Earnings call transcript Q4 2022

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Operator

Greetings, welcome to Augmedix Incorporated 2022 Fourth Quarter Earnings Conference Call. At this time, all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

At this time, I'll now turn the conference over to Matt Chesler from Investor Relations. begin. now may you Matt,

Matt Chesler

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

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

which Safe of forward-looking we Harbor statements. are federal during this forward-looking statements expectations begin, will management results in make of the to I’d Before pursuant meaning that that of made like Reform provisions events, the Private are to statements XXXX. this include that Litigation Securities relate securities the or to Act future performance, laws, remind contained predictions you of Any statements within or call call

statements those Accordingly, forward-looking that actual could involve statements. current various estimates These based on reliance to or cause from these not anticipated upon implied uncertainties these and statements. materially material and forward-looking you assumptions are should differ place risks undue events results or and by

a results most and filed the XX-Q analysis uncertainties the disclosures financial business, filed and the with reports with our Exchange discussion in operations the risks refer XX-K SEC. and of and of to For associated please and risk subsequent and Securities Commission, condition and recent factors description Form our and of list management similar with Form and

financial our measures, Also during results adjust non-GAAP eliminate today, which certain discuss call items. the our may we to GAAP impact

financial release. will and in non-GAAP financial GAAP a press measures find reconciliation these today’s these additional to non-GAAP You of measures regarding information results

projections only any law, forward-looking or broadcast March contains statements, events because obligation, as intention time new XX, or financial sensitive XXXX. of whether or by accurate as the of live disclaims future call today, update any required This information, or otherwise. except revise Augmedix to information and conference is

And over with Manny. to call that, the I’ll turn

Manny Krakaris

also like us. to thank Augmedix morning, to us. of Thank FNK IR you great welcome everyone, team, Good for Chesler and with you, Matt I'd joining Matt. you have

Augmedix with building strong momentum the another year and quarter ever with than second footprint was the finished saw its accelerated with the increase revenue number experienced enterprises two as and quarter other physicians bookings accounts. we existing use and we we a We our and performance. the XXXX When who ROI all of our and physicians, our best bookings quarter. growth the third of strong substantially great service QX due continued a fourth for deliver. more fourth products We of now materially our enterprise of enterprise third quarters in continued in traction expanded to

all products to account impact major In of Augmedix Augmedix has a and recruitment, policy positions. its retention adopted have to partner the recognition provide productivity leaned on clinician positive and in another had

the grow result doctors in XX importantly XXXX our us with customer furthering reduce our that health physician We initiative a Augmedix approximately enterprise serve the and in system region of of of won of part expanded department, new Department customer's affiliated cohort emergency And early top As and we will with segment. its won Market to existing a a Emergency large XX% total added deepening that to of [Indiscernible]. relationship physician of as penetration network. an

revenue. progress have business our solutions March strategic the ever our is ever with year-over-year the annual was AI-driven in and rate recurring model. growth platform expansion, The revenue momentum, XX% of bookings. pace product hasn't $XX Total slowed enterprise in scaling down in differentiating executing We first signed million, tremendous and drive a a us to in our to fourth we team cohort our for There realized our quarter best across of flexible million market quarter the is customer representing front our core in priorities XXXX maintain Augmedix and opportunity and XXXX. $X.X largest exited intelligently

broadest We medical care so most product the or are workflow. setting developing of portfolio regardless documentation meet in the clinicians space, of the we needs can

will beneficiary approximate target than product use This SaaS dictations time tools. be for legacy significant a and U.S. will greater notes. generate the for and Notes Go, segment the be savings gross for software to than us products, as Augmedix our intended U.S. margins is largest Augmedix used Augmedix opportunity other of a that the market dictation is of product clinician XX% higher these have pure Go documentation clinicians of Augmedix directly Our easier historically and medical doctors the to Live.

