INOV - Earnings call transcript Q3 2019

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Operator

Good day, ladies and gentlemen and welcome to the Inovalon Third Quarter 2019 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. And now, I will turn the conference over to your host, Kim Collins. Please begin.

Kim Collins

Good afternoon. Senior of Collins, at Kim is Vice Communications President Inovalon. This here today am with I Dr. Chief and Executive Board Inovalon’s Dunleavy, Keith Officer Boldt, Chief and Chairman Inovalon’s Financial Officer. Jonathan the of third to you like earnings would I to our call. quarter welcome XXXX

website. results on The the was page the a of Investor third and be will Inovalon’s for today’s press Relations afternoon our call this available quarter announcing replay release financial distributed shortly, on posted

that the For and you you call, to we of rebroadcast as the will updated subsequent XXXX this made those to earnings of remarks today, the of listening be XX, are herein initial remind October call. not

I under statements could statements future growth results will future this forward-looking the during Private position, made of operations Securities operations. for to related Those to and Act number cause certain factors business actual market remind a including plans, you financial materially. strategy Litigation and statements XXXX, and as call that maybe differ our objectives of characterized Reform involve results our that of

concerning the Additional with company’s release the earnings is in contained filings factors and SEC. these information

In webcast accompanied of a an investors, which information additional IR presentation, the available is is on our by call conference website. effort section provide this to and to

a encouraged with our presentation You’re prepared download copy to to remarks. this of follow along

includes non-GAAP also financial certain presentation Our measures.

of the You release will the find definitions charts website. measures the company’s end earnings and of at these non-GAAP on company’s reconciliation and

the my call Keith turn to pleasure is to Now, it over Dunleavy. Dr.

Keith Dunleavy

thank everyone you, Thank call. Kim. afternoon, you for our and joining Good

as modular the And that more key a customer diversified legacy transitions. our enterprise the Concurrent capability and unique from We’ve a based end We’ve with sales on our empowering these approach. cloud healthcare. we’ve several of number scale subscription stand approach. key increased market’s approach focus cloud foundational more complex the years result, a We’ve today platform and from sophistication is transitioned the pillars based structure base past of transitioned organic acquisition the on technology dramatically leading the our and to across strategic based expanded of we through contracting an platform we’ve driven approach of streamlined focused development. to a Over objectives. and our data executing provider four

focus ability we primary data strengths our the manner profitability have showing care connectivity, bar and to is for of we raising the driven performance and how that We’ve continued automate focus this structure degree to strong the growth the in by and differentiating focused source on up processes analytics healthcare which point the depth impact the to our we organization interventions specific and execution we operate. ecosystem patient on our sophistication the still From on of associates the empower primary of of sets, at of company. data of further of incentive

On a trailing XX-month basis, revenue was up XX% year-over-year.

started $XX operations. cash than from year a organic and ago we’ve X% margins million two from was ago saw of increased EBITDA trailing down greater payment an of provided the that the increased XX% organically quarter From sequentially versus quarter increased XX%. increased ahead and from our flow XX% growth This additional years million year a the schedule our and our from $XXX free XX% cash from excess $XX to pay up increase more million adjusted XXXX% and quarter flow cash XX% than debt third with We’ve than we’ve XXXX. we’ve to operations from our our net ago, gross versus greater to period our XX-month we’ve to margin of second XXXX of reflecting

raising per the are and net non-GAAP ranges. reported ahead revenue of the we’re income profitability or our our guidance and ranges income we’ve quarter, at for again for consecutive income, EBITDA, third non-GAAP and adjusted net the income share, share for per consecutive end the results net For that high net quarter third

For I of our day. us who tremendous all with my of this, of despite now accredit and victory credit it a time But to strong a associates Inovalon these the all are colleagues, doing honored customer take job is positive, whom partnerships we’re every to all for work lap.

the to that opportunity of lot us. ahead have front here a not work We’re we have significant in celebrate of we to realize

just are indeed getting We started.

