CVET - Earnings call transcript Q1 2022

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Operator

Good afternoon. My name is Abigail and now we'll be your conference Operator today. At this time. I would like to welcome everyone to Covetrus First-Quarter 2022 Earnings Conference Call. I would now like to turn the call over to Mr. Investor President Vice Jansen, Relations. Nicholas Please go ahead.

Nicholas Jansen

Abigail. us for you Good earnings afternoon. joining for you thank Covetrus' call. And conference Thank First XXXX Quarter

President with and to this Chief Financial Vice be Officer. on afternoon's happy Matthew are take and Chief Wolin, Joining will then and begin will call President and questions. Executive remarks, Foulston, Matthew our Officer, Ben our prepared Executive your Ben and we

expectations. statements call, this conference projections anticipate statements based of on statements we current forward-looking, conference including during forward-looking today's During statements expectations and historical our operational business, regarding operating making financial performance, All are made expenditure. than other management other fact future and for call

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

those or could those materially are many and risks available of uncertainties ir.covetrus.com, guarantees Factors on and most future variety Commission, performance, on the are website annual report to the risks These Investors beyond actual the uncertainties, which differ other these cause statements in results subject and not from our of XX-K and a contemplated are at Forward-looking filed Exchange in the control, Risk and include forward-looking of recent statements. are Form Securities periodic www.sec.gov. at which our our reports heading website section on under of with which promises SEC's to and

these and statements. as hereof obligation law, the except only update undertake speak date to forward-looking required statements revise as no Forward-looking we or by

also With further reconciliation call release accompanying financial non-GAAP announcing the to Ben in I today. those on provide information that, to slide to this GAAP about discuss our of will highlights. results. for find financial Please a will we measures first turn contain now over release the presentation to that it our non-GAAP quarter the for documents refer You The can ir. and covetrus.com. results this deck afternoon's measures XXXX

Ben Wolin

to of thank and of well in you I -- And many seeing And hope presentations everyone. afternoon Good forward events for person everyone of this us. year. later is many safe. you our staying look and Nick. Thanks several joining at you I

can usual, accompanied our As on presentation sites. IR that are remarks found by be a our prepared

get and non-GAAP the a start the are veterinarians for to net strength that year non-GAAP to management The over X, year of our first XX% over our solid a prescription across started the comparison, dynamic focus the due on Despite let's the headwinds globe. year. of organic the year. for of momentum sales of team adjusted grew year sales Now, Covetrus. slide XX% represented over net X% a over year, market, strong dollar quarter drive total better and XXXX tough end solutions EBITDA and year a FX grew year recent numbers grew a result continued outcomes

from prescription Let is North gain year continue America includes our total compelling me year, management. grew get some X% customers resonating, comprehensive net America, sales performance clearly organic for over to and North we in-clinic in market solution specific distribution highlights. which In share

improvement sales us to As their growth underscore this medication X, compliant call important, million, and strength you XX% increased but are our with future we prescriptions. proactive visibility slide only growth, the year-over-year adjusted auto-ship, can health was KPIs solution. initiated more veterinarian from prescriptions non-GAAP give XX% auto-ship often stickiness management, pet's Most sales see of our into to These better care leading in more in $XX driving doubled year-over-year customers and not or outcomes. what $XXX on where sales to net XX% than prescription EBITDA net year-over-year, a million increased

platform business that the health both use for progress technology of prescription platforms, and customers spoken in we into an which driving to PIMS directly our past, about integration by the better integrates have owners. easy-to-use the management, outcomes in likely prescriptions pet proactive and Our are themselves their by is our driven more providing for

made company basis. in This real cost that a on progress on growth growth America, declined a also first inception year-over-year earnings. corporate since operating the costs Beyond as has on corporate not is leverage quarter company's North the the drag the been

mention progress As expense. the previous to headwind growth been in FX a It’s have company QX. would year strengthening we even not headwind, XX%. first tied reported, we impossible there the for that And expected dollar. earnings Without of leveling corporate not me our we we're been in of the growth to have this to recent referenced year-over-year of had million very XXXX out would the would calls, be a $X experience proud been when stronger the U.S. than made have

your some me Let to and industry investments now our about turn highlights the and thoughts in Covetrus' attention non-financial forward. role going

