MDRX - Earnings call transcript Q1 2019

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Operator

Greetings. Welcome to Allscripts' First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. is conference this note being recorded. Please now Vice President will turn the Shulstein, Stephen to over of conference I Investor Relations. Thank you.

You may begin.

Stephen Shulstein

much. XXXX very Allscripts' you Good welcome and Thank to first quarter earnings call. conference afternoon, the

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

Rick Poulton

Thanks our today. call everybody. joining for Good afternoon, Okay. Thanks Stephen.

Allscripts. always time As in your your we appreciate both interest and

we already for to this call, XXXX. provider, I position our the seen and and quarterly the begin in competitive earnings over improve platforms in last strategy payoff markets. sciences we end payer with our During to made growth healthcare us And life the years have last cataloged detail moves several had standings

our we X% year-over-year. both As of XXX reflecting focus reflecting life these science our million bookings moves, and a businesses. focus of strength and And pipeline in increase strong provider payer reported record remains a quarter first result

per moving all earnings to difficult and our organically quarter, and to to it’s acquisitions the see revenue grew of first year-over-year grew share X.X% organic the non-GAAP year-over-year pieces by you the Due During result. non-GAAP we for divestitures, X% million. XXX

So and of well divestiture want January all as I occurred it. as the Fusion of Practice transparency, for X, It’s to XXXX. acquisitions HealthGrid One assuming the calculated full Content explain on

and So while the implied we growth in to quarter there’s and in guidance in the want I saw that organic are outlined our current QX second realization, strong revenue well the below multiyear first and sales a the in remind growth we as the certainly year. this that both guidance provide opportunities everyone us also as we January. always three-year quarter lag revenue sales sales in confidence between guidance QX earlier our our and pipeline published of still

client We all-in the me additional having in in-patient of Center ambulatory, from which providers consolidation activities and financial for and for specific let and purposes. patient, clinical continue system one now we market, trends hospital among the one and record preference both some In signed quarter. highlight health So during deal to see our Hendrick expanded to a Texas. Sunrise seven-year platform of include Manager was Financial Hendrick expansion major a both who XXX-bed were just with displacements. with This hospital use Medical Sunrise Sunrise their competitive and agreement Abilene, clinical

the up and available. In for in one on one from base, to Paragon allows deals In year. our fourth as setting us System Blessing patient, practices. Heritage acute This portfolio record seeing Valley California which clients which have our deals also for we ambulatory and functionality their of System Hospital similar across Ridgecrest signed enterprise-wide quarter care Paragon momentum going Paragon we’re engagement for addition, our signed as signed up all-in now all-in solution Regional five Health ambulatory in of we last Hendrick the patient signing an Health well. builds agreement ambulatory

Paragon by to from clients extension back Additionally, competitors. signed five-year competitive a for of having other after We in the Iowa the decided maintaining implementation community of one sales Paragon in leave coming Waverly our then hospital a vendors to the Center value believe our this Health with shows they platform experienced product investment and base.

As illustrates deliver invest further and is chatter believe functionality the experienced that a the versus little full our a lots the incident to comment press market service. industry one-off to we Paul and permeate will realities and it of later, in on not and Waverly we boomerang of vaporware seems get with strategy

international had new first this leading quarter project the signed three the Group, Medical Medicine. services of Middle of family one Chicago-based owned a Alfardan system new the Our Northwestern Qatar launch strong in selected business to Alfardan Sunrise deal in including we and its conglomerates Medicine and Allscripts Northwestern Sunrise for provide health also logos, with East.

hospitals won in Allscripts the UK the market. important which also further new deal presence solidifies two We a in UK for Sunrise

So moving as in investment creating us science leaders the and has of industry helped payer position Veradigm, to end over to Veradigm serving life markets. now the our one

We’re expanded highlighted in earnings and scale Veradigm that would Veradigm NextGen a solutions of of scale our of last is we deal on best the partner attempt their is Allscripts organization an to beyond on than rather compete reach with own well created and deal platforms we creating call. with chose to footprint that with how point the transformative like our the This competitors on to workflows. care our us testament that of own. much health QX this IT and I’d evidence EHR signed NextGen of leverage core Perhaps assets the one

combined value focused and patient use million set our these solutions examples unique how real improving analytic data expansive world me more creating few a care end Veradigm share than patient evidence in markets. outcomes. records is advanced XXX and of provide on of We insights quality to Let unique