accomplished, with exciting pleased me So advancements I allow we With that XXXX today, us some excited of speak on touch how they strong you we’re the have positive and focused but and to remain messaged is that beyond. what to and we execution. in and

continued the to our platform them. advancement the is capabilities responds portfolio and of First; markets

cloud capabilities or based risk base, pharmacy XXXX, hubs our significant strategies pharmacy specialty platform all exchange been capabilities. platform launching ScripMed from EREMs areas client supporting electronic to evaluation mitigation of in During we’ve and and supporting

by Additionally, our or Elastic our we’re all burst meaningful also readily platform clients are selected extraction supporting sales. processing language health exciting desiring We’ve population natural Technology new analytical runs. of news non-structured seeing to initiatives, the EHR data modules and now modules data offerings or accelerate of seen being Container automated ECT companies clinical

the time and We’re about very toolsets in of of data Inovalon’s the interface of availability patient midst growing capabilities utilization through of transactional supporting the AI of specific our excited supplementation applications [ph] cloud-based Are our APIs. real NLP launching tools arrival a team larger new expanding capabilities.

examples are resulting clients, All in delivery that of and of benefiting growth. sales value driving are these differentiated demand areas our stickiness client exciting

is expansion Second, of platform. that client patient continued are the to the the connected ONE populations Inovalon

reach XX Recently, setting and year achieved its to as expand within is an of its even the for populations to number large of which land clinical greater new population benefit become add that to evident solutions the new member improvement the and expands. organization more implementation utilizing so organization. the continued new has has populations occurs contracts the of are Inovalon respect strong will clients, of incorporating of business additional The ONE positive that logos platform, scene new expand As this far Inovalon as entered logos positive expansion value value benefit base, in A classic very into quality customer patient and allows continues for Inovalon’s performance with XXXX. client of demonstrated. Inovalon’s expand Inovalon expansion economic

these are what We about Inovalon as financial what population they they the performance for reflect market excited and expansions, the place far by in XXXX. as portend reception

ONE healthcare to why demand positive impact the expanding differentiation wanted and I marketplace bringing all impact market this positive your into to and meaningful Lastly, Inovalon clients is both the of attention and meaningful that the translating value platform is ecosystem. on the the

sixth in a clients Scores. the of of clinical utilizing the place improvement for known Monday, outperform the Star Inovalon’s row their market platform performance on as year reported scores As the rest and quality

nation software XX, CMS a services XXX% their than clients as While the Inovalon on clinical whole more scores for reported quality utilizing not by or as Federal Government’s software. October the improved improved and Medicaid Medicare those Center nearly Inovalon using

analytics Inovalon’s intervention breadth capabilities share of differentiated differentiated and connectivity, highly are resulting land opportunity. market highly data delivering driven expansion in tools and and data, expand stickiness

cross-pollination the same but and experiencing are ecosystem is This clients the our between As growing growing. the example, set silos our scene based effect [ph] as platform, meaningfully deepening the are value the coming Inovalon differentiating a on These differentiated delivery. effect, the network breadth capabilities realizing and into additional the the and The ONE patients integrates within the of our is performance delivery result. Inovalon of translating of one barriers motes differentiated its increasingly expanding, between for platform and and is occurring. platform and increasingly into client populations value down number network growth clients Inovalon is

that, end them. as With comments I I’ll my began

to to of the Inovalon. we’re the proud performance the the and value our and We’re clients that’s of resulting strength execution seeing is it that delivering for

third strength. our of marks important an While demonstration Inovalon performance quarter X.X

path We’re point not rather the many as exciting today the but celebrate, of steps. an data viewing on

which have our focus opportunity and much to and our shareholders. to execute our associates clients, we much on on we need this great to which behalf of We deliver on need

and review balance outlook With and the of to Jonathan? to call our that, please the to for the me XXXX Jonathan results of allow the turn the quarter over ahead. year

Jonathan Boldt

to remarks. in points Thank you, everyone. begin Keith highlighting good few I’d opening building like key by and Keith’s afternoon, a

