Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Tabula Rasa HealthCare’s Fourth Quarter and Full-Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Frank Sparacino, Senior Vice President of Investor Relations and Corporate Development. ahead. go Please

Frank Sparacino

the results subject is Corporate from This intends SVP Investor made provisions of avail of within cause and Reform Good uncertainties, other Certain XXXX. for Frank Tabula expressed that and statements of could harbor safe forward-looking Development of this call of company by statements. Securities law. Rasa Relations Litigation itself risks, Act morning. during will the Sparacino, statements Private HealthCare. the to be materially These to that Rasa to HealthCare's or implied actual Tabula meaning those the forward-looking differ statements are forward-looking factors The

consolidation and the for healthcare in market include uncertainties regarding expectations in trend the risks United expected industry continued including and States. and and the These growth market our change structural

about expectations organizations. PACE Our all-inclusive of growth programs the the care elderly for of

expenditures, of performance requirements and Our for future operations, penetrate plans, plans to additional and further capital strategies, economic markets and markets, regarding management financing. capital for our new estimates future enter conditions, objectives needs existing future and or

continuing the February facing our XX-K information section otherwise, on discussed we the this to unless our are filed on Factors call, refer filed the SEC, risks filings indicated and we additional Tabula including Risk Please Rasa, to of XX-K shortly. When XXXX to XX, operations. For from XXXX our on Healthcare. with be results XXXX our results referring

recording the financial through call release be this financial accessible page and on in a on XXXX statements contained information our March from website. Relations For additional the of XXXX. is link XX-K earnings notes for included to operations, our results issued to to on A our the statements refer Investor of discontinued in the please the XX,

to President over Adams, I Interim Tabula of HealthCare. call Brian and Rasa CEO turn the will now

Brian Adams

in for what you the morning accomplished during Good Frank. thank team especially and proud XXXX, speak and of The for the we Tabula year. the I'm Rasa joining numbers all second us. half Thanks, of themselves.

rate a approximately growth the accelerated quarter, For fourth the XX%. however, and in of XX%, at revenue full-year, revenue grew to

a many know, for As you year us. been on levels transformational it's many of quite

in We business DoseMeRx Women addition diversity Executive Board America's for as first August, Board announced November is to XXXX recognized Commercial of September. workplaces one and Officer Named two and and a as assets. non-strategic in changes Champion important by PrescribeWellness Gill an leadership sold being April This unit greatest The and Chief Forum named sale SinfoníaRx the Diversity of recently in our our in of completed Newsweek. by of

I'm of proud enter the and the our have brought past these of have for extremely momentum. we to XXXX continued our calls. members team strong as business helped These they important with nearly number year new position a of us individuals over events how evolution XXX

I has So, of our short managing been expertise a system. patients provide thought in and an around most to complex developed the XXXX healthcare overview has for it Tabula do. what since helpful Rasa might be we

to reduce regimen and those And We for organizations provide help risk effectively. responsible more medication curation operate of the the individualized optimize through personalized care efficacy. patients

Over is interaction predict which platform, multi-drug our solution the have unique related that proprietary we years, our medication developed helps risk. MedWise

care showcase the reduction that positive publications MedWise total various and peer-reviewed on of from numerous have in patient outcomes We of health the profoundly settings. impact cost

serious help multi-drug effectiveness. interactions promoting R&D developed side risk a also of individual and reducing a through software platform continued our proprietary optimize for clinical teams while algorithms to and that collaboration MedWise medication has the patients, and highlight maximum set been clinicians regimens of Our robust engineering of effects, their

hearing the each On every a the the using our for celebrating. response personal weekly certain is MedWise more really effects These enjoy platform. These care to worth individual showcasing stories genetic medications day. and our we are precise motivate their note, a allowing by help patient MedWise one team to for are on that are person's can updates positive and team prescribing. share also I having moments that account makeup personal

the services, to care market, $X,XXX savings or revenue percentage using the we our demonstrated of Rasa. coupled largest for our using at today of represents which platform Tabula In the program elderly fourth those our quarter, when MedWise not all-inclusive person per as have the annual compared grew with in pharmacy base and PACE a XX%

to the and you For institutional Medicare a people of or have demonstrated arguably with program in and and in care to home familiar those designed allow age value utilization, rates of not hospitalization home. care than care is compared most at it It the Medicaid material settings. community PACE, funded by those is a example to based individuals ER nursing like in long-term and reductions successful rather

solutions the to technology-enabled clients to help financial not and a towards more to on our our but serving also care. of is years, allocate added PACE, And operations. simplify of Over patient adjacent risks We software believe have taking relevant we demographics. only markets their combination suite to similar resources solutions services other these and healthcare

