MDRX - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to Allscripts' Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now like to turn the conference over to your host, Stephen Shulstein. you. Thank

begin. may You

Stephen Shulstein

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

Chief and Our Allscripts' speakers Olis, President; Chief Black, our Dennis Executive Officer; today Rick Poulton, are Financial Officer. Paul our

We can be future and Investor descriptions to a release supplemental the and of earnings financial available no during as statements and number undertake call. well non-GAAP events. statements also of the forward-looking tables current vary affect on and that the detailed presentation are factors of both on risks risk a for our based new Please that statements, revise site. may of our cause the part expectations as to We'll Web more results to and these Please making non-GAAP light earnings These the release in statements refer the materially. workbook information our GAAP SEC our in are the our number actual Q&A that and or Relations obligation uncertainties involve forward-looking results. of filings reference

that, hand I'm going over call Rick with the Poulton. And to to

Rick Poulton

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

strong interest million, As in bookings with both XX% and was your reported year-over-year. a always, up we $XXX time second which Allscripts. appreciate your quarter We of

Our pipeline of new deals remains strong as well.

the the of are outlook for of our midpoint raising XXXX midpoint old guidance in so, we to range. $XXX strong with conjunction million, by performance, And the range the at first-half our bookings compared new

growth throughout year. financial balance the the was performance to on had outlook the quarter, in quarterly we had backlog than for provide details Although nice from during Dennis the call. we continue expect And less revenue more growth to this slower never our the little QX. and sequential of later of will conversion sequential revenue a we hoped

a Sunrise Paragon very highlight as strength quarter. and bookings a systems strong the had perspective some both bases. In and quarter client we specific health and Now, the market customer let hospital the we from me trends saw activity during across

two we to seven-year that separate footprint their decision the had ambulatory expand and Specifically, integrated Paragon with also signed extensions. module, accounts include

We are since nearly to base, from acquired XXXX. proud the Paragon clients with as on XX made signed McKesson progress long-term in the have now the we of we've agreements, business late

continue who some experienced base. made we we'd a in majority and While the attrition client before to vast the to clients, our Paragon had us we decision clients this the investments have from of base serving anticipated business, allowed bought retain forward look already

during two Sunrise our solution, result the we With proposal new brand the of processes. acquired clients competitive quarter, winning both

in Gorgonio, in Luke's Center, who more leading The than first, X,XXX is Philippines. the California-based Medical full cycle win institution is respected clinical us. at healthcare And academic international and facility is migrating St. beds, and most a Luke's the community large a second hospital revenue an country. is is San to St. the medical with the with

our our We Philippines, they industry the it leadership client join family the thrilled them cements as in and have Rim. Allscripts as further to are Pacific position the anchor in

patient clients, as to us as we Sunrise add module the of to and the all ambulatory had addition solutions. new significant quarter. engagement in entire MaineGeneral In expansions these well went with account solutions perioperative suite integrated during several the

include and an solutions of with medical academic our York perioperative mobility in We had also a to solutions. suite center New major expansion

largest we most during Finally, made with quarter and customer. perhaps the significant progress importantly, our

end on and of with negotiations negotiations stages year. of conclude expanding to with are these our Northwell in advanced both we And relationship the them. We extending expect before the

in annual added continued X,XXX billion over saw the XX strong second demand management in with the cycle and ambulatory cycle for representing to over in the the market, We date approximately moving clients $X covers Allscripts revenue quarter Services Revenue billings. now Management we quarter, first providers, services. we momentum new to So revenue

HealthGrid to we continue the see new and also second during base HealthGrid success We deals selling of to our quarter. XX closed ambulatory clients,

in cycle and services revenue market, ahead this HealthGrid deals pipeline our for remain clinical looking new So new up-sells, all strong. opportunities,

Fusion. about to to Veradigm, making let of few a start Moving by me principle Department Justice announced with related comments in agreement our the Practice

this have resources required These with our has and As that we focus before investigations investigations could put many and been to began to the the prior of motivated of on Veradigm our main has DOJ chapter an the we occurred serving Practice you life continued accord levels Fusion markets. know value competitors. acquired so the payer DOJ last science from many our the the either behind us that been to soon to reach active and Practice us remain early highly opportunity thus and significant that with focus as of investigations to bring from to similarities entirely actions certain settled our that our expanding previous Fusion, we expand realizing year. or were team to industry on After The acquiring practices support. as end SEC DOJ investigations into had business ownership, possible clients filings,

