned and on schedule and launched our digital be ever health programs for the initial five sites.
In Q4, we also prepared for large payer migrations that have already taken place in Q1.
The percentage of Q4 visits on converge were relatively similar to Q3, when we met our goal for the year quarterly.
In the first days of Q1 'twenty four we successfully migrated our strategic clients elements and Highmark as the result from converged to date approached nearly 70% of total.
Our platform is scaling and performing well.
I would also like to mention a sizable Q4 win with Ambler part of Medibank, one of Australia's largest private health insurance companies, serving more than 3 million customers.
Ido Schoenberg: One of Australia's largest private health insurances, serving more than 3 million. Their initial rollout is planned to include automated programs in digital behavioral health and lifestyle management. I'm proud to say that in Q4, provider and patient satisfaction measured by our Thumbs Up Rating reached all time, also indicative of high client satisfaction. We had an active quota for renewals and expansions, including the following. The HSC in Ireland is expanding the use of our digital behavioral health
Their initial rollout is planned to include automated programs in digital would be ever health and lifestyle management.
I am proud to say that in Q4 provider and patient satisfaction measured by our Sam's operating metric reached all time highs.
So indicative of high client satisfaction, we had an active quarter for renewals and expansions, including the following.
<unk> seen Ireland is expanding use of our digital behavioral health solution, thanks to healthy adoption.
Ido Schoenberg: Thanks to Healthier. Integris Health was a large win for us in Q2 of 2023 and is already a Q4 expansion win. Integris will extend its use of our AD discharge program outside the. With our automated checks, Integrity Behavioral Health specialists can stay closer to patients between visits while prioritizing high-acuity visits. In addition, a virtual nursing solution continues to resonate in the. Related to this, we had a healthy expansion with San Bernardino. Q4 performance demonstrates how our existing client, Fertile Grounds for the future. Continuing on the topic of growth, we are putting the final pieces in place to transform our commercial organization and re-accelerate booking's momentum. Here are a few highlights. We completed a sales model transformation, moving from distinct account management and sales to a combined hunter-farmer model. This will allow us to streamline client interaction. Engage in more strategic selling discussions and sell a broader range.
Integrity health was the large win for US in Q2 of 2023 and is already at Q4 expansion win.
In February <unk> will extend its use of our EDI discharged program outside the AED.
With our automated checks integrity, we ever health specialists can stay closer to patients between visits while prioritizing high acuity patients.
In addition, our future nursing solution continues to resonate in the market.
Related to this will be a healthy expansion, which Tom Bernard healthcare, our Q4 performance demonstrates how our existing client base is fertile ground for future growth continuing.
Continuing on the topic of growth, we're putting the final pieces in place to transform our commercial organization and Reaccelerate bookings momentum this year.
Typically you are a few highlights.
We completed the sales model transformation moving from distinct account management and sales to a combined hunter farmer model.
This will allow us to streamline client interactions engaging more strategic selling discussions and fill a broader basket of services, we completed tenant review and up skilling initiatives, including adding important leadership in sales operations.
Ido Schoenberg: Completed a Talent Review and Upskilling Initiative, including adding important leadership in sales operations. New talent is coming from ROI-oriented, hunter-farmer-based enterprise selling environments with optimal experience and skill sets to sell our new hybrid care delivery. We launched a new sales and compensation model at our commercial kickoff held last, The bulk of this work is behind us with fine-tuning going on in the first half of the year. We have a growing
New tenant is coming from our ROI oriented Hunter farmer based enterprise selling environments with optimal experience and skill set to sell our new hybrid care delivery platform.
We launched a new sales and compensation model at our commercial kickoff held last week.
Bulk of this work is behind us with fine tuning going on in the first half of this year.
We have a growing list of expansions and new client wins under our belt and we are confident our selling motion resonates across the healthcare landscape.
Ido Schoenberg: With new client wins under our belt, we are confident our selling motion resonates across the healthcare landscape. It's an approach squarely aligned with operational and financial pain points that direct our client's spending priorities. We have achieved a lot in the past. I believe we are better positioned than ever to deliver the profitable growth promised by our large market opportunity and highly differentiated SaaS-based software infrastructure platform. As we turn the page to 2024, I believe it is crucial to understand the transformation we have successfully achieved. It's a transformation from a telehealth vendor to a hybrid care enablement partner. Health organizations are turning.
It's an approach squarely in line with the operational and financial Pinpoints, the direct our clients' spending priorities.
We have achieved a lot in the past year I believe we are better positioned than ever to deliver the profitable growth promised by our large market opportunity and highly differentiated SaaS based software infrastructure platforms as we turn to page to 2024 I believe it is crucial.
To understand the transformation, we have successfully achieved.
A transformation from a tenant health vendor to a hybrid care enablement park to telco organizations are turning to us the seek to modernize and achieve operational goals.
Ido Schoenberg: We seek to modernize and achieve operational excellence. It's also a transformation from selling video visits to connecting and mobilizing digital assets and provider networks within and between client organizations. I want to share a couple of key points. Our infrastructure platform acts as a distribution system that digitally empowers our clients to address the challenges they face and generate better financial and health outcomes. Our clients are looking for one platform, consolidating the digital. Path Forward, Connecting Disparate Healthcare Facilities, Teams, Patients, and Digital Aspects
<unk> also transformation from selling video visits to connecting and mobilizing digital assets and provider networks within and between client organizations.
I wanted to share a couple of key points about this.
Our infrastructure platform exited distribution system, the digitally empowers our clients to address the challenges they face and generate better financial and health outcomes.
Clients are looking for one infrastructure consolidating their digital initiatives.
The path forwards connecting disparate healthcare facilities teams patient and digital assets.
<unk> hi.
Ido Schoenberg: Time and again, we hear they have tried to build this lair themselves, and they are coming to us, recognizing our expertise. In addition to our technology platform, our Professional Services teams are proving to be a powerful differentiating force. We are particularly good at the challenging and complex work of integrating work, and connecting our clients' most important work and their AMG services further sets us apart in the market. Our payer clients leverage our AMG providers to deliver high-quality care for members and also increasingly virtual primary care that improves access and reduces Our provider clients look to make the most of their own teams while maintaining the highest standards for care and wait time. AMG provides a combination of critical bandwidth and
Time, and again, we feel they have tried to build these clear themselves and they are coming to us recognizing our expertise.
In addition to our technology platform. Our professional services teams are proving to be a powerful differentiating element for us.
We are particularly good at the challenging and complex work of integrating workflows and connecting our clients' most important asset.
And our AMG services further set us apart in the market.
Our payer clients leverage our AMG providers to deliver high quality care for members and also increasingly virtual primary care to improve access and reduces costs.
Our provider clients look to make the most of their own teams, while maintaining the highest standards for care and wait times AMG provides a combination of critical bandwidth clinical expertise and load balancing provide or services that are unique in the market today.
Ido Schoenberg: Clinical expertise and load balancing provider services that are unique in the market. Our partnering role is validated in the market. Our Strategic Customers, CVS, Elements, The Leidos Partnership for Defense Health, and others are powerful examples of organizations turning to us to help them achieve their goals. And while our largest clients give us validation, Amul expertise and value benefit a broad spectrum.
Our partnering role is validated in the markets our strategic clients Cvs elements. The latest partnership for defense health and others are powerful examples of organizations turning to us to help them achieve their goals and while our largest clients give us validation.
T as in value benefits, a broad spectrum of clients, our future ready platform enables clients of all sizes to address the needs of today and expand to new use cases, when they are ready our installed base of clients is a substantial baseline from which we intend to grow our company and finally a tablet.
Ido Schoenberg: Our future-ready platform enables clients of all sizes to address the needs of today and expand to new use cases when they're ready. Our installed base of clients is a substantial baseline from which we intend to grow. And finally, at Amwell, we believe we are in the early innings. Health care has only just begun to model and leverage the benefits of technology. The market for enabling this is substantial. From where we sit today, it's never been more clear that at Amwell we are unique in our approach to these issues.
We believe we are in the early innings as healthcare has only just begun to modernize and leverage the benefits of technology driven care.
Market for enabling this is substantial.
Where we sit today, we never been more clear that the downward we are unique in our approach to these markets.
Ido Schoenberg: Before Bob covers our financials, I'd like to share our key priorities for the coming year, with their healthy balance sheet and improved financial visibility. We have high conviction in our path. We are laser focused on advancing towards profitability, supported by the following top three.
Before Bob covers our financials I'd like to share our key priorities for the coming year with our healthy balance sheets and improved financial visibility.
We have high conviction in our path to profitability, we are laser focused on advancing towards profitability supported by the following top three priorities.
