Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, greetings, and welcome to the Augmedix Inc.

Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder, a is being As

It Matt Thank Chesler, my pleasure you, your host, to introduce Investor over you is to now and sir. Relations for Augmedix.

Matt Chesler

operator. Thank you,

Executive today Officer Chief Manny Officer. me Joining Krakaris, Financial of and Paul are Augmedix; Ginocchio, Chief

afternoon, an for quarter be investor We'll our at XX, financial presentation ended be of the begin results a Q&A our session. also a archived is and augmedix.com. with by to We to followed posted copy released prepared our press we June This call the on XXXX. release remarks website. simulcast call and website This being will

federal Before Litigation the Reform you of call securities that are Securities we made during safe remind the statements this Private to that statements I'd begin, management include harbor will of within provisions laws, Act pursuant like which to XXXX. make forward-looking of meaning the

predictions are or on or events, and and statements materially expectations future involve material results could results that uncertainties based those from differ are to of implied. They risks that performance or cause or current assumptions statements. and actual to relate events various Any anticipated estimates forward-looking

statements. should undue place you on reliance Accordingly, these not

disclosures associated For discussion with Risk the of risks a and with subsequent filed XX-Q our and filed XX-K to in Form analysis the reports SEC. list most refer Securities our Commission in Factors and and please and uncertainties business, with management's similar and description the in the recent Exchange Form

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

today's reconciliations regarding and information additional measures find the will to in GAAP measures release. financial press You these

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

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

Manny Krakaris

Matt. Thanks,

Demonstrating systems in value and are quarter revenue clinicians revenue health that for growing QX. We set XXX%. strong adopting XX% delivered year-on-year, increasingly net and base at dollar Augmedix another products. records our and retention

expanded We to points margins XX%. by basis also gross XXX

As operations. revenue increasing strong operating bookings best year. inherent this guidance our performance with the of that and the are our scale are outlook leverage ever recurring revenue for With our matched confident and model we we realizing our in our quarter, raising our of

patient We have help promised healthcare dissatisfaction world-class of industry to medical solutions. ambient the and clinician address the dilemmas documentation burnout to

products for delivering. developed experience And that speech that we the including of sets the uniquely a models, combining possible. accomplished years portfolio We've what is level the encounters. standard and more datasets clinician million recognition, are vast large workflows, of power patient grade natural library that language by from understanding accuracy of Augmedix offers a of technology combines a structured language X proprietary than processing of and models, stack automatic this

adopting settings. and Our of products within are number customers growing ambulatory by a use both the health system practitioners acute for increasingly their care our

greater the generate in data patient is the harnessed byproduct with includes such to being HCA innovative partnership transcends, medical the structured deliver U.S., which that the in same health system process develop Now, of generation as healthcare that these our as some note to we customers, encounter. solutions Healthcare, largest of the ecosystem even a value

health year for serve. our We clinicians are and we right on track systems and company for the an important

both working Healthcare care the acute of in about partnership developments April, with and company. the Go Let's collaboratively a HCA some such ambulatory across that now trialing talk as HCA, our Augmedix partners are settings. with formalized we we current Recall actively strategic exciting in

and to that to with are quality notes of it is product the the use. user of the possible to optimize to with pleased very making the enhance progress clinician we interface automation as draft are We as the the delivered make the easy to

Augmedix on launch this later for year. schedule commercial Go is

to say of offering have rollout speak much We about this will the to more in you new when the fall. we

underpinned are their our ability performance resonating compelling Lives Notes by due strong accurate while products, to ROI health clinicians which systems. and with current to notes medical is to Our delivering generate

largest This of our base is behind confidence value strong broader evidenced proposition. dollar our year. approach much technology our XXX%, are which of this revenue further of on what a is our major which revenue and by first growth. the already validates an our factor retention accelerating our in out rolling from vote XXX% net clients already Many rate strong improved in a a HCA's of quarter basis, products is

healthcare is focus providing is leaving we market. highly We're allowing accurate their to burden the the clinicians. evolution patients. unviable Go by bring believe focus will while notes Our more administrative of to of Augmedix segment medical the on efficiency this even to doctors which broader to an initiative, next appeal