First, end the solid non-GAAP our execution of EPS another above high results ranges. financial EBITDA with or and at adjusted the quarter revenue reflect third previous quarter’s provided guidance

guidance guidance range. third quarter Second, the our full consecutive range XXXX year our increasing for adjusted and revising year we’re non-GAAP our tightening we’re revenue upward or and updating EBITDA range and our this guidance within GAAP earning’s

growth guidance cash setting to revenue continued fourth; of XX% the before is to forward our guidance million strong diluted of adjusted XXX% we’re X% of guidance for retention for strong we a our with income $XX of non-GAAP positive company providing net EBITDA client organic net rates, annual again to begins with and outlook XXXX October growth and debt financial in repayment continued pleased income XX%. per to payment mandatory growth flow of and XXXX of growth XXX%, XX% on to the sales X, and to initiated X% provide our incremental share the acceleration in year XX%, Third; obligation our

to quarter third turning our Now results.

and relationships of and an our revenue quarter X% year-over-year million, compared revenue of from was increase revenue to an XX% of third of reflecting year-over-year based million in of of $XX.X from in the $X.X the of grew increase increase to these platform existing $XXX.X XXXX, of customers XX% was revenue increase driven offerings. new million third organic sequentially. revenue expand XXXX XX% Subscription adoption quarter, Third continued quarter by organic customers million reflecting an $XX.X platform

third XXXX quarter be continued XX-month rates. an continue growth XX% strong growth increase and client On XX-month revenue XXXX new contractual revenue period. retention Trailing third renewal was $XXX.X a XX-month the of trailing quarter basis, XX-month by compared driven trailing strong of to to sales trailing client million,

in New or services. and million came million annual at excluding the quarter sales, $XX.X ACV value contract $XX.X during

this down that and to and size in While is quarter-to-quarter factors numerous timing year-over-year deal dynamics result of important as signature can it remember variability such is metric. ACV

higher gross gross a as increasing scale offerings. driven well efficiency strong margin, the XX.X%. gross Turning continues as XXXX product third of company’s margin shift to margin was and be to platform Strong quarter by value

$X.X for performance million scalable and increase $XX.X year-over-year Sales $X.X the company and expense of the through the the was demonstrated third offerings XXXX, has and growth. an As company’s continued million, million company’s sequentially. XX% structure or delivery nicely profitable, platform for quarter marketing position

of compared of a Sales of quarter to X.X% the for as in third third X.X% XXXX. was and the marketing revenue percentage quarter XXXX

trailing XXXX $XX.X Third million $XX.X period or marketing or XXXX quarter million quarter million expense $XX.X XX-month sales or trailing XX% third XX-month revenue of of the revenue. increase was of compared X.X% to represents an which X.X% and or

marketing sales focus be strong by continues engine in revenue and investments delivering to driven company’s in increased organic Our growth. the

of XXXX positive a operational which to $XX.X in quarter represents third and expense million X% or General the continue demonstrate increase administrative was only million for of expenses an year-over-year. leverage is and very $X.X XX.X% the quarter. only percentage G&A third gross drove of XXXX the of during margin third strong the revenue expense strong in quarter Increase quarter compared operating was profitability revenue, with of XX.X% continue XXXX. efficiency and only

the expense of a $XXX.X includes activities the EBITDA of $X.X an of increase Adjusted XX% the million third X% XX-month the on EBITDA third compared impressive $XXX.X an adjusted $XX.X and of million quarter of the sales XXXX million. increased EBITDA which an investment basis, million. inclusive trailing increased Adjusted to $X.X preceding for increase period, XX-month when investment marketing million third $XX.X and was year-over-year quarter margin in quarter during sales marketing for million was XX.X%. or and of

quarter ago trailing year the compared Third increase XX-month period. margin was EBITDA basis XX.X% represents XXX point adjusted to XXXX which

XX% $X.XX which third $X.XX XXXX quarter non-GAAP income increased was $X.XX XX% and XX-month period. during preceding from per XX-month period. the share ago income And non-GAAP $X.XX to or increase XXXX share an of the Third share trailing net per year was net per quarter compared

of and Turning was interest of to the $XX.X payment provided cash cash incremental our million. quarter service net $X.X operating payments flow, million an for after acquisition $XX.X consideration after third activities contingent of debt in cash related million XXXX by is which

was million the to previously of return $XX.X Third back towards company continuing as quarter projected. or CapEx revenue X% historical

the increase year in For compared Inovalon period. XX, XX $XX million XXXX free X,XXX% trailing the $XX.X as million cash September an in $X.X generated or million months cash to flow, ago positive of flow ended free

strong cash of Importantly, cash this the business payments. capability. outflows interest Further incremental $XX.X cash cash after company’s million very generation free was highlighting in models flow flow