at providing consumer saving options front, We’re our and product true Their insights the our the integrating by And On sciences team point portfolio by also solution workflows improve transforming transparency by data and is prescription payer anchored advanced in price of workflows pillars. cost. research and is of Price into creating into reduce analytics life treatment. Rx, three empowers healthcare analytic solutions patients to time clinical quality care

risk the provider improvement adjustment second being program for a third risk-bearing First, and and groups; pharmacy quality plans management. government the metrics health being program

international of and years life from us have build strategic our vendor. risk-bearing platforms strategy finally, growth for the the management ISO to XXXX remains we over a Quality that other achieving like Management requires solutions meet entire requirements entities. EHR made congratulate add And I’d just to certification. to is Allscripts an differentiate additional System XXXX system standard few the quality companies to Allscripts team Allscripts ISO pursue to with Our the promote investments and demonstrate Overall, ability number exceed Veradigm that that unique continuous last services to workflow analytic at standard and positioned requirements. improvement, any and quality data regulatory client consistently to leading continue to risk and provide meet continue new products opportunities to dataset to and science Allscripts uses to mitigation. industry the to or

of I competitors and more Dennis outlook our from in obtained we XXXX the our XXXX. With have the details want through balance to Now that, for to industry to only the over first our other of are back all ISO turn call to go Allscripts financial quarter company certification. stands for apart as the

Dennis Olis

Rick. Thanks,

schedules reference the results, as the available Relations well So as supplemental in workbook Web earnings the the Allscripts we data this review on quarter’s Investor release please site. as

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

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

reminder of whole transaction XX Practice of Second, XXXX the includes that a closed on quarter a contribution as and Practice from QX the consolidating we Fusion began of date. of as Fusion. results February XXXX

segment XXXX Third, in do $XX recurring This to XXXX therefore, this levels. from December a XX on on the the we QX margin supplemental growth creates of business segment. from Content the the quarter comparison drivers we a revenue, Content result, and include when quarter our total realigned results revenue in are Fifth, evaluating impacts the we And finally, acquired Netsmart Netsmart financial provider of divestiture clarity unit. the related full a also into $XX and May XXXX million This business In first and and corporation. results. the margin our the not running to as 'XX revenue to unit. business reporting of Fourth, way year-over-year in from provide our segment of reflect difficult QX greater the structure unique each results prior Allscripts in at we XXXX of HealthGrid year-over-year XXXX of analyzing business results our business all to quarters. and this gross and contributed X and excludes in data when One of include results financials therefore XXXX, One million of QX the sale on results our April closed now non-GAAP closed

Veradigm reportable targeted sciences care. Provider, focused Corporate corporate of solutions segment Our the primarily adjustments. our and patient at and revenue segment segments new market. and and continuum comprised level clinical and entire includes new integrated The across on SG&A Corporate. financial non-recurring The software ancillary is applications, Provider the core R&D, payer Veradigm is The are of engagement new life segment management clients

filed historical and in tomorrow. will XX-Q segment current results provide We financial level the

totaled Bookings were record Now results million the and a quarter X% in the quarter. $XXX first up let’s turn year-over-year. the to for

we quarter. As the Rick first record for noted, saw bookings

quarter billion. bookings now as the backlog in the well This included reflects of that as at impact the $X are not renewals reported bookings in Our metric. stands both

statement. the income Turning to

in X.X% organic First acquisitions opening noted million guidance was of quarter $X Non-GAAP the quarter XXXX, the million. In to of deferred the and revenue non-GAAP grew GAAP reflects million. versus quarter adjustments adjustments revenue remarks, $X million within QX XXXX of same Adjusting such $XXX range $XXX my $XXX revenue in ago. million first divestitures million. first a the acquisition-related revenue revenue totaled in $XXX XXXX. period our year for totaled

recurring Non-recurring $XX total but XX%. QX the million of period our last versus Looking mix same total sequentially. Thus, year our in revenue up came revenue was sequentially. at total and recurring down revenue X% X% was versus at down split, XXXX revenue up

