VCRA - Earnings call transcript Q4 2017 | Vocera Communications, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to Vocera Communications' Conference Call. My name is Shantel and I'll be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Sue Dooley, Vocera's Director of Investor Relations. Please proceed.

Sue Dooley

Thank you. everyone. Hello, Conference XXXX our earnings. Vocera's full quarter to fiscal year Call to fourth discuss and Welcome our This today Brent Spencer, are Sue Vocera's is Dooley CEO, Lang; and and joining me CFO. Justin detailing our distributed press We quarterly a earlier this results afternoon. release Web on also normal is sources. investors.vocera.com from at our release and site The news posted is available call conference our live site a where webcast Web be investor archived. the This on being replay is of relations will page

that may this begin law, the our financial I'd opportunity differ reconciliation to and required results prepared this update is this This posted to subject we earnings events course to during described take obligation and to release. call, as information Except both and in with non-GAAP we opportunities. forward-looking our non-GAAP financial call measures. statements to you we revise refer no GAAP of or these in statements. by or Before regarding forward-looking like materially. remind anticipated remarks, and make we Vocera's uncertainties A results market risks forward-looking is On to GAAP filings provided operating SEC undertake will projected actual the of measures will

the let that, to So with call over me turn Brent.

Brent Lang

you Thank everyone. afternoon joining Good Sue. us. for Thanks,

year, I $XX.X milestone full serving was out stakeholders, for and of revenue million, of and one year I for community for integration milestones year up XXXX. record I during in last We million, environment the up call review Bookings with profitability Our year finished and of of $XXX.X in a We enterprise some the our a federal would include over an XXXX of scale investors like in we adjusted employees, discuss Vocera each bringing accomplishments, these to Justin of adding XX% you is strong banner fourth major Extension in but in the revenue GAAP $XXX.X acquisition, a giving a successful indicator continued Healthcare million, XX% growth. quarter same profitability space, to were and and many in about XX% profitability, revenue QX. Fourth the first EBITDA highlights, the which major over more of. the growth of am market later showcase before hit was achieved accounts. number closing talk a of year financials our will the customers, future year. XXXX added truly in and detail. progress facilities Highlights new the and last up an important period and great leading large quarter wins over record expansions, great year really our opportunity to some the review We proud off customers

success opportunity. a We will transform as spending efficiency greater set crisis customer with trend expanding the solutions in and achieve our clinical our healthcare supplies long and resonating this a platform meaningful in We challenges large is sizable our and caregiver tone seeking driving patient believe landscape Vocera for software eventually the several made that In the to term addition a of secured We customer conversation progress maintained also deployments, with The to is business. hospitals expanding. Software meaningful unified very demand more satisfaction is the are the and customers. to believe products existing a address market order communications customers our at seat platform the large is has expansions, solve high they become competitive our new and customer changed resulting the and focused, their of to Engage table that market booked and burnout. grew IT to priorities. that and Both of market workflow with confirmation customers in us is

to we the is and industry. improve as quality, staff these and aim. which across to mission experience resiliency patient cost, Our the aspirations receiving attention term quadruple is refer increased A

standard Sutter another of In to installed of solution the our was as Gartner the of effectively vision friction alarm reports solutions quarter in Medical cross-selling booking This our deliver deal expansions with footprint, to the booking, resolve the when million our Medical Sutter very two for validated awarded by on positive epic command, patients constructed robust seeking move gave to Department follow by as deals, deployment and treatment will voice, Because known from recent exciting of has new follow. these medical into some journey to been they operate San to and best integrations existing and Pacific along Health included authority for market, ROI open MEDCOM. highlight customer management new to customers. our hands in hospital points of of strategic solutions goal supplies $X.X addition which families being included reports a main Francisco. the two selected described messaging the fourth and successful The and orders One official facilities Our California a completeness free activity facilities. communication MEDCOM which wins workflow is published two a platform. another our and demonstrated system this was hospital Vocera from million class assessment the procurement hospitals new patients in quarter our initial Vocera a the Defense. Army include $X.X their expansions U.S. The for federal the summer. and Center scheduled care

our with facilities heels two including with the it's Sutter existing relationship comes for and new has on this represents Sutter an a Mills-Peninsula. largely experience Vocera expansion Vocera, facilities great other While of in of had

BayCare validates deploy of at new with customer an important a showcased clinical was in wide building. project our traditional operating add as the new team over our Indianapolis free also win They hospitals measures This XX to communications System a last potential to of department success acute enhancing solution facility Florida. platform clinical clinical strength leadership address for are systems. mile view and robust other our utilization. the XXX existing they and solutions IT the care BayCare and to Neuro-Diagnostic as expand bed will platform $X.X time. future Smartphone the Tampa, all the million our our communications a clinical Meanwhile integrations outside the they hands Institute seeking We will had in market. excellence Health in important foundation safety for This The at and landmark integration system deploy platform rooms

healthy Land with particularly expansions in of very Our suppliers element support expand customers a this key software quarters initiative. to renewal was rate. and and continuing with robust our delivering growth high remains and a existing services produce results business maintenance

Health During into the Shore, quarter to existing Baptist Wake general, Forest, we also in North successfully customers are into Tandem Partners, existing sold our opportunity demonstrating who Vocera customers. the Hospital and Engage solutions sell cross

us Our which expansions. to results wins international Medical million focus XXXX. Center in We great international on had of also markets remains been good QX. from which valuable saw $X a had expansion source in for our in initial has a We solid efforts top some business priority Qatar, a our at Sidra

like seeing impacting how on our about this would looking the some are provide I is to we context are horizon priorities. strategic at how what and we Now XXXX,

big be environment continues hospital the to First, spending a topic.