CapEx by same XX% to over Additionally, million or to $XX.X levels. see we the trailing as XX-month decreased CapEx continue basis normalized returned

XX and earnings CapEx supplement on Slides on Additional details can deck. XX XX-month trailing be of results our found and

this position outstanding financial company reported Inovalon’s sheet, million the $XXX.X of remains our X.XX $XXX.X its any cash of $XXX.X balance debt solid. had find equivalence position of under sheet our $XXX together, quarter Bringing balance and credit the The $XXX.X debt debt with to Total On drawn QX as net the and all approximately million debt revolving company’s credit million company of net of facility. end million the ratio cash was million. of not and exited agreement X. to the was as

from announced today, we million earlier company to initiated schedule this million estimated our This million pay reduction facility. revolving flow was increasing incremental of incremental and return of $X.X payment the in above decrease our the As the today, shareholders. made no to end of cash subsequent from down million quarter. payment its an with repayment of drive accelerated mandatory interest one-month the company as debt an expense of our cash LIBOR quarter, rates, $XX an continues surplus of annual drawn thereby amount and have $XXX will $X.X current Using principal credit to per operations on

me year financial XXXX Now outlook. on updates by a guidance XXXX conclude and the sharing full company’s let

as the revenue to to $XXX be tightening year-over-year and we’re of to full range provided XX% reported revenue XX%. For million million organic reflecting to XX% previous XXXX, growth of first $XXX XX% revenue our growth year a

once we’re GAAP EBITDA. again for our GAAP and and per net non-GAAP income guidance share non-GAAP net Second, income, adjusted increasing and

million fourth for XX% in guidance XXXX activities. net compared of provided third, year-over-year prior in as share And see results $X.XX capital between This reaffirming XXX% income to quarter increase million of reflecting and million growth we’re million a XXXX. XX% to increase guidance $XX follows; revenue $XX operating $XXX XX% quarter our by a $XXX we expenditures ranges be $X.XX XX% to to fourth we net of diluted per cash the third, to year-over-year to adjusted non-GAAP We see to see EBITDA and XXX%. of to year-over-year of

representing Looking XXXX $XXX ahead, follows; first, XX%. million see of revenue of million financial growth organic is outlook revenue as our $XXX to we X% to

Second, we $XXX X% XX%. see to million million growth EBITDA adjusted of of to XXXX representing $XXX

see to non-GAAP with to $X.XX XXXX diluted range of to net XXXX XX% million of representing $XX increase income expect to $X.XX finally, to X% CapEx share flat And we our year-over-year CapEx be million or $XX per year-over-year revenue. year XX%. Third; expected we of full X% of

the in you We ranges. deck our XXXX to our refer me With that, for over operator supplement to to earnings in third quarter our more earnings session. release encourage today’s back our to turn Q&A details guidance and call XXXX let conduct

Operator

and from comes Morgan Instructions] question Stanley. Ricky our Goldwasser first [Operator with

Ricky Goldwasser

guidance. of know the about very thank you showing the all all, nice about the next us you’re this of expansion when first had when much then questions second very of, more there, you opportunity But the it year. year early So last obviously quarter, on next comments color I provided us that think year. expansion you muted on you for that we give about like when of we margin you And on kind early talked that? fourth just into guides margin some seemed can think visibility

progression it can because you you’re new So think the about when and seems means should XXXX margin are And think products be base. we selling service how about the about customer talk that your should lot thinking offerings of margins you’re the how what the to to maybe margin product? we when that about and new we outlook, introducing there

Keith Dunleavy

for the Thanks Great, questions. Ricky.