well Importantly, our the doctor proposition to extend beyond we encounter. ourselves positioning value are patient

basis by for U.S. some The structural function revenue cycle of adds payer imperfect that than the and results result The which the in the those a ideal given healthcare that services. are system in between providers leaned services the iterations, to less for healthcare billing system. cost burdened from rendered note considerable and between that they price idiosyncrasies a for relationship, has healthcare management encounter, provider the is billing. primarily are This by is paid used medical multiple the information as often

that AI being clinician's accurate We note fairly, medical enable our to our customers billing we in with learning largest can machine entire generate process to we the with This more an record closely help create the do working provide can health this byproduct transparency. are activities products to detailed address use creation of as to and tie more result of paid already medical more a and description should faster records. ecosystem the more organizations than inefficiency, area this our and tailor We to accurate note.

ROI provide of our offerings to compelling expansion customers. This yet another will our

patient the the serve a beyond in should competitive as extend Importantly, encounter, chain for value durable advantage our Augmedix. which it will participation

on sit substantial positioning, evidenced market which revenue net we high remain our here is And midpoint our growth. trust. by of very as revenue in retention as overall XXXX. scale building by evidenced confident we're predicated scale our trust As We're rate. at and that the achieving We very

business is Our in products. wildly performing very largest our driven customers by adopting some of well, part our

We to while scale order are track the gain breakeven future. invest in to we to on that continuing need for

care of even more evolution excited we business, about helping and to next looking Go system see of which a are downstream areas, value. forward deliver health We the especially where point opportunity Augmedix is in major the beyond to our

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

Paul Ginocchio

Thank you, Manny.

delivered of an profitability. proud of during accomplishments second on growth very improvement that the success Augmedix's the generating the business and first I'm team quarter. in the strong quarter, and Augmedix Building the financial continued is

a results position as leading tech our demonstrate health Our further company.

strengthen required took to cash to the sustainability. to important steps ensure continue position capital also business We to our scale have and reach the to financial resources our that we flow

XX% driven our the a clients in Let's new for $XX.X while review Revenue million, year offering the a in million same by from June XXXX the in quarter's ago. was ended financial period the $X.X XX, primarily months Growth growth highlights. client notes was increase existing also the expansion, three contributed.

of customers, for the net was a quarter second compared XXX% to in quarter enterprise the our Dollar health XXX% in of based quarter second rate first XXX% for XXXX XXXX. retention revenue the

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

The was our primarily customers. largest expansion, driven acceleration system of in by and handful NRR a health

rate clinicians service XX%, best-in-class for as second put the of companies. XXXX. SaaS Compared to the quarter in to first Average quarter a results, of levels in compared rose second Our for year-on-year NRR XX% XXXX. the us at quarter growth

of business. as a in an the business, define our service individual believe market in performance the penetrate either our to Note demonstrates clinician our service. and We using indicator professional, clinicians practitioner, We other doctor, of growth grow or number of nurse it in an Live the is or service healthcare a ability as

compared gross to and to mainly over first XXX the margin clinicians scale, compares in percentage XX.X% basis the This our Adjusted XXXX. XXXX in point service improvement XX.X% was of for driven of as the quarter margin growing prior period, second year was initiative U.S. to in gross the XX.X% strategic corresponding quarter by our outside shift to year-on-year and U.S.

XX%, year. of G&A operating for compensation compared of million exclude quarter expenses quarter operating in growth second X% quarter and the year-on-year, $X.X up was million were quarter up expected was the the as first year-on-year. sequentially the $XX profit second stock-based X% expenses, which from for last Non-GAAP of million XXXX XXXX. to items Total $X.X one-time XX% Gross

expenses, G&A professional $XXX,XXX for in second fees including Transaction accounted of quarter. the