Bob Shepardson: First, we will work to ensure a successful deployment of a broad portfolio of our solutions for the military. We will continue to work on the initial phase of our implementation. Demonstrate value and support the DHA's enterprise expansion, which is anticipated late this year. In addition, we will migrate the majority of our remaining clients onto computers. Finally, our sights are set on re-accelerating. We believe we've made the right moves to return to by expanding our footprint within our installed base and winning new clients. In 2024, we will continue to enable the digital aspirations of healthcare organizations, with long-term positive growth well within. With that, I would like to turn the call over to Bob to review our financials, some key metrics, and our guidance. Thank you, Ido, and good evening to everyone on the call.
First we will work to ensure a successful deployment of our broad portfolio of our solutions for the military health system.
We will continue to execute on the initial phase of our implementation demonstrate value and support the DHA is enterprise expansion, which is anticipated later this year too we will migrate the majority of our remaining clients onto converge.
Finally, our sights set on re accelerating bookings.
We believe we've made the right moves to return to growth by expanding our footprint within our installed base and winning new clients.
In 2024, we will continue to enable the digital explorations of healthcare organizations with long term profitable growth well within our sights.
With that I would like to turn the call over to Bob to review, our financials and key metrics in our guidance.
Bob.
Thank you Vito and good evening to everyone on the call.
Bob Shepardson: We begin the year in a position of strong visibility into our future growth and our path to profitability. Tonight, I will walk you through a few operating metrics and financial results from Q4 as well as our guidance for 2025. Then, given the near-term opportunity we have to meaningfully expand our revenue and profitability, I will provide you with additional transparency into our expectations for 2025, as well as our plan for adjusted EBITDA breakup. To begin, total visits were approximately 1.65 million in the fourth quarter, a small decline versus 1.7 million last year. Last year's early and severe flu season did not occur again.
We begin the year in a position of strong visibility into our future growth and our path to profitability.
Tonight I will walk you through a few operating metrics and financial results for Q4 as well as our guidance for 2024.
Then given the near term opportunity, we have to meaningfully expand our revenue and profitability I will provide you with additional transparency into our expectations for 2025 as well as our plan for adjusted EBITDA breakeven.
To begin total visits were approximately $1 $65 million in the fourth quarter, a small decline versus $1 7 million last year.
Last year is early and severe flu season did not repeat this year. So the relatively strong visit volume reflects growth within some of our strategic payer clients.
Bob Shepardson: So the relatively strong visit volume reflects growth within some of our strategic payer clients. Scheduled visits represented 60% of total, continuing to highlight the evolution of our company from the provision of virtual urgent care to a platform provider enabling hybrid care. We continue to make good progress migrating our clients to Converge. After achieving our migration goal for the year one quarter early, Q4 migrations temporarily leveled off as we teed up strategic payers for the January launch. Visits on Converge were 52% for Q4.
Schedule visits represented 60% of total continuing to highlight the evolution of our company from provision of virtual urgent care to a platform provider, enabling hybrid care.
We continue to make good progress migrating our clients to converge after achieving our migrations goal for the year one quarter early Q4 migrations temporarily leveled off as we teed up strategic payers for January launches.
Visits on converged were 52% for Q4, we.
We successfully migrated some of our largest payer clients at quarter close with their volume now on converge that percentage is materially higher and at the end of January stood at nearly 70%.
Bob Shepardson: We successfully migrated some of our largest payer clients at Quarterflow; with their volume now on Converge, that percentage is materially higher and at the end of January stood at nearly 70%. We will report a formal visits on Converge number for the quarter on our next earnings call, and we expect a steady stream of migrations to continue this year. Another important metric is our average annual contract value, or ACV, which is a good indicator of the success of our land and expand strategy. Health plan ACV was $902,000, and Health Systems ACV was $415,000 in 2020.
We will report a formal visits on converged number for the quarter on our next earnings call and we expect a steady stream of migrations to continue this year.
Another important metric is our average annual contract value of our HCV, which is a good indicator of the success of our land and expand strategy.
Health plan ACB was $902000.
An ACB for health systems was $415000 in 2023, we look for HCV for both groups to expand as we grow our footprint within existing clients and add new clients over time.
The number of active providers on our platform was 103000 at the end of last year.
After careful consideration we plan to Sunset this metric beginning in Q1.
Active providers was initially conceived as an indicator that the activity on our platform in a post COVID-19 world was healthy and sustained after.
Bob Shepardson: We look for ACV for both groups to expand as we grow our footprint within existing clients and add new clients over time. The number of active providers on our platform was 103,000 at the end of last year. After careful consideration, we plan to sunset this metric beginning in Q1. Active Providers was initially conceived as an indicator that the activity on our platform in a post-COVID world was healthy and sustained. After growing from approximately 8,000 in late 2019 to almost 100,000 by the end of 2021, our number of active providers for the last eight quarters has remained steadily at or above the 100,000 level. With the majority of our volume now on Converge, we are finding that many of our clients are aiming to improve outcomes less by adding providers but rather by increasing the number of patients each provider can care for by using our platform capabilities.
After growing from approximately 8000 in <unk> in late 2019 to almost 100000 by the end of 2021, our number of active providers for the last eight quarters has remained steadily at or above the 100000 level.
With the majority of our volume now on converge, we are finding that many of our clients are aiming to improve outcomes led by adding providers, but rather by increasing the number of patients each provider can care for by using our platform capabilities, including our automated care programs.
Turning to our Q4 financials total revenue was $71 million for the quarter, an increase of 14% to last quarter and down 11% from a year ago.
Approximately $3 million of the decline in revenue versus last year was subscription related driven primarily by legacy platform declines with a balanced split between lower visit in services and care points revenue.
Subscription revenue declined slightly from Q3 and was $27 3 million in the fourth quarter.
AMG visit revenue trended, 8% lower than last year and was $32 1 million for the quarter.
AMG visits were 10% lower this quarter versus a year ago, reflecting the early and severe flu season in 2022, and a return to more to a more normal onset of flu season in 2023.
Bob Shepardson: Including our automated care program, Turning to our Q4 financials, total revenue was $71 million for the quarter, an increase of 14% from last quarter and down 11% from a year ago. Approximately $3 million of the decline in revenue versus last year was subscription-related, driven primarily by legacy platform declines, with a balanced split between lower visit and services revenue and care points revenue. Subscription revenue declined slightly from Q3 and was $27.3 million in the fourth quarter.
Average revenue per visit was slightly higher this quarter than last year at $72 driven by a mix shift within AMG.
Our services and care points revenue was $11 3 million for the quarter, an increase of $4 4 million from last quarter, driven primarily by an increase in professional services and marketing.
These revenues can be uneven from quarter to quarter due to customer buying patterns for our marketing services programs and for care points as well as the timing of professional services that precede deployments.
Turning to profitability, our fourth quarter gross profit margin was 34% flat to last quarter and down from 42% last year.
Bob Shepardson: AMG visit revenue trended 8% lower than last year and was $32.1 million for the quarter. AMG visits were 10% lower this quarter versus a year ago, reflecting the early and severe flu season in 2022 and a return to a more normal onset of the flu season in 2023. Average revenue per visit was slightly higher this quarter than last year at $72, driven by a mixed shift within a year. Our services and care points revenue was $11.3 million for the quarter, an increase of $4.4 million from last quarter, driven primarily by an increase in professional services and marketing. These revenues can be uneven from quarter to quarter due to customer buying patterns for our marketing services programs and for CarePoint, as well as the timing of professional services that precede deployment.
This was largely due to lower subscription software revenue combined with a revenue mix shift away from higher margin implementation services to lower margin marketing services <unk>.
Recall that in 2022 Q4 was a professional services heavy quarter as we performed deployment work associated with our strategic client go live in January.
Turning to operating expenses, we are applying ongoing cost discipline across our companies that figures into our guidance.
As a merit based organization our incentive compensation in 2023 reflected our revenue attainment, which was below plan.
Our operating expenses reflect this and underlie a portion of our expense containment over the year further since the end of 2023, we have reduced our head count across the company by approximately 10%.
We're tracking well on our path to the normalization of R&D spending.
GAAP R&D expense was 5% below Q3 and was flat after adjusting for $1 million of software development capitalization associated with our DHA work.
Bob Shepardson: Turning to profitability, our fourth quarter gross profit margin was 34%, flat to last quarter, and down from 42% last year. This was largely due to lower subscription software revenue combined with a revenue mix shift away from higher margin implementation services to lower margin markets. Recall that in 2022, Q4 was a professional services-heavy quarter as we performed deployment work associated with a strategic client go live in January. Turning to operating expenses, we are applying ongoing cost discipline across our company, and that figures into our guidance. As a merit-based organization, our incentive compensation in 2023 reflected our revenue attainment, which was below plan.
This brings the quarter and the year to down approximately 27% and 19% respectively compared to last year after adjusting for software capitalization.
SG&A declined approximately 8% in Q4 and 18% overall in the second half of 2023 compared to the first half of the year. This is primarily due to lower stock based compensation expense.
