NH - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the NantHealth 2020 Second Quarter Financial Results Conference Call. My name is Tanya, I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. to Jaffe, conference Investor like speaker to now Robert today, Relations would hand over the your I for NantHealth. sir. ahead, go Please

Robert Jaffe

Welcome, financial for NantHealth's you everyone, today and discuss to joining XXXX results. us quarter second thank

I'd On today's on Chief Bob and that Chief to Officer; or remind Chief provisions will all like Petrou, future, and www.nanthealth.com. of aspects This implied. Officer. available call Act. will the today NantHealth's stated call is could Litigation management's the results three Reddy, broadcast the Financial be actual information our under information The A cautionary live are at call Harbor the Sandeep Louks, certain materially discussed current Safe statement Operating forward-looking the Ron everyone discussion from of those Dr. website. today Medical Officer; months is for on include of make the being playback company's Reform differ company's covered of reflecting forecast and

In business, will Bob, measures non-GAAP detail. release for accordance used provide including addition, reasons is discuss Ron financial financial by measures of are prepared the non-GAAP results also measures be of measures call, from not we press In companies. those that for other the NantHealth's The directly accepted are the financial discuss in full non-GAAP quarter company's company's in results and this refer overview today. the different brief to will issued second a encouraged to its may non-GAAP comparable quarter US principles in and to financial more XXXX financial generally financial accounting may release the course Investors the review financial press contained by its followed with during most a of reconciliation announcing the financial who results earlier in GAAP moment, measures announcement.

the that now call Ron? Louks. questions. I open over We said, for turn Ron will the call will With then to

Ron Louks

took strategic call. Robert. all in discuss XXXX OpenNMS welcome you well. your we everyone, including conference and a a to XX. as and We our hope We management and management major network of customer COVID-XX support its OpenNMS it community. Group, is base Good like recent application results more and across financial traffic completed our moment afternoon, we of to premier NantHealth's well our But the And provides about XXX for open as comprehensive talk safe multiple providers. Thanks, workflows. platform and performance to and acquisition We'll second quarter on I'd large which environments first, companies health actions July healthcare its acquired company, is source Fortune enhances includes service portfolio diversifies networks. and easily event, and cloud offerings scalable SaaS capabilities. intelligence, because platform expands artificial OpenNMS OpenNMS fault, families software and integrated enterprise multiple and

opportunities Importantly, also helps up opening the us beyond market it healthcare. diversify

virtually all on COVID-XX, pandemic, for swift things, we of now and processes our to the Turning implemented employees the other remotely. among action outset we work to fortunately, took procedures of

our during free employees providers to May. the minor. entire the of platform AllPayer result, has a NaviNet As available relatively in our made for impact month We been

two a and on medical experts presented Dr. CEO, Both discussing providers our partners registered payers, to viewers. And Our the from and interest, considerable with Soon-Shiong, more video webinars science COVID-XX. than webinars Patrick COVID-XX. generated hosted behind series of XXX educate each exploring team

detail revenue, to XX% revenue of XXXX Total margin for results. discuss financial our the were quarter. of a Gross $XX.X nearly reduction quarter shortly. million. in million. to of $XX.X SG&A to Bob Total turn second lower was compared will second more last XX% SaaS revenue $X due briefly by financial part million, with net operating which year's let's Now, was expenses increased in results our

implemented Eviti division, medical Connect expanded leading science our emerging states. support the center Medicaid software insurance across and cancer York a channel on leveraged services two City. clinical In in the we Eviti US through New our population Advisor to support We non-profit health discuss let's July, in decision of COVID-XX of educate for users treatments. addition business, and care Now partnership, a significantly with of behind leading with company the implications decision platform Eviti the platform we a clinical the

blood With their payer requests of to policies update prior directly post the as to these investment savings expect of enhancements dashboard users added the option file ROI plan enable medical regard to White payers provider cell added customers. impacted Open faster COVID-XX platform, for cell allows workflow a also for COVID-XX messaging Payers validation the insights by factor blood to and a factor part implemented managing review make corrections NaviNet gain more authorization that authorizations we providers. messaging, when that of pandemic. to our communicate solution, enhancements testing white process treatment leveraged can growth updates their to is to our This the return and We already unexpected that streamlining deviation key providers feature in to payers growth to use customers. entered. approval. authorizations other payer we enables on real-time enables a quicker our engagement while prior robust reporting, enable We community that NaviNet for platform enable to plans. to We released we relative on assisting included: their launched NaviNet Eviti of more treatment information cost services prior electronically, oncology the receive and with this

