VCRA - Earnings call transcript Q4 2019 | Vocera Communications, Inc.

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Operator

Good afternoon, and welcome to the Vocera Communications conference call. My name is Elaine, and I will 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 of Vocera, Investor Relations. Please proceed.

Sue Dooley

you. Thank everyone. Hello, conference XXXX Vocera's discuss fourth our Welcome call fiscal earnings. quarter to to

website today page Brent also is a on Joining Spencer, our at conference release are me CEO, call our on normal of Earlier our results. will Investor be where website afternoon, the news is detailing This posted our and a Lang; live this we from replay release being distributed is our webcast press investors.vocera.com quarterly Relations The available CFO. Justin and sources. archived.

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

like call I'd over to to the that, now turn With Brent.

Brent Lang

market bookings the to Then our the year. start for and for call, our team's great Vocera on quarter Thanks, more details proud much prepared area with will growth our business. the record in out We and a and of of With a fourth Sue. full for Good significant that customer specifics perspective, and substantial visibility quarterly I'll priorities XXXX in on on the afternoon, of my revenue from I'm provide highlights quarter as the bookings a strong bookings for turning year. remarks Justin a call everyone, year-over-year performance building for provide on each joining we before by ended bookings wins key for a summarizing better financials. conclude commentary XXXX over QX, some backlog I'll on year The and the the environment and On note. today's XXXX. some thank setting us. was you quarter finished from of very details fourth our I'll amount

demonstrating roughly XX% revenues For customers continued XXXX, line $XX of win existing to the and with $XXX in we customer year. resulted our bookings the million towards continued and high expectations new growth compared full value see large million expansions, our the and Revenue year, was both drove in rate trend wins and to solutions. our QX in the in of nearly for sizable

care customers, growth was year for I growth year the have of health I'm leading won long-term XXXX bets strong and proud of success. that not record we we significant will placed we significant a was strategic XXXX several what great us, number a large revenue strong wins for finished the added expansions. annual a originally number of While future a and accounts accomplishments and large potential. enterprise the was customer important of and hoped, new indicator be believe our we to

pace important is in our solutions business this XXXX drove our collaboration of completeness maintain we space. maintenance leadership and advancing us, our differentiator transitions renewals a We large our paying a demand to innovation strong with a customer remains for our also deployments satisfaction continue both and we against succeed with to a Customer by business for our customer of year, communication see our high continue was and activity. of levels this of as made significant and and The high progress reflected rate. win solution and RFP very year off, competitors customer in surveys.

As business. of of differentiation our our we excited solution pipeline unified begin large I'm and increasing our the by opportunity, market XXXX,

after across our their of RFP University to at customer and Chicago Norton the an more win This second business they Care awarded Vocera outstanding be Norton process, for deal in solution Louisville, largest our the the some system. Experience rolling had provide for a Health for $X.X entire Now QX. Chicago their wins commercial health I'd product. history of you at detail Kentucky like already with $X.X University based will communications for in out our of company. on the bookings million was system in million. Health new And in performance represents the We QX, complete entire suite. extensive

$X.X team large UCLA at platform, Kaiser the aging land booked has to that and our software million solution is of as as Brothers our showcasing replace customer at is in million customers existing Houston Vocera at build for the are great million been seamlessly million continue only booking. expansion a Methodist, out Intermountain, cross-sell who example smartphone a Smartbadges. a and $X.X devices case capabilities. us, well study, software. including solution. software Houston orders Vassar and existing with Medical new their expansion which Center, app bookings We We a leveraging our of who hundred our million to Vina smartphone mixed the $X.X an now great We had pager purchased several Methodist won both for from engaged operate rollout Our delivered previously with full in an $X.X had customers. bookings variety expand at included device Engage a $X.X

solid achieve business, we federal In QX. our to results in continued

by year, operate strong the and the our and continues team for the VA momentum our bookings, leveraging and we authority track build to our For vehicle purchasing to in federal with record another SATOC record set DoD.

of selected by pleased our Al and our Qassimi built performance and the sizable first our East. in to to Ministry Middle newly markets. were the facility of book Health Women's at Smartbadge cardiac relationship largest Children's on Moving our for Bahrain, hospital. we the were Building X our in UAE, new We in in wins won center there. international we And the the in Kingdom on with win

several had meaningful regions international team XXXX. goal top a the the for in markets with we the opportunity continue in us. we of support momentum to XXXX, to on and building invest is across a While be all marketing International sales in continues in this wins and large priority

experience. enhance a we rollout a we room which last and creative order healthcare, for in being their are of use booked distribution booking, we Outside included center. new for shopping of The initial quite the is complete Nordstrom at more there are In workflows the orders. fitting to Nordstrom now year. had QX, generate is opportunities efficiencies hit, and and future connected our believe solution a that

