INOV - Earnings call transcript Q1 2020

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Operator

Good day, ladies and gentlemen, and welcome to the Inovalon First Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. And now, I'd like to 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 today with here Dr. I'm Chief Chairman Keith and Officer Dunleavy, Executive Inovalon's and Inovalon's Financial Jonathan Chief of Officer. Boldt, Board; the first to all welcome I earnings would to like our call. quarter you XXXX

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

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

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

earnings concerning company's contained our this provide IR website. information call a by investors, information these is filings of presentation, In webcast and effort accompanied on and factors on additional to the the is which to available conference is an section with Additional SEC. release the

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

financial non-GAAP measures. certain includes also presentation Our

the company's and of measures at release non-GAAP and end definitions earnings those of find the charts You'll company's reconciliation on website. the

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

Keith Dunleavy

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

this an job clients, pride pandemic. all a moment truly who've I results, gratitude the during Before take Inovalon each COVID-XX the to to and first employees we deep speak quarter's the and company our incredible like about express supporting other regarding my tremendous would done

increased aspects many the XXXX it of and situation of model, clarifying challenges, also course, demonstrating of The Inovalon's differentiation are needs, capabilities, cloud-based many in capabilities marketplace COVID-XX but of a care strength, the and the is economics. is analytics, today's of well. improving within data clinical health with the driving entered marketplace to for aspects crisis Inovalon's position assets strengths respect beneficial business an impactful of meaningful and both we depreciation navigating all solution extensive and COVID-XX deep company empowering outcomes bringing We connectivity, architectures, and that define its

company In into place plan. pandemic XXXX, put a crisis the

remote administrative to operations design, software During the February, activated platforms business functions operations. and of and strong Inovalon's of we sales, transitioned to and and client operations. cloud-based the from support are into this continuity operations effective platform and company's plan entirety supporting their quickly Nearly development thus

empowering is jobs of for now, years seamlessly of our about ability connected, to For cloud Every health been allow from deliver clients. in to our layer Inovalon designed heard ONE of clients. the becoming And data-driven and the the on enablement environments, speak the Inovalon for every investments the care is process company computational you've into that us moved capabilities software that focus impact platform. has piece or company which associates and a our meaningful operating and through operate environments remote every their achieve to have our our do for our clients myriad locations, and value to the EHR value all investments

and marketplace. the also during our served differentiation multiyear as value only in to impact remotely investments operate in these they this us Not but crisis, have allowed advancements have

XXXX. $XXX.X coming XX% of more the vast to total than platform Inovalon revenue grown majority million to of compared to Since our cloud-based revenue of of began XXXX, or the year-over-year a transformation in in revenue first XX% platform quarter at in grew In business. platform at be subscription-based XX%, revenue XXXX, its has total subscription-based model

and the strong intervention offerings. demand capabilities innovations The platform business strength, assets, flexibility translating into are that company's driven toolsets have the model and data of for analytical our financial connectivity,

continued processes. quarter, to Inovalon's existing During telehealth a launch government, data-driven within its pandemic clinicians offerings strategic the innovative the visits platform Inovalon accelerated country. across In plans the and virtual telehealth the and response to we analytically-informed our first data-driven with guidelines number for capabilities clients changes from of empowering in

begin the The capabilities power the with to other each several brings analytics the or offered no knowledge little telehealth which Inovalon ONE of the within Unlike of primary This potential patient advanced engagements, each offering insight data-driven or implementation and is factors of the the the the impact while effectiveness available capabilities landscape. experience. time telehealth element value encounters platform the and analytical data telehealth within contributing telehealth marketplace, to insights call of improving a and or typically of encounter also increases needs, source patient informed of patient. Inovalon's patient's by efficiency, respective

of even with and offering in since have for the to availability, top strong are its April as XX and the contracts I we plans on Demand executing more plans, health been ramping more that our offerings we pipeline. am days capacity many pleased began multiple telehealth platform and early report health announced encounters within platform regional within speak. telehealth national rapidly