Augmedix quarter feel. Go value In highly, more a of at created empowerment and relative and system to critical structuring into physicians to clinicians health transparency And according this being serve approaches offerings. to capturing expand Box and physician attributes added year. providing in look currently easier We is of tools, patient addition the of a Go dictation major health than and with and Go are the testing tested saving and being provides control plan of notice sense and to data of time systems. believe Go requirements transparency handful benefit specific medical Black how competing will content to commercially differentiators as physician Augmedix this visit its the as late importantly use physicians to the has launch and and to second we control a

Language curve our the at change latest care effectuate at patient the and point can Go across Large impressive patient as the medical significant represents parts the indeed can effort help that Augmedix of to improve that behavioral we increase access, the impact on automating the are or scale bend continuing cost of in models LLMs outcomes dominating today. have healthcare popular are press a ChatGPT note. LLM such industry. Models

providing particularly used incorporated our generate summaries and LLMs transcripts. are other in with in conjunction from to already are LLMs useful models stack rapid tech fact, our notes. context data NLP and In and sets structured medical in are

(ph) wants together deliver other and We're so with we LLMs or use structured considered needs, progress that making customers. notes accurate conversation the the technologies [accurate] structure unfolds the moving the the of major what conversation cannot solid However, into in the cropped notes industry. data is requirements use our invariably physician setting why to is and in the which such produce acute our a emergency same with reason and highly quality wins. standards meet encounter acute also not summary that additional alone some A why is inconsistencies is care up contains of care patient our that or medical sequence high of room in medical industry of that LLMs today by and note

all to and them and continue acute to products make our ambulatory both features We in to settings. support add create value care

integration between us Integrating of system the milestone our medical to within EPIC. health now Another our enables and large in integrations nodes an efficiency. with the fourth in EHR customers We coming clients planned one more operating EHR multiple have to quarters. improves and quarter with our EHR faster deliver even

impactful continue our our proprietary automated advancements we pursuit in to of with Finally, platform builder note make fully medical enabling notes.

have margin. through week our XX,XXX continues expect of levels a we to data benefit about notes machine Our on the automation large gross platform increasing a our and will passes of from that volume impact positive learning

The model operating investing on as business operating and reduction profitability bear these product self-sustainability increased. are leverage achieving again quarter-on-quarter possible. inherent sales priorities, engineering, We our on and to marketing as as in and we in as is development, remain rapidly realize focused our our fruit in the executing starting volume laser loss

grow is operating throughout trend to and continue expect as leverage top our XXXX in Augmedix Improving to XXXX We aggressively a continue beyond. line. theme for that key we

fourth to with accelerated growth market. rapidly offering, to In positioned profitability. a we Financially very on and expanding showed top respect large the our closing, operating continuation product path a as quarter are and of leverage and our progress great we made well line in improving

our on improving We strong continue on increasing margin focus delivering gross and growth, to leverage. initiatives strategic operating and execute

I'll the Paul? we’ll with our Ginocchio, over closing that, return Paul now Financial With comments. then turn call Officer, Chief to

Paul Ginocchio

Manny. Thank you,

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

The fourth or recently stabilize quarter NRR metric our accelerate slightly quarter. XXXX was of fourth NRR expect when peaked, to the from we

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

the Our higher strong most of SaaS NRR us end at companies. puts

third And the growth to of for fourth as of the XX% to compares service year-on-year a fourth of quarter in Average clinicians in XX%, XXXX. quarter rose XXXX. XXXX the compared quarter rate

year-on-year Our and XXX% growth either using a as We live and again define or service of to in the in service note service. doctor, our clinician business to grow We XQ. two-year stacked healthcare nurse clinicians professional the an XQ of indicator ability in individual in or versus demonstrates market an number our accelerated our business. performance rate other growth practitioner believe penetrate it the as is our of XX%

of compares our efficiency the the and Adjusted was in XXXX XX.X% reduced U.S. quarter offset of period, third gains. year-on-year partially year fourth margins, exposure the quarter to for in serviced clinicians The gross XXXX. increased to out and XX.X% gross the XX.X% to margin compares prior corresponding of by

with into progression from are margins We quarter. third the the of pleased gross fourth

