AMWL - Earnings call transcript Q2 2021 | American Well Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Amwell Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, Ido Schoenberg, Chairman and CEO of Amwell. Thank you. ahead. go Please

Ido Schoenberg

guidance. thank and our and XQ joining earnings in our our and strategic cover Good as trajectory this you evening, On reflected XXXX including trends, call full recent our will I call. then share our performance evening, our year for I acquisitions. will performance discuss

I turn to open color and financials, our will will Keith both more Finally, then call the Q&A. for on to give we you

million with visits. consistent XX% our remains in quarter $XX business from revenues. from with XX% second technology our The came plan and

active We XXXX are excited providers, to significantly adjustments. one-and-done than count considering over expected, XX,XXX we higher COVID-related

million to drove increase point set our $XX and for higher-margin revenues to Group EBITDA the efficiency efficiencies a Following These into platform pleased X.X versus the QX including Amwell we as the of Amwell Clients a basis started was favorable now that previous in and were and quarter. their million by This to summer, own the to X.X Converge. to gross contributors to were seasonal XXX headed technology Amwell and to our year this million through the pattern, margin technology more of on quarter ended Cloud, visits quarter. I'm XXXX leverage Amwell report the initial continue typical deliver clients' visits shift performed Medical platform realize, care migration Google accomplished school that improvements performed a to significantly to on XX% of our all of patients, our deployments also loss XX%. providers. improved

originally better continue to Our software subscriptions, and Carepoint operate expected. at or business than technology-related

demand. account Delta to half a extra the Delta to new emergence $XXX second to not potential To some introduced adjusting season full possibility preventive outlook. cover to demand half variant potential masking significantly reduce want scenarios, flu we our million. the recent of To are to could variant including adding million which variant-related measures, development, $XXX has the these distancing, all in COVID-related However, for second while our cover range and social we visits the year uncertainty such

platform. performance guidance Given are to write-offs. from Converge, acquisitions In million, live Amwell the Converge deferred our the GAAP to began burden million QX, and basis we high. already satisfaction million organic are Patient seeing SilverCloud Clients significant $XXX negative which EBITDA XX earlier efficiencies, $XX new providers are $XXX hospitals $XX deploy million to clients related powering on improving and and by our the we on networks. legacy are a in rates X,XXX our discussed platform. the delivery revenues includes on Conversa over Now improvement EBITDA

focus example, using platform. Converge. providers are high another For highlight simplicity example, all partners. has tech on patients and second quarter, strategic care troubleshooting expanded which we of the experience, work and video on connection a new the checks real-time to user are fast Converge than they They reliability with our mobile and twice as ambulatory the say issues, providers devices giving for both intuitive In inpatient marks enabled of Midwest and In rather hospital for is the our on speeds technology. previously also care, and for connectivity

are will and key and Cloud sold sales technologies Amwell's built For Google Converge into bolster accounts. example, automation, experience, user and insight. the Marketplace. Google now are our products And are Google in teams analytics in cross-selling

it an driven adopted patient renewals. it. and telehealth digital long-term continue to significant to on Cerner, of the has and alternative medical not only gain academic We COVID independent to of by physicians These who it for impact strategic we uptake, arm With a The partnership from by a clients will choosing care the led momentum span but centers see delivery. use care is of and the more visit also number telehealth excellence our More X volume so to possible expect strategically, becoming country. only health a systems intelligent be is continues to only new cannot and constant health digital mainstream, transitioning accelerated presence into Such of client that public around of at regional achieved to of scale work Amwell care from presence using a technology-assisted with automation. spectrum with It centers can clinicians. companionship an clients across achieved Cerner office patients. be

conversational virtual For clinicians this need into and the various between There strengthen companionship to arises. sets cohesion physical adopted must skill was they real It of tying valuable. care, is be convergence This as such automated in single integrated Converge combining changing care. platform and our care companionship, recent platform No physical the acquisitions. no market is and with virtual today. Amwell until

an companionship, the AI providers assimilating of ago, affordable Two weeks care are health needed Amwell's We X acquisitions. know-how ecosystem and strategic telehealth live we components offer payers and joining for longitudinal announced digital vast experience. to with

Our combination over health outstanding value share Conversa It incredible $XXX XXX% They that Conversa our growth nearly to relationships. and are high-margin technology revenues how like not and replace existing are high-growth, total companies. will was further improve rates. And understand the expand loved million platform. with net most retention their easy largest, differentiation provider-patient made of and a teams stock Amwell's SilverCloud culture of cash. is Like clients values, power they SilverCloud and us, is trusted directly via to and same-store feature enable care by and purpose us, with Converge both annual and their Both Both XXX% investment mission. companies of and players.

to automated highly navigation these Conversa approximately $XX business. assets result year, run to As The subscription our shared, and technology expect over adding fully million we capabilities create, and grow longitudinal engagement always-on, XXX% Converge. we to is in efficient, already brings data-driven, integrated programs experience. next manage

many SilverCloud. UNC Health and access Converge of leaders, can including enhance improving addition the greatly other by outcome, Northwell, and UCSF. Conversa utilization to assets, the In including trusted and is patient experience technology Conversa

behavioral of fully U.K.'s and partners programs Health allows and services, modules digital patients clients than over more our Health specialty health Services, offering Service programs with that expect XX% award-winning this the our Health a equivalent our will validated. to research results enrich including embed evidence-based These in by health We Mental SilverCloud of well to platform provider own behavioral delivers diagnosable than digital mental face-to-face National for platform as programs. range of Used Kaiser-Permanente, globally develop Providence have and to organizations, to XX XXX clinical condition. care SilverCloud cognitive are more SilverCloud end Conversa by to their own leverage as also and and year. shown of clinically new health Amwell programs. Health care years enhance Optum,