we healthcare of biomedical as a mechanism transcriptomics importance the and reducing Insight, resistance. into with of in molecular To services offering presented from Society data, In advance abstracts June, its potential silencing treatment For risk tumor of both genomics Molecular a the developmental We The targeted patient peer collaboration a up, explained educational community determination gathered biology. tumor as dedicated reviewed XXXX publication and of a June, American of sequencing coverage we of In in using our study completed for treatment support to Diagnostic research. announced we to we actionable and recently notice Omics the treatment. test. the with journal insights of business, molecularly tumor JCI four ASCO, received strategic was that agents resistance, information of positive and CGP a we Virtual and findings study, which ImmunityBio, May, a on diversifies database, In acquisition the Services therapeutics' COVID-XX from products. and in the in publication Scientific Core Clinical our the used to gain interrogation sum transcriptomic of Oncology, announced session Program.

that We results related despite I provided during With to to to available for COVID-XX. financial in over ongoing NaviNet of will of the May, also Bob solid our free entire the platform reported more Bob? business, detail. challenges providers discuss turn and our results AllPayer financial overview month we to call

Bob Petrou

Thank Ron. you,

free million. by decline revenue prior the sequencing second analysis second help May $XX,XXX, drivers quarter CVOID-XX providers AllPayer were in the million, revenue promotion this X% primary $X.X XXXX included million, molecular revenue. $XX.X SaaS decreased million For year-on-year in revenue XXXX $XXX,XXX home in XXXX down of SaaS revenue of GPS revenue quarter and million which revenue $XXX,XXX during performance The of to $XX.X quarter the of from and various in pandemic. QX changes from the streams, health for $XX.X the compares $XX.X to for same of was was including our to year.

efforts of year XX% million improvement removal prior ago. to in quarter revenue a see sequencing of may under As $XX.X management CMS of cost changes the in and in status, receive business. revenue the tied to in we expect total not code impact and from determination reflecting compared full XX% million gross submitted our ADLT quarter, QX minimal the margin to which This to price. operating has molecular our with XX% a decreased due to list PLA coverage analysis divestiture to have health continued grew percentage require been $XX.X costs gross year yet. referenced profit The product primarily expenses mix. the past, QX until was home the continue second full we we from of same

to and expect will through including sciences, to continue base the through of as our recent XXXX investments offerings, year previously this mentioned. overall data increase generate manage cost we modestly intend year OpEx that OpenNMS but invest in acquisition I benefits. July on We Accordingly, see to in our new growth have product in future

operations loss our for year. as continuing well of value charges, million million $XX.X AllPayer our in due non-GAAP Without mentioned to million per lower was our would $X unrealized which $XX.X second was $XX.X $XX the two net non-cash NantOmics to in the losses the a liability. fair operations net million to as related continuing quarter, charge these loss included For have our as of and XXXX impairment QX of non-cash from million investment $X.XX $X.XX or per R&D. in changes On been SaaS $X.X as tied from is initiative commitment last net loss bookings from million last the QX free basis, up revenue due This second same share year. share, well $X.X the other versus above, quarter as of mainly or a in quarter investments continuing the operations loss from to million,

operations continuing from to year year-to-date for basis million same decreased improving share per prior million period or a continued loss the $XX.X $X.XX from financial focus on $XX.X our net on results. $X.XX or per share However, non-GAAP showing

year, will front-end back the compared net $X QX, that, cash burn quarter. over $XX quarter. to the and million equivalents Finally, turn small approximately in With at burn included loaded interest with now semi-annual which in Net payments the cash leaving Robert. payments $XX.X and of million million of million I the approximately a XXXX, in June at operating was $XX.X the XX, cash other were call end cash first

Robert Jaffe

now Jenny, Thanks, to to Bob. We'd questions. like up completed we've call prepared the open comments. Operator, the

Operator

from have Thank And ahead, Charles you. question [ph]. go we sir. Ree Please [Operator Instructions] a