Sales and marketing spend increased by $1 million, primarily due to severance costs and G&A expense was 18% lower this quarter compared to last quarter also on stock based comp.
We continue to streamline and rationalize our commercial head count in keeping with the changes in our growth organization. We believe we do not need to spend more in SG&A to achieve our growth goals and there is healthy operating leverage as we scale.
Putting it all together adjusted EBITDA for the quarter was negative $36 9 million or.
Bob Shepardson: Our operating expenses reflect this and underlie a portion of our expense containment over the years. Furthermore, since the end of 2023, we have reduced our head count across the company by approximately 10%. We're tracking well on our path to the normalization of R&D spend. Gap R&D expense was 5% below Q3 and was flat after adjusting for $1 million of software development capital associated with our DHA work. This brings the quarter and the year down approximately 27% and 19%, respectively, compared to last year after adjusting for software capital. SG&A declined approximately 8% in Q4 and 18% overall in the second half of 2023 compared to the first half of the year. This is primarily due to lower stock-based compensation. Sales and marketing spend increased by $1 million primarily due to severance costs, and G&A expense was 18% lower this quarter compared to last quarter, also on a stock basis.
A 4% and 15% improvement last quarter and last year, respectively.
And transitioning to the balance sheet, we ended the fourth quarter with $372 million of cash and marketable securities and conclusion.
While our 2023 financials reflect the headwinds associated with our re platforming. We believe we are coming out the other side.
Our business has moved meaningfully ahead in terms of putting in place our growth transformation normalizing and rationalizing costs and growing our contracted backlog.
Turning to our outlook. The progress we made this year are significantly adds to our financial visibility and meaningfully de risks our path to profitability the.
The impact of our planned supporting the DHA, including the enterprise expansion is not fully visible within a single year of guidance for 2024.
So we are taking the extra step tonight of providing a look at the growth and profitability. We expect in 2025, and we will also provide some thoughts on our plans to reach adjusted EBITDA breakeven.
Bob Shepardson: We continue to streamline and rationalize our commercial headcount in keeping with the changes in our growth organization. We believe we do not need to spend more on SG&A to achieve our growth goals, and there is healthy operating leverage as we scale. Putting it all together, adjusted EBITDA for the quarter was negative $36.9 million.
First I would like to provide our 2020 for guidance.
We expect revenue for 2024 to be in the range of 259% to $269 million for the year, we expect subscription revenue to be roughly similar to that of 2023, we expect visits to range from one six to $1 7 million and services and care points to be in the high single digits percent of total <unk>.
Bob Shepardson: 4% and 15% improvement on last quarter and last year, respectively. Transitioning to the balance sheet, we ended the fourth quarter with $372 million of cash in marketable security. In conclusion, while our 2023 financials reflect the headwinds associated with our replatforming, we believe we are coming out the other side. Our business has moved meaningfully ahead in terms of putting in place our growth transformation, normalizing and rationalizing costs, and growing our contracted back. Turning to our outlook, the progress we made this year significantly adds to our financial visibility and meaningfully de-risks our path to profitability. However, the impact of our plan supporting the DHA, including the enterprise expansion, is not fully visible within a single year of guidance for 2024. So we are taking the extra step tonight of providing a look at the growth and profitability we expect in 2025, and we will also provide some thoughts on our plan to reach adjusted EBITDA breakeven. First, I would like to provide our 2024 guidance. We expect revenue for 2024 to be in the range of $259 to $269 million per year.
Revenue.
Here are a few key assumptions, we carefully assess and arriving at our guidance range. The.
The re platforming related headwinds from prior periods will impact 2020 for subscription revenue, which we expect to decline approximately 10% in the first quarter then build back up with contracted go lives with respect to our DHA work. Our plan is to implement the full portfolio of solutions at the initial.
Five sites for the DHA over the year with the enterprise rollout anticipated at the end of the year as we have discussed there are three separate go lives and the initial deployment. So revenue will ramp over the course of the year. We've achieved the first milestone as planned.
We expect little to no revenue from the enterprise expansion in 2024.
We are assuming a gradual return of bookings growth as we finalize the transformation of our growth organization in the first half of the year.
As to profitability, we expect our 2024 adjusted EBITDA to be in the range of negative 160 to negative $155 million.
As for additional context around our assumptions, we are on track to reduce our converged related R&D spending annually by 25% to 30%.
This year, however, government related customization of our platform will moderate the overall decline in R&D to a circa mid teens percent reduction.
Bob Shepardson: We expect subscription revenue to be roughly similar to that of 2023. We expect visits to range from 1.6 to 1.7 million and services and care points to be in the high single digits percent of total revenue. Here are a few key assumptions we carefully assessed in arriving at our guidance range.
Our head count actions will result in over $15 million in compensation related savings. So our guidance assumes we returned to normal levels of incentive comp versus 2023.
As we complete 2024 and move beyond the initial phase of deployment for the DHA and Reaccelerate bookings, our financial story changes fairly dramatically in 2025.
Bob Shepardson: The replatforming related headwinds from prior periods will impact 2024 subscription revenue, which we expect to decline approximately 10% in the first quarter, then build back up with contracted go-lots. With respect to our DHA work, our plan is to implement the full portfolio of solutions at the initial five sites for the DHA over the year, with the enterprise rollout anticipated at the end of the year. As we have discussed, there are three separate go-lives in the initial deployment.
We currently expect revenue in 2025 to be in the range of $335 million to $350 million representing growth of circa 30% compared to 2024, primarily driven by go lives of contracted software backlog, including our planned enterprise wide DHA deployments.
Moving on to 2025 profitability, we expect an approximate 70% improvement in our adjusted EBITDA to a range of negative <unk> 45 to negative $35 million, we expect the change in our revenue mix towards subscription software to lift gross margins from the high 30% area.
Bob Shepardson: The revenue will ramp up over the course of the year. We've achieved the first milestone as We expect little to no revenue from the enterprise expansion in 2024. We are assuming a gradual return to bookings growth as we finalize the transformation of our growth organization in the first half of the year. As to profitability, we expect our 2024 adjusted EBITDA to be in the range of negative $160 to negative $155 million. As for additional context around our assumptions, we are on track to reduce our CONVERGE-related R&D spending annually by 25 to 30 percent. This year, however, government-related customization of our platform will moderate the overall decline in R&D to a circa mid-teens percent reduction.
In 2024 to over 50% in 2025.
After customizing our platform for operation in the government ecosystem, it will be fully scalable and ready to deliver complete hybrid care across the entire military health system enterprise with minimal future development required.
And finally rounding out our forward looking guidance. We currently expect to achieve adjusted EBITDA breakeven in 2026, with a cash and investments balance of approximately $150 million.
In conclusion, we are encouraged by the strides we've made in our business. We believe we are just beginning to capitalize on our market opportunity and this guidance smart the early days for the long term profitable growth trajectory we envision.
Bob Shepardson: Our headcount actions will result in over $15 million in compensation-related savings. Thus, our guidance assumes we return to normal levels of incentive comp versus 2023. As we complete 2024 and move beyond the initial phase of deployment for the DHA and reaccelerate bookings, our financial story changes fairly dramatically in 2025. We currently expect revenue in 2025 to be in the range of $335 to $350 million, representing growth of circa 30% compared to 2024, primarily driven by the go lives of contracted software backlog, including our planned enterprise-wide DHA deployment. Moving on to 2025 profitability, we expect an approximate 70% improvement in our adjusted EBITDA to a range of negative 45 to negative $35 million. Additionally, we expect the change in our revenue mix towards subscription software to lift gross margins from the high 30% area in 2024 to over 50% in 2025. After customizing our platform for operation in the government ecosystem, it will be fully scalable and ready to deliver complete hybrid care across the entire military Health System enterprise with minimal future development required. We currently expect to achieve adjusted EBITDA breakeven in 2026 with a cash and investments balance of approximately $150 million.
Thank you for listening with that I'd like to turn the call back to <unk> for some closing remarks.
<unk>.
Thank you Bob we.
We are driving everyday to Tom will to advance along the path to achieving our goals and pursuing our mission.
Our solutions solve is the most important problems facing health care organizations today and he is now proven in the marketplace.
We begin 2024 on a strong footing with a high degree of financial visibility and laser focused on our priorities.
As always I want to take a moment to thank our team for their extraordinary work and passion as we pursue our mission as one team.
With that we're ready to conclude our formal remarks. Thank.
Thank you for listening today.
Greater we're ready to open the line for questions.
As you.
At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad.
Your first question comes from Craig Hatton back with Morgan Stanley. Please go ahead.
Yes, thank you understanding youre going through some transition in 'twenty four it does look like there the health systems are starting to benefit from improving utilization and just curious.
What you're seeing from spending intentions at health systems versus health plan.
Lee.
Hi, Greg well, you're right I mean health systems are going through a financial hardship.