We XX% recurring for XXXX. range XX% low trend in to continue to high the to expect the revenue

the quarter first and by the consolidate with Moving amortization cost and M&A in margin, margin increase gross already the quarter Gross of XXXX quarter. close QX centers to margin increased in in data of first compared gross impacted XX.X% discussed, the was non-GAAP two XXXX. activity the in software in was to Allscripts XX.X%

the the We improve balance run and of gross approximately to year. throughout the at year margin XX% expect for

approximately totaled other related Looking and non-GAAP million a $XX actions transaction-related we acquisition benefitted as ago Non-GAAP non-GAAP excludes transactions year we to figure $XX SG&A year-over-year. expenses. flat operating non-GAAP a drive SG&A at R&D the approximately $XX The related Recall efficiencies. EIS from was expenses. expenses, as R&D that synergies expense from to overall million, the decline excludes other as well million, in took

rate was Adjusted Our margin, EBITDA gross to the XX% within flat a software EBITDA which the quarter. to our range. adjusted capitalization million totaled $XX with XX% year-ago be expectation XX% equates low in

margins the overall high-margin Veradigm balance as our benefit to cost XXXX and to expect of SG&A faster data the center business related and we on improve in We savings leverage migration, R&D for expenses. from growth

the year of line, other $X.XX below share transaction, million $X from and includes cost and to a in per was decreased the $XX GAAP total to loss ago. million. $X which cash Looking interest legal million compares quarter

from the in a effective non-GAAP XX% Our was quarter year XX% ago. compared rate with tax

As in taxpayer our to of NOLs of utilized recognized have and gain a of a XXXX. be effectively most result expect cash we in the net sale Netsmart, the

secured XXX totaled EPS transaction-related non-GAAP $XX other ended Finally, and principle expenses, the of senior to million convertible increase. We with of excluding a for quarter million a balance and non-GAAP quarter, million was and $XXX in Allscripts income representing net and year-over-year adjustments non-cash the notes. $X.XX attributed X% debt

high-growth now in us first significant We at to in return quarter. the million Our strength shareholders. and We additional aggressive under X.X XX-month XXXX. authorization. balance of quarter. We end with leverage net quarter in debt were for our the capital end our The compares $XX trailing stock million with stock repurchases areas the remaining the repurchase the repurchased was as flexibility the defined of EBITDA $XXX sheet have investments the of existing This continued X.X stock first of of of divided ratio by gives at quarter.

We additional expect opportunistic going to repurchases with share be forward.

cash flow operating ago. $XX to cash. with QX a Turning compared $X year million totaled million

of Our first Netsmart. realized the cash made flows million divestiture tax in quarter a operating $XX quarter the related payment estimated the gain from reflect we to

million continuing $XX higher in continuing of result, by flow the first a operations the the first from As of quarter made million Cash in compared incentive quarter flow operations was from XXXX compensation $XX XXXX. cash with quarter impacted was of XXXX. first in

negative for $XX after QX software Our flow free software. capitalized adjusting million purchased totaled cash capital and expenditures,

to million been the payment $XX would quarter. have Netsmart, tax Excluding free flow the related $X in cash million

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

XXXX We some expenses XXXX. cash to expect We expect from cash to levels XXXX decrease one-time in related transaction-related throughout transactions will flow cash to as improve do, however, continue cost quarter second from one-time the we approximately expect non-GAAP flow. to XXXX. free a conversion to of normalized range income XX% transaction-related continue net Absent more the cash cost, to of XXX%

XXXX non-GAAP outlook, our outlook our bookings share. we are reaffirming for per to Turning and earnings

for second non-GAAP providing addition, XXXX. In are the of quarter revenue we

Veradigm reflects billion. $X and We XXXX expect businesses. strength the bookings in in and both million Provider $XXX between This

between to non-GAAP Paul. quarter which non-GAAP million $X.XX it second with effective I’ll of outlook. a And finally, million XXXX. rate XX% XXXX. expect $X.XX and And We revenue for earnings over our turn between that, of and XXXX This a of increase outlook for of the share the tax X% reflects reflects second midpoint $XXX for at expect also we per $XXX non-GAAP sequential quarter

Paul Black

Thanks, results bookings pleased quarter Dennis. with financial I’m also the our first and performance. strong

Since to funding that from ecosystem. learning medicine. billion transferred to and were a quality you and and and systems our digitizing to and Allscripts where ago of give Human is early To years adopters risk was of XX reduce XXXX, American Recovery me brief Medicine’s data has relentlessly The to error a safety machine XX a technologies flares on electronic health publication event and Allscripts $XX security and human Key encouraged the of Err advancements the measures Err Human decade Let safety can IT. back the and the led [ph]. the Institute sense industry healthcare to has patient the digital to industry watershed finish in XXXX, from the precision To cloud potential made. come we’ve report progress years charge. executed. to platform who for take of in and Big Data brought U.S. provided for phenomenal records of of follows as catch is great saw and that genomics a analytics such designed avoid Act healthcare collectively focused the consumer to step developed ago

focus marketplace. long-term us We Now clients the our reliant had and tenured the which us into for on visibility revenues outline provides longest let publicly team helps the provide priorities. We traded now recurring future me we’ve to among achieving less to makes accomplished. bookings. and performance annual on three strategic have leadership what our top This companies in XX% allows ability the in-quarter

for We sciences and end engagement, markets. record interoperability health dollars have management we patient platforms, and payer as substantial including a full consumer capital electronic adept invested R&D. deployment, solution acquired extraordinarily important Through we’ve and in life

annual investments resulted transactions $XXX past Allscripts. sale industry approaching increased revenue have in the five in have net at relevance million recurring drives zero. These also over an cost a Our for added years which