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

activities recent of had in of to collections the quarter, was this quarter. adjusted this improvement XX% in nearly to negative million last $X.X negative quarter. with year-on-year from an end lighter quarter to in a led than our the ago million was burn cash at an We outflow a margin flow the in compared outflow Along million of from which higher second expected EBITDA in Cash improvement the loss year. most $X.X in June, operating adjusted EBITDA year XX% $X

week most planned quarter. in is third of costs stronger a than timing below and plan. issue, the first This shortfall was collection that corrected the of With revenue and

reduce We are to in versus on track burn XXXX. XXXX

in initiatives of the June XX, cash HCA the of term At credit. extension cash to million strengthened The and from of XX sheet equity the had million facility $X cash, XXXX. equity $XX of and equivalents XXXX, million and compared $XX.X million as up as $XX.X the to include months we Group, the balance Redmile line by December Healthcare XX, loan of new finalization restricted

can accessing of and But as the equity we've backstop before, without closed. expectation we this cash access if markets that is flow provides credit certainty, sustainability, line The are further even gives capital facility. capital our reach said us

have In share $XX.X common outstanding shares million we of count, currently. terms

weighted be count as average shares warrants XX. prefunded Positioning our X.XXX top XX.X a priority. reach million continues for issuance profitability April on the the we to million since to share include show EPS. common outstanding company We For the

exit technology XXXX. believe operating and growth we before we flow leverage the As to we our have platform, tremendous operating said, of strong breakeven, can front opportunity revenue interest us reach both in cash with we expense and net deliver as

to Now The on have at year now expect million continuing. the for is during momentum we to moving this of We $XX.X guidance. revenue full positive be demonstrated XXXX. least year

the given million. in for the third we our to and XXXX, $XX.X our outlook to expect of quarter third bookings, to $XX.X strength the recent current of Turning million approximately revenue health be backlog, quarter of the

gross similar GAAP margins of second GAAP XXXX expect be We to margins. gross the to quarter

operating the expenses due hires expect accelerating made we to have be growth. to quarter-on-quarter, to We up our X% X% accommodate to

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

Manny Krakaris

Thank you, Paul.

generative shareholders. deliver like we to would for positioned, team entire and strongly strategy, our well set are our growing and in our are will quarter moving thank believe, our industry. is another fast sound for evolving increasing AI strategy against turning rapidly customers, strong impact on I an while our and particularly to on continuing executing a have forth market. promise to and We Technology, that have a

you ideally experience, inflection poised workflows understanding maximum truly I'm of and clinician what I our years Augmedix, advantage is advances. to and believe is excited ahead. and a lies Thank their significant our industry about of Through take at these point, challenges everyone.

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

Operator

Instructions] with you. [Operator the from Our Ryan ahead. Please question go Thank William line Daniels Blair. first comes of

Jared Haase

to of a color hoping comments the the and for of further appreciate our I to Yes, just of add kind insights this products specifically the of customer of this and data partner inefficiencies source value you that Are to curious, the with leveraging area across guess is good data share was the - unpack idea this with monetize of to on theoretically others in around current This as drive data market. idea in and made some momentum something could value that those maybe you thinking all continue with was afternoon. continue as stickiness your bit questions here is I as the get is is something you RCM little base? solutions you partners. more pull could future? can more for taking Thanks an expansion or distinct through enhanced scale sort base for the congrats you where Jared maybe and around you just see the your that Ryan. on Haase you Manny as another proposition

Manny Krakaris

Jared. Hi,

now. right So

may As and my of access the for structured actually remarks now third-parties in directly know, integrating prepared extension - lake to data. building that you we Google, that a working to, lake referring HCA in would and far was build get own lake we're to along into allow to for was capability an where HCA. data actually pretty concept data that productize that I we're What HCA mine to with a data their data

the and relies on little bit on you collections is that fairly the of to where archaic probably them system. between the help for as billing many in cost added in and of complex healthcare, payer better. know, our as do And in reimbursement, So, and result provider submissions a situation, is their there's with that data great the to to go our of the that idea it structured iterations jobs on ecosystem an a deal input develop area here a

if feel of function, that could those to system. those today good are removing that in inherent that responsible the are parties that we for we then inefficiencies And input we're some provide

API to architecture days. the enable ecosystem information. to an that yet, to get haven't early third is these model idea We parties and it the entire built access to establish business around still But

