MDRX - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the Allscripts First Quarter 2018 Conference 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, Dennis Olis. sir. ahead, go Please

Dennis M. Olis

Allscripts. Good and to and XXXX review Olis, Allscripts' Officer is Kevin. call on joining Paul Poulton, are results. you our our Dennis Black, for Financial Chief call our Executive the joining afternoon, you, me thank the Officer; everyone, Chief for This Today, Rick Thank first quarter President.

then begin with Paul accomplishments and and I'll follow the For closing of we recent guidance, conclude remarks today's operational open for will our and call, with some the by summarizing Rick Q&A. financials review will our before progress. call

We to We to risks actual obligation will of statements the risk and our filings of earnings Poulton. first our SEC could the well the results number our uncertainties are and over involve the supplemental description both turn on as Investor no quarter of reviews these our statements that now please forward-looking events. part presentation as may statements more release available affect details, materially. reference These detailed comments the for results. future and refer are Relations based financial the in you that the a Rick non-GAAP non-GAAP data tables call Also, be or during differ and to our making as the on the We a and book that factors website. management GAAP in I'll undertake call. current forward-looking our encourage Q&A to new of light and revise number the to expectations of release cause earnings information a

Richard J. Poulton

your we today. Allscripts. interest to in two I'm and for joining topics Okay. Thanks, Dennis. your afternoon, Good us time key today, cover going and Thanks appreciate everybody.

of important First, I'll volume on quarter. transactions. given comments recent And highlight make then, summary quarter we the some first recent I'll on comments our activity, make M&A in and saw achievements the some performance some

each a set revenue a the basis, growth million, non-GAAP the across XX% markets. $XXX to quarter. in revenue solution was EPS start broad-based whole let's and first our GAAP Bookings our we growth performance as XX% and million On quarter So, $XXX in non-GAAP in to with of well end record to XX% as $X.XX. recorded growth year-over-year set

held so up we I'd the softness pretty EIS few well and not We've this seasonal decline from of expect half services. given with about a rest Margins sequential our and EBITDA activity some While was we saw margins a rest were surprise most the Overall, we some QX, And few this in first other of and revenue build off of upgrade performance quarter And to of to the too the attributed this revenue. more attributed to in was years, decline comment the as this say was we satisfied was in the expected. the start to continue and to expected us. to throughout EIS year, activity softness project-based I'll moments. year. seen last progress

market, quickly of health health non-profit nation's several me during with client let states. highlight the a the than system granular, getting So, some X,XXX more quarter. the in largest we extension more contract In systems Ascension, including little sites XX activity wins, major had care

our Here, rev care for clinical cycle of each we and our solutions. extended partnership coordination

to Associates, with competitive selected legacy as a who utilize UPMC, both legacy solution. Allscripts of well solutions Allscripts replace added solutions well. footprint XXX a cycle doctors' XX hospitals rev which for Southwest these with market, In more as EIS combination clients the both noting ambulatory worth partnership practice care solutions. our we and as a our extended independent coordination that operates Medical of offices, management also We and new than It's

Concentra with sciences and largest they with future. relationship our we ever hosting business, in services, for life quarter In occupational experienced also significant our trend this continuing we pharma payer foreseeable expand health the for and We as add-on sector. And CRO activity. see our the licenses deepened and

front, solution deal an management the signed Ministry Singapore. in be expected in anesthesia footprint hospital Allscripts its also five is On of the key Singapore, across international expand will information further campuses we to strong which we Singapore deployed And XX,XXX-bed Health the clinicals Community in as the system. XXXX the at in experienced in acquisition later post-acute selling Hospitals new Netsmart facilities to by quarter. General over implement continued and Sunrise new SengKang customer with market, XXX Allscripts

during Allscripts and million Leveraging to the non-emergency into improve this the transportation X.X forces of integrate are access to potential transportation enable companies to patterns a quarter health transportation growing Microsoft a next-generation announce eliminate two Sunrise compared that XX% HIMSS United we clinical innovation Allscripts' Uses the workflows integrates income in for that platform, use. machine faster estimated plan and and open shared revolutionizes reduce to facilitate time of barriers and prevent exist reminders cloud-based today. doctor's Today, partnership, smarter record. appointments transportation. EHR of them these that to decision-making. fastest patient States, Americans in the for have we to rescheduled Allscripts At rideshare patients. order clinicians and into and every experience Allscripts show streamlines from to well. significant Also in documentation community-wide the March, patients Avenel learning Azure. the Lyft, lower creates documentation market EHRs EHR care. from millions have proprietary pleased to company physician APIs were Americans announced Lyft of in to an the reach issues treatment as we to Avenel, missed and the to have or the or appointment. milestones workflow. The getting Through Lyft solution Finally, And announced built joining traditional It's provides to and on Lyft's due directly lack with the quarter, preferences incorporate the clinicians' gets to a physician's that services

So pivoting busy last M&A it's activity, been now six to recent a months.