settlements million, agreement other insignificant, reach line are we So, in is the the amount agreed with the and pay, while it we've not principle. to in industry, to $XXX in happy of is

have to government. finalize coming with a variety parties next DOJ We third the will and portion that offset to the help expect of months, work details will of agreed pay settlement have of recoveries the the amounts we from a the we the over to

and dataset, remind me new opportunities data workflows add solutions additional strategy So industry-leading companies to with that entities. analytics and pursuing our for life risk-bearing and our science to let building at remains you that Veradigm covered,

in year. deliver positions are long-term one We our to creating shared the and well science success to outlook for the we life earlier clients, date payer problem leaders industry of us solving Veradigm on growth key for and this

make even our dataset to more opportunities robust. additional pursue to continue We

clinicians cardiology recently ambulatory of than will This in EHR-enabled As and American Veradigm's network assets. million patients registry XXX,XXX United this, and disease an we example XXX large-scale a create of network acquired to diabetes States. with Cardiology's research extend College the the more chronic

dataset quarter which we ambulatory these XXXX. data revenue provide really of robust includes and change key is processing to according during advantage recognizing the clients, the for plan, is partnership allows Our care, next-gen affect which competitive start data insights Integration point next-gen the from us the analytics and and of at to of Veradigm. fourth to to expect the

So, now with the for and over year. the to back through for our second of the to the outlook go call quarter that, Dennis details more financial turn I'll balance

Dennis Olis

Great. Rick. Thanks,

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

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

the the for million, the strong Bookings quarter. quarter continued. totaling the in quarter to results XX% turn second up year-over-year as were the let's Now $XXX momentum from first

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

$XXX within revenue quarter GAAP $XXX income our Turning to range totaled million, $XXX non-GAAP million second statement, to guidance million. of and the

QX revenue experienced in the that the improve revenue and we growth with from first-half year. XXXX as we the strong of in the of year-over-year back-half we've guidance, to demonstrated benefit our As expect QX our organic bookings

variations quarter, slight continue in high quarter be for may there revenue to expect to XXXX. we XX% low recurring recurring the in revenue XX% to from to trend range While

in of second efficiency Moving of first second XX% XXX datacenter the to quarter basis the XXXX, compared is with total Allscripts to quarter The quarter cost was initiative. XXXX. consolidation gross XX% gross and point XXXX, from the margin improvement attributed continued non-GAAP and margin, sequential up XX.X% in of our efforts in

we the said at balance to margin approximately the gross expect last of for quarter, run we As year. XX%

to totaled approximately transaction-related Looking we SG&A operating approximately million, a expenses, benefited actions from expense year other R&D as at synergies well decline million, and management. non-GAAP expenses. transaction-related exclude Non-GAAP from was year-over-year. The taken overall SG&A $X million $XX as non-GAAP $XX flat drive figure as ago

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

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

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

DOJ. other noted, legal As costs recognized Rick transaction in $XXX with in related million expense principle a the and to the agreement we

tax the effective quarter in non-GAAP QX. rate Our with consistent XX% was

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

continued as related the material areas did for in as in which Our with QX growth any The in leverage second of result investments was ratio gives of restrictions flexibility quarter end the shares the of of trailing not in agreement additional months quarter, strength XX shareholders. at at the quarter, by of from significant repurchase sheet to high up divided slightly return in debt our of DOJ. blackout to capital X.X principle net EBITDA negotiations and the the We end a resulted an the defined us X.X balance 'XX.

with with million practice. group We $XXX additional end share which expect forward, conversation. going the consistent under our be At our we is to existing prior stock of had QX, purchase remaining opportunistic repurchases

million from cash we cash, quarter with to in the days from compared year the $X higher benefited and million, $X revenue improved ago. in negative quarter, XX operating as DSO a first collections. down Turning total total QX XX favorable