XXXX expenses, operating compared fourth and third increasing grew deceleration sequentially the for items million, XX% from excludes of of one-time year-on-year of from the compensation stock-based third in quarter quarter million quarter. the the operating Non-GAAP Total XXXX. were the $X.X to quarter expenses $X.X XX%, fourth a which XXXX, in

investments marketing we portfolio as year-on-year, team our and to technology we marketing a team to in investments further note commercial incremental engineering automation product due and and the in company. salary Operating listed increases, increase expenses and our sales expand platform, reach, our NASDAQ expand our extend increased G&A due being enhance capabilities annual as cost

EBITDA the fourth and Despite our adding quarterly in the a interest, profit fourth gross amortization, compared of in a of OpEx, taxes, back growth, in loss quarter. depreciation, loss by our quarter $X.X XXXX, the million stock-based driven operating to was Adjusted outpaced which $X.X for million in in XXXX. of compensation loss quarter OpEx a Difficulty] one-time [Technical growth in of reduction quarter-over-quarter second to items the resulted net consecutive losses growth

points adjusted adjusted EBITDA basis EBITDA year-on-year. our by improved While XXX approximately losses margin increased, our

the by $X.X to XXXX million million over quarters, losses million we two our last XX% $X.X the quarter adjusted in EBITDA operating from or quarter. of second $X.X in have Importantly, reduced the fourth

breakeven flow cash the at the over our path last and to be progress much quarters, should clearer. Looking two trajectory

an to health retention year turning Revenue an was full-year Now results. net XXX% for the XXXX our from in of the was enterprise million last full-year million, year. $XX.X $XX.X increase XXXX. for revenue overview of XXX% to XX% compared customers, Dollar-based for

grew $XX million profit to gross to XX.X% XXXX XX% gross to margin, with gross for XXXX. margin a million a of as GAAP XX.X% margin in last with Adjusted compared profit compared was gross $XX gross XX.X%, a XX.X% year.

were and the million, Total excludes one-time in to the Non-GAAP compensation which items year stock-based XX%, XXXX. $XX.X XX%, operating grew XXXX. compared million compared $XX.X to operating expenses expenses, up for

cash. cash compared was of December cash, of $XX.X had we $XX.X equivalents XX, in XXXX, and EBITDA a to for million million At Adjusted million $XX XXXX. restricted loss of XXXX, net a loss

In addition, term we debt $X takeover did we million. be of $XX down and access facility. incremental SVB, tranche take existing in million the second had After loan of FDIC of liquidity the our

remaining line AR So incremental we liquidity as via today, million of the still of have of credit. $X

in with only us runway. we XXXX, facility, on operating ARR been declining performance of January incremental balance runway. As interest period XXXX years cash the on $XX achieved million and approximately expectations from our Based debt operating two our our still extended have metric our July current has we our to of debt capital sheet, providing burn,

and due to Just first quarter a burn of annual cash payments the quarter bonuses. our some the year typically quick is largest reminder,

a and to start we implying strong $XX approximately Now finish growth million moving providing are XX% to to of to Due XXXX, a rate. XXXX year-on-year the guidance. for strong full-year revenue XXXX, guidance of

the to XXXX. outlook our of Turning for quarter first

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

similar quarter in of be fourth We expect of GAAP margins gross to first XXXX quarter the XXXX. the to

XX%. in will Augmedix gross Recall Go XX% margins Augmedix gross than to scale, indicated the at range we've Notes Augmedix of will the that Live XX% be with be of margins notes. gross range to higher XX% in Augmedix margins

revenue Go in However, XXXX. we from material don't any expect

expenses quarter to quarter operating first higher fourth than the expect expenses. be slightly operating We

expenses operating our revenue, to which growth. in We lower substantially in expect increase but sequential our operating in investments growth top that than inherent increase leverage in incremental the expected coming again Importantly quarters, than be the will the some OpEx XXXX less model. and our be reaffirms do business line growth is in

turn At comments. to back the this like call point, for I'd to closing Manny

Manny Krakaris

and like year. the labor for process, the proud Healthcare Augmedix to Paul. see the and in U.S. to to team's Thank in results medical fourth over be the thank delivered I that quarter largest shortages physicians addressing team are inflation. strong of you, our and distracted staffing of the points we we I'd note. course personally am entire burnout, the the commitment patient the generates by System, physician enable the In the not technology pain the