This the to of month, Thanks to ago. average generate in revenue $XXX PACE to efforts by per which all gaining our generate XXXX, from refocus these fourth per to increased is total individual of individual $XXX around our evidenced is services were a currently they we solutions, by cross-selling company five activities each $X,XXX. year from The monthly revenue we our be the momentum. than are up XX% covered if more could the quarter

have we our overall adoption opportunity making our versus pharmacy base, we're greater XX% pharmacy increased our significant existing our at PACE customer patient that XXXX. driving towards penetration we In most XX% and of through per goal. end is services services of to per revenue month base into average of progress the XXXX, $XXX increase to the The of

market. thus customers, continues PACE existing developments I that to grow, important past services provide took place want months. incremental XX few to highlight market a addressable In the the to to over the addition total our opportunity to expanding

According PACE estimated for of the services, XX,XXX to terms access program. but Maryland, to XXXX, it Association, states New During PACE, without eligible an PACE their to one and Ohio, currently individuals making opportunities. has top of in expanding National committed Ohio the Jersey

Ohio because to passed consumer will service includes and in them bill that their PACE program. approach expansion the a a PACE awareness. the eligible proactive increase support of identifying $XX enrollment This to approach and individuals taking notifying outreach it programs area. important is includes million PACE in is state This costs on appropriate start-up proactive drive

Bipartisan PACE adoption versus to quarter facility. nursing in One accelerate of individuals Policy Center the key residing policy last the recommendations we highlighted from a

these plus participants, new In addition XXX,XXX reach of Kentucky three the to to XXXX enrolling quarter, market XX. NPAs rate by and have PACE developments became state to states PACE an the highlighted Last the XXX,XXX And are in number XXXX. Kentucky to driving total start and bringing according NPA, noted an I XX,XXX expansions, currently and eligible. of growth two accelerated Missouri I all estimated project, the Missouri to enrollees of individuals important in states

enrollees in and of yield month coming client gives per seek growth strong XXXX. applying used Using average a PACE share. billion expectation would TAM PACE that years enrollee services of our online an us XXX,XXX for if result targeted per PACE our that all over confidence by continued PACE next in estimated expansion the to market increase our The $X.X new the plus several as revenue in would the market to states the existing states, we $X,XXX

to and making PACE. detail, investments more Tom while for important inside scalable with will serve profitable, best-in-class better accommodate sales of also to business we're a demand discuss and in anticipated building growth As commercial our customers, PACE outside our in organization the

exist key disproportionate dual at-risk in today the total of provider calls, As health with prior adjacent discussed spending. XX groups focus and beneficiaries than include on and eligible drive a country's we million the markets share healthcare have a more plans that

Before a our strategic non-strategic recent to DoseMeRx. continued sell organizational I of Rasa wanted for also allow to decision the future. and SinfoníaRx while making exit in more strategy profitable to call divestitures assets I The realign the and briefly grow investments and markets turn is manner, the non-core over to Tabula part of mention the to structure Tom,

in continuing the find in process challenges sharper many come This focus execute its and reasons years. for and roles team margins to our members expand not coming the as confident did the this without to is has growth business. our not of able the SinfoníaRx one of we in associated a resulted ability with I'm strategy on plans This our future some were

asset sales focus each the guidance luck and with long-term person I with every the while represent full-year I of our want part for and creating for commitment work you did to to future. important DoseMeRx in on the shareholders. These and our SinfoníaRx value our best thank of Rasa, Tabula they wish XXXX along associated

a for we on Rasa more a XXXX view call. on from transformational significant the on remain far. Rasa to what progress future providing We fulsome our you and made can we forward focused a so have was Tabula year of strategy today throughout expect XXXX beyond executing and have look and we highlighted of the Tabula remainder