offer it automated are automation. a a in to Amwell covering now for trusted able improvements services. enables Combined, base Ireland. single clients platform Both Finally, care care and relationships U.K. the opens significant partners we with physical, unique companies virtual through new and our and enable hybrid that

care. Our programs improve will health for innovators open apps of outcomes could health full marketplace to allow continuum and integrated the deploy technology across deeply that

probably by advanced one and the We and are to growingly the it after will existing vast be most the maximize delivery impact of before, powering array digital on of The continuously reach result during and well and impact expanding innovators supporting care of the providers and as them bigger and partners technology. visits, through clients comprehensive will providers, platforms their payers, It of rely parts new enablement connect to business. employers for date. positioned

technology margins performance. our further we highly change. are As XXXX, improve differentiated to on we would better to financial a positioned that, for turn and demand we more to Keith begin that to you this to and high-margin, fueling is feel think The With growing give I beyond EBITDA. color like scalable

Keith Anderson

and for call. joining second our you, thank Ido, everyone, Thanks, on us quarter

While the first simultaneously later performance in unpack remarks weeks to ago. X announced we want insights I prepared provide X quarter, my acquisitions into some our this I'll

manage you monitoring If is of care patient longitudinal ability device-agnostic the core programs areas platform, to earnings on first Amwell companies then the quarter Acquiring identified have while the theme in own health focused address our coordination a interoperability, to as inorganic the is functional care Conversa health the their system care, customer tools CBT-based coordination, behavioral discussed Converge driving that conditions also we and situations two and tenet by call delivers intentional program. provide or lower-acuity, SilverCloud while was chronic plan automation of of if these recall, the to strategy simultaneously on for Conversa. does not our health

own or customers' their Converge to platform to both the right, own opens been on patients time While of provide care opportunities their the at of for the further tools the platform core deliver environment, combination these the on companies and of deliver to for Amwell our successful up wildly both to same our many in mission: the have members. them providers

mainly when appropriate is that technology important Kaiser that dynamic. automation most functionality, What SilverCloud can SilverCloud customers' them. to the highlights competitively care a of competing of the will Converge's example own providers SilverCloud is use tool in search is is While patients. treat behavioral their their fantastic a of broaden this health Conversa a in the differentiating Amwell function versus season. coordinators and with success theme This to it virtual as companies about that of care been selling and against we partnering differences is Conversa versus provider key is the our other are enablement has and and

$XXX the in for similar contribution SilverCloud a with earn-outs deferred stock. in financial we revenue basis operating million, our transactions transactions aggregate, Amwell, $XX XXXX and in a to Amwell impact, with additional have in over of contribution to On paid of on achievement upon expected in and paid XXXX revenue that to of but Both if Conversa XXXX terms both XX-XX XXXX. million revenue balances, GAAP revenue will to $XX million XXXX. operational a approximately and achieve $XX are mix GAAP on companies stock. for for and In In we milestones little be due no terms to and million approximately for significant cash expect and acquired basis, $XXX based in million stand-alone

GAAP are revenue, a still building While as significant recognize the write-down to both up expenses, the revenue basis, all deferred companies infrastructure growth is on to we which their headwind rate. the were XXX% of XXXX support a

from base revenue a comes From XX% in XXXX, in of to customer gross XXXX. and important perspective, and typically notable achieve the achieve net million expecting to a was an revenue from both SilverCloud loss GAAP the these are customers We SilverCloud's absorb end XXX% on yesterday, from additional of of margins retention. NHS. majority closed Conversa companies forecasted will XX% $XX health close systems, from U.K. are for by over we revenue EBITDA which in such companies the month. basis So to acquisitions. the Both aggregate comes us, as the related to

last We results. quarter, of $XX.X million, quarter growth quarter second previously discussed. of X% $XX.X if about driven a programs a subscription quarter customers' by increase of our mainly to increase quarter reported normalized expanded that total over lost system and to over last a M&A in subscription the due technology revenue business. turning we've health Total and the year, compared to X for the Now last million, XX% modules. plan X% of of second increase an expansion result was health revenue our The is

per clients these AMG quarter that deliver was platform QX due COVID we experiencing this platform contract to the is in visits conducted own of by expansion in the revenue range AMG the per summer hospital. platform. the specialty to in to annual significant behavioral level Ido XX% on typical what basis, notable through health XXXX in range increase our a psychiatry on a Total higher and providers. continues the much-needed customers' QX to $XXX,XXX rapid higher rising spite as X.X passing now summer of report $XX plans care as average care Amwell being and virtually XX.X for mainly in is and Reiterating by urgent first visit delivered the versus dynamic. Total low the of around quarter, our especially was continue QX visits on to visit on this While $XXX,XXX volume with shift $XX price XXX,XXX in acuity slowdown an contract which patients were mix, delivered in exacerbated QX $XX by now average programs XXXX. average Unpacking was increase visits, quarter, said, our visit average people driven health visits, was from value same million, visits values conducted million the the of to acuity which the Similar this visit to euphoria, the per performed also it's visits. despite

care. shift number visits mix percentage revenue versus to AMG flat to revenue While slightly, the as simple continued of urgent the visits higher decreased specialty remained

last As implemented Carepoint's increased revenue also earnest over health million versus points on from XX% the Gross to XXX was subscription in we their guided weighted mix and on margin in revenue, $X.X is shift quarter. basis in more to to plan as plans of last $X.X revenue quarter, This services efficiency increased measures capital begin million execute revenue QX. partially to but due to side. services XX% systems

