Q2 2025 Streamline Health Solutions Inc Earnings Call

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Greetings and welcome to streamline Health solutions second quarter 2024 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note that.

Operator: Greetings.

Operator: Welcome to Streamline Health Solutions 2nd quarter, 2024 earnings conference call. At this time, all participants are in a listening mode.

Operator: The question and answer session will follow the formal presentation. If anyone wants to require operator assistance during the conference, please press star zero and your telephone keypad. Please note that this conference is being recorded.

This conference is being recorded I would now like to turn the conference over to Jacob Goldberger, Vice President of Finance. Thank you you may begin.

Jacob Goldberger: I would now like to turn the conference over to Jacob Goldberger, Vice President of Finance. Thank you. You may begin.

Jacob Goldberger: Thank you for joining us for the corporate update and financial results review of Streamline Health Solutions for the second quarter of fiscal 2024, which was the three-month period that ended July 31st, 2024. As the conference call operator indicated, my name is Jacob Goldberger. Joining me on the call today are Ben Stilwill, president and chief executive officer, and V.J. Reeves, chief financial officer.

Jacob Goldberger: Thank you for joining us for the corporate update and financial results review of streamline health solutions for the second quarter of fiscal 2024, which was the three month period that ended July 31, 2020 core as the conference call. Operator indicated my name is Jacob Goldberger, joining me on the call today are Ben Stilwell, President and Chief Executive Officer, and B, J Reeves Chief Financial Officer.

Jacob Goldberger: At the conclusion of today's prepared remarks, we will open the call for a question and answer session. If anyone participating on today's call. It not have a full text copy of our press release announcing these results you can retrieve it from the company's website at Www Dot streamline health net or from numerous financial websites before we begin with prepared remarks, we want to be sure. We are clear for everyone on the record.

Jacob Goldberger: At the conclusion of today's prayer remarks, we will open the call for a question and answer session.

Jacob Goldberger: If anyone participating on today's call does not have a full text copy of our press release and not some of these results, you can retrieve it from the company's website at www.streamlinehealth.net or from numerous financial websites.

Jacob Goldberger: Before we begin with prayer remarks, we want to be sure we are clear for everyone on the record how certain information which may be provided today, as all of our earnings calls, should be viewed. We therefore submit for the record the following statement. Statements made on this conference call that are not historical facts are considered before looking statements within the meaning of the private security litigation reform act in 1995. These are subject to risks on certain keys assumptions and other factors that could cause actual results to different material from those who may discuss. Please refer to the company's press releases and filings made with the U.S.

Jacob Goldberger: Certain information, which may be provided today as in all of our earnings calls should be viewed we therefore submit for the record the following statement.

Jacob Goldberger: <unk> made on this conference call that are not historical facts are considered before looking statements within the meaning of the private Securities Litigation Reform Act of 1995. These are subject to risks uncertainties assumptions and other factors that could cause actual results to differ materially from those who may discuss.

Please refer to the company's press releases and filings made with the U S Securities and Exchange Commission, including our most recent Form 10-K annual report, which is on file with the SEC for more information about these risks uncertainties and assumptions and other factors as always we are presenting management's current analysis of these items as of today participants on this call should take into account. These risks when evaluating the topics we will.

Jacob Goldberger: Securities and Exchange Commission, including our most recent Form 10-K annual report, which is on file with the FCC for more information about these risks on certain keys and assumptions and other factors. As always, we are presenting management's current analysis of these items as of today. Participants on this call should take into account these risks, one evaluating the topics we will discuss. Please note, Streamline is not undertaking any commitment or obligation publicly to revise any such for the statements made today.

Speaker Change: Discussed. Please note streamline is not undertaking any commitment or obligation to publicly revise any such forward looking statements made today on today's call. We will discuss non-GAAP financial measures such as adjusted EBITDA and booked SaaS H D. D management uses these measures talk about better insight into our financial performance. However, certain items of income and expense are not included in these measures. So.

Jacob Goldberger: On today's call, we will discuss non-GAAP financial measures such as adjusted EBITDA and book SAS ACV. Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures.

Speaker Change: These calculations may differ from those when she another entity may utilize in calculating their own non-GAAP measures.

Jacob Goldberger: If you compare these amounts on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for reconciliation of such non-GAAP measures to the most comparable GAAP measures.

Speaker Change: You compare these amounts on consistent terms. Please refer to our website at www Dot streamline health Dot net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures I would now like to turn the call over to Ben Stilwell, President and CEO.

Benjamin Stilwill: I would now like to turn the call over to Ben Stillwell, President and CEO. Thank you, Jacob, and good morning, everyone. So far this year, we've significantly expanded the value we provide for the gravity cycle and health care. Expansion comes from product enhancements for workforce automation, identifying financial opportunities, both from the clients we have brought online or expanded our impact with, and identifying the next set of clients to partner with us to get paid through the care they provide. As a result, our performance SAS revenue group 21% turned for six months of fiscal 2024. After excluding the revenues from the client non-renewal, we discussed at the end of fiscal 23.

Thank you Jacob and good morning, everyone.

Ben Stilwell: So far this year, we've significantly expanded the value we provide to the revenue cycle and health care expansion comes from product enhancements for workforce automation identifying financial opportunities. Both from the clients. We have brought online or expanded our impact with and identifying the next set of clients partner with us to get paid for the care they provide.

Ben Stilwell: As a result of our pro forma SaaS revenue grew 21% during the first six months of fiscal 2024 after excluding the revenues from the client on renewal we discussed at the end of fiscal 'twenty three.