No and we will be buying different from what they both.
Donnelley.
Recently.
In general all health systems are interested to buy platforms and systems that help them improve retention and help them improve the efficiency.
So I'll give you. An example, just from nursing is the high demand the iPhone for health systems as well as the automated programs.
Do variety of tasks to improve there.
They are re performance.
Bob Shepardson: In conclusion, we are encouraged by the strides we've made in our business. We believe we are just beginning to capitalize on our market opportunity, and this guidance marks the early days for the long-term profitable growth trajectory we, Thank you for listening. With that, I'd like to turn the call back to Ito for some closing remarks. Edo.
So they continue to be a very important part of our business.
However.
Biggest story in many ways is the formation that we see in pairs.
Now laser focused on becoming much more meaningful.
For their clients for employers as members putting in place a digital first option, especially virtual primary care options.
Ido Schoenberg: Thank you both. We are driven every day at Amwell to advance along the path to achieving our goals and pursuing our mission. Our solution solves the most important problems facing health care organizations today and is now proven in the market. We begin 2024 on strong footing with a high degree of financial visibility and laser focus on our priorities. As always, I want to take a moment to thank them for their extraordinary work and passion as we pursue our mission as one team. With that, we are ready to conclude our formal remarks. Thank you for listening. Operator, we are ready to open the line for questions. Thank you.
It allow to upgrade the member experience and stickiness and greatly improve effectiveness too rich to available and cost effective option.
Especially the area of focus for them.
We Havent health.
Which is seems to be in very big need.
So I would suggest it's generally the need and awareness.
Core plus.
Platform to enable all parts of digital hybrid care.
Our very relevant today more than ever there.
There is a growing understanding of the challenges and sophistication required for such a platform and the fact that we have so many clients migrated to converge with very clear proof points.
Operator: At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. Your first question comes from Craig Hettenbach with Morgan Stanley. Please go ahead.
A very strong tailwind for us in both segments, both for providers and payers.
Great and then just a quick follow up Bob Thanks for all the detail on 24 and in bringing to 25 and 26 on the 10% head count reduction can you just touch on kind of maybe some of the things you were doing with that in terms of getting leaner within the organization and anything else you're able to share.
Craig Hettenbach: Yes, thank you. Understanding that you're going through some transitions in 24. It does look like they're the health systems are starting to benefit from improving utilization. And just curious, you know, what you're seeing from spending intentions kind of at health systems versus health plans. Hi Craig.
Yes.
So this was.
Across the company.
Ido Schoenberg: Well, you're right. Health systems are going through a financial hardship, as we all know, and what they buy is different from what they bought only recently. In general, health systems are interested in buying platforms and systems that help them improve staff retention and help them improve efficiency. So I'll give you an example.
And.
Some of it was programmed in as we.
Yes.
<unk> right sized in terms of our spending related to R&D and some of it was related.
To what we're doing in the growth organization Craig.
Ido Schoenberg: Virtual nursing is a high-demand item for health systems, as well as automated programs to do a variety of tasks to improve their performance. So they continue to be a very important part of our business. However, the biggest story, in many ways, is the transformation that we see in payers that are now laser focused on becoming much more meaningful for their clients, for employers as members, putting in place digital first options, and especially virtual primary care options that allow to upgrade the member experience and stickiness, and greatly improve effective steerage to available and cost-effective options. A special sub-area of focus for them is behavioral health, which seems to be in very big need.
And really.
Maybe its best if you don't really addresses.
In a little bit more detail.
What we're doing there and what what we're trying to accomplish.
Thank you Bob look in essence Craig.
The headline or zooming out for a second we are completing we didn't even complete the re platforming periods for <unk> and our investors and our partners have been enormously patient with us as we went through this very important investment and we are today reporting on what.
He's very clearly.
Already the growth phase.
After re platforming.
The biggest opportunity is in the top line in the growth and we talked quite a bit about it in <unk>.
Ido Schoenberg: So I would suggest that, in general, the need and awareness for a platform to enable all parts of digital hybrid care are very relevant today, more than ever. There is a growing understanding of the challenges and sophistication required for such a platform. And the fact that we have so many clients migrated to Converge with very clear proof points is definitely a very strong tailwind for us in both segments, both for providers and payers.
The guidance you can see what's happening which is all contracted.
25, and beyond and really the only.
<unk> can focus area.
Our execution, but in addition to that we are completely transforming our entire cost structure across the company. So obviously in RMB. We completed this giant investment in R&D is really right size being very dramatically.
But in addition to that people need to understand if our delivery organization is now doing less in this migration. So only because we sold most of them and we are starting to grow but not a lot but much more importantly, everything we do at converge <unk> dramatically more efficient the deployment cycle or shorter.
Bob Shepardson: And then just a quick follow-up, Bob, thanks for all the detail on 24 and converging to 25 and 26. On the 10% headcount reduction, can you just touch on kind of maybe some of the things you were doing with that in terms of getting leaner within the organization and anything else you're able to share? Um, So, you know, this was across the country, and some of it was programmed in as we get right sized in terms of our spending related to R&D, and some of it was related to what we're doing in the growth organization Craig, and really, and maybe it's best if I really address in a little bit more detail what we're doing there and what we're trying to accomplish. Thank you, Bob.
Support is easier, it's a very very modern and very reliable.
Platform.
Support tickets are a fraction of what they were in the legacy.
In sales and marketing.
<unk> seen in the marketing and competition.
Really allow us to completely transform the growth organization. The first thing we've done is to reassess our segments and we're going after very well defined segments. We have the right to win and of course that includes the very large very sophisticated clients, where we have enormous advantage.
Jay over others, then we are implementing is very.
<unk> go to market plan, we have a great day operational rigor and are beginning to execute on that we changed our team we killed a lot of our team. The head count is the smaller right now and we changed the model.
Ido Schoenberg: Look, in essence, Craig, the headline or zooming out for a second, we are completing, if we didn't even complete, the replatforming period for AMREL. And our investors and our partners have been enormously patient with us as we went through this very important investment. And we are today reporting on what is already the growth phase that comes after the replatforming. The biggest opportunity is in the top line and in growth, and we talked quite a bit about it in Bob's guidance. You can see what's happening, which is all contracted in 25 and beyond.
If pragmatically the account management and sales.
<unk> represents representatives into a single hybrid partner individuals that are very well trained very skilled to sell the full portfolio.
Our offering in a model of a hunter farmers. So we have less quota carriers, but their impact is already very clearly.
Much much bigger we also changed our compensation to encourage the high margin reoccurring subscription software and that change is beginning to pay off. So we are now in a product that we believe is significantly more attractive in the market.
Ido Schoenberg: And really, the only risk and focus area is execution. But in addition to that, we are completely transforming our entire cost structure across the company. So obviously, in R&D, we completed this giant investment, and R&D is really right-sizing very dramatically. But in addition to that, people need to understand that our delivery organization is now doing fewer and fewer migrations only because we sort of did most of them. And we still have some to go, but not a lot.
<unk> proven in the market by very large sophisticated customers.
Cost of maintaining it and selling it.
Is smaller and that's all explains the results that Bob shared which really don't require us to do anything unnatural, it's mostly contracted.
Ido Schoenberg: But much more importantly, everything we do at Converge is dramatically more efficient. The deployment cycles are shorter. The support is easier.
We just need to continue and execute and we have a lot of execution under our belt. So we think that execution risk is very small for where we sit today.
Ido Schoenberg: It's a very, very modern, very reliable platform. The support tickets are a fraction of what they were in legacy. And in sales and marketing, the changes that we've seen in the marketing competition really allow us to completely transform the growth organization. The first thing we did was to reassess our segments, and we're going after very well-defined segments where we have the right to win. And, of course, that includes the very large, very sophisticated clients where we have an enormous advantage over others. Then we are implementing a very specific go-to-market plan with great operational rigor and are beginning to execute on that. We changed our team.
Got it thanks for all that.
Your next question comes from Jack Wallace with Guggenheim Securities. Please go ahead.
Hey, guys. Thanks for taking my questions.
I appreciate the multi year.
Guidance outlook and Echo <unk> comments.
The prior analyst's does sound like a transition year and then.
Pretty exciting 'twenty five.
Focusing on 25, just wanted to get a better understanding for how the NHS deal impacts that the model and maybe more specifically with the terms of that contract if I understand correctly.
The task order and sometime in the middle of 'twenty, five and just thinking about contribution from NHS in the back half of that year, what is in the guidance for 25% how should we be thinking about.
Ido Schoenberg: We have upskilled a lot of our team. The headcount is smaller right now. And we changed the model from a fragmented accounts management and sales representatives into a single hybrid partner, individuals that are very well trained, very skilled to sell the full portfolio of our offering in a model of hunter-farmer. So we have fewer quota carriers, but their impact is already very clearly much bigger. We also changed our compensation to encourage high-margin recurring subscription software, and that change is beginning to pay off. So we are now in a product that we believe is significantly more attractive in the market. It's proven in the market by very large, sophisticated customers. The cost of maintaining it and selling it is smaller. And that all explains the results that Bob shared, which really don't require us to do anything unnatural. It's mostly contracted.