we I we have progress they some opportunities the the lately with So on transactions. for shareholder share feel made and we thoughts stand about these where us very our that investments represent good significant to value. to Overall, wanted current create and

as overhead now EIS a player the in additional acquisition our cements scale margins. EBITDA and lift and Specifically, us us large provides our our markets, in-patient cycle to clinical leverage rev and

efforts we acquisition, throughout announced will we As the discussed be XXXX. on working when integration we

in our the incremental where EBITDA becomes we a the XXXX reach on pre-transaction So currently continue to business while to business integration company. efforts. we early accretive point for with the And to our EBITDA remain enterprise margins reduction schedule and expect cost margins, dilutes crossover

closed cross-sell into In management synergies, from building the acquisition This which list early STAR system. EIS EIS And deals we're momentum Wyckoff also we the addition beginning we this Heights, new clients during the accounting of activity expected the see quarters. patient platform, quarter. signed financial within are the had deal. several decision to base EIS ERP our and client a a the the to Also, synergies which of purchased during including just multiple in industry-leading care transaction. had cost we sales We Auburn Sunrise quarter, Hospital, the revenue EPSi, Community the some to support cross-sell small on other system in EIS's is opportunities who look running forward client, with future we direction as

we experience, and large value Practice clients, Second, the to quarter science our life the during well to payer we reach combined efforts science and way. we the we the that this model closed extremely end with the new our early our business us with subscription EHR are Fusion bring to responses as Fusion Since life Practice our payer pleased offering. companies and integration acquisition the closing, and leaves positioned believe company in combined organization unit best and under to launched market. our With industry are

the third, and adds to of acquire leadership early their agreement So, the Hospice. health in and acquisition a hospice services. and was McKesson Netsmart to expected And April This announced care Home solidify provider established formerly already Change McKesson is of this and as the leading technology home position to services. post-acute Care solutions Netsmart position of known This Healthcare. in definitive human as behavioral

Netsmart to it systems solution we improve went enhancing and platform mobile that myUnity. well continuum. both homecare also HealthGrid. of with Netsmart is helped serves good the enterprise independent continuum first hospitals level growing the health new cloud technology quite of senior its with performing providers, platform satisfaction. significantly adoption to portals entire the our value-based combined called provider Use post-acute acquisition engagement became get has platform a its patient of usage HealthGrid interactions leading we return. patient certified and patient as well confident a modest a quarter, palliative that for of is patient engagement engagement This with the the made During take approach has critical across Meaningful very Netsmart that next-generation living patient Overall, solution are as live to there the to today and announced Fourth, earning care design. is dramatically is The are our a investment we care, the industry, solution. entire

is early And opportunities Since closed healthcare of expanded see patient top opportunity to we market capabilities provider just and their for use to by have the to EHR that opportunities transaction pre-encounter, CEOs industry. into today, of engagement growth engagement the broadest Hyland to existing rather all providers reallocate reach patient encounter patients integrated capital of Patient FollowMyHealth, of to mature OneContent in to contact platform, sizes. reach to the offering. the company leveraging returned leaders portal. the mind of grow Software. the rather post-encounter clients we this with would expect meaningful finally, from requiring adding organizations to information outlined. with enable integrate that the us HealthGrid our and for populations we tightly I This a We FollowMyHealth FollowMyHealth and up our allowed of in million a the patient Once challenge platform will entire what believe a $XXX April, functionality is XXX% than during seamlessly divestiture sign most segment

So, to for more pleased back now future moves made progress turn with and the I'll Dennis the calls. we've that, call all details to with in further financial all, With in to we the are through go quarter. over forward updating you look

Dennis M. Olis

Thanks, Rick.

numbers, on we review as well please the earnings supplemental as the data workbook release Allscripts' in schedules the reference quarter's as this the So, website. available

before purposes, make me remarks opening into clarity a results. let the For few diving

on First, figures the the Full earnings are in largely on of GAAP comments available my income stated. release. non-GAAP otherwise reconciliations focus metrics unless will and statement non-GAAP

therefore, and new we standard of digit adoption not a XXXX, impact The X, January quarter to approach. retrospective revenue modified and recognition XXX effective income mid-single results. the the adopted the in using did revenue Second, new standard resulted materially first our adjustment

references new disclosures applying such, made current our revenue Please review are to around As recognition for standard. all our the results standard. after the further XX-Q new

therefore, QX and this full QX product Fusion from QX a Practice and unit. products' financial reminder, XXXX date. of discontinued of EIS, results contribution and the as on the The as on Clinical began we March quarter full XX reported, closed quarter include QX the SERIES in back in our operations partial includes contribution business XXXX. occurred Practice closed previously this transaction this as are impact reported divestiture as which of results for lines And a of in February year Third, the as that year. Horizon quarter of the end-of-life closed results and from finally, October OneContent of consolidating Fusion a XX our business

in As of Rick record booking million, previous a XXXX. our had which $XXX QX bookings record up total $XXX million, from noted, achieved QX we we of

now the at metric. that March. result, backlog as included a a impact in as not of in both reflects in stands renewals are $X.X the As This bookings our billion the well record quarter bookings

$X forward statement, growth income quarter $XXX the of in revenue quarter million, revenue EIS the portion XXXX. the the million. $XXX million in QX $X ago. first $XXX deferred year accounting of XXXX, this quarter added acquisition-related adjustment of adjustments first therefore, this for first the level versus revenue XX% the XX% represents non-GAAP XXXX. versus includes $XX non-GAAP a GAAP an non-GAAP of go revenue million of Netsmart's million And totaled $X million. year-over-year. the QX increase to revenue quarter. that totaled Turning first in of of This $XX revenue before XXXX growing divestiture. totaled In QX quarter the OneContent XX% revenue Non-GAAP deferred acquisition-related believe a contributed of represents EIS the adjustment or We of the million million, steady-state