Ben Stilwell: During the second quarter, we successfully closed contracts with an aggregate SaaS ACB up $800000. However, we received notifications nonrenewals and renewals at lower rates for contracts with aggregate value of $2 $8 million of SaaS AC. So as a result booked SaaS ACD, which is the annualized contract value for all agreements currently.

Benjamin Stilwill: During the second quarter, we successfully closed contracts for the aggregate SAS ACV of $800,000. However, we received notifications of non-renewals and renewals at lower rates for contracts with an aggregate value of $2.8 million of SAS ACV. So, as a result, both SAS ACV, which is the annualized contract value for all agreements currently being recognized, as well as bookings that have not been implemented, as of July 31, total $13.6 million, with $10.7 million already implemented.

Ben Stilwell: Being recognized as well as bookings that have not been implemented as of July 31st totaled $13 $6 million with $10 $7 million already implemented.

Benjamin Stilwill: Johnson. Due to the reduction in books that's ACD, we now estimate that we will achieve our adjusted EBITDA break-even run rate of $15.5 million during the second half of fiscal 2025.

Ben Stilwell: Due to the reduction in books as ACD, we now estimate that we will achieve our adjusted EBITDA breakeven run rate of $55 million during the second half of fiscal 2025.

So with the significant churn we experienced during the quarter, it's worth visiting how well our service model is working the claims to terminate or reduce their contracts with us mostly made their decisions due to the lack of resources available to them in some cases that is leading them to outsource a large parts of the revenue cycle at a higher cost and others. It leads them to understand.

Benjamin Stilwill: So, with the significant journey experienced during the quarter, it's worth visiting how well our service model is working. The clients who terminate or reduce the contracts with us mostly made their decisions due to the lack of resources available to them. In some cases, that is leading them to outsource large parts of their revenue cycle at a higher cost, and others leads them to understaffing these functions and subsequently failing to see potential return. It's an unfortunate dynamic in our market, but also emphasizes the reason our products and service model needs to exist. Our best clients frequently remark how deeply their Streamline counterparts understand their needs and provide them with hands-on education, optimization, and insight.

Ben Stilwell: Tapping these functions and subsequently failing to see potential return.

Speaker Change: It's an unfortunate dynamic in our market, but also emphasize that the reason our products and service model needs to exist.

Speaker Change: Our best clients frequently remark, how deeply are streamlined counterparts understand their needs and provide them with hands on education optimization and insight.

Benjamin Stilwill: Compared to the outsource model, this helps leaders take back their revenue cycle and keep the crucial knowledge of their system in-house. When a health system chooses to outsource, the vendors they work with are incentivized to not improve the systemic challenges that health system faces. So we need to continue to invest in the high-quality insights from the data we collect from clients, so that leaders are increasingly aware of the value of owning these outcomes in-house. One specific example means mining client remittance data from 835 reports to help solidify the relationship between the ROI dollars estimated before setting the bill to payers, with the actual cash received post-payer underpayments and denials, which is one of the industry's largest challenges.

Speaker Change: Compared to the outsource model. This helps leaders take back their revenue cycle. It keep the crucial knowledge of their system in house.

Speaker Change: When a health system chooses to outsource the vendors they work with are incentivized to not improve the systemic challenges the health system basis.

Speaker Change: So we need to continue to invest in the high quality insights from the data we collect from clients. So that leaders are increasingly aware of the value of owning these outcomes in house.

Speaker Change: One specific example, I mean mining client remittance data from 835 reports to help solidify the relationship between the ROI dollars estimated before saying that bill to payers with the actual cash receipts coast payer underpayments, and denials, which is one of the industry's largest challenges.

Speaker Change: Just like in addition to denials trends demonstrated coding improvements in collaboration with Expedia and departments create the touch points that resonate with higher level executives as well as the users and managers.

Benjamin Stilwill: This link, in addition to denials trends, demonstrated coding improvements in collaboration with their CDI departments, create the touchpoints that resonate with higher-level executives, as well as the users and managers. In today's budgetary environment, more than a member, health systems have pushed the decisions higher in approval thresholds lower. Our client base contains some of the best health systems in the country, and they fully embrace our services model while continuing to ask for more of these insights. Our client's success team in class by them is either blessed for having all the resources they need to succeed or motivated in the sense that they need, they know they can use our insights to make the improvements that they need.

Speaker Change: In todays budgetary environment more than ever health systems have pushed the decisions higher and approval thresholds lower.

Speaker Change: Our client base contains some of the best health systems in the country and they fully embraced our services model, while continuing to ask for more of these insights.

Speaker Change: Our client success team and classify them as either blessed for having all the resources they need to succeed or no debated in the sense that they need they know they can use our insights to make the improvements that they need.

Benjamin Stilwill: Our challenge in ironically, the area for most opportunity is with those health systems who are resource drains or unmotivated by the challenges they face in today's environment. The clients who opted not to renew this quarter are represented here. The clients who did not renew were largely related to outsourcing all or part of their revenue cycle. This outcome is what we're trying to help our clients avoid, because when a health system is forced outsourced, the revenue cycle they lose control of their financial health. The ones who did not outsource with due to the sell-off facilities, but each of these examples is primarily resource-trained.

Speaker Change: Our challenge and Ironically the area for most opportunity is with those health systems, who are resource drain or unmotivated by the challenges they face in today's environment.

Speaker Change: The clients, who opted not to renew this quarter are represented here.

Speaker Change: The clients, who did not renew were largely related to outsourcing all or part of their revenue cycle. This outcome is what we're trying to help our clients avoid because when it helps us move sports outsource the revenue cycle, they lose control of their financial health.