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

performance to the of year year, cash We outlays cash bonuses, as the divestiture of the expect and and flow XXXX the the employee second-half associated retention first-half improve Netsmart fees. included for with of severance taxes in

transaction back XXXX. in expect We related cash the expenses half minimal

first-half Turning bookings. year, and of are we of our increasing to our second-half the for our outlets expectations outlook, result as for strong our results a the XXXX bookings

reflects provider XXXX and our prior at We outlook which $XXX our from and This and strength up million the billion. $X in in businesses. expect billion both are bookings midpoint between $XXX $X.X is Veradigm $X.X million the between billion,

of accelerate so we've For the far half to strong bookings the XXXX. as we expect in revenue from year, we benefit back that seen growth

in revenue increase quarterly expect XXXX. growth We quarter sequential every to

outlook. For quarter fourth we as a year-over-year the of for revenue result bookings which we of the the million X.X% and million, expect non-GAAP also the third providing a third non-GAAP quarter quarter organic $XXX of as visibility our between have midpoint performance. reflects XXXX, We're $XXX at guidance growth revenue of improved

million $XXX the reflects between $XXX revenue non-GAAP expect organic year-over-year million, X.X% we XXXX, increase which our and midpoint at of fourth quarter fourth of the For approximately outlook. quarter

Finally, full-year reaffirming share. our earnings for outlook non-GAAP we are per

share We XXXX. tax expect XX% full-year effective and reflects non-GAAP of outlook for non-GAAP $X.XX This a per for between earnings XXXX. the rate $X.XX of

I'll that, turn with And over to it Paul.

Paul Black

Dennis. Thanks,

me with a First, our results, particularly that let pleased performance. financial first-half bookings second say and quarter with I'm strong

to Our resonate solutions clients with and prospects. our continue

from edge and benefiting that leading robust surrounding We are with in from and solutions to the portfolio, believe growth decisions high an EHR a strategic peers. We us we are EHR and the market. industry. portfolio This the we made life build sciences HIT distinguishes industry-leading that payer of presence our expanding

on delivering shareholders. and clients both our to We're commitment

side, we the continue our On invest client in platforms. to

regulatory innovate, to meeting. and being allows client Our us responsive scale to

As this year. have has strong far Rick this so reported we bookings in noted, resulted the that

highlights and the platforms growth business, all-in with in Paragon robust growth cycle expansion, Sunrise extension, consumer including revenue major in penetration continued So Veradigm. a with our

we've in of years. back-half bookings had build competitive Year-to-date, to growth internationally. that noted. XXXX, Dennis past acceleration very revenue internationally We we've a see strong We the driving growth best as continue five had the business first-half also the in in the

We to very shareholders take our seriously. commitments our

revising For the commitments past outlook our our matched four have midyear. we EPS years, without

portfolio in our only financial we in share Overall, We our that strong XXXX, new have and quarters in provided our a our are us This our existing across give is position cross-sell our should XXXX. can our delivering outlook. to three-year and current January while new in results. We've and clients. of revenue result pipeline demonstrated to And sales vision outlook three-year expansion. two laid and out execution strong, confidence we path market revenue capabilities we are to attract clients our

to us demonstrated Our deployment. strong our and in with this de-risked allows sheet capital successfully balance the be past. disciplined We've

As on team, an continue executive to we and M&A strategically focus drive to priced operating growth synergies.

will discount to given associates, our capital this and and repurchases. opportunistic driving share trade at such our on focused growth, peers, clients, our we earnings focused returning shareholders expansion be our All and are on that We margin a benefit we via to will shareholders.

let's open summery, that up line questions. for With the

Operator

this At Our Fargo. from first with session. proceed question. Instructions] Stockton we'll be you. question-and-answer Thank [Operator Wells conducting with comes a time, Please your question Jamie

Jamie Stockton

although Yes, of behind Practice the Can got any I number? is but also you Thanks. way just this of guys Practice I software attestations you, would let's kind Fusion, say, how at maybe color there's If appreciate penalty. you penalty about that were about you you Fusion, to that be I'm to similar. just number But want the the doctors I talk want versus, And good eClinicalWorks, less. put the who evening. pretty to great. say ton a start sure with not look with who guess a attested it. big obviously had I'll again,

Paul Black

only the similarities risk going again, others Practice I -- this, the Jamie, aware know, to to, wider bit. it you're said follow this those were there's we you close, is certainly changed think probably they Fusion with investigations what widened, [indiscernible], is the example settled, well. many because think little I And you other I'd as investigations lot started provide, you a with by us, at first the anxious that broader put of extent color out but those thing behind so of scope But a than, the started so used us have -- I were as Well, only of repetitive, Jamie. DOJ as the being on, is, are up, on going say actively I and guess the so I of the that and

got long how can't about we stomach government what to place government what's a -- the the with I think and protracted it that for thinks it. was you, but a negotiation we're both to tell we So can various fair can we speak parties entities,