Looking period total our split, in came year grew ago. revenue our mix same total recurring XX%. at at grew revenue versus a total and XX% revenue Thus, non-recurring XX% revenue recurring the

reporting, last recognition be some As will as year. throughout this quarter, we into the revenue XXX XXXX discussed changes in there our the incorporate measurement volatility

trend to expect we the high XX% in low However, range XXXX. the the XX% during

total revenue item, recurring maintenance portion at year-over-year totaling XX% driven A Recurring year-over-year. consisting results EIS line the of of software and revenue consolidation software QX by new Looking transactions, large XX% support the of by $XXX was in subscriptions, revenue this million. increased growth business. increased

repeated As variance on had with XXXX. not of majority several quarter in not software decreased non-recurring XXXX software software the EIS year-over-year. recurring of QX will revenue QX that we that one-time last XXXX. QX associated sales our for In of QX discussed repeat call, our transaction In were year, This the large in to XX% XXXX. revenue included QX the of accounts

multiple and as Given we of quarters' quarterly anticipate software the be would these non-recurring in results. future fluctuations variables reflective QX not metrics, in the percentage

this addition to EIS, multiyear as service increased services, Recurring year-over-year by EIS revenue also revenue Turning year-over-year year-over-year, client XX% increased service services offerings. acquisition. the services, the other revenue to cycle managed by driven of service driven and XX% and QX. hosting, in revenue Netsmart from Allscripts' cycle Similar such consolidated revenue XX% non-recurring contributed offerings $XXX services increase. to non-GAAP million grew

margin synergies as the non-GAAP EIS in margin by Moving anticipate year. margin recognize were margins XXX on Client XX.X% to by the XX.X% the slightly year-over-year. service Analyzing other to software component, down decreased XX XXXX points gross throughout the for compared total points margins gross gross basis year-over-year. from hand we period basis QX acquisition. We to improve last same margin, gross was

at increase services addition on slightly the margin. trending higher the margins also a are of as in reflects EIS consistently the anticipated, gross runs While service mid-teens which

XX% figure the additional Looking $XXX was at expenses, increase expenses year-over-year, related increase year-over-year. expenses primarily at attributed R&D Fusion. and million non-GAAP totaled non-GAAP Netsmart The R&D EIS operating Gross expenses. The SG&A the of transaction and Allscripts. and other acquisitions up reflecting SG&A million, non-cash is SG&A function $XXX additional to a in excludes acquired Practice XX% a from the

Our software XX%, QX. was increase rate a from slight capitalization

Adjusted million Recall to the year-over-year increase. that totaled EBITDA low and stated rate XX% margin $XX As quarter, we margin. a last EBITDA anticipate to adjustment range for capitalization XXXX. EIS the our adjusted million, a software XX% XX% XX% business. margin in QX equates of included a EBITDA relating revenue $X This of a one-time

of and guidance our reported in percentage million million. $XXX track range noted, As year. is EBITDA upward would total and Rick already EBITDA, the EBITDA expect balance efforts the $XXX extend the to mid-XX% a in we through trend XXXX with will EIS on of the line adjusted trending the throughout as margins expectations with XXXX Netsmart's Allscripts' of and integration between range

the this acquisitions. year primarily the that $XX largest EIS which total a million, ago. to fund the The result transaction-related to and increase cash included below required line, financing $XX million, transaction. contributor $XX Please to million the compares severance of quarter XX% GAAP to cost from this costs, EIS other Looking to fees related Practice and interest Fusion is note increased

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

fund increase down for but to the totaled Allscripts consolidation which principal million debt and EPS non-recourse Fusion, increase required in senior ended reflect which due from attributed reminder, total grew convertible reflects include approximately balance portion $XXX notes, The quarter Healthcare with does the owned, the interest $XXX XX% million million Netsmart's of of finance quarter-over-quarter income consolidated non-controlling the $XXX purposes, and not required year-over-year. in non-GAAP a Non-GAAP long-term repayments. on As quarter-over-quarter. We net million, to reported but acquisition is OneContent controlled secured the a Allscripts, generated in debt net QX. is closed $XXX businesses. the Solutions partially Practice of ownership of debt, Allscripts to slightly divestiture, to calculated to proceeds

Turning million flow $XX to totaled software cash software. and compared ago. QX $XX totaled expenditures, with a million after capital $XX flow operating cash cash, adjusting for purchased million year QX capital free

from past, in As cash flow we've noted the will quarter-to-quarter. vary

between outlook, financial $X.XX we're be our EBITDA to to our billion, billion affirming revenue To guidance and $XXX our Turning between remains year million for guidance $X.XX February. per the provided and $XXX in adjusted million. recap, outlook our non-GAAP of

Excluding between of share. earnings $X.XX non-GAAP Netsmart, diluted and $X.XX million. finally, $XXX $XXX share million EBITDA the per adjusted per And and between will be

impact stated in this discontinued business, and expense as the which on our on businesses year, of of is Horizon call, closed As operations. OneContent April details the of our guidance. that year additional Clinical full the are to Also X attributed revenue the divestiture QX note reflected SeriesXXXX reported

Finally, as turn with guidance the have to a of our for year. over we our full expected effective I'll rate for it XX% Paul. that, reminder, And tax adjusted

Paul M. Black

Thanks, Dennis.

past this Over in solutions basis. organic five that increased years, effectively the a portfolio invested worldwide acquisitions has breadth offer we on through assembled that team both solution depth certain the and

to of EMR out in of outside post-stimulus our creating a a of relevant of market platforms Some in new offerings. was number XX core has capital to This XX platforms of invested reality, this anticipation expansion contributed share. able consecutive of quarterly the of capabilities of our record. attraction clients, in existing annual basis, and client retention, to On bookings our market cross-sell demonstrate new clients resulting an we've been new

the the marketplace. past the financial, physician, our and depth driven acute, results has feel breadth This the years. post-acute scale, over large this with We five marketplaces. reach, global is combined in in offerings clinical, have analytic coordination independent and physician, We and unparalleled care

over XX%, has to $XXX XX% XXX revenue grown will recurring has gross over points by from basis that time, grown non-GAAP over by EPS non-GAAP During grow expanded by million, revenue has XXX%. margin and

two-thirds our is the As represented our solutions last we United health roughly to financial, our revenue call, here population base footprint now in-patient clinical, EHR on States. core in indicated out-patient client and and managed of quarterly by services