platform. And substantial in made map. we detailed company our recent into most aggressively X, As invest on progress Slide the technology continues the road our quarter, to against

team, e-prescribing under First Pulse, of technology full four and a conversion cloud-based This ecosystem international also the area Pulse, the the new Ascend, ever into off software enhanced made of it to Covetrus map been now easier veterinary that road feature includes industry. is only many first expected first not make the our X,XXX a when write renew management single of vet launch operating thrilled to the generally prescriptions. solution. has immense of so to available even built has the last we already Covetrus' later practices the by practice where we month, bring that We've will of over our launched an migrated for the with technology our veterinary significant pane Pulse advancements it becomes and months, This stage the is effort all we're practice. new upcoming of for system this community. glass progress

in offer leader opportunities veterinary in solutions software UK, address and coming other is geographies new as as and and leading product years over time. market we the of segments ascend, New internationally market Australia, global fortify will immediately customer position Ascend based the market. to help to will With pause up Zealand, and the be our for several following development well

With for have to customers value the revenue Covetrus. we margin for of our and high the ability modernization drive platform, more

re-branding Covetrus For our value our team leading integrated example, experience more the A recent solution payments in industry into launch services, calls. into I'm including by credit an a excited of We building payment accelerate opportunity of US. the directly our customers. proposition and to about software seamless see to and card our processing integrated suite solutions

care for with of for integration it and power Well platform the is we our the now made easier plans. to we've of veterinary example capabilities progress customers even our have Another made managed feature launch care out enrolled their frank seamlessly plans marrying up veterinary new and pro clients the of feature. operating that right clients sign care system. through This our allows

performance Although packages teams manufacturers. a at our Delivering In be a the technologies, year, customers not supports of not and standout distribution spotlight millions chain in-clinic world would for a teams. solutions in the many approximately our per to missed veterinarians I XXX Covetrus, have remiss so backbone dominated our the mentioned in-clinic innovation beat. challenges global and by income the supply by is thousand

our indispensable industry. animal with marketing for Our health logistics combined the in solutions made network has sales Covetrus

continued Whether tell, to consumer squarely strengthen Covetrus better unparalleled bring to is outcomes veterinary capability the environment. management, and unique be complex through market. our focused an only software pet face is leading on demands to overtime. Payment the for in and leading practice operating per or as drive increased Solutions. our marketplace challenges our can saved positioning As the omnichannel, you for veterinarians an that a across of in-clinic a We veterinarians. the veterinarians And know labor time to workflow it'd in company revenue delivering through value simplicity position solutions will supplies We as increasingly prescription connectivity globe. Covetrus building meet

the turn more to financials call over Now, our detail. I in Matthew discuss to will

Matthew Foulston

Ben. a M&A M&A continued deliver outflows description modestly results. measures our margin where when we And the reaffirmed couple while in non-GAAP additional be half we capital-related improvement year second results year-over-year. dynamics Strong our X, refer on prior A margin non-GAAP QX expect commentary results net to to declined XXXX, for American comments We drivers our were GAAP reconciliations press afternoon, QX year-over-year play $XX QX expanded our the non-GAAP financial versus organic we as X% to year, reduce higher remain our compared down with tuck-in Encouragingly, thanks some XX% of adjusted our Thanks, expenses results. during today's in Please strong to leverage prior out. EBITDA and for as brief our XXXX million. our detailed seasonal financial of the non-GAAP gross performance highlights. on my first-quarter our a the now ticked of of any return outlook. amount leverage financial we cash And of our operating North The XXXX the to cash and first-quarter of increased on us results, Slide more sales did progress full-year transactions. for normal on financial GAAP year-over-year I working XXXX period. seasonal track non-GAAP due range targeted good joining applicable. provide and to in net And adjusted today. excluding corporate Starting increased on to additional EBITDA primary used release segment. were the review XXXX, earnings, will Good grow will focus to and to everyone. margin

an X% non-GAAP organic year-over-year led net again, sales year. North to challenging Slide turning on sales the X, America Now consolidated the QX, on despite X% from of billion non-GAAP growth, Covetrus comparisons once delivering year-over-year or increase were organic prior $X.XX basis. X% net in the details way a

