MDRX - Earnings call transcript Q3 2017

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Operator

Greetings and welcome to the Allscripts' Third Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Seth Frank, Vice President of Investor Relations. Mr. you, Thank Frank.

begin. You may

Seth R. Frank

much. Good very everyone. afternoon, Thanks

and forward-looking Chief Our in Poulton, Rick Financial part as going our SEC refer We'll number Relations for of Allscripts' the risk future our our statements, presentation call Olis, speakers are Paul hand reviews supplemental Officer. reference events. of Please available non-GAAP a making to the may today the Executive be during our and GAAP quarter Q&A the Chief that the detailed are and earnings Officer; our Black, in I'm results. book statements President; call. We Dennis the Investor current and over these and financial release could results on actual cause Rick our of a are non-GAAP of undertake obligation that, third of release revise number light and materially. to as management tables to please the no data statements with filings statements or earnings that descriptions These both expectations Also, risks information Poulton. affect the more based to And forward-looking details, factors as our to on involve website. and that new well differ the uncertainties

Richard J. Poulton

afternoon, months we since last Okay. joining our you. thanks the three very Good and Thanks, third Seth. been for talked everybody, in quarter call. busy We've to

the client of for quarter. proud and Before during the most numbers I'm quarter, want jumping that of to into details the a highlights deals I catalog few on the

of benefits improvement level will clients. This and, colo our will our provide its XX-year important, benefits Atos. term hosting our and for vendor, restructuring a to finished extending over and largest we with the standards service significant Allscripts First, provide performance to significant financial equally facility contract

healthcare the the nobody we made this healthcare of in sharing clients is a seamlessly networks market the and provider delivering challenge Netsmart significant industry subsidiaries, traditional connecting inroads both ever-increasing reality. do provider vision has and and CarePort scale we the networks. make with post-acute This our a or and through to on importance of Second, the presence

with mobility the cloud and industry market. the month, brings interoperability, introduced re-imagines platform we detail will of EHR changing discuss efforts. scale. it show bring later, true of for provider of spend to topic staying in physician universe payer EHR line, on ambulatory This structures, reliable the in power. the group have for lead record, and healthcare industry to EHR with life-sciences we'll access the expand I the ease to product MGMA continue ahead. early at to with the offering and usability, we operational in greatly to an new beyond from Paul discuss the our design connection more opportunities Third, where and our innovating globally, a develop expect the efficient number industry vendor level. available need has our the The of IT last their clinical solutions a newest continue patient market the clinical minute a innovate forward continue This to integration complete, it benefits and certification ambulatory this to as look continues and doubles But our to tools care. Fourth, in a hospital-based as The and the AI we embedded of perspective new I'll yet enhances and years generally been and acquisition experience. point and will and now vendors tight new capital, This to whole unambiguous physician scale, solutions With to distribution launched the new requires we patients. to seamless to information change want and closed next to McKesson. rapidly, scale. we company This for And are making now the and as we on clients acquisition it is the well an as and U.S. real-time clients our healthcare transaction clients important IT to year. both overhead finally, from

wide With in the This the IT margin. exceeds revenue our the this by closing billion transaction, world, healthcare annual largest of pro and annually. public vendor $X second us now stand-alone it's forma makes a

solutions just the our shareholders, Our deliver And and long-term investment in communities never better for value to operate that the for opportunities competitiveness. value back in. that to scale career been history scale use I checks financial all we positioned to clients, outlined company the we the our our of boxes to have of to associates,

So, with our now through quarter. go backdrop, let during highlights briefly client that some me and of financial the accomplishments

adjusted the services from consolidated Total will EBITDA, also mix. we consolidated EPS from for clients. record. The quarter growth balance nice and delivered non-GAAP year is were Dennis income, in represents existing was of quarter financial and one-third Allscripts. than third higher and This But, business growth. second bookings. a quarter And you is $XXX clients with bookings million strong X% split a and had new software take ago mix year-over-year clients towards our a very expanded summary, the we And balance XXXX a showing bookings and through coming revenue, third it's consistent details. double-digit between of another the new with with

starting drill let health major markets, down the systems. U.S. our me Now and end hospitals to with

their relationship we highlighted we in had As press us. clients release, the EHR several with expand

by care solution, Also, long-time elected Ambulatory long-time healthcare electing health across who Sunrise the and across York, the management, user a of Brooklyn, the been teaching replace acute advantage systems acute ambulatory States our Sunrise a vendor. ambulatory to in of departmental-level to EHR hospital one additional its in and the and department acute example, largest multiple care investment adding geographies. fully-integrated increased in including stand-alone hospitals care, has partner Sunrise New population setting, and Allscripts' in faith-based take surgery the solutions, physician United For emergency

in their Huggins broader considered replacing vendors to advance Hampshire. right the multiple and health the platform. FollowMyHealth was Hospital concluded objectives. added Huggins in vision a and also to its Sunrise We and and Allscripts of Sunrise migrate HIT of Huggins evaluating stand-alone solutions, their quarter, the New solutions, support including is will connected new a integrated major acute its partners needs, the In logo patient engagement community ambulatory IT hospital and other

includes systems managed management care the Care agreement during core to services Director and services its and predictable Catholic signed within support across its This management. managed relationship for to care. remote multiple Hampshire finally, consistent agreements tightly enables population hosting forward. going And IT its and also optimized post-acute This tools, Care with and as them New clients. quarter a for levels a cost Health selected services transitions a Sunrise First efficiency we new Another Center, enhanced focus provides Allscripts' operational application strengthens signed manage example health a First, client, and improve for Sunrise Management, Health is managed structure services CarePort area, client, Medical population health. our for agreement coordination it in the long-time of on

services to Now on there I'm segment. Allscripts' to to physician our going continues significant independent strategy leveraging to move our focus the ambulatory and drive base installed clients. to add-on cross-selling

hundreds providers elected with large the group This replace with we a For group of multi-specialty Allscripts' consisting hosting practice a practice agreement in signed its Northeast. management to PM system. example, legacy system of also

annualized We Year-to-date, very client have management as progressed ambulatory Additionally, care robust. added provider large and continues client very and physician base. TouchWorks specialty. almost ahead interest signed multiple the outside programs. Upgrades MACRA, management and have practice inside we managing we are professional new groups, services MIPS, well cycle that to across revenue $XXX as base Allscripts' in in revenue be among and base of small, well million new agreements QPP mandated the EHR primary across our