Our balance reporting substantially post been been and sheet has the has of our Netsmart. financial derisked sale simplified

solutions We believe Our topical today report way has the the down XXXX. some revenue Size our out core as thoughts from high end leverage I’d came to like growth are perspective. by ratio since a share and to scale we the that come platforms. about into a us allows share of best materially player industry industry invest rep back size which is by to in largest this third creates the in metric. EHR

core Sunrise platform of significant our solutions. have Manager, acute investments one care three oncology. and making material across ambulatory, only wins who surgery, are investments in Sunrise These including resulted are in companies We radiology Financial

of the and many breadth to with go solutions has expand Our led of clients us relationship all-in.

our Paragon we some that told base, solution. acquired we we you that For when anticipated attrition

platform to and one clients of is these. to a needs out Rick going clients success Paragon XX retaining we as May Waverly, share one in I’d invested competitor. where In days, we robust quote the a back client in big that no and are gaining We past mentioned, building in unsolicited have of our ambulatory seeing subsequently address an Paragon Paragon. to clients believe client more is base from less five returning to which of XXXX. reflective like than clients our there’s is reside

delivered XXX of no the Here’s the EIS. be thankful fact public for and has work is staff. Paragon has available quote. functionality in that the solution major both in and still The Paragon throughout version the of should XX months. completed sites Allscripts suite parent customer now base Allscripts appreciation that conclusion just McKesson purchased Any a Unlike below advanced from or opinion, providers on

to cancer the represent we facilities patient we patient we counted. healthcare which will in to genomics. outside were number to the right government Turning Allscripts’ focus not that hate hospitals any always and interoperability one also the reflected, data with while very the report to are loss Sunrise, did wins across improving policy, time to results actionable while records States patients a wins in-patient with ultimately it’s hospitals unfortunate as improving not connecting occurred on including counted. access hospitals XX and with care major lose client significant had United be the respect With improving the systems, at believe right of

innovation continued We and initiatives we’ve and front, push. invest Program, interoperability through in will regulatory comprehensive Allscripts any integration. interoperability quality and like solutions the solution lead have care own most Motion FHIR, our the through the industry’s Argonaut supporting we Developer to On DB believe

shifting continue value CMS than rollout models value-based payment week shift our for we service. demand new open to continue term. for comments value-based as in even last we models on line two to payment fee and of for adoption questions. With as will the models paying solutions. greater to saw and Finally, focus payment rather to the increasing payments These see We for expect let’s gain our solutions encourage new further up near that, the to

Operator

[Operator Thank you. Instructions].

proceed. Lynch. is with Michael question of Merrill by Please Cherny first America Our Bank

Michael Cherny

behind Good of and of thanks you afternoon re-segmentation I about Veradigm. It’s established question. and been short for GAAP, about of the fairly think re-segmentation. Thinking within period the why since the kind numbers taking time ahead a getting the

You talked offers platforms across about the market. difference this other that versus the

seeing growth sales Veradigm cycle are the this of you to cycle you to that’s in can opportunities will have traditional you how about how convert different about how Veradigm from As business to going successful, there the overall is terms it over dynamic in contribute What of now? And your is or how and think will where thinking time? evolve a the about think P&L? revenue terms to bookings sales we quickly of

Rick Poulton

Thanks, the within Mike, seems few question. that there question. for was It like questions a

Michael Cherny

Sorry that. about

Rick Poulton

split know that if reportable just don’t with it our provider No, markets view. and view I’ll given us. and our that’s there’s reporting it’s away than we with the really view they group it’s going we auditors that the obviously segment sense our need question with Netsmart on make for makes a healthcare a to natural focused And segment end different okay. that’s most the I reporting. and recalibrate concur that a have shared guess comment I think on we that

that in why going direction. So that’s we’re

takes long general markets. as equally yes, for say kind does would As a the them, in it Veradigm to deal probably question, start like I it to provider of finish your of cycle sales the balance in for closing the

presence. footprint shortens increase as I think our that and our we

because established But less There’s on should part sales on be year little will, you the evidence little need I as the side. process. provider once think to bit of happen quicker of what in goes a we’ve revenue that’s says the if conversion little happen, bit does that ourselves, sales there’s as general it I’ll than the to a shrinking and credential the interested watch to of So bit that here. a

Michael Cherny

Great.

