MTBC - Earnings call transcript Q4 2020

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Operator

Greetings, and welcome to MTBC, Inc.'s Fourth Quarter 2020 Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kim Blanche.

Kim Blanche

Thank you, and good morning, everyone. Fourth Conference MTBC the to Quarter Call. XXXX Welcome Haq, and Executive Executive today's and call Stephen Founder Mahmud are Chief On Chairman; our Snyder, Director; A. a Officer our President Korn, our Hadi and a Officer. Financial Bill Chaudhry, our and Chief Director; our today Molina, and Johnson, President. Growth Officer; Also joining Karl Chief us are Juan Divisional

of amended Section to of begin, call as within are amended. statements are like that organic growth Section All XXA the business statements Act historical limitation, remind and and statements, fact, of including, and acquisitions. Securities statements, and future during of we as other statements call the growth, Before of would than made of certain XXXX operational conference for forward-looking the and you our expected XXXX expectations statements I guidance Securities outlook this during conference XXE potential without regarding meaning made forward-looking financial this Act performance,

be plan, these as sometimes negative such of identified terms. words believe, may terminology the similar upcoming, statements or anticipate, Forward-looking and with expect, may, will, estimate

results differ comprehensive could contemplated Forward-looking materially information our or Exchange our actual or our presentation, forward-looking These find opinions are Please differ and undertake no future discussion subject the more are of beyond events. we reports and new of and of the of date obligation to guarantees control, cause reflect statements uncertainties, that a future with promises could performance you Commission, these Securities of this in revise and these to of variety our will actual these factors which light statements forward-looking release performance filed to to risks our forward-looking to which a those statements. of from refer results and are where press and materially statements in not from many cause statements. only as

Investor Relations the download presentation. XXXX call Events, on presentation. site, you our and dialed by fourth quarter ir.mtbc.com. may the who earnings download Please to For our Click visit telephone, anyone earnings into want

non-GAAP Finally, said, financial turn fourth on today's call reconciliation that Officer certain of today's to refer GAAP quarter to MTBC, with release now to of over our for to these measures Please press measures. And results. results I'll financial a XXXX the the Chief call, we may non-GAAP Snyder. performance our refer Stephen announcing Steve? Executive

Stephen Snyder

you, on our quarter XXXX Thank for us call. you, earnings thank Kim, and joining everyone, fourth

We pleased another record-breaking and are quarter report year. to

As providers to we we've technology-enabled remained systems solutions, and continued focused with care have health growth. our on our empowering health accelerate

we and $XX quarter, a report million. increase new of year-over-year. of is are to For pleased revenue the This record fourth represents an XXX%

in full EBITDA. and us Our an million $XXX.X of Quarter for XX% X were of over and also revenue XXXX year breakout high new periods represents also full a XXXX. of year increase year full adjusted XXXX terms

XXX% year-over-year. have accelerated our our of million. a As $X.X revenue adjusted quarter the of surpasses quarterly quarterly $X.X we growth, which the have million adjusted EBITDA by to We fourth our record during the quarter, we velocity during of EBITDA our grew also record prior increased number

a $XX.X year are we of to report million. full As pleased adjusted to EBITDA, also record

Our driven variety record successes on were financial a of key results by fronts.

extraordinary practices and meet base our care needs health which to our to we tested were year pressure the during clients able pandemic unique business, of as the an systems. First, in

terms their strongest use increased of and our yet year of company others commitment a expand responded clients Our by in our by their opting to retention, as solutions. public granting us

portfolio R&D, and acquisitions most acquired further have Both and in to our companies. heights product growth acquisitive as in us acquisitions terms Meridian. yet transformative XXXX CareCloud our we scale, we now strategy Since success. grow first new have of add XXXX, And acquisition XX helped Further, our our customer acquired enabled make more as reached growth Second, than They've capable in strengthen stronger patient represented additional and our other key a us year they of provided even have important and objectives. play of with areas. operations, as more company customer many they team roles growth, our who and terms contributing members base. our to organic key us support, are success achieving

in Third, our increased expanded marketing, solution our investment accelerate sales combined and helped growth. with set,

sales in that invested during bookings we measured year-over-year on increased XXXX, approximately in XXXX. our be average, to robust yielded, a growth growth will annual $X.X pleased the recurring to to continue $X million of cost-effective acquisition year positioned And revenues. our $X.X well and are see our come million in from we that During accelerating in enable to way strategy. approximately addition believe each investment to organic dollar this and XXXX believe to We in are of we terms continue marketing to our

our for backdrop gears shift historic embraced With care clinical founding upcoming Since optimizing our brand our powerful the the or excited streamline have of moment to same ago, very revenues we are we reducing and let this XX and commitment a namely preview me something operating and a health customers cloud-based help year, rebranding years to workflows focus business the developing about, solutions briefly merger. else time, intuitive on costs. innovation at and to while,

management, multiple in has to records, include the Since Our intelligence evolved launched then, more. solutions health and management cycle cloud patient XXXX. platform platform electronic were significantly together cloud-based of practice experience revenue and business much with and first-generation grown our components

of patients. I'll reinforce preannounce pleasure that strategic by experience. decades, tools help week. next to CareCloud, further look During announcing unified name We of change turn a cloud-based over In care officially providers forward legacy new to cloud-based brand to solutions, on our the Hadi? empowering care focus company's our powerful now providers seamless deliver their Inc. the manage is my XX, the last leveraged our floor have March today, enable effective it over health across view and will with millions practices be Hadi. and XXXX, This intuitive States and change this United continued increasingly our been the to will and two innovation client to of