Jared Haase

on Got makes relative one accelerate high metric, to the sort first of in then - average me. And of Excuse just it. number to the net take it the the lot doctors quarter, added see docs of service follow-up from of the like Absolutely pretty a kind to clinicians quarter, to a to sense. nice terms actually, watermark of if in relative you just prior this quick in is added was us terms the looks I just of difference comfortably that service. the

having any sort in I'm feel should terms resources So, we think curious level are and about that of the of operationally, to in place of or kind risks of how staffing growth? there support the

Manny Krakaris

taking And well you're capacity No, we that in expand proactive don't or beyond now. seeing of supporting actually the kind to constraints - our we've any what significantly envision fact, growth that been growth level. in beyond, necessary steps,

So, for falling. we had up thresholds brushing against old keep we that established keep ourselves, and they

So, steps we've have been the I working. think been taking

Jared Haase

hear. I'll to great congrats again That's the in right. on All back And hop momentum. queue. the

Manny Krakaris

Jared. Thanks,

Operator

Thank you.

comes of the with Please Chatterji go Neil next Our question Riley B. ahead. line from Securities.

Neil Chatterji

versus last kind of of larger different questions. good what adoption just of prior? Maybe kind on in Yes, that know, you there? congrats And notes. And on maybe Augmedix talked that about strong And quarter mean, driving for thanks is you quarter. yes this our taking curious, afternoon. kind adoption you I the with see the a there growing customers what's

Manny Krakaris

Neil. Hi, Sure.

with selling was, is been respect what's actually, first with precluded to customers, those to it and the new, to our of to go prior new we this sometime major, those entities. because that to time, the particular quarter, negotiate biggest security notes - our that during happening we had some requirements, new had quarter, because data So started what and of some we product. took through contracts that had given And compliance nature from

along ability fruits you know, organizations. of of that's that's that through all of that most we're into to unlocked standard you seeing see, product managed them. particular And now effort. that. sell what bureaucracy there's, we to the But And And our those the goes that with get

all necessarily of what you their customers ability are those to choose right know, the not to fits the the one that, for having seeing some enterprise As is and size best right, solution physicians. go? Is particular them suits way and pick

Neil Chatterji

Go. kind Thanks for here, of just flipping it. Augmedix follow-up Got color. one Maybe that

kind feedback see the that launch? you're setting and side, I guess care Just how getting on that of curious on you evolving upon ambulatory the

Manny Krakaris

Sure.

testing So, commercially now. physicians It's we're be on particular feedback time, we're right design day, into released to that and the the development every this year. still product. incorporating are getting And feedback who of it the from all the track

So, we're really now feel and right we confident feedback doing it All on getting. we're better is that. better about very the making based

So I like said, commercially feel good our we about release this very ability year. this to

Neil Chatterji

HCA setting I far on mean, acute of the maybe care with - - the side? and versus progress any just as nuance ambulatory there that sorry care as just kind

Manny Krakaris

Well.

Okay. gap. commercially to staggered few a of version, will setting ambulatory be going big maybe acute so. acute It's or versions anticipate version Go. of maybe two weeks, the Go. do be of not version We But the Go, a month before a care releasing release But between there a

Neil Chatterji

Thanks. hop it. Got queue. back I'll in

Manny Krakaris

Sure.

Operator

you. Thank

next of Please Lake comes ahead. go with line Street the question Our from Brooks O'Neil Capital Markets.

Aaron Wukmir

Good the Hi. Aaron Wukmir everyone. print. afternoon, line for This Brooks. the Congrats on on is

other that result been So products of sort HCA? customers of and the with a just you guys have getting relationship reaction potential from as curious the

Manny Krakaris

sorry, Aaron, You little up bit. broke that? could Hi, repeat you a

Aaron Wukmir

Apologies. Sure.