Additionally, utilization. such also company's Data and with relationships expansions client increased demand volume of for higher Extraction Clinical connectivity have as capabilities, significantly as a existing the cloud-based remote multiple Service,

clients. seeing and new from are continued We existing strong demand

of to in shelter-in-place, of segments quarter, platform of to the and parts services its the which continued subscription-based X% as the ordered business revenue of business, our our know, of XX% company's and approximately was U.S. show services experienced and softness. made in intensified are offerings legacy some and of you business our majority XXXX as nature other legacy offerings, the And our the respectively. namely, While majority the during the there up impact strength March, of first COVID-XX

quarter legacy begin internal dynamic, resolving first XXXX to million, the the were $X.X currently expectations. to latter approximately compared and offerings through the of half The quarter to continue impact which second services thereafter. We million expect $X.X of to of fullness and respectively, budget and this affected the

not characterize is the that demand as believe the the significant COVID-XX We we represents crisis due delay a to and loss. softness demand would what portion and of softness temporary

in We are are their of of regarding and to optimistic of discussions second already aspects the these contribution year. reacceleration planning regarding half the for the our engaged business

pipeline turn let and you with up-to-date our to me seeing. Now, sales bring what we're

cycle change their As with however, different Payer and dynamics in and sales you saw might in expect, we and in early The are sciences markets. remain change pharmacy their cycles somewhat dynamics out sales provider play markets in have no substantive strong. mid-February. seeing of end in different very shown sales cycles, starting elongation life

substantive to rates. loss changes close are we any Importantly, seeing not

seeing within dynamics. of team and the offerings well strength within market. and of market we to are expand a rather value the capabilities of have In the available are resonating continues success increase set healthy differentiation of and continues we the fact, to our number The sales our impact

is Inovalon together, all started significant XXXX. each this of the platform one record standing pipeline our since weeks, the Bringing showing offering increasing company recent many a in the strength, high at

the remain pipeline of about important to While the which we ahead. be very pipeline an current about, dynamics variable, implications overly for quarters are we our want cavalier positive don't

for operate and of its its subscription-based to that the financial recurring Inovalon just to Inovalon I clearly within model, base report flexibility all crisis is mentioned. platform summary, was the business its the and pleased scalability COVID-XX strong In the handle reasons prepared benefiting of construct of revenue. I'm well from

being company relevant current received the further demands to within several well capabilities new, continues the able the are Concurrently, benefit being secular that and has which emphasized positive highly been from are marketplace. during introduce the crisis to

to due of While our we are as we demand indeed and this not softness in some experiencing business short-term COVID-XX, and demand areas loss. specific see delay of more

forced and organizations other additional the their in in focused their investing investments. challenges expansion because accelerating while maintaining on be the we development marketplace to investments continue and investments may innovation on Furthermore, within and new in brought by platform product even decrease launch offerings, to the crisis, be of

rather to prospects even resolution period following COVID-XX about our the while appreciating surrounding, the the number the about company's are of performance of risks navigate variables Altogether, optimistic the ability growth COVID-XX and we optimistic more and crisis. and

our full several that, the allow call turn me you Jonathan Jon? over for to and and expectations next to through numbers walk With quarters year. the to revised

Jonathan Boldt

afternoon, and for I'd everyone. on job my for while fully schedule, the Keith, seamlessly out doing environments quarter the closing like to good team a and begin operating to remote report by thanking in stellar you, Thank us time. first allowing

at echo Keith's missing Inovalon focus, this great together. teamwork across in about clients The to and the of dedication serving our and the team at the also all testament I'd a a country focus have performance is on without we beat. the employees sentiment moment put history,

opening few Now, key let points remarks. a Keith's me on highlight building

strength positioned financial maximize the a and navigate environment, exited well First, balance the and flows entered with healthy strong they to from to in of year cash sheet, as the is also while position a quarter marketplace arise. being well the capitalized current the opportunities company

Second, financial to XXXX the reflect the EBITDA the of year-over-year outlook quarter's we to financial And updating our revenue, non-GAAP reflect be impacts first adjusted solid and growth across we another third, results COVID-XX are what believe EPS. short-term crisis.

to first turning our quarter Now, results.

X% organic year-over-year. signed, an continued in million attributable of revenue $XX.X $X.X platform XXXX clients was of to $XXX.X or offerings. an contributed increase was reflecting quarter revenue This of from increase increase adoption new First subscription-based million, million primarily

utilization of revenue $X.X was growth clients and legacy services attributable a the platform million This in from partially to offset COVID-XX existing decreased decrease offerings to due pandemic. by

$X.X compared and the As was the of approximately our legacy respectively, our impact offerings COVID-XX to million first our internal Keith on release, further in $X.X model and million, in expectations. mentioned, and was outlined quarter services

compared million, increase year-over-year, based revenue our to of revenue the was XXXX. organic quarter of first on quarter first Focusing XX% quarter XX% to of $XXX.X revenue in equating XX.X% platform streams, subscription first in the an

million in first First XXXX remaining period. million, XX-month XX-month the revenue subscription quarter represented legacy was first the quarter X% trailing with platform revenue first trailing of quarter $XXX.X to the revenue X%. $XXX.X Services revenue an for XX.X% of XXXX contributing based XXXX compared increase quarter

did impact new sales company's an global sales our the the have ACV, Regarding on XXXX QX, unfavorable pandemic activity.