Sorry --

Rick Poulton

Go ahead.

Michael Cherny

target way looks One some increase It more that I’ll Netsmart the the new now leverage sequentially, buyback. about to Any types of think much quick for quicker. you’re this looking went off up balance question is Dennis. keep with roster? for debt like did

Dennis Olis

Thanks, Mike.

expenses. made. range. to up with payouts the As leverage you buyback had we’re type and said, primarily some of low some for like the at X.X. any went some payments debt transaction to due the in operating and the employees I would closed the incentive absent and We We QX X ratio be comfortable expect we stock that

be that’s Xs. in, I a low in think good place us to the for

Michael Cherny

Thanks.

Operator

Stockton from next with Our Please question proceed. Wells Fargo. is Jamie

Jamie Stockton

guess Thanks Good for one bookings. Hi. I taking on questions. evening. maybe my

some saw You growth. nice

how segment the much kind but of in don’t give there you of With give can of color you structure is came Veradigm new segmented, dollars how versus total sense that Provider bookings traction the any you’ve just any on business? how that maybe much got from

Rick Poulton

Jamie. sure, Yes,

of we’re quarter probably disclosing very think good our the new had a and – yes, below not of stick much a of with to But it policy a the numbers sure doesn’t good going that certainly we first Veradigm surprise quarter. set I going in I’m specific you. was terms But why really and record in number. part that consolidated directionally,

contribution partly revenue some is why in back of at why for the way we think So I’d it’s their and so relative January outlook was say that we you years you the had relative contributing revenue go it contribution their we that’s have now to – disclosed strong. a level bookings right three are about the beyond if should their

Jamie Stockton

one Veradigm. on other one And great. that’s Okay,

NextGen other way Is the I or like one a of on which front down from NextGen. need hey, said patient there just records kind great? have had we be we assume patients thought you’ve I NextGen-like million to to the anything that a includes two that you already that do should the unique of guys XXX think You kind we you’re you deal. about, got that would probably to records there, out access go or contribution feel or robust deals knock and want,

Rick Poulton

is answer addressable question, That includes the collective your the of yes. group. part first So figure

about grow you’re to as continue right. you you’re can it. XXX, population, of half But the to talking to when about going imagine U.S. talking look We’re

So other any the of let’s data other overlap, say on more source with any deal likely margin has right. individual competitor or

So your do as lower we deals. records to contribution of will start go more lower unique marginal probably and

But like So said really I think we discussions we kind have if other that, scale, the active having with you already. parties in feel we’re good a footprint of a consortium, will. joining about

Jamie Stockton

you. Thank Okay.

Rick Poulton

welcome. You’re

Operator

Our next question Jones Please Goldman proceed. is with Robert from Sachs.

Robert Jones

Great. Thanks Netsmart function looks understand for on a gross segments it just lower margins the bit the obviously like the Maybe think than It trying within used particular had lower about out, questions. to what with to how just to. business we step one post transitioning service in margins in world. but that looks a been is like

So from things and the are given progression or can we how about some margin and should on, Veradigm anything share how on like think shifts that hopefully to you the here? think about a of going going the forward on forward mix basis, on

Rick Poulton

Robert. Thanks, Yes.

couple items the gross a when at we there of first in looked impacted margins the the results. that So quarter, were total

all, so first in hosting I my So quarter. in in as duplicative but in the the centers we some quarter, more had comments, consolidated quarter couple a first mentioned the our fourth data of expenses, we of some so

also costs data a had quarter in and two that quarter, centers expect amortization. for in year. and that We’ve away we additional second Now in those significant the we’ve closed the additional software balance of uptick go margin first would the to the

gross our spend over through as That of amortization couple and capitalizing our to increasing been roughly that as the our the spend. which an quarters So XX% R&D now years flows to couple we’ve has of increase last margins. last software know, come back in of us you

XXX as about we’ve to relates software uptick amortization. So seen it of the year-over-year points an basis

Dennis Olis

couple As for I over that service quarters. of Service look driving the We about service margins with the data margins items – expect to at which the last be improve going would to XX% to in talked range this the challenged year we we that continue margins. we’re expect half of that in to second as do be the improve the margins see remarks, We’ve continues of is in said revenue to the consolidation. the balance year.