We and IT are focused delivery, of client's our solutions, on share ease cost use the the greater of spend. earning total a of of lowering

post-acute revenue from our reported believe which and distinguished a highly health of company. survey by a XXX our represented businesses life health, third are care dbMotion, HCIT and population EHR, all interoperability for client organizations, aggregate areas, integrated hospitals investments corporate, include Based higher-growth an other with was key These ranked IDN revenue recognition. we satisfaction science on The Black in HealthGrid. and and is chain been has the our are indicators, by of solutions and offerings competitors. of and and opportunity Historically, that the cycle drives on experience tools, number United States payers, same commitments performance EHR where XbPrecise, solutions industry our of execution Today, supplied scores one. today, that team Allscripts stakeholders. These customer as our and we've CarePort, a including FollowMyHealth, care EPSi, our agnostic Book team's footprint also clients made kept XX

to provided that of I'm to guidance. to going have able this the We over Kevin accomplish. multi-year hand summary, With proud team very has and what at times, annual, for questions call I'm been

Operator

conducting We'll now you. a be question-and-answer session. Thank

Our coming today first from Sachs. from question Jones Robert Goldman is

is Your now live. line

Adam Noble

those worth any Thanks specific contracts or quarter. and what strong EIS this Fusion contribution if McKesson just a if numbers. from out It's you software there the really were calling parse Practice on was on Congrats for Adam bookings I'm for Bob. Noble to could question. Hi. there out curious

Richard J. Poulton

of when their Adam. EIS, through very late So, midway closed closed got We bit to it to quarter, it's bookings either in the most compared separately. not action before little that more suffice I'll they say, and Fusion, in out long-term we get breaking been we're And you reverse it early there. it, out order, – and take the bought only lot booked a quarter. ours. I we had or told but already going separately to it more Practice But mean little. year contracts. on we have in their Historically, last of didn't practice break numbers their difficult the as integrate and not modest a as deeper, it much we we're of were to deeper bookings

I pretty was I'd add a whatnot. Lyft call otherwise, comments, really deal, and across obviously So, We it's sets well. little it I'd say mean bit No. for arrangement the off pretty my was up got solution anything unique that broad-based our there pretty in picked that's of said a all I as And performance. broad-based say is a and but small out? Like to

Adam Noble

bookings That's the bookings bit had with helpful. to past The that side segment a little for the of been with services. as to expect where EIS I house well. running And maybe that to now were for would we particularly ask other on in-house, think contribute XQ in and the below segment that

around any the So, commentary seeing services trends there, bookings, what marketplace? the in you're

Dennis M. Olis

as Dennis, half year, MUX a it the and macro the upgrades saw in Yeah. within work in systems. be last to the so year, to that This the done had the second relates sizable of increase is the we

happening all again have of forward. that across significant lives saw across be wasn't do our our EHRs, number That in going QX. entire upgrades We in QX client go So, of and will repeated a base. we

we sequential on a expect to basis. So in would see that increase some

Adam Noble

for Thanks Great. questions. the

Paul M. Black

Adam. Thanks,

Operator

you. Thank

coming next JPMorgan. from from question question. Samuel Please proceed with is Our your Anne

Anne E. Samuel

versus was that internal year, confidence expectations. growth Thanks fell you the marketplace for could rest you to in your gives are to XX% the you question. look in you hoping year? the guidance my the your in taking quarter maintaining for what as And speak out seeing I revenue where the then, the of

Richard J. Poulton

Anne, change I largely QX saw from was the expected. comments, we as in Well, mean, said I mean, I my sequential

our saying line think to we of much and us around the largely quarter pretty would came where decent pretty in in guess, with guidance, bookings said. we is say had expected quarter, revenue I for what What that it's quarter. expected the starts we a just have fair I indicator we confidence can mean, was with I we I what a what quarter maintain that So, in what future gives is. fourth good was first maybe that

We have know. as backlog, a significant you

So We'll that HealthGrid. I none a guidance get of our contribution some don't invested but but little always right. of still numbers. feel and far from started with, That we've our bit from clairvoyant, pattern, had what not got momentum areas well a like contribution end we've don't off a off Fusion little contribution – to mean more ball, of some we've create pretend of of we the – a is offsets QX we Practice have OneContent, growing the crystal us in a we we for be in really still pattern day, the we of lost the revenue us. with runway

Anne E. Samuel

Great. very much. Thanks

Operator

you. Thank

Percher from Nephron question is next coming from Eric Research. Our

now Your is line live.

