- Earnings call transcript Q3 2022

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Operator

Greetings and welcome to Augmedix, Inc.

Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Ji-Yon Yi, Investor Relations. you. Thank

begin. may You

Ji-Yon Yi

thank for and call. in you you, participating all today’s Thank

results ended me Executive of company’s Earlier site. Financial financial Chief Manny the today, the and released Joining available Krakaris, Web Chief press Officer; release are on A XX, September XXXX. Paul is Ginocchio, Augmedix for copy quarter the Officer.

which are forward-looking involve or our Litigation management call or predictions statements. assumptions are expectations these the federal events based during this and statements we Accordingly, various future I’d begin, results make of the risks cause to from like Before pursuant material of these estimates those upon in anticipated implied to undue Private reliance forward-looking meaning that of performance, or made statements to events, Any statements current and results uncertainties include materially on Safe defer or are will securities of this you the remind contained actual relate place statements laws, by that Reform you and that to provisions should XXXX. could within call not that Harbor statements. forward-looking Act statements. forward-looking Securities These

[indiscernible] and and adjust during disclosures which discuss Commission, XX-Q results and list most financial recent management our the Form XX-K may Exchange items. uncertainties we For the of Form subsequent refer filed our in of results GAAP operations filed today, and with of and financial please non-GAAP with our a certain with analysis Securities the risk our business, description discussion associated SEC. and to call similar risks reports the Also to and impact factors measures condition and and

results of by or November future required accurate the live regarding information to whether measures release. these or any is except that, press disclaims information, sensitive and or in find these This turn only with financial revise Manny. non-GAAP today’s forward-looking will reconciliation Augmedix the And broadcast intention any as law, financial XX, financial events to You projections call today, otherwise. obligation, to over time as new XXXX. statements, conference GAAP of non-GAAP contains call I’ll measures a or update additional because and information of

Manny Krakaris

Ji-Yon. and joining I’m a very thank everyone, Good you, Thank afternoon, for record to us. announce quarter. you pleased third

our to and Our expansion, solutions, drive priorities focus differentiating platform results across AI core strategic reflect business our driven team's executing enterprise scaling our customer continued flexible our model. and on product intelligently

burn our driving leverage, has and losses are cash initiatives operating reduction these operating quarter-on-quarter. which in Importantly, in resulted a

we in losses continue XXXX to that QX, expect versus in burn to we As stated trend and and operating XXXX. decline for cash

have Augmedix shortages to remain to KLASS our solutions quarter and U.S. across improve boosting the of and address wage by productivity demand been care labor which demand organizations growth report documentation Retention physicians, reducing differentiated staffing staffing over company's as see at multiyear effective revenue clinicians cited Moreover, range. the bookings shortages major our inflation history. consecutive fourth and of in our target very quarter. is quarter, by Bain our month quarter that for They health of for XX% resulted our had burnout which revenue administrative a shortfalls for slower validation. September is The the will record operating market and positioning these This these key results healthy rate. we XX% third gaining meaningful seasonally quarter the theme strong growth the the as operating combined grow substantial past at among topline. Notably, we with for continue retention. pipeline go-to-market Improving traction XXXX providers, realizing XXXX Our and fourth to increasing aggressively million, a service for in months. nurses bookings has challenges is representing front year-over-year be industry improving to continue exacerbated was and $X.X the productivity third environment, were leverage a end needs. in -- the labor leverage. in published largest turn directly in demand XX solution, forefront third and inflation for also wage by era COVID-XX and near We with catalysts of typically differentiated alleviate which burden, Total concern top Recent what other strategy labor a XX%. plague tailwinds the driving representing

the burnout, health We have of and addressing how highlights a in are our our clients. momentum, our physician human for new of with number additional solutions of commercial the underscores existing reinforces This resonating pipeline our XXXX. large and optimism the are as which toll continued pipeline, orders both