Robert Jones

still guess synergies to as of helpful. just SG&A there an share perhaps the Did performance on it. got we Anything the strong really the expectations. obviously stick That’s or I be year? side, cost factoring over to side Okay, profitability, synergies relative in synergy on with on you update can some far as the of course than the realization? achieve faster anticipated should you Dennis,

Dennis Olis

don’t any I of the the realized, synergies or the synergies XX think over so have Yes, acquisition talked about we McKesson been course the the lines the of so last over next bulk of months with that I the anticipate significant in couple SG&A quarters.

remaining I manage three eliminate as anything in effectively, wouldn’t to look significant type cost our But to continue the so the some we’ll We quarters. year. corporate expenses appropriate over course model the of

Robert Jones

some Dennis, shouldn’t synergies. But though, just this clarify quarter residual still It’s just going anything in from it. anticipate incremental? we there to Got benefit was forward

Dennis Olis

we Yes, there manage just but also spend. were that overall continue recognize cost we synergies as to some cost effectiveness our

year. So the the of to should the latter expect continue course through you

Robert Jones

so Thanks much. it. Got

Operator

question next Please Company. Rhyee Charles with Cowen proceed. from Our & is

Charles Rhyee

Thanks.

Rick, obviously the Just expect would that growth growth? think of organic in sort here follow terms you top at the How when then And beginning sort from of want then about see the in inflection translates. should up, sales to to the then about and how talked performance the that line of and that? lag we recent you

Rick Poulton

this. the would to difficult But I precise about I’d it’s that. Charles, too out point Well, following. be say

As the last far the high about When up the QX, by range Dennis for guidance in in of terms watermark X%. you is midpoint provided look, QX numbers. indicated quarterly we QX of sequentially revenue the outlook, is year

the the a rate. lift that was of revenue in in QX. year. momentum a the and bit turn year couple also growth in we little that Those We be performance will start that I’d make maintain QX, the of a will in of further to back So backlog would in the high would our should result say we hope organic in unusually in points also there half sales here. to put the We bring

Charles Rhyee

sort guess Veradigm of – a the of on earlier, a And sort Michael’s give traditional about a versus is for I question customer? implementation sense times the you customer follow-on can of your Sunrise sort

Rick Poulton

because Mostly to two really take are not longer. same talk I’m can and Charles. a bit I’ll the they just deals repeat, little specifics no going

Charles Rhyee

is the Or or it relatively qualitatively? just about maybe or it shorter is same

Rick Poulton

to Yes, contract shorter the conversion said a shorter. was I what between revenue be bit and translation would little a Veradigm. tends little to ought sale earlier as Their be to I length time it’s say the shorter well. a in

reasons, So latter the you impact quicker side. a do on for revenue multiple you bigger get than

Charles Rhyee

And you I remember think going advantage after and different one laying the this just you you’re this? the out market of earlier as aspects up this – a really sales of force have on, type one sort that would to the sort kind pushing last Thanks. gave of you require and of guess market slide than of different does take about kind Can out of about talk what of I currently? this be follow we you kind and if of marketing sales

Rick Poulton

referring you’re referring, just you Veradigm the – because activity. Are to Charles

Charles Rhyee

Yes.

Rick Poulton

sales team different is Yes, absolutely. It’s end very different value the for very selling different proposition. and and markets answer a a it’s

are of of very organization. a business teams are we sales Provider independent that the is as the So manage sets very and our unit skill business unit sort different, different

Charles Rhyee

Thanks. Great.

Operator

Please with Richard proceed. Our next Close Genuity. question Canaccord is from

Richard Close

money. Thanks. R&D if you maybe here also on on that. in of the give just investment? in points the the bookings. are about you R&D your of about levels where spending think to spending there Where’s should terms we guys the then how not of sure Congratulations your XXXX? focus maybe I’m Great. want thinking thoughts your curious And I’m

Rick Poulton

Thanks, Richard.

Dennis Let pile other were of middle things to would a think when in EIS related comments. that functionality, Part alternative the that will I debt was quite I up we bringing like picked they to business McKesson like the platform. inherited some that with activity business. the in we absolute in of of spend, we because and me had a start with terms first technology we say felt dollar then of on kind couple all of

was of off in And go that support first of bolus fully, there little but taper invest just we be think and So that away. XX bolus continuing months it’s acquisition platform we’re will spend a to over a clear the will bit. happened that to that

we’re that, – a there’s little the you expect. the little across of Where’s in by a generic. give of mostly We’re focus? that also So Provider-based very board. reduction win in absolute We a platforms support to I to driven for the We – I’ll there’s assets. share that the in as out. invest bit spending continues And think still that’s It’s business. bit you should the Veradigm market investing differentiator the itself sort think yet market heavily continuing

still very shifted we but spend is strong both a in money, So there of a bit camps. little

Richard Close

Thank Okay. you.