Speaker Change: One who does not outsource was due to the solar facilities, but each of these examples is primarily resort stream. While they may have had the foresight to acquire our solutions they have to make some unfortunate decisions to reduce expense despite positive rois.

Benjamin Stilwill: While they may have had the foresight to acquire our solutions, they have to make unfortunate decisions to reduce expense despite positive far-alive.

So to help our clients to combat the resource drain we are improving our ability to maintain these relationships long term, we're creating stronger ties with client management, leveraging our results and providing actionable high level insights to ensure our counterparts and their executives clearly understand our impacts and what they stand to lose by not engaging with their streamlined solution.

Benjamin Stilwill: To help our clients come back to the resource strain, we are improving our ability to maintain these relationships long-term. We're creating stronger ties with client management, leveraging our results and providing actionable high-level insights to ensure our counterparts and their executives clearly understand our impact and what they stand to lose by not engaging with their streamlined solutions. We're developing formalized best practice manuals for charge reconciliation, building an audit program based on the experience of our successful clients, so that new clients have a great roadmap to success with RevID and Evaluator. With evaluator specifically, we're making our in-house auditing resources available when necessary, generating enough upside that clients can prove their value and then tame control of their HIM departments.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: We're developing formula as best practice manuals for charge reconciliation building an audit program based on the experience of our successful clients. So that new clients have a great roadmap to success with <unk> and evaluated.

Speaker Change: We've evaluated specifically, we're making our in house auditing resources available when necessary generating enough upside that clients can prove their value and maintain control of their H I M departments.

Benjamin Stilwill: We continue to drive tremendous value for our clients. RevID helped a recently go live, identified half a million dollars of mischarges from a single department in just one month of utilization. Not only do we uncover loss revenue, but we help them identify a broken process that would have resulted in significant ongoing leakage.

Speaker Change: We continue to drive tremendous value for our clients remedy helped our recently go lives identified half a million dollars of Mischarges from a single department in just one month with utilization not only do we uncovered loss revenue, but we help them identify a broken process that would have resulted in significant ongoing leakage.

Speaker Change: So in summary, our client success model continues to receive accolades from our clients and we're confident that we're taking the right steps to ensure retention in a challenging environment.

Benjamin Stilwill: So, in summary, our client success model continues to receive accolades from our clients, and we're confident that we are taking the right steps to ensure retention in a challenging environment.

Speaker Change: Okay.

Benjamin Stilwill: On product innovation, we're working to deliver impactful solutions focused on identifying financial opportunities and providing automated workflows to resolve them. The impact of our AI model that we talked about at the beginning of the year continues to create enhanced rules for evaluator clients exceeding four million dollars recently and continues to grow with more rules being deployed and further refined. The model observed coding changes that occurred unrelated to our existing rules. The work started out based on observations with an evaluator, and it's now expanding to coding changes that occurred outside evaluator from other processes or applications, both up and downstream from us.

Speaker Change: On product innovation, we're working to deliver impactful solutions focused on identifying financial opportunities and providing automated workflows to resolve them.

Speaker Change: The impact of our AI model that we talked about at the beginning of the year continue continues to create an enhanced rules for evaluate our clients exceeding $4 million recently and continues to grow with more rules being deployed and further refined.

Speaker Change: The model of observes coding changes that occurred unrelated to our existing rules. The work started out based on observations with no value later and is now expanding to coding changes that occurred outside of value better from other processes or applications, both up and downstream from us.

Benjamin Stilwill: We've also successfully developed a powerful risk-scoring engine within the evaluator, and we are looking to bring that to market as an upsell in the near term. Our go forward evaluator roadmap is focused on identifying additional opportunities for impact and operational insights that are highlighted.

Speaker Change: We've also successfully developed the powerful risk scoring engine within evaluated and we are looking to bring that to market as an upsell in the near term.

Speaker Change: Our go forward and evaluate a roadmap is focused on identifying additional opportunities for impacts and operational insights as I highlighted.

Benjamin Stilwill: We are exploring how we can more directly address payer denials, which have increased significantly in the last two years, in our top priority for hospitals. We anticipate having material upgrades of the system for the identification of the denials before the end of fiscal 24. For rev ID, the benefits come mostly from our investments in automation. Thousands of charges occur in a hospital daily, so identifying only those that need attention and quickly allowing users to resolve them is paramount. Our recent development remain focused on usability and backend implementation, while our roadmap includes pattern recognition to automatically assign tasks and improvements to usability.

Speaker Change: We are exploring how we can more directly address payer denials, which have increased significantly in the last few years and our top priority for hospitals.

Speaker Change: We anticipate having material upgrades of the system for the identification of the denials before the end of fiscal 'twenty four.

Speaker Change: Forever I D. The benefits come mostly from our investments in automation.

Speaker Change: The charges occur in a hospital daily so identifying only those that need attention and quickly, allowing users to resolve them as paramount.

Speaker Change: A recent development remained focus on usability and backend implementation, while our roadmap includes pattern recognition to automatically assign tasks and improvements to usability.

Benjamin Stilwill: On the growth side of things during the quarter, I elected to take full ownership of our growth division. While I'm extremely passionate about our clients and products, as hopefully you just heard, nothing is more critical today than us accelerating the rate at which we are bringing in new clients, and therefore, as the leader of this business, I need to live and breathe sales. Over the past decade, with the company, I've witnessed a significant shift in the way health systems purchase new revenue cycle solutions. The starkly one-to-one weapon buyer relationships one-to-one today. Health systems decisions are made by committees who expect significant data and references.