So HCA? just a other potential reaction the you've as seeing with and the result prospects about curious been that customers of relationship from

Manny Krakaris

Generative pretty Well, we company AI The credibility adds approach as and technology another to to into our our would partnership positive. the level suspect, been just of HCA go you stack. it's about how incorporating

at are how this And So applaud waiting at to who far goes the those just poised sell and release we're are these purchasing enterprises, Go, as for big - then they of and the people aware see it. decisions organizations. they're that - they point, making as the it, we're to to

Paul Ginocchio

launch thing brought probably our most really that existing probably potentially conversations, customers. a only would Go the Aaron, the was the fully have And customers. the add elevated tech with us I has of into think we higher level with the new I only of solution - is

back So it's has map, year, with been clients. having good for coming on half road of that really that's in the the been the conversations out overall our

Aaron Wukmir

Sure. Yes.

Very technology need about with market? and have player products? or helpful. any follow-up feel then a you And effectively in really you Okay. the How And resources Google, resources Amazon maybe compete feel on. you your just do other more to your to advance you do quick that

Manny Krakaris

one. with their Modal Well, recent Amazon's announcement really M Google. interesting is competing They're about not XM our we're an partnership with partner. and

from seen that really in yet don't haven't market We the that anything but announcement. lightly them, take we

ground feel strategy based portfolio, in our on have product like we're solid compete positioning, on to So, anybody. here much our place we the we against pretty

And up that, is to traction the enterprises of U.S. some course, the biggest in getting testament the of we're with the

like said, feel in about, marketplace So feel - pretty good we we we I today. are where the

Paul Ginocchio

it's Ginocchio. Aaron, Paul

did Just - continue and and guide nicely. Q-on-Q, growing we we make the to keep investments investing up cost for that add growth to we - growth growth,

able not build be grow rate, to And we're at product better, continue that out to to to obviously and investing so, the to continue if set.

at continue So, add see profit gross certainly that you're at. going to level cost, the not to grows us but

Aaron Wukmir

Sure. Sure.

the Thanks helpful. for Very questions Okay. guys. taking

Manny Krakaris

Sure. Thank Aaron. you,

Operator

you. Thank

with the Klee comes of Group LLC. Our from question ahead. Maxim line next Allen Please go

Allen Klee

Good about that directions what afternoon. could that the of set into? little you're Could go some thinking Council up Advisory of talk you you about a AI kind

Manny Krakaris

Hi Allen, great question.

AI issues started that that to we need our some on sorts of technology large we get actually particular a our manner how a when in use well last apply over year, Generative we're responsible cropped customers. that realized that to that they thoughtful they for up case. And guidance we from - language thought use going in There's weren't ago, their all and panacea. using a year models So we

a started of ago. Council we couple AI So, months together putting this

in Council different from And announcement idea set. about design is much products. the they composition collect the from make about number side to the we one. our out we the and of latest figure what an healthcare pretty some of reflect technology But that areas challenges academia, us learn how It's developments, develop, perspectives to are sure of before We'll number those shortly. to two, that the hit make

really how we've to good proactive So being this to this And terms been the - able properly it's that just technology. in being attract people council. of to use we about, us join feel

Allen Klee

Thank you. great. That's

Manny Krakaris

bet. You

Operator

you. Thank

As Krakaris, closing there conference are no further to now comments. Executive Manny questions, for Chief the over I Officer, hand would

Manny Krakaris

- to call. Thank Well, over just building momentum jumping quarters. building we everybody for with this a We're with thank on second you, operator. very last the shared I the quarter's on want pleased results, several you up

Our goal become by flow to remains the of next end year. cash positive,

leadership so the catering not doing, right needs because position In big all approach. industry, enterprises, size we to that the we our will recognize fits the of varying one is healthcare maintain also in

we'll So, and Thank thank you much keep you progress. very on updated our you.

Operator

Thank Augmedix, conference Inc. concluded. participation. you. of Thank you for has The your now

lines. may disconnect now your You

Matt Chesler	IR
Manny Krakaris	CEO
Paul Ginocchio	CFO
Jared Haasec	William Blair
Neil Chatterji	B. Riley Securities
Aaron Wukmir	Lake Street Capital Markets
Allen Klee	Maxim Group LLC

Augmedix (AUGX) 7 Aug 232023 Q2 Earnings call transcript