We meaningful accounts. organic through drive continue land enterprise revenue expand growth to with and our strategy

the their their largest productivity our ROI results, that line with system Based implemented order. health physicians beneficiaries in service patients. health As would ever based have of who was at more efficiencies placed for to the that on single established Coast see health target issues, based cohort an believe those address of The example, retention on We one wanted -- an solution our our metrics. our initial larger from the the of outset systems physicians prime system and individual increase be East services our program. believed to we an enable system we of realized its to among who specifically

this a their will total significant physician portion at of footprint population. enterprise cover Our

customer. to a to systems. generate partnership introduction with In health continues Google the large successfully we strategic third quarter, into Our another introductions new converted

expands beyond reminder, of Cloud over a go-to-market partnership power reps. systematized the our harnesses X,XXX engineering enterprise effort, a includes which now Google focused As collaboration, and Google

into quarter, the Google Augmedix System their services. the our Health towards Cloud purchase the integration to third commitments we marketplace, GCP financial During GCP Platform allowing formalized allocate customers of

to development product efforts. our Turning

resources for addresses before Augmedix patient distinct response solution. respect to excited are encounter release with positive Prep, see a patient we're begins workflow starting and the Prep We another challenge commercial the by our to time chart. The Augmedix of spent administrative pre-charting with clinicians.

note. Our for current about a chart each the burden administrative information hours health historical or relief record that systems health solution X.X clinicians of extraction enabled day, staffing into to Prep shortages, amazing Pre of with We challenge save medical from providing Augmedix charting believe can patient's our respect relevant a today.

choice option We able pleased their device now to our this are personally for clinician additionally satisfaction of with they offering system which application, preferred offer rollout, operating Android further and rollout system. reach enterprises, to existing we client clinicians regardless commercial iOS device health broadening use. will our care enhance system client retention. client With all select operating believe that of the our such our are and thereby clinicians include complement the to We to operating

track a commercially that to to themselves solution released our facing software in enjoy software We This notes addresses higher ambient intervention than large it margin clinicians of segment market. part. class even customer remains This use products anticipate generate XXXX. gross product human Our documentation on is the portfolio. a no our with be current also will medical medical on product

continue technology our we medical our enabling make in proprietary fully Notebuilding Automation platform and Ambient Finally, with of automated pursuit notes. to advancements impactful

pleased of confident In automation. realizing positioned steady that we notes at our medical benefits a we proportion represents to We the week. results. machine closing, a margin pace, anticipate of meaningful percentage very As third automated and learning, from levels from the We notes our been opportunities is has now we are with benefits increasing every with are of firmly XX,XXX gross realize the large that we begin generate increasing quarter remain plus ahead.

operating to continue growth, return Ginocchio, our on closing and will comments. increasing execute We initiatives now strong our focus and I then on with Paul? strategic With Chief Officer, call turn to the leverage. delivering that, gross Financial over margins, improving we'll Paul

Paul Ginocchio

Manny. you, Thank

year driven and higher enterprise As XXX% quarter for the XX, for from the client of health in existing ago. clients $X.X notes based XXXX third stated, September of quarter to XXX% XXXX X XXXX. XX% months the revenue the our for compared $X.X period a new third our million, same Growth was again customers, was expansion, was in net revenue by retention the million ended increase a offering. Dollar growth in

As into any year our clients on upsells, previous excludes many recent XX includes but quarter, revenue net existing a dollar during that were of months. grew churn, new most a measures logos from revenue this you retention and know, ago the in expansion revenue at added

and puts third NRR us Average companies. end at quarter XXX% the of quarter XX% as the XXXX second of to growth of compared Our year-on-year the XX% compares most SaaS third for of XXXX. higher in quarter rose service to the in XXXX clinicians

and ability either using the number stacked being or combined We of losses live the the doctor, we platform, growth performance XXXX of in third XX.X% $X.X due quarter. Our XX% in as XXXX. believe quarter gross the third in grew costs other sales extend our in third of by of and versus service We reach quarter define The automation clinicians compared our clinician were decline expenses is NASDAQ we to second the reduce to The corresponding to for operations. of is our the our operating in penetrate XXXX. and year our to the the increasing in million, of as the million gross marketing improvement in and to compared margin third market expenses quarter team both expenses, a over the our direct Non-GAAP salary enhance in OpEx our compares portfolio. in individual a quarter-on-quarter of annual our the in to the investments as allowed a note Total second gross versus practitioner demonstrates in from note or capabilities margin business. the XX% second grow of result excludes nurse year-on-year engineering indicator increased XX% growth Adjusted an was and care XXXX. service also our XXXX profit, growth year-on-year technology operating to of G&A down Operating and health quarter of further And accelerated operating increased in XX.X% professional it XXXX. marketing an team us of sequentially product expand business, listed prior X-year scale as the due for the period, commercial service. quarter XX% which incremental rate increases, our second the of $XXX,XXX quarterly of investments stock-based compensation quarter as sequential $X.X company. with quarter expand