So that's -- all

Jamie Stockton

my guess seems the business growing That's it's great. again. I like other question, obviously

are kind keep quarters a You cash a is direction heard couple annual have flow; an it them this is flow you moving things with comment, in guys to a free seems the good year, reasonable about the first cash there for so a improve of in free conversion of produce of of talk second-half. things mind. flow negative the guys EBITDA, most on you I exception year. Maybe negative go-forward or rate Dennis' second-half, level expect cash reasonable you to the last outlook could the what you for on want free obviously, like we that adjusted basis basis in the to that should and of EBITDA, and And

on that anything great. Just would be

Dennis Olis

is Yes, Dennis. Jamie, this

the employees of events million about in us of and of Netsmart had talked as a And some we've as incurred first-half that referenced the year payout first cost. remarks, costs cost I hit those in us. fairly who of the of we we've behind them significant large significant a past, are quarter referenced couple transaction-related So a had few in couple a prepared a the payout. our for Most severance performance in my transaction-related pretty $XX --

little expect into to the of the of We that forward very year. second-half carry

year. So of in will us again, in of one-time repeated the the large the be we the hit had that that not some year second-half very first-half items

the next use would flow should free model that and happen an what something be would latter we've given on this us over cash to to in year we modeling, of your talking year, going period of think conversion terms to of income. going In the XX% look guidance about longer We forward. for the that part into of and before net you XXX% that's

Jamie Stockton

you. thank Okay,

Operator

comes Our next question. with from America. of Please proceed Cherny with Bank your question Michael

Michael Cherny

you've Afternoon, terms is and optimize start dive the Could talk areas they're the driven in thanks you just looking of into competitive of the their for the year-to-date. market where how if international geographies taking some much and wins been where in government-related question. maybe incentives business? how specific successful, versus you've to performance, we those Maybe highlighted so strong you far had about

Paul Black

is This Sure. Paul.

we've and market Rick had a I in Asia-Pacific that's been for marketplace, historically. as results good pretty think about, some talked good us the

satisfied We us today, about that region, as between over in lot do talk clients references that we work Australia. in now Guam, very are for a of there that have this some great well as Singapore, we that one

that's area well. do one So that continues to

where were be in that specifically of one of high -- to the Service Health with based also week, the business The and had past, over were have watermark to inside actually other last important the tasked the there, a we we within references what that to one do for pretty and there's Kingdom, production in that procurement and they able software a the do National in-country, based them would eight have on is are people you United show That's compliant order which new you be process. process to country. on to in be the

then proud say what over and we're all Kingdom been able accomplish what thing doing all, and the United to other that is that but And I very country. they're clients the a and we've to thing of team, are and say, that the I'm hard there that I about would referenceable, that's highly think in in always

the of pretty So those in. we opportunities are good well to probably continue sized that two do

Rick Poulton

are we entire DB in area And of connecting so the think the lastly, now with the Motion to a while And I Mike, footprint a some EHR, has us. homegrown well. have a of there's recent that. for operates would action where I Israel we focal ahead we opportunities country Canada a mean but think just Suite. that's Yes, good that's good on country pretty in Canada, I jump as the been, lot up

model and has lot that's interesting that of Europe of European, other So, a pretty of a a we think countries. even lot and applicability outside

Paul I are. just points -- add So, would the those to where focal staple said

Michael Cherny

then couple that it'll those there It to intend Dennis, you're months. be is whatever able Is you relative to you like would comments. year, maybe, to next that Department of the the of within to be recoveries funded some question due cash the And all just be this other net settlement. seems debt for through that it funded component and obviously, capture? expectation Justice Appreciate will a technical due or

Paul Black

negotiations in Yes, we the are still the with DOJ.

So of concluded that been yet. would payment of not one timing in be due, has terms the

talk we'll agreement have once about more we So place. that final a in

Michael Cherny

Okay, Thanks. guys.

Operator

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

Robert Jones

right Hey, guess you you any to of sense think thanks. though then guys slightly on highlighted at how I dollar versus I follow-up just on how I of that that. thinking Dennis, think amount know, and cash third-party XXX? maybe would balance much that, am I that below now about Allscripts actually You is mentioned is the correctly? the that work,

would have cash? inside So the some it to portion would it timing -- be in debt

Dennis Olis

Again, the be it due. the those when we take of payments would specifics into timing of

know we have we at I clarity time, certainly allow it we've a we again, the lot current got finance of that really with would will facility you us provide So ability address the DOJ. agreement more But it credit would once a final fund do needed. can't on how to that availability that our