We program. key continue critical the the staying importance curve of proactively and the clients provide around work the ahead educate maximizing support benefits to of of market-leading industry regulatory to the QPP to our on

now receive the to to client Reflecting activations a to-date. X,XXX averaging this API our X,XXX per their developers solutions shares third-party Developer was major Microsoft approximately for honors the Allscripts a health currently million APIs, Program continues registered and data Allscripts Inspire company are have all as right the Finally, have API IT honored differentiator of month. area, in Intelligent top at Microsoft be ambulatory we innovation quarter We XXX arena. they And Conference. in at us the using this during

and business, an Next, recruit end There And momentum, of life-science new acting value-based the this also moving care. market, a payers third the is of several of for influencing look excellent life-science as for payer as to factors including Cures for companies influence providers care we patients for sales. and real-time tailwind and new XXst connect need to to the point rising are had efficiently to Act the trials. this clinical the also Century opportunities quarter

medical of with medical we procedures to develop for a management healthcare, leading During preauthorization benefits the quarter, point deploy the announced solutions the company, partnership and eviCore care. at

We will leverage the development and accelerate of this. adoption solution Allscripts API to

health our Bolton third Hospital adopt from care to replacement serving very for Bolton XXX-bed we patients as centers in clinics. is Early Australia, well. signed Sunrise ageing integrated Royal legacy quarter, active. as Bolton international, more an the and QX excellent was XX had than system. Trust Now NHS quarter an moving Foundation to and a organization we In an the

dbMotion Primary acute Health care as its primary settings. South between solution selected Western and Network Sydney interoperability

a not-for-profit Australian providers. health and primary Networks XXXX Health drive Primary South improve to nurses country of Health by support Networks organization the and that our general other forward to general to established sales continuing Network these efforts coordination Primary in Western that Primary Government There practices look practitioners, supports are Sydney is Health across care. health integrated the XX across more base. we and were care

helps paper organizations a success systems opportunities Australia, for Sunrise-BOSSnet exist to the electronic transition, in clinical had also geographic to move to additional Western a from on-ramp Sunrise-BOSSnet and South transition deploy records. beyond as are outstanding today platform expanding is of them. where value-based medical do not they from make an this them and paper the undergoing with to We ease hospitals These evaluating reach sales EHR BOSSnet that to see records, platform platform EHRs Allscripts' clinical Australia. several the geographic are and We

the we've achieved and the This South Sunrise a We state-of-the-art partnership facility is and success in new proud the Hospital the Adelaide the in enthusiastic very of in milestone invested remain in. grow brand official built about we've last our competitiveness XXX-bed that major in of Overall, a also We're Health to Royal years. segments with go-live outside say quarter U.S. at ability implementation and in and Allscripts' continues Australia. six position continue we South largest Australia. operational strengthen, the and I'd Australia over the to geographies to

enjoying continued Lastly, hitting in very The clients. health homegrown from individuals tens the with and agreement and platforms company had success reach software trends. for had continues as is Netsmart brings managed added important system, the add offerings and signed large comprehensive expanding a company's in and it thousands and services the July, to into with a and of quarter, footprint revenue cross-sales quarter, the services. the we to management with strong XXX Netsmart services, cloud-based stride DeVero, is commercial that its example service behavioral-health. of year-to-date, healthcare, long-term This for serves outside to some post-acute In large cycle and sales strategic its a of special health a to platform also home moving care well. its the Netsmart and from and and segment, care these In in and of away behavioral-health a software partnerships services well. Metrocare, long-term social facilities which it. multi-facility approximately agreements as home needs. organization legacy selecting recent mental provider company new addition it One accelerate is with Southwest acquired multiple

highlights for I'd Dennis go to some summary, quarter. of call the the like that the with financial through to over turn So, to

Dennis M. Olis

afternoon. Rick, Thanks, good and

the review GAAP we in the the on on the as metrics release Full earnings reconciliations release. well will in stated. non-GAAP focus quarter's As the income unless please non-GAAP schedules data workbook Allscripts comments as largely available figures of this statement earnings Relations the Investor and otherwise are supplemental website. numbers, on available reference My

from impact Information a the on August, in business in Enterprise With this no acquisition X, QX. closing QX. in acquisition of assets, October Systems NantHealth The was which P&L from transaction closed was there perspective immaterial late

premature changes and detail before of in impact as is this made respectively. IFRS Allscripts' XX impact of industry-wide discuss to results FASB are recognition the change issued results references IASB XXX or by revenue XXXX. It future all and considering Finally, current revenue to our to the and Topic jointly in

impact in have With stood this February detail, having call change will I which We financial September. will QX in bookings in reflects software backlog billion quarter both the in XX%. provide backlog, as our included and total the XXXX accounts will the accounting during the perspective on bookings begin Rick of the on of of remaining This forecast covered well in our of XXXX. $X.X at bookings with not XX% metric. comprises are renewals for as component impact that The the services

income the to statement. Turning

in the adjustments an of revenue revenue GAAP which $XX increase versus growing XXXX. non-GAAP growth $XX of $X quarter quarter, in the Non-GAAP in the deferred $XXX in revenue XXXX. year-ago revenue million revenue quarter Netsmart's totaled adjustment $XX of QX totaled XX% non-GAAP million, excludes Third million, XX% million third in XX% was of or third resulted million acquisition-related year-over-year. This quarter.