over call turn performance. now Tom our will to I review to the financial

Tom Cancro

everyone. operational good quarter you, XXXX guidance. comments will metrics, focus key three morning on and and I fourth results, Thank areas: Brian, my

solutions service using product its As The respectively. be revenue revenue the you and previously changes no company [on saw in comments titles technology-enabled retitled in our updated my revenue impact medication from earnings amounts] our and will and I release, reported. revenue [ph] line revenue today. categories had revenue

on basis versus XX% of X% quarter revenue million versus quarter. ago quarter increased XXXX. sequential XX.X the a the Fourth And third year of

attributable performance the strong another client expected and large October. than of Our in participant PACE PACE new better revenue to primarily onboarding growth was

growth revenue year These of led versus factors XX% a medication ago.

centers and we This, census driver Brian a PACE our in growth of in growth quarters be to a why revenue strong number statewide to growth expansion. years program commitments As already to our with coupled is of existing the are there robust mentioned, come. expect

Fourth was quarter versus revenue technology-enabled ago. year a flat solutions

revenue versus fourth a ago and X% EMTM, XXXX. technology-enabled quarter the quarter basis third on solutions versus increased XX% of the year Excluding quarter sequential

no pilot shipping as gross down December are year forward. fourth we program as XX.X% XXXX. That margin of will EMTM was due well working to revenue for address. comparisons ago. higher mix, a XX.X% was be quarter, the longer in revenue from CMS' which a charges, largely Adjusted going This to ended A our as in percentage

basis of gross driven basis margin. solutions by a margin versus percent quarter points, technology-enabled third improved XXXX, adjusted XXX improved sequential by On

financial earnings yesterday additional these. and We measures are starting of our non-GAAP includes this descriptions providing quarter, release issued

medication gross margins negatively and related that charges. revenue in XXXX headwinds shipping Few mix higher impacted to

margin shipping impacted and XXXX, increased adversely by charges adjusted During nearly gross significantly, basis points. XXX

in of to in quarter. improvement as factors working both above gross noted XXXX these the improve margins are in some see and did We fourth

pharmacy our pharmacy as future growth that is facilities. note we and expansion order well to to in margin, as experiencing in gross to gain significant invest lab of plan our business We of scale, topic the on While and automation support demand.

part While will XXXX to these level implement, XXXX. take XXX anticipate from better improvement gross efforts of roughly of overall we at XXXX the the points basis margin to do

part, in ballpark due adjusted to which gross to XXXX. other lower coming our fulfill believe will XX.X% large in investments the orders to we In margins these cost our and of automation XX.X% years, by initiatives, in be can

severance includes net real quarter X.X consolidate loss loss million to ago. as related million charges net And our of of compares million to costs for as lease impairment of estate X.X well terminations other and GAAP million footprint, non-cash to a Our a XX.X of costs. the year XX

noted greater XXXX, the of table the year include PACE a well EBITDA ago. respect EBITDA provided of at versus primarily increased adjusted that On our metrics, provides earnings driven to quarter clients. key in a business. operations by PACE transparency center growth, flat a operational medication the a release the XX% from participant we gross performance the versus as of ago, our Adjusted census, for third doubled, basis was earlier. driven year of our adjusted which These versus sequential as into roughly same primarily improvement million quarter by X.X new With margin XXXX, continuing end by

per PACE X% increased X% which our and provided quarter technology-enabled the month solutions, per have ago quarter. average we for our year versus revenue addition, the in In for participant medication fourth respectively and

per month fourth Our [XXX] total during [ph] of XXXX. the revenue per participant to PACE XX% increased quarter average

to Turning guidance.

revenue EBITDA and introducing first full-year quarter adjusted XXXX and are guidance. We

range represents to from million, revenue of versus the million EBITDA year growth year of continuing at X quarter for the compares a First to ago. million XX% the period of million XX of X.X operations ago to million adjusted XX the midpoint and quarter X

the an mid-point, XX growth XXX to from growth and million, XX% XXX the X.X%. of XX% midpoint, of million at For EBITDA adjusted to the continuing XX and full-year adjusted EBITDA operations XXXX, million million, of of revenue margin represents at represents of

some I starting XXXX additional want provide to with for color revenue.

