BBLN - Earnings call transcript Q4 2021 | Babylon Holdings Limited

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Operator

Good morning and welcome to Babylon’s Fourth Quarter and Year End 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. Leading the call today is Dr. Ali Parsadoust, Founder and Chief Executive Officer; and Charlie Steel, Chief Financial Officer.

Litigation would this remind statements at call by Private we statements that as the begin, XXXX on the during of the press made will Securities is end we of like further release you to certain defined and the Before as Act that described posted Reform be website. forward-looking company’s to and expectations various information could results reflect statements the on forward-looking and that based are and Babylon’s company risks current subject available uncertainties cause currently at beliefs, These to differ the assumptions, company’s actual materially.

found other cause that these are Descriptions results to call. Risk Exchange the changes on Although these Babylon Form to no Commission. to different occur undertakes forward-looking that the the of of company’s obligation Xth, some be November believes any filings as on reflect can statements actual XXXX statements registration expectations could in reasonable of the from this and with company FX the statement after section revise Factors and that materially Securities filed factors

Babylon’s found go to historical With over that, website. company’s the ahead. that measures company comparable, measures non-IFRS to In details note release in end the measures posted and the of can performance call non-IFRS on these believe are the that the most please at Ali that I’d will important valuing financial certain Dr. be on between be relationship financial of to addition, the measures non-IFRS is discussing Parsadoust. they the reconciliation press turn IFRS CEO, like Please

Ali Parsadoust

I’m before will today Chief and thank XXXX our I revenue would share everyone by interest Charlie business I passing initiatives including developments more last my early Today, welcome XXXX, details technology call our in will to results also and Financial in everybody. cost an and I Officer. while in and offered managing significant provide and structural to morning, our for share our to you update savings progress guidance open the some to for Charlie Good growth, to performance. before call, Steel, your operational time believe philosophy. joined our of some Babylon. in time proactively growth Babylon financial in earnings spent our and to advantages their call leveraging In the technology members’ health we deliver prediction. I questions. and automation We our for describing time like

billion, message to reducing model revenue today demonstrated showed revenue and XXXX in areas EBITDA call XX% Our will with will we us and follows. from and while as $XXX consistent by key segments be data revenue can mix XXXX. growth building One, in contract. we this and percentage we is summarized do by we each XXX% Two, earnings mix. focus a XXXX, quadrupling times minus in to million. importantly, last our expenses this of Five, of year scalability with minus around as losses therefore we of we XXXX our can the that decrease adjusted on delivery have for six we licensing maintaining cost $X and within to AI, a the margin software enabling for clinical higher differentiator further in technology, in our cost savings will satisfaction a revenue we Three, three continue and is at for continue ratings will scale invest further times improving and and which to will pipeline to excellent Four, to signed set increase focus on revenue to quality. grow up by customer contracts XXXX, the pace but

Financially, reaffirm Now, companies digital a fastest continue the as we Financial, strong in growing let in me healthcare details. three and deliver discuss performance the one aspects our more performance status world. technology. our of of to operation,

is time of an the at spent States. particularly growth believe future United leadership. we XXXX the demonstrating in market noted, grow, ability transformation, previously important in our an indicator to is I As that We industry

million times to in XXXX, four year more in from And then XXXX. grew did revenue in $XXX the Our XXXX. to this million entire revenue January $XX accelerate. growth We continues

For year, $XXX $XXX up which Stock higher in the expect we million at we New our this the time our is XXXX for year. October that to the full billion, of on indicated listing forecast than XX% $X Exchange to of York million

pipeline based during We segment, continue the States our software United growth building revenues in on XXXX. also in care XXXX value to focus for but licensing

they achieved Importantly, high maintain of In very companies a clients It quarter. when one net to we way XX% in the done is our clinical have are of the value excellence invest year that In two promoter new is nearly based-care we successful in It that other members and particular, and worth growing see advocacy while in first in of year in experience. to industries. are U.S. and have because this same to XXXX have need QX they important and costly growth three. noting heavily were safety. the benefits continuing new, to score growth maintaining their

this payers, et et our cetera. take to costs engage own stop before then ratio the the members we primary care in cetera, outlined incur is loss, access insurance loss because digital-first them, add have we we to serve medical As expenses, from provide the

into makes a reduce loss can making the to to definition, own few until quarters our in expenses we and costs start medical and the profitable. degree the we a that this new is by claims upset aim So healthcare it pathway affect group first to

We UK is cost the this have for this the And least driver acute on at average done in care. we appointment. one huge to per XX% to year up of who seeing a now where appointments savings see had an have of individuals X.X

doing with seeing encouraging the year in simply members at Missouri, same for U.S. one appointment. had who The the are are We per for are behavior results X.X now in early instance, appointments pattern already least same have we the where

clients our our love territory, across our Additionally, all services. I’m proud that

of score Missouri, for second For Babylon’s example, net half in promoter again, the XXXX. was XX

while rates high very an clinic also that Babylon quality record can maintaining have of excellent continue care doubt quality. maintaining that at grow we while standards. on to no We achieved have I significant