Hadi Chaudhry

fourth you, for us joining earnings quarter thank our on Thank you, call. everyone, and Steve, XXXX

begin, Before like reiterate it the what I would for and how about future excited company. foremost, means rebranding this I of to, and the first I am

change, components about As name mind. come this two to I key think

The our and gives to Steve unified in foundation the our first, strategically second, services streamlined as in positioned approach. better market mentioned, become to market help we how today it under the create a more are go to is we a who And customers products and positions customer more better have future. it us a that experience and more to continue represents

provide incredibly the on was across Management. it work to Medical latest acquisitions: wanted and Meridian we a for you us two our a always, year update quick brought CareCloud important as As momentous us transition XXXX acquisitions.

in While overall. these of that were More evolution on the our our minute. acquisitions largest role strategic ever, two company in also they played a a

continue we In progress, had XXXX. our work, transition as in great terms of the to record we make year evidenced by

stated both As are the and Management the we CareCloud acquisitions Medical Meridian now past, have in accretive.

as leveraging Our teams progress are integration proven our have made great focused on strategy. we

acquisition, significant and business summer. quarter With regards spend, by large-scale third-party substantially by operations. EBITDA have improve all This us over resulted margin reduced able and adjusted XX% Meridian, CareCloud fourth operating last XX%, than expenses the in to of hard to dedication since expansions members record work offshore year, respectively. we're continued XX% the we operating and again contractors expensive XX% of we overall outsourcers for and to enabled XX% MTBC's costs year-over-year and in our process our achieve of more acquisition revenue in XXXX. terms this and to optimize team overall transitioned This by onto and all the This represents has In XXXX. the has increases

expect revenue of grow to XX% with by we $XXX to million. XXXX, our During to $XXX million XX% guidance

represent We expect EBITDA, record expect another million revenue $XX we strong and believe of the to XXXX differentiator between year. adjusted is We of generate to XXX%. will our $XX and in rate growth XXX% of be growth market, a million to which

areas, expansion accelerate coupled work market as to brand last services, forge in acquisitions our we us of ever-growing our we support that customer across continue are opportunities mentioned We our expect be our team's global will foundation our patient be We to in As client believe look a including team disciplined and to disciplined seen on call, that gives by base. CareCloud This organic much and growing our base, stronger our to XXXX. but continued strategy. the know, with forward fueled teams. about and XXXX, approach professional with our that we have operations, in cost excited the customer success we I believe, with growth further. continuing ahead will focus sales, on operating for scale several R&D In we great global to functional our too,

I a much were said Meridian services robust us earlier, as market CareCloud broader of to products go significant our to and we Turning could set with. and the solutions. brought as that And they acquisitions

experience grown services now of be records space. succeed our in tools add not health market opportunities health the to ever-changing to they to and clients solutions group also acquisitions, just different MTBC, main the our our proposition we in management able industry-leading a the soon we and but portfolio, to businesses. product system intelligence these total in go We Today, and a market but only precision expanded our extensively software grew and of revenue from more include overall platform not find patient market. require BI, our software be individuals, practice new name after cycle CareCloud, our need ahead robotic addressable segments by thrive partner management, value Breeze their offer categories with incredible and that position have products introduce and ourselves exciting the being health to products both incredibly care electronic offer only this an We customers talented management ambulatory now effectively through business did a in to we help bots, process an continue to to automation award-winning few. in with services trusted

velocity, these our than increase growth organic year-over-year doubling engine. For reasons, booking through our our of have to we sales more continued sales including

While in the even position workforce believe We the why pleased most all we the and industry's on-demand truly business in to offer positioning over customer capabilities, us one have increasing this ever rates our of more best of now, years. one that cloud-based retention solutions had, of suite market sales than the leader. are foresee comprehensive differentiated we unique we next more including to and a extremely several Force, opportunities achieve we that as truly MTBC are customer expansion of over despite ever, also we a services, XXXX, and pandemic growth this year, were able last

our as continue same ambulatory exercise, As part rebranding and suited health approach go while complementary are market, specialties will our in serve largely the and to space. this both services others segments go-to-market products will of system the different immediate remain more and to to

we However, eye on with seamless to towards time solutions client customers, on streamlined an diligently over plan more unify crafting experience. a our work and and continuing our

to new over updated our our product will the some our and innovations and about it direction providing defines role specific We strategy keeping look what and horizon clients you progress continue exciting excited forward the this you on innovate are ahead. play it how details we sharing we on about customer and months have current with overall for as time. We we prospects, mean to over the

for thank floor all to would to work. personally incredible Before dedication their I the and turn employees Bill, over of hard our I like

to Officer, Our Chief Bill now will Korn. future is over the our turn Bill? floor bright. I Financial

Bill Korn

XXXX MTBC. of tell excited year to that record-breaking so of Hadi. world, it you a for a challenging the most for you, was Thank I'm performance year was