the we margin. range continued migration and what done margins our with aspects and early eventually we margin in economies business time partnership our over time, But core above on we AMG some business. to shift QX, target IPO clients of take AMG Converge, half at and technology confirms to our mix resources subscription to customers currently gross business our is we begin margins operationally Specifically, technology in with currently realized, seamless. versus to to this our ensure additional within meet complex the and is and expect business, will migrate visits efficiency aspects the scale take have process over Google will higher what on the migrate being our operating represent of that begin quarter improvements Note expansion mid-XX% with seeing as again, our Converge. of of slightly to are our ability as more in margins the dip that business, this XX% and even we as of But as QX and

expense $XXX,XXX. that partners development calculation. will revenue, these have been the for versus in Client OpEx. G&A engineering through to we mainly favorable million, onetime keep in to was to and revenue of narrowed XX% marketing offshoring We've due expense discuss efficiencies in-house. the of originally thought later reflected some compared EBITDA $XX.X R&D expenses also QX, efficiencies which company leveraging of first achieved million, our quarter of our Converge better been and sequentially achieved operations. and Moving changes similar total also to a quarter the We aspects in second of $XX.X revised strategic XX% M&A we'd adjusted These mainly our the an within was in of representing due is Forum. we $X.X that but legal that have million were increase favorable million adjustments in excluded the $X.X and Sales EBITDA and increased guidance our spend call. from quarter

of of an our We increase due favorable measures operational are million compared operations. EBITDA gross a margin of sequential also our majority loss efficiency last expansion, was technology to but reporting million adjusted $XX.X successful The and $XX.X loss in to quarter.

the and cash. to in but a marketing favorable year We versus expect and ended the with spending over remainder million place, as our spending EBITDA. R&D revision at adjusted the and $XXX to lower original quarter increases of guidance, Converge sales increase events take cost We and thus the marketing

of active QX AMG delivering X,XXX closed XX,XXX providers we the were active care which on platform, providers, In of with providers. terms

also number added we doing QX on providers last the when decline quarter As visits we a roll as QX added the more on will of of the to COVID single and during our those day, and to Since our Amwell solely active in touched doctors, to higher in business which visit through then, level AMG this will QX. handle in we of is the platform peak do and now need of that revenue spike the are off we year QX, delivering XX,XXX the were number have providers own we more customers mix platform. good and of and of migrating as a our everyone, doctors part care providers. but in has added their specialists not for this doctors passed, next

annual our guidance. Regarding

the variant we Delta the how As COVID are new we season. Ido will discussed, of reflecting affect the now believe impact flu

a a we one the no range guidance especially season a which the flu on now variant, Delta low end provided season, in flu with we our moderated assume has guidance originally end COVID on with flu of and versus the crystal and a While March. normal guidance when high revised season ball low reflects

We original QX operating on announcements call. it confirming plan, as are guidance business our And potential business we health or in technology services CMS also will guidance upside regarding for systems. subscription for for and Carepoints is our grants recent this and above more given our you for original confirming update at the dynamic we're Carepoints our is There on business. the

total you X.X visits X.X the X.X model to total equates Thus, million. the For approximately $X revised range $XX of top to million And and from A XXX,XXX-visit visits. season the forecast of a top model your difference a revenue to our visit math million end lowering in $XXX X.X original further top we visits $XXX give revenue. of to visits, ranges, to a original visits. $XXX our a $XXX million, for of guidance to million. visits $XXX to per to guidance our revenue are end in represented adjustment to end between you want low million million million of the flu average $X of visit this about XXX,XXX approximately change to million forecast decrease. equates X.X This at visits, million and X.X within million, X.X million is declining that The so range I we range visit visits. range million million your narrowing was our are our million of isolate translates lowering from the overall can X.X line. The solely

the range at million. $XXX are same end revised the we our So lower setting again, math, using of

XXXX to little to ramp-up significant burden to adding the GAAP significant the due due in results. the XXXX. EBITDA but of growth basis, a $XX are will In million, revenue M&A they nothing anticipation revenue to of X terms expenses their transactions' On of to XXX% our our in supporting write-offs, deferred contribution mainly by operational

a by EBITDA increasing EBITDA $XXX M&A EBITDA our a deals, caused X of we $XXX the X are on loss $XXX equals of favorably organic $XXX million terms differently, organic EBITDA on netted the But million range against in range of million $XXX $XX EBITDA, burden together narrowing is by a an So million loss. million $XX basis, on to deals, our range and and the $XXX basis. to will million loss. combined million basis, EBITDA GAAP with be M&A Said to revised GAAP million

execute specialty Next Services revenue and execute systems QX. implementations visits. care be digits to flat will each increase we're With say to visits, halfway hit capital can as quarter slightly campaigns we on logo and and specific sequentially will we as for subscription to seeing up spend, visits we marketing hospitals both will urgent Carepoints third the their less in with continue so starting grow, that plans. new are continue quarter, double since through quarter

In coming balance growth a distribution terms single QX. in majority QX of assume over visit with high revenue, of of digits

temporarily In As Ido X with X pleased to clients noting Conversa margins We're discussed, migrate and ago, especially another acquisition. gross spend. our yesterday complex good will and margins in weeks in some operational Converge closing next quarter, we begun the and QX gross platform, are which to acquisitions results we positive we expected are onto burden to gross announce are seeing temporarily our the pleased margins. the have conclusion, quarter decline as more

care inorganic evaluate have to and and to on deliver functionality execute to continue our enhance of to full funds longitudinal Converge ample coordinated strategy. We overall the opportunities

and opportunities Converge now slope happy the especially closing and I'll and are our advantages seeing expanding are the the remarks. of to his development of for competitive We call we growth Ido? over operational turn and efficiencies. rollout our the back Ido our steepen with progress

Ido Schoenberg

current our and would future performance. Thank for questions. unique to impact you, growing call growth trajectory that, and And the I like with Keith. for I evidence overall clarified on hope a today's further its and our open report strategy

Operator

Instructions]. [Operator

first Morgan with Stanley. Ricky Your question from is Goldwasser

Rivka Goldwasser

on margin. focus to guidance My more on on the questions going and one - are second,

to just flu. around sounds assumption it understand Keith, guidance, like half and is the So difference here second over the your the

also to kind in your physicians in the just there, of through back think the talking any about visit - mean, want better So that have visits number Delta you - you we're visits. around understand we're less of you of assumptions seeing you're like Do just rehire? to to does scaling scenario think do variant. see What because uptick that seeing mix? - COVID now the on flu COVID-related I sort where to because the compare And an

Ido Schoenberg

Ricky, this answer. and answer I'll is to maybe Keith complement Ido. try will my

related according related performance of change exactly visits Our to and very in to the our and the was flu. specifically cold The visits is beginning to guidance from the exclusively of year models.