to of XXXX. the expect EBITDA, because detail XXXX. growth to That higher onboarded half PACE adjusted in be We some in the to the regard comparisons to revenue year is half year. of two than With second the first with programs want of we provide I large second added half the respect

to highest be EBITDA percentage adjusted in XXXX. we quarter for our XXXX Similar the of as to and a to XXXX, expect we second fourth EBITDA year of quarter project the full-year similar account the half of the adjusted

first a first will the to increase the items, to certain be seasonal due flattish quarter merit which expenses impacted of annual present The to XXXX, be the negatively by quarter. versus quarter may quarter XXXX of fourth sequential and second increases,

cash are not a items. highlight we few guidance we flow, to respect can While with providing

property First, range million to X million initiatives be X X in to of investment XXXX automation the in equipment million the we million, expect mentioned to earlier. in and to and expansion I including support total X

software integrate modernize and capitalized several be legacy to XXXX investments including million, expect platforms. non-recurring approximately We to XX IT for

down in capital of In investment million. investment million XX in million is XX XXXX. XXXX capital in a we to to range a be XX total total, This expect from

XX and XX per automation, and software, over and and average years, Excluding the year. investment in to million capitalized next million should projected XXXX million. development investment at We equipment software total several XX in non-recurring total is the believe property in equipment property

I turn Brian some the to back now concluding for will call remarks.

Brian Adams

day. inspired our offered specifically patient team with these Tabula to a solutions by reposition Tom, progress improve who work for do. I'm steps transformational difference for call you the to for long-term members those have every you the updates. I Thanks, we made in to make care Rasa want out that Thank success.

also we value. are to to strategically investing ahead deliver look we while As to XXXX, drive long-term growth well-positioned and profitability,

With that, over Operator? I operator the Q&A. will to for turn the call

Operator

SVB Instructions] [Operator you. line Securities. Thank of Our question the with David from comes first Stephanie

line is Your open. now

Stephanie David

a them. evaluate congrats return role, new tell to months on the April's now both, was [indiscernible] Chief Hey four for to Commercial Officer that how for a us going quarter little hoping success seat I the getting new Brian, and the bit seat? in about to Heard good to the and profitability. you're more

Brian Adams

been here as best-in-class she's mentioned that I our It's April And for putting thanks team. our I Stephanie, really is a and doing work in in organization so amazing addition goal question. my place. structure one. of the an that a And of great lot is on sales am today. so develop point, a far has the she's commercial She to talking glad some that and

not that's recently we something had And necessarily the place, and so, team really focused one been what framework that's our things the products a four commercialization in previously. around and we And and months really first of about have on evaluating the we've that solutions. rigor done develop have of in is that

don't since excited I'm I it whatever, commercialization so, a an call we that have really focused the if but or know that's that on it team process. And or you'd office driving grew new,

And growth sales, that, backlog, so, terms that the some market both see in to this half in referenced of of terms in in adjacencies a of think it PACE measure things you're terms of you're on and of in I those lot call. going new good see the specifically But the we're going pipeline, the of I in within in to how year. going second terms to come of

Stephanie David

economies profile. to anything to Is [elongated Brian heading making what could to [ph] to your like arc] this pre-M&A because a related it scale there about investments back that like is you're Tom, then, expected? or than just timeline faster relatively get or talked a Now, talked profitability you accelerate that of macro

Tom Cancro

for Hi, first your No, thanks instinct I Stephanie, and the correct. question. was think

take fruit. of some the bear as those the in part of It investments get to better in XXXX will to think such these some automation take I time place.

quarter saw some of as investments. the when of project or we XXXX the consistent from in to XXXX with get benefit on we our these margins so, to be fourth start then of And you And of it's XXXX. bulk guidance,

Stephanie David

Helpful. folks. right. All Thanks,

Operator

Thank you.