That that customer wants the task order ends.
And maybe I'll take the headline and then Bob will give you more of the.
The details.
This year is really not a transition year of any sort.
We are basically investing in a new market segment, which is the government market segment take this out and you can see the transitioning our number.
Already today, but we are doing some really big investment with the military health service that will allow us to get very strong returns, which are already contracted with this client and hopefully with other similar clients in the same sector.
Our work with <unk> and the others.
We talked to in the last call on the last call about the task order. The 180 million task order. It is already budgeted in contracted and it includes a few phases. The initial phase, which we are now going through an OLED part of it is live as I mentioned earlier.
Ido Schoenberg: We just need to continue and execute. And we have a lot of execution under our belts. So we think that the execution risk is very small from where we sit today. Thanks for all that. Your next question comes from Jack Wallace with Guggenheim Securities. Please go ahead.
Is the deployment in <unk> sides of the entire portfolio between step up for the full enterprise.
Deployment.
This is about one <unk> per quarter across the able health.
Automated point of care programs and of course the converge.
Jack Wallace: Hey, thanks for taking my questions, and I appreciate the multi-year guidance outlook. Compared with the equivalent comments from the prior analysts, it does sound like a transition year and then a pretty exciting 25. Focusing on 25, just wanted to get a better understanding of how the MHS deal impacts Model, and maybe more specifically, the terms of that contract, if I understand correctly. The task order ends sometime in the middle of 25, and just thinking about contribution from MHS in the back half of that year, what is in the guidance for 25, and how should we be thinking about that customer once the task... Maybe I'll take the headline, and then Bob will give you more of the details. This year is really not a transition year of any sort.
Deployment from that we're going to step up in 'twenty five.
Due to the full enterprise.
Vehicle.
We are using the financial vehicle is covering us, but it does cover the entire military health service Genesee.
The contract of the government that includes the EHR and other elements. So this is really the core infrastructure for the military health systems.
We're quite confident that this will continue.
Through the process.
Going forward and we believe that assuming that we execute on what we need to do.
Our likelihood to continuing to provide it is very very high.
Cause of the enormous investments that to us and the rest of the partners are making in.
In this deployment.
Ido Schoenberg: We are basically investing in a new market segment, which is the government market segment. Take this out, and you can see the transition in our number already today. But we are doing some really big investments with the military Health Service that will allow us to get very strong returns, which are already contracted with this client, and hopefully with other similar clients in the same sector for work with Leidos and others. We talked on the last call about the task order, the 180 million task order. It is already budgeted and contracted, and it includes a few phases. The initial phase, which we are now going through, and part of it is already live, as I mentioned earlier, is the deployment on five sides of the entire portfolio that will step up for the full enterprise deployment.
We don't believe there was a budgetary risk for this mission critical infrastructure.
And we don't see a scenario, where the government will not do that.
We think that in that setting us not continuing as I mentioned earlier was very slim.
But then if you have anything to add.
I think you've covered it.
Yes.
Just to be clear Jack.
We're assuming that run rate from the end of 'twenty four.
Beginning of 'twenty five.
Is.
It continues going forward, we're not assuming any growth in it.
Although I think thats conservative, but but we.
We are assuming that it is part of <unk>.
Sustaining contract.
Together with the multibillion dollar EHR deployment that the government undertook for the DHA here over the course of the last couple of years.
Ido Schoenberg: This is about one go live per quarter across behavioral health, the automated chronic care programs, and, of course, the converge deployment. From that, we're going to step up in 25 to the full enterprise. This vehicle that we are using, the financial vehicle is covering us, but it does cover the entire military Health Service genesis contract of the government that includes the EHR and other elements.
Excellent.
Really helpful and then.
And you alluded to it before.
But as we're thinking about potential expansion within the broader government customer.
The VA and others.
I think I heard you say it was pretty much all of the heavy lifting on the R&D side.
Getting done this year so in future expansions.
Potentially happen.
It's a matter of.
Ido Schoenberg: So this is really the core infrastructure for the military health systems, and we are quite confident that this will continue in the process going forward. And we believe that assuming that we execute on what we need to do, our likelihood of continuing to provide it is very, very high because of the enormous investments that we and the rest of the partners are making in this deployment. We don't believe there is a budgetary risk to this.
Just turning on the software and.
Some some training.
At that point there is there is not the big lift do I have that correct.
And if so just as a quick follow up to that how have your discussions gone.
The military health system, and others about potential expansion opportunities. Thank you.
Sure. So yes short answer is you are correct look we're doing a lot of work today that is super relevant to the military health system, but will pay off to the entire fixed or suggesting real quick headlines. We are now creating multiple environments demonstration environment staging environment production.
Ido Schoenberg: This is a mission critical infrastructure, and we don't see a scenario where the government will not do that. We think that in that setting, us not continuing, as I mentioned earlier, is very slim. Bobo, I don't know if you have anything to add.
We pulled action across our entire portfolio to the cloud the ultimate care and converge. We are configuring all those systems, we're going through the elaborate in detail cyber security hardening in such a crazy eight station.
Bob Shepardson: I think you covered it, you know, you know, it's just I, you know, I think, just to be clear, Jack, we're assuming that run rate from the end of 24, beginning of 25 is going to continue going forward; we're not assuming any growth in it. Although I think that's conservative, but we are assuming that it's part of a sustaining contract, together with the multi-billion dollar EHR deployment that the government undertook for the DHA here over the course of the last couple of years. Excellent That's really helpful. You alluded to it before, but as we're thinking about potential expansion within the broader government customer, the VA, and others, what I think I heard you say was pretty much all of the heavy lifting on the R&D side getting done this year, so for future expansion. Insurance Thanks for watching! See ya. It's a matter of just you turning on the software.
The images and the government we are training a lot of users and administrators and of course, we are going live in the sequence that I described and beginning to measure impact, which we are confident will be a very encouraging going forward.
Apps getting from there which is constructed.
And budgeted fully is it does not require any addition, the airport it's an identical.
The environment and as I mentioned earlier, when we turn to the next government client.
We are probably not going to repeat a lot of this work with a lot of similarity between these clients and other clients in this segment.
Jack I would just add thank you so much the great thing about the great thing about the.
The project we have now is we're integrating into a brand new.
Singular EHR across the DHA that was just implemented.
To the degree that.
Ido Schoenberg: Training, at that point, there's not the big lift. Do I have that correct? And if so, just as a quick follow-up to that, you know, how have your discussions gone with the military Health Department and others about potential expansion? Sure. So, the short answer is you are correct.
Like in many health systems, you might have a customer in the government sector that has multiple.
Ehr's and different environments that are built up over time.
It's not it wouldn't be as clean, but this one really is.
Ido Schoenberg: Look, we're doing a lot of work today that is super relevant to the military health system but will pay off for the entire sector. So, in terms of quick headlines, we are now creating multiple environments, a demonstration environment, a staging environment, production, pre-production, across our entire portfolio, silver cloud, automated care, and converge. We are configuring all those systems. We are going through the elaborate and detailed cybersecurity hardening and accreditation process of the MHS and the government.
And this is a great one to get going on.
And all of the work that we're doing here.
It relates to operation in that ecosystem, regardless of what the HRS.
Got it.
And.
Maybe just to end with one last point, which is an important.
Your way.
One with the bookings that we shared today.
It really has.
A very very high degree of visibility into everything into our full year profitability in the 26.
Something that is even more important we believe that the mechanics and DNA of this transaction is going to be very typical to future transactions youre going to see an umbrella, namely we're mostly selling almost entirely selling software, which is very scalable and much higher margin.
Ido Schoenberg: We are training a lot of users and administrators. And, of course, we are going live in the sequence that I described and beginning to measure impact, which we are confident will be very encouraging going forward. Upscaling from there, which is contracted and budgeted fully, does not require any additional effort.
Then before.
And if you can connect the dots and extrapolate from there. This really opens a new page in the new era for <unk> is we're really moving into software SaaS almost entirely a world, which is very different from where we were only a couple of years ago.
Got it understood.
Your next question comes from Charles <unk> with TD Cowen. Please go ahead.
Yeah, Hey, thanks for taking the questions.
Bob Shepardson: It's an identical environment, and as I mentioned earlier, when we turn to the next government client, we are probably not going to repeat a lot of this work. There is a lot of similarity between this client and other clients in the segment. Jack, I just add that the great thing about the great thing about the project we have now is we're integrating into a brand new singular EHR across the DHA that was just implemented. To the degree that, you know, like in many health systems, you might have a customer in the government sector that has multiple EHRs and different environments that have built up over time. It wouldn't be as clean, but this one really is.