pipeline. in and the sciences life seen ACV came of a quarter primarily mentioned, year-over-year Keith X% to decrease at COVID-XX factors. As sales in provider during related million, new the Inovalon's $XX.X due the

since has cycles ONE the sales high are demand increase while sub-segments pipeline, after seeing accounting an million, within X.X% or Of elongation Even the to for very excluding ACV, sales a XXXX. $XX note, the was platform services the pipeline pipeline platform of introduction new the Inovalon resulting healthy of overall of in strength. of record we sales expanded year-over-year, and

gross to margin. Turning

in improvement margin Gross from data predominantly X% XX basis increased connectivity mix sequentially by XXXX, was QX, year-over-year, and revenue. a revenue XXXX XXXX margin points primarily solid margin investments investments. XX.X%. a increased as primarily result to driven quarter Gross an First of decreased platform gross to in subscription-based by employee QX,

the XXXX, in revenue increase marketing first million, year X.X% quarter and million $XX.X marketing and expense was Sales first year-over-year. percentage which the for the quarter as of X.X% was Sales an of of an in was period. increase from ago a $X.X

change in no As sales on conference call, our we to XXXX fourth marketing been our there investments. view discussed has quarter and our

see continue and its operational cost long-term technology to for from continue attractive, and and on focused remain in our data-driven We care returns drive engine driving strong on and demand platforms efficiencies marketing organic health growth. for we marketplace The our revenue to that users. revenue our near-term be investments sales the increasing increased

was margin $X XX for XXXX EBITDA ago quarter year-over-year. points increase year to representing an the million, an XX.X%, of X% increase $XX.X adjusted of compared basis was the period. million First Adjusted quarter EBITDA first or

XXXX compared share $X.XX, XXXX. was quarter to QX an XX% of income per non-GAAP First net increase

$XX.X interest cash an activities million, annual XXXX was by the flow. Turning basis, $XX.X by net a operating million of quarter the associated with to Net $XX.X which $XX.X after and payments provided compared was bonus XX-month the provided after trailing in is activities outflows to million, cash company's X% On operating increase payments. of million first period. incentive during XX-month cash discretionary $XXX.X preceding million

in came at CapEx $XX.X quarter million. First

net Total Reported XX, XXXX, debt sheet. Inovalon's issuance billion. and was financial balance equivalent balance $XXX.X as and $XXX.X liquidity and debt position million. million. of fees financing sheet Inovalon's Moving our $XXX.X $X deferred discounts was outstanding million, was the March cash solid. remains was position net and debt to of cash

as X.XX X.XX improve of net as as ratio, and to X.XX continued Our agreement X as debt XXXX our within to X debt compared of XXXX, QX to leverage to X QX XXXX. of to defined QX to

financial debt flexibility drew outlined in capital opportunistically. leverage earnings the increases facility company's ratio, our proactively company of potentially net As first The additional no impact on and the from $XX drawdown million down revolving release, in company's quarter. availability its had the provides the credit the deploy to

company debt ratio one credit of maintain financial drawn, the the X net X requires or the has company a to to covenant that lower. facility With revolving leverage

company EBITDA twice $XX.X leverage At company adjusted over required nearly trailing be adjusted its to be the adjusted financial trailing providing the within way, of Said EBITDA generating the within XX-month excess million, EBITDA had debt end of significant QX million XXXX, one of EBITDA required is to a the XX-month $XXX.X another covenant. totaling the covenant. ratio the net adjusted

Now conclude by the to financial let me updates XXXX company's sharing outlook.

we our guidance are see expected We impacts as updating them on today. prior based from ranges COVID-XX

through As have the on updated to we this, part we it quarterly expectations of expect as progress our cadence XXXX.

half and second to we trough of revenue that, quarter allowing clear, which and a of to originally due outlined we our To the third the our in bounds COVID-XX, impact upper XXXX, reacceleration to quarter be quarter we return as the fourth October growth of see of in XXXX. QX growth XXXX see the

We a revenue to full this contributing slide XXXX year $XXX supplemental of we for representing full $XXX organic all growth of of encourage deck you together with range X% on see XX% quarter. year, platform X% the where million, each total revenue. laid to subscription-based to expectations million to offerings we XX, Bringing for to our out refer have