MTBC's the As rate increase guidance of in compound has million million in million. mentioned, grown $XXX full a was XXXX. to of at at million, revenue for $XXX Stephen and XX% of annual per Revenue revenue upper XX% of range year to run our rate $XXX.X of IPO a XXXX $XX.X our in since XXXX $XX half an was compared a year the record million

attributable of best ever our our was than organic customers. and existing of a XX% revenue. and to bookings XXXX are portion growth largest XXXX more recurring generate from to actually bookings revenue X% new also Meridian acquisitions, from expected in to revenues that revenue revenue While growth XXXX organic XXXX Organic sales our contributed the the in is customers CareCloud annual combination with for year of growth equal

net a $XX Non-GAAP million end-of-period for was our within year EBITDA EBITDA integration in million costs recent Adjusted $X.X the acquisitions. adjusted EBITDA loss was million is noncash expense. a transaction attributable of the to net share, stock-based was using per $X.X increased and XXXX, income account is for million million compensation expense per calculated outstanding. depreciation $XX.X excludes depreciation our million record as year XX% record. per dividends XXXX. share to $X.XX compared Non-GAAP million $X.X million and and $XX of GAAP $X.X $X.X million improvement new amortization For year on expense Adjusted an to in common adjusted expense, range. in million which in of or million to declared income share, shareholders, the $X.XX net which loss common full net preferred the per guidance or and $X.X and Adjusted stock-based XXXX to stock $X.X share $X.X XXXX the during GAAP based net in to compensation included compared takes into and last loss million noncash year. shares amortization $X.X related full

to the revenue adjusted we such net ever acquisitions, to are and through and organic Meridian EBITDA than generate continue spread base adjusted over business means both able larger income expenses we As our strategic before. have scale and a we our larger and CareCloud fixed as

the fourth to quarter. Turning

significant fourth operating or new quarter GAAP quarter much the was fourth double income COVID-XX Fourth XXXX. a decline fourth from saw in in the non-GAAP improvement third of second during was The $XXX,XXX, was of We the $X.X small volumes and to which during million, quarter XXXX. of in levels, part was and which income an was quarter operating XXXX. adjusted decline represents $X.X quarter. XXXX XXXX due quarter historic double MTBC. which in operating million for adjusted income quarter revenue saw of X% Our we $XX operating income approximately was quarter for million XX% of revenue operating patient revenue, latter fourth quarter averaged the the less record in the than adjusted Fourth a income corresponding adjusted

Fourth exercise using $X.XX. outstanding Adjusted of shares end-of-period per vesting computed in-the-money earnings diluted per $XXX,XXX was quarter net common fourth $X.X XX% XXXX net compensation of by million noncash more adjusted provided diluted a the warrants million. million was revenue as net was XXXX shares a $X.XX fourth was period income Our in amortization and earnings per stock-based new $X.X share, positive income diluted adjusted units. was share compared period same record. XXXX million $X GAAP quarter depreciation and of earnings the fourth despite Non-GAAP year in in record. outstanding, restricted includes expense. adjusted are against for non-GAAP for and new Adjusted share was $X.X share one $X.X of million expenses quarter or $XXX,XXX of On million quarter per flow GAAP fully and issuable XXXX upon year. stock basis, EBITDA and same income the operations final last $X.X cash or income to net last

last in generate. expect type questions what to to response should they us of margins slide about Here's showed to investors' an update I quarter a

at health very isn't practice quarterly additional our businesses, excludes to our care way for the buy can X management businesses and annual up quarters the $XX focus and these which we because XX-Q, of our as Looking we out on in or so depress typically segment at our note to wring look you XX-K helpful results costs. look regularly results segment, to is better million The profits IT business.

QX. X QX, was an Our gross points of from during XX% margin percentage increase

we duplicative well XX% cycle do to in our to time large That's half We But margins is of bundled But XX% or to you revenue next over take as gross we we either our unless XX% unnecessary than a margins hit consummate margins as another software acquisition, have eliminate pure a SaaS more acquisition. gross including revenue a the major costs. and see a as expect reported should few of quarters fee, our management. until each past. to the return up service because

flow Our from Meridian. Adjusted profitability points our for XX QX X care of adjusted operations. was good IT points up up before XX% overall business during our QX QX. XXXX in It was from percentage our cash estimate EBITDA of EBITDA and QX, XX% from acquisitions margin CareCloud is a health and and

many have continue realistic. XXXX, steps, will XX% taken XXXX which or already We margins increase to more throughout returning to during very our so is

million approximately As on current assets cash drawn of Bank of capital, our Valley million. approximately $XX less line $XX defined Silicon of XXXX, of we million credit. positive December we nothing $XX.X current And as liabilities, XX, had had working with

stock, common trades NASDAQ preferred our level market MTBCP. A ticker Series which also to the addition under we on the In have stock,

dividends of preferred be perpetual, at and share. stock Our at per is XX% the $XX redeemed pays per monthly could it cash while it our at option rate annum,