Speaker Change: On the growth side of things during the quarter I elected to take full ownership of our gross division <unk>.

Speaker Change: While I'm extremely passionate about our clients and products as hopefully you just heard nothing is more critical today than us accelerating the rate, which we are bringing in new clients and.

Speaker Change: And therefore as the leader of this business I need to live and breathe sales.

Speaker Change: Over the past decade, with the company I've witnessed a significant shift in the way of health systems purchased new revenue cycle solutions.

Speaker Change: Historically, one to one rather than buy our relations ships wanted that today health systems decisions are made by committees, who expect significant data and references a relationship may get you in the door, but it cannot close a deal as a result, we have shifted tactics.

Benjamin Stilwill: Our relationship may get you in the door, but it cannot close a deal.

Benjamin Stilwill: As a result, we have shifted 10. Today, the Streamline growth team takes a very analytical approach to our discovery activities, pipeline management, and identification of likely buyers. We have motivated, hardworking RVPs who are going deep with prospects, helping them understand the significant results their peers have seen within our solutions through historical data and smart projections. We're also hiring more in the regions that we have not covered that fit that persona of the ones that are successful. We've begun to invest more deeply in targeted high-value marketing, expanding on the success we saw with our bootstrap social media strategy.

Speaker Change: Today, the streamline growth team takes a very analytical approach to our discovery activities pipeline management and identification of likely buyers.

Speaker Change: We have motivated hardworking RV piece, we're going to keep a prospects helping them understand the significant results. There appears have seen within our solutions through historical data and smart projections well.

Speaker Change: We're also hiring more in the regions that we have not covered that fit that persona of the ones that are successful.

Speaker Change: We have begun to invest more deeply in targeted high value marketing expanding on the success, we saw with our bootstraps social media strategy I think many of you saw across sites such as Linkedin I expect.

Benjamin Stilwill: I think many of you saw across sites such as LinkedIn. I expect that together, this combination of powerful analytics, sales talent, and a renewed focus on marketing will track more healthcare systems to our client community.

Speaker Change: That together this combination of powerful analytics sales talent and a renewed focus on marketing will track more health care systems to our client community.

Speaker Change: But our priorities remain the first a displacement campaign related to an existing offering in a value inter space, where we believe our tool delivers better results at a lower cost.

Benjamin Stilwill: But our priorities remain: the first, a displacement campaign related to an existing offering in a value interspace, where we believe our tool delivers better results at a lower cost. To a continued emphasis on our Oracle partnership, which continues to aggressively push REVID and three, the development of a new and effective channel partner, four, and the last one, beyond new client sales, we can more than double our existing ARR through upsells and cross-sales within our existing client base. We've seen success in each of these areas. We've had a number of positive discovery activities as a result of our displacement campaign, and with the right pricing strategy, I'm confident we will see a win from that channel in this fiscal year.

Speaker Change: Two our continued emphasis on our Oracle partnership which continues to aggressively push Rev. I D.

Speaker Change: And three the development of a new and effective channel partner.

Speaker Change: And the last one beyond new client sales, we can more than double our existing <unk>, they're up sells and cross sells within our existing client base.

Speaker Change: We've seen success in each of these areas. We've had a number of positive discovery activities as a result of our displacement camping and with the right pricing strategy I'm confident we will see a win from that channel in this fiscal year.

Benjamin Stilwill: We've had several successful Oracle Bill lives already in fiscal 24 with more in our backlog, and Oracle has been instrumental in a portion of our new bookings and our marketing efforts. We've been presenting jointly with our sales team to a digital process and that trade shows and continue to see an uptick in the number of prospects Oracle is introducing us to. We've also had successful upsells during the corner in our working to expand our upsell potential with additional evaluator functionality. Our first enterprise clients, one who added REVID, another who added Evaluator, who both go live with their respective new streamlined solutions during the second half of this year.

Speaker Change: We've had several successful Oracle go lives already in fiscal 'twenty four with more on our backlog and Oracle has been instrumental in a portion of our new bookings in our marketing efforts.

Speaker Change: Presenting jointly with their sales team to additional prospects in that trade shows we continue to see an uptick in the number of prospects Oracle is introducing us to.

Speaker Change: We've also had successful upsell during the quarter and are working to expand our upsell potential with additional evaluate functionality.

Speaker Change: Our first enterprise clients, one who added Rabbi D. Another who added value winter will both go lives with our respective new streamlined solutions. During the second half of this year, we'll be excited to share success for success story, obviously once we've had some time to work with these clients after their go lives.

Benjamin Stilwill: We'll be excited to share success for you, success stories, obviously once we've had some time to work with these clients after their go-lons. From a sales operations standpoint, we're arming our sales force with enhanced messaging to match with industry priorities and better explain the overall financial impact of our solutions for all prospects to align with the priorities of the sweet, sweet leadership and with VP and director level counterparts. In some cases, clients have brought up our solutions at peer round tables, and we're looking to encourage more peer-to-peer activities in our user base.

Speaker Change: From a sales operation standpoint, we're arming our sales force with enhanced messaging to match with industry priorities and better explain the overall financial impact of our solutions for all prospects to align with the priorities of the suite C suite leadership, and with VP and director level counterparts.

Speaker Change: In some cases clients are brought up our solutions at peer round tables, and we're looking to encourage more peer to peer activities in our user base.

Speaker Change: So health care systems need to be able to 60 unit revenue cycle. So that they can get paid for the care they provide.

Benjamin Stilwill: So, healthcare systems need to be able to succeed in the revenue cycle, so that they can get paid for the care they provide. We believe it is our duty to develop the products and provide the insights so that they can succeed.