a our continue sources carefully XXXX While listen as and to we weathered industry chaotic to about budget as well, priorities we our well plans. customers spending

improve X% patient to the up and around hearing in address is expected hospitals that X% initiatives IT spending be be will to are widespread We create on burnout. focused efficiency, caregiver squarely that and experience

you goals you echoed these systems the JPMorgan time attended to basics from big the If during and sessions again. these last back conference month, heard hospital

we conventional While goals the hospital robust, that bring most device application the achieve in technology on complete security concerns devices device our competitive BYOD data. play side, to provide out directly and On they address limited to spending to continue are workers the choosing for have so is favor. several can workers, continues your own rarely or them. a maintain and based solution to have clinical increasingly for hospitals of with control hospital needs these their based very

customer secure a messaging, a combination for deliver is of larger This time that essential a voice, is the essentially the real in solutions communications unified to in is A a environment. the unparalleled platform has time it life-critical and footprint journey secure competition watched from texting looking implementing solution functionality for also carefully but texting platform hospitals noise to platform some around sensitive and does throughout market complete providing health single their channels. deep has healthcare system. marketplace wrapped security in not a that Regarding patient decided hospital combined integration into industry. our and a IT this vendors text our is convinced demand for complete across customers. solution with experience feature the communications and from been the workflow long-term There the remain the clinical unmatched We and leading communications to delivers

real you increasingly information about call the time right and to future. caregiver We this awareness will to delivering patient We in the this time. us situational the are essential and the becoming from hearing decision-making clinical the more be right right care at in place

IT with Our they spending differentiates our hospital into and us credibility seamlessly further to integrate our as competitors data from clinical ability cements priorities. set systems

time and partner real system believe a friction journey, platform trusted quest described address expanded health Our patient the main increasingly caregiver they the in resiliency. in hospitals enabling to Gartner's that will experience We key is recognize the in patient their impact report. need to to points

expertise points care the the and have and these within to address beyond. acute environment We the solutions pain

to top year. of like to drive In wide expansions coming win couple hospital systems one and key our XXXX, the in of be customers. our will existing new priorities would I our Now a system continue for priorities to highlight

base opportunities increase installed growth cross-selling within pursue markets. will our international focus from pursuing We on our will and

to product hospitals. On our and extend to continue outside solutions the relevance will of walls our invest four within clinical both side, the the we in

It's new expand for closer grow future. year move we I done profitability our strive our Vocera We introductions target goals. and product proud to have to I solutions as excited a exciting as to we towards business we time have plan our our help and the to our the big am for accelerate work customers. about of model an am

cover give QX Justin our to chance guidance CFO, for our details QX would and Now, results and to Spencer, financial our like a the I around XXXX.

Justin?

Justin Spencer

quarter platform our strong profitability strategy. the Vocera's QX XX% $XX.X by everyone. fourth to capped Hello, Total flow. expanding of million, reflecting a results, and financial momentum of year higher success in Brent. broadened great revenue revenue grew and cash growth highlighted Thanks, and

at growth of $XXX.X XX% software. increase digit full to revenue compared the both to quarter million and the million, For XXXX. devices increased XX% year, revenue Product an with $XX.X total was in double

device Our and revenue base customers. XX% supplies grew to new expansions driven our was in by shipments QX within installed in and

is badge wearable role continues clinical accelerates. and for adoption to the Our enhancing as vital play a us differentiator key of in voice a enabled services communication

and trajectory of total were revenue QX platform. XX% integral R&D XX% to spending Software further continue will represented our an focused quarter was our in Engage during is of revenue and grew our of is of on Most the software very solution last it to revenue. invest year. our up million, now in we We with part and $XX.X distance year XX% competitors. software from from Services our our aggressively pleased the roughly the platform

implementation a revenue Our our grew XX% strong as professional result of $X.X demand for services million a services. to

We believe services robust that of and a have we strong to services a tied software year XXXX. see professional we growth professional another will in offering broader much for backlog

our software portfolio The of is other services and maintenance portion large support.

customer approximately our accelerated of is which this our our end. million rate renewal to and a a and also healthy total was This year deferred revenue was our the nearly recurring With to maintenance in XX% QX. base increase all This XX%, in revenue. led software growth well in year increase support at above sizable and revenue revenue $XX XX%

our maintenance in revenue forward, revenue to in backlog at position XXXX. bookings deferred look added and $XXX.X XXXX, be continuing robust we to in again total our software we exceed to expect ending With million. we As growth support in

cycle and our While to software slightly the with services expect reflects we to improved transition the our substantially up a to the conversion improved in $XX.X more second utilization is which backlog model. XXXX, deferred our of million, And have we revenue XXXX. very in professional organization, of driven ongoing decreased continue particularly half predictable, revenue is which

a than adjusted was favorable On revenue benefited the higher we of pleased to side, expected million significantly QX. This profitability or expense $X.X were revenue deliver management. in EBITDA we higher mix as from XX% of and

than $X.X this milestone net sooner As this we achieved a reaching GAAP quarter, much result, we million expected. of income

the leverage adjusted we the financial EBITDA $XX.X year, our have strong illustrating was million growth. in at With full our revenue model operating

our XXXX, people get brought us revenue. said to in that cost. on detail as Non-GAAP meaningful Product in was we me and let expenses. and XX%, some to favorable service and progressed. revenue margins improvement see QX software the into business, support from XXXX roughly a margin strength may in In business, and that enabled by gross Now remember on XX QX driven more device leverage both our increased margin XX% non-GAAP professional our margin of our would fixed mix we over services technical acquired that the we you operating

and record to that in support QX As and QX, expected, services gross teams services margin higher XX% reflecting in revenue our services the technical from utilization professional delivered our XXXX. XX% in improved

we forward similar XXXX, non-GAAP margin higher be we and look expect and margin margin a As XX% services to gross between our XXXX. XX% overall with slightly now product to to compared

the expect in the in continued again the revenue then $XX.X the XXs second year and first last margin Given similar we business, at expenses. as be to QX, low above in we manage operating seasonality percentage half. our gross the were Non-GAAP normal our in XX% million our expenses of half to to