We dividends. have paid monthly XX consecutive

XXXX, by million close acquisitions our and the which preferred forward-looking to A CareCloud for later ending nonconvertible shares $XX.X Meridian. stock, fiscal for of of by year Series December During of I'd was our we raised net used million issuing XXXX. of about XX, some proceeds X.X guidance talking like

regarding growth guidance XX% companies new record effects through excludes organic any acquisitions. but from on of expectations of the Revenue revenue and be material As recent to annual is more, based of from clients, over million growth which acquired Hadi clients implies compound XXXX able or full $XXX our public to have year tuck-ins growth a of XX%. with to existing a mentioned, which rate XXXX annual additional and/or been is few million, revenue XXXX our of we XXXX approximately anticipate revenue represents revenue approximately XX% fifth through growth and XX% year This consecutive $XXX will anticipated achieve. acquisitions

XXXX, to over growth during comments. $XX expected we the over floor year concluding is million million our XXXX. Chairman, XXX% acquisitions for continue now adjusted his completed EBITDA, turn to XXXX to XXX% Mahmud, from EBITDA and to $XX of be reduce expenses adjusted as full CareCloud Meridian to Our the I'll for

Mahmud Haq

you, Thank Bill.

While we thank to for generated another strongest for XXXX fortunate a has our employees record-breaking with world, be been investors, in continued support. their increased and the challenging as we are our customers position ever We growth year profitability.

to now open the call will We Operator? questions.

Operator

And Cohen Ladenburg Instructions] question Thalmann. first with Jeffrey is our [Operator from

Jeffrey Cohen

questions my keep just I'll a So couple. to

forward about and well you organically, strength could Where as cycle revenue bit electronic possible us? the past health areas to as as little management, talk growth those a records specific of you going expect And far you as MTBC for So XXXX? areas are over more management, practice weakness? or year where during would grow seeing

Stephen Snyder

Growth And Chief with Johnson, us Karl have we our new Officer. also who's

extremely made So increase to the million, we year, to of Jeff, that and quarter this as upselling. cycle organic accelerate about mentioned, last we number to year, we us of perspective about and our further. and about perspective Probably think for continue had growth from last think sales maybe, $X.X invite revenue that jump what acquired every base that invest $X of the revenue XXXX investment moment, that can achieve a of from about back plan bookings. Karl, if years to came $X in growth upselling of neighborhood base, is enabled from we marketing management. of That But And in the about as during step couple organic for existing significantly increased and Bill of in organic about is And continue a if XXXX we've really a I'll organic that's that to recurring of investment you $X.X XX%. growth. And the well. been million. just think bookings an by we'll we from to investment compelling. that, is another CAC XX% Much our upselling And managing we came in primarily to our to to that investments

the the little over XX% area MTBC groups overall up our bundled from of a We're that and And of came we enterprise focused we Karl will then our ahead year of solutions. sales believe, me for came newer particular, focus But turn Another from other group. Force SaaS to and believe close to let And provide something amounts that look floor us. of bit ramping solutions. to and a that now, part on as And to that's those large additional more larger color. in Force we wins, come from from group deals. stand-alone

Karl Johnson

them of nearly skill those And the team up the have cycle onshore revenue doing onshore. and think really those to of What mentioned, As top are global X:X of We've of to to revenue at kind is I'm the X:X of cost of individuals. we people a have important very offshore XX working them That's that It's the competitors right use in Most sales than industry the standard. our the as real our doing we're is sales support in the their development, we're the do teams team over software us. expanded acquisition rate. of do more with resources. ratio, a customer using that? resources we to management managing in really How using right that particularly critically a ability recurring at Stephen we're pleased doing places. one sets. tools to play is third we're different I to cost. that's our cost same that are global the make tenth salesmen person X:X

and So think in that our marketing also from? I where for rate 'XX. QX would organic come these I'm do XXXX state plan will doubling I sales that And sales result by together we confident growth like our that of put to of

very we're that prospect. And excited about so

present to than today different prospects. was have what's think really lot a we is more it a or to X year I options ago

and software talkEHR We have platforms between CareCloud. multiple

that revenue provided direct by services have management our cycle employees. are We

RCM ability call, I We now what have on, systems. the host to work

When the process them have and help platform attractive are somebody can is we automation don't software they creation have need acquisition, Meridian extremely ways there. we looking activities approaching practices they're And intelligence from Through to our basically in Force, provide at we're up things having hospitals, want to really a salespeople but before. we didn't large larger through can all as that not now they revenue connect struggling went marketplace. in All larger robotic we're to into practices markets those those cycle and we those to group in of FTEs. Through to talking business seven if rolling dedicated private about equity we more and groups. get group change be So the sales, tremendous on marketplaces. firms, competitive work, the

has the client great In that's within addition where to revenue that, those base with one to revenue additional to and common going looking an successful focused that's Largely, services, obviously very over opportunities upsell it. last thread through provide of stream opportunity our been CareCloud with associated acquisitions to the around and we're organization, ongoing for is the cycle which services clients. year, a

thing okay. makes it Another ahead. that Go interesting,

Stephen Snyder

COVID-XX and has gangbusters. of lot a created ability Force as been well, going has

question. great you. a So Thank

Jeffrey Cohen

of and well so for the be about far as groups you perhaps of increase secondly the smaller to direct could for thinking users should we should then enterprise as toward about, talk the just Or we DTD and business, the users? number business the number more large think as me, the as practices? And docs, the in

Karl Johnson

of above. To that it kind of question, all is answer really the

that the campaigns I large to time, same and segment. practices. tool directly that abandoning to our we to marketing our So go with smaller go hope grow group continue also answers new that. your enhance with to to practices are at after We're sets But question. group activities looking not

Operator

Wiesenberger And Riley our with is next Marc Securities. question from B.