Wanted to touch on Youre talking about bookings in one of your key.
Our strategy.
Initiatives right is to have the bookings acceleration you mentioned integra is set to start.
As an expansion client.
Can you talk about sort of the focus of the sales force.
In this next period is it really trying to expand services with existing clients or is there a focus on getting new clients on board and just curious going back to an earlier question sort of receptivity and health systems, who have not yet really part of an integrated platform for digital capability.
<unk>.
How high is that on the priority list at this point and so is the focus more on clients that are already committed to this.
Ido Schoenberg: And this is a great one to get going on. And all of the work that we're doing here relates to operations in that ecosystem, regardless of what the HR is, them to the. Maybe just to end with one last point, which is an important takeaway. One, with the bookings that we shared today, we really have a very, very high degree of visibility into everything, into our full profitability on the 26. And something that is even more important, we believe that the mechanics and DNA of this transaction are going to be very typical for future transactions you're going to see in AMREL.
Strategy going forward.
Hi, Charles.
A question and the answer is both.
Obviously, we have a very very large installed base that you have currently even after migration has lots of room to grow in a way of traction and additional solutions that we can offer through Austin through third parties that we can resale to those customers the demand sophistication is.
Growing almost daily the appetite really depends on the type of clients as I mentioned earlier was high on payers' mind is very very different.
From the health systems to health systems are really focusing on savings and staff retention.
Ido Schoenberg: Namely, we are mostly selling, almost entirely selling software, which is very scalable and has a much higher margin than before. And if you can connect the dots and extrapolate from there, this really opens a new page and a new era for AMREL, as we are really moving into a world, which is very different from where we were only a couple of years ago. Your next question comes from Charles Rhee with TD Cowan. Please go ahead.
While health plans.
There's different explorations.
We tend to offering better outcomes for their clients and for their at risk population through ownership of the member and better.
There is <unk>. So we are so pleased.
Most of our clients.
Our own converged and it is going to want to get better from here. So this therefore is the winning we know they are really really happy our NPS is at all time high.
Some examples both.
<unk> slash members and providers the high Ninety's very very.
Charles Rhee: Yeah, hey, thanks for taking the questions. Hey, um, wanted to touch on, you know, you're talking about bookings, and one of your key, you know, uh, strategy, you know, uh, initiatives, right, is to have the bookings acceleration. You mentioned Integris at the start as an expansion client.
In prestige so that's a great starting point to begin as we discussed in the past the dialogue of further expansion.
Is that a higher margin and of course, we will make our relationship more valuable both for them and for us obviously.
More sticky, but there is the world Big World out there over additional systems and health plans and even government debt.
Operator: Can you talk about sort of the focus of the sales force in this next period? Is it really trying to expand services with existing clients, or is there a focus on getting new clients on board? And just curious, going back to an early question, sort of receptivity in health systems who have not yet really thought of an integrated platform for digital capabilities, you know, how high is that on the priority list at this point? And so is the focus more on clients that are already committed to this strategy going forward? Hi Charles. That's a great question. The answer is both.
Don't you say on will.
Typically this entire market is very risk averse.
Very very careful so the value of the proof points. The reference ability of this enormous install base is now on the converge is our biggest day.
And we certainly plan to expand to also new logos.
And begin the journey of starting with what they need today and with our future ready platform selling them more as we go we see those relationships has really lifelong relationships, it's not transactional.
Ido Schoenberg: Obviously, we have a very, very large installed base that currently, even after migration, has a lot of room to grow in the way of traction and additional solutions that we can offer through us and through third parties that we can resell to those customers. The demand for sophistication is growing almost daily. The appetite really depends on the type of client.
We are even hopeful and expect that some of the people that we lost during the re platforming years are likely to come back as they discover.
<unk> of what we're offering today.
But everything we discussed to bring us to profitability doesn't require anything dramatic or accordion on the country.
It's mostly based on what you've already booked.
Entirely dependent on the quality of our execution going forward and require very very realistic work by our market facing teams. That's not to say that we are not optimistic we are usually optimistic we just don't count on it to get to this very important milestone.
Ido Schoenberg: As I mentioned earlier, what's high on payers' minds is very, very different from health systems. Health systems are really focusing on savings and staff retention, while health plans have different aspirations as we tend to offer better outcomes for their clients and for their at-risk population through ownership of the member and better stewardship. So we are so pleased that most of our clients are on Converge, and it's going to only get better from here. We know they're really, really happy.
Of profitable growth.
That's helpful and maybe Bob and we think about the 25.
Sort of revenue guide here is kind of a step up of <unk>.
<unk> 80 million.
How much of that is really dhan, because it sounds like with the enterprise expansion coming up at the end of the year. Most of that contribution falls into 25, you can kind of give us a.
Ido Schoenberg: Our NPS is at an all-time high. A thumbs up from both patients-slash-members and providers is in the high 90s. It's very, very impressive.
Rough sense, perhaps of how much from government versus.
Backlog from existing clients.
Yes look.
Ido Schoenberg: So that's a great starting point to begin, as we discussed in the past, the dialogue of further expansion that is higher margin and, of course, will make our relationship more valuable, both for them and for us, and obviously more sticky. But there is a world, a big world out there, of additional systems and health plans and even governments that don't use AMWEL. Typically, this entire market is very risk-averse. They are very, very careful.
Charles.
I think the important thing there is.
Okay.
Very high percentage, 90% plus of that is.
Is it as contracted backlog.
I really don't want to go into too much detail beyond that in terms of what's associated with one client versus another.
Clearly.
This.
Our work with lighthouse for the DHA is a big component of that but.
Ido Schoenberg: So the value of the proof points, the referenceability of this enormous install base that is now on Converge is our biggest asset, and we certainly plan to expand to new logos and begin the journey of starting with what they need today and, with our future-ready platforms, telling them more as we go. We see those relationships as really lifelong relationships. It's not transactional. We are even hopeful and expect that some of the people that we lost during the re-platforming years are likely to come back as they discover the value of what we are offering today. But everything we discussed to bring us to profitability doesn't require anything dramatic or Herculean. On the contrary, it's mostly based on what we already booked.
But the most important thing.
I wanted to communicate.
This 30% increase in revenues and 70% increase in adjusted EBITDA is that a huge amount of that is predicated on contracted backlog.
Inclusive of what we're doing with with lineups.
Your next question comes from Joe Andrew Zhang with Truth Securities. Please go ahead.
Hi, guys. This is eduardo on for Joel Thanks for taking the question.
On the comment of achieving breakeven adjusted EBITDA in 2006, I think you guys. Previously mentioned that you could get to breakeven on $400 million of revenue is that sort of indicating.
Ido Schoenberg: It's entirely dependent on the quality of our execution going forward and requires very, very realistic work by our market-facing teams. But that's not to say that we are not optimistic. We are hugely optimistic, but we just don't count on it to get to this very important milestone of profitable growth. That's helpful. And maybe Bob, we think about the 25 sort of revenue guide here, you know, it's kind of a step up of, you know, around 80 million. How much of that is really DHA?
A ballpark of what Youre expecting for 'twenty six.
Yes, I mean look we've updated I think everything.
From.
From.
A few quarters ago our mix.
I would expect is more heavily weighted towards <unk>.
Software than prior.
And so that has a meaningful impact on our gross profit margin and whats available obviously to cover operating costs.
And so the.
400 number I would view as kind of ancient history.
Bob Shepardson: Because it sounds like with the enterprise expansion coming at the end of the year, most of that contribution falls into 25. You got to give us a rough sense, perhaps, of how much from government versus backlog from Yeah, look, Charles, I think the important thing there is a very high percentage, 90% plus of that is contracted backlog, and I really don't want to go into too much detail beyond that in terms of what's associated with one client versus another. Clearly, you know, this, our work with Leidos for the DHA is a big I want to communicate about this 30% increase in revenues and 70% increase in adjusted EBITDA is that a huge amount of that is predicated on contracted backlog inclusive of what we're doing with light. Your next question comes from Jailendra Singh with Truist Securities; please go ahead. Hi guys, this is Eduardo on behalf of Jailendra.
And.
And I think the important thing is that.
I am really reluctant.
We've kind of gone long guidance here.
2024, and 25 and.
Talked about what has to happen in.
In 2006, it's pretty clear.
That.
We're guiding 30 negative 35 negative 45 on EBITDA, so that goes to zero plus in the following year.
I feel like.
We don't need to put yet another number out there.
Our top line in 2006.
But I think it's fair to say that.
It's lower than 400, given the given the change in mix that we're that we're anticipating.
Your next question comes from Eric Percher with Nephron Research. Please go ahead.
Thank you Bob another question for you I think you fleshed out the revenue side.