July Association A X/X on which mentioned, and CDC on effective later, States. Pediatric in guidelines now and now and masks social the are K-XX areas, reversed guidance I is days mandates about United few all mask children. of American their XX, own the distancing the reversed As their for XX, July mandatory

where of God flu are automatically performance, cold will providers our we importantly, second if guidance. much same the more visit a more changes own you and season in those increase visits, the AMG. remember, in preparedness that earlier forbid, but a we a if serious mandate flu we flu is the our a COVID-related driving assumed change assume to time, significant illness should our and lower With Obviously, the increase in will those demand our than we coming in overall our in we of dynamics into - to and what's cannot availability part see the back, scenario take need of also and year, that's changes, and visit which part account big half normal year. cold the of traffic. a At have in As are

were technologically. better last much are to both do operationally than and We we way in it of prepared year, the

that and clients addition in many if should to that, In integrated chip emergency much are more to our reoccur. ready of

Rivka Goldwasser

see we revised that, - assume resurgence the upside should to this provided today? we if that provide recent would you guidance very continues, if that So

Ido Schoenberg

average a tell August, in that example, even That's we've seen definitely Look, from can I an growth AMG care XX%. you, for visits of possibility. urgent July to

we XX% in the a noticed However, states. growth Southern of hard-hit

If significant demand. unfortunate an that's a also the definitely obviously, that on have we could reverse through what would effect continue will So that see happen, is situation. It's year, of end possible England. the nationally the in that which

We and is will see much social mask with distancing, likely decrease removal a variant a Delta of the coupled to create and going which is more of prominent. flu season that

on factors we scenario our are see that However, the now, really therefore, can't that control. to just right driven had to that articulated, assume other we are are what don't based and we by guidance adjust that possibilities realizing we that there

Rivka Goldwasser

Okay. Converge And getting investors least starting a from on that second on the from benefit the half it I margins to around the of and think understand a this we're the see, of basis. margin, dynamics understand to benefit questions all quarter, like sounds thing from of year. in kind lot at waiting we're the better But then is Converge. like to potential one you're I steady-state the

Converge that So provide potential us the could help could from benefit you sort of be at steady-state to now can you least quantify margins? that - what the some benefit of you're that incremental maybe kind seeing maybe quarter, in you've -

Ido Schoenberg

Sure.

is mentioned remember, providers part learned love So our X,XXX in use is case. on have converted, the we We what about as earlier. And client we upgraded may know. the Now of XX that, you simplest as platform. it, I real-world is clients a, here clients, base we've What we Amwell which,

revenue the support revenue, in faster. customers, way product. deploy the a to the translate hosting larger We reasons we going rest. much better Amwell proportion much into have as XX% believe that is Now the super of of because it's proportion at concerned, is smaller those efficient. We're Amwell much simpler footprint bleed is The the Now us efficiency. lead of that to as to time as to The that is a efficiencies least which rest of deployment And is far believe

of to mix related change of modern that to increase that Converge the likely revenues it the revenues between More is value related service more efficient for mainly are use it's technology to frequently, that Converge clients the use fact the to things importantly, the increase only impact not It's is platform. likely reach. super fact the more of it appreciate the and use, as scope and

also in more likely functions and programs capabilities up We apps, with are or to modules better it's Converge way where people build into a for buy and much upsell Converge. integrated to that

We next to upgrade - our sizable a lion's already deploy, as this report by of plan we we to report sizable and going of complete the are - to end of amount the of year. a year amount clients additional clients share

and meaningful. we'd take full The news will However, it positive to installed the But a early is the into to more in for quantify like too our little bit to from be quarters a extrapolate Amwell order base few Now installed partners. base.

Rivka Goldwasser

Okay.

to before So just back I go the lastly, queue.

it margin relationship in if basis XXX versus was gross of the So about Converge? expansion, points we think what the percent Google

Ido Schoenberg

Go Keith. ahead,

Keith Anderson

had doctors there's or partners. the you specialty efficiencies Cloud better some - come strategic Google, and of leveraging within enhancements cost economies fruition. then migration had the And and to that those on we're and lot to scale, we're material. utilizing, We've you those a mean AMG Google There's providers. to the other not it AMG those operational side of fruition higher technology economies for over been I was are about I scale mean operational a - starting while, talking go that more. to the

see the efficiencies days coming So from early we're starting of of and platform. there's then the all to those, Converge

those. all So of it's really

Operator

Rhyee with Charles question next from is Your Cowen.