OpEx fourth quarter XXXX of expect quarter of XXXX. third from mid-single-digit We the in growth the into

objectives in on by basis. with we strong we've Adjusted quarter. our pleased progress losses is which consistently million calculate amortization, in made XXXX of of $X.X loss quarter compared EBITDA recent of depreciation, a interest, the operating are loss was primary a XXXX. quarter reduce million most back And net One in this compensation third we of $X.X the our to third to taxes, a loss sequential adding to and stock-based the of

$X.X the adjusted in cash, of quarter quarter second the restricted EBITDA We cash the of million quarter loss Our third XXXX decline third with million in cash. and XXXX from $XX equivalents XXXX. in ended of

line have term after third access a million, our third trend. X via quarter to facility and that $XX quarter an we versus operating $X.X of under to would tranche Based credit emerging decline our SVB. that years additional cash said at liquidity we runway. of CapEx million existing last operating highlight in Additionally, burn over Remember, on and loan have credit we another XXXX burn AR with of results quarter, continue XXXX, cash

our our third place uplisting season plans consistent regarding brief XX-Q. strengthen controls, quarter Turning of our a be year internal further update put in public ago, larger Ahead with companies. to to we a

these application change part change the years. our quarter, should a position. we XQ we on steps, firm. transition related X tier or that in resulted the has in third 'XX over Commission's commissions cash With and accounting impact that and to top of it to losses XQ positive Previously amortizing and As quarter our change, to this of 'XX. no we we bookings in capitalizing identify are made a now material one This in cash reduction expense in in policy the accounting update the we new of commissions. We

XX-Q. in put the address our plans regarding We remediation have extension this the change and place our material weakness arising to filing from with SEC

will results in position, material present financial X-day the the period. We financial summary, our company's fairly flow their the management XX-Q reviewed and cash thoroughly for operations concluded grace In file disclosed. and all periods all of statements, within aspects, has

for outlook our of XXXX. to quarter turning Now the fourth

million. and Given strength the quarter the $X.X bookings, backlog, recent revenue in XXXX of to to we $X.X health our of our million the expect be current approximately of fourth

rate. growth guidance our sequential acceleration revenue a implies of Our revenue further

for XX% XX% in be gross at of Regarding we that margins third to the quarter. be expect be indicated closing to I'd reported comments. in point, scale, and we live expect the margin gross similar quarter to turn what for the we the margins it fourth have like Recall XX% to back to At of XXXX, to range call XX%. knows the in gross to this to range of Manny we

Manny Krakaris

shortages. the staffing strong will There's forward directly Thank to Thank deliver, pain ROI our physician And mission from fourth address confident rehumanize, and that and relationship solutions. proud a that to the given drive solid economic entire uniquely you, solutions continue to results the care the in to points thank delivered for to the team face you. our we inflation. to like the our I'd and need for I'm and third issues health the our to personally team's remain continue largest in these are differentiated we U.S growing Paul. look services patient beyond physician with value wage address quarter labor documentation the we quarter. health system, our care compelling burnout commitment shortages the of increase to and address our challenges for delivering stakeholders. positioned to We Augmedix long-term organizations forward major stemming offerings demand

So we'll with now to up questions. it that, open Operator?

Operator

Ryan And be will Instructions] ahead. your at go question [Operator Please Blair. William first from Daniels

Ryan Daniels

once about can the the congrats mentioned a It revenue productivity. specifically. more you study into it a or Thanks know detail kind client more to that then is that going that waves in contract, Hey, expansion. will ROI big all pure bit a regards details with out little in that detail was guys, Dr. of questions. large can any roll little you the about be drove or to at was more for on led I to large cycle, you what Thanks. into there quarter. bit to want go helpful. Manny, taking go And if

Manny Krakaris

Sure. Thanks, Ryan.

with there individual a metrics of of track which for is from per time productivity doctor, the wRVU the respect when ROI doctor. amount specific a standard ROI, is average doctor the specific realizes that calculate that that we we our those doctors. of the given with when the determines are to in And the was And represented using EMR measure two the we visit. the unit And of in look that of metrics the One offerings lift is in each initial of metrics the So we our that based across cohort over wRVUs two other the And at line we increase improvement -- was estimated the lift doctors, aggregated the two estimated. spends in -- by on ROI, time. the what right those had doctors, after the that particular those service. doctor was

supports lot of data a that estimate. that have We empirical

we population what The that was in the been served large can. have came increased given by that service cohort. size them cohorts much initial doctor result, they chunks, we to based of confident our on had And we're as the be pretty the fast that we're in And as larger onboarding substantially. So going than that customer. added

Ryan Daniels

… That’s Okay.