To ask you to dig in a little bit more on the R&D commentary I think what I heard was the path to 25% to 30% reduction over time.
Jailendra P. Singh: Thanks for taking the question. On the comment of achieving breakeven at Just Deep Down 26, I think you guys previously mentioned that you could get to breakeven on $400 million of revenue. Is that sort of indicating a ballpark of what you're expecting for 26? Yeah, I mean, look, we've updated I think everything from a few quarters ago.
Remind us how that kind of stair steps with converge and youre getting that 70% of volume.
The.
Step function reductions are.
And then what was the last part that with DHA. There is mitigation, but that's in the mid teens, what was that mid teen reduction.
Yes, let me clarify Rx so.
Bob Shepardson: Our mix, I would expect, is more heavily weighted towards software than before. And so that has a meaningful impact on our gross profit margin and, you know, what's available, obviously, to cover operating costs. And, and so, you know, the 400 number, I would view as kind of ancient history.
The converge related spending.
Assume pretend theres no work for the government here.
We saw year over year high Twenty's decline in 23 versus <unk> 22.
I would expect that that will.
Would have continued in the area of down 30% and 24.
Bob Shepardson: And, and I think, you know, the important thing is that, you know, I'm really reluctant, we've kind of gotten long guidance here in 24 and in 25 and, you know, talked about what has to happen in 26. It's pretty clear that, you know, we're guiding negative 35, negative 45 on EBITDA, so that goes to zero plus in the following year. I feel like, you know, we don't need to put yet another number out there for the top line in 26.
The spending.
Investing that we're doing for operation and the government ecosystem will mitigate that decline.
More like mid teens as opposed to 30%.
Is that clear.
Okay. So thats helpful. Overall declines are going to be more like mid teens.
If you segment that it would have been down 30.
But but the spending.
The investing on.
On the government side takes it back up to mid teens and then Eric.
Eric R. Percher: But I think it's fair to say that, you know, it's lower than 400 given the given the change in mix that we're anticipating. Your next question comes from Eric Percher with Nefron Research. Please go ahead.
And then.
And then from going forward from 'twenty four we get we get back on.
Bob Shepardson: Bob, another question for you. I think you've flushed out the revenue side. I'd like to ask you to dig in a little bit more on the R&D commentary, and I think what I heard was a path to 25 to 30 percent reduction over time. Remind us how that kind of stair steps would converge in getting the 70 percent of volume, what the Step Function Reductions are.
Track for those declines.
And by 26, we're envisioning.
A.
Kind of run rate that's in the ZIP code of call it 25% to 33%.
Of software.
Revenues.
Got it and at that point, you're getting.
Getting the dividend from.
Sunsetting anything beyond converged.
Yes.
Perfect. Thank you.
Thank you.
Your next question comes from Jessica <unk> with Piper Sandler. Please go ahead.
Bob Shepardson: And then the last part that with DHA, there is mitigation, but that's in the mid-teens. What was that mid-teen reduction? Yeah, let me clarify, Eric. So the convergence related spending. So assume there's no work for the government here. We saw year over year high 20s decline in 23 versus 22.
Hi, guys. Thanks for taking my question and appreciate the updates just on HBV by customer type.
I guess just.
Maybe can you help us understand whether the <unk> subscription revenue.
Level includes kind of the Cvs and elevate or all of these large customer pay or migration.
Bob Shepardson: I would expect that that would have continued in the area of down 30% in 24. The spending, the investing that we're doing for operations in the government ecosystem will mitigate that decline to more like mid-teens as opposed to 30s. Is that clear? Okay, that's so that's helpful. Yeah, overall, the clients are going to be more like mid-sized teams. If you segment that, it would have been down $30,000, but the investing on the government side takes it back up to mid-$30,000.
Thank you spoke about and then just kind of as those transitions or the migration to converge have occurred there is there any shift in the way you expect to recognize revenue from these big payer customers like a shift maybe from subscription to visit.
That would have occurred alongside the migration.
No is the short.
Short answer is no.
Yes.
There is no.
Bob Shepardson: And then, you know, I expect that, you know, we'll, and then, and then, and then, from, you know, going forward from 24, we get, we get back on, on, on track for those declines, and by 26, we're envisioning a, you know, kind of a run rate that's in that zip code of call it 25 to 33% of, you know, software revenue. Got it. And at that point, are you getting the dividend from Sunsetting, anything beyond Converge? Yes. Perfect. Thank you. Thank you. Your next question comes from Jessica Tassin with Piper Sandler.
Yes.
I think fourth quarter includes all the revenues from the customers that you mentioned.
We're not charging for migrations.
And just migrating clients alone won't change the type of revenue that they're doing with us or how we recognize that what it does do it puts us in a fantastic position to upsell those customers now that they are on converge and so the revenue potential from them.
<unk> is much enhanced relative to them.
Remaining on the legacy platforms. So there's that and then doing so I think thats really I think where you'll you'll see the upside.
Jessica Tassin: Please go ahead. Hi guys, thanks for taking the question and I appreciate the updates on just ACV by customer type. I guess just, Can you help us understand whether the 4Q subscription revenue level includes the CVS or all of these large customer payer migrations that you spoke about? And then just as those transitions or the migrations to Converge have occurred there, is there any shift in the way you expect to recognize revenue from these big payer customers, like a shift maybe from subscription to visit that would have occurred alongside the migration at? No, the short answer is no, Jess, the, you know, there's no, I think the fourth quarter includes all the revenues from the customers that you mentioned. We're not charging for migration.
Proceeded with the current basis, we expect to be able to see increase in same store sales.
And.
Expanding with those customers over time.
Maybe I'll just hi, just maybe I'll just give you. One example, so they think it's public information.
Go lives.
<unk>, which was the largest migration we need in our history.
<unk> everything we've done before on a converged fully integrated with Sydney, but in addition to everything we've done before in the different programs to enable we enable a local thing for relevance. We also in elements towards public about it begin to do virtual primary care.
And we are currently very cautious in the wages, we think about how to model this but that interaction has enormous potential.
Bob Shepardson: And just migrating clients alone won't change the type of revenue that they're doing with us or how we recognize it. What it does do, it puts us in a fantastic position to upsell those customers now that they're on Converge. And so the revenue potential from them is much enhanced relative to them remaining on the legacy platform. So there is that. And then, you know, doing, yeah.
Same store growth and enormous value a full elephant there are similar examples with other customers some of them public and some are not.
So the biggest opportunity with migration is increased stickiness with the customer increased level of satisfaction and an opportunity for selling additional solutions and we are seeing.
Much.
<unk> ramp up in volume because the experience is just dramatically different for the different participants for both providers and members of the old patients.
Ido Schoenberg: So I think that's really where you'll see the upside associated with the current basis. We expect to be able to see increases in same-store sales and growth with those customers over time. Maybe I'll just give you one example.
Your next question comes from Dan Bernstein with Wells Fargo Securities. Please go ahead.
Hi, Thanks for taking my questions.
Bob I want to crystallize. The comment you made earlier it seems you expect DHA to be a steady contributor to revenue beyond 2025 is that correct.
Ido Schoenberg: So I think it's public information. The goal of Elevance, which was the largest migration we did in our history, included everything we've done before on a Converge fully integrated with Sydney. But in addition to everything we've done before, and the different programs we enable, we enable a lot of things for Elevance. We also, and Elevance was public about it, began to do virtual primary care. And we are currently very cautious in the way that we think about how to model this.
No question.
That is our expectation.
Okay, and I guess, if that's the case, where do you expect to pick up.
It's no different no different than any other customer that we would.
<unk>.
We.
We expect that there'll be with us for a long time.
I don't know why we would think about this one any differently.
Especially if that level of investment that we're making right.
Ido Schoenberg: But that interaction has enormous potential for sensor growth and enormous value for elephants. There are similar examples with other customers. Some are public, and some are not.
Of course, just parlaying that until a question about 2026.
If we're thinking about incremental growth in 2020, if it's not coming from DHA.
Where is it coming from and what's your visibility there. Thanks so much.
Ido Schoenberg: So the biggest opportunity with migration is increased stickiness with the customer, an increased level of satisfaction, and an opportunity for selling additional solutions. And we're seeing a much significant ramp-up in volume because the experience is just dramatically different for the different participants, for both providers and the members of all patients. Your next question comes from Stan Bernstein with Wells Fargo Securities; please go ahead. Hi, thanks for taking my questions. Bob, I want to crystallize a comment you made earlier. It seems you expect DHA to be a steady contributor to revenue beyond 2025. Is that correct?
It's a big wonderful world out there of customers.
And we expect to do a lot of business with all of them.
We're signing new logos and we are expanding with our existing customers. So yes, Dan I mean, we're presuming success.
Across.
Our lines of business, but if you look at what the guidance for.
For 2025, and then breakeven in 'twenty six.
There is probably about.