Charles Rhyee

can not we us recognizing year, with give about split kind on revenue Yes. in and Maybe first, burden you how OpEx? costs scaling should the related the the on the in sort we're of half that breakdown between we goods? side, that OpEx the of of a getting cost Or Conversa out? it back mostly to of up up Is think with just and SilverCloud Ricky margins. When follow

Keith Anderson

above In going terms rollout, well as line in to both OpEx. of in Converge COGS hit it's as the the

the fair expansion line. going we've to we in-house. numbers, of So go through We've those unlocked to we R&D. other a we There get amount Converge. to talked When were keep the the of some R&D projects that We aspects of about for thought efficiencies the actually leverage offshored. you see you'll you that certain able - our strategic when been partners in were

we our decreased So quarter-over-quarter. on actually spend R&D

there mean of complex support. utilize more much able to I the customers be that current the be Converge than the on it migrate we platform. functionality platform, customer the onto is higher is the going to they're And to has level more seamless. a platform Converge As to going be

So higher. support going customer be the of level to is

to So question and gross to it, your you're answer see in one, the in both sides, OpEx. margins, the two, on going

been to the we are to think the OpEx, are going to we you Although company say I the efficiencies continue will and of that has see go when going below And focused line. have line through very you the able proud we're line on by this. unlock been

Charles Rhyee

What also X, that... burden of in SilverCloud, the but what going was And EBITDA that is you be OpEx? I the talked split asking half back with about kind the actually, year. the I and between of might was have $XX to - misspoke, is million Or Conversa COGS and

Keith Anderson

No.

for when tech is terms revenue recognize a have So be all to nothing going margins could actually, you're with or you write-down business balance to significant that revenue get acquiring it's there. sheet. revenue. a look balance nasty of thing They deferred the But gross deferred QX at the thing OpEx in the to see the because haircut, negative because of companies, we actually called this little

- it year-over-year. the growing of Both it all far majority, is OpEx. So XXX% of companies over almost are majority

of So business growth. that aspects their all building they were support up to massive

absorb the have We for of to that remainder the year.

Going the those into is obviously the burden to the combining $XX we next businesses. them to part both the going of realize bring platform, year, all they're for they're when or realize, family, on year remainder that by But the businesses coming we're efficiencies platform. million being on going the of from

Charles Rhyee

of more about - between bit Can companies Can worked and talk customer them obviously, about acquiring Conversa Okay. just you with little them? you've And sort talk you between the these with then X, prior the sticking overlap to SilverCloud. clients Amwell? are thinking Amwell opportunities, about using clients you And that are particularly be at yourself in into clients? Conversa and a SilverCloud what case, as might care virtual either platform? and cross-selling currently And of not those how that a

Keith Anderson

the I XX% I is which a mean coming excited. They NHS when it's in was of revenue going larger that The program. part like us to a mean, contracts very U.K. get contract, Charles, at Venn you SilverCloud, we're behavioral currently great have question. SilverCloud, the of And look world. the one very, the from treat the diagrams of

SilverCloud So we there. have in significant buying And over of a that inorganically. to But don't clearly customers have Israel. presence talking we have doors a part Europe. really of going business do is We number in been organically to open and

Many our neat patient quickly on companion in deals our delivery health of it list has how And is the footprint simultaneously, they well. SilverCloud. the to that's are do a of did Europe these look the of both Conversa. talk virtual when on mean have as care. journey. with of with really customers our becomes really overlap were Conversa all alongside us, of fully they're care I the automates the their to that customers. you customers expanding those we - But Conversa U.S. about When thing that customer already really into products, Conversa focused a very fantastic mean as we able I We the are you diligence, at

So number intervention. or member simultaneously deals patient requires a Conversa situations buying because behavioral the where both of intentional identifies was

a internationally. SilverCloud when and so excited. really the diagrams, But doors domestically internationally it gets of both you do lot us look opening And see Venn we at

Charles Rhyee

The $XX And then cross-selling. clarification. Great. contribution any that does million one next year, assume not

Keith Anderson

No, going is it next revenue year. That GAAP a so does there into number, not. is deferred

model. the full somewhat million $XX to going assume So your actually do They're better. in

Operator

from with Your next question is Percher Eric Research. Nephron

Eric Percher

year, or to the I'd the components in recall and on I came into be to support increased understand expense. R&D spoke as for roughly you like about of to you're expect million. able outperform outperform. double know where It to some would $XX we helpful Converge. that I back expectation click

Ido Schoenberg

Sure.

service-oriented allowed we decentralize like us you and do many to our as development, companies, basically our So that. architecture -

Israel of it to globe That to really We way India around Amwell, to from now have type the new which a and teams was be over the operate, working United and efficiency. to really development, all is States. to mainstream to Mexico Europe Eastern enormous drive does

are to price. quality able decent a at We much to recruit more and we're great able get

time, possibility basically see lighter still that between plan any point this I aggressive plan. make plan now. of our just now will the the at should spending some is I'd it and end we're right little to, end a our may You account year. earlier R&D change that we out being of have prepared But for mentioned. same because year, efficiencies up the of like expense that very it that not the significant the to There a than original in

Keith Anderson

increased believe that efficiencies the are to incorporated, continue our $XX and that into identified the EBITDA Eric, million or we we've adjusted benefit going guidance.

Eric Percher

Right.

half well So year. they're part of the from that first of as upside the as the

Ido Schoenberg

Correct.