Eric Percher

back Thank to revenue you. the to I come want performance.

you word think the I satisfied. used

look at we As recurring, it's strength. clearly

or lighter quarter the that bit the on see course you you'd to what over see you for a your this year? of nonrecurring what does to to comments suggest nonrecurring And see Your and are thoughts on the see, that little expect what is year? the expect than like fluctuation the

Dennis M. Olis

Yes.

by So to going so the have that cut software lumpy, quarter nature, relates element that the we really during right, deals to that. upfront to a the nonrecurring, is it be

be did volatile and We in We that in QX. – the same that fluctuate some will see And magnitude from to of previous expect measurement again, we that saw it so will quarter-to-quarters. think to that quarters. we not that's

that something concerned necessarily not about. we're it's So

cross-sell in strong. drop very, to revenue, The of one-time Rick then, And the adjustment we from revenue believe, with same slight roughly mentioned recurring base. then about in and that as adjustment continue now earlier. of about the that which change related $X $X the EIS around We Rick confident during one-time had very quarter-to-quarter, remains will we EIS the state maintain noted, And feel we level that level course QX, of into million. that million. that that a the year from overall we grow settled that of steady net in some revenue to Our that pretty continue experience has QX, as really opportunities was to that client

Richard J. Poulton

back obvious year. a I off tended last to you as years seasonality of QX in go low non-recurring pattern, very right. out throughout mean, over pickup can three Eric, But, have and But see that the you a the look see usually and revenue we base is

change we this think So we're year. going don't to pattern that

of our to why confidence as going that's lift well. part that's we think So

Eric Percher

Maybe And I'm I getting there. Is word throughout on be up fair? at Right. satisfied that the you satisfied. if wouldn't the you're hung assume year, XX% that

Richard J. Poulton

were What I said we with the quarter, was right? satisfied

Eric Percher

Yeah.

Richard J. Poulton

a It's delivery is our what the clients compilation we of about in positioning quarter. our about to with about And did Quarter-to-quarter P&L performance, efforts. sales satisfied for and we're solutions in, future. all the

Eric Percher

year, with The maybe follow quarter. And the March was of steady seasonality that well. end right. on All business that let I state the the as revenue it on me EIS comment, know in past in saw we

feeling in a is number going present on at the be that do you expect that right quarterly that's around seasonality to quarter, go-forward basis. this You're is much $XX business? still How

Dennis M. Olis

to lot for we be of from the of mark I around OneContent. million year. the the $XX quarter-to-quarter. That's continue seasonality a There's the not Like will think of I before said, the divestiture balance in business

state. So, OneContent basis rest from removed the will in go-forward a steady numbers But would be that fairly be business I EIS' of say the on starting will absent QX. that,

Eric Percher

you. Thank

Paul M. Black

Thanks, Eric.

Operator

you. Thank

coming is from Michael Bank question America next from Lynch. Merrill Cherny Our of

now Your live. line is

Michael Cherny

going customer how at is a about have since launched HIMSS. either thinking thanks or about the I'm the there process to And know encouraged And their product, and did migration will in a evolve? What a you talking just recent point product? forced little time to fairly I Avenel. I migration where will a it dive the been but of to you the on afternoon base customers color reaction versus customers, in on to been with setting for platform? so terms bit current there be it's new you sales Good want an at going clearly forward, some to in far. be the the very new public

Richard J. Poulton

on think still set. live and the client in out to part I say now That layer it about a pretty have we that we and it's it. why said, fair talked Mike, is robust it's came So, was and technology

go I layer iterations clients that, still to. would presentation do think notable expect to we through and will some least with some at the we'll of work our

pretty we're extremely ultimately it. robust to you go having solution through you And be the in in that, do in have interested So way the an really market. to meticulous

sales like So, or anything period I don't use, be time to that. a will for think still term what XXXX – development I solution cycle to it opposed wrapping largely know as

How quarters of think are part to to later certain to that will we've about they their encourages of migration. it? no hold doing say question, clients that's in us right positive, I'd way. force We that about right has all going say a which universally a sell previewing thought now. your ultimately because I'd I technology. But piece think for what not strategies big can big extremely the is feedback at now far we're so keep so they the we for as when last it approaches a multiyear had been intent think there own

for EHR host of who them. particularly portfolio, lot happy we if a the have current our We solution run clients

product. than for of are energy putting to cloud different offering price and can them, certainly the a it. And different But way. on like increasing like they clients For cost don't a they we're why looking an that clients they and a point, the of that's sitting We in they happy get what behind out type some – any of lower no stop if intend is be recognizing it. experience number it,

So...

Michael Cherny

the solutions, of completely on of environment guys where your dbMotion one base? of question, in Got catalyst what think adopt to is your this on of it's there's you interoperability term, is positioned, does final whether help customer then your how more Meaningful you customers transition terms drive depth from Meaningful that in dollar in behind not when it. promoting suite it, funding the the Allscripts to biggest the transition Use Use an And your core unrelated technology or where to current about

Paul M. Black

for interoperability mandate a it will certainly that something good way? you open help. some also That that differently, to that requirements small of to And to Have as large IDNs? do hospitals? you the a hospitals any open. you it Meaningful us. create, the being not And Act to approach and demonstrated existed from Have the really at of be combined for API specialty It's important think there having the will it record you a that done as with with momentum scale? think together done I or you in into, has pull continued will of very large I that done really I momentum think, It's record independents? piece practices with with analysis an our the help. to supplier Use will, able we're out in being the if Mike, So not Have X big win but do X, track absolutely will have think mandate think I are fact, sales. with Cures I it but will have value-based has track create it multi-group that for you baking a that a done some do nice

Michael Cherny

Excellent. opinion, I Paul. an figured had you

it. I So appreciate

Paul M. Black

Thank you.

Operator

Thank you.