XX% full For expenses the $XX.X operating of year, million were or revenue.

a included as compared only the of XXXX two in acquired months reminder, year XXXX. As to business from expenses full

in scale. our on In XX% XXXX, XX% growth four from we last revenue ratio entire as in expect in focused our outpaces very expense years, rate to to declined operating the our to growth. been business continue revenue more have we XXXX positive throughout efficient We this our has XXXX as becoming expense and trend

of we roughly in operating year and remainder grow and X%, expenses the the between expenses with expect For half in of the our to our X% XX% half. the XXXX first second

our strength of like balance to alluded cash profitability cash strong few in a we make had last about sheet. the of comments as would Now million the to timing collections quarter. $XX very of I We on flow and flow our QX and

we after related balance the roughly to acquisition Even cash added million For of $X the million sheet. $X full payments. year of

and improve negative during Looking we XXXX, QX forward full our to Cash and in pattern. positive year. flow normal year, with into likely the for cash be expect the again will then be flow sequentially consistent profitability revenue

million Our expected our million sheet in expanding XXXX. of balance to over CapEx is debt With cash, $XX very $X around be and no generation, cash strong. flow is

turn fully I new 'XX, about XXX, important to a Now revenue before XXX, guidance, really standard the I revenue XXXX understand would like accounting will guidance. to in properly it ASC we our as adopt on is new talk QX Beginning retrospective called the basis. to recognition ASC standard,

reminder, of of change a but As effects engagement. standard of our customer timing any this does not the the primarily revenue recognitions economics

standard, the revenue, many based maintenance it by model some our software software recognized us of revenue perpetual rules, parts recognize expect will Engage, professional the software perpetual Historically, entire associated portion and delaying is will to faster. new of our In of been the revenue growing time and until complex a revenue affected of customers often and which we are from long-run implementation revenue recognize revenue revenue has recognition the will our software services including we an ASC frame complete. significant customer not simplify our XXX enable change. While in recognition on our

under and to XXXX we opening of that in are our been revenue expect we a by a growth software previous have revenue under accounting ASC in ever in portion these recast However, our believe recast thus $X of is periods, bit related to see few drives as as we million what the deferred the initial as software will of of quarters business the to we new balance strong XXXX this increasing prior as XXXX be to recognized XXXX to improve growth part compared revenue comparisons software reduced expect of Much moderate standard, so and rate get we XXX, change. our standard. software transition through inherent have to a licenses The as could reported. and result our this

upcoming As loss a software a will have a short-term we previously, we required provided revenue as There revenue. future. provide the to and we today's revenue our lower the growth back is the this information you seek while ASC have let in positive But are model business. release in we all our so we result overall in be our revenue for disclosure Since XXX that grow over will that, an as is to have in believe With to continue recast earnings overall said preliminary as deferred to financials business me bit guidance. XX-K, ASC our optimistic momentum of run, build deferred with that good now. of aggressively be base under turn long XXX we estimates additional of we about

market in combined We continue years. competitive mid-teens with a with that to it's next opportunity see few us position, confidence over growth the we can organic strong of deliver large which our front healthy

we as revenue million XXXX moved could prior recognized believe in into has recognition have been Our revenue reduction a the XXXX standard. period of reflects the result new in and $X been guidance that adopting

target our of the XX% and For seasonal XXXX, With year, to expect XX% this in first and growth, model. expect improve our half. also expect similar to second revenue in annual revenue be we to between last following a $XXX revenue we half and continue we million, pattern as occur to the $XXX occur towards million roughly profitability

be in progresses. improving million We the XXXX, $XX quarter each as expect year million adjusted $XX EBITDA and between to

$XX accounting the be very are the negative summary, of momentum we million, negative be In expected financial million quarter, and $X be we XXXX. pleased and reflecting $XX and into impact carry between we positive is expect the change. results million, to in the For the fourth revenue and first Adjusted quarter EBITDA between XXXX the to $X to $XXX,XXX. million with

sales a fuel have growth. along to meaningful robust pipeline of deferred a We revenue base our revenue with and backlog

we execute our on it this progress Brent. I As a model. for target now turn will plan will that to back we year, we towards great expect our on continuing

Brent Lang

Thanks, Justin.

stakeholders. our about talk well among call making wrapping stakeholders. Before this I our during creating impact on community. focused is the culture year want Vocera, and to a major positive moment value At up, take customers, to four our investors end long-term as Employees, all as of

Let into more me around go detail little a that.

working First employees. November, In It In to newly for the me experience with we year to office business pride, XXXX, opportunity India. a company. the the Extension Healthcare in rest of I the into company. teamwork of group integrated Bangalore, highlight demonstrates also successfully unified our visit the in this the passion, and unity the have the renovated the was

we goals. reflect and to of Our employee team achieve assembled loyalty amazing our engagement the people shared have that

customers. Next

enabling for and to our facilities resonating Our business. is was new adding mission record customer the XXXX a quadrupling of year

high partner. maintain customers customer loyalty view maintenance We continue our rates extremely as trusted customer scores to and and measured a by as renewal promoter us net our

the the compelling our with relationships progress have investment For investment. sets make We made a and financial we we opportunity, profile investors, have product business we unique in community. market the Vocera built our tremendous believe value and

our ourselves set and have for have the we but momentum. continue We opportunities to bar high a capabilities

Finally, our community.

parts transition communities the continued for accomplishments was software as make Demand a increasingly our we the proud need. on our this year the we customers, community. with with profitability commitments our year international investors levels we and we record share am local an for the but of assistance to is of and to have of communities [venture] employees, was commitment To for done XXXX to our tough to world year be a conclude, the [ph]. success volunteering expanding is the work of XXXX communities in. back our I broader to to to in give live addition and as great Vocera. many In we products rise

differentiated We result have market Thank today. the and scalability solution all more as place for have unmatched of be is hospitals highly time software functionality our have must which to you today. elevated added a for a in your sizes. we And our to

I your free very if to to of HIMSS Before like much. opening the March you personally the questions Feel would up your you, questions, at any I for investor Thank operator, over Sue all questions. to for call Wednesday, event. With to contact on like have back invite X. that, call to about our this turn would breakfast

Operator

Your from of Gillmor first Robert comes question Matthew line with Instructions] the Baird. [Operator

Your line is open.