Madrid. in Finally, we season X another this facility added time

this is larger We evolving being see were essential. felt make and These were them today's Now to be I'd selling in changes by investments deals market our where progress opportunity, Today's starting largely decision-making changes market comments X in the we successful enterprise benefits of to the first, like about and we've consolidated justified address XXXX: trend towards and completed opportunity. the to necessary us. final off. sales force our is transformation pay to

good striving can While I today. are selling to selling about this dynamics, where enterprise constantly transition feel enhance we're we present challenging capabilities. our

selling, new to opportunity. are confident capture well sales territory have and that I'm and positioned bring in reps We several market this enterprise leaders we experience that substantial

introduced the that new we customers. our the front, market product our On the distance products from and thinking we Meanwhile, stretch of ourselves both competitors.

extending with and innovation our Smartbadge further the an clinical categories, demonstrating conversations important their device deal and Vina winning demonstrating game and app awards, our customers results. are Our Engage leadership. part smartphone our of our vision mix, software of remains changers, redefining market important mainstay

best benchmark. awards the as win its market With reduction in the to are eventually team, sales and risks. large For in and bookings, is believe With high. than Vocera, sepsis-related our the revamped saw example, a that are of deal at reduce Augusta to sepsis-related a Vendor part Health they our less recently implemented to and a half significant Choice rates we and state fatalities what continue rate pipeline convert effort our we now of solution remain products

I'd seems field, conversations quality It underscore have workflow and with conversations share the continue sales in that solutions to of and care been. a Now executives communication to level Out the interest there around the role communication of awareness be for our talk hearing and has for than top my higher interactions can growing to in customers. these the to we're solutions discussion our staff moment and margins, outcomes. is priority improving hospital and solutions And on clinical that like list. like about safety of market the feels ever rise amount of their of with a what consistently it improving

eliminating improve begin we as reduce justification, rigorous looking friction requires and always ways and operations. hospitals healthcare streamlining in by for in costs to spending course, bottlenecks Of XXXX, are throughput

this Chief into the is patients staff aspect These beginning end. for Evans, presence Experience safety Rick In communication proposition spoke the connecting transforming for He year. both a value harm from recent of and culture staff. HIMSS Officer, play ed, priorities op X hospital our a set C-suite about our and criticality also journey a to right compelling present's technology a by goal and as of particularly NewYork-Presbyterian's

partner note the is combining increasing based a The our real-time that our breadth of our and solution these number complete integration quality taking addressing services, deep clinical is secure is effectively and texting opportunities. Our great integrations. high voice, on industry Vocera of solution

smartphone, and customer the for addition with Spectralink For showcased Versity portfolio now comprehensive being software. operate [indiscernible] [indiscernible] seamlessly the unique we of our example, And of experience which integration a in new the mobile all have most of devices is recent healthcare, the with with center.

are coming the and and we look deal and strategic first, we'll our our and continue and and a broaden in support, expand to increasing finally, made by expansion country expand progress large adding XXXX. and international platforms our our success. extend sales the we to solution; will of work take sales to on leadership. moment harvest customers our continued on standardize resources we'll federal to deals; investments as highlight marketing presence ROI to year: XXXX drive we'll in in for also communications well work to key initiatives, priorities products in pipeline successfully for cross-selling new new moves a new our benefits; to positioned the facilities made believe we the couple like around enterprise I'd we Based market Thanks our

continue emulate. teams, hone great Our large of UCLA Northwestern, centers and our process for on and like on sales continued our represent who academic their be develop closure to peers deal University with work recent success execution. Chicago, focus will examples UVA, We'll the to medical

in walls and outside hospital. within to both clinical invest We X innovation plan to product the relevance, the extend our continue to of

and information actionable focus customers to our to with and Care We life We'll the predict context our time. prescribe around best the clinical arming will clinical diagnose, consolidating our describe, bringing data delivering right of at continue practices analytics also are member the workflow. that and vision collaboration right and team of