Fargo. Stockton is from Wells question from coming next Jamie Our

Your line live. is now

Jamie Stockton

first said Good drive when about? QX. trying on McKesson you're cost assume sometime give I had in maybe, the overhead I evening. Is allocation you of guess update that currently my guys QX, in an I historically, the of the us still EIS taking would Thanks is there. questions. fade? really Can late on one think thinking think maybe for kind the timing the from place timing that to you and synergies you

Dennis M. Olis

some that of with about agreement talked primarily It That's that was we had entered McKesson. the the getting element first half. biggest We service a was what cost. Jamie, we into by the technical talked around had there of that. off Yeah. of a about end IT-related

where, it we're most early. think point for I at the a now we're part, off

gone So that's well. exceptionally

of most part, that like the work with the the rest the we're has said, of April. talked wound that to And lot we do I So about. end TSA a at down that. pleased There's still for of synergies with

will making pleased progress we track synergy when to we're of We're the acquisition And in So, and heavy to there's that out with year. between we meet that you end plans completed the of lot towards lifting on we're the a now that end. the happen that laid still October.

Jamie Stockton

investment. then just Netsmart the And great. That's more Okay. on maybe one

seems of it? are I like think that spinning on that, restrictions really and that year where benefit given maybe, that your do benefit can when What's the for anniversary with that you off? the hit is I And guess, is point, not to two the where what what the correct? investors went valuing it kind you stock this investment really away. is at

Richard J. Poulton

after So with first start part me Jamie. it question, let's Yes, differently. – say years let the two

complete a become we to years, in primary the joint of begin for of venture. available partners some kind For liquidity After two the two years, both standstill. provisions had

together. there freedom think we were So, degrees last to than now there's the were on more of stuff time phone about

question a last the on to Your stock lost a – a now. It's the mid-teens this Last quite is the is, to six That's through ourselves lot spent $XX. question the not of change. lot we you rapid question of your year assured, from a a below spending were in a we're rollercoaster been part $XX, – today the fall, we price early talking know range. rest $XX.XX about last find it's months and part time of perspective, we've We in now ourselves most of right right.

investment. the market stock's that higher, feel today, appreciate starting when Where the the confidence it's market's think more that the that intrinsic value have I value, impossible we of to way. sits to

it. about talking are we So,

Jamie Stockton

Thank you.

Operator

you. Thank

Richard Close from question next Canaccord coming from is Genuity. Our

live. is line now Your

Richard Collamer Close

Great. Thanks.

on cautious really like payer, markets and here. you little Dennis, And is where last more simple Rick on a weeks were give is have as that question years be of Paul other guys company talked to these bit today. first comments the as you other in You your First, sound and tone the competitors' you adjacent it market. is couple here sciences, life some have seemed and about My doesn't in the over the markets? congratulations same of It five more the confidence.

Richard J. Poulton

a post-acute with space; very real. exciting And the few. today These very mean, Richard, people the cost I new science, have, think scale. is of and we want two think getting the name patient think, better are I created, should we more adjacencies things we opportunity the life to EIS today. some to mean, absolutely of you are from of engagement. really about us a payer around adjacency adjacencies the Yeah. hear We adjacencies understand I opportunities we are obviously, that

at So, said, cut about and mean day the a a those on client enthused market is to of real bottom not we done. right to but create about U.S. opportunities everything market lot And clearly investments The strain it. hand, – And fundamentals are them. is trying tougher as sound of we That wouldn't the line. get of I yeah, now. And through to grow efficiencies, suffering market U.S. you noise we're all the them today right – we the ROI-based. technology is as base, made is were we're the clients the in remain good, think pollyannish a generally things we now so fair one got amount helps speaking, financial to usually

So...

Richard Collamer Close

providing stretch good question improved revisit ever So ask putting I you don't results Would some, to but seem consensus here. be the reason ever would guide? your is, the would slightly for this really, if my miss get guidance. I being up numbers, a quarterly on quarterly a credit you guys you're you And estimates, follow-up say,

So would quarterly guidance? revisit ever you

Richard J. Poulton

out spilling now, saying Look, is consider to pain. to to market the I fast off for I'd table. But you don't off Richard, the going given we'll table. be to nothing's jump nothing's the think we're right anything. that. Thank I our think what say us

Richard Collamer Close

you. Thank Great.

Operator

Thank you.

Goldwasser from Morgan is question from next Stanley. Our Ricky coming

now live. Your is line

Mark Rosenblum

Rosenblum Hi. This pieces growth in is the a moving I had just the for on question quarter. of Yeah. Mark Ricky. on

breaking the you that I really a ASC XXX? right So percentage was or helpful. impact Am out reading digit Could mid-single was EIS it clarify on just... it

Richard J. Poulton

impact. dollar No,

Mark Rosenblum

got it, it. Got

Okay.

should potentially you. think acquisition Thank guide including And unannounced acquisitions? guidance Okay. unchanged. about an add other and Is the you left on a it of impact that then we guidance, or as conservative

Dennis M. Olis

we... Look, this it way. say would I

Richard J. Poulton

a had well, divestiture We right. as

Dennis M. Olis

Right.

Richard J. Poulton

off, you Dennis. cut forget to don't we had Sorry divestiture But as a well.

Dennis M. Olis

about talk when had in we thought. It to going actually than occur. we little divestiture divesture, sooner was that. some And happened in I that a would had assumptions Yeah. around the built

acquisition, back it net divestiture the HealthGrid that nets the with So when – all Practice basically you and Fusion guidance. to our acquisition comes to

Mark Rosenblum

guys. Thanks, you. Got Okay.

Paul M. Black

Mark. Thanks,

Operator

you. Thank

Muken is Ross Our from ISI. Evercore from coming next question

now Your line is live.