Paul Ginocchio

to we Ryan, done a onboarding, it's completely with have -- clear, still ongoing. And the still be not we're

Ryan Daniels

of a go-forward pure on data bigger more with -- a outlook? becoming piece to lot with of sales then, but bigger And proposition sharing a that the burnout the offering that ROI perfect. becoming proposition I productivity basis? the is recruiting, know, and is turnover that with there's Okay, sales value pitch of and

Manny Krakaris

we boost relieving make part not to health encountering, want be that I to standard mean, them is. we're a of top staffing recognize that it's that line, of actually but our very we're appealing systems just sure them care pitch, because them. It is which a issue our may helping

cause are and other Burnout factors So we service. those, we subscribe one that, But shortages our these Dr. the there of want systems staffing to to another. care is is stick sticking to health want it. that with with to are

Ryan Daniels

use client really rollout. it that the a towards individuals doors? the in And iOS device more Is then, system curious open barrier really I'm easily was advancement think if something that operating they Android a Or solution? if your is to this up can ever your you that going view? just to had offering question was an this product take So for that device on? expand in lot a

Manny Krakaris

of care health system. obviously the Android two service we done doctor to was was could universe on every or for that Well, with not an system broaden solutions. it reasons. our Because is doctors every One

systems So there are that some healthcare large are iOS. exclusively

to make Augmedix will from And rolled those it the excluding our iOS was in other go, prospect So to want we solution, be device our we of based going which rollout fully client call we be of not XXXX That's were the go. solution. anticipation that automated sure list. an in out and

Ryan Daniels

Obviously, perfect. feedback here, discuss but a I an this favorable you reception of with and early clinicians. new got burden a for that's Thank about you. Prep client on then Okay, saving you know any clients seeing base? them an just what's but to the perspective, more or or the be bit, half its just either existing feedback little for the within final And question product? ROI hour mentioned you're for and

Manny Krakaris

Sure.

So good we are getting reception.

enterprise One clients them progress contract by them is Augmedix of customers systems. a other we're with we've with encouraged that and in their our made on finalizing the product across with for deploying We're negotiations large Prep. on

optimistic several customers. Prep remain big enterprise resonate with that I will So Augmedix

Operator

you questions, any further have Do Daniels? Mr.

Ryan Daniels

you all No, I'm Thank much. set. very

Operator

Thank you.

ahead, go Please Securities. sir. Riley B. at Wiesenberger Marc from be will question Next

Marc Wiesenberger

Yep, thank you. Good afternoon.

and Cloud accelerating growth. potential for to customers that little how about you touch the see could you, on a the integration you the Google spend through leverage more maybe bit and If

Manny Krakaris

Mark. Hey, Sure,

for to made they can they've they we partnership our wish a and with allows portal that are to. But to, to that based respect customers go select That's the services. So contract had their would executed. spend, or Google technically on that -- they've online, that this into wish they integrate portal, that system, that commitments portal, we formal services, on And to marketplace. already Google customers subscribe pay Google in Cloud those through portal and the furthermore to that services we formalized of the one which annual committed we the those also to cloud Platform membership get to in their

So is one what significant the syncs it And is budgetary process, it for in annual us they've gone does or through time that Google the for eliminates cycle. cloud. already it of when the did barriers the commitment with their sales they because

And so with that just sales shortens customers. those cycle the

Marc Wiesenberger

Understood. that question. And Got next my dovetails it. with kind of

self If across service forward? going the opportunities. maybe how you provide could current you about for, of level talk integration range EHRs could that And you about think additional do of the and that work that

Manny Krakaris

Marc. question, Great Sure.

efforts So ongoing. cetera, big are we are Allscripts, the -- ongoing we are integrate -- EMRs et with to Epic, our Cerner,

We EMR Go. the integrated are already unlocks integration Augmedix you And Athena into may as fully with know.

an a we as of many imperative possible. as EMRs is ours as possible it So integrated to with as ensure that are