Matthew Gillmor

million cost that thinking consider. $X down Or is the showing revenue about, essentially to have deferred dropped also versus -- as fair there the EBITDA the apples that comparison Commentary we in that to EBITDA the to would assume of some is that is apples of essentially are sort Street, other up, to line.

Justin Spencer

other Hi, gets that software of a reduced margins. so it has previous revenue majority Matt. Yes, high deferred but is the a presumption. is from re-cast, good few gets largely therefore and software. are of There that periods, it's re-cast revenue pieces The into

you is what down And pretty the where the can tables see able in net the that and revenue close we is. you additional will EBITDA XXX at to income etcetera to be disclosures information the the flow see to provide so and

Matthew Gillmor

ask those wanted pretty Okay. I significant that but of question one saw it [MV] matter so sort investments doesn’t it to it made clients anymore. Great. the that much know [ph] become and on views amounts to or maybe And see available the had am much sure its environmental to upgrade so spending language, meaningfully through Vocera, then compromise wanted you standards increase includes just still over those Congress. have making if are if helpful. are dollars is on your any time. budget That’s requirements I to some really And I way eliminates its

Brent Lang

Yes.

it's are Most most of experience, Obviously I really have in payments main efficiency those to care I patient that’s and capability organizations think data at it's it on most well maintenance things focus EHR and those been use the improve and the we Make more to care to that. beyond appropriate whether part, just have in defined their use kinds care there accessible is think try is a health for electronic is has now them desire have health trying of And investments. the the ongoing record electronic by we the the think already of is already market right they think those or data but trying help and to of got. where whether that their the customers providers. I captured records. the context and I What made. meaningful point the providers delivering made have from optimize already of to moved and can most in filtering really defining major step out hearing to that selected make that investments they

Operator

Your next Jansen question comes from the line with of James. Nicholas Raymond

Your line open. is

Nicholas Jansen

relative the of Engage the you number that where today thinking were about for start just would including the first color. XXXX. that and Thanks platform question detailed be contracts My to are all to

your on there have of Thanks. the Just the the fold integration those combined sales seen bringing force more you the progress your that in terms satisfaction business. with level of into and of of

Brent Lang

starting deals that the Both Nick. making new is as installed base Actually Hi, ramp. as well of about think really excited definitely to including number great I there Yes, Yes. deals traction Engage. in we are are we deals it. are the

higher real is it's the essentially It's into us more three are with team patient flow, I and one into and a means become conversation care brought of the think awareness up has that equals which as together, bringing we on. here products bringing the before, I data, well dynamic customers tone data, this is that of it really of really integrated the the clinical the case changing the to specific as and increased the of going mentioned C what have even situational as communication relevance idea changed more time communication plus truly one clinical marketplace. to as suite right

becoming cross-sell I their week complete, attention of were in themes. more full so excitement the the QX of that’s particular at the point both as as more platform. the captured core sides QX, At to and there think was and force then selling across of coming accelerating selling of sales our really And sales one base. core more off combined the excitement of the last really see, combined And starting the our background. regardless and teams Lot well kick solution comfortable really and one opportunities into the our is in customer and it excitement we the around started complete and We themes meeting of platform. capability this

So I front. think progress we are making great on that

Nicholas Jansen

Thanks I up color guess there. M&A. your question of for in just my for follow And the terms then appetite be would

extension. digested have You

You would have then better a done probably much integrating job what most folks have thought.

and your today. So how your solutions do you platform stack about think

dabbles into some make the seen your space. competitors some have of We

was I think messaging. secure it

trying about anything you are on the think your customers portfolio, you to might have out an adding get to rounding really your asking as So just that on their eye that thoughts capabilities Thanks. solution. out for

Brent Lang

Yes.

platform forward. M&A strategies we of of our there. have like I we in move got certainly think that be communication terms core I I before that part have for feel don’t as our big gross gaps said will collaboration,

points are We friction or to the in continue deals place expand an patient's not of the journey. the loosing hospital eliminate smart real around these the result I But market health there into and offering is system missing as of context our a to think time the do functionality. opportunity

additional of then of Things. of scheduling, offering. the assistance, proposition user the interface size the nice are think of to predictive total the These on-call market allow the we And marketplace. in and like are that level value delivering us Internet areas all voice broader They are our a will analytics. of connectivity system increase voice things So into some to core taking next to expand context to actually our available supplements we the our the

an So opportunities fill. need got it's do a selectively. that not at like opportunity the to proposition burning like not an urgent see platform so we in look we the M&A must and do, But to continue to today hole very we we value expand feel it's have we

you and the acquisition future. As given the the made have healthcare happy extension are to that’s we with another over we here mentioned, business tackle ready us last very year we progress be in that will integrating that confidence

as long right the we to and our a of the meets where cultural right As strategic standards model price is fit fit financial and drive obviously and it the the that are product and trying business. is

space. continuing see to us you So that explore opportunities in will

Operator

Your next with the question comes from Mohan Oppenheimer. line Naidu of

open. is line Your

Mohan Naidu

backlog it and looking of years. guidance looks last the deferred than like the again couple at you just coverage lower coming with guys and the the are Brent, revenues,