EBITDA net of with of see $XXX share, see income Non-GAAP to million adjusted at we CapEx at see million range long-term see million we We remaining EBITDA to to an $X.XX, net margin and provided to invest $XXX as $XX to opportunities. operating and $X.XX $XXX to activities million $XX per at cash continue adjusted million $XXX in million revenue. and between near we XX% by

go provide and additional me the let Now second XXXX. insights into of back quarter

quarter legacy an XXXX, While QX from in be new while $X.X COVID-XX services, impact for offerings impact of we $X.X amount in in in expect approximately million two of QX and offerings million XXXX, we This $X.XX $XXX growth full saw this are to and share a year-over-year demand reflecting million in to X%, EBITDA $XXX of of of diluted of capabilities per results million to million, of ramping. income and following $X.XX. $XX net $XX the revenue non-GAAP guidance to million flat to adjusted organic times

encourage our supplemental our rest of our we refer details based for Again, XXXX guidance to quarter earnings range and deck today's release and on revenue our views more quarterly you year on earnings to the cadence first today. for the

setting revenue company's I well cloud-based as Q&A, Before will reemphasizing modernizing support going collaboration and pandemic has our our by and efficient to move comments. architecture investments to The software the a work and company's investments safe to Keith's multi-year clients close members. enable seamlessly continue to in as operations for and plan team business a model productivity cloud-based subscription in based enabled

our our we capabilities have and While financial do what on our the pipeline. sales impact XXXX marketplace current expectations demand about COVID-XX optimistic the we are an in our operations, are seeing for outlook,

positioned We continue focus COVID-XX health this support the a activities the on demand during and stronger to manner secular and leader driven as continue and through care even post to to fiscally investments clients emerge progress in marketplace larger maximize to prudently the to and be within of very pandemic. an data strong our our time well

our With session. the that, Q&A call to conduct operator back our me to turn let

Operator

KeyBanc. with [Operator from first Instructions] Donald Hooker comes question Our

Your is line now open.

Donald Hooker

on a of bit QX hear can on maybe in what I sciences things sort be so my activities been into of do at Great. those extent lot specific, what might trying have I'm -- Good to coming specific a the end the can -- the and elaborate of wanted in get just in the terms just of back might review quarters? a in afternoon. QX. life areas. just the you if headwinds elaborate mind, picture to you And we might of sort deferred? I bounce a bit you and and a provider And what there to guys sense of

Keith Dunleavy

Thanks call. Hey, joining evening. for the Don. Good

and talking characteristics? I'm closure So to let sales question, properly. generating your you me you me look -- Are about make characteristics? talking answering pipeline let Are answer revenue about it sure,

Donald Hooker

your revenue QX QX downside to The in guidance? generating and

Keith Dunleavy

Okay.

So, different slightly two there's things.

of services them in about By separately. was legacy side and talk things offering in Let's areas. the our revenue

to started mid-February the show in quickly quarter progressed softness about the end pretty impacting services $X.X through million. So and of

A clients was pretty lot and requires of period. during you'd that collaborating that be expect, face-to-face be with is requires impacted time quickly It materials, meetings. people and as to to that It requires teams that on-site.

being And side then have the a generating using an of clients software unit-based of million software to the fee lockdown where how is timing the being They're started as put platform. under using able how doctor legacy opportunity the using of are and country to regions of client's our have preference software, offerings, vulnerability intervention their ours does during they of less different software, use business direct things. a our those at that $X.X aspects but when to of discretion. they that's Remember, is do period, our subscription-based, than a orders, offerings legacy our those

So the the turns aspect. similar there, QX, is during to. presuming which some we're continue a already fullness that we clip, revenue at We're positive back come those can of although seeing that

changes for audience life characteristics and – audience was. interpreting of did provider a of pipeline in question pipeline we pharmacy. and see pipeline second payer different did the the your we from had not your in a The sciences the whereas on the standpoint, in The who or characteristics substantive characteristic, the a QX space, part those see depending of treatments, changes pipeline definitely end end

side, a sales a less provider COVID the interested situation. to you are very And rapidly the calling on you would in handling sales was, can customer discussion became they little or during as So call. expect, imagine that the pre-occupied – the

their back But potential pretty change that On basis. using seeing on sciences in to in impacts. word back. attentive saw in go clear that the as the global potential there had life the fastest through was way, I'm to say, when issue most the the the seem fastest rapidly But sciences, world processes And arena, to to the notice potential becoming quickly. that in they rather we in we're were COVID marketplace, a we were be impacts, also, turn very change sales life February, similar quickly would a availability February, characteristic the a pharmaceutical the marketplace in