also reminder, April in to dynamic quarterly our comparison during emerging delivered of the activity the for European previously and growth, sales the some outlook, of during clinic Germany time to year-over-year markets Positively the U.S. second a loss were quarter well, and tremendous COVID-XX This but experienced solid variability shutdowns consecutive pandemic. year-over-year customer market our results. of digits. XXXX March another net basis expected our QX. the and of a last to UK. flat and into market prior reduced billed and quarter Europe mid-single year-over-year XXXX, organic on mid-single-digit growth rest in non-GAAP create in related the delivered perform manufacturer was continues growth marking vet growing sales initial a month-to-month disclosed in did APAC the As a QX its because with

profit distribution, helped Moving quarter this to rate aggregate, times future. make higher consolidated point our seven faster X% XXXX. And products the growth to segments in faster XX% the X% our Covetrus to as $XXX of profit or the profit XX% proprietary net in growth during gross GAAP, of rate we quarterly reported million. than technology, year-over-year year-over-year Slide a e-commerce, gross than continue year-over-year, A margin the sign of collection sales a increased driving rate during Covetrus. a the represents businesses mix shift the gross basis throughout and as X, of gross quarter QX and for now in improvement of compared the XX% XX.X% services for progress record margin first drive positive quarter. first average in to increased This and our products In XX first to X% good third-party

year of $XX the million non-GAAP EBITDA by to QX our Strength the versus recent by negatively basis XX, Year of progressing U.S. non-GAAP Turning America was corporate and out-performance XXXX, adjusted XXX North XX%. adjusted over margin growth an the basis non-GAAP the impacted dollar. in with slide points period, at over were of for of year year. EBITDA $XX was more X.X% than up expectations. rates XX million growth to first consolidated prior flattish compared adjusted the year quarter points drivers in strengthening EBITDA increase

supply segment year of the chain quarter, margins versus helped in management which XX, organic X% prior logistics and individual over year product our X% with non-GAAP during in drove costs another basis. increased offset the animal software first foundational period. growth market including year in year onto on higher new QX of certain Ben operating inventory growth launches, included share EBITDA in and management ahead as growth the year flat investments as in year products. over over growth on XX% chain, in QX, beginning segments, over companion an active well quarter supply bulk This in year the America for described. net XX% prescription planned adjusted slide North of Robust Moving prescription gains Segment adjusted XX% in year as our year challenges sales increased EBITDA

net management increased America March. from mentioned completed North during acquisition earlier, As small first the a XX% sales including in year-over-year $XXX an contribution quarter, a million tuck-in immaterial of prescription

client operating non-GAAP pleased we quarter grow with adjusted leverage business than We the were year-over-year the Importantly, delivered level doubling spend net in period. QX. EBITDA, the with adjusted strong of acquisition quarter. once line again year-over-year, delivered in this non-GAAP discounting the million. a than top more significant versus simultaneously by we delivered to more to profit while ability prior This for flow-through internal year in growth self-drive during XX% our $XX EBITDA the reducing incremental incremental of first Overall XX% sales into the

to XX% XX can EBITDA investments XXXX. sales from always lumpy While we in the of net for be year full to timing a focused the prescription adjusted incremental management, remain delivering on flow-through of

to were flat previously XXXX net due UK Non-GAAP in in demonstrating disclosed turning more European issues following Slide our on QX Germany a sales segment markets. organic to our year-over-year progress Now XX. challenging the and

UK half to start the the net businesses were quarter notable now the helped level of more are in year. it over well organic challenges encouraged last the headwinds quarter, year-over-year the note, growth, months quarter. in business the Our that XX the off beginning segment and we was European offset that sales non-GAAP UK second boding during Germany Germany. pronounced Netherlands, QX growth the as our second contributors ongoing I'm in operating share consecutive to have Romania, entering And of Poland, Of for second that impacted

to Turning profitability.