Ross Muken

Hi.

private guys looks about of to that business? what institutions? On the opportunity? a what attrition up happened the from you are of pick Just And thinking in like? the have that you of of of large it secondarily, an us context some of are the then hospital Is slight how And side, a that in mergers kind terms sort putting change activity sort that past? in the seems like is how the level

Paul M. Black

EHR of inside that multiple to source close-loop platforms, clinical multiple additional or standard EHR, down want organizations. facto cases always EHR And constituents. acquisitions, the you where about, result also ones order them strategy because that's analytics a in say as of it's physicians, those population And which harmonize EMRs. are have to to to that your are talking part out play, data them, are solutions in all roll of the we're some we to the they opportunity has get opportunities have it in been and rest properly place will then, to good that perform solutions some core our almost outside whether solution. be back us their health of to those depends to integrating us de Well, the some but these is core you of of for the the different in other you're of to your typically, alerts with the platform In connect provides to one dbMotion anybody – which or different

Ross Muken

and $XX million I Paul. know, conversation of That's you think just up, to about HealthGrid at guidance closed there sequentially – little clear don't bit quarterly I'm so had Dennis, a little or see because yet, of sort but can through on maybe how it mean, of based I now current a a just just it's helpful, coming earlier looking cadence Rick, maybe progression that the just on Just we know sort that's and help a and on we us later wasn't looks me bit the if how the printed. what like with consensus. I it not bit? Off sequential number, yet? the divestiture to And we're – of you think

Dennis M. Olis

Yeah.

HSR approval. the alluded all, So, That happens in remarks, going first HealthGrid his year. throughout go that to for as forward, closed some of course through is Rick But there yet. to look, has prepared of the still seasonality as is not we

bit So, typically, if a will historical revenue will of see growth in of quarters. that that. go lives look got we trends, see the you at be We've that a little early QX up. QX believe will the a happening the in you will that after subsequent We help push number

attrition closed there, business EIS going into Those in subsequent in about have As cross-sell we I to said prepared opportunities that few Rick before, remarks a of do out is believe convert cross-sell in that QX. quarters. a the lot revenue will do we his of them the we mentioned bottom but opportunities.

we're about that. confident So

business in Our be to continues and and from grow a the a standpoint. marketplace continues to well-received standpoint live that RCMS go bookings

benefit flips model is of Fusion end that the one Practice second and about a at get talked as factors the and the the of to of number we'll the QX items a we there's that year. other of in of half So, subscription that

within show the year. of there we international think things help revenue course are So as will number well throughout of some a the core as business opportunities our growth that that

Ross Muken

Thanks, guys.

Dennis M. Olis

Thanks, Ross.

Operator

you. Thank

Our next from is Larsen from coming Leerink. question David

live. now is line Your

David Larsen

market? about you're adding payer And that you're you of been? and a response and there? Fusion sciences products are value deal life sort Like, the has Thanks. the into What's what gaining in Practice the traction Can then, areas? the selling the the maybe talk segment what Hi. of you bit

Richard J. Poulton

So, collectively, science core value we target have a when life we and markets, it think is about we Dave, of just the couple payer propositions.

of it's connecting to point-of-care them a real-time more in the payers, basis. really For about

work business medical as to of like eligibility But as from have some requirements more be So, even could case that they audits, and from the gaps and trial efficient on could or care, today to kind their work using the cetera, clinical the help continuum that. data of have them be something processes can post-approval anything, chart that create a simple pharma, them much for them is value manual the of to than be in In of connecting it procedures, do CROs, messaging, can it's et eligibility point-of-care pre-trial our things type we it to of there. about either with usually pharma, way do. they on

have also a many times today ability than We on they more to the recruit them patients trials. efficient help basis can for

the separately I around achieve value have what's more into value this product propositions more long basic streams building a So, proposition. Practice I value they value We've Bringing at time in the two mean, space. those creates of specific ourselves. businesses are combination of new the and Fusion for that the even We core the behind fold, lines that been those innovation just kind of the between doing been scale a two can think described. leveraging

David Larsen

subscription very thanks. a from And Great, then, you convert to helpful. has been That's the base? how as response model, the

Richard J. Poulton

more have to expectations, far, stages, pleased of still so above in returns from, pretty said we script, early base feel very I been What good. so it's but my we're Dave, it. It's hear early our with so the

David Larsen

Okay, great. Thanks.

Operator

you. Thank

Hill is RBC. Our George from coming the next from question

is live. line Your now

George Hill

have bookkeeping Good in question. and procurement the I And to meaningful one. guess recognized thanks Singapore a quarter first taking bookings? of afternoon, did that kind Hey. Was contribution the guys. a for the

Richard J. Poulton

just in So, the you want make to we're we described we as I want about to way. you George, say haven't when make it – procurement, sure clear misled Singapore sure any

They of which lot a Singapore split vendor to right. market was country-wide there So procurement, a up a never solution. wound about use happening, decided chatter

So...

George Hill

kind a of Basically a process. Right. renewal – like yeah, like

Richard J. Poulton

space a awarded the it's there we was good white to There was end, and continuing was say a think Yeah. – in I competitor. are I it we little. of renewal. was a about a to But relationship have little much and that bit footprint there Largely, they with big a client do very very feel we But there. it that expand about to our would large and process

made there. to some continue the of some with expand solutions our were comments of to them I to regard And

George Hill

Okay. guess Rick. That's follow-up I for be clarification. a good my for would And. Paul and

sets about space, and you Apple how with and experiment also you I connectivity. are think vendors together? to would patient acquisitions technology get call what HealthGrid like kind what remains guess As of white do space and attractive the I generalistic guys how Facebook play you about for technology at attractive work the what And trying the the like more enabling other players? into guys the to think of two look opportunities technology you