So stop I'll there.

me I if know, Don. question, Let answered your

Donald Hooker

No, that Is that's wonderful. sort ramp? on some don't that's more the – you QX QX, in through particularly going wanted for maybe you to I you that you seem if Thank – can spike on now of about the side, going offering, And but know, clients, discussion interesting that. that a broadly. gradual positive of and you to about sense out? excited more to the telehealth base? see, there, then of there? a your with sort was as – of you and to I'm any know – broadly rapid. I if squeeze you very like how uptake the broadly client Or specific I don't share is willing us talking more any sort elaborate to of How that. be Can is penetrated of kind just level kind but quantification could out of that. provided sure,

Keith Dunleavy

to see, out. I help do you can me Let what

point if seeing to for delay were you we're – on to a need of bit calls will? didn't character saying, life can a time, interested. us to out touch no These a us in this to positive. somebody were arenas. deciding us These somebody loss. us things. And evident little you But that portions demand we're those think just It give that saying, the first not demand and out even already in of not losing call they or was longer else, phone rather change a a hey, just to So provider not I the and important non-telehealth is sciences this is all, phone first.

So we positive on. of which characteristic do a quite see us, ahead demand obviously, catch-up were

and pharmacy in to And there prepared change size QX. or we as expansion, telehealth is the deals On was about of side, side than pipeline the no we're really today, that. messaged in strength, we're change as get really not well. more in demand seeing any QX, connectivity to counts and strong seeing our we're fact, in payer on even and strong of pretty and of excited the marketplace telehealth, But differences offering the and also the deals connectivity materials

organizations imagine, here. as it's and connectivity through are done. capabilities, about But your talk also they Language Processing how it's kind I'll a remote As as their you more Extraction rethinking seeing Clinical And question. of through those to telehealth, Natural just Service, not things Service jobs which our like strong Data might are upticks get a

many telehealth, going telehealth that in We very local more many quite We've April. the national health in come marketplace. on in On within sign We sign health on many it launched and pipeline. saw have within That on plans days. offering days. nicely. multiple regionals the is had since, differentiated is early and we saw We plans

So, the marketplace, the as doesn't data-driven, the interest to unlike anything and encounter. plan the the more conquer that any encounter leads It and to patient experience. It of about or the offerings to their patient to know better well. In higher have to the for clinician during analytically-driven. that health value might encounters impact, their special are and in encounter a concerns our leads clinician needs, patient, the client. both try a get situation, a where and leads for It those patient together a efficient all other

on feedback ramping strong. launched very we April. The early today, they're pleased It's in run first received actually quickly. I there, patients very the that We're it. surveys with We very tied it.

only a seeing user of but we're patient both the a from a feedback ramping from strong users side. So country, rapid also it's we and a are not software, the side positive seeing from across

companies on that's be household we expansion regional expect very XX now we're rest if and right, not strongly giving ramp do numbers on not signed many year. that out will, a top to a expect our have of spike and QX, in But be are but capabilities the ramping large platform. in we the many here it this We through QX, of name expect you're and multiple systems you expansion. nicely long-standing substantive to national to this on more So

Donald Hooker

Thank you much. very

Keith Dunleavy

Thanks, Don.

Operator

Our next question comes Morgan Ricky from Stanley. with Goldwasser

line Your is now open.

Ricky Goldwasser

is, Yes. of to about pushed you I COVID? When book one the are for have new you how do business. we providers. your XX% the Good run changing? nine going them contracts out previously, do a into provider think affected afternoon. going things marketplace, think you of this are And How pushed to be be lines conversations of providers' for How with range question think of Or result priorities being think things about months do you out? about providers How are really time the is as And XXXX? implementation think to to like, are discussed to changing?