Our Stifel. question with next from Jones of Craig line the comes

now Your open. line is

Craig Jones

Hi, you member wondering, around you thank options top us your you. of end guidance? growth sort could PMPM of I walk was and growth bottom XXXX when about the the through, and your end think

Brian Adams

question. Craig, thanks for the

what this in I've that's I'm Tom And about backlog to But with comments customers what specific I'll I'm then seeing I'll some cases, they have all into in interacting I off first maybe you, been evident of growth. role. with think around happen I the it in on some excited frequently hearing. numbers. numbers. our let the just market kick now get right new really we're focused In more And tell really are and

are see, can focused customers A majority exciting related But lot really the expansions pretty we what's that of of the now. to existing is those see in happening reported. to that and space. last you of significantly As the time that pharmacy in up from it's right market the is

about ends? I'll lower upper talk specifically more let the Tom and

Tom Cancro

Yes. over it year. per the the think how And with Craig, we've per that's we've in seen past participant month largely growth revenue average what in I tracks our guidance. modeled

the growth about. digit increases of two in medication the cross-selling of per Brian single talked that participant, but the and of blend a of revenue technology-enabled got you've So, each has because the the services some

Craig Jones

Right.

going saying [indiscernible]? to member that a that's grow the basis, is you're medication So, on faster

Tom Cancro

shifts board Brian starts and with services. to faster as grows coming to the two as fruit. bear tech-enabled individual than on faster the the of April That's mix the grows correct. alluded medication that And cross-selling blend than the The pieces the

Craig Jones

is] you got I looks pretty [XX% just you Can math incredible just it of us sort mentioned walk backlog, XQ. it. [ph] think Got the from we Brian, and XQ the like And to there? how then, through

Brian Adams

Sure.

– way this I'm But that I'm specifics. some color and the then have at a place. and Tom based the happy we could of of jump probably of the little of provide to today those bit on So, each on backlog look just in contracts we in top that the maturity measure on is

or using pharmacy And the maturity and to by at if location members signed an [XXX] months. by that of contract, or roughly that so on individuals example, you're pharmacy multiplying side that assuming XXX $XXXX just at or participants PMPM a we're center XX the we've use services our then average of [ph]

get you So, to little a million contract. a X over

that's on we unit So, individual build basis or an about then you're just if it thinking there. from and

to significant that? related the we the in know from to expansion existing coming aligned few seen pipeline, I and you add specific, anything past really in which have customers. Tom, we it's So, have to months have services they contracts what around, if over don't

Tom Cancro

Just multiple the backlog provider large to PACE that but the increase we signed – provider due that services. large also centers the in medication services, some we is was who tech-enabled taking both that of a national with

Craig Jones

me. Okay, from great. all That’s Thanks.

Operator

comes [Operator the William Thank of line Instructions] Our from next you. question Ryan Blair. Daniels from

line now open. Your is

Unidentified Analyst

morning. Hey, [Jack Ryan. for good on [ph] This Malek] is

color you. any cost that bit on of as be efforts you those mentioned over guys great? Regarding some extra basis year? the XXX but modeling know cost in levers EBITDA ease, could you margin provide some additional for additional points of gains headwinds XXXX, optimization are on the out improvement XXXX comment you gross get Thank to I you would anticipate XXX, expansion which you

Brian Adams

couple talk expect referenced thanks specifics. Tom start more we we and XXXX, turn in This know, abate XXXX. to we Brian. Jack, a then it you in headwinds do the had to But, of that to that for I'll is question.

renegotiating to of really favorable higher The of costs. shipping the or in shipping renegotiated And first terms some largest our with we've related was more process vendors.

our these start lower started to surcharges some abate. cost the experienced and delivery All to identified revenue And them. also in And call was mentioned cases. plan mix. XXXX. we this acquisition use going our in to are cost see then mix related then to that some second a have positive Medication on really impact we've finally that shipping methods We've the in XXXX costs is we And area on by impacted the to

lower that give to how and Tom as we're those? in us to cost. source automation you of mentioned, ultimately want relates investing either add enhancement greater we at medications process will flexibility Tom, as in And anything it

Tom Cancro

Yes.

more EBITDA, roughly we Well, than do question. in and year. prior is get guidance, million about $X increase doing how of at you're million revenue there, your the So, midpoint the XX

As about margins, we we falls margins to expect That quarter XXXX. fourth said EBITDA. XX to million that And the of gross in adjusted X margins, profit. gross be gross yields earlier, flat of to

much do tells entirely some that revenue more going hold talked have because because what but have able been our cost, We've to to a flat XX% the our we're costs we you not relatively getting of incremental So, of operating focus to is, leverage. largely savings as SG&A some sharpening growth. We're result we flat, of flat remaining business. previously about

Unidentified Analyst

guess, one, Thanks. detail And With might low-end the visibility, at close top year-over-year there. based to Appreciate to on contracted revenue of target drive guidance high-end yourself] [in this incremental the of what on sales additional [ph]? midpoint either you. XX guide, is the color two, I the million much Thank assumed is or versus any the line how to respect range?