Robert Jones

it. Got

this but kind really the profit accelerating year that's clearly for the step seems growth if kind know they strong guess quarter That's back ballpark. maybe we're in back were of out versus quarter and and a same you Netsmart, and fair, sound the just helpful. a the I if at of EBITDA revenue take guys back, gross in where ago confidence Now, were taking you revenue fair. look like bookings, in a it where and step half, you that's I into

where what you point don't. guys to could We start the that, a confidence, into confidence you these could So What be I you forward pick gives have obviously, the potentially the P&L you mean, in visibility levels? look gives up from bookings. the time as this

Paul Black

unless two comments that. Dennis up want finished I for asking So

year So second by well. the high as watermark know, last right first, you'll was far quarter

opportunities you drove of part what that came see in can were had, some QX it that So, non-recurring had that.

we that outlook a lot different And XX goes it's moving through year with the of this to chalk back McKesson very, of lots both a to the So and very I deal. of back a half away. M&A some would for know, accounting mean the if earlier revenue, last of did working it will, impacts over up activity than of that men of Veradigm of bringing months we you you still we made year, span some were walking, going knew clients on of right. knew they had a were dead to you some McKesson those deals, but board comment, if but instance, just also, we I about think for bunch They were contributing I pieces

have that. to through we'd So work of some

created business, And of gives all that around movement for we how what a think with I QX of us we've on of worked lot backlog turn turns in NextGen Veradigm. through deal our otherwise about Dennis some to kind some talked I'll as of the as facets we're business. including what And and a has that. core well the nice over noise forward But then an it secondly, you built example. the We've confidence across

that going the up in are of things that start new opportunities So are numbers. showing a to like there's lot

Dennis Olis

recognize Yes, strong of in service booking will an acute the year from those of exceptionally systems some space international generate turn just to and worked the first-half add we did those were revenue on markets to the revenues able for start have and get to that. and to projects that as on, both we live

for HealthGrid. as We also management revenue booking half strong had Those cycle speak. turned and being a businesses are we on very

and expect a to to continue grow. model revenue that So they sooner recurring those turn on, we generate to

the latter I deal finally, start to, to in part the I NextGen see the in Rick from revenue of coming will think as alluded then And some year.

what we've our about are those delayed, along lot of the provided the bookings the those coming in year, That's talked us a the service upgrades to and the third projects in just of we those and items executing that the fruition, received of of of the second-half confidence in year. a those now implementation So quarters. upgrades being with happening lot the on first-half for second-half guidance gives the we've fourth

Robert Jones

Got that, for appreciate I all it, it. thanks

Operator

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

Charles Rhyee

Yes. talked so Thanks bit on question, might on to a less have about expected. bit of picked you Bob's kind invitations follow-up up a get in a for little that the taking quarter, quarter just Maybe the question. timing Anything revenue second watermark. the terms of you was low, than these the third the of to here terms like are high I understand little in

So of track? timelines I here, implementation sequential happening terms for see that should far everything the quarter, we watching anything on Any year-over-year the would in we'll assume, in that's in let's out be specifically, of growth, so third that terms that say is growth.

Rick Poulton

at Charles that the the albeit the second low-end. within in the range the the revenue we quarter provided, Again, that we had year, million, of was guidance the $XXX

but getting things that bookings, I the think the that these just we it, of onboarding HealthGrid drove of again, have. we deals of the some had strong some

we've a to to second-half we from teams perspective, some standing the those of India a recognize some And in onboarding those -- that up the a management, some because the longer than size expected, the of built backlog. little revenue of had of was took expect of the revenue the cycle get we year. little to and with And but positions cost wrap-up synergies

Charles Rhyee

of now, question guidance Paragon the either a thinking base, quarters more it of strong maybe And has raised quarter, a there you've two about a just first expect, talked retain that made Paragon hear extensions about expansion back sounds and half, mix view? at this obviously, just back or customer of a That's performance bookings here or to At give here, U.S., in it's then client decision about been to how any it left lot already here you day the the the is was great. bit us the of vast some and where terms customer of majority the the sense on that's a thinking that second here. in you point, of in like percentage And the then half would obviously to here shake Veradigm looking a you about has of to you you're in lastly, plus, Are international, from able the that international good a the when out? you sort this can leave? chosen base make to decisions base, to mostly little

Rick Poulton

Let's also have a away good Veradigm start we business, we business, with like this QX should the we business. areas. Charles. What you ambulatory those pretty about feel have think had a your in pipeline call we from in is those and all business, areas independent be our first have taking in if quarter our good in we all part business you we hospital our events, question, U.S. broad Yes, our four have we of international and have

of what you're So hearing comments. our part that's behind

drive year whole And performance the portfolio. so back think which the half the we we will across

best long of those think that's the talked be we a been was like particularly in time, But our would pretty the five to we slow and is it, area we've participation mistake good of in thinking across of it's For the International, quarter mentioned the I an areas. years, coming. having end, performance, four about feel milestone a in a focus, it why been because, that it significance walk a all and for quarter's but most equal international away drove it's

Charles Rhyee

Okay.