Keith Dunleavy

for A thanks Hey, few Ricky, question. the in questions different there.

them I if can all. see me Let hit

business We're to in they engaged. they're they to much interested very yesterday interested also efficiently, additional softness selling First we interested, elongation and their run not the in are the new the in some still are still But all, of just they sales game, provider. – shutdown by are any provider very much We're cycle of in providers. much seeing but across-the-board seeing in stretch. interested in day every very a what And more capabilities. were

to care not a reimbursement obviously, a like did telehealth, strong the revenue-generating benefit seeing capabilities. greater tools, only of to make tools. changes the we're things interest providers' broadly for it used, telehealth chronic but And seeing number to right? world regulatory management allow increased a of also We're So telehealth appreciation be more use in

of doing generation out looking there that. providers inbound that. on lot are They are take of advantage lot A of to a demand

One systems, hurrying is and definitely – phenomena eager as those living that. running or XXXX is any back describe, reasons, not their to can to Ricky, might The they're I eager be. they're practices world a kind of push I broadly obviously, ramp they're capabilities. and and get provide like seeing, out there you a to hospital to making of provider we're if the But – their running and as

we're there. not We're things nice definitely, full pushout. So already talking positive year seeing a

our Now because XX% of revenue for so a us, –– business subscription-based. provider XX% on much basis platform, is

provider started. you're your on It's seeing side. get a revenue Ricky? and Did just they're the elongation really eager a side, I to answer not questions, So sales in impact provider the

Ricky Goldwasser

And I do you just positive XXXX, think about How quarter where and than are about kind changes in you pretty meaningful. of were if to you're you alluded did. When changes ago? XXXX You have follow-up. a can other one you right, because think regulation you the more in think now versus

Keith Dunleavy

experiencing. rein the marketplace the are where innovate not – defensive in support much, having challenges to a services as having on of notice pushing technology I our would during the ourselves competitors a new not of the say originally, and QX client spending, selling hearing be you'll having this that, to that we're into as number capabilities to in to back upper as QX, that had definitely marketplace, are we that's right of Ricky, that the challenges. two upper We're guidance right. have the more outages. for end are our of able them bit well product in a little And those in marketplace guidance, hearing layoffs, and of pocket range do that we of growth, XX% in hearing where numbers of see the we're number forward we period we having We're the on

an solution So our clients and that, seeing switch also solution. a Inovalon are to from to we're getting calls

great And the a that marketplace through seeing this paying marketing instigated we're well process. attention were we're marketplace that is So the crisis. COVID-XX capabilities how got new in to we've some by

feel So quite positive the going period yes, we about forward.

Ricky Goldwasser

Thank you.

Operator

Blair. comes question from next Daniels Our with William Ryan

now is open. line Your

Jared Haase

sales Thanks obviously, with rates evening. in had positive This and pipeline taking last you press mentioned, is Hi, follow-up the upward I win noticed the I some for dynamics for of good think Jared just actually the the across an Ryan. remain the to Maybe that those with question. you bias. board mentioned strong release, Keith, there, Haase specifically in on comments

aside competitors And maybe market from maybe of with the kind curious, is so now? in in proposition, of of curious, specifically value I'm some seeing that's that some uncertainty comments issues made resonating we're you're right helping you those the what seeing just some take of in the terms some light of specifically current share. I'm you

Keith Dunleavy

for this. – right? all comment about call. I'll could on value perhaps achievement, Jared, Jason as being thanks and Hey, the add you'll on, to to It's So want

pharmacy plan systems, systems, current environment technology clients, do. the need systems, they because health and are the our all feel in like you pharmaceutical Our recognizing hospital probably use more I handcuffed to systems

the ability to larger of want and in marketplace, I And our add dramatically appreciated. so business the is to technology value go don't the plays too into their And platform being to They capabilities to much them. detail are cloud-based to audiences. appreciating them the with do as to that new looking and marketplace, those and to bringing they're to solutions Inovalon them for

that? all upticks deals, want rates, for those are to competitors, absence reasons in numbers the in of seeing capabilities deals. many those Jason, upticks we you So upticks in of of our and win of to and add size of

Jason Capitel

Keith. Thanks, Yes.

Jared, we not the the would I as only answered -- of face-to-face can't actual a business think and realization. proposition We'd dinner on. it goes are of because and value where things, our people somebody value that that put strengths with the and you I took demonstrable value knowing And is in social and be in that's We realization where but but world of value those because have one this thing well. for focused marketplace we we're don't automatically just the to our it, value I we you it's great you The win deliver relationship. that out clients, clients. like think add pretty is deals focus get towards realization the

Jared Haase

Great. That's quick sneak color. I'll maybe follow-up. you. very helpful just And in a Thank

Or revenues? of based EBITDA in of the looks kind midpoint. the a that's sort basis quarter we On guidance, think so initiatives implies the on there? strength or points maybe mix control from up of cost about second XXX some just about margin more place as with the that subscription like Should it in adjusted sort QX,

Jonathan Boldt

of scalability you're it's that and continues bottom leverage to seeing very is the the to Hey, fall nicely What as the just additional there add line. we Jared, Jon. really business the model revenue