enhancements, truly hands-free Vocera", a We became Smartbadge also deliver wake experience. expect including word to available which recently ongoing enables "Hey and a

will to text workflows message and via also systems grow. wake Our an into a that the customers believe "Hey, able integrations Vocera, to we voice say: interaction word their to message." Smartbadge, triggering of and course, soon a converts send their number of continue be will our text clinical use into

expand Moving partnering forward, to the healthcare by ways to for look enable to continuing continuum or across offering buying frictionless we journeys. patient building, are our

opportunities also we retail, outside plan success. and While to a continue of focus, healthcare of few recent market areas healthcare, name hotels pursuing high-end in remains to primary luxury our

there. We on we capitalize to opportunities sales by and space that the this adding reps, experienced few are incrementally investing out intend in are a

to well overall active our opportunity this where is about new like safety we're mission our topic, fits have school talk pilots. an initiative It's early school now but for team the and on While some eagerly in exploring still I'd safety exciting we opportunity. this within

funding is to We of systems educate a and pressing what dynamics believe are use building and solution. relationships crucial in prove school we inform, navigate our value our

us. discuss that lies Overall chance we we'll I'm I'm details opportunity CFO, front and of by with around QX With our give the Justin, the financial guidance. to in then our how that, excited cover I'd like year, happy our ended to results, the a and

Justin?

Justin Spencer

Thanks, Brent. everyone. Hello,

grew and double-digit a finish Our by represented momentum. with a to QX guidance to begin our in and summarize growth fueled Total continued the XXXX results revenue to results QX good for million our of us QX put strong year XXXX. of device recurring maintenance turn I'll position then $XX.X software and business our in revenue. expansion to primarily

was XXXX. $XXX.X slightly revenue full total million, year, from For the up

$XX.X was result strength several a similar as refreshes and badge our quarter a shipments supplies record to devices. reflecting in last large of was of customers, continued new and of million in the to number revenue growing XX% revenue last XXXX, recurring of robust, some wearable to Product the business. shipped year. year Device appeal our compared Smartbadges hands-free badges We continued

included revenue ago. also to Houston Methodist, purchased a Our QX few shipment a messaging third-party device of who licenses quarters had smartphones

million, as category. begin in confidence Services from in us revenue XXXX, While X% again software that was as view combined, XX% with holistically was and and revenue year. we fourth software we'll we XXXX, gives once software this revenue which the up growth have lower QX maintenance we business, record prior was in year of for the full consistent revenue our year. which And have software total last quarter the $XX.X software backlog strong

to have in services in QX. our larger our And revenue a customers. streamlined up lower and deployments revenue software cost services with process more to professional maintenance a again of above implementation expect down was support professional base transitioned we well large and again renewal this With customer XX%, rate as XXXX. already a a grow scheduled, year we Our for year-over-year and backlog was

growth This receive customers and recurring has a our our our revenue from been consistent software. and value reflects enhanced driving the engine functionality directly

in revenue software expand increases XXXX, again software should our maintenance growth accordingly. As our also

increase This up briefly in I revenue. guidance. in end it the balance end Now when $XXX.X and business. enhances most the I'd years combined like This XX% on the of In the more a of significant compared the the health our XXXX. backlog short I'll touch comment visibility, is revenue year to also gives and was confidence to our million, of a us long-term at bit discuss term, few our which on deferred

year, QX, adjusted we $X.X was profitability. EBITDA EBITDA And our million. for to million. full In adjusted $XX.X Turning of achieved the

to from detail on As on comment forward improve non-GAAP in more some again these get we areas. a expenses, software. what operating we to with of margins look including that as XXXX, for more and and With we XXXX leverage our revenue me let some expect each profitability context, higher our operating expect into gross

margin Non-GAAP Houston decreased gross software year, in margin QX Product lower third-party as shipped to and Methodist. was from revenue we last of result XX%. the a primarily devices

customers badges, looking of vendor. with reselling less are software provide smartphones to a solution we than leverage Although we the from margins achieved a are complete our those our from own to them who single

margin of Our we parts services to gross increased as all compared continued in drive business. to last that year leverage

expect As forward, we non-GAAP overall in XXXX. increase gross look to now we our margin percentage

as As normal revenue our QX on our last our QX spending we and year continue we quarters pattern to business. million on in to XXXX, expenses fixed as and in be subsequent revenue Non-GAAP focus expect leverage returns, low growth. from in the in in we operating again expected $XX.X were in of growth XXs realize then percentage similar our the growth increases. improve to services even cost software our seasonality gross the margin And with greater

ahead Given particularly investing sales are the market product for we opportunity us, growth, in to development. and see drive we long-term