Just confidence Can year. shows drivers and are the of what in seeing maybe converting talk booking you and of about confidence you a the there? within perhaps pipeline that more

Brent Lang

Mohan. Yes. Hi,

actually we good seen out we our revenue we revenue about feel mentioned seeing in So here remarks cycle. put have and are have guidance the I that target we and really higher that there, my prepared today, conversion a

our be continue convert So and expect what be revenue. we our to backlog to deferred is able to able to

and a our process invested the has to backlog enabled us a We here revenue at over improvement of faster pace. that deferred and have lot in convert capability our last year

continue the of to to we one expect clearly that’s as we into benefits head XXXX. So realize that

are overall The opportunity. targets other market see a bookings our things We is up. going large

breadth and those And solution a of continue continues in in our XXXX. installed base. position and strong expect the things our competitive more solution our us east penetrate and of to market be all the able strong so even for really to we bookings year to the expand Our to be point to deeply

convert so So those [ph] bookings the year. does [book as our increases, target bookings to ship] in opportunity our to

Mohan Naidu

you growth bookings ask, got with disclose any that us? or can I targets share to

Brent Lang

for expectations goal that typically always range. to say we providing feedback to And that, on other for No. or, bookings to of revenue just deferred would and a in to another we expect build and We our mid-teens, guide growth kind be us continue be will backlog that than drive don’t XXXX. continue of to expect goal is in revenue as organic our growth

Mohan Naidu

revenues that XXXX, you before benefit side accounting implementations. some here. complete of this not as recognizing this quick One in had Okay. the get have perhaps software change With you do the any change, in of you question change

Brent Lang

long Well, be a able certainly revenue software from quickly. to our there -- convert to there is a being bit certainly the going little is in benefit run more

to of group. us quarters the of of is and backdrop that that success historically Although of get The Engage. into to that for a take business portion few increasing been because it's going of it's a software kind our

been have the some we the very recognition shipped We to though have revenue the historically the software project software and until even customer of end required completion. of our defer to

new the to will moving us the of at of is that benefits time the enable that recognize standard shipment. of it software to the One

revenue here conceivably So bit quarters from will benefit to quickly. over to several we more the software next recognize a that able being begin

Operator

question Blair. William next Your Daniels with the Ryan comes from line of

is Your line open.

Ryan Daniels

if curious this number was I And mentioned have in of you U.S. believe the in year-end the am deployed and have if which number apologize I it you color facilities and us. on have I the international. past Vocera provided you for case, both but some that is

Justin Spencer

Hi, Ryan.

to those is numbers pattern in typical our XX-K. Our update

we United a updated had XXXX that come just with orient added his facilities. globally. over of So we XXXX over prepared hospitals in the States, Brent you, remarks But We in numbers. will record customers we number to added, out facilities mentioned

think that we is was in goal. excess XXX it can our say of which I safely

for bit So that you. hopefully of provides framing a little

Ryan Daniels

And When X% That’s say you. that housekeeping operating for talk about you then question X% a growth, would year-over-year. be did or you expense up year-over-year Okay. helpful.

Justin Spencer

there we was to the that XXXX. in expect X% X% growth range

Ryan Daniels

meaning XX%, of And gave more reduction revenue a that year, for roughly that impact in towards then you couple attribution revenue the Okay. of accounting it's of a the Or million skewed year, quarter. full as each is a XXX, kind kind what XX%. $X it's through Great. that prorated questions.

Justin Spencer

That $X quarter. but million would evenly probably be not spread not exactly is between the large variance a there

account full in does difference for the it year. of it million of So really terms $X guidance of particular. the over for But really is have that recognized the in the -- QX course some could

Ryan Daniels

maybe big picture then this I toward questions, two Brent. And and will Okay. direct

a JPMorgan and the both data transcripts. talked points the hospitals. and And You there's there conversation few about conference the of from interesting earnings

One improving productivity. work HCA, workforce and they big on flow which of there which kind that a indicated is have focus of was

some larger are XXX,XXX they guys their nurses. among As part more seeing broadly am And you iPhones to become if at launching I change a the are that of curious productivity bigger And level opportunity if of corporate you your profits. be are for a for software that think could an agreement is you so, a where market the there how for and platform that. pursuing concern

Brent Lang

fronts. on Great multiple question Yes.

reducing is core absolutely that the the cost First of efficiency all, theme. are focus you right I think and on

that and cost, back the gone basic patient value turnover. like proposition really Really the me concepts. operation plays it and our to delivers feel this driving because back some the most Vocera that basics that’s that out we concepts improving really strongly buzzwords hand was experiments the very the had directly. reducing mentioned into And throughput, to away concept around there, to of Somebody

do into And see these an so sell we opportunity larger our changes. solutions to

consider great for some investments that obviously application of really some be It's focus to towards decision bringing drive some of XXXX headquarters becoming our sales We more focus as will to Vocera's the increasing to and our centralized and the into is opportunities. corporate we success an we best think are with efforts. Selling is focus strategic larger timing account we actually we accounts. selling operating some are put that of we bit our experimented making sense changes fact, making on In little a designed head at solution that good so on more making the strategic on year increased to last had a these in those folks with are and and help organizations and levels these we those right in closures large efficiency.