four think quickly. or of them I a five have I [indiscernible]

call. really the good. taking out for for thanks is first Visibility the time So

we of transitioning client as we about above. XX% XX% very the very positive excited XX%, have to growth power in know period strong you strong a pricing the year were all from Last retention market rates We organic growth. negative

a from to wanted the XX%, lot So visibility we a that of to provide rightfully swing market. XX% a

take the market But realign pipeline, raised beat this took way today. at visibility, them really as these and thing. as after opportunity hit wanted to out time We onto again rates really questions. retention through in that, We metric quarter-after-quarter on also moving at before really some out strong and information, and/or then give looking a giving numbers our our benchmarks. through last we look with and spent sort the competitor other XXXX what strong year for of were This having clarify think I’ll space to put and really peers and really your of nicely we we strong on visibility the year. then processing parts your we marched delivered

throughout we a XX% that to illustrative there’s the In the X% expect cadence there, for should year, you quarter basically each you should Slide quarter. shows graphic an revenue Street supplement XXXX over that deck the the so in look XX graphic organically gave

in nice XX%. like X% XXXX progressive the in a you’ll same just to you So see XXXX, cadence saw thing just higher,

we’ve of The words number ability it that more and quarter think on single marching second We’ve the is to on and I operational is show with comments used. automation, number forefront. progression thing connectivity our XX% the muted here profitability up to the XXXX every strong virtually you you more leverage, and the of increase strong really bringing EBITDA increase seen are asked the made profitability, in

spend been to this and markets and see will investing pretty loud expanding in in further accelerating going marketplace growth do. you if us how about new what want products We’ve profitability the we that’s to new and our you’re on

been marketplace. we generate to strong the very really that’s So hope that profitability, ability clear to

taking and advantage broadening comfortable metrics will breadth. amount those want our further profitability good a spend on you We of money levers of if and growth our to have we accelerating very on further

profitability is So control also. strong conveying what and we’re strong on that profitability

products the with I’m question existing if products new interpreting part versus products. of to it had new then your right, last do and And

number capacity receiving So to implication. things a investments Certainly our your marketing expanding different product our as offerings sales and and sophistication in of well investments. are expanding in our

portfolio for, [ph] that tend is their products a profitably very New of as Inovalon do the we initial a those find and and broad you what the gives we strong a if to little market we have base us blocks in the that will to to nicely looking of profitable client the platform ONE be on to to year less bring inbound advantage they’re one. from lego have market use capabilities as launch, but quickly a that with product indication modules us what

on we’re you’ll see on So launches very from content and there what new product them. content profitability

Operator

our question comes Demko Thank Citi. you and Stephanie with next from

Your line is open.

Stephanie Demko

Very similar does it to from were prior year. mid the deceleration your line at the imply XX’, guidance, just some question, XXXX you where top looking this

balance just you’re So these that’s contracts. seeing or driven versus to know conservatism grant large visibility as some well you numbers off I’d love some that [ph] the of from larger

Keith Dunleavy

Great to Stephanie. well Yes, have of the you on first all call.

Stephanie Demko

be Happy here. to

Keith Dunleavy

And of this to we definitely of various versions credibility and under to clients the than I’m conveying continued market, it, function the the that all here. appreciate involved. reliability sure the we’re to was is demonstration to sure you as our making marketplace question and a expectations and promise deliver know us a all lower and over we Certainly from bit Street of

an strong what but promise seeing into going it’s hear correct, you above very send our revenue conclusion that to very ahead to mathematically, them strongly year, very very about So customer under million on to consensus the we’re we’re you’re good base we well, also was and let’s and but things in and the we if want are from and unfair excitement going marketplace not significantly we from deliver. that’s earnings coming want Mathematically confidence message, and well. over the go EBITDA $XX where to expect

Stephanie Demko

Understood, create kind record. that in makes to order that of sense [indiscernible]

partnership? topic, With a or have. for more them on follow-up EHR foray make tools Sterner and make your thinking data players that extraction the opportunity like data, it does healthcare quick one competitor [ph] just now an of about tool does entering Now your different that into you Allscripts