As to we a this expenses our result, increase expect operating year.

quarters. our expect similar of X level be spending non-GAAP operating in We the roughly of to expenses each at fairly a revenue XX% with

We and added as Now $X and QX to profitability about of cash balance I'd result comments cash sheet in our our working few of sheet. make capital flow like our balance to management. a million a

to in we our expect be For cash XXXX. even full flow and $XX.X the operating to million, higher increased year, this

of roughly revenue. $X is year CapEx Our be around expected this X% million or to

well positions opportunities. growth to new balance Our sheet capitalize on us

this to reps market changes progress earlier early this touched about our the but in contribute expect we and that have are ongoing the spoke have to evolving we dynamics relatively are success now year. guidance. good with the making Turning in last align sales the in their XX we to year, the The we market. to them our on capability Brent months sales added expect in we ramp,

we deferred Additionally, revenue the entering confidence revenue provide backlog higher visibility XXXX. our than level of better and and had to our increases

we We the With expect With $XXX $XXX top through revenue with half current improve tied second model. in QX between our background the as we to million. will operating be expect that higher profitability XX% in be our increases our to and be adjusted revenue this to first XXXX, historic $XX.X XXXX, and closely annual line the million be to half. for and In our target as similar reflecting $XX.X roughly progress toward million. million in expect EBITDA the EBITDA our in profitability the we XXXX and expect seasonality pattern pattern, revenue so to In then to be profitability. growth, and expect revenue XX% expand lowest between adjusted to we year, also year,

For to $XX million. to $X negative be is and million $X.X million the between first be quarter, revenue million. and Adjusted we expect negative expected EBITDA between $XX

optimism. with now lot look XXXX forward We of to a

continue see feel organization us to to we turn back Brent. long-term opportunity the the it and are drive align ahead to and a growth enhanced profitability. moves We I'll large and of right making now

Brent Lang

still our products. value great of our software We system see customers in large solution platform And wins the great is finished our was a and to Overall, year XXXX address for of a sizes. the communications have us. functionality the provides importance early unmatched underscore bets and away Thanks, long-term made had the from large We the pagers, compelling the Justin. for wireless and and hospitals year we right I the proposition strategic the our of year all scalability evolution believe of we believe a strong, marketplace. phones, differentiated days hospital loudspeakers strategic in opportunity. accomplishment in expansions It's for

to and opportunity us out goals our large the pursue technology to inspire greenfield differentiated achieve. we set Our

You that is may the XXXX the Year of know Nurse.

moment I'd Vocera? drives mission at healthcare and take by The Our highlight to to that like mission me. something our improving important to lives patients "Why" And of to caregivers. transform the a really is

to reduced and we back I'm with long to with lasting have talents to of broader reach the burnout our dollars sense celebrating their unique made extending track volunteering where Nurse. to I'd and the hospital and charitable like to patients. In connection thank thought resiliency, our providing employees communities. the toil to record their dedicate time of proud and our delivering our return to those employees with We staff, and improve in Vocera donate forward meaningful contributing joy nurses a our leadership time of culture. of look our also tools nurses and a Year the and who market, our developing into our both solutions contributions side-by-side XXXX, deciding money local working together communities, of of and

of booth conclude able opening to you up to please up where free Feel for firsthand. to at line our investor XX. I'd formal our experience questions. we're questions, HIMSS, event, to before you March we're ready at for Finally, With all that, ready you be open stop Sue personally and to contact have this solutions to your about our by today. for listening questions our call the you'll remarks. Thank Operator, any the invite breakfast HIMSS like on if

Operator

Instructions]. comes line from your Sean Markets. [Operator the RBC first Capital And of from question Dodge

Sean Dodge

guide. revenue starting the Maybe just with

for about implied quarter, Your and full the for the X% first targets year. growth growth X%

revenue course course trajectory and year. So revenue, will given of the be around I would comments growth over deferred to and the year. bookings thought, over be you'd Brent, it the backlog flat of have growth accelerate looks being expecting pretty the the like it

that help So maybe me? just square you for can

Brent Lang

Yes.