Unidentified Analyst

open about a network they it question And free. Thanks more outside run. this the the diversifies I about most healthcare. companies that an business, the understanding management talk really so business as multiple of little have understand maybe here. little bit OpenNMS Yes. think solutions and started Maybe Ron, business more it's taking because it, for bit that my source - is I extends and questions a talk

healthcare model. - is you talk just what of I process standpoint you And do the like about a sort more it and company guys? from think, as of it strategic forward convert bring Are of lastly, to then, we will you all to sort bit is strategy more vision what in what together, little financial healthcare? sort company's a we that Thanks. as out that company going going OpenNMS, the anymore? of envision what NantHealth trying for just just see Can really the you're serves do tying a and into look a from further? you traditional we How a pay are vision look be software the that here you not

Ron Louks

Sure.

to them. try remember last the take first original one I'll of question. So, all then and maybe I'll the

their So, our do very you at point looked tools. largest I the CFOs the in in primary at in the other network management the CIO the finalizing needs. interface to use obviously management customer that interface large if have we in costs if think, of of you with lot healthcare the customers, them a tend tool the their of deals and management view is match the they base. if your decision the negotiations but look making, dealing from to times is the with up the a network organization, customers typically you their customer And complexity depends point, one network and budget that cases It primarily is at, they some with the And to our multiple cases, - CIOs, we're base the look tool. involved use And of tools, CIOs. are of if one business will all on only for

an a like when and get basis looking seemed advantage bottom of a progression core by And continuous at businesses we if so are line our products, on for tool product there process. for it on price as natural find us, their can just another able renewals in their be helps help situation, some management I that overall with with that renewal network budget in it negotiations helps the our and think them to bringing to breaks side offer on the you

like is I years. synergies, I good source it I original from fully charge go that to mean, go at that, They if and you things that the Red and management you've see we it SaaS-based it is [ph] and want to And think, for been custom customization been an the Hat you that then expect has point, your similarly when of we along free guess, develop. So, we on for do - to cloud a side, sort version, if model But did many at to the open your what look you line. question what network able of to point has to do. view, APIs look to if start

and as And And expect model tools, look different. OpenNMS cover customers Red Fortune the wide one OpenNMS we some been tool. in XXX has the to of where We And all? so to to situations them companies customer customers what do the as from follow along that our a well. a have every you as Did other such on monitoring we typical do. OpenNMS to network very overall is side I Hat other at used use the base, able with solely is have

Unidentified Analyst

yes. Yes,

consumer will healthcare be are we financials XX% I to everyone argument - think at in what so. of talked focused I tech. not Yes. But obviously like would I at what OpenNMS Because when over would them still for the all the mix go revenue say, maybe a we be we But, in little and or - very like? we customers that large Would the look you They follow-up, past this. who some does, in healthcare predominantly SaaS look let's point? retail, can you about and like? Would mean, model. would a I sake, look still still customer maybe know when I've have in company and or bit if

Ron Louks

that So, the the is first two initial way itself, non-healthcare, in NantHealth focused are in got there. are the fortune a company - solution top in itself, beta I think, have them. but top our and be guess, OpenNMS will already company. on to XX, of I a healthcare The customers cloud They the cloud-based obviously, one we're we've on two describe we do the rollout healthcare rollouts to best predominantly third

of it expect it's and in I But as And, to first the it the the that works from the are of more put probably OpenNMS. the - the do to that We there expect, would as solution to don't want to take that which disrupt some that customer customers grow I base. So, for back over on weighted rollout and if cloud well. time and as today but traditional heavily to that so expect customers makes when would sort towards year, already existing a [ph] renewals our side think, on the we OpenNMS' to pick expect that non-healthcare of chosen, in customers up we sense. to be not healthcare we rollout - their specifically was we

Unidentified Analyst

that's helpful. Okay. And - okay, then

think clients obviously about these is say, to have you on thinking see Eviti to that other where about the go and bring with solutions. add tools there that dollars renewals other a - on core spent Are going on kind then? we've some, your investment million as holes of the on discussions going forward there fair you're NaviNet, that OpenNMS. you it is to so, Are here, of kind that you that out need when there about let's $XX And think solutions

Ron Louks

in for along That's of facto network and the end what I de a the monitoring Yes, strategy. that put be standard and for space. we healthcare focus And exactly. to is hope effort the tools lot exactly think industry, the obviously

Unidentified Analyst

will I Thank stop Okay. there. you.