Rick Poulton

to anybody or of client upgrades, base think don't can commitment granted competitive effort their Look with broadly, and longer more about try to it's was really we create opportunities for of them the longer-term for their of for and the relationship a client a for think the market period. cetera can think that et show take making question, They and value plan for can between second clients. I for around lockup making time clients base, a much Paragon I a period us longer been which two around in general. As maybe We've party out there to us.

we've what been And deals, not doing. so way. value, for that those that We've sees see everybody it that's longer-longer gotten that

to like And sectors the you continue decisions. market to those with to go Some but okay, long-term risk. still you that's have kind of think contract, have if we'll I a of clients, year-to-year work less

don't, of the every end you to -- we feel margin, but the the clients. certainly more think I have on we fight like everybody day room each for need If day, you in of little our a

Charles Rhyee

Thank I it. Great. appreciate you.

Operator

Carol Company. Please Our Blair question Jeff with with from question. next comes William proceed & your

Jeff Carol

a bookkeeping thanks questions. quarter couple afternoon, for Maybe more type revenue the the questions. taking more and Yes, good on in

a number we if ZappRx and -- some this, provider HealthGrid contributions been from I would of Veradigm the there revenue quarter one be second and the organic I in revenue split might from then segment? between the the the get missed the quarter. if apologies and specific still First, growth have know

Paul Black

in up most would -- there delay just then, had significance let in sales of any is M&A cover year-over-year. HealthGrid, I'll all got that. even it, picked zero some for QX to and we've obviously but of year, I Jeff, real impact ZappRx of what nice of like Dennis there's revenue except next only say we really activity is the since last some we no contribution

you should of So I is see think what you it, think organic.

up to want you of the the pick question? Dennis second part So,

Dennis Olis

Yes.

provider terms we that a queue, general that of here, guidance into and but we split. published the had typically given roughly be the split details the between XX-XX obviously Veradigm it's In will get in don't

probably lines. than in ratio, the along those non-Veradigm little a net richer a space think it the in quarter but it's this was I provider

Jeff Carol

share or the cash on second it. capital so thoughts your then payment And does then terms first, potential Got couple payment? impact on beyond potential settlement or a another conditions any allocation? that's repurchases And this DOJ questions looming,

Dennis Olis

Look, and beyond go there's that -- some we agreement an the are parameters but yes, writing those obviously of the still check, finalized. that, have to and terms be deal, principle, we just to a of need feel

of before have on likely then think of the we things other impediments view, with, But don't to our have can specifics business, not fully I the think to will to for of agreement we what writing the with material -- we impact but amount some comply work all be conceptual we'll biggest transparence is. we got would to to that provide check, We done impediments or as them a but at getting business. what those be points, see be some we're in and that

-- we thinking, to that now, so think done of I repurchase it and on respect right do with no, we share change it's a several does amount occasions, what [indiscernible]. to available us our not I mean, capacity cash tremendous then have

Jeff Carol

the Make sense. for taking Thanks questions.

Operator

question Citi. Please your next Demko with with Stephanie question. from The proceed comes

Stephanie Demko

question. Hi, taking guys. Thank you for my

FollowMyHealth Just are you love to us the product? hear patient future in solution, I'd build-outs in recent given the any that interest functionality the could portal about in on demand update work?