coming guidance as to do into of feel know, year. tend spectrum. we the the we I the So -- you our on We end set about conservative think good

think we the the so I So get we'd of and towards ended I say of be dynamics to the to love really in top really that have want we we're that we momentum in fair backlog early it's think growth the to ourselves. and still end where the range. of And don't understanding stages the market But good business. we the feeling that and that ahead we're about have year about

Sean Dodge

I you growth Okay. higher bookings the generated then of the how most said us higher full recent the fourth a much this the And the XX% were quarter? sense in year, quarter year-on-year. substantially for of quarter you guess, year with give was? fourth Can growth most wins for just

Brent Lang

that's really drive that helped relatively think had after a strong a fourth momentum quarters. year. talked But I And feeling We strong Yes, obviously, deals the sales finish overall, was about, team now. mild previous quarter of the several the great it think right growth to I is And way large that. fair. in the I

Operator

the line And your from Guggenheim Securities. Vikram of question next Kesavabhotla from comes

Vikram Kesavabhotla

on changes that's about productivity the talk I maybe talk how to and want the the for had you are are overall how what far characterize just to that comments throughout evolving. that XXXX? how And make you you key you can Maybe relative just what force your force you moment. throughout about I level, high the today if a along sales in XXXX? sales level been from a appreciate expect commentary to of transformation

Brent Lang

Yes.

able force. had there's And was So with we deals. to the components made one capabilities to of selling number. in these people sales larger enterprise to C-suite the that the to grow be more sell piece The to absent to second upgrade the the complex sort trying more was changes two

in of of course been has And us, date market QX. QX was. we're obviously, see spread the are sales sales place remaining a There's their internationally. ramp, to in XXXX, hires to growing corresponds the that when that occurring, completed. it growing And of but QX, quota-carrying still -- our took is So process corresponding the of front the the few vast and of opportunity actually we of the and both force majority those sort size larger address domestically the then through hiring start during

hire ramp someone within date. to X months full we to of typically expect their see speed So about

the fully I ramped for have it of and to process. others great I year. still of meeting and them majority was we expect it into XXXX, reps, the folks the meet larger for our we whole new now was vast are as kickoff fully in full look them week so think be sales meeting of last for But we from Dallas, ramped in and to And some the those are came deal that from into me. capabilities selling have the group exciting who been enterprise solutions, and a lot folks great many together And really the C-suite really organizations, a of dynamic. understand complex much

So and was succeed year. see increased great I and confidence it of it ability think their to level them my meet really this them, in to

Vikram Kesavabhotla

maybe Okay. that. quick Great. And just follow-up as a to

and On associated be the just the the in on in the an with update assumptions give what great. that Smartbadge, trends if been outlook XXXX? for you how and rates us have you've adoption would attach That can the embedded

Justin Spencer

our larger Yes, -- had Smartbadges a highlighted we there. continues progress to The them. deals few attached of the that

refresh going badge we're likely progress. look for for dynamics customers. at our Smartbadge. customers it's the the existing we about new product. think They're that that with purchases. the finding terms to work or to we And previous hands-free wake XXXX. way points the continue device assumptions at which The we of large experience a pleased excited technology. to versus because really portfolio. customers as in they're addition, enhancements talked enhance in Brent to particularly for new our adopt of word we're And relatively some made the through just that about the customers We've modest. product a continued look to of easier so of But business of as natural We're adopt overall, ramp are bit it kind to then little is Well, continues the existing tied we at a not Smartbadge

to the their can our BXXXXn set a them from smartphone And offerings work best X now goal the to with is environment. so allow that Choice best a our original revenue come category, complemented are select device And platform the true mix to objective grow Vocera and Device of option overall the best customers the by we that of and the Smartbadge our software is have. devices of badge, and for that and the which offer

our as assumptions modest. for XXXX So the are Smartbadge relates it quite to

Operator

And Daniels your comes from Ryan Blair. from William question next

Ryan Daniels

on just for the another Yes, Justin, you one, guidance.

it indicated that the philosophy year. and revenue as providing locked relates to then the kind that up that the or indicate of Does better You year you is to have backlog would in how in a entering percentage visibility report and of past? think in least bookings versus how early you you're regards of on guidance you at the maybe the guide change