Operator

Our Research. Percher Nephron with next Please Eric question proceed. is from

Eric Percher

be you could that thoughts think welcome next I’d any still how the regulatory has step comment is walked you Paul, period, thought currently through or you. in and on what of ONC short look active you the years Thank movement stopped like XX meaningful of but what’s Act and needs of been occurring for like? to Cures I looks the we but course and

Paul Black

came XXst Act. Thanks, encouraging will around a Eric. the long very XXXX the on I all in Act been records been around we’ve for patients’ which There��s a our a that number We’ve of to active work open been quite Century the very amount it and here. what fair out. time clearly regulatory gates API given we fact supportive and also plotting new through that make future There’s with comment timeframe. of Cures since period of of think coming the access the XXst that, Century the are Cures We have were in API out that in fair work rules

piece around so also the to consenting had And patients’ them and on is and it something the the whole working get to that approach access we since have we’ve medical record been that for ability XXXX.

it this that the people still things at commented open a stress to blocking this industries there data what access bit that collegial some bit There’s input are we’ve be portal time. we things end solid. But pretty also a encouraging pervasive a patient broad [ph] very other it. long for not very how very see also of because the using in about interpretation been little who little other that around which to we look might it can were past. and been the the from very Specifically been that good some on around would There’s They in physician much. have on, environment current have for definition some is why has been patient and people and on think brush be think grant our regulatory for through other a anything the was to blocking inputs might their That additional rules with as of create open to been we has environment a rights is regulatory user. doing has record have data

onerous et come years five Some and physician and cetera. burden been around out regulatory the of in heard work the the that’s has past burnout fatigue, comments you’ve somewhat and

So these will regulations there’s put to on more that. listening regulations be nonclinical they’ve that’s cause these behalf attentive work and in actually importantly been a place. been lot of feedback our focus difficult to of will to their And on extraordinarily new more

in we’re coming all-in, industry So will retreating there’s from because pay the and XX started see and That that for no think not just based healthcare be My CMS performance something for good on, a to The or out and that folks payments nor commented you and support to – are issues are they are case. that a we left some value Eric, through components boat around have backing I will that do in been bundle question value-based train incrementalism that that if pretty be I of the we and from needs should we’ll station regard. is there. when years attention care there the there’s EMR there’s that that old. expecting first get CMS that things hoping paid that continue that for bunch some we doing opinion

Eric Percher

that So more migration that investing. investing there today, lead to helped very three if there’s but a to of tree the about been essentially realistic at towards around shake your are replacement marry to those that this scale elements and we that the market entities are comment bit you’ve

Paul Black

it I does. think

is to highlighted marketplace if of really that that have we’ve each a to you As actually there’s when scale organizations do think as organization. you’re is the people look X but States similar R&D to to XX set occur just budget requirements that scale at that year, today, the the States these demographic are to innovation A to to standpoint being what United as cases. relevant and with a outside has contemporary the about with or be regards trying much ought move different in the component you left that accompany or a in architecture much regard innovation with every well past of requirements other is these distinguish pure revenues percentage in compliant a as of with course deployed bunch strategy around the have that from one this government market have from more and which well that to a has some global country-by-country of how platform specific of as share to and there you that how then against scale,

that to amount talk spend to a transfers afford of So you on transfers which stay when we about thing there’s Last ability to I above. able that of little a scale, and to into money money also point into make to lot be current stay to size to the called all current. substantial cyber a on afford scale have on spend be able is would security

just a all scale the weight and as next of harder look And we five what years four think is add smaller that and are you really bear the I you to lot makes like. it it so look are up, at the going going to

Eric Percher

Thank you that. for

Paul Black

Eric. Thanks,

Operator

is next question from Citi. Demko Please Stephanie proceed. with Our

Stephanie Demko

Hi, questions. guys. Thank taking for you my

your that for Is your with the that top there of datasets? there of you So you think on portfolio to areas utilizes assets Veradigm that the or now layer have do how opportunity NextGen are dataset opportunity flushed buy assets about an new out data? of deal,