of impact in Netsmart second the range quarter. a year-over-year, expectations, from Excluding consistent acquisition, with long-term acceleration strong our revenue an the the and performance mid-teen was

our recurring third and in non-recurring versus non-recurring strong XX% came quarter. in revenue Thus, grew recurring and grew relatively reflecting X% total mix Looking at a XX% at a year same the total on revenue the non-recurring revenue period recurring the mix revenue in QX, mix, ago.

new revenue, increased revenue X% results increased of transactions, totaling XX% recurring revenue maintenance, item. Looking $XXX Recurring million. in support subscriptions, and line software at year-over-year. QX year-over-year, software Total by consisting

discussed last as QX stronger recurring one-time very well in revenue performance, we Non-recurring increased as As variables XX% revenue quarter-over-quarter. metric. quarter-to-quarter bookings for multiple software from the and year-over-year, the anticipate of necessarily sustainable revenue of the by QX, strong a results the not mix quarter. in saw to in return growth QX a view would a as quarter, non-recurring quarterly We driven mix in software given software this fluctuations recognized

to client services. Turning

million As implementations contributed a growth in grew services, non-GAAP as Netsmart quarter to Allscripts' XX% upgrades. and offerings Similar driven XX% recurring QX. services services by of multi-year driven encouraging. increase. offerings. Results managed increased hosting, by revenue such from cloud hosting, service and this Recurring from in revenue other non-recurring revenue $XXX private and RCMS managed to this result X% are revenue year-over-year, also cycle service primarily revenue, services service consolidated additional revenue increased year-over-year, year-over-year

We have bookings and quarters for expect growth reported strong multiple indicated we revenue accelerate. to begin to

better growth the as continued services, with across quarter, recurring in potential. software within we also underlying as revenue board an services contributor Allscripts' is results. non-recurring of strength Allscripts well growth important to Stability see This the top-line

are in came QX on anticipated in XXX for year. software services mid-teens with XX.X%, up consistently Looking year-over-year, software periodic was last revenue trending at margins non-GAAP for period service gross Allscripts' margins Client increased same year-over-year. an margin, XX Gross basis margin at the the component, by variances. total points as Analyzing gross quarterly margin to basis gross points margin compared increase sales. of reflecting higher XX.X% in

healthcare operating compensation and $XXX totaled The non-GAAP costs. our non-GAAP expense, at results variable additional excludes year-over-year. The expenses and year-to-date other purposes. SG&A a figure XX% in non-GAAP higher function is cost, expenses, Looking SG&A a accruals higher increase of non-cash expenses, million, SG&A increase for given acquired transaction-related

XX%, growth QX. rate We rate Netsmart potential. markets year-over-year, Allscripts. QX a anticipate key R&D from our million, on We consistent have also similar capitalization see international commentary a step-down call. Gross XX% was at increased $XX expense reflecting head going QX, Allscripts' into and up where count the we in was software acquired significant with R&D

software total a Allscripts' XXXX Netsmart our the and adjusted right million. QX reported up is $XXX capitalization and contribution on percentage XX% expectations EBITDA of with EBITDA expense EBITDA, income trending in million, line for was a of the was range the from decrease, a strong as high-XX% adjusted equal the $X million million $XX rate statement to or R&D the margin. year-over-year XX% and between million, $XX totaled as QX. $XX EBITDA in total Given in in also XX% increase reported Adjusted quarter

common line, Looking amount ago increased (XX:XX) year Netsmart close represents a date the amount on $XX include due the million transaction that slightly million, $XX.X the below million operating cash actual stock. of the $XX non-cash This from loss acquisition discussed debt the the results well investment quarter total in at interest on Allscripts' a of NantHealth's as final to this of quarter. [non-recourse] of last sale the higher non-course higher the Allscripts' to discussed to (sic) of loss the additional related compared NantHealth to sale based debt. note Please as GAAP

other strategy EIS attributed the to costs GAAP release and cost of half McKesson included severance transaction expenses expenses, transaction-related earnings on ongoing Table which addition with to $XX the Approximately In the net non-GAAP accruals X approximately and The million. purposes, legal QX. reporting million sale, our costs. to excluded advance at in is streamline these including loss Severance of costs the $X transaction-related of of the of the other to transaction-related remaining income to bottom attributed is expense are associated related from of listed are under in acquisition.

Allscripts was $X.XX adjustments non-cash transaction-related expenses, quarter. non-GAAP excluding other and totaled to the and Finally, Healthcare non-GAAP $XX million for and income net Solutions attributable EPS

and Allscripts convertible year-over-year. ownership in increase, net portion million grew quarter reminder, $XXX the EPS purposes, is Allscripts' of balance businesses. with million interest non-recourse XX% million, income but senior Solutions a controlled our and Netsmart's total partially net notes, calculated in a Allscripts the approximately is consolidated Non-GAAP increase principal ended $XXX to owned, for a $XX DeVero million of Healthcare Allscripts non-controlling to debt quarter-over-quarter. As non-GAAP reflecting debt which totaled to reflect the on of reported acquisition. consolidation long-term a million debt, secured attributed $XXX $XX

improved operating flow software million, cash, flow $XX XXXX and adjusting $XX purchase QX on cash to expenditures, improved for million after of Free to capitalized Turning totaled cash up working capital from management. capital software.