Ron Louks

problem. No

Operator

the [ph] Ree on Charles line. have we And Instructions] [Operator

Unidentified Analyst

real I growth? wanted to a you've the a we on we're to follow here I contributor, What's obviously the side, come up, starting Yes. molecular think of just guess, kind of of testing at line talked where being looking just as again, GPS really news about timeline could top to lot here. that positive out

Ron Louks

Well, you, will honest awhile, with be I Charles. think, to that it be

does if the coverage costs. - I our it cover CMS with not regards still is announcement at in the that you think that the look to

obviously get the I then then would And ADLT. so I coverage, rollout towards think steps then sort TMB think know once to the going stage, that mind, our And look take, for and can to be able in a taking we I to you think, I eventually at what next mean, of amount - commercial significant discuss that's there. you strategy, get to but probably of time we

Unidentified Analyst

are factors other of lot dependent of we of year, significant I say two but... amount you a is know years, one when rough on time, it three talking Any years. sense, And kind

Ron Louks

of out a it our see don't within but right. Little control, year. Yes, we happening

Unidentified Analyst

Okay. right. All

of around should terms it's for models, much probably not guidance least in and kind foreseeable we should any our about there, of say be fair we future out how thinking at So, to the build that.

Ron Louks

Correct.

Unidentified Analyst

from me... Okay. Last question

Ron Louks

regards [Indiscernible] to the foreseeable, so.

Unidentified Analyst

Okay.

around of think cash, kind of of back can half terms as of the any past kind the give In year? you cash for cash burn, generation guidance we cash flow, us

Bob Petrou

Yes. It's Bob here.

has cash As on cash in you board. know, management line and came I a since primary been focus

I is to with a job an good be impact us going late. to think, to is done - sorry, [indiscernible]. as through so impacted the we be they had QX manage we've hurdles and are the organization acquisition, that QX going Obviously, of get

the the in burn, through the again of QX cash perspective, we'll speaking be so to I Beyond that, investing and again, bit, do we to in includes little the $XX-ish-plus least products said up a from purchase occurred in generally and side, OpEx QX. probably on be which these anticipate QX, other which go again, we're OpenNMS going businesses at offerings, but million

based into view to lot now, obviously factors as QX, is of of come see down doing of our businesses. it said, management all that again investing I beyond base, but the there definitely, you although, a and we ties I that our business in cost give activity the on coming started in new we'd will we're are So, like play, that kind that as the of in

base you QX that, leave touch I'll quarter an But beyond the and we give now. next it can So, at for through quarter. update

Unidentified Analyst

you. when was makes Thank because my up that of an COVID, really not that obviously Okay. question, one That's broadly put And off. guess, can of held pretty the more well sense. I areas oncology, you people look actually last condition elective then,

talk you that can the interest through can of During on year? helped from this any has talk the out about play you this. the of new kind rest for pipeline NaviNet and thoughts the for the sales Eviti oncology here period, drive about and might for And in how Thanks. pipeline that sales and -

Ron Louks

Yes.

So, the and in opportunities up. we that continues the With strongly when based by several be Eviti out growth on we and sort to look building time at they the at you I had COVID, have has all priorities have customers if decisions that feel of strong. pushed with purchase COVID think, Eviti, the about pipeline been that been kicked

will in that deals to we so, to being latter the were close fully the back get progress this able expect on they we making year. And pre-COVID half of

at cycles NaviNet cases. I have in think, some had think, short-term. you for Sales if solutions are look the in NaviNet lengthy we side, I the headwinds some

but for think this we're for NaviNet that I behind little bit definitely so, we expected And year. I guess growth we're side forecast the on a our -

Unidentified Analyst

come the it, decision in you is is Eviti expect out, pushed side can the something back maybe as say do back maybe you Okay. that of half we well But to or but... here that on that kind when expect

Ron Louks

Correct.

Unidentified Analyst

we could But NaviNet, not. something

Ron Louks

can expect to we - think, I I expect get we're - still it and to think, I struggle, forecast some into I would going think, to, wise, I NaviNet year. it, will think, we're more where carry on next we I think, to

Unidentified Analyst

the Okay. That's you. helpful. appreciate all questions. Alright, Thank

Operator

questions [Operator this Instructions] time. We at have no further

Robert Jaffe

day. our Thanks, Have scheduled everyone our progress joining next sharing for We Jenny. today. us forward conference Thanks a look to call. great on

Operator

conference. participating. for and you you, concludes This gentlemen. ladies Thank today's Thank

You may now disconnect.

NantHealth (NHIQ) 9 Aug 202020 Q2 Earnings call transcript