Marc Wiesenberger

of about, wondering if maybe looks I'm XXXX in you you're your say, from like million the ARR come let's In million roughly leaves guide, derived another expect growth. XXXX, XX% might to about where could you about which It year-over-year talking growth. be still $XX $XX talk implied from. coming that

Bill Korn

growth from of is a coming angles. couple different So

that live XX is clients one whole So sign XXXX, during even And go the if for live XXXX. they're not often in live, happens not we they're and sometimes up they fully months. fully things the of

worth full a year's sign XXXX. see from revenue. to get get Then the you you of up clients growth So in some we

maybe now, three of from patient probably I state years, per-doctor sort years we're sort have ago, basis. our away on depressed but were of in to the a certainly as about we steady some as or the two year a expectation, it's progresses, that second that are of although think the right volumes that is that ball, they we And seeing half. first second don't where X% year, to crystal get a going go visits not of quarter,

Of course, and colds, not do during by and strategic work of other or piece rate. that finally, at look decline, added the at marketing a as a close not Meridian, and see given gets a we wearing wholesale some our major but some we up acquired of that terms importance back. doesn't that a CareCloud when of that come to be It decline expectation, always to big excluded But in business may that acquisition playing kids material team. the maybe customer sales looks tuck-ins the year And minor reserve can picking be done right of great that kids that not attractive sort good like acquisitions. that's mask to or we've our the we've to the extent

Marc Wiesenberger

back you talk forward. track you cost should going of can the kind then about the of are And in Meridian? had on that if those much levels. below where are of there we your been cost-cutting we, trend from how rationalizations in kind expect and terms Wondering I from more think normalized

Bill Korn

and little cost-cutting before on because new was in XXXX, the profitability. Meridian, focused most trying a acquisitions on different brought were than they to So the long we that fact of say I'd they with to return management, bought them,

is news the bought cost-cutting of them. we they So even say beginnings good before on I'd embarked the

job are We're fact, in costs, nonetheless, the there track. I on has started room. doing would of that, But say reducing good yes, as much somebody we a So quite reducing costs. isn't when

we be We that to or not in our terms on skirmish brought cost do that a the cost to war of onshore but systems, on Meridian, things hospital way. contractual average, expectations. also means do And win are big some in the need to recognize there's But particular reductions bigger with reductions obligations work that with clients. lose in some I'd track cases, the sensitive losing say very much to the and client. on there And

Marc Wiesenberger

kind just me. that one about that to of you business? of for services we from demand in then pent-up see? of cadence are XXXX? might there maybe talk anticipating the XXXX kind changes activity you And seasonality normal alter delayed is cadence And the in And final Can any one the some of the normal

Bill Korn

that QX us is health care people have in and of is cyclical QX this their always industry, cadence deductibles plans. for normal a Lots for in Our low. everybody

So see the when pay in pay. patient is the QX, for the the within bounds, doesn't then claim wait anything. the to when you they And insurance even doctor

sometimes a they pay they slowly. very pay slowly, and sometimes little And

a So well. in of remember that QX. for And Jonathan Bush Athena. years guess I seven know, don't different five, typical year, I'd I it's us say question, no ago answering sort see I as you X% at decline And

from So from we're the see But second think that in headwinds facing as of sort thing and COVID some country, these same partly the XXXX. I going also effect to think of COVID. partly I you're order a of

down not not are the sick the the effects either result exacerbation you're of visits like of pediatric volume the and infections they're of mean asthma, ear colds kid's not of patient sick, that. is or pediatricians' the And colds half if order see going if to the the a I the and So lot. sort second

cadence a you're more in So XXXX to see. to loading revenue little back-end probably I see usually than we going expect the

Operator

question And from is Allen our Klee with Group. next Maxim

Allen Klee

hear did XQ bookings quarter? of a that by that -- double the is, you you what that potentially you I say the had could were and be us whatever fourth that it tell And just number you Could comment 'XX? in

Stephen Snyder

that the quarter-by-quarter that don't a had basis, for were Karl thanks growth, tell revenue invest Allen, bookings every But publicly worth mentioned release $X question. for managing to I We total we invested. million. recurring on $XX granular approximately signing of be that continue numbers. of can $X in for towards full CAC year, roughly And you bookings

to all things being year to return we'll the this in able And investment progresses. increase marketing So in equal, area, as a be increase bookings we're sales the invest year, that if candidly, to, anticipate, accordingly. being if to investment continue able another invest see likewise, XX% XX% we and the really and able on that overall we'd to

it's who trajectory added fourth XXXX, think do members a think that upon fourth our of we closing and that team, team of we $XX been ramp-up the think during look were terms of be hope hired full newly and the per the in if up the million that we $X million based that quarter ramping million rate have speed investment if our if could twice average by down marketing quarter we team on where break average for think think quarter. you and to by we we realistic and sales XXXX, anticipate and And sales was the $X.X I to as year we the about from that quarter what existing average we about we of per So the on to at XXXX. at be

Allen Klee

And understand, spend? and to about XX%, when say sales you just you're your XX% so marketing increase to talking want you I