Rick Poulton

is it you Well, think way the about I should think Stephanie, is – right. opportunity the

in add We to players generates that have mile significant to use, And to building a you care we consortium, footprint are that that whatever set. want point lot the data talking alliance word about. with to the an some a of we’re or care last the now of of the other

of we generate that. so And data out

Veradigm we’re can synced like workflow we the point to We of doing. also the so of big is the tools go food and you data bigger data, have that value that to a respect and That’s there, With – up point solutions opportunity. with the solutions what bring things care. aspect of the the to data, care to intelligence bringing will chain analytics analytic itself, a bringing create higher

are and And so add we sophistication move as up continue there. we stream yes, we’ll to value the

Stephanie Demko

contribution on bit right. for one. strategy. little All Thank And a you the more that data

some bit a of going head-to-head walk you’re how you given of with competitive of kind landscape, different that a us Just could these through new peers?

Paul Black

companies customers, how Well, value you life bring our what to payers. customers is science and/or we again, described we’ve being to

with to clinical to how care world. improve more to and data, clinical to So how about respect bring trials all the real it’s efficiently

referring do you’re opportunities sure are of there’s access can what clinical we that. to in think those but exactly nobody you so has talk point care, And when the that about care. back the else others industry, not almost scale the to of I’m to that

we that’s think build we expect that so And unique to to out. continue and

So for and life evidence is on, the ability real world them conduct described specific companies trials of that this real to can think you I talk collection efficiently more that goes ways science about finding the to we’ve But is already the create have to as life to science time where we’ll is you to value. the data with we’re value more bring we what companies.

Stephanie Demko

competitors you, guys. in color. [indiscernible] Thank There’s life sciences I that appreciate and fair. payer other All right, that that’s dataset, so

Paul Black

Thank you.

Operator

[Operator Instructions].

Okay.

Goldwasser question Ricky next Morgan with comes Please is proceed. Our Stanley. from

Ricky Goldwasser

Thank Hi. and evening. good you

way Should right same that given same that one side. XQ each to about for improvement the from the quarterly the be on you XQ? question to model revenue guidance guided the momentum think quarter it? operating quarter-to-quarter about question quarter Is – Just on talk you the income in throughout year. up second and a we on revenue up just to And step in

Dennis Olis

giving where quarter the model We’ve out. any we provided one Yes. haven’t Ricky, revenue guidance we’re annual guidance. changed

on So you number see by as to from QX live to QX we that In continue products. different clients with step there that. some CNS function turn items step up type live we of driven model a more is a our – consumer

growth those seeing We’re in businesses.

typically can’t down seeing also guidance provide for provided which revenue at we growth We’re a just beyond QX. for and for this media QX’s quarter is the any I spend cyclical But is that guidance which somewhat point on the them.

Ricky Goldwasser

you. Thank Okay.

Operator

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

Matthew Gillmor

for the questions. Thanks

well uptake on the – the good update I’m Just on recent there’s with an releases deals. Manager seems get most had one press product. Sunrise new on as the hoping like it been From to that Financial

remind product So you is can is? then how where that us the penetration And performing?

Rick Poulton

when indicate talk all we’ve been and especially Manager about, talking other couple Thanks question. ones. for The about that the Financial the deals [indiscernible] all-in new the deals of we Sunrise a

well. activations The has or that So that very gone the also for good. has pretty turn-ons been uptake

systems made course domestically patient the administration Pacific area lot as we that work over with or [ph] Kingdom. in Rim three four United progress with well do the as solution of both the well years, in as last both States outside have a as on United the the of that We

pleased we people standpoint, going are with with new with I think agreements for from So Sunrise where multiyear and us staying And a why all-in-all, and signing that’s that. with are player us. we’re big a reasons

Matthew Gillmor

very Got it. much. Thanks

Paul Black

Matthew. Thanks,

Operator

-- Ladies have and gentlemen, we

Paul Black

wrap To and has vision combined made term. grow investments Paul. the strategy has and right the the prosper right is This Allscripts to with long best up,

as for well robust clients a science set winning for across We solutions a as payer companies. landscape and award life our wider and have

to returning conclusion, I and Our shareholders capital growth and on clients Thank investment repurchases. loyalty for our as balance allowing in our their to your associates confidence. thank sheet share passion for In you. is well focus via success, want strong their new shareholders for areas client for as our

Operator

concludes you. Thank conference. today’s This

You and disconnect at your your time lines for participation. thank this may you

Veradigm (MDRX) 2 May 192019 Q1 Earnings call transcript