Jared Haase

in really Right. I But specific nice control growth second in quarter so cost sounds still with of or was seeing measures more expansion it muted relatively like leverage that's there. like any that? I sort versus anything thinking guess -- general margin just the more

Jonathan Boldt

the benefit The Jared. and are is subscription-based profitability really right, predominantly the the line. profile adjusted that benefit just seeing benefiting That's really EBITDA of revenue you're

Jason Capitel

maybe just we're certainly, growth. mean, would our for costs, demand we're that I lot about on Jared, really increase. thoughtful I while seeing add being And of building a we're

in we cost-cutting prudent a We're expand and advantage we're So in take cost obviously opportunity of this not best investing our but capabilities. always mode, a mode. are to

Jared Haase

it. Thanks Got a lot.

Operator

Our next Jessica question from Tassan Sandler. with Piper comes

Your line is now open.

Jessica Tassan

Thank question. Hi. my you for taking

know services for just guide quarter. in the revenue to interested down First, the second

with event resurgence respect to potential moved then Just in the be of a and COVID to potential or online, of event services of in fall what the or second you the both XXXX? of the quarter winter the to the extent that of also in spoke some can

Keith Dunleavy

for Hey, Jessica, question. thanks the

services to impact bit They of We initiatives, need because QX. them having get in they to that to They're services. done. see of -- to them, done. done. They were clients of There's So people a the fullness you have higher need a we have They some get drop a services, ours you didn't of get of reopening the those eager these they have service they work, done. discussions $X.X need of get right? saw projects, million already the obviously, and are typically not online-provided see of

to in things We to will. some you expecting magically aspect if not on July X, normal go back of have built

really -- an So things closing get or entirely we fourth done. opportunities, pushed but to waves, paused we believe occur. lost are different can into a factored work move we're But not But tolerance have then their if for out already were of again, people environment. these they and in are prudently not to second, third, our expectation on until services on services looking point reasonable that, degree

Jessica Tassan

And then of switching you. one gears. Thank sort

alongside chronic a you patient management chronic or remote mentioned think disease disease telehealth. I monitoring capabilities

see the little you disease in interesting your where could management might if interested, And offering? a bit you market? just gaps might to So chronic then develop? be about it you any Or talk think

Keith Dunleavy

number out government in called of of conditions. actually interesting a higher significantly provider that a sure, might know have, available It we platform couple the years marketplace doctors they're in of that reimburses chronic many world. chronic lot the an the especially the that marketplace That's benefit what's data. most program to patient how actually the that challenge provider The have do dollars you, area. has a don't CCM. as put more provides The patient back. The by a appreciate, fee-for-service Yes. having government of setting care It of introduced for if is take I'm Inovalon's there was a a is federal conditions

access our country, fee-for-service other the with largest data to of the data. have in combined We all

the in most which but patients tools that the developed assist patients significantly provider marketplace of optimization. allow We've not need see see care, for in are can which provider to only reimbursement that

that rest the challenges Providers the hungry for play a that not presumably typically afterwards. catch-up to is bit demand data seeing and nice solutions in little in QX We're present in that. in available other So marketplace. QX because the very are is to they've of marketplace experienced and the gap

So we pleased there and an we're definitely have advantage can we that help.

Jessica Tassan

you. Thank

Keith Dunleavy

you. Thank

Operator

question Draper SunTrust. with comes Sandy next Our from

Your line is open. now

Sandy Draper

the -- sales. have lost down again, the market? results in But been the obviously, old the that good to new and But strong asked. guidance, it's against is guidance, a of our But of SaaS quarter the lower ramp-up the provider thinking not is questions if the my I revenue, it's of at I'm primarily of -- think, the look the that from just back XX% from much, existing at lot numbers. slower revenue in to one. A that's the clients trying leasing midpoint the model, very you coming afternoon. maybe first beat Thank I'm

are that's the than impact midpoint? have pretty ramp-up first of recurring. slower you Because then maybe any quarter, was But to Or sales Thanks. down take you other the strong lower expected? just mentioned, in is causing all Keith, would what as the what originally see pretty, coming dynamics view, at a there to we're seeing a but there my numbers a is

Keith Dunleavy

that for wanting strong, and a QX. large of for thanks platform the and strength come really is question, we Thanks that clients to Sandy, continue Look, onto platform. in seeing and our to that persisting number see

it's have build there's new a already bit that dynamic thinking, in online. things we And all around So caution of Sandy. the of that. we one you're have clients in prudent coming just bit to implementation to, no little little other think the thoughtfulness But of a than

Sandy Draper

only my really answered, question. and other ones That's great. all been have so the Otherwise, asked thanks. Okay,

Keith Dunleavy

Thanks, Sandy.