well of European adjusted our declining in result net was $XX margins year-over-year of year-over-year to XX% segment impact strengthening the in recent impact dollar. reduction a basis points the the Our FX negative EBITDA the Much decline as the a UK decreased of to QX million, with sales, XX X.X%. year-over-year US from as from

new proprietary given half anticipated to second of geography's launch return year, improve. the also a buy-ins anticipate actions several into We last Europe in faced our cost a savings. a the growth EBITDA comparison difficult we in And XXXX, early deliver adjusted trends sales recent during

our delivered in of XX, out category X% recent net tied headwinds, Moving Australia. despite growth stock On team to segment. over APAC markets and flooding on the unanticipated veterinary QX this slide another organic strong quarter our the year region notable situation sales of emerging non-GAAP in execution reflecting to food in year and in sales in diet

recent the the digits by New the growth Brazil just Segment the basis over compared from Zealand on offset year and during over grew high the for organic the in underlying QX to adjusted flat margins of EBITDA single mentioned. year year during year growth single digit on a dollar. with negative as Australia U.S. non-GAAP low impact strengthening quarter were reasons

investments Free XX, QX turning after capital in Now, cash balance flow in usage activity. typical of cash to $XX sheet flow slide the normal on a of net cash was million seasonal expenditures.

our expect the operating $XX versus deliver year on the working flow spending trends. equivalents million availability under seasonal XXXX in of improvement was cash of cash. which revolving second we earnings acquisitions the cash And million was we along -- strong a million approximately during cash we during facility. of quarter, period. However, alongside comprised free $XXX And and to prior spent We're with $XX tuck-in and increased is this ended half with available in million QX liquidity, $XX capital which credit

our have credit We under net covenant in as leverage to headroom our defined continue adequate agreement.

to XX, growth in X% growth outlook X% as markets. non-GAAP in guidance in to X% to to XXXX Europe, year-over-year X% North XXXX. emerging and growth reaffirmed X% of continue on X% The XX% our to net in to America, includes and Slide organic we outlined turning XX% sales forecast APAC Now, growth

then and XXXX Our to 'XX, rates which robust XXXX to outlook the continues continued levels in normalized, into above in conditions as market assume and prior But XXXX April. March the pandemic. market of growth seen the growth start rates started below and more

growth. Looking reflects XXXX our XX% and outlook to year-over-year XX% at at $XXX million to non-GAAP EBITDA, remains adjusted $XXX

sales dynamic original as in this is QX growth the quarter. believe stage was at above to reported our our net year full-year sales the our for products we in that monitor in higher While of portfolio the a strategic dollar it the alongside XX we escalated also brands of market said, North inflation of end XX% and incremental new in prudent outlook percent COVID-XX in created plus drivers We global and With and U.S. uncertainties growth in supply market. net interest margin the continued our above an growth segments. proprietary our prescription trajectory chain year maintain tight expectations refreshers, across recent acceleration branded software growth management including confident alongside global The headwinds. Ukraine, in impacts, America, in has conditions, another rates, Covetrus war rising labor the products, average XXXX, of of our remain strengthening

not for line we growth guidance, global lapped Finally, in the return non-GAAP chain tough the EBITDA during half call anticipated the market I fact QX we With some that turn do not we of over in the provide that, the and quarterly adjusted double-digit back comparison challenges specific the emerged levels supply year-over-year the will given prior-year with second remarks. yet now XXXX, of half approximate some of while QX, year. a expect second to have brief to to closing Ben

Ben Wolin

is market to value better partners. future will in creation results. manufacturer and products growth against seen have to concludes in our value strengthen our to over off we continue a closing, to significant path momentum stand Jansen XXXX as now new to and year slate and execute our have our the shareholder Q&A. in I that for call to proposition strategic as Nicholas owners Matthew, in QX of moderate to this strong now coming see And strategic prepared and I'm excited we're pet plan. a This we customers, a drivers, our start remarks, expected Thanks, than margins, the our back turn the higher

Nicholas Jansen

Thanks Ben.

Now take you of two, We queue one. possible, then should to we to the the re-enter you we as them want limit begin section though questions Q&A and conference many additional to ask as have call. our

instructions please and provide first question. Abigail, take are So to ready the we

Operator

Instruction]. a Ladies [Operator and gentlemen, to ask question

Block comes question the Jon first of Our line from Stifel. with

Your line is open. now

Jon Block

so Great. $X EBITDA than you to And kick for Thanks, you raise and raise. in didn't thought I a on or trends you Maybe but get ran million just just lot there. I of a chatter guys. it wondering, And that I But didn't North prudent. called half or dozen better hear Matthew, reasons you you afternoon. out off, were to imagine, you mean, can Good XQ, call America. specify want term there's no why remain it. near as real

your but any love more tough we'd I So how tough if to it is capacity it on could earlier thoughts or trended. ago, constraints April thought things? get March Is North of demand just even the comps you complicated in a side elaborate. Ben, and with comps from practices anything year America on the you to or alluded at