Ryan Daniels

guess novel got to another have Seems senior you in facilities it be one, then to remarks could that that’s you Vincent's I more in in facility, Okay. age St. had little Australia. release Very you helpful a living XX press I a into. they you And bit I didn't curious your more refer about last you as you give am facility on mentioned or age if think color Australia. Australia know this a prepared I given that that And but of signed color. market over care alone. And you mentioned cracking in are

like So seems getting you great it there. are traction

adopted anything market there regarding much the see that an the your are a Do unique U.S. is being in senior much about which is for So U.S., housing larger well? there where you as versus opportunity Thanks. products growth that. market for

Brent Lang

Yes.

had years. earlier was solution So several Australian it really adopting market success than the care here. age for there It we for have good was in

it in also, subsidization made those well demonstrated the are senior in government fair it's of More ground it's have say where on was teens traction a U.S. many see funded. opportunities But XXXX. more facilities, in to starting U.S. see the care to the here we are we those execution we I living There than are in combination the growth of new exciting here environments the some contacts of proposition initial sales think where one facilities not those and some good and we organizations in towards driving that Australia. money in age value there very clearly. is

San around kind delivering remembered in really area about did age And Francisco we sales the it. think which and may care Bay environment. are environments we have care living is we that proposition You senior the to another in that value chain the we the translates landed here of excited is [indiscernible] announcement nicely QX that team

to delivery with more space thing those are is organizations our and advantage the other that that’s integrated working aligned health systems. of networks more more in becoming and The closely that

we relationships systems that leverage with for the have delivery sales And can the the we so integrated network process.

a we excited more that category I So basis. from you us go about. forward It's hear certainly in think on will one are

Operator

Wells with from line the question comes next Your of Jamie Fargo. Stockton

open. is line Your

Jamie Stockton

couple. just guess, maybe a I

there during of down, would that quarter should in tell that Justin, ticked expense and Is OpEx that’s number? I we great. that Anything to is in some XXXX. base a there think, new line can marketing the helping noise be about think it contain sales kind the you

Justin Spencer

mix. expense. From quarter just the That our which more unusual. in QX, in particularly Yes. That the Nothing is a of was commission of fluctuations was there fiscal time can year, largest be of driver. sales to function the time, last

different different have variables based plan. commission We on our rates in

So lower. commission was expense a little bit

for and rough I into in QX pick would next heading give for That where good QX look reference think probably kind would you at the XXXX. QX, a that number. to of line a year base

Jamie Stockton

voice them. out Rolling a that some want there virtual call record assistance, or Okay. number That’s of the in assistance like whatever them And great. then, electronic Brent, in seems health are time at it looking companies to are XXXX. you

and drive technology about into integration that would it any and a you going seems very, your platform that’s you front-end level you happen I sites your talked is not work color deeper kind make should that to logical deeper anything is logical healthcare hospital. to that right maybe badges into of or be of now the us there of especially thinking are and about of there about, Can badge, As know that have rally enabler kind kind be sure that of out your else those. we on a communication give like can for

Brent Lang

Yes.

are that open to technology making, part this that then the of is as companies are more work that fact recognition as speed announcements, And the the more that also putting our there transparent. leverage doing. excited interface is the platform. gaining a about I user up, we And to announcements are These seems larger be is voice fact examples mainstream. becoming can heavily Apple Amazon about traction I mean making, on the who also are and think we the in more Google excited more of pressure are we great that we opening and is become an announcements that industry investing

to care you footprint tremendous offer. as the possibility that, as already app really am the Vocera to out with additional information about provider marketplace existing Both this to deliver ability into better Smartphone, functionality more that recognition speed update in we information improving to have this it add I And of we running mentioned, or excited the value to of. other adding because the that for time tap being interfaces talking situational around and that I the is more So work that wearing around users a also back a also And was a there a inertia gets that core I and those got And the more a end over potentially the on the consumer is the APIs the awareness. as of direction. that some carrying we time could up see attention Vocera us opening core badge functionality. and a real

Operator

of Matt Hallum of Your next Craig Hewitt the line from comes question Capital.

Your line is open.

Matt Hewitt

Congratulations up on international a bit in on opportunity. follow little the 'XX. the success want to I

You in remarks. prepared mentioned the Qatar

do that united release Where press about what greatest little and a today markets you talking in of sales provide that would color helpful? if the kingdom. near-term recently you as Middle there a particular had percentage out the could see East, here the Is is You opportunity? that be a Europe, that

Justin Spencer

Matt, right four was international different so revenue. it's for really across Yes. around XXXX XX% of And areas.

is starting the a Dhabi had reenergize Zealand The sort The which we year. has now which Middle is primarily we a been in And to got opportunity really about the like second that. New big the strong an a momentum. business over little around getting the hospital the market care, with So slowing started probably we in Canada the the we Abu and U.K., actually in then UAE until is in really in in little Qatar. market and East U.K. focused years which and of feel bit build age Dubai and talked has up to of largest just last bit half A opportunity are the Saudi there. the markets to there its we Australia the couple have earlier but

U.S. that summer pay there. a have starting the the changes a from made leading new down guy who some dividends effort. We And changes to country are manager, already brought moves is We in the course that of other in who the some there. over growth made

don’t be path that are on biggest the growth a there. a be regions, going this to faster out geography we overall and I Canada to although was depending be percentage the know to one are Australia opportunities But of growth East, towards you see really year. driving international U.K. So the business. accelerated And I pick that’s steady us for higher that the business overall going going exciting our us. new for than represent to hospital the really I on on think opportunity in also any construction going growth Middle for would and

in And and we the a from and as organizations. now that services that a changes wish And of we support obviously the those have in that the a well clinical The we things effective and acceleration combination executive. the One selling is U.S., as way team well that of deliver serving to we and use sales support a of as in here bookings from these we are international just we faster in we have a the made here technical expertise currently approach market. accordingly the needed some U.S. markets realized of based mirror a In really not are and I person it's them that best. will made regions selling engineer, that of a expertise drop successful hope enterprise systems revenue some investments is able clinical to to selling effort in be then the

Matt Hewitt

those type on enterprise at ago a your learned [Francisca] implementation, along A wins. you couple has lines. when of were that shrunk? time and color how years are from and running. bit to large maybe Thanks. Great. question. up type experiences get with to forward Maybe has enterprise hospitals that win, those update Any large have you you. today? What going those Thank where time to an their months expectations going a signed of XX, longer maybe And take couple was one to you additional little and a XX, [ph] they that that first The