Keith Dunleavy

should typically organization see that and this out mentioned you around a to XX% so a stuff they’re and a how do an hard to ladder there one is great any has or managed small patient would or patient’s it, window, or Stephanie, be have to EHR's entity window, We organization really really improve not are roughly market small properly they adjusted upon life in great or presence, diabetes any It’s for a that only is analytical so predict of those window being but tough patients’ have if forth. important but still that. to capabilities predict the on changed an data clinical clinical agents obviously it’s on whether whether not chemotherapeutic

API that of sources, assessment sets, the as data. in a and about that also sources across you in heard rolling forward a can platform of couple multiple a do pharmaceutical the and So different partners patient sit to an networks, already. sources we’ve lab that to format. not view API of they seconds that’s excellent analysis into the The bring the platforms holistic offerings and of [ph] aggregate HIE that, multiple from what into you’re all them but to anywhere brands, have lot our space the multiple answer about Supplemental administrative prepared decision that Inovalon the calls data securely EHR claims in sources, the here XXXX, move ability aggregate analyze different of into support, a our hear sources, platform tool the product aggregate a utilizers and only different the we transactional EHR back our data remarks frankly started it, something from just strength data on broader Inovalon API are gives together in ability mention with supplemental us data going

EHR putting of capability the any excited We see marketplace marketplace. it’s device, be care point in and device, applicable and clinical in any any environment mobile we is unique the to that to see that in we’re work

Stephanie Demko

for question, well hear, thank Steve. you to good the It’s taking

Operator

you. Thank

Sparacino Frank next comes Our from with First question Analysis.

open. is line Your

Frank Sparacino

wondering Earlier, give me. about one then just you of pharmacy things. the touch could just And also, you update maybe on knows, an talked side from on. perhaps if ScripMed Keith,

you we’ve in been the in some terms I think that a contracts of the talked pharma. those are was I since some value ago, of signed it’s know perhaps interested in were had performing. with recently I about while AstraZeneca, but how of a or some Thanks. news year based contracts more two

Keith Dunleavy

Frank. the Thanks really that The growth of question. of is between implementations And we’re obviously parts question. is part, Great, of start me opening is to is or likely pharmacy seeing is now as for client it the important which ecosystem. double-digit the short breaking the silos double-digit the seeing all you the forward, the all, interesting, different question first now and tying those marketplace space actually remarks, growth, in second additions to that very growth intentionally we’re so of of be part robust is reflection heard first what so very nice becoming areas is set here nothing a that answer that as substantive down the unintentionally to go to of of strongest into area new your of OBC and we my

an trusted that So pharmacy of on pairs and our we’re reporting add. independent that additional and platform, is analysis life serving mediator our source for because our aggregation platform platform as the single on data that have value and so sciences of fact proving truth finding that now and on OBC many contracts around the we

Florida and major sciences weekend in rolling of as to that you’ll town partners. major with and as about off down I So this Conference well talks be the will more about actually our ScripMed a hear many that’s anticipate every one we think company lot out the pharmacy of we’re companies life as that just

growth strong we’re XXXX, So about it. excited in it’s very good, looking double-digit

Frank Sparacino

Thank you.

Operator

Thank you.

next with Daniels comes Our Blair. William from Ryan question

Your line is open.

Q –Unidentified Participant

This is taking Thanks [indiscernible] for for Ryan. question. the

about to a landscape. maybe and wanted little step competitive back bit a take of kind talk Just

meaningful change uptick the sort quarters in curious and given any your win those investments in specifically more and you you a kind seen competitive investment. of of kind I’m positioning here development. if sales talked maybe seen change your if you’ve rate Given for marketing product and of material know you’ve couple and or just

Q –Unidentified Participant

Sure.