Speaker Change: We believe it is our duty to develop the products and.

Speaker Change: And provide the insights so that they can succeed.

V.J. Reeves: And so, with that, I'd like to turn the call over to our CFL. These are your views. Thank you, Ben, and good morning, everybody. As Ben mentioned, our book SAFACB has a July 31, 2024 total of $13.6 million, and we continue to expect that we can generate persistent positive adjusted EBITDA above a $15.5 million SAF ARR run rate. Currently, $10.7 million of our book SAFACB is implemented, and we anticipate we will successfully implement and achieve at $15.5 million ARR run rate during the second half of fiscal 2025. As been noted, this adjusted break-even timing expectation is the result of unexpected churn during this fiscal quarter.

BJ rooms: So with that I'd like to turn the call over to our CFO BJ rooms.

BJ rooms: Thank you Dan and good morning, everybody.

BJ rooms: As Ben mentioned, our books that they E D. As of July 31, 2024 totaled $13 $6 million and we continue to expect that we can generate persistent positive adjusted EBITDA above the $15 5 billion.

Speaker Change: That's a run rate correct.

Speaker Change: Currently $10 $7 million up our book tax ACD is implemented and we anticipate we will successfully implement ended at $15 $5 million run rate during the second half of fiscal 2025.

Speaker Change: As been noted this adjusted breakeven timing expectation is the result of unexpected churn during this fiscal quarter. We expect to continue to recognize revenue for more than half of that $2 $8 million of non renewal contracts through November of 2024.

V.J. Reeves: We expect to continue to recognize revenue from more than half of the $2.8 million of non-renewal contracts through November of 2024. Total revenue for the second quarter of fiscal 2024 was $4.5 million as compared to $1.8 million during the second quarter of fiscal 2023. Revenue for the first six months of fiscal 2024 was $8.8 million, as compared to $11.1 million for the same period of fiscal 2023. The change in total revenue for both the three and six month periods was attributable to previously announced client non-renewals offset by the successful implementations of new Sats contract. That's revenue total $3 million and $3.5 million, representing 67% and 60% of total revenues during the second quarter of fiscal 2024 and 2023, respectively.

Speaker Change: Total revenue for the second quarter of fiscal 2024 was $4 $5 million as compared to $5 $8 million during the second quarter of fiscal 2023.

Speaker Change: Revenue for the first six months.

Speaker Change: Fiscal 2024 was $8 $8 million as compared to $11 1 million for the same period of fiscal 2023.

Speaker Change: The change in total revenue for both the three and six month period.

Speaker Change: What's attributable to previously announced client non renewals offset by the successful implementation of new sets contract.

Speaker Change: SaaS revenue totaled $3 million and $3 $5 million, representing 67% and 60% of total revenues during the second quarters of fiscal 2024 and 2023, respectively.

V.J. Reeves: For the first six months of fiscal 2024, that's revenue total $5.8 million and 66.6% of total revenue compared to $6.7 million or 60% of total revenue during that same period of fiscal 2023. As previously reported, the company had a Sats contract which did not renew toward the end of its fiscal year. On a pro forma basis, excluding the revenue recognized from that client, revenue grew 19% in the second quarter of fiscal 2024 and 21% in the first six months of fiscal 2024 versus the same respective periods for fiscal 2023. As a result of the client non-renewals and reductions been mentioned, we currently anticipate that third quarter fiscal 2024 total revenue will decline sequentially by approximately $300,000 but will return to approximately $4.5 million of total revenue in the fourth quarter of fiscal 2024 as we successfully implement the existing contracts and expect revenue to grow sequentially in fiscal 2025.

Speaker Change: For the first six months of fiscal 2024, SaaS revenue totaled $5 8 million, 66% of total revenue compared to $6 7 million or 60% of total revenue during that same period of fiscal 2023.

Speaker Change: As previously reported the company had a SaaS contract, which did not renew toward the end of its fiscal 2023 physical year.

On a pro forma basis, excluding the revenue recognized from backfire SaaS revenue grew 19% in the second quarter of fiscal 2024, and 21% in the first six months of fiscal 2024 versus the same respective periods for fiscal 2023.

Speaker Change: As a result of the client Nonrenewals and reductions spend mentioned, we currently anticipate that third quarter fiscal 2024 total revenue will decline sequentially by approximately $300000, but will return to approximately four and a half million dollars of total revenue in the fourth quarter of fiscal 2024.

Speaker Change: As we successfully implement the existing contracts and expect revenue to grow sequentially in fiscal 2025.

Speaker Change: Total operating expenses during the most recent quarter was $6 $7 million compared to $8 4 million for the second quarter of fiscal 2023.

V.J. Reeves: Total operating expense during the most recent quarter was $6.7 million compared to $8.4 million for the second quarter of fiscal 2023. During the first six months of 2024, operating expense totaled $13.3 million as compared to $16.7 million during the first half of 2023. The lower overall operating expense for the three and six months periods was the result of the company's previously announced strategic restructuring and was primarily reported in SG&A and R&D. We also saw lower costs associated with our professional fees and software licenses and line with lower overall revenue from that portion of our business.

Speaker Change: The first six months of 2020 for operating expense totaled $13 $3 million as compared to $16 $7 million during the first half of 2023.

Speaker Change: The lower overall operating expense for the three and six months periods was the result of the company's previously announced strategic restructuring and was primarily reported in SG&A and R&D.

Speaker Change: We also saw lower costs associated with our professional fees and software licenses in line with lower overall revenue from that portion of our business. We do not anticipate significant increases in operating expenses for the duration of the pepsico year or in fiscal 2025.