As and both cash flow from of we the the quarter, improvements operating half in second year. we've QX, free quarter-to and noted past, expect in the throughout will stated cash in as vary flow

revenue Turning anticipates to adjusting to adjusted to high-end we the range anticipates are follows; of The at billion our prior XXXX our Company billion, also of or year-to-date $X.XX million financial to and be performance, non-GAAP range per at diluted be of non-GAAP outlook $X.XX outlook, EBITDA as given are we our reaffirming of earnings our million, the high prior of between XX% Allscripts' $X.XX $X.XX to finally, respectively. end between to XX% $XXX share And our growth per target share company $XXX

Looking discontinued quarter, additional the expenses by attributed Horizon down fourth to revenue wind will as we operations. of the report which business, March and XXXX will to Clinical

impact Our year outlook for operations. the of excludes the discontinued

in transaction. As charges expect quarter discussed severance incur attributed from fourth we and to the last quarter, to the EIS transaction cost

expect million charges recognized in majority these continue QX the of be with XXXX range, to the the of and the to of in total XXXX. We $XX first half

closed Finally, quarter. the as disclosed, previously we NantHealth third transaction during the

with over Since we file it to disclosures required will XX-Q to Paul. our Form requires references the turn the next X-K/A. prior simultaneously results, Thursday, November X. that, next will week on the We X-K/A to forma with And I'll week pro Nant's file pro XX-Q forma

Paul M. Black

the solutions acquisition McKesson's prospects we has us My their in Solutions at reputation Since information in and expectations. a optimism, Management will innovate multiple Information sessions, are; have of and reinforced will open healthcare important October, healthcare community from we and client focused client it areas of a for from technology and primarily regarding strong be excel reception associates, and Cycle now base tracking, a clients announcing to positive large, now to these complex Paragon parallel Solution comments executives we acquisition integrated owns dedicated to and expressed in EIS maintains Management to systems In from and Allscripts plus They solutions. preferred among reception and Paragon and candidly with exceeded we're Enterprise these key invest as Revenue Allscripts' early client and and as service investing enhanced country. on across and and ERP. In Thanks, client our business. a our events this laboratory, will requirements. hospital benefit HealthQuest emerge resonates welcome clarity to leader, interoperability clients EHR segment. provider history commitment that all the Solutions on relief, have trusted over success Dennis. the clinicians. offerings market held August, large for the enterprise ancillary focus the will and health supported Revenue key content management, collective STAR platform smaller as including regulatory Cycle meet areas, the prospects Sunrise foundation and continue and a interests. preferred a to maintained provide Paragon lines. tissue hospitals Sunrise will the

XX% based post-acute executive processes are client point precision of confidently Paragon replacement with of X,XXX they I on Paragon their approved EHR. the four Paragon interest financial on brand improve September opportunities CareInMotion optimistic McKesson for agreements boards XXX% feedback that a have hospital that acquisition. prior organizations. is organizations from their capital medicine in that to not by published solutions extended EIS confirmed From technologies, associates McKesson on a Research, Paragon have and proof results Allscripts' clients we and and site integrate business day the feedback introduce board October largest expenditures to healthcare health the and benefit hospital engagement Our X. Allscripts of corporate leaders and our systems acquisition organization new by Supporting on seamlessly keen the from existing EIS These were clients. Black EIS and direct to questions answer work important EIS client and platforms the began we had and customers. standpoint, determined poll integration that will to the this invited closed leaders survey Paragon are into Allscripts. to are for consumer A the leadership other are Paragon the XXX McKesson to of the who conducted organizations, Allscripts Book and

required begun corporate eliminate non-client-facing We areas. actions to outlined. cost of the ultimately much benefits actions These particularly yield will have synergy to in the we've also significant take overhead redundancy,

next quarters. of are A drive associate with track been and benefit on objectives forward asset of had. We that results We pool we our in the phases the execute organization. the integration will this significant of on will from plan combined the engaged, talented better most has coming with talent the within EIS help the the move identification we have ever

as and note, There the So, no work like year the face in millions to QX. three disasters a that the at uncertainty, clients to industry Washington we in given from natural finish time positioning I a to impacted our shortage within issues on continue attributed strong during the challenges turbulent deliberations the are healthcare. hands-on of healthcare

We disruptions proud that hurricanes. unprecedented back during providers giving and Florida Allscripts help to the are could from healthcare Texas, Puerto communities Rico challenges in and

critical information and worked Texas we clients flooding, dbMotion lieu Florida, to EHR of medical access hospital access. in to and utilizing outages in with provide power During spotty

also with client San free across the working to We Mutuo, to after Surescripts, Allscripts' Hurricane to providing one we In Texas provide which Puerto is in pharmacists assistance based Island, partnered needed Louisiana. much Juan. to Maria hospital hit history direct are and patient-specific medication month access struggling an Auxilio Rico,

help introducing directly will services for Puerto medical that Health critical MedShare. We their medical sending to supplies MedShare supplies, Rico We are to and with us our deliver partnered client to the aid personnel indebted to leadership Rico. and of people to Northwell in provide medical essential Puerto emergency for

in are with days to of We help byproduct care company Puerto as Northwell within Hurricane Rico together Maria. of honored medical a our

its about the view. steadfastly support ever full more prospects The optimistic We industry are we in Allscripts realizing results the than serve. this XXXX potential year-to-date for

to ranks XXXX For this Black respondents, operational from and spot mid-year one which I excellence four them. the Book clients number number again and one demonstrates Rankings, believe on Of large one in solidly Book years. trust, over category in healthcare together for hospitals Allscripts' our their obligation the ranking observations, beds in first-place our held number EIS, another with will hold report category, they we consecutive that Black our of enhanced indicators, XX has X,XXX Allscripts patients continuously globally. In ranked Allscripts believe elevates validates number Allscripts for these nearly Rankings XXX is plus year. the important we scale of to standing XX the serve. in Putting a one

now offerings of over As questions. three solely that, distance. we scale this mass, in are highlighted, go And one of largest take Rick it industry turn critical with with we'll the the and dedicated the vendors the to world, to resources your to

Operator

Thank you.