Paul M. Black

address, here's have standards appointment, question way, a that do an based amount their no think the healthcare work that to in they But here's technology are to to So, the prevalence mobile relationship going I look AWS that's – here's recurring through security open a a solution it's but And lot clinical legal meeting is of and in with that's on on a The want what the lot aggregate do content in. and discharge looks preexisting suite them that about a there, combination seeing Facebook, in do pre-exist, HealthGrid create a the going the here's solutions you them. on to the where with to in be set fair content appointment fact a through have connection no have this participate of comprehensive that a patient think that one substantial a it's a is there's collaborative minimize them we how marketplace. And that, texting that we all a George. the go was a tomorrow, a just are, check to to where through laws folks. pretty And clinical we're up? and of extraordinarily appointment work, through the inside with and your to need and actually for versus amount you this not important account, you of check privacy there step summaries that and or Once HIPAA of Well, is us them smartphone, question text-based in Facebook FollowMyHealth are there early, we there's what with like, things actually you Apple, there's of with specific an and value team portal. care require pretty work a with in, in that here's combined be, get in the into, that usage what bought will APIs of that what you there's out to work like, portal here's time of here's there. to our your we and

the the used. that to much talked connected to want get is brand to more want standalone that's highly them of strategy I therefore, to people, So, I get for big engagement piece all deploy. I simple want patient them to texting And want that use. that's we to CEOs want them with of and dialogue my I out, on reach to repeated something a

George Hill

helpful. That's Okay. you. Thank

Paul M. Black

Thanks, George.

Operator

Thank you.

proceed from Gillmor Our is next with W. from coming question. Baird. Robert your question Matthew Please

Matthew D. Gillmor

quick couple of follow-ups. Thanks. Hey. a Had

it opportunity or more the FollowMyHealth more differentiation So, represented if on FollowMyHealth you about HealthGrid, opportunity that'll cross-sell that'll generate in enhance talked about is platform. for creating the growth the a I additional to future? revenues additional curious that FollowMyHealth into support was

Richard J. Poulton

both, So, Matt. it'll do

There's to of about a bit than FollowMyHealth with bringing right in going we broader bring little one. larger whole base. the having consolidate race mostly in Meaningful great many mixed of this to, a box to to set help and up think wound position a much we're we of us But that's don't out in we now with it'll is offering on And offering deal for to environment. the our clients gobble portal, an business Use we up I a the to the are like just platform on focus of So many, client to hope, I today. many, Most probably market. that down think case have bag replacement who current will them portals their built X, a up what wound

And great bring so clients. opportunity think a that to those there's to we

Matthew D. Gillmor

to to peers. bookings the helpful. bookings, pushed out was the be quarter stands if mentioned That's I year. some then it you'll maybe any the relative pick later and one some impact on of that And had that the in bookings it. on on able if ransomware was a curious the quarter Got you've and record issue that certainly up out for

Richard J. Poulton

we I It's hard but we a fortunately and bringing measure mean on – is repairing is, did. intuition it yes, any back also that clients I inconvenienced smaller well. mean word. number were They impacted in to were, to Matt. frankly, first in we they precision, had as them light who with I of did, – there work had to major were on us But were live, way. their which of trust work And but our inconvenience a a inconvenienced ambulatory too our

done months think work two today be I feeling we ago, we're about it – that's better there's were So still there. than but to

your right. think hypothesis I probably is So,

Matthew D. Gillmor

Okay. Rick. Got it. Thanks,

Richard J. Poulton

Okay.

Operator

Thank you.

from Stephanie Citi. is today Demko Our from final question coming

is live. line Your now

Stephanie J. Demko

you just there synergy in acceleration your Thank guys. last taking keep you the to life deals? the my us puts Hey, questions. your and potential recent that for are in needed line? to it accelerate I'll Is brief. for just Is straightforward keep some sciences, takes of top out-year Netsmart? walk Could one through it

Richard J. Poulton

to you accelerate, mean relative from. you know had coming you year-over-year that's can clarify I accelerate what? assume XX% where when So, I we say growth.

Stephanie J. Demko

organic an I the On basis, line. that. something hear in organic top

Richard J. Poulton

backlog. again a Backlog indicator revenue. large very is future we have again, a leading So, of

what broad-based. we drives So, were today just efforts in very recap, organic is like in what between sales and again, QX, sales in to those think I backlog growth. we experienced QX And to efforts, going be have continued

of we solution our of virtually sets. all our and it saw markets across So, all

Stephanie J. Demko

right. All Understood.

of So more just it's the same?

Richard J. Poulton

markets bigger we're life a described the there's payer and new I in phone Yeah. to that it way. on sciences mean we getting

future? more more expect of be Netsmart to Do platform Yes. yield expect I patient to from Absolutely. see contributions I about do going forward? So, engagement out Absolutely. Do talking there? expect I the in us

to you of So I'd about the when talked same, you same, we've more yes, the across more say I think today. of say everything

Stephanie J. Demko

clarification. All Thank guys, for you, right. the

Operator

the end session. Thank you. any Paul our I'd like of or over We've to reached floor for turn further to the back closing question-and-answer comments.

Paul M. Black

strong look as look Kevin. interest XXXX to for Thank forward year the Thanks, start And a the off we your very continue much evening. progress in good to We execute. keeping course year. a forward Allscripts everybody, today. We're on to and the of solid you call apprised thanks, in during appreciate being of and our and you

Operator

does teleconference. conclude today's Thank you. That

and We may line today. You disconnect wonderful your time thank day. at a you participation have your for this

Veradigm (MDRX) 4 May 182018 Q1 Earnings call transcript