V.J. Reeves: We do not anticipate significant increases in operating expenses for the duration of the fiscal year or in fiscal 2025. We continue to make investments to improve our technology, including the development of enhancements such as the my-evaluator update, continuing development and expansion of applications for the AI technology that we have leveraged to generate additional content and improvements related to automation and usability. For the 2nd quarter fiscal 2024, net loss totaled $2.8 million, or a loss of $0.5 per share, compared to a loss of $2.5 million, or a loss of $0.4 per share in the 2nd quarter fiscal 2023.

Speaker Change: We continue to make investments to improve our technology, including the development of enhancements such as the my evaluate or update.

Speaker Change: Development and expansion of applications for the AI technology that we have leverage to generate additional content and improvements related to automation and usability for the RFID solution.

Speaker Change: Second quarter fiscal 2024, net loss totaled $2 $8 million or a loss of five cents per share compared to a loss of $2 $5 billion or a loss of four cents per share in the second quarter of fiscal 2023.

V.J. Reeves: The more significant net loss during the recent quarter, despite improved operating costs, was primarily the result of higher non-cash interest expense associated with the private placement notes issued during the first quarter of this fiscal year, as well as an approximate $100,000 valuation adjustment expense in this recent 2nd quarter of fiscal 2024, as compared to $359,000 of valuation adjustment income during our 2nd quarter of fiscal 2023. For the 6 months ended July 31, 2024, total net loss was $5.5 million or a loss of $0.9 per share as compared to $5.4 million or a loss of 10 cents per share for the same 6-month period of fiscal 2023.

Speaker Change: The more significant net loss during the recent quarter.

Speaker Change: Despite improved operating cost was primarily the result of higher noncash interest expense associated with the private placement notes issued during the first quarter of this fiscal year as well as an approximate $100000 valuation adjustment expense in this recent second quarter of fiscal 2024.

Speaker Change: As compared to 359000.

Speaker Change: A valuation adjustment income during our second quarter of fiscal 2023.

Speaker Change: For the six months ended July 31, 2024, total net loss was $5 $5 million or a loss of nine <unk> per share as compared to $5 $4 million or a loss of <unk> 10 cents per share for the same six month period of fiscal 2023.

Speaker Change: The relatively static net loss. Despite lower revenue was the result of the significant cost savings that I previously mentioned offset by the same noncash interest and valuation expenses that impacted that three month period.

V.J. Reeves: The relatively static net loss despite lower revenue was the result of the significant cost savings increase I previously mentioned, offset by the same non-cash interest and valuation expenses that impacted the three-month period. Adjusted even up for the 2nd quarter of fiscal 2024 was a loss of $300,000 compared to a loss of $900,000 during the 2nd quarter of fiscal 2023. For the 6 months ended July 31, 2024, our adjusted even up was a loss of $1 million compared to a loss of $2.2 million for the same period of fiscal 2023. The significant improvement of adjusted even up for the 3 in 6 month period is the result of the company's focus on the growth of its fast revenue solutions as well as significant cost savings achieved through the previously announced strategic restructuring.

Speaker Change: Adjusted EBITDA for the second quarter of fiscal 2024 was a loss of $300000 compared to a loss of $900000. During the second quarter of fiscal 2023.

Speaker Change: For the six months ended July 31, 2024, our adjusted EBITDA was a loss of $1 million compared to a loss of $2 $2 million for the same period of fiscal 2023.

Speaker Change: Significant improvement of adjusted EBITDA for the three and six month period.

Speaker Change: As a result of the company's focus on the growth of SaaS revenue solutions as well as significant cost savings savings achieved through the previously announced strategic restructuring.

Speaker Change: Yeah.

V.J. Reeves: Moving to the balance sheet, as of July 31, 2024, we had $3.5 million of cash on hand compared to $3.2 million at January 31, 2024. As a reminder during the first quarter, we executed private placements for Grace per seed of $4.5 million. Our total debt, including senior debt loan and notes resulting from that private placement, was $12.5 million, and we had no balance outstanding on our $2 million revolving credit facility as of July 31, 2024. Looking forward, as we continue to execute new bookings in fiscal 2024, we anticipate significant revenue growth in fiscal 25 and the achievement of persistent adjusted even up profitability and significant improvement in our use of cash for operations throughout 2025.

Speaker Change: Moving to the balance sheet as of July 31, 2024, we had $3 $5 million of cash on hand, compared to $3 $2 million at January 31, 2024.

As a reminder, during the first quarter, we executed private placement for gross proceeds of $4 $5 million.

Speaker Change: Our total debt, including senior debt loan and notes, resulting from that private placement was $12 $5 million and we had no balance outstanding on our $2 million revolving credit facility as of July 31, 2024.

Speaker Change: Looking forward as we continue to execute new bookings in fiscal 'twenty 'twenty four we anticipate significant revenue growth in fiscal 'twenty, five and the achievement of persistent adjusted EBITDA profitability and significant improvement in our use of cash for operations throughout 2025.

V.J. Reeves: That concludes our review.

Speaker Change: That concludes our review operator, please begin the question and answer session.

Operator: Operator, please begin the question-and-answer session. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker, quiment, and maybe necessary to pick up your handset before pressing the star key. One moment, please, while we pull for your question.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press star two to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the starkey.

Please while we poll for your questions.

Operator: questions.