Eric Percher

the along out benefits is Google and partnership, on sounded then like And you teams we called effort a the today? teams more of about when similar to give little insight Can Okay. what sides. sales both of it that think you Google are on the some it do able us sales front,

Ido Schoenberg

levels Sure. One Cloud to three discussed I with relationship we have to Google. I've migration relates Google mean of that the already.

you and access United vast qualified have the technologies. channel, But effective relates is to get they we currently, And one Google, increasing know, the States across apps - in helping our in different regarding in the of one fairly collaboration. care United They a on powers us our States. other focus sales to opportunities. collaboration health and other as technology The relationship the ecosystem are globally. sense pipeline and third

through And some machine reach mentioned online to The of that allows I've basically of for certain products our marketing people Amwell their the Google. products marketplace go products and complement clients.

executive technological through So the Google future around the the it's sales effort of in personal effort the United States. a really and beyond a both United hopefully States and

sell solutions more our together, we really we So services. marketplace. the our in technology, they And solutions create each cross-selling are as basically other's

Eric Percher

like Or to there. was that still period suggest you're there's increasing momentum your early? some feel it comment Does to

Ido Schoenberg

is We great a and relationship. lot potential. We with its pleased we the and a It's believe is we are what of together. growing. of can will It's Google there in momentum momentum full the do room nowhere the near partnership, to grow

Operator

Your Credit question Jailendra is next Singh Suisse. from with

Jailendra Singh

has that so following on there Charles' would SilverCloud be up a any Conversa. the of question But From of Yes. there this Maybe product Converge? if call on these integrated little helpful. solutions? point will and any addressed. for late, a through integrating come I customer's joined heavy new will the be been earlier with all apologies single view, Or lifting color

Ido Schoenberg

Jailendra, good to hear your voice.

very discussed, on integration a The was we as part transaction, core different. we the we for of before both reviewed integration a much is This is become the obviously, this Conversa have can imagine, companies. As by you end plan - way. Amwell little made significant for the year. and of the will thoroughly of plan

that mentioned, ambiguity effort, we It's something it's heavy about not value The that added expect will that an are to more something do into module, that have SilverCloud added is not Keith difficulties concerned lift. any - can't the built engine or it's is get it's or So but be it's it. as wonderful a Converge doing. we to about that - something we a and not any

large add-ons. to of since So heavy expect again, this then the designed not it's expect to type lifting technology is a very

Jailendra Singh

Fair point.

point a in follow-up. little on view or if how space. wondering I capabilities could the spend health of RPM care system from quick you opportunities time you're Just a thinking was of chronic

care of health competitors highlighted have One systems. your multiple chronic with agreements

your any with having discussions any you Just are wondering clients. if in this of area

Ido Schoenberg

a very acute singular are primary similar adjacent and care different physical those to that online home that, very does all effort includes allows in together to really connects rather primary types - also referral virtual that into also meet the not is ability full bring right of area spectrum making the really person example not which that care, care, important good a for of of care, It's other the but is care whole different way absolutely. Oh, Virtual now automate care importantly, specialties. we chronic providers ignore longitudinal to integrate care, designed only physical The territories. very, care, platform and a and to in care. from

interactions but and physical a visit monitoring set data benefactors and an could remote a the believe a the many that really right growingly create continuously So platform extends efficient that the and of experience. ill you health mentioned, clinician, very first then an like foremost, intervention also We into are, omnipresent over care this with ability over to collect labs, importantly highly data chronically visit from and patient automated, that that online complement patients it that a those sources analyze care many require of other be clinician, sources, with that years.

Keith Anderson

companies late important very was then, from in were my us. mean, systems, I comes majority I that to that - remarks, you I of revenue talked to call if and these Jailendra, prepared the about from the the health

both opportunity health massive the the a there's and providers when So and these fact insert platform there. opportunity, when we of being and an our own by system's companies see that on highlight integrated appropriate

product knew that enhance landscape, and at we're in to the these both the when So really worked of inorganically, we looking the space. wanted really themselves that that well health differentiated a by areas creating system

assets for both aspect. these So that of were intentional

Operator

Sandler. Wieland next Your with Sean from question is Piper

Sean Wieland

million Keith, what's the you you're do begin going XXXX? in $XX revenue? to ramp on recognizing When that GAAP think actually

Keith Anderson

basis, probably would year. In mean through On QX. this have a stand-alone halfway they done XX I it's QX.

given continue would That's so the what year know basis. say, to XXs, on they going a, exponential I were do entire somewhat you X ramp. going can to throughout the take roughly You

Sean Wieland

Okay.

should a So get trying - how the much extends of ramp what into be. what's sense XXXX? to I'm revenue just deferred that the write-off of

Keith Anderson

number. I gave GAAP you the Well,

So million, for the you. so $XX math gap is the did I

million assumed that to GAAP Amwell contribution $XX year. next So

backs out. need So the deferred just revenue. figure It the out to it alleviates

Sean Wieland

you comment many on live? Can installs are many Converge far how Okay. Awesome. on done how and people you've so

Ido Schoenberg

Sure.

Now XX% product about relates use with a installed our not but don't revenues expensive but So a is associated base, a of yet. X,XXX of much we've number that, done, providers. have our the patients It it's huge that Sean, as Amwell to with are amount clients, smaller into much I less much case. it XX exact translates because Amwell number Now simpler

Sean Wieland

then All right. decline right. XXX,XXX, much my And how tough math if of paying into And a software? attention last non-AMG to visits, comp? of How utilization this is a is one. read-through I'm the of the is that much

Keith Anderson

neither. really mean always it's was I QX it's urgent lower would I in all is the and care. it - of months, say one

to So guided $XX on if up were you to We're look I across we already visit, at $XX the QX, for the year. average last XXXX. board XX%. the We shot In entire at per $XX. revenue it mean,

solely in urgent care but visits. So other behavioral, to especially the decline increase. areas is specialty The specialty, continues

visits So on conducted mainly the visits, those on customer unpaid urgent being the platform, care. the were

the COVID summer then people one there months. this, thought did So euphoria and was of thank good, celebrating the where weather And what receiving were this putting the was typical passing people just was that we off - at passing. mentioned - it's health just see conferences goodness, we care, and we

urgent care thus the Specialty area. to per visit. QX It increase, isolated $XX was typical So continues it's declines. revenue now the in

Operator

with next question is MacDonald Needham. from Ryan Your

Ryan MacDonald

ecosystem, Ido, apps first app Last building the continue marketplace the for the that to of there. monetization build developers about the Converge as and that key getting to and with strategy you. aspect talked you continue installations you quarter, one was a get to going

terms curious Just marketplace. of to some of that's and starting sell-out in those trending developers interested that how to get building apps start