Paul Black

that two mean, we I everybody The It patient be see also HealthGrid, by big both of had go-to-market was our much curve an the clients growth just broader that. to about and really of we Well, portals was lended took you together sales in step Sure. with was a technically continues do when team what integrating that acquisition year and thinking portal, all behind so, of to these from the strategy requirements. know, clients. EHR those meaningfully -- FollowMyHealth terms adopting than expulsive engagement FollowMyHealth virtually we last and used was

-- say use. to else in -- there a am X of most patients have more the something to might as about. engagement should sure specific been of success a bringing right market now the industry earlier, are bringing is in really having Chapter you trying I fair FollowMyHealth they're flexible of not lot comments success what what think your you continues of great as amount HealthGrid we the on it's represents, solution some up I heard for think in So you it the be but had think maybe patient think and mind, a to

Stephanie Demko

payment see let's So solution with or you I mentioned thoughts build grab there? any data versus, are say, in a was just FollowMyHealth starting that partner innovation that institutions portal thinking track patient try on about to more a and financial patient to you of and cycle players so solution, pass SYNTAC of you prepared institutions the to your more comments, revenue the to sell

Paul Black

Yes.

have payment We embedded in already technology -- FollowMyHealth. is there

FollowMyHealth easily and of patient settle portal to is user the deductibles, etcetera. who a go a account So, co-pays, can the

a of focus active healthcare pillars more be in patient patients continue expect HealthGrid, easier should exists one see of -- with with areas. and financial to engagement and there some evolve as for lot some of and of we'll should our making of So, capability that to a expect partners. those and you us and We continue transparent big part add continue going forward, that we to you think to us I to

Stephanie Demko

area big a that's hear demand. I

trends, or you quick Now fact anything the do is balance free just it? from side one of or payment the given to in and debt confusion fund making kind flow cash of the will to sheet on have size that equity follow-up

Dennis Olis

is this Dennis. Yes, Steph,

agreement a terms we're us structure So available we our but about and facility. -- previously, available working with DOJ, quite credit timing payment I bit still the the through as the credit to and on of the have talked of

So that when and comes we'll we'll with time terms. the get deal final

Paul Black

structure disruption this no capital to absolutely is on There our deal, right.

source, We our credit on mention cash months. generate availability next whatever free the XX to will half-a-billion mention over -- the to not cash flow, time balance have you of with to not of pick, that north sheet, want period current

is structure. So on capital there zero implications

Stephanie Demko

Well, it. you it. that's guys, Okay, appreciate thank

Operator

with proceed Hooker question KeyBanc. from is your next Our Donald with question. Please

Donald Hooker

Hi, great, good afternoon.

revenue and learning if the year, when of being lot so of four and quarters? well, of Veradigm, you probably typically through the about distributed business, the about in how maybe of help the so that acquired Just a of understand this would think are us seasonality think year, had businesses changed has you with between being sort business a out, sort particularly I dollar guess sort I I coming some as in obviously

Dennis Olis

a equal of be of XX but XX $X.XX maybe the SKU the pretty that probably to balance They for otherwise but maybe QX, size would year.

Donald Hooker

Okay…

Paul Black

What's not lot and It part. on true have so most of is sometimes does Veradigm revenue company and not to perspective is the a $X.XX some impact seasonality some to bookings you that revenue that in be you're translate that subscription, think than seasonality seasonal to used closer rest of quarter. the you're There we as that -- of selling but each recognition, see selling from when for some of pronounced with is a it's licenses pattern outside a seasonal revenue by of -- sales, the the can sale well seasonality in industry, revenue answers. really then less frankly and license when

as have then to You you considerably, laggards and to, way QX level QX just was biggest, and to as by was used but… QX and don't have variability you the swing be, second, of it were be a that don't QX far used the wider used

Donald Hooker

put price a would And that you like in me, guess Can into of sort two growth things of now I you. that Super. things? I also area. the optimistic one been just maybe hear stickiness on maybe Practice then cycle had could there product of of all there last that in terms into the revenue love that we're you subscriber related thank some thing Fusion with kind Fusion And an of always follow-up just base. from And those subscription then after maybe lapping, believe, that, I other into to and other you that's I elaborate tools from me, year Practice that believe to terms that, June of in the update or cross-sell

Paul Black

Yes.

the very estimates. it, new our still we to of to conversion. with had, told It up. we've a first There pick internal -- that's bit providers year rates some churn, pick you continue And we retention answer to and your is after a have we how introduction have positively point, market with were the ago initial no of story. doesn't did short we the providers surprised planning the up question some EHR yes, we're and is We'll lapped churn. on that So, beat are but the have we little by that, continue in the we good the happy and we the

the quarter not actually question, practice began that have began to our part On Historically, yes, Fusion Practice process management PM second your own. to system. we phone solution we of a just last did cross-sell

be they for it clients, down to able to address so Practice selling PM system, when parties have we on of the relied EHR/PM practices that, on the scale third been good they Fusion a combined larger a solution. And the we've to chunk to were able a

there to where So practices, small too for is dark are complicated RPM them. system still two one

of to begun we'll but the so into And continue some third-party we use that cross-selling have there, relationships probably base.