Matt Hewitt: Our first questions come from the line of Matt Hewitt with Craig Hauer. Please proceed with your questions. Good morning, and thank you for taking the questions. Maybe digging in a little bit on the market itself. What are you hearing from customers? I know that procedure volumes seem to be improving a little bit, but it's not to say that it's broad-based or that all hospitals or health systems are in recovery mode yet. So any details on what you're hearing from customers would be helpful. Yeah, thanks for the question now. So what we've heard is that they are making material investments into whether it's expanding their physical footprints or new service lines to accommodate the patient volumes that they're seeing.

Speaker Change: Our first questions come from the line of Matt Hewitt with Craig Hallum. Please proceed with your questions.

Matt Hewitt: Good morning, and thanks for taking the questions maybe digging in a little bit on the on the market itself, but what are you hearing from customers I know that procedure volumes seem to be improving a little bit, but it's not to say that it's broad base or that all hospitals or health systems are in recovery mode. Yet so any details on what.

Speaker Change: Are you hearing from customers would be helpful.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: So what we've heard is that they are making material investments into whether it's expanding their physical footprints or new service lines.

Speaker Change: To accommodate the patient volumes that they're seeing.

Benjamin Stilwill: But they're still struggling with the revenue cycle side of things and sort of the payer dynamics. You've heard a lot about managed care, et cetera. So they're still trying to navigate those payer dynamics and use tools to do that. Got it.

Speaker Change: But theres still struggling with the what I'll say is that the revenue cycle side of things and sort of a payer dynamics you've heard a lot about managed care et cetera, and so they're still trying to navigate those parents payer dynamics and use tools to do that.

Got it and then shifting gears a little bit so over the past couple of years you've.

Benjamin Stilwill: And then shifting gears a little bit. So, for the past couple of years, you've kind of created or added a number of enhancements to your software. What gives you confidence now that you're kind of turning the corner here in that, as we looked at 25, you mentioned sequential growth next year. What gives you the confidence that you can see those types of returns? Yeah, I think our products are definitely better than the competition as far as a standalone technology, and then pair that with our service model. We do have opportunities to add additional modules to our existing software as well.

Speaker Change: Kind of created it or added a number of enhancements to your software what gives you confidence now that youre kind of turning the corner here and that as we looked at 25, you mentioned sequential growth next year. What gives you the confidence that you can see those types of returns.

Speaker Change: Yeah, I think our.

Speaker Change: Our products are definitely better than the competition as far as a standalone technology.

Speaker Change: And then pair that with our service model, we do have opportunities to add additional modules to our existing software as well.

Matt Hewitt: And people are very ecstatic about some of those opportunities, like the current clients that we have. So if we extrapolate that to the product market, we do think that we have a lot of opportunity there. Got it. All right. Thank you.

And people are very ecstatic about some of those opportunities. The current clients that we have so if we extrapolate that to the broader market. We do think that we have a lot of opportunity there.

Speaker Change: Got it alright, thank you.

Speaker Change:

Speaker Change: Thank you our next questions come from the line of Michael Potter with Monarch capital. Please proceed with your questions.

Michael Potter: Our next questions come from the line of Michael Potter with Monarch Capital. Please proceed with your questions. Hey, Ben.

Speaker Change: Hey, Ben.

Speaker Change: I was hoping that we get.

Benjamin Stilwill: I was hoping that you can give us a little bit more detail around the pipeline that we currently see and you know how late is that pipeline in regards to are we expecting a significant movement in that pipeline being converted into contracts over the next quarter or two? Sure. So we were not happy with the first half bookings under, for sure. I think when I stepped into the role and I looked at the opportunities that we had had out there, the ones that were currently using our reps to close, we should see a good uptick in the second half of the year just from the opportunities that are out there, not including some of the initiatives that I kind of mentioned during my remarks.

Michael Potter: Give us a little bit more detail around the pipeline that we currently see and.

Speaker Change: How does that pipeline in regards to our are we.

Speaker Change: Expecting.

Speaker Change: A significant movement in that pipeline being converted into into contracts over the next quarter or two.

Speaker Change: Sure. So we were not happy with the first half bookings number for sure.

Speaker Change: When I look when I stepped into the role and I looked at the opportunities that we have had out there the ones that we're currently.

Speaker Change: Using our reps to close we should see a good uptick in the second half of the year just from the opportunities that are out there not including some of the initiatives that I mentioned during my remarks.

Speaker Change: Okay. So so you're expecting some.

Benjamin Stilwill: Okay. So, so you're expecting some significant closings before the end of fiscal year? That's correct. Yeah, we have a good line of sight onto deals that will actually close before the end of the fiscal year.

Speaker Change: A significant closing before the end of our fiscal year.

Speaker Change: That's correct Yeah, we have a good line of sight on to deals that will actually close before the end of the fiscal year.

Benjamin Stilwill: Can you give us a dollar value of the current pipeline? We're not currently giving guidance on the total value of the pipeline, but I would say that if you look at the first half bookings, we're looking at more than double that in the second half. As far as the total overall pipeline, it is pretty heavily weighted in the middle of it. So, we expect to still get back on track to have a couple of deals a quarter closing at that half a million dollar PCB. Okay.

Speaker Change: Can you give us a dollar value of the current pipeline.

Speaker Change: We're not currently giving guidance on the total value of the pipeline, but I would say that's.

Speaker Change: If you look at the first half bookings were looking at more than double that in the second half as far as the total overall pipeline. It is pretty heavily weighted in the middle of it.

We expect to still get back on track to have.

Speaker Change: A couple of deals a quarter closing at that half a million dollar ACD.

Speaker Change: Okay.