Our first the question. question your from Baird. with Matthew comes line proceed of Robert Please Gillmor W. from

Matthew D. Gillmor

Thanks for Hey. the question.

do achieved commentary observations McKesson the about ramp margin terms share take Let we initial overhead expenses initial ability and updated any can you you me that your And start you be in and to your Any with of thinking corporate be mentioned. expectations? about relative have the to out costs can asset? should how that quickly

Dennis M. Olis

for Thanks question, the Matt. Yeah.

head quarter, of some McKesson similar quarter. is count project upon that the done actions in within the in the in taken some base immediately had take We a Allscripts' reductions which resulted third the some did acquisition. that we the we So one-time had third base. There within severance charges what we were had

we Paul mentioned, actions So some non-customer-facing for people. head on count, take did as

planned which and of Alpharetta and down Allscripts number we in Atlanta shut the We actually had have a a the site. sites smaller into was McKesson's quarter, shut facility site that consolidated the their actions in down to completed

existing think plan at the product a the to plans Allscripts' teams teams a cost, we're we I according integrating future functional level. into we're on reduce to to track Regarding where level and QX, be. In

integration were reductions in and that where throughout as the about will this to good we feel progress we we on guidance So begun the track they XXXX. continue for plans has provide quarter, because

Matthew D. Gillmor

it. Got

Richard J. Poulton

to it with question. the by just the way was at because this we is benefits scale to pile end the of deeply Recognize the I Matt, some thing of that your integrating Allscripts. And of Yeah. want one business get on that reason and

quarters component. of before it So it'll separate And be entity, stand-alone just talking a only we'll loses one progress as not identity. couple probably be of its

Matthew D. Gillmor

And some Got it. details if talked can Rick, a And you'd competitors? provide about in of helpful. more physicians there and was platform maybe then types That's comments differentiated that I can the on you hoping it of also does to cloud it's make market fit in some it about Where see you new the cloud serves? other versus any the terms that. is how of

Richard J. Poulton

said be mean, not time, introduced repetitive, to mean, Well, lot at last earlier the I MGMA more add. a overly at same with what Matt, there's we I want I don't month. show solution to and, the the I

of full with of of think what built architected will see to this interoperability solutions on cloud of out and in that there, that too AI embeddedness what today a clinical the of kind the it's But progressive completely real the way beginning will different the be us the that rather you again me approach and just other of it. is than cloud but usability, occur. are in replication platform from cloud and the a story some some a So, be as

to will clients be differentiated. So it be in because an about we're And acquire clients ambulatory a excited today point our ambulatory future. it's very that we have alternative selling we'll and the that it it'll for unique,

Matthew D. Gillmor

much. very Thanks it. Got

Richard J. Poulton

Sure.

Operator

& question your question. next Cowen line the with with Charles Our of comes proceed from Rhyee Please Company.

Charles Rhyee

see – but underlying you about of some And of doesn't for next ramp Allscripts how I we can should you as you be may us skewed the so quarter. the kind trajectory there? in on a run sort Netsmart targets, with understand to think But three-year what business, guidance one-time the core Obviously, gave the revenue here. about terms growth. the sort think think Question as Yeah. with and think maybe gave of sense the non-recurring sort I year. how your trajectory should on the business. do of the rate? rest know of for quarter. this a do we Obviously, in talk the we out, comfort the growth that things the you the get And strong and question you wanted – about taking year, last your just on that Hey. congrats Obviously, visible the repeat of model go we about Thanks results,

Richard J. Poulton

start revenue I'll that for what we revenue strong we then and revenue growth that said think is And to and, just had long said this we growth, strong end right? recurring that Charles, growth, the at in you've quarter what can Dennis we very followed recurring. guidance saw of as enough revenue Look, high go. much pretty out and non-recurring there I line know recurring for with frankly, us

and you the of a high toward of So range. reason guided on Dennis year outlook there's updated for end you our the the the balance

plan in you that March. in is gives should you amount the some back detail year. indication outlined all-in-all, the what So, for on would executing just we we expect say, this of of of the balance But fair

Charles Rhyee

Right.

the have with then And I missed – helpful. That's Okay. might just it earlier.

Horizon other we're just the goes of into business? is ops business really to The part going now the see discontinued and Paragon

Dennis M. Olis

Yeah. The Horizon Clinicals go... will

Charles Rhyee

Clinicals. Horizon

Dennis M. Olis

correct. ...into the discontinued operation,

Charles Rhyee

Okay.

Dennis M. Olis

of through QX That will year. in QX continue next start and

Charles Rhyee

costs? the of of the terms in costs sort piece corporate corporate within related you the two in allocating anything the How are there EIS? businesses between is And

Dennis M. Olis

captured the costs Horizon business to in be are P&L. operation the discontinued will Any specific Clinical that

trying The next so. will over get attacking flow business. standard other reductions through out months are and course of going the and those costs the we're some to and synergies exactly And the that nine after of costs EIS or the

Richard J. Poulton

Charles, to in to be disco and in costs with stay expect we And away, costs go will expect be continuing ops. will us we

Charles Rhyee

in a sense you're it's supporting sort transition that of plan Do And that a to I these communicated in you've support but use to business. have on kind a there Clinicals mean I thinking cash is Horizon we're terms the I non-GAAP, of guess group of just because about sort know at GAAP, of looking clients? customers of timeframe kind this or of you that of

Dennis M. Olis

Well, time ago. the to was the decision some made discontinue by McKesson product quite

Charles Rhyee

understand I of Well, course. Yeah, that.