Justin Spencer

represents there be XXXX kind we to Ryan, because Yes. quite I'd XXXX unusual say expected. that norm the in of ramp the was more return a had our second that we historical half bit a -- or bit anticipated would didn't that as materialize

don't back-end we similar much the before where a ramp. have as years to more of that is in XXXX so pattern And

follow on revenue were So and half. XXXX and spot in the that's curve for our before half XX% with a that. we of example, then we And expect XX% roughly to the in seasonal where second in XXXX, first

the go of and bookings, the our it we year, amount we where healthy that, last particularly a of that visibility to were into the strength deferred years. us backlog similar year of The have of because didn't and to is allowed end at more beginning of revenue, that in with and in again, build the level so the second prior thing reasonably of is at we a year

of expect, beginning together and is those And than in revenue, of is. to the with supply steady. represent amount elements our deferred year. position last we consistent the that, a visible we the about from us of of say we're The feel where look which better were to very just at We result changed. a our the that now and as revenue amount so generally try the we has be expect I'd guidance. We revenue that point backlog better at our And framework conservative two And guidance amount been added year. itself this of we not has at

Ryan Daniels

would then X.X% of X.X%. the year, a year know And could. be I like only gross EBITDA, guidance reported have This margins expenses follow-up, throughout that would one. just think looks you to supposed this like increase it would indicated helpful. relatively be That's margins. But increase it looks you if your Okay. midpoint would I I similar we're EBITDA But year-over-year. and script, and op profitability

bit So a returning? a the on EBITDA why percent basis margin with organic stronger year-over-year, wouldn't little a be growth from

Justin Spencer

organic But We our we expect expect to we're margins increase. gross with do -- the also our revenue in business. growth, investing

in focus talked a The much increase We're can we our or areas trying of development. about, spending can and other -- primarily our innovation-related spending that will kind in as as investment, to to as are essentially so those bit revenue generating areas we sales manage -- areas. product XXXX. in direct of expenses operating So new we

expenses conservatively little going guide a to all are we'll higher operating to try increase. range. what leverage. But kind investments the that, with That's the said we bit of always So term, the see pretty our our near and targeting to run, those in less EBITDA, us having profitability the creates long of re-catalyze we're allow end

at try where that of the end targeting our expectation so we range. and about of we're kind with the it's that to higher And -- be would think align

Operator

from Weiland And Sean your from comes next question Sandler. Piper

Sean Wieland

if doing slightly ratio this end as Hey, your higher of year high the of forward ask revenue range. than you XX-month way, number question suggest backlog that a same Ryan's had revenue to it Vocera. To year, different to we're would deferred slightly the a last applied we

in there Or be are a little or calculation the So it, just, different? I up want that is bit. conservatism mechanical understand specific you things that to that it dialed issues see is

Brent Lang

a to more bit trying can. conservative we're certainly, where -- be we we Sean,

I in our there, is are a I'd several there probably that and though, deals different each little the point have large factor bit think to backlog they timing.

And can a but specific which so of if kind to the impact look of these a is had the you're of ratio of a that looking to quarter like and -- move we at size terms our in have factor deals bookings. record deals. good also on timing one larger at, in that, We

delivered be now those carry in they're large some XXXX, projects. most forward into and are -- they're because to so even just XXXX, And up of will teed

of of a So feel the much like better and from kind revenue in the unfolds. backlog position a we deferred determinant that most that's of how But probably overall, single standpoint. we're timing

Sean Wieland

X R&D call can OpEx, that then out you're spending increase, big And specifically on maybe the money X on? or the projects Okay. you the

Brent Lang

more areas of really created excited couple a overall in Yes, as of about: that voice the mainstream, we is we now. there's originally an of recognition were a it's experience. Voice lot Vocera, things much competitive mavericks where with remain And do become like interface. When lots very we've feel got a we around differentiation. can and much user area it we one, use more the Speech has we

of be I and going we're of some And we're becoming what in you are terms user about -- talked in expanding offering those a things reality. And to so past now interface. Voice that more the of

integrations XXXX, expanding address and lot be large would really what revitalizing that of, to and wins. I'll scaling platforms, area system and sort was the one them. is and to able larger that deployments the call, new I us of support larger of really additional is be So systems the they're those platform that capture these for the customer clinical a of to new some another continuation and the complexities scaling of XXXX both introductions these area; workflows very, of Vina. very more wanting to about product of the and certainly with needs and integrations other mentioned integrations the Smartbadge

Operator

Matthew comes your from And from Gillmor question Baird.