Brent Lang

XXXX as continued see business. Hi, Matt. in continuing into And earnest theme and effort be kind and back sell of Yes, we larger able and from I we of to is the we deployments. really [ph] projects, selling And we and proud that really but from of in standpoint and we of XXXX are important support think standpoint still driver our UNC that beyond. has have [Francisca] There are large began made these deployment head be an just to to really that to ongoing. still also transform a these the several company, a not support just really

a there be is projects. well. bit But more there revenue gone little really to able those to from and by large recognize So have they

implementations that and Our facilities VA focus those now go we on in well making is QX are really successful. and closed that really the sure

have collaboration from voice they workflow team done to their of have professional kind to of a We and They solutions. services our broader implement are not really evolved including the really these just a implementation that kind platform and work the proud of expertise team that’s working are addition the in lot of a job implementation. basis. more to the projects of a make has implemented timely done to our And services a properly the customer professional added Engage. great sure scoped, timed complexity that And with and

are this us of great put proud facilities, a proposal when multiple front customer support our really an fact in to across So is that for project ongoing really we an and way. a ability that of to effort in a live have we we the go and plan

Operator

comes Your Sean question with Jaffray. the Piper next of from Wieland line

open. is line Your

Sean Wieland

believe or question, it XXX another not. So

that in or recognized So would in recognize terms 'XX maybe presumably you revenue under be the able will 'XX have to some new accounting been 'XX.

recognize revenue of about in million net that you you the that thinking that or I right. earlier $X was 'XX is be about, talking not am So able are would

Justin Spencer

some being more a comes really our portion to from because that hard does there future is estimate guidance incorporate our revenue able of which to But [ph] bit it's significant bookings. Sean, quickly. [temper] revenue benefit a from

really reduction. standard. our guess hopeful able new that to revenue growth from pick we will revenue prior are So able to in bookings we the purposes additional I under million that as some to was our on being $X as the XXXX, true deliver main up continue to re-cast we into period. And be highlight benefit

Sean Wieland

Okay.

related and to to how deliver your cycle of that seeing? is of So just is to much backlog are related to customers. ability of to conversion products is XXX you revenue the that much much faster how that How

Justin Spencer

faster on conversion is little able maturity really we and very revenue to faster. is expect in have we revenue specifically that allocated The We to focused that There to attributable the to or XXXX. XXX. from continue deliver into that XXXX being earmarked really as head

Sean Wieland

one for and And you, DoD. you MEDCOM left Okay. more got government much think runway business, VA which do and how Great. you this is within

Brent Lang

Quite a bit.

far at very we across branches if obviously various penetrated so the and the amount also in large the know come branches rollout. penetrated You are And being those VA, only to opportunities there into large then Army the penetration It's a well. air of a that half VA about including as still cross-sell us you more marketplaces. in look and opportunity probably certain with the in highest force facilities are number but for of little to penetrated remaining regions, certain the navy

years. next to business substantial business we several portion So to of the expect our fed forward continue a moving the be for

Operator

Wardell line the from comes Markets. with of Steven Capital Chardan question next Your

is line Your open.

Steven Wardell

how Congrats in us into of solutions. prospects? going for the on on tell XXXX some may are what demand issues for are more international your quarter. you and hearing Can them are from your about and that customers you translate that What the

Brent Lang

Yes.

on deployments market see bit has think that adoption. in the as the market I health years their the in They U.S. records are more I terms, in those earlier general the electronic deployment a from here we eliminated distraction would just a in interference behind or little of classify international being technology that U.S. few

say tighter around in consistent efficiency a particularly where cost at looking U.K. theme or U.K. the are they markets and Australia the you If the market, operational under East Similarly there well is are hospital very really favors products characterized new around very budget Greenfield constraints. in The to do construction really is Middle Canada. market our environment. in and that largely new reduction,

and the from completed construction take Some strong is have be construction ends a a get sense unlocking typically and standpoint. that in wait our would come because those the hospital up does to bad for deals most momentum the that budget drive It's market deployed of to acceleration sometimes to good dollars part. news result in by. it of longer be But otherwise hospital news for Canadian is new harder to we that actually the

think growth overall, a opportunity. I represents nice So that international

it are moving We 'XX. excited about into

Operator

Your next with the Larsen from line Leerink. comes Dave question of

Your open. line is

Dave Larsen

Congratulations on the good quarter.

in XX% looks of impact to your exclude XXX. So the the were sort I you are about like expect it Like a EBITDA quarter. what mean if adjusted mortgage we posted you EBITDA be XXXX forward didn’t really am to rule whole I Like and Thanks. we change. be Any if go there of helpful. margin would color about this have thinking accounting beyond.

Justin Spencer

Dave. Hi,

been we are have we revenue but feel on know not our trajectory we journey important grow only to that also about You the and improve really this profitability on. good

We bit in We benefit really XX% a target some OpEx positive variable than Our current and and deliver did internally, is commitment, and from I it's something really did margins team committed had of to on that little anticipated. feel mix there our lower and is and Brent EBITDA this really deliver very point model. emphasis important plus the QX. we, very we

trajectory and in leverage we educator revenue QX our term of of as growth. necessarily on we ramp kind tremendous is operating an near our revenue isn't that business So illustrative our overall have as kind but outpaces of of the expense it

out margin deliver as and capacity to good on pretty we incremental XX% continue envelope, been drive but $X.XX more being more have inorganic can last incremental that a leverage guidance and and to in drive kind levels get the we are XXXX, significant of to force we doing a like targeting basis. potential we to we of over incremental which to accomplish is then an able thumb, know change years, we we every reflect our an is feel kind organic is anywhere of tends back temporarily we to currently where the heading there to sales if productivity Certainly into on that higher like look growth of basis, much that on what our organic talks of continue job rule neighborhood And the dollar. margins few roughly leverage. of XXXX, that does feel You of

'XX about trajectory heading the 'XX, out or XXXX level of we So to if continue that you of kind believe of that’s the and the can we leverage think on. kind

Operator

of line the comes Your Steve next Cantor Fitzgerald. question with from Halper

Your is open. line

Steve Halper

million, midpoint range you when re-cast of to for the revenue look numbers, million. it compare that So at and your XXXX $XXX was it's the you I guidance think $XXX

you looking So growth. that said growth for mid-teens you that’s are X% still and

delta bridge mid-teens? to sort the just between something and through I you X% am growth the me can sure the there So accounting of I And missing the adjustment. am relative

Justin Spencer

Yes. Hi, Steve.