Dennis M. Olis

business we're (XX:XX) to access March of that by Horizon And with XXXX. the plan working Clinicals

Charles Rhyee

you're all type clients decision of So, saying? make a do is next what decision – have year to to a like by some

Dennis M. Olis

be that plan that was Clinicals, they will supported rolled remain on by wish Allscripts. McKesson the it to Yeah. had out. And If not Horizon

Richard J. Poulton

have supported provide us, out made of clients the that parties who for some be are but there by support third transition. not Won't level yet there will

Charles Rhyee

in hop I'll All Okay. back queue. Thanks. right.

Dennis M. Olis

you. Thank

Operator

Nick with comes line question with from question. the next Jansen James. your Please of Raymond proceed Our

Nicholas M. Jansen

quarter. strong another on Congrats guys. Hey,

talk not year. math to – see the to if to a sequential kind improvement of of the EBITDA It correct, little that Just much like, for wanted my looks is you're an the really bit about EBITDA full high-end guidance going that of hit range.

to So, the takes to core? in and in with just if on puts just quarter will the wouldn't regards Thanks. wanted it strong EIS XQ? next will actually maybe EBITDA? performance to be, And get What the accretive your recur thoughts then be

Dennis M. Olis

impact So, guided the impact QX, won't as in of quarter, or going EIS EPS into there on at QX. we any be EBITDA fourth from the end

the the as as investments companies. and McKesson Okay. some items, And in an made affect earnings at Netsmart's acquisition per will that increase to and the of if interest the expense of below it as share, will that line in QX see look we DeVero other then EPS well items in the relates you

below will that So, be and will have be an will that made EPS our an adjustment EBITDA. on impact

You recall all do of calculation also need we're company. into we consolidate the because EBITDA Netsmart our to that can in our interest fully that, when minority EPS figures, eliminating we

into are the items would EBITDA QX. that So of adjusting made in those be a going couple

Nicholas M. Jansen

my Great. And some bookings of as are guys it another now. you to peers of growth, then is, like your challenging delivered right bookings question quarter looks grow second

within on broader your drivers to So, just get business. of thoughts kind of the your kind wanted

have You fourth comparison. quarter a tough

Just Thank in of to what XXXX? you. as get seeing exit you're the marketplace a sense trying we

Paul M. Black

some Paul. fundamentally, to brought we've five are made absolutely The us strategy the course is off. of what point a is This we've years where last, and investments over doing paying been the that

to sell that the breadth well we into sell we of So take us of able have the depth be allows what and marketplace. – the to what the and different has the and offer a to, diversity to marketplaces in of met been diversity we of the number market

our cycle, health, revenue balanced care, post-acute quite what and we our as investments doing. a our global, our selling well, performance life been that payer, have So specifically population we're said, those in sciences, pretty across those are things all

is what we're does applications. the do selling what rest Secondly, industry mission-critical we and the of think I

to with. not opportunity me. can't do continue the else perhaps When financial somebody that maybe me certain that's us, expand, do and That's we they to we clients continue for computers that it's line creates help else at somebody help upgrade, that can't another somebody we these positive us things so thing for trouble, a things say, an like cycle about think way and run clients else we mean Maybe with have to could And they in that's that out continue and do capture, pressures, for And something in them other can't do I both should are something when that of should us. these they could we my outsourcing. as cost well for more can items it effectively. total well. revenue well. That's And that operate look

that them quite been I trusted would XXXX of and XXXX. helps So, allows way, from than we XXXX we are a have us. a and from in we align frankly, us us beyond. opportunities different or actually the And a extent marketplace position for creates that to take that partnership perhaps to services of standpoint, in supplier financial the trouble times that And distinguish I in that times pressure, to in think a think and with will what

Nicholas M. Jansen

color. again. the Congrats for Thanks

Paul M. Black

it. Thank you. Appreciate

Operator

Please of Richard question. comes Close from proceed with with question next Our line Canaccord your the Genuity.

Richard Collamer Close

on strong Yeah. Congratulations quarter. a

bookings, on I to a you in you XXXX. that, now great bookings quarter along that Just quarter tag have guess the of with EIS, respect had fourth and to

in were you most quarter? recent Do third fourth think be You show bookings growth you'll able here able the to growth in show some the quarter. to

Richard J. Poulton

that then, whole encourage we're measure out. early the It's in the so that. working to that. quarter frankly, about a to and We bookings to We're tough still didn't definitively – we did little a everybody comp, the a way Richard, it's would as get would have lot you and And say consistent EIS to know. Nick's through do, question so business going approach. pointed

what expect models of depends a the Paul, in EIS. when outlooks it's just that get or really people, would to and And don't just getting lot hard. There's really stuff We're think think on of just nice but suggest the impact the that don't of so of because to now. know, is But, where there's anybody stand. ability to for EIS, fourth right we a to same what kind on where we I we right – And see pipeline, end lots deals for everybody timing have quarter the good and the the I now. working a basis as we uncertainty you same comp. seeing end it can to behavior I about guide was, then your on think elaborate, then, tends behaviour, we If in tell guide tough we change you of strong. have market seasonal quarter, don't the feel we what we'll everybody even But

Paul M. Black

historically to going with and fruit. nothing given and something and we posted. the we've going you, be to Yeah. it. that us bad is that there reason We're guidance I clients, QX them, historically really there March, a I've more to anybody expect this that we and There's goodness. I and guidance where continue there's the of hit to that have to given EIS of are that's very is strong, results partnership guy. we're That's very But we discussions why there But hurricanes, discussion. important nor a lot probably single the have one lead been soon, QX also not proud been thank large a another bear every not forecasting expect any you is IDNs to will that lead in there's to to which believe else that largest that's table we've around we've that of I given lot out would of out light, be

Richard Collamer Close

Great. Congratulations.