Stephen Snyder

approximately. yes, correct, That's

$X.X that we're SaaS think of year, or increasing company and that if like see million upon are sort roughly a So XX% million yielding we of believe be SaaS-enabled, to the about and getting and And surpassed which about anticipate baseline of during by the results that XX% roughly because as XXXX, about invested XXXX, from $X we we having invested the which as $X.X the we that prior based far that marketing investment XXXX, norms, in we service to million sales investment that the tech-enabled we recurring think revenue the taking $X market ours. in very we year really we'd to less of result see progresses. that excited contrast $X.X

growth, of come customers majority acquiring growth that that significant the we the fragmentation that to our that have overall competition very exists vis-à-vis wildly that that And we attractive growth future, through really look from our be in facilitates continue as these come and the have return we'd And on historical and and the value, in are even as believe of a the investment, to our because just at we whether that to future real market. and majority We investment. wholesale That's progresses, So advantage experience to built grow continue in us way scale believe that excited of really the believe current technology we will if we I and successful sort growth terms can we the year, strategy. the strategic add and in growth incorrect, and through acquisitions. it past, we that will that's to through strategy correct that where tell that of still believe most believe or continue suppose. achievable. the the of and will see our we But it's we're the

Operator

And Baldry our ROTH with from next is Richard question Capital.

Richard Baldry

willing organic as sort attractive in and naturally situation? curious ROI cap on look Given that even process a marketing sort seem create dollars or that those maybe seems multiples to how you'd thought of to would of point ballpark if that what would efficient I'm multiples M&A sales you've does pay a an like fair. natural be of is, would around those into It breakeven expand, revenues, growth. more sort done built

Stephen Snyder

those acquisitions acquiring some and revenue of that revenue we've customers also somewhere standing. about to think other historically, the with good base of for and cost that we the customer neighborhood a higher. has If to in see a that Meridian, And in overall you'll acquired, digital X.X acquiring more acquisitions. we our look larger addition percentage we bit for product were of the that sales cost that been and CareCloud really came the the higher if relationships assets X.Xx portfolio equity MTBC brand additions recently, of also the with associated in was at in as those done we But was terms to because customers

look invested, that those if why can acquire very our we of And back scenarios to that solely not focus we to they recurring able can acquisitions, to in revenue, more terms CAC be in relationships than on we going way, a our market $X to about that at at I the the us these to of limiting be play, in just is, scale? perspective, by acquisition, we think model when element that And quickly quickly acquisitions. answer of would gives to a the acquisitions. at over combination reality from honed there's of How and through yielding or override scale. we're we acquisitions? continue that's of there's through organic $X continue be question, bypass scale. So essentially more the cost-efficient accelerate through also and slightly effectively also, the both far organic decades, natural in your terms customer the can of and cost-efficient growth an if, capable, a in applies growth grow be and or processes can some technology factor virtue in a that another it, last expensive the more and can it's fact, the two experience we've to And ability to uniquely norms we

Richard Baldry

of are things easy-to-plan, Has COVID more for appetite created again sort people either of easier-to-execute price patient willingness forward? pretty people -- visits Historically, at terms company disruptions disruption at because pipeline has or COVID's would have and a the and sort face battles Thanks. the looked impacted have opportunities like look at going that. of they've sell market to seen willing less the And given in outright seen. the look that with as those challenges steady, to maybe how at Force where to partnering more people a of curious might maybe fair selling acquisitions, MTBC

Stephen Snyder

grown X be every also, Part very of candidly, trend. would continues that or say year-over-year. And but the is it the years, to the I could I Rich, consistent with today. year last be would say, X case virtually, COVID, for our well it overall has pipeline

Operator

question And & with Dougherty Co. is our next from Mannheimer Eugene

Eugene Mannheimer

ask to has rate your wanted over One I as couple changed of how in so bigger, the the is, business that profile revenue time? a of much natural gotten attrition has things.

Hadi Chaudhry

in talking even our be in practices we or around before years up the number an practices kind end number a of bought number on and finding because was acceptable XX% we XX% X many XX back, groups, larger they who same on. and some retaining on this other times, typically, about terms so other of solutions so industry being below have year, mergers, so may been or number that we factors to RCM considered So what come. about were say XX% and in let's the of on. because to of industry, And the anticipate of attrition But due so integration patient and in that and for by are this retention. even to are we the improve even slightly this XXXX, the And year, year to further for numbers the number any

are we even we own expectations. So surpass happy -- our able to even that report to were

Eugene Mannheimer

assume and I you Can the believe going set that on the some out any ultimate that played how that time to were there provide purchase at respect CareCloud targets I'm pandemic. price color revenue. achieved earn-out that the to With And on acquisition, there? their given they hinged were not

Bill Korn

that the the sellers. usually year set do, there was better earned we by And candidly, they earn-out their I'd than year best when say, a no parameters, Eugene, have CareCloud as XX% $X were ever you're would And aggressive. we earn-out. needed to pretty correct earned or we earn-out of probably have

earning times, in bit very therefore, without So of have best course, And would of a revenue. then of real difficult. earn-out little the COVID, they a been lost

nothing from beginning. which, that expectation was there earn-out, the candidly, our was the terms of So much pretty paid in

Eugene Mannheimer

now -- to respect have given the struggling. the guys, pandemic, more imagine with are from even that the robust I smaller vendors acquisition And been they're struggles there pipeline,

be this very more least deals last You it large that did would color we great. year. year? would one see I two at mean there is reasonable Any