Matthew Gillmor

is lumpiness And of it dynamic been the that specifically the sure is sales a I you process? last I quarter first to would if improving perspective different the Talks as obviously how updated a the know, that's bookings lot related than thing? is and think question, it victory on same you any you're with were deals some maybe don't but elongation of quarters, wanted guidance. I had with -- calling of This fourth process factoring ask a elongation you. of indicate Sean, to declare yet, I'm obviously, that's a trending? has Sean's bit. you And on characterize curious Is trend would the sales different the out but that kind to Or how little this sort and to just probably of about that you was the X want dynamic? into kind a I

Brent Lang

larger So we time it. that and between of is towards in deals, continuing had is I where we years right longer this longer the trend in cycles. the think a period certainly middle of we've larger were period versus sales of two or where The we're difference line these deals are today year ago a ago

working that And deal Choice the with planned that a year we reality, just eventually, one majority was in state revenue booking and revenue Vendor XXXX. XXXX, that it XXXX. in QX, -- data you point. about into and going going beyond. now of in I received I'll the to for interesting XXXX Vendor confidence years even of Norton in vast is we were deal awarded came win. where years had actually This the had high were a when actually, talked on and in so of though that just of book sort two million degree be And early out. the of to been recognize deal the to $X.X And we steady was and been awarded ago, in associated we the deal Choice give

And new so the this is normal.

these various it and some have of much therefore, as backlog are to both in taken larger the But a it's we think we better deals, to get have I of now relates evaluate into within the used to we forecasting stages us deals close and what pipeline, time to understanding our and methodology revenue. that. closing can pipeline it factor that takes for our that that

it's in some So its slowing a but kind of on Each to own much going to these business of closing, has them definitely a are our be because of in don't now close. aware of deals continuing we we're of more take we've I force one stages what various deals various got think where state story.

Matthew Gillmor

in Got called out how Justin some device through. it. Fair I so could we enough. And that then, yes, came revenue the third-party revenue And I influenced curious could you that quarter. quantify if was that understand think

Justin Spencer

Versity meaningful don't -- that the solution it a with software. you phones whole way with tell Houston device as a the to a the one essentially It's solution specifically, provide to we they're to the portion for partner shipment. we combined Spectralink bundled to do the smartphone convenient -- of us. to Zebra can growth And was from out but for them. the now break Matt, We and smartphones work the for able receive attributed I Methodist customer

though, also, the we in had We badges that in quarter, growth well. absent also even as

of come in but did -- Houstin from So category growth Methodist the smartphones. device majority the the

Operator

And & your of Gene Dougherty the question line comes next from Company? from Mannheimer

Eugene Mannheimer

the I way. guidance to it ask cut different want another way, a question,

-- ago. you had like backlog, your drawing sounds right, of year guidance off If a it you're than you more did

So if how you when your you year ago visibility have gave have today, much XX% a midpoint did guidance? visibility into you

Justin Spencer

Gene, significantly why The at as we're you for be supplies overall, our numbers, and expect deferred that just software much better the to a we're better relates the backlog, which going and yield the tell feel but of we and XXXX. revenue convert think in stronger situation. overall in exact to have more then to better just backlog revenue deferred as that's share we to in it's it in look probably not we growth going is we like target so combination can position and we're the a year. And the a backlog position we to just I

Eugene Mannheimer

about or might That Is sense. that full the product's the it departments? respect And phases deployments start customers house seeing, that year. see follow-up good of these makes to you're in small see the more and Smartbadge? with we wide the still Smartbadge that to when piloting been dynamic out now change a adoption are Or

Brent Lang

think I pilot we're stage, the Gene. beyond well

numbers. in we've their to of mentioned right They're deals prepared roll with out larger this even of that and are Middle I the customers out going of As mentioned the looking got Smartbadges gate. customers my deployments. that are at went ordering particularly hundreds point X initial house with East remarks, Smartbadge to wide that in these standardize customers the And upfront. the I Smartbadges existing starting the are some newer

definitely stage. it's So the beyond pilot

think I for of there and we're the be Device what it of this the they're groups tied demand devices various a strong the is products and to or device whether within offer, a the different to it Choice of specific think interoperability the customer each be the cases is for we portfolio the allows hospital. workers smartphone And seeing that of worker. the between most use really the that's seamless continues really style variability, Smartbadge communication form seeing badge, the that that those factors. appropriate get platform the I for different represents And of power nice to

Operator

from comes Instructions]. [Operator question And Windley your next from Jefferies. David