Operator

comes SVB Demko Davis question from with next Our Stephanie Leerink.

now Your line open. is

Stephanie Davis Demko

Hey, guys. questions. my you for Thank taking

sales as for to you obviously, a seeing the demand pretty that just But at is becomes noise, And analytics in for moment. where cutting through exchange that bit So, broader to environment unique then business, HIE, pandemic? can the more you resurgence your the potential forward, pockets seeing are suite? within are of talk looking any important you data

Keith Dunleavy

have Hey, you for Thanks Stephanie, on the all, question. the call. to of first great

Stephanie Davis Demko

back. be I will

Keith Dunleavy

have you to We're back. happy

only the we're seeing no we on sales, see payer life some really movement on negative And pharmacy of the change we're in to and And clarity, elongation starting sciences. provider sales the to saw side. already that the for improving. So and

look pipelines sales those pretty fact, tremendous. In

looking We're but little we And and not that would seeing really positive for use is year. really seeing then areas, sales we're leading So bit strong the I a longer, growing no. the mentioned a to a where the as not is word payer this pharmacy world really, pieces the taking weakness.

sought as they like being very as And analytics that data capabilities of and offering to be more clients' then can risk asked capabilities for our about deliver our COVID-XX well after received, with to better seeing Things to Data in risk Lake where government it combining we're jurisdictions for need the data help can. where marketplace, we well the advantage data, you And and there. is is to plan the members the on exchange as clients We're and it. data through being the using together wanted, catch-up benefit we broadly every planning. other demanded,

data the where into that wrapping analytics also demands capabilities, all our telehealth logistical We're operational, supporting are. those planning of for that are

Did the question, answer are of I for that a increasingly the we're your holistic data. appreciation we in phone getting from seeing appreciating So, that inbound value the call greater marketplace. Stephanie? And have we're of marketplace people that view the

Stephanie Davis Demko

guidance demand. the market Yes, context a in end different demand. that helped. That thinking guess of And helps I one then follow-up about the just the on just lot, that

of higher low in move think where towards visibility about How should visibility new have we you guidance? the the end and stands what's today? end as range So And baked you model. high your a subscription your the into

Keith Dunleavy

and think we humble. today want may there think be of want to are I We operator company to business think you thoughtful. I to be would the not We deserve smart stewards be to Well, understand, want any prudent that say good credibility of a right? the that marketplace. it's things in

thinking of be variable ahead about every us. So that want don't be arrogant we know might to we

very too, are drive they, our to for we're from strong platform-based and we're that are financial predominantly model their hearing business often, is very we have as value that hearing said, and that performance. want actually fortunate our Very But clients a about clients they sensitive more. platforms

They get obviously, up. want music the our our That's, goals to performance. catch back client ears, both game. in to their want They help help annual to our want to to and They get achieved.

have there. So we're good we want want thoughtful prudent. But pretty be feeling want about what we to about to be out We We be guidance. our careful. to

Stephanie Davis Demko

guys. you, Thank Perfect.

Keith Dunleavy

thank Great. Well, that, with want I to everybody.

a few call, I with just the close Before to want salient we end points.

platforms, thank an to really job the for and leadership the sales, achieving the the employees the the finance, incredible of board. executive client support of I Inovalon First, continuity, the both across incredible engineering, capabilities, strong technology, company want operations, business legal,

of financial rapid, Second, agree, capabilities supporting approach performance company. as the subscription-based and believe, and and we value a our differentiated our flexible model, shining are the a beneficial of really all you I cloud profitable and, hope They're innovations large-scale clients delivery highly strong effective, for implementations, through. platform and our capabilities, business characteristics

And optimistically about seeing what risks the I as having COVID-XX variables in to recognized being as the capabilities while that for next the recedes. ahead COVID-XX the about to period, was respect strongly differentiation what ability you we company as then the to seeing, to our navigate I forward abound, call. we're demand, and the with period Stephanie, that of mentioning even all we're third, strong are look and just on of to we're the strong appreciating more and the optimistic speaking

for thank in Inovalon. interest your course, time everybody. this you thank Of you really your Good night, evening, and for

Operator

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

You disconnect. may now

Inovalon (INOV) 29 Apr 202020 Q1 Earnings call transcript