Matthew Foulston

to X%, at I that drawn say comp each don't hand how Ben? issue. I piece a early you data optimistic in above and really it's north let's on Interestingly, seeing. quarter the it on a shows everything X-year but down basis, we tank yet, in say month, all started fairly be anomaly then we January, to X.X%. then Why Yes. of if nearly XX were April terms look don't were and goodly would up out of entries we're we look accounting have In the March is bit quarter XX% in looks it that over unfolded to we so strong, the XX% rest February, the an get the of was of which really a of kick And off March off from I'll about mentioned. you XX the at you up and

Ben Wolin

of Matthew listed in to to coming that the access would challenges, of across globe, thing uncertainty out John, from Yeah, the markets. I the everything add, all I certain chain supply only think

think I guide. full-year around So that's driving just the the prudence

X% more right, had North evidenced value to of I prescription having we America, for down, is that proposition I XX%. whether in-clinic grew it driving more growth driving pass-through think prescription management. as solution revenue have been the management and you're been efficiency and or in America, supply clear are We software think it's a North as chatter essential, visits number. Covetrus definitely It's or resonating there's while by efficiency the becoming practice through clearly relates per lot the even one

market showing can the ways, challenges a end company the and in that maybe So are better in real some positioning we value the practice. the bring

Jon Block

some inventories maybe color that great increases second to on one may just to price just coming I about inventory but case, question, quarter, Last speak partners seems about ability, and and be to Maybe a on the builds capitalize on on clearly that just if pushing hear, maybe shift types talk that the you try to further. to play to just the you for you. you. quarter, veterinarian. and, that bit gears this the about build are the of of us Matthew pass capitalize sort with your through. is and more the of Great price price unwind on that's your our can that the thought on talked to little it the if of a didn't, trying we're through broadly, -- case the what's to some going it -- Thank again, in which increases increases there it maybe

Matthew Foulston

say to in year. I'd couple a aspects there's inventory early the of

and activity. back to But you then which comes us cash inventory take pre disciplined comes to some to continued off. tough pricing a back fairly see the of build way that in the execute our have first pattern two to through advantage -buy in generally And quarters. environment, in in typical Our we is the for flow,

beginning in a in we're the unusual of which see of is rounds history. indications pretty in tailwind cases quarter, second absolutely some is and pricing, recent to that So

but to the it them any So it. we opportunity, have think in, absolutely of extent we take to not will that factored allow more of I advantage provides

terms parsing of pushed I last of done the in fuel. the through, pretty good organized, inflation pricing And we once year. most of after the probably through of a the half I've In freight got job we've shock think second and

say there's we've lingering here get Let's in quickly. a that little obviously And the will fairly brands, bit that on proprietary regard. been after asserted

with So the environment. pricing we're pretty happy

Jon Block

Thanks follow-up Okay. offline. I'll guys,

Operator

Our next question is from Elliot Wilbur with James. Raymond

is Your now line open.

Elliot Wilbur

some Matt seeing price Thanks. you established current Maybe terms what may expectations logistics. seen challenges. supply set, of then Follow What of Good and increases up afternoon. inflation overall in or what some just quarter. the inventory we what we chain general X% you what in be those a should year of terms the so terms Thanks. year, environment, thinking terms beginning in increases the just briefly, Ben around described But negative of impact. and of commentary. in so area in originally at be for in are, you're cost Matt, the was cost FX full the about can level versus

Matthew Foulston

flat Let strength gives assumed is just of purely U.S. the rates our to that is And FX, be the talking obviously into average headwind. we're the here, the are to that just and foreign with about me dollar FX in QX. dollars, start we've currency clear, What you it's a profits and translating FX. go-forward

on I've been I've than wrong been right. times So FX more

here simple what is and our that's a approach took we So based fairly guide on.