So couple of thoughts.

exceeded we with our so the conservative goal traditionally the about think when all, our high certainly have consensus top target and we end be pretty our we of First, to with tried the the guidance, is the beat We and and range midpoint. to provide towards internal that’s end it's guidance don’t the of range. targets not

overall of just think you about, our that’s So as important consideration kind about contemplate guidance. how are we thinking

of As the go XXX back I to that. and think we XXXX, impact about do

does our we $X balance that prior lose of roughly sheet million get period. have that in revenue the deferred of off We re-cast

to just our looks But for I a now. Had under ask, those that have 'XX business. rules the a might we the and compared previous rules. were to Someone say well different little overall might in would re-cast numbers effect had 'XX bit business operating been different the cadence we

So than anything. the not, of accounting as related as historical are view, comparison kind changes relevant more in our

business our XX% growth. delivered in As XXXX, forward, bookings think going about we we

our we faster which revenue. slightly us Our to revenue believe We build to bookings continue enabled deferred benefit will from revenue to and exceeded cycles. backlog conversion continue

towards as start to away transition, visibility impact the of overall XXXX. our XXX, of and to a growth revenue this more achievement the move normalized of the head from for and year, that in for to to business. this get will of XXX guidance terms the we rate point we level backend all kind And So back of

Operator

next comes from Citi. question Your Stephanie with Davis

Your line open. is

Stephanie Davis

line Sean's contracts. little on you of your of the questioning, federal talk Continuing bit could a dynamics

VA or [grouping] a decision towards where a for they more end. and example, a opportunities [ph] are for the mass like of of point could there adoption be DoD, the larger sizable systems For tipping

Brent Lang

Stephanie. Hi,

a we The vision what is been made seen [vision] at level either have were [ph] the typically level. in VA making hospital individual the is that’s So regional the has made at decision or the There within controlled budget designation. those hospital level. the are are facilities. XX visions or various across each United dollars controlled States organization they individual of are typically VA visions the for And at

We the seen technology VA has the across a other entire decision decisions in with system. made -- not the VA have past

the seen that been vision communication not yet of dollars we within have making that has and in. play the budget the Most driven space the at We collaboration decision level.

of a the amount tremendous within having I said will tell you have that, we that VA. momentum Now

the the further think in now and be a we and because I are requirements funding various as potential advance environment in we had availability not the capabilities down are the their are budget in the It could us. advance about we about mentioned very budget suddenly talking us. award de that to obviously up priorities certifications only have of of order that VA, and the we it of to discussing VA and on think this we but give products standard the creates favorable don’t security the environments to comes passed the we further move we to say one are, will success budget fell We swoop. funding, deploying a those purchase for facto more tailwind where for opportunity also them wake have facilities, for us, for in potentially just day will in environment through, really remarks, our the the where based facilities and essentially an products one I have VA the that across remaining and you we prepared

our active think going selling in to is to sales. for those advantage have drive that still us. do to do be momentum And I space we that I an continue think to

Operator

question Co. from last Mannheimer Gene Your comes Dougherty & with

open. is line Your

Gene Mannheimer

which federal the finish. federal and year. this bookings you strong the Congrats discussion of on that or think do lot grow around federal a you a is the There in you do bookings, you did above XXXX can business,

Brent Lang

know Gene, it's think to too honestly. I early

something federal a we visibility know to success better by time get we the bookings federal get much the in surpassing the side we with on in was us QX. typically MEDCOM. what did the You XXXX even year is for into XXXX phenomenal

XXXX. I corner it want than we think a don’t saying that will in I greater so And back into be myself to necessarily think

because know is for don’t of are an left a necessary year. working building as progress be that’s year to space. Having said and unlock that certainly those requirement it team budget us in but was I throughout and for the And had is think Just the that, we growth. will such dollar the more we a there business lot we to exceptional federal pipeline

We business. a great represents in cross-sell other have a fed large for lot drivers our opportunity commercial opportunity, both as as in us. in of growth The the space, the space growth well

international integrated have And systems. talked networks the health call. fundamentally, about on to lot a these of opportunity large more We more delivery the in sell

that here. collaboration serious are a federal piece. bookings healthy of would started the large they new large, wave multimillion a dollar for extremely represent opportunities represent really systems and could about well dwarf win are now communication getting large to we just We just the frankly are us positioned There of these getting very number that are and that

XX% portfolio business somewhere drivers. to and us is fed all that got come know really going of overall allows so business multiple we from various one tends success growth and our balanced a our to varies our but XX% from You tap drivers. thing the be quarter-to-quarter between growth business the into to have Each these nice of the that about is

Operator

the over presenters. time. further no now are this the questions at back call I turn to There will

Brent Lang

we Thanks today. can so Okay. again investor with lot. we if And up the a to reach and look details Lots breakfast get free Sue to and feel forward you you I you. details in of out at and that appreciate we the you everyone's really there. questions great in HIMSS, to please time see will following interest any have participating

Operator

today's conference concludes call. This

disconnect. now may You

Vocera Communications (VCRA) 9 Feb 182017 Q4 Earnings call transcript