The improvement there from a cash flow perspective is probably somewhere at 25%, 30% driven by costs.
The balance driven by revenue and gross profit.
Got it Super helpful. Thank you.
Stan Bernstein: No question. That is our expectation. Okay, and I guess if that's the case, where do you expect to pick it up?
Sure.
Your next question comes from Ryan Macdonald with Needham <unk> Company. Please go ahead.
Hey, this is Matt Shea on for Ryan. Thanks for taking the questions I wanted to circle back on an earlier question about the reference of all base of customers. You have this nice base now, but also commented over the last couple of quarters on how the sales team has been seeding opportunities with new health systems and payers just curious if that restaurant tubal base is starting to.
Bob Shepardson: I mean, it's no different, no different than any other customer that we would sign. You know, we expect that they'll be with us for a long time. I don't know why we would think about this one any differently, especially given the level of investment that we're making, right? Of course, just parlaying that into a question about 2026. If we're thinking about incremental growth in 2026, if it's not coming from DHA, you know, where is it coming from? And what's your visibility there?
To make converged less of an evangelical sale and more of a must have best of breed solution or just ultimately curious how the wind down of converged development and the new Salesforce design and increasing the velocity of those net new customer conversations.
Bob Shepardson: Thanks so much. It's a big, wonderful world out there for customers. And, and we expect to do a lot of business with all of them. We're signing new logos, and we are expanding with our. So yeah, Stan, I mean, we're assuming success across our lines of business. But if you look at what the guide is for 2025 and then break even in 26. Um, there's probably about a, you know, the improvement there from a cash flow perspective is probably somewhere at 25, 30% driven by cost. The balance is driven by revenue and gross profit.
Matt This is almost not a question, it's almost like a statement, which I wholeheartedly agree with.
So I would still.
Maybe give you more color and detail.
The initial customers for converge, we're super early leading edge adopters.
Excited by Division.
Two the value and turned up to be first to market with our platform. They are not too many of those.
The market Theyre essential obviously for any new platform to be accepted we are very quickly reaching a point with all the go lives that we have where we are becoming.
Bob Shepardson: Got it. Super helpful. Thank you. Sure. Your next question comes from Ryan McDonald with Needham and Company. Please go ahead. Hey, this is Matt Shea on for Ryan.
A very proven infrastructure that is scaling really well with very good proof points and metrics.
In a very safe choice.
In the market.
Matt Shea: Thanks for taking the questions. I wanted to circle back on an earlier question about the referenceable base of customers. You have this nice base now, but you have also commented over the last couple quarters on how the sales team has been seeding opportunities with new health systems and payers. Just curious if that referenceable base is starting to make Converge less of an evangelical sale and more of a must-have best of breed solution, or just ultimately curious how the winding down of Converge development in the new Salesforce design is increasing the velocity of those net new customer conversations. Matt, this is almost not a question. It's almost like a statement which I wholeheartedly agree with. So I would still, maybe, give you more color and details. The initial customers for Converge were super early bleeding-edge adopters that were excited by the vision, understood the value, and signed up to be first to market with our platform. There are not too many of those in the market.
And in health care, especially that's a really big deal.
It's not only the value of the workflow and everything else. These are things like cyber security or regulatory compliance. There are so many things that you need to think about when we deploy an infrastructure for digital care.
For the entire organization. So a few things happening to our platform of reading matured and its proven but also the need for our platform in the market is much more palatable and clear today than it was a year or two years ago, we don't need to explain much about what we're doing why it's important the rfps.
Our detailed and long people know what they want to buy.
And we are invited to participate today.
More than ever so we are at the boring execution phase. If you will following gaydon age of a lot of innovation and daring and dreaming now it's really about we build it it's working really well and it's 100% about execution efficient execution to generate.
Ido Schoenberg: They are essential, obviously, for any new platform to be accepted. We are very quickly reaching a point with all the goal lines that we have, where we are becoming a very proven infrastructure that is scaling very, very well with very good proof points and metrics, and a very safe choice in the market. And in health care, especially, that's a really big deal. It's not only the value of the workflow and everything else. These are things like cybersecurity or regulatory compliance.
Store growth, which also means the laser focused on software subscription high margin parts of our business more than anything else.
Your last question comes from Glenn Santander <unk> with Jefferies. Please go ahead.
Oh, yes, thanks for taking my question.
Listen to the prepared remarks, I think Bob said subscription revenues were down just modestly from Q3 and I think maybe you suggested there was a decrease from legacy platform, maybe that was the source of the decline.
Ido Schoenberg: There are so many things that you need to think about when we deploy an infrastructure for digital care for the entire organization. So, a few things happened. Our platform has really matured and is proven. But also, the need for our platform in the market is much more palpable and clear today than it was a year or two years ago. We don't need to explain much about what we do and why it's important, because the RFPs are detailed and long. People know what they want to buy.
Curious about from those customers.
They have already migrated over to converge with now with more than half your volume on converge like what sort of your booking experience has been with those new customers and is that sort of translating to some increased subscription revenues with those that have already.
<unk> migrated over to the new platform.
Hi, Glenn well, a few things you're absolutely right.
Ido Schoenberg: And we are invited to participate today more than ever. So we are at the boring execution phase, if you will, following an age of a lot of innovation and daring and dreaming. Now it's really about what we will build. It's working really well.
What we've seen in subscriptions that are missing are the outcome of decisions that were made sometimes four to eight quarters ago.
Always a tail in the heart of re platforming and we are experiencing today as I mentioned earlier the results. We see with people that have migrated are really excellent in Wales.
Ido Schoenberg: And it's 100% about execution, efficient execution to generate profitable growth, which also means a laser focus on the software subscription, high-margin part of our business, more than anything else. Your last question comes from Glenn Santangelo with Jeffries. Please go ahead.
Almost any metric that you would choose.
And as I gave us your.
<unk> and which are not atypical.
For expansion I mean, the first thing that clients are doing when they're happy is to buy more and to use the platform.
Glenn Santangelo: Oh, yeah, thanks for taking my question. Hey, you know, listening to the prepared remarks, I think Bob said, you know, subscription revenues were down just modestly from Q3. And I think, Bob, maybe you suggested there was a decrease from the legacy platform; maybe that was the source of the decline. I'm curious about those customers, you know, that have already migrated over to Converge now, with more than half your volume on Converge, like what sort of your booking experience has been with those new customers. And is that sort of translating to increased subscription revenues with those that have already migrated over to the new platform? Hi Glenn. Well, a few things.
More and more often so we are now just different reality.
Then we were even 12 months ago, where we are very optimistic on retaining and growing our array converged clientele.
Many many ways.
Do that but I'd like to point out again, there's nothing in our guidance.
Assume any dramatic thing beyond the reasonable and that should not be confused with lack of enthusiasm, which we share. We just don't want to put it into our into our guidance a focus at this point.
Okay. Thanks.
There are no further questions at this time I will now turn the call back to Dr. Schellenberg for any closing remarks.
Thank you everyone for joining us this evening again I'd like to express ROI My bulb in so many other people in on well for your faith for your patience as we went through their re platforming.
Ido Schoenberg: You're absolutely right that what we see in subscriptions that are missing is the outcome of decisions that were made sometimes four or eight quarters ago. There is always a story at the heart of re-platforming, and we are experiencing this today. As I mentioned earlier, the results we see with people that have migrated are really excellent in almost any metric that you would choose. And I gave a few examples, which are not atypical.
Very excited to be in the growth phase of our company and really humbled by the opportunity to help.
Wonderful people, including our women and women in uniform and many other people that deserve better care then they get today. So thank you again.
This concludes today's conference call you may now disconnect.
Please wait the conference will begin shortly.
Sure.
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Ido Schoenberg: For expansion, the first thing that clients do when they're happy is to buy more and to use the platform more often. So we are now in a very different reality than we were even 12 months ago, where we are very optimistic about retaining and growing our converged clientele. There are many, many ways to do that.
Okay.
Okay.
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Okay.
Yes.
Ido Schoenberg: But I'd like to point out again that nothing in our guidance assumes any dramatic thing beyond the reasonable, and that should not be confused with lack of enthusiasm, which we share. We just don't want to put it into our guidance and focus. Okay, thanks. There are no further questions at this time. I will now turn the call back to Dr. Schoenberg for any closing remarks. Thank you, everyone, for joining us this evening. Again, I'd like to express my thanks to Roy, Mai, Bob, and so many other people in Amwell for your faith and for your patience as we went through the re-platforming. We are very excited to be in the growth phase of our company and really humbled by the opportunity to help wonderful people, including our women and men in uniform and many other people that deserve better care than they get today. So thank you again. This concludes today's conference call; you may now disconnect. Please wait.
Okay.
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Operator: The conference will begin shortly. The conference will begin shortly. The conference will begin shortly. The conference will begin shortly. The conference will begin shortly. The conference will begin shortly.
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