Stephen Snyder

insight we targets are company. have I the as where think can focus the that element we we in it's, acquisition the, model can is that that address, strategy the combined together pursue, of on that that targets absolutely, correct majority we Yes, be stronger we a business would an in their that think the strengthen, especially that

companies in acquiring. exists business doubt usually that no models there's stress increased the of stress. of And element COVID an there's So that we're the

time and that from have have lenders exit the effective and strategy probably a in comes exiting like under believe, would the On from that's CARES and nevertheless, for to these of done the companies a some understanding of have avoid more is exit. down and impact other provide companies shore of overall enabled forbearance up PPP Act perspective, very terms in in of the an amongst regard particular, to time. really the helping a temporarily That has otherwise has of landlords job only caused in to also estimation, companies the the caused perspective, flip to some an payment And incentives period factors federal terms extend creditors, broad-based with we enabling grace that that side, government's good a with to a Again, been COVID mitigating of real. that and that, terms. our that, investors' combined for to delay very period

it. if that, time if that can you exit holder, ideal to equity an to the you're the addition cognizant fact not In probably very this is you're of avoid

of per all changed fundamental factors haven't X the think dynamics I those se. So

In believe. And see anything, enlarged of what does has, the overall we universe valuations. if the opportunities, to that fact, relative we'll COVID

strategy, exit However, of overall the we these additional those time companies. X into elements have created many of in some terms that's believe, built

can is question trend. than was the I this your year? bigger But bigger particular, So this a year certainly the is larger in at what hope than that acquisition We that this it and and tell was It last that's be time, today was be next so. you the year be before, pipeline it will year. to back could might there It year.

Operator

H.C. question Wainwright. with Kevin And Dede next is from our

Kevin Dede

How I smaller right, the just shift, versus away? color just course like could over dynamic the the year. on maybe And your practices see larger pretty however or you you'd ones? little addressing some Steve, a it? a of it's Do of or insight see you the business at more in MTBC on, mean change look base going do give amalgamation brand us to you

addressing see you could just So brand how future maybe talk and you clientele. the your it to clientele and

Stephen Snyder

from CareCloud, ticker. that we That Corp. ahead, we're but leveraged me a right, XX changing on question from we in granular more And change. from Inc. are shift, the regard we're terms what is, to you're of overall that we're and name is organization to MTBC, We're to the broadly think beginning alluded the Transcription about to your changing will more about acronym remains the the it. Mahmud be address from we've provide continue years company months why came initially have and what and pretty details, Inc. unchanged. The you Inc., doing the and Billing, that to, the the briefly the us brand MTBC Medical planning and maybe just us recently with for The that our ago. And values steer very from in set founded and the we'll more throughout common significant shares, our We're the And steered some name company our as services excited continue stock not what let very when solution doing, the of today. parent preferred. MTBC, MTBCP changing which for

convey throughout in last, something And needs extension, fundamental focused that and our haven't been on a power of the or from company, doing those couple decades, increasingly of focus elegance rebranding been the grown, the this our able with over scope leverages a long then, proprietary in been delivering There's the offering rest been to which care grown today or through the well direction. So regard of technology. merger. doesn't of to overall and the a it's health belief our itself and to beginning, of value we've real the fully embody the the that delivering market being and to grown the it's, the really cloud-based expansion by with the care MTBC doesn't assistance really, building that of global in we've transcription brand focus since and And overall has Instead, things of technology, fully increasingly and again, patients of past it's terms Mahmud has platform, that this way health the care and changed. And last also meeting solutions, providers the And on evolved, we're provide platform. us as value this team. solutions. that a the the proposition going our has billing evolving of market solutions will the

in a of working client will customers, customers a us unified after customer to and market go-forward be a CareCloud, for relationships, go-to-market, and the experience, go majority with a of of go overwhelming of those under brand end more to at perspective the create those the be help our the official under seamless And we'll terms CareCloud. also existing we'll will from We'll date Inc. So March. market that that

Kevin Dede

going Hadi, the you're shoulders, project big this question talk my customers? bit your what to image Can op falls amalgamated to in you friend. your do a to on little to have about on the side order

Hadi Chaudhry

No, you're right.

on subsidiaries. to the to employees as our XX things next they of clients the on a in we number of CareCloud we other So internal representing any instead the the days, mentioned, a communication how MTBC start as company working and will have Steve lined even of have, to or terms the keep of over up one

place. a So we have plan in

properly. XX the with round in the on working, be they is is We a to more some announcement. There first one-on-one are with of had enterprise-level that make that conversation done the But next we one client plan will we representation did individual much the sure communication days, clients. over working conversations. are We

have, in communication to place days we we communication. external in over a plan have address internal short, XX So the next and

Kevin Dede

I'm I it, the through packaged little everything just to continuing What think offering execution you're kind CareCloud's I be the at business back least mean that I just about offer you bit. as full integrated guess had the just while how on of of too, understood MTBC's. And to about talking back end. goes that wondering terms about, I'd of is me a expect basically, on what systems? I what whereas, indulge I mean And end, in