said that And a away, Asia say up. we've prices, fold, I'd and you last when inflation, to increase we and seen what's see, on then X, fully into the be freight on bit really that's largest surcharges. will to material. through on I caught X, of far extraordinarily successful oil increases. back going through. up execute at you X And about inbound and and pretty as we're we've happening significant Obviously, containers the fuel by earlier, fuel out been of slowing XX% we're talk percentages Going primarily got from we've hanging shortly, going here that that little pushing certainly

logistics think out a job of ordered I a great supply. guys seeing probably So terms have bit coming. in We area the in this some done of the securing

talk you where road, tripping I bumps or that three for are think to when as aren't of big could the talking even about about, supply big pretty the headwind we issue. in diets chunk small to had worth and The from one prepared off point remarks, challenges, business it which to of a pockets really wholesale. we're us a only and enough real I small little the us. for Australia, a big about was anything there talk in in things opposed two is

Operator

our question Goldman Rich from of comes And with the Nathan line next Sachs.

Your line is now open.

Nathan Rich

Obviously, your but does pressure the that continuation into of a might some prolonged more their do if now constraints afternoon or prescription and Ben, how checking? seeing Thanks. guidance, change America allowing of maintenance of you I that of maybe we're business. Great. helping Good we vet for the start, the to in see questions. impact and thanks management what outlook didn't terms for for right the some management with the period guess traffic North play the sell chronic Pulse scripts -- on some of does platform, capacity the actually traffic, urge vet clinic of vet be of in

Matthew Foulston

you actually in question, date a sense. answered think I Yeah, your now

clearly prescription slowdown does pet It seeing drives only not are is protects is two. for drive management per the because They that that. retail, don't the with but or and capacity traffic under so have them ways compliance or it against customers revenue of a looking really owner. up labor to down pet. As and connectivity either They're our greater pressure, combination for come

greater even any And at just would the seeing consumer or as interest feel reminder, only say we're practice. penetrated an given or X% utilization five the platform. of So utilization that in a the about I platform

with So customers, XX,XXX having XX,XXX average those only X% their clients the customers on now on of despite are platform.

were So best are we room revenue year-over-year. down, that and reduction I reduction prescription QX view XX% or visits, think visits tremendous there's head even management, signal the in X% results up X% on went if of

Nathan Rich

outlook target variability in like Can think little continuing be And And you XX% just the the quarter. there business. But some about contribution talked there? better for the maybe that first bit on quarter-to-quarter with investments. outperformance does I Matt, XX% to could a did to you And the drove margin it what seem about margin. talk

is something think vary being that I quarter-to-quarter. also labor

how So that Thank for of out maybe could margin playing cadence piece the you that you you. about talk just business? see

Matthew Foulston

a this we generally pretty in about it. over rolling we've measure consistent, period. that's Yeah, talking as how a target been I think XX-month And

out bumpiness. some of fast as technology growing side, the Obviously, much do as lumpiness, chunks. investments these as with the in come we've and we in are, that as So on takes and got activity

And we well XX% quarter. the revenue and market. I'd now of slide tuning and the don't presentation tell better XX% sales. sales. I just actually the XX% investment prescriptions massive that discounting. Yeah, refer quoted XX% the had along platform in the would vet down. represents And in a the on a a that, quarter just terms pretty of you I and are tremendous So goes the of variations team the did prepared of was up not level this initiated think worry the that low deck but as year-over-year of Nathan, auto-ship a investment you job and in getting remarks, side, how same we quarter-to-quarter drop coincided phenomenal to represents And that I as better But back about grew with, with

high-margin two-thirds from think from or the a coming XX% almost being in XX% coming auto-ship, vet XX% whole initiated So about is that's way. driven business prescriptions, compelling very of you just

helping drive drop And so what the is down. that's

funnel. want the Now, to the to of we consumers top of course add

and comes marketing where in. that's the sales So

So but really performance was we model. as like team, great keep strength just of going, but engine the by magic feel you the the that of kind shows the

Nathan Rich

the appreciate Thanks, comments.

Operator

Our next Balaji question Barclays. is with from Prasad

Your now is line Excuse me, Balaji open. Prasad.

now Your is open. line

Nicholas Jansen

Balaji come to Abigail, and we'll see let's in. go next the back caller if can

Operator

is is open. with question Christine your Blair, from Rains line now William Next

Christine Rains

smaller this the on same to for high my And of guys the Russia-Ukraine the in impact downs lock QX. taking question. for just you the of is or expect My in thanks Hi, and impact. exposure kind first impact And question then quarter. have you end, the larger if one

Matthew Foulston

Yeah.

broke question one the to make heard bit, was up we Just the first the right, a because sure line China?