Keith Dunleavy

being [ph] thanks thank call. you, for Jared Sure, on the

us, or our part. category landscape poster it Number three we last client December [indiscernible] to not break right number different serve we in in year. solutions So Day small brought reclassified themselves I’m and two, be a three point named classic on competitor Investor the into if competitive Slide large that that competitor the think XX, on categories board, might the together this We out, laid clients for brand it’s company, could mistaken deck it I from [indiscernible] sourcing need. three, individual capabilities work source pieces,

we they that we’re We dispropriate back was we in respectable that strong find having reported change matter landscape taught source the the not talent, marketplace, and in child to lot expertise be access connectivity to we our but reported against then the primary the in time were to harder the in the trend that not in more competitive very subject having seeing was not in year more moving kept at good a and positive time. organizations to at opposite. expensive, competitors found A have lot a [ph] really for had. not the and of certainly that and fact, The data, eye tried December favor, we whole challenging poster the in one that changed we source way us that on, last any and that have marketplace out a organizations reasons laid right

players it. if a seen many again. smaller as have liking work one, [ph] That and the in But what were you’re continue and we have we players, story very of cyber themed rates much to last like against just it XXXX. ahead it’s we that their the the of so hearing space over and so in security upticks a for on not in by operations the marketplace entrust But roughly things some selecting really competition XXXX marketplace we’ll governance wins was, not movement reported were said reticent stay away data, a as and organizations reiterating competition, entrust and investment and respectful in to less and and environment recovery been forth. we’re platforms the in then very actually to we we hard been case. And from [indiscernible] Jared We winning the hard smaller have business organizations the much word their the I’m areas, positive us data to that we seeing year has recurrent win critical make are disaster not our smaller or to ago, changed. that work that

Q –Unidentified Participant

appreciate color. Great, the

Operator

and you Thank SunTrust. Sandy next comes Draper question from with our

Your line is open.

Q –Sandy Draper

my questions ACB year-over-year, last there’s Jonathan [ph] on I quarterly have tune know maybe asked, the but A of down just was question. mentioned volatility. been a lot fine you

In will quarter Can what two following just one that up, those any around fact, great? the large made there slowing me, [indiscernible] any of be remind third improving, for commentary deal you then deals a things [indiscernible] comp competitively was terms specific flow we but is [indiscernible] there just appreciate. tough in and visibility down

Jonathan Boldt

Sandy, to talk to great you.

our other But the there was QX, to for it’s pipeline of pretty the a tough shaping were should but XXXX XXXX. were sales velocity, from that for impressive been currently For say, deals some is deals notch. say ACB October delivery up strong continued large the all your so kind continued first be an actually top compare is velocity I’d strength impressive really our team strong I years of five question, of in our QX or QX, [indiscernible] sure. continues salesforce of and very record [ph] in [ph] the of ACB perspective last

Q –Sandy Draper

see your that’s pay follow-up down a be but going going say to helpful [indiscernible] debt expect the that to you fund. strategy capital necessarily cash It’s really primary free That’s or at, on going one time capital. Thanks. them nice or and to to be be of quarter-to-quarter, use generally generate that’s the you flow would looking don’t my you’re every

Jonathan Boldt

our our to we on a capital how that’s flow. strong Sandy really and one and we’re from focus very Yes, that deploying area continue position in cash sitting we’re

and cash we sheet. areas as deploy and accumulate flow maximize of our for continue shareholders. We continue to to in our look the a to excess capital return to for flow We’ll for have cash or lot we balance how flexibilities shareholder return deliver that

Q –Sandy Draper

Great, thanks.

Keith Dunleavy

seeing all close. and Number is that and playing translate a final into capabilities to the few and our that very give it’s here profitability healthcare. is double-digit as tonight data me provider cloud allow which how comments capabilities as into growth our being of into before strong leading leverage you very one, Inovalon efficiencies, very we expand two, XXXX. organic you’re out. nice is platform operational growth nicely to of excited based Number on been also continue market and the we see scale demand revenue That a driven question, Number also three, seeing us comment empowering these please we’re increasingly translating for heard continuing we as

We’re about the excited momentum.

of We’re but and excited outlook, remaining XXXX the here positive about only portions not for for the XXXX, beyond.

for our being that remainder into We game and really the to is we year name here important remain and committed know our focus execution. next. the this of of is Execution

expect Inovalon. clients. very and as strong always give profitability Good revenue your you strong for your you, night, everybody. in as very value our interest Thank and for growth We for very time as this well to strong thanks evening

Operator

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

all day. You and may a have now disconnect great everyone

Inovalon (INOV) 30 Oct 192019 Q3 Earnings call transcript