long-term and for customers. size to take massive also industry's patient of of tenure, Board. point the stakeholders. financial our has would ROI boost market confident outcomes unmet successes need relationships the delivered realize healthcare as Chairman Rod our the to to in and and vision the behavior to We performance. XXXX will compelling of welcome needs access, offering doubt remain forward care changing our accelerate and look for patient to and products to continue long beyond this IT will the increase opportunity that of His our We improve our help the and O’Reilly given at to like us new extensive no I value multiple generating the our industry

that, open With you. Thank it questions. we up will Operator? now to

Operator

you. first your proceed Blair. our Daniels Instructions] Thank William line conducting We'll now you. from Thank [Operator questions. is And the of Please session. question be question-and-answer with a Ryan with

Jared Hasson

guess, guidance, congrats Jared hoping all or we close much I of any, that level get there How you're $XX is thanks the This that to of a million is think below drive to that Ryan of, of this that of visible trying the taking on actual reflect year, about momentum. terms stay one the in year. Really of, would versus to performance variables contract our is morning. for what and Yes, a good just could to sales just under sense comfort for sales Yes, should what new and Hasson outlook? questions above on is outlook in kind sort key there? you --

Manny Krakaris

Paul, you take that? want do to

Paul Ginocchio

Hey, Jared. problem. Jared. Yes, sure, Manny, no Hey, Thanks for the question.

strong at year very million had of the exited we $XX year. So ARR, we entering the backlog a

plus So really into that million. visibility ‘XX that backlog good exit $XX ARR of the gave us

incremental $XX You guidance of see first that Q-on-Q our progression sort added and what of we like revenue good that feel achieving looks can quarter the million. and about ARR

Jared Hasson

driven momentum client data little by I of help guess here. solution? has expansions large identify some any follow-up Okay, as talked driving guess bit you benefit then in more your broadly And been you any I quarters. which of that the curious, doctors I'm to terms perfect. in just is a a Maybe where recent think about client really success around expansion? just the really most you're could from the what able color of sharing systems

Manny Krakaris

question, Jared. Great

cohort So our it an experience after big done or many the approach enterprise those enterprises. an on definitely initial has with impact of definitely we've we customers has use that expansion the data-driven with two

are grow inflation, us stimulating burnout, services. driven shortages, and predicated. general know I demand in by think probably you other demand staffing being secular for particular there's issues but is that in is Demand choosing our as labor to particular in doctor

to it’s impact easy we're pretty enterprises the those by And see that financial the having their incorporating on think to deliver approach, able high those on for data-driven enterprises. performance. I we're to ROI

Jared Hasson

leave Okay, it perfect. hop again on success. We'll all queue, there the congrats but and back in the

Manny Krakaris

Jared. you, Thank

Operator

from comes with Chatterji your question Securities. proceed of next The B. with Please Neil line questions. the Riley

Neil Chatterji

of, testing how enterprise And going Go and and just the year? your the the later the taking envision for the curious Augmedix how is foundation this so questions. you beta preparation being, far launch that morning Good thanks Maybe platform? for off, just kind first with any feedback for

Manny Krakaris

Hey, possible that Neil, much that testing, feedback it Manny. is will target the Good we're it's when as -- of launch point as service, that we the users to from the commercially so it is to we're satisfy so the sure make beta this question, get the needs of after. product going market

far, but days. the good, still early So feedback has been it's

been our we're get and to commit you'd other So product exactly as which feedback, -- and feedback that don't still is productive, than nature we're still had indicated changes the making want timetable earlier. what we expect we I what it's and to to that improvements of is the

in indications We does we're we will -- as of next the And be commercially beta testing more are testing the year. go one product with today. that well. another enterprise the that extended this launching end enterprise And particular to quarter the deeply towards with all will it

Neil Chatterji

curious thanks did Great, one the And mention example the into talk more earlier, more update. if expanding just just bit of then opportunity you the little ERs? a about you that for