And so towards ample is effort, we which resources that ongoing. have dedicated

Marc Wiesenberger

envision current one to the offerings? do automated. the if you've significantly then And for cycle the offering, the you. many look Thank me, I which it. said does Got times your think all that And is new at potential you and relative for sales how more changing strategy just go-to-market final how

Manny Krakaris

products services. be services Augmedix to platform enterprise. three That enterprise Well, the foundation the to linchpin is other into sale, extent three doctor or that transition a the other we doing want platform. is have that portfolio with an solutions upgrade to add and it's right forward as Skill go we're serving are then of services And available Augmedix Augmedix would any they that we going The is go enabling be to We a across Live, want what would we subscriber, those Notes, Augmedix or thinking with. have now Prep. of distinct to

an -- it's by a way moving to grow strategy. enterprise So us that within for easier to it's an

Marc Wiesenberger

Great, thank you much. very

Operator

you. Thank

Brooks O'Neil from be Street Capital. Please go ahead. Lake will at question Next

Charlie Montang

This O'Neil. Hi, Brooks guys. for Montang is Charlie on

situation Just quick a first couple comments question, you with of the My have McKesson? any for me. questions on do guys

Manny Krakaris

want you to Paul, ….

Paul Ginocchio

that. of want -- -- working McKesson like fashion. Xs it it's say it's shares in for so yes, are our with of point they I leave just at can to filed we sure they if Charlie, I'll But to Hey, Form filed dispose we'll and shareholders. don't some that and they've expedited it at obviously Charlie, be a some future, think to a We XX-D. that just -- speak orderly make the an in any

Charlie Montang

have And for Okay, and it. in the question kind me got more November? trends continued that you into [indiscernible] saw of then one just QX October

Manny Krakaris

that repeat I pardon. beg your Charlie? Can you

Charlie Montang

strong that the well you've as Have into continued sorry. QX as seen November? Yes, trends October in

Manny Krakaris

judging would our yes. pipeline, by I Well, say,

seen haven't we of any We what in the third saw anything evidence from changing quarter.

So we're very encouraged the see we by fourth quarter. for what

Charlie Montang

Thank Okay, that's me. it you. for

Operator

[Operator question Please your Instructions] And ahead. Allen go next you. will Thank Maxim Klee at from be Group.

Allen Klee

or it third clarify, good had Not, Could to two, that operating expenses margin for U.S. or that did to some just better? customers, you sequentially than U.S to was I you. be I the that why the just shifting Thank then you the you due Was selling? that's 'XX, morning. gross good businesses expect single-digit gross type had you're quarter about to the second, quarter compared the was quarter up it's was that Yes, 'XX? your due of of on to in talk better you wanted say hear more mix quarter it impact fourth to margin And in guided what that the information prior of of or In to. be afternoon. your mentioned the you'd good Couple, morning, stored

Manny Krakaris

growth for in to that's the quarter. looking Sure, On question, our mid-single-digit from second your third -- backs Allen. fourth correct. quarter We're sequential

your interpretation. are you correct in So

of percent Second, year-to-date. as on gross margin, revenue has are we our increased a business U.S still --

And We the gross good headwinds, those the gross did So efficiency in quarter some and drove margin. still just sort scale operating would to the efficiency face our margin. see relative which second. we third improvements of higher that working are and with

was that So really it.

We the we labor improvements. and those. our scale, But front and are we saw improves, that third technology believe end to both with automation be still still ability and in efficient gross margin expansion our the again, we have of as the on significant quarter. technology We from

Allen Klee

great. That's Thanks much. so

Operator

you. proceed Thank at no registered. comments. this And additional time, further we questions Please any with have

Manny Krakaris

Well, I'd like joining call. to this for everybody on us thank earnings

As the we're I which fourth and quarter XXXX. to beyond. and in mentioned really positioned new excited strongly believe offerings We very broad about with before, about already the product that our we've we're we very that differentiated are with marketplace in talked expanding portfolio

on we're possible, to note this as automating forward updated joining medical that Thank for next the thank continue We tangible everybody progress session this front. to as earnings on and our that, on much us conclude call. With making We you. call. I'll look press and you keeping on

Operator

for And this call attending. time, does Once your we disconnect gentlemen, conclude that lines. please today. this conference sir. Thank you and you again, indeed at Ladies you, ask thank your for do

Augmedix (AUGX) 15 Nov 222022 Q3 Earnings call transcript