David Windley

come I expenses the way. different from at operating wanted to a slightly

under this more talked giving I XX%. like about guidance XX% range, in You've margin that today to think, you're XX% normal incremental is circumstances, the

I then of the also sales And R&D little So expense well, you'd bit that guess, a sales think is of $X operating And back you you've $X development, operating is pointed million reasonably of of type investments is some beyond kind and understand the I cadence, I investments. said investment. already additional largely XX% million that top-grading that that margin call like step XX% do think to it, product of the understand the I kind I wanted of that but function to you've some then sounds at done. the XXXX, it but beginning year, think right? expense at algorithm? to in to of incremental place get And

Justin Spencer

R&D. attractive are to been is than also we've stated. to do is we're little -- about the bit And in inherently continue model. leverage the we half we we've think significant in We his the as of very the some But leverage. that that that financial Yes, the XXXX, transition now we've what made a touched say demonstrate on And year. of we range. prepared going Dave. extent, what higher back the operating to have we a made actually company's you history, already sales those as able have what of in investments portion It's Hi, I as a just to in believe a remarks, Brent kind would targeting

really actual year. in our you We at put the if will, the relatively the end in amount new is hiring, of people of modest. So place, XXXX,

And kind full effect. what so of happens you year is have a

expenses, the because we're first likely the the kind now the QX, And really over and strong there heads you been more significantly XXXX, going of the be not will into to as a year quarter leverage at just look step-up constant the as we've progresses. year we'll be And a to then as So half in adding as then then get of to position will to it year back a operating remain full effect. hopefully -- back there from year of to more that relatively looking the our several be get from we to result last years. accustomed

David Windley

of you that prod some the stock? I guess, your in gauge entertain investment Great. capital if would I your more And different into Brent, build I acquisitions. of ask wanted some leaning things, building, think deploying you development And you buying can your to to strategies, a for slightly your I commented if you're some about possibility toward technology, which question. comments, appetite connotes buying want

Brent Lang

a definitely it's building and both combination buying. So of

But found that deals equity in we're to of we put strategically couple We active on these forward a in feel have we be sheets prices of that at firms were haven't for deals. important we an deals us. just didn't acquisition years, outbid And we private a cases, to pay we've remain appetite looking a in couple doing couple And both. of on term that appropriate. but made by an

We to kind evaluate business cases, stock acquisition the either the inorganic so And internal a in use that future we're better capability in that for and think or we'll capital have in-house. your of And any pursuing. R&D to buyback. of we don't other the to continue through of last activities ahead to through go development at this to opportunities. look the cases, question, invest With plans in decided build regard to point invest some it organic is we part

Operator

from of comes line question And your Matt last Capital. the Hewitt Craig-Hallum from

Matthew Hewitt

[indiscernible] set your I the press I release, you But I remarks, so prepared thinking mean, XX mentioned bit there most recent coming additional that or the should 'XX? how hospitals on a Arab on Is timing coming I those? course into be late, jumped if about on were 'XX? little for these of in we board. In addressed the a over extend apologize. Is Does apologize, those in Emirates. regarding United answered board? it

Justin Spencer

Yes.

that exact can't on have timing. in time more is any of the kind don't you're as a hard there, that. going been when is, named frame that's the vehicle, dealing time bookings of that occur their by really line give Middle an a for activity What little specific is but the ultimate when specific East, and we've POs associated with you the we and know. So deployments encouraged terms with agreement detail purchasing those will Vendor bit really I to outline We're of a Choice. And

Matthew Hewitt

last X then, the I of additions and And maybe year? how last many to a your bit relative one back the lot does about like complete. guess, the And the Okay. to pretty half bit sales say A little are would you over of here. What it digging a force last much past sounds you're year, deeper, force today discussion the months? at sit -- headcount little of over that sales new existing

Brent Lang

XX -- about think, quota-carriers we're cycling. number of new. And and I the the numbers, new is rough constantly So are

incremental to be So people out those hires. those and some were continues swap some of there's replacement of are there of existing --

I the XX. around is quota-carriers total think

Operator

further showing no for over I'll turn remarks. time. closing questions to back the this I'm at leader it And

Brent Lang

appreciate and again. with everyone's time look and you, you to Thank you up today seeing catching forward and

Operator

Ladies you for today's and participating. conference gentlemen, call. this concludes Thank

You disconnect. may now

Vocera Communications (VCRA) 7 Feb 202019 Q4 Earnings call transcript