Hadi Chaudhry

be one, our call, there detailed which couple coming I planned type Steve we strategically things. that mentioned up in have and we the the few anticipate more products months, Number weeks to coming mentioned a specifically a press And of we earning about or will will some over more as that So and release next week. we plan then where will more customers. which address talk things of in

what So relaying some the Let's right is going still we'll on. something the be forward I of that think that group are details things be say that the for clients because leave being of that's clients the of or worked with? talkEHR, category much we will those I'll for

precedence though, over sell almost maybe we say products of just the of end that merging today will the all about experience will Breeze, existing terms products take which we we'll some let's few have We into exceptions, management in up talking to have. we with continue, probably the that another, patient

tool Precision BI, our analytics containing as have MTBC's side, our such work Already, clients of have to already rolled engine. continue product integrations to out the our we with providers. products integration and On the completed X,XXX-plus we enterprise-level one other on between over the

already to have it production. started they in So use

working I if we of step same the the back, on number products. One, So things. so way, are a integrating different

to go isolated between have So they don't need the products. work and clients the to

or second, right will product is the are over right the in be That X done day and communication press release, nothing size announcement months. type client. the of addressing which or the of couple is market next we change with with a proper will clients. other some which And The target that way for for along weeks third thing

eliminate We to short the are products not the going in term. of any existing

say, the They none away. system maybe, of transition. the is CareCloud be, or go is based and let's will going someone to or if over So using, can that on and direction, VertexDR system system, talkEHR be time,

Operator

BTIG. Larsen question next with David our And is from

David Larsen

expectations about from Can how for portion telehealth to Like are your going your as base? for of that's revenue? forward? impacting your coming you telehealth utilization related revenue talk And your client and that what what the is rates

Hadi Chaudhry

different do be though, share So to all, the products from revenue we first trends of disclose, of different But some numbers. type the the of the stream practices, that happy have. I'll the not and specifically of we type

the seems do we went XXXX, in started but adoption settled technology first for As then total believe all, the January telehealth-related have Pandemic participants about the that the from to more XX% before, technology the even either back the participants participant, in and survey that to the pandemic, on at XXXX they XX% and That perspective of quarter. We of telehealth-related come. site. around total available of even to go the about top That more of future. side. at the most XX% noted was survey about of they utilizing entire details number more be of too, will number somewhere to if that first X.X% mentioned out the And the more towards the we encounters. at and the telehealth be of year in be the the look more what post they encounters, there others, to telehealth to ask the continue or is that be are the telehealth early encounters. of over try And to will -- relied that X% a see on There XX% Web tried on have utilization the be the the look And encounters, how literally of practices utilizing did of the seems we late it now was believe COVID more up to total will to technology. number the and adoption in since survey seems services -- that is the CareCloud end what at they down encounters. they

will be in year tremendous a the it So opportunity come. to

Operator

Benchmark next question final with Bill The Sutherland is our And Company. from and

Bill Sutherland

think profile. the quick products curious I if believe that the I'm you for into as this Do the of on that? or And than will with will then resonate base the question maybe customer same be initiatives. area your in customer new that think product traditional sets get focused you Karl, similar maybe -- you also mix enterprise be CAC better a there will

Karl Johnson

let address product first. So the section me

larger to with by I enterprise really think CareCloud And think that's a good we enhanced Precision attractive the product, particularly extremely resonating becomes BI, them. practices. fit

that we company. along that way. $X worthwhile the kind a of Certainly, far of make incremental spend, look continuing the revenue, that's improvements the we're think As CAC you. $X But as to goes, in always X:X, to investment to we Thank of that. match

Juan Molina

And Juan. This maybe, Karl. Bill, can if I just to add is

and or come markets, small peers by our right, solution you etcetera. So of up the some bought segments architected, I the one a which speak, those we go unique that tax specifically to stack, down The as we differentiates two kind under in technologies private us or particular or have gives kind opportunity, have to think very doctor what different go products operate in us to can are broad of XX-doctor spaces, think, across practice, very We say, back need or a purpose-built the to but that is don't think market ability in have products very those and take we to step understand how the a at and necessarily and segments practice you that's ID in for about is of and so equity, unique. address we the ambulatory needs I a let's market, not to to multiple when the capabilities a in together in consolidated difference XXX-physician try that products kind to kind space segment between specialties, that of system being XX- of go market. are XX- of And us purpose-built practice health the only well. versus those really our or you and really space, go and look the the can a

services, the we stool, that I kind patients legs of patient ability bag, combined So it think management need, that those of to of our that, mentioned where solution kind experience really MTBC simple, in BI earlier what by an our have more or other Breeze. practice clinical you even and EHRs, systems like management whether cycle right, have opportunity coupled financial attacks in with solutions and to with then and the or our And it's three a ancillary Karl the make have carry the the management systems RPA built Precision are revenue us and Force. that the apps

think we strong into go larger, market really value I specifically out as deals. proposition the gives enterprise it go into as complex us out and incredibly more we these an

Operator

would Ladies and Blanche the back Kim of question-and-answer reached the to I to remarks. end call gentlemen, session, closing for we've turn and over the like

Kim Blanche

have everyone to you, company, today. joined your as day. Thank we thanks our a great extend participation We who's to and speaking you in to like again us We'd to quarter. forward and look and us appreciate a next interest

CareCloud (CCLD) 27 Feb 212020 Q4 Earnings call transcript