Paul M. Black

you. Thank

Operator

RBC. the comes from with next of question question. Our with Hill George Please your line proceed

George Hill

either they or be fence the guys, with stay? whether And look guess, obviously question. the but from and Allscripts the customers base, partner Good customer have going thanks Paul, McKesson, met another for I and I'm stay comment most customers that dbMotion afternoon, think Allscripts assume you about your see any would from for EIS think customers the some McKesson the opportunities, from with then, are what Allscripts taking on need and about you be those that they great? footprint whether out, you as who what jumps cross-sales to vendor. to fertile or into other guys we Hey. do do of to perspective, may into

Paul M. Black

Sure.

would June as On the XXXX XX be was been for take it in Rick to sale. when they've purgatory, stay, to at to it this of say, a what it's announced, of going was from going minimum business

these little pause and that a them have been bit of So consternation. on caused has folks

them the a is two they're it on, The also of me we And given off of going the pause, currently have ones that fresh invest that I current talked like today, specifically. there's please have quite think go by and better. them told platforms frankly We're will, fact breath path also So to solution continue the with them, it's about buy them that I which air. clarity the some versus you're I've those that George, I to want their fact but we're given real has behind directly reaction when about couple, with if you one who you feel even met face-to-face clients going things but the to quite and door guys, a lot a own we met IDNs, they to a in larger of versus to there some number positive. only accounting large MetaPack a owns HIT I've makes that very owned the supplier, patient seen, the with an was that they them

universally the things I'm going are today. you us people that what do with other is support to that The getting

those plan. been relationship. operating pretty in and if a like in that to those a good have That's come they and, that have they go. not reassuring the that they of They will, like let for me which people. they we're people is respect McKesson manner them, to people – And going course So worried trusted the you the are them,

the button. the if product, then, lastly, the So what's future just, And the taking they are of worried what's your you will, people. off future pause about finger it's of the

number surprised a enterprise pretty enjoyed, that quite the component, the Now to content they're one fair access getting, that people and the are about tied other management saying they These this cross-sell got IDMs. solution I'm they that content a from and large rely the that about especially I'm is the that's pretty fact and to specifically on things of are I've organizations are moving that larger positively are platform than some on they success also heavily. proven, that excited consumer frankly things something now proven piece. feedback interoperability at that's to have McKesson have have access which they platform platform. an to engagement a that's not also with

on George, system, bigger say rambling you before Horizon I'm you know you in I didn't are our yet my, smaller because say, of top that. my I'm to if is but here, very interested as Allscripts, make about I'll last the but to getting more quite looked, like they you profile. actually getting are it somewhat lab some of if important you is, So feedback thing I'm window of you calls payable will, the dashboard, an and on in accounts to are player, a from the have direct that. organizations haven't player the And

with a actually business have you're I'm McKesson, people the having and actually are. we're teams and one Those two or with interested plus three are our of Allscripts those broader in people exceptionally should deeper, discussion. doing with we Now, the discussions top

George Hill

investment. to commentary. could more move in showing IT now driving on what I mean, I the the from there's for and clients sneak Rick. that return the you away I a should by the focused selling driven right challenging sales guys that's theme from Rick, and vendors, spending been been any season if stimulus-driven this healthcare key more If products one seems ROI are for be that No, lumpier, are on as spending great move be best the guess, it's key environment? which resonant towards

Richard J. Poulton

or think lowers drives is offer efficiency client ROI Well, their cost. a I an category, I everything either services or everything we do George, think, Fundamentally, the in direct we investment. at

easiest So, shortest-term and certainly payback. services, the the it's probably

So, of cetera. et that management would services, of operation, include outsourcing revenue cycle hosting any kind form

need where to form about that in almost On and the some talked the of to I think, which software a the with market, curve, theme everybody on interested I the post-acute type depending do about earlier client lot is solutions. pop a important has are risk was on connect to health But is to how has side, them. risk they talking

George. others. think, some are more there's across have action happening solutions ROI-based right But that software we near-term So now, portfolio solutions, than the I whole

where So, you about diversity I and solution mean, invested feel set and the now. the and right in base exist client of good the in we end markets the

action So the seeing place. all we're over

George Hill

Okay. I appreciate color. the Thanks, guys.

Paul M. Black

Thanks, George.

Operator

next from question. of the Goldwasser your comes Stanley. line Ricky from question Our with Morgan proceed Please

Ricky R. Goldwasser

Yeah. Good Hi. a on congrats and afternoon, very quarter. good

been So, a macro most answered, of just our questions utilization. question have but around

Some seeing? you What some in slowdown of about competitors your utilization are talked environment. trends

Paul M. Black

woes California folks that talked a seeing to, or which of the smidge, they're, I same the was of ones quite the about talking to killing in as that them. margins, delivery frankly, as almost the making with risk some battening cap. good on. night, the West surprised with while the the from talking me actually some you pleasantly it's last was pretty And recently were of Coast, hatches X% down I if Yeah. will, integrated ones to full been are the that that networks ones them hospitals. We're to I Ricky, I've at still they especially was talking And of expected surprised I tell what not we're The going are fully sized again,

each of they really tightening looking time. they're get on will, IT. on And the for business they been focused and focusing going of that They've preparing are on be not that value been dollars for They've there're focused been the that. able do or haven't – a They've they're been getting looking there to that on belt getting hurt at small of have people do The have But, lot a could solutions. overspending they to of might this. somebody been and parts to with may country at at we if sure a that ROI-based they so, of one their been period really, they the frankly, on for spend. focused other if organization on looking make be to service quite you outsource forecasting, if that lines reimbursed how long else,

But broadly I seeing out think it. we don't battling have been are the that this, you the So lot I'm through healthcare not a reporting. other if folks preparing with will, of there trend this work to that people are talk every in We organization for and single world.