Christine Rains

Exactly. Yeah.

Matthew Foulston

Okay.

one start Having second the first quicker a because clarified me it's answer. with the one. Let

it with Our exposure think extremely about circumstances. had XX I there. really difficult that I working under software Russia developers to, to And know managing frequently, contact I is limited continuing work and is we think Ukraine, relatively was them

good. enough, think I them got to been seems to most of spots. oddly And Internet have safer amazingly themselves connectivity

part the So I this team, is but pretty we've think important been so an lucky. and productive of far

sales No out There those And impact. small sourcing from, such it only the or is business era. wouldn't business. to there, of on ending the us really for enough around markets. a big revenue that's of even China about. is but be not then talk China But So our it's piece

Christine Rains

year-end Okay, customers my thanks many for end that caller. inviting by you migrate Pulse. second just XXXX? then one to How or your is to by And on goals year are targeting

Ben Wolin

the Pulse by -- either new to and PIMS I be end migrated and will net additions to So so little platforms, have new then other more than we our XX, AVImark think from of the about ImproMed. migration existing XXX% this month. will bit XXXX, that's business a or And

about get amount can our a interest, backlog to this X,XXX or solutions. our we of in by using it FIM from a that customers comes year, think base the have existing are that customer and nice competitive of end tremendous I whether

Christine Rains

Great. Thank you.

Operator

at again, And you [Operator if question this have Instruction]. time, a

open. is now with line Erin question from Next is Wright Stanley, your Morgan

Erin Wright

Great. Thanks.

level, of you're to you So from us customers, But about remind practice a broadly, are a and pass can still more back the successfully resiliency backdrop. able vet hearing it just perspective push front customer owner thinking how pet seems you're price Thanks. the you economic on and your any that at challenging here. more potentially your anything on business

Matthew Foulston

I kind say pass Erin. I would that for Where ability Hi X% price. growth. think Again, of level. not the speaks certainly itself industry line was growing on to top quarter at from the

market look at market from Animalytics we QX QX picking share every data you see would if the quarter or think since of did you like share third sources I Second, up XXXX. basically party that

no us actually following following price. our the share. of you if evidence industry, are losing see that I closely So competitors on you some think And in we're

environment terms our macro think of in I back. the of push basis, slowing business and environment. I think very well micro on pointed micro a no macro down. one X So to ability kind to continues forefront, that's the kind The I company's be things, actually in of succeed and to is business suited that

revenue solutions valuable. the that's veterinarian, about Our are technology more incremental to clearly to driving be going

in-clinic it's in your clearly you solutions with looking if driving And to run to about you're try an standpoint, supply provider. simplify also from easier valuable. just efficiency, to all how then solution Our practice, go software

is think very you conclude standpoint, the would of think durable on clearly animal health fringes, that 'XX, People 'XX, last other XX years expect And a maybe then the we to But well health, pretty their and I maybe parts to it's you from back essential it's And or think some continue last to animal slowdown. going categories. of have are remain we're very to down not the see that at families just I people So strong. spend situated. that this I want some continue. Pets look lives you macro pets. turned maybe and at likely if luxury

Erin Wright

what's just thinking other just then about we detail? quarter-to-date here? Okay. that omicron that prescription you the And of you overall quarterly there should the any Do how then the or lift acquisition, continuing And any growth the be that there tuck-in on is Thanks. contributing one front? anything or Thanks. contribution was management that one. or like mentioned, to follow-up from The momentum dynamics think progression

Matthew Foulston

of no good full-year XX% Obviously acquisition. you've in a still volatility, on got growth. XX% and acquisitions And is the our but in number. as talent We're capability quarter-to-quarter, still confident contribution significant tuck-in the plus plus variations number

Operator

And there closing for are to comments. no further call questions. presenters I over back turn will now our the

Ben Wolin

at events. everyone. everyone you. for QX you, forward seeing Thank our to look conference call. industry joining Take care, upcoming We everyone earnings Thank

Matthew Foulston

Thank you.

Operator

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

disconnect. now may You

Covetrus (CVET) 5 May 222022 Q1 Earnings call transcript