Ido Schoenberg

with so appetite apps our those with capabilities. interest Ryan, and there a in programs now is also writing new and healthy

app introduce store apps don't years, through app As the to stores. of year. the I before we the the other the mentioned not open through We earlier, may end expect

partners a and beyond. and will believe Amwell, we become even proposition of 'XX of very part third important parties value of external However, our the it's clients in innovators the that cohort whether or

Ryan MacDonald

acquisitions or on margin. as for adjusted on slightly that guidance then but EBITDA dilutive year? your the would of think I'm Not, thoughts Keith, be And what think about neutral they to next have Excellent. I the sort we curious expect margin for generally impact to today, asking the you and the - you guess, particular them XXXX, impact and adjusted EBITDA just

Keith Anderson

the are a neutral and be but on adjusted that's XX%, will basis. on GAAP gross It EBITDA, at margins

all and it includes, the the revenue. deferred So well, revenue includes deferred

On be continue on accretive, will platform. million make $XX basis, adjusted gross we it our and capitalize XX%. EBITDA - them basis, using to efficient more to margin and an need So on a

be will adjusted next neutral So year EBITDA. to it

Operator

next Ravi Capital. is question from Your Misra Berenberg with

Ravi Misra

think So I about you're Converge and right seeing that expansion the seems guess that I we penetration of of and touch like want to the how now. kind do on with ACV it kind

can latter on you first. maybe So start that point

of segment. move I to think much think powered the of And going of issue your you your clients is kind be expectations said plan is new our Converge this base we kind running kind that are health about ACV fueling adding kind around $XXX,XXX as where Is that normal onetime modules? How now forward? being of really of by thing this kind forward? the an it of should or Or that in should near a in how the term? more

Ido Schoenberg

- has large not care trends. talk not that a that things many yet, you kicking carries So like about virtual ways quantified. about primary definitely for sure are yet, Ravi, care talk guidance to and yet and we very things, that of technologies increase specialty are year so not Converge to upsell but and can The existing modules, I see other lot services I'm next relates multiple in Converge we see prepared you promise but of provide. a

and efforts companies, Converge upsell to that progress begin relates mostly we've waiting and to efficiencies the actually throughout impact. are still seen we the that other you've done So to see the

tidbit is clients partners, clients very quite Although the larger, reaction. the strategically. the talk that found we is. encouraged greater are that An the to plan are, when value by beginning of to are People our Converge their out more and complex we interesting we

of be many modular very for large that is integrated we organization of of apparent. a the expect one-stop to are the because size shop, a bigger capabilities value see probably single going converging in So to deals platform scalable

Ravi Misra

a bit little Great. pushing that Maybe one on just more.

You're closed. talking roughly on going And speaking, after with or million deal balance cash you're going give sheet, about so $XXX kind complex firepower is that more the this have to the is of go of to Converge. you accounts to after

maybe you do more going of for exciting the invest demand given growth? of think of of comes allocation our something capital wouldn't this acquisitions? versus there to this to of you it guys and of to this, Like how drive suggests that kind wouldn't kind like So much when be after kind you, about why the how seems kind opportunity out why check kind upfront

Ido Schoenberg

everything already. year. if investing or we our sure are to significantly very not need Time quite completing important, important. and is we very to In build I'm significant Well, it's opinion, this it's is little less. quite a market

to trying best are investments. combination inorganic investments create We between the organic and

For of really to thrilled quality the example, were we in the that core ingenuity and fits find the of technology Amwell. Converge so well the of

on platform It's our realized one very And give of own that our, patients, for Converge When fashion you each the any When to to go behavioral so that for is they different organizations one really Converge, focus program built-in value already engine, that assets complicated amplifies in clients. would the a by - now, smaller that you such same that you want have health that could significant clients, where I'm like anyone organizations, us. what should they ready therapeutic part program native ways to them. seamlessly account also finding very that only by as helpful. what flexibility already be to the things, organically cohesive for for We value program to not inorganically clients use important, area to to fit that better, better about. of would them. made assets technologies to imagine look for go want We continue other for it's our other SilverCloud, whether why to behavioral full create. examples that's mostly market not complete that it's therapies in assets, incorporate to into makes talking and we make really incredibly embedded will, are native Converge if provided part with but improve go of will, as available the to more our there that partners if programs powerful investment but going also SilverCloud want further others the We're well. in up is down very apps, that flexibility of offering be the very, or to market to take our offering helpful you the their and palatable is likely And and

Keith Anderson

cash for you're environment. million. the to longer acquired as $XXX of can strategy. Stay slightly to have right, strategies, of perfect on highlight to to execute really customers And advantages our we We're over while going all as work both the from fast execute equally a our has inorganic no north of perspective, able environment be on Converge we Converge to tuned People Both are assets of operating in delusional. continuing The these and are more. we changed. migrate

on focused inorganic our very are both and on We Converge strategy.

Operator

Hooker Our next Donald is from question with KeyBanc.