Brian Adams

and I'll of provide just color. a bit Jack start little

Tom talk the through over bit about we're feel before, to would specifics. the expect now, think the that healthy extremely years. market And reasonable hearing see very what mentioning was are Association to is growth we for customers. an a let few that next projecting happen National is right but more seeing we're little right What acceleration through in I'll The I we're that now conversations the that revenue and of I we with As all grow. observing PACE the continues backlog we

Tom Cancro

low-end little centers same the will, if pricing the of pricing, say the the price comes the you XXXX range, the new new at more drug than very it etcetera. participants and of is high-end added. half and split at Jack, resembles or to existing of it the split entirely store And a Yes. centers. from to the growth contracts, increases, sales, new range, At growth rest centers ascribed is sectors is between new and almost of existing little that

Unidentified Analyst

you. Great. Thank

Operator

Thank conference this call. time. further you. participating. no showing I'm Thank today's you at questions concludes for This

disconnect. looks And like Sandler. sorry, may have I'm popped it question Piper now we one Jessica with in just You from that Tassan

Your open. line now is

Jessica Tassan

Sorry about that.

can projected So, conversion just anticipated how to looks the revenue like? of backlog remind many conversion? you what us years included revenue in Like are backlog rate the process of and what is

Brian Adams

Thanks, Jessica. to Good talk you. to question. Good

So, that What's all in full place in is reflected contracts at those are ramp. backlog are today.

once So, census maturity with XXX at about associated members. those on is those average them, contracts are and have XXX participants which they are, locations or full

So, months years. XX that we three time is between to and over time would anywhere expect

see would we're at there We in looking right. be you're realized. is revenue ARR, that our quoting. what backlog Effectively That's what

So, those it time though. does locations to take ramp for some

Jessica Tassan

drug or spent in bit time remarks prepared just MedWise sense. then makes of interaction little a That you Brian, about it. the the the And talking Got platform.

to Just interested, market of fit share. product physician monetization has is the this this XX% what intention of within And now? for drug platform is kind PACE? understanding then strategy is products? where reference that the of outside or of Our does right that platform landscape And about sell [indiscernible] the

about or think that you if know to curious just an to offering? as a alternative complement so MedWise And

Brian Adams

bringing every important we're everybody PACE those where listening understand in PACE use our for MedWise services We today platform it's single regimens great a our customers. that that's I use about individual. question. pharmacy and to think for medication That's analyze a to MedWise We talked we lot to MedWise

markets So, different in be but bringing thinking us into services, bringing around not capacity. MedWise pharmacy of a adjacent will some those

the really market and are April at our looking ways of that existing strategy am to relevant for So, with for and quarters. over the been to adjacencies. we team solutions very coming some bring I feel new it excited paid of these us some have couple team that the commercialization and

how to I some relaunch our with effectively strategy. things go on to you to think to we're have MedWise good plan market share we going

of [indiscernible]. X-to-X you It's I necessarily so, it's same at And of whereas think platform drug. are that it This in a some wouldn't process. think about the interactions, looking that's products simple other is multi-drug very a way these

going value we I from think higher. we're ultimately And is very by can significantly at perspective. a this that platform different come using it to the provide

Jessica Tassan

Got it.

XXXX be And on a from timeline so me, Can would you the and bookings XXXX frame revenue. of with thanks? kind the relaunch that's impact just or relaunch XXXX it

Brian Adams

Yes, I think We timeframe the in that's back in half recognized XXXX. good terms with year in a in being the be plan revenue of the expectation. of market to starting second

Jessica Tassan

you. Thank

Operator

questions Thank this call. today's you at time. you. You concludes further no now showing conference disconnect. I'm This Thank participating for may

Tabula Rasa HealthCare (TRHC) 7 Mar 232022 Q4 Earnings call transcript