Rick Poulton

before point, first last on charging to the today on And started more the have subscription then did build just actually we system we we the providers than year. fee

Donald Hooker

you. helpful. Thank That's Yes.

Operator

with is Please Company. from Mannheimer question Eugene Dougherty next proceed your question. Our with &

Eugene Mannheimer

percent again, progress. good that you're Good is of a I bookings growth ask Congrats Veradigm Thanks. what to here to afternoon. related? wanted on Veradigm your guiding

Rick Poulton

growth, the bookings in say other you increase for are about our When outlook talking year? you

Eugene Mannheimer

That's right.

Rick Poulton

increase was. think us given had Okay. thought the were number in company. I -- first-half? And but you growth do good an not, expectation had is first-half. of weren't And was good have pretty Veradigm of were outlook gave Well, we rate, the they they good to easy the I as had I I remember much In they've bigger, the first-half a to don't for they first-half, for to Eugene, sorry, across it a should it, would a year contributed I'm certainly it from with made earlier think I but how we come to going to growth it but definitely contributed the all where -- this

Eugene Mannheimer

Right.

Rick Poulton

think should relative you that performance line type with relative of contribution And growth. sales of about in and is

Eugene Mannheimer

whittle then so again, for some on amount that you grids Thank quantify good. organic and agreement, can of from with growth NextGen very Okay, the the Thank revenue sort that you. here organic the you. also, help piece? respect expecting growth fourth maybe said in the drilling of those to we in just you down can quarter, the And down business, you're

Rick Poulton

say to a not contract says, level that Look, single-digit from areas we're contract I just those impact mean, dollars. get collective million we're going the -- commercial that is not but let's detail, that's two

we're increase across, we're where in -- into is disciplines we, the multiple coming from to so, And going to seeing the standing not… that company, relative

Eugene Mannheimer

you. got Okay,

So, very standpoint, you. from then small contribution that thank

Rick Poulton

I mean.

Eugene Mannheimer

Yes.

Rick Poulton

without just, NextGen to and a the it. in respect -- it's is eye and it's It early start we that's holder, with of the but

about contributors meaningful time. become There's will over them no of both those So, it. doubt

Eugene Mannheimer

you. Got

Rick Poulton

talking we're [indiscernible] about When

Eugene Mannheimer

you, it. good, appreciate Very I thank

Operator

Our next with Oppenheimer. your Please Mike question is Ott from with proceed questions.

Mike Ott

expand It's my which with them? say can Northwell. if hear taking you're Good afternoon. might in talks for great with that Thanks you question. to Curious areas you

Rick Poulton

you their just let's you just a I ambulatory about And, and would solutions, some very we're wait tell that. with their do about big make. that, we're with to joining forces data till what we announcements forces have with big with Northwell institution, I'll them. joining them, thinking know, is And, to as that about thinking around are things. they more and doing Think

Mike Ott

Okay, has was the Prime Minister recent strong in knowledge NHS or enough. a changed to there U.K. historically been from Brexit developments anything where there? change, your you've recently And fair the

Rick Poulton

health Jeremy to some is announced gave Hunt they XX the still digital different trusts as on No, for the minister and us there of monies more of go today matter just enhancements. a spend fact to

money their spend put indication and continued national NHS. those a where lot seeing and governments I'm meter So little That's them. the big government that, free good treasure have succeeded have most to clearly Churchill on a a of for but dollars The they up advocates It's a of certainly a want the been bit. mover, that of to money.

Mike Ott

right, helpful. guys. Thanks, All very

Rick Poulton

you. Thank

Stephen Shulstein

Thank you.

you call So for much very today. the thank

the some our that guidance going on of today. perspective. side of and drives we on and the As rest clarity things received and also friends specifically we Department also the All we're reaffirm our which you hearing we is the very good why see, comments booking where success that pretty about had raised the we is The bullish for of at and why think XXXX, is with you're Northwell are all first-half up it to from and can have that my we're reaffirming company had. that to the visibility Justice the The we which end shareholders.

attention to take what and Thank calls these a to as company. appreciate this grow profitable in your We seriously earlier, appreciate to everybody's manner. We we everything do business And and you. very questions. continue do we we can will this said we Rick

Operator

conference. today's concludes This

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

Veradigm (MDRX) 8 Aug 192019 Q2 Earnings call transcript