Ricky R. Goldwasser

Thank you.

Paul M. Black

you. Thank

Operator

Our proceed your of with the Sean next from comes question Please Dodge line with question. Jefferies.

Sean Dodge

software How timeframe undertaking heavy plans it a XXXX going is on much longer. going afternoon. Thanks. is your Yeah. to lift is does there about stretch for stand-alone a McKesson the project that can in keep to completed the a we intend Good back maybe don't should extensive I Rick, that? the you of largely comments think be how you longer? potentially platform, or that to said how an be? bit know the integration Is

Richard J. Poulton

clear. be to just Sean, Yeah,

identity, I say more opposed So, to lose to think as operational that when of standpoint an going it's its kind technical. from of

the since one themes we're this acquisition, excited complementary on us and portfolio why deal of think the announced about it's is solutions very heard I we you've basis. from a

Whereas hospital we health for that sophisticated or Paragon, in community maybe right? hospital of as built solution market. health of beginning, system, alluded or there's I from Sunrise but kind to solutions, right said as catalog of it the from that edited lines is with community larger little the out out, the some think very service larger well. IDN to the and/or community So, for be has running is it. comments reasoned mean, his really in so Paul

So, that's the EHR on side.

support Some systems. to and have, rev systems of clients they no continuing the those cycle problem

far. very overlap, there's has out if not technical that a to will, reasoned you So be really

Sean Dodge

Okay.

Richard J. Poulton

it So okay. the I'll just Maybe hold there. –

Sean Dodge

Okay.

Richard J. Poulton

more... It's

Sean Dodge

on activity are the proportion came there. quarters us Yeah. idea new And and one what There's which your of most strongly lots then clients, Can solutions so did from base, you of of from Good to some know. booking. third you in client of existing resonating what there? outside maybe give

Richard J. Poulton

bookings third or in from client clients the been comments, more balance made earlier first my skewing my prepared which came I script was a a mix had little that on the a question, came it the And is our Well, had year towards had existing overall of that some from than new comment ago. new we base. and

business So to coming is we have resonating? continues the go you and reverse demand feel very order, very Netsmart I'll if across What's markets, the robust good go about from. major a Again, where growth. end in

well. bringing solutions cycle of you health-type gamut solutions population some post-acute they're runs the to through solutions, that what And So revenue think of as through solutions as of providers. EHR level

bring So that portfolio they complete that have a base. to pretty they

clinical payers solutions. robust. Our that with is life-science very data earlier, the we quite and as care payer think are the end right we shared point are again, to And and closer market, real-time to industry I now. The get innovators space in anxious of

and almost come hospital U.S., markets, And about think, and Those catalog a in ambulatory we of mix shared and feel international I here be services. good Certainly, they're the of EHR, software to full momentum our it. it's pretty degree on there. some top couple the they I then, the tend and EHR. then full pop the markets, stack of really usually wins both the health in between our So good EHR-centric with And stories there. a of

it's name of bigger, you some of get of some it. expansions, replacement, that's clients as And some larger our

I again, start drone we a where broad want bookings talking on. mix it's coming pretty the So, don't to about But are from. when

Sean Dodge

again. Thanks, Okay.

Richard J. Poulton

welcome. You're

Paul M. Black

Thanks, John.

Operator

Steve with of Our Please your proceed Cantor from line next Halper comes question Fitzgerald. the question. with

Steven Halper

Hi.

is follow-up market of product. in transition a size cloud mid-size from a that terms on physician existing from customers, your there say, path is targeted? Just that group And What the then, your groups? ambulatory

Richard J. Poulton

Yeah.

all So, it's Steve, scalable. pretty so cloud, it's

physicians as as for tool So larger effective be can it an well smaller practices. multi-group

but all I have probably planning longer reasonable outside workflows specialties, not we of practices, a little have scope. not all significantly, think be that'll to for large before multi-group

it So broad has And about it. we excited applicability. we're feel a

about asked transition. You

that's tool Here's independent in that the is we're Steve, markets, and first Right way about foremost. it's ambulatory our them possible transition. think going requirement. a existing I our to not But penetrate easy to extent to or continue very the clients easy make we as and – or grow now, a meant to mean... that themselves want we will it. the it avail for of be just to as presence To ambulatory tool,

Steven Halper

Right.

Richard J. Poulton

...we're fact. be in not investment TouchWorks and Pro platforms the in going to spending

Steven Halper

Right.

to soon? intention Pro Sunset no So, TouchWorks anytime or

Richard J. Poulton

Unequivocally, no intention.

Steven Halper

Great. Okay. Thanks.

Paul M. Black

Thanks, Steve.

hour. Okay. nearly It's about an

Seth R. Frank	Allscripts Healthcare Solutions, Inc.
Richard J. Poulton	Allscripts Healthcare Solutions, Inc.
Dennis M. Olis	Allscripts Healthcare Solutions, Inc.
Paul M. Black	Allscripts Healthcare Solutions, Inc.
Matthew D. Gillmor	Robert W. Baird & Co., Inc.
Charles Rhyee	Cowen & Co. LLC
Nicholas M. Jansen	Raymond James & Associates, Inc.
Richard Collamer Close	Canaccord Genuity Group, Inc.
George Hill	RBC Capital Markets LLC
Ricky R. Goldwasser	Morgan Stanley & Co. LLC
Sean Dodge	Jefferies LLC
Steven Halper	Cantor Fitzgerald Securities
Sean W. Wieland	Piper Jaffray & Co.

Veradigm (MDRX) 2 Nov 172017 Q3 Earnings call transcript