Benjamin Stilwill: And then can we touch upon a little bit on the value proposition to our customers? Obviously, we hit a bump in the road for extenuating circumstances, it seems, but what are we healing from our existing customer base? Are we exceeding their expectations? Are they seeing the cost savings, or are they seeing a reduction in compliance costs? What kind of feedback are you getting from our current customer base? Yes, so from our current client base, they're very by and large. Like I said, they are motivated to turn around their revenue cycle. They, our best clients, are very resource positives so they can use the most of our solutions.

Speaker Change: Can we touch upon a little bit on the value proposition to our customers.

Speaker Change: Obviously, we hit a bump in the road or extenuating circumstances it seems.

Speaker Change: But what are you hearing from our from our existing customer base.

Speaker Change: Are we are we are exceeding.

Speaker Change: Our expectations are they seeing the cost savings are the same reduction in compliance cost.

Speaker Change: What kind of feedback are you getting some of our current customer base.

Speaker Change: Yeah. So from our current client base there theyre very are by and large like I said that they are motivated to turn around the revenue cycle day.

Speaker Change: Our best clients are very resource.

Speaker Change: Positive so they can use the most of our solutions.

Benjamin Stilwill: I would refer to some of our prospect conversations as being very interesting right now because they, during COVID or shortly after, outsource some of these to other vendors. And they're now disenfranchised by that outcome. They've realized how much they lost by doing that. And so one of our marketing pushes in the near future is going to be take back the revenue cycle because people realize, hey, I need to bring this back in house and I need to enable my troops to be able to find the financial impact. Okay.

Speaker Change: I refer to some of our prospect conversations as being very interesting right now because they during COVID-19 or shortly after outsource some of these to other vendors.

Speaker Change: And they are now.

Speaker Change: Disenfranchised by that outcome, they realized how much they lost by doing that.

Speaker Change: You know one of our marketing pushes in the near future is going to be take back the revenue cycle, because people realize hey, I need to bring this back in house and they need to enable my my troops to me all the time.

Speaker Change: Find the financial impact.

Speaker Change: Okay and just one other question the Cerner Oracle relationship you said, we have we have.

Michael Potter: And just one other question, the external oracle relationship, you said we have several implementations on the platform at this point and several more in our pipeline. How is that progressing, and how is that different? I know that's the RevID offering. How is that different than how our go to market with Evaluate? Yeah, so we had a couple that went live at the beginning of the year, who've now seen significant impact there. They've been referenceable clients, which is obviously a huge thing in this selling process. As of late, they are signing up to do a webinar very soon.

Speaker Change: Several implementations on the platform at this point and several more in our pipeline.

Speaker Change: Hum.

Speaker Change: Hows that progressing and and how is that different I know that's the rabbi.

Speaker Change: Offering how is that different than how our go to market with with evaluated.

Speaker Change: Yeah. So we had a couple that went live at the beginning of the year, who now seen significant impact there they've been referenced have all clients, which is obviously a huge thing and the selling process.

Speaker Change: As of late they are signing up to.

Speaker Change: Do a webinar very soon.

Benjamin Stilwill: So they're very positive. And then we have a couple in the pipeline, who are sorry, the implementation backlog, who are well in their way. You know, some of it is tied to Oracle's upgrade if they're accounting system, but some of it is just, you know, going through the project process. As we get more of those, it's a very connected community. And so we anticipate that they'll be very vocal with their counterparts. But Oracle themselves has committed to the relationship. They are making active introductions and working with us. How that compares to a evaluator, it is a little bit more complex sale.

Speaker Change: So theyre very positive and then we have a couple in the pipeline who are starting the implementation backlog who are well on their way. So some of it is tied to oracle's upgrade of their accounting system, but some of it is just you know going through the project process.

Speaker Change: As we get more of those it's a very connected community and so we anticipate that there'll be very vocal with their counterparts.

Speaker Change: But oracle themselves has committed to the relationship they are making active introductions.

Speaker Change: And working with US how that compares to evaluate or it is a little bit more complex sale are sometimes viewed as a it can be more impactful at an enterprise level. So you have to bring in more departments.

Benjamin Stilwill: Sometimes viewed as a, it can be more impactful at an enterprise level. So you have to bring in more departments. Versus evaluators can sometimes be viewed as something that helps a specific department. And so maybe you can, you know, have less people involved in the process.

Versus evaluated can sometimes be viewed as something.

Speaker Change: Something that helps to specific department and so maybe you can.

Speaker Change: Less people involved in the process.

Michael Potter: Okay, great. All right, thanks, Ben, for the color. Good luck. Let's second after you. Thank you, Mike.

Speaker Change: Okay great.

Speaker Change: Alright, thanks for the color good luck with the second half of the year. Thank you Mike.

Speaker Change: Thank you we have reached the end of our question and answer session I would now like to hand, the call back over to management for closing remarks.

Operator: Thank you.

Operator: We have reached the end of our question-and-answer session.

Benjamin Stilwill: I would now like to hand the call back over to management for closing remarks. Thank you all for joining us today, and thank you for your continued support of Streamline Health Solutions. We look forward to speaking with you again when we will discuss our third quarter financial results.

Speaker Change: Thank you all for joining us today and thank you for your continued support of streamline health solutions.

Speaker Change: Look forward to speaking with you again, when we will discuss our third quarter financial results. Thank you and good day.

Benjamin Stilwill: Thank you and good day.

Operator: Thank you.

Speaker Change: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time enjoy the rest of your day.

Operator: This does conclude today's teleconference. We appreciate your participation. May disconnect your lines at this time. Enjoy the rest of your day.

Speaker Change: [music].

Yeah.

Speaker Change: [music].