Donald Hooker

Great.

from parts your to It XXXX there's GAAP of that acquisitions some with talk of a like you're the sort points the moving you the deployment changes guidance in these of have talked [indiscernible] cost past kind point? EBITDA accounting and of I in about for of going any So if moving think to the sort - can of to Converge. the cadence share guys kind - sounds of lot you

of assume progression kind EBITDA we grow out As it? linear a we of exit XXXX, you should breakeven as

Keith Anderson

didn't whole let's so up broke mean I there - the you get I bit question. a

burden enhancements when $XXX million wanted an bettered million. $XXX to - sorry, instead for from of M&A I'm or net $XXX to transactions, $XXX of apart million. EBITDA the to guidance the You million you it million to $XXX organic $XXX basis, million And guidance million of break the we the range to by the arrived instead $XX $XX EBITDA. at our increase million the or On

Google, have linear AMG. different partnerships than with better the what our margins technology still IPO unlocking Once enhancements are efficiencies of for a one to the economies these are for to of going we scale we examples, spend that strategic target within we being and the the all subsides, it's be Converge them path were. because - R&D So the

path's march You add to all profitability. those the together, toward we continue

Donald Hooker

real And quick. one follow-up I'll just ask

equally base. XXXX? So are gross deploying - margins. kind will I'm wondering sort sort be of if like client the it maybe those going into mean to costs sounds mean that in we're Converge across levels I Do I margins bounce telling QX. material of snapback that - in of there the XXXX extend just have a back QX in XXXX? that us weak and to Does you're gross does

Keith Anderson

do But what a are hit We IPO. Converge and with the have the to back we getting path have even We companies to seeing on told bettering path paths acquiring the platform. do the be a that. at are and to could see margins mid-XXs investors confident the we - in we what we're that

gate happen won't definitely the that year. next So out of

Converge as for customers earlier into a continue The continue we call, will the do we reasons about the you platform. have time year increased of we see customer over that customers terms to migrate over. on going migrate to the next the to In the talked our onto next X dip line, That quarters, are support.

Operator

is David question next with BTIG. Larsen from Your

David Larsen

up year. talk in X% you the mean little subscription revenue about the I platform Can growth? a bit

I acquisition that except been give think you expected in around customers? more customers? they Were switched detail would would and Or hospital X were what any Can process? that to? be have any color acquired. any it that around more that for for telehealth up XX%, helpful. those growth platform said you Just those And item sense were they health plan clients line

Keith Anderson

Yes. The acquired. was was company one that MDLive

customer, they a So the MDLive are their was it so - was on acquirer platform.

do We still functionality them we because offer than small different to we degree with Although business things a MDLive. differently. do

system hospital that chosen was platform was other yet. acquired The telehealth that not one has their a large

that basis. bought they health a we two of growth XX% very large using on together were platforms. about are different IPO. two. talked were hodgepodge Those normalized that a systems So are Subscription was They the the during

is and the those remove And sequentially. being reason on the sold you additional X% the platform. just X, modules programs If

all programs as that health there's seeing well. - when behavioral have Now, increase are of lot in modules side, sold health, been number that the side, on on then Amwell there's telepsychiatry, that modules the carts members. for different of their subscribed the And equally, So require then integrations, and health an been plan system the the we're nice EHR a increases:

So into of that goes for than capital increase. spend those the subscription, all other And obviously reasons the the carts. are for the

Operator

is with from question next of America. Allen Bank Your Lutz

Allen Lutz

going talk Keith, today? Conversa growth grow into about you already contracted that to and next year. revenue are mentioned XXX% and sight the of Can line SilverCloud that you about is what percent of

Keith Anderson

platform, thing companies, both these excited really their net The gets is XXX%. us the to which revenue is about neat them put retention on

from So XX contract year and anywhere the another it XX% X they sign then over a grows following The months. are year. contracts to

talking Venn we diagrams. of revenue earlier answer retention, given XXX% we're the to that customer pretty there's a line platform, a significant to. significant guided U.K. excited especially sight. line sight the $XX the million our But there's net about for the lot of your On of So opportunities, question, in There's

Operator

last from Grossman with is your question Stifel. And David

David Grossman

the So stability in will, curious, health the you health and over kind any relationship evolved on the your vendors Cerner large I'm prepared markets, momentum in And remarks, spoke end good other EMR more with how just Cerner. updated that time? major if thoughts you of with there's systems system now with of

Ido Schoenberg

partner better. has became Amwell. good the digital thinking delivery, your as around matured been David, both that to and you're better companies in right hear assume for to a voice. their And partnership terrific care Cerner

with likes create to long list Our different others. to the very relationship with Cerner a EMRs, difference experience with for We Cerner, the of and Epic integrate is in seamless do order proactively our is that but we with than clients. the of Cerner integrate a do that ability much

our team. much team training between go-to-market We the and efforts also have and bigger force, in sales the Cerner investment

of Cerner But for years so we been it's recently, you change sure through that again. and for change as them Because a does we have stabilizing long, quite so worked knew So together not know. many went impact bit I'm platform clients a Cerner. really, we by and mentioned, it's the It's as And well relationship. strong our begin was. of prospects to really I received on good as really the it see as Cerner on well, momentum. and any Converge works

David Grossman

the seeing at are an whether that anything Epic, And on and And like and that, doing clients does complexity running they're where you platform? in others, to Epic upgrade terms contemplating enter into if of that to the equation of all? the are cost

Ido Schoenberg

someone an Amwell, conferencing it an buys on clients. inside other the and Well, Epic for previous Epic, integration. EMR. Converge has of upgrade ability a video When Epic as Epic many today you they basically do know, to big long list to with buy reasons is the a

file native have We extensions.

than because of lots on Cerner that grow make accounts, both to that have of with therefore, a before, We call, earlier. option. in very people faster work bore mentioned technical way the little what We I will seamless plan Epic Cerner and details probably the more in and it of probably better valid most the and faster

Operator

and call Schoenberg. concludes back session will turn for to And call. now the Ido that the this question-and-answer I the CEO, Chairman conference

Ido Schoenberg

Thank continuing follow. look that call forward to in to and We formal the everyone, next Have a you, and call our today. for joining our thank calls report you, progress nice Paul, our evening. on

Operator

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

well. safe great may night. Have You now and disconnect. a Stay

American Well (AMWL) 12 Aug 212021 Q2 Earnings call transcript