Manny Krakaris

Sure.

figure healthcare went aggressively the the clinical into our enterprises. with and ER workflow ambulatory kind ambulatory off, is West not can cut on from just on this the hospital the a that market the out more as Coast, the major out different and pay deal while imagine with us, with beginning are figured decided not to is because it's and we just is the And setting. regional because challenging effort or care it linear is a you And that to as very we a Coast in workflows, it that of ago to helped So how setting. at facility workflows teeth that, to kind West of, those

opportunity. that about excited really we're So

represented documentation so And expansions virtual know the because it's that But we do. greater very as and in we've nut space, probably you hard forward well that within feel segment. looking to not to it's cracked

Neil Chatterji

jump for the it I'll in me. back That's Great. queue.

Operator

Thank from Group. question the you. proceed questions. of [Operator Instructions] is with your with Allen Maxim Please next The line Klee

Allen Klee

expenses Two on of going operating of, that questions, year-over-year Is run what Good targeting fourth and quarters. morning. you're, just kind what been third is one kind rate the we've forward? the seeing for

dig little of on Dictaphone? offering, them would into from you And you make doctors that basically, have what you a switch what second get versus the then you. the feedback could Go -- to more? Thank If

Paul Ginocchio

it's that take Alan, Paul, first Hey question. I'll

OpEx you be as will same get we the it as the look year-on-year growth into fourth at of think saw growth or that XXXX, levels XXXX. in I third quarter of not at we year-on-year

not year-on-year We we're give moderate but growth. I you specific growth rate. more expect any more expect that's in -- going a a hope deceleration to currently, should

X,XXX we And just Manny’s at make on but the to year-end, estimates average products clinicians service, at in first, the did fourth to relative the quarter. commented metrics, for I that, year-end. service question give of call move benefits point clinicians to you. point of clinicians estimate is and end before out Thank two aware on typically the There around a the in we at want just just sure that number service of year. are everybody's different dictation. the the our want that was I of The the X,XXX of don't of we we

Manny Krakaris

within lot you be steps navigational physician the to amount of value see there's the second, dictation, more in for is one, time we beyond obviated that specific or place have note, that note be a of dictating And lot the of the second our Go with or sorry, product solution. work just saving that for savings than it's in of by easier use in medical lot be is to criteria the to the Yes, done that need important it to the medical EHR has to answer objective commentary physicians a evaluate capable and and are, time content really want dictation to ease a use there's specific a that a taken fields by the preparing proposition Alan, product. that to question, the your has to use of

as think one about is There's a that we which intangible well really couple talked important; I our transparency, of criteria are in comments.

And expose built, the into we user sausage the than so physicians, will interface. they want the where important baked then the the they how can that's are show there's what areas appreciation note something is making to think that's it's medical where have physicians an for see differently what to they do to are. to important, We doing. might And the steps models

beyond the specific They in to is point, ability the the feel that more without they and leads that we control product. that's elegance and and our to the look want view value content it's I see empowerment. to And that effort, objective particular They intangible look think that that at. have of And physicians lot that second of control and many which transparency. medical metrics that go note a the

Allen Klee

Can improve Thank gross ask that to one their potential I you. that other have you question, in think do over margins ‘XX ‘XX?

Paul Ginocchio

growth of operations, it's to mix. Alan, the Serviced impacted question. of not down in serviced We our may higher that Hey, U.S. going percent by XXXX Absolutely. -- excuse Service me, see actually go as again Obviously U.S. clinicians Good we're a our XXXX. was see Paul.

gross over time. be And a margins will benefit so that to

Allen Klee

much. Thank you so

Operator

further for hand time, I'll this Thank you. the any floor management back remarks. At

Manny Krakaris

on we earnings progress. we'll and in-depth later Thank tomorrow with in take our to and questions-and-answers. those our interested Well, call more appreciate keep online everybody listening you are callbacks we'll all, posted coming today that and and you

Operator

This today's you. Thank conclude will conference.

may your You at lines for your Thank this participation. you disconnect time.

Augmedix (AUGX) 27 Mar 232022 Q4 Earnings call transcript