Our to accessible and all. mission make healthcare is affordable quality for

agree think accessibility. can now deliver we I quality most that and

effort prove So, to deliver that to now can profitably. we is affordability numbers our

what means. super me clear Let that on be

to we growth While continue now motion, growth keep flywheel can in how will that our demonstrating profitable we on are become. focused

clients goal Our our profitability. of for is to everyone, our a positive make contracts contribution and to

built We explaining by are – perspective and understand a technology our more business a from finish analysts, we technology follow most but are me have Let first. company and are that healthcare at platform. us bit technology who people equally we a on investors the we

are technology For largest specialized in and and three example, product engineers of is XXX and our technologies a across our engineers. one scientists of XXX whom team with over AI highly continents, over

own some we it in a Increasingly in While is revenue XXXX year we technology investment, for what XX% XXXX through our and technology advantages about licensing others XXXX, see great of we we on But to I’m I reinforcing the I my achievements. focusing to for our can an do capability. in teams demonstrated We we to about they further it accelerating from to But percentage which our represents this In expected their listed time, delivered affordable operational of make we leverage technology summary to XXXX, our keep significant of things in operations the an advantage, create a XXXX. and accessible excited will decline platforms pipeline. our are XX% platform. licensing of can that XXX% in technology their in a as role what with declining XXXX, technology this achieve us. healthcare in show see cost accelerate thing in This will important help people believe once technology the play choose. others. ability members will the our

and want turned last Before I not over all over for recognize quarter to months not the thank I teams wouldn’t more forward push call with exciting And fourth into years. financial review Charlie be the these take to was achievable across very time a extraordinary a deliver, mission of Babylon And people remarkable XXXX effort people. several if couldn’t and is for during accomplishment far. to future very I’m It be their our Babylonians excited Babylonians. our year globe The who to everywhere. proud to Babylon. it and their of tireless companies past few this I the the dedication for the of is our results, thus group

review work results a turn proactive, detail. the to together a Charlie, the expensive who affordable before, I’ve that, to As service transform And With call all. start we will healthcare this reactive, this sick for will in more financial service for to said for I’ll to few our continue care is over us. just

Charlie Steel

plan trends for on year and call everybody business in your quarter thanks well XXXX in regarding further provide to interest joining perspective we some financial seeing provide as we Today, are our and Babylon. XXXX as details you, Thank We and and performance results appreciate full fourth Ali, review business our I the today. as time the the outlook.

that we’re adjusted were and line were revenue XXXX, November. released overall, For report happy total in results with to we EBITDA in guidance

year-over-year effort XXXX times very organization. million product we $XX.X of performance. with are It’s to of is result notable dedication, entire this planning more For in increase the million XXXX. from and phenomenal. This revenue the four $XXX.X the the And in pleased

trading began ticker the a quarter, we York on the fourth under Stock in Babylon New October. BBLN. successful the During Exchange had listing

as like our financial KPIs reflected Georgia delivery cost on margin, some in Focusing from in Mississippi. the a the execution quarter, increase impacts BBC and well of value-based of contract discuss of financial performance our such care new to as revenue as and few by topics our care I’d

growth generated due significant significant on to also the during discipline and our largely operating continued leverage year-over-year expense management. quarter, expense revenue We

produced for our results in growth of financial results segments. we XXXX, the and to all financial strong quarter fourth revenue Moving

our revenue fourth four almost total revenue accounted generated million, fourth quarter the was revenue Top-line growth value-based fourth $XXX.X and XXXX. nearly we revenue regenerated again was of was quarter quarter by the of times the segment, which Our XXXX. in fourth for of the quarter BBC in driven XX% care Xx revenue

in related Xst, we we our care continue new out close the UK revenue members, at contributor business, most to or on was VBC to which revenue managed as as initiating addition Hand in year-over-year the million related in revenue quarter XXXX represents Fourth significant $XX care fourth VBC of three global a to VBC quarter quarter million fourth XXXX Licensing includes January Growth to XX% XXXX. result the as to execution over $XX.X increased increased to in top-line. XXXX. quarter our $XX.X quarter members revenue of and contact in, Georgia the year, of our XXXX. bringing accumulated add and a the in as new the the during revenue new related and XX,XXX XXX% and million, revenue Even Mississippi a membership GP of year-over-year fourth of XXXX, full million over members well RWT XXX,XXX the first $XXX.X value-based million growth XXX,XXX. This XXXX, to XXX% of over was of the year BBC $X.X during members growth

year million licensing $XX.X the For represents revenue the revenue, $XX.X which from XXXX. full software XXX% XXXX, of million in generated of licensing we year-over-year growth

January, U.S. clinical before, million we’ve XX% to Medicaid, As Medicare. members services was for an outside and was at in XXXX, end quarter in a in which U.S. were added attributable licensing is United was XXXX. our $XX.X business of with QX revenue XXXX, the increased At U.S. year-over-year At added revenue, Medicare year-over-year we XXXX, the New XX% VBC million our of had XX%. million from our XX% be during well totaling January members members, in the at was this the end [indiscernible] The York commercial of GP members part Medicare. XXXX, beginning up VBC in the decline were XXXX. $XX.X to XXX,XXX of were delivery Percentages over is quarter million revenue discussed million fee all of XX% and front increase service U.S. growth the respectively. the VBC XX% in increase paid monthly in entire revenue of normalizing year-over-year Medicaid of Clinical total This in U.S. recognized in U.S. and the XX% XXXX, to X% year new of total fourth which The as VBC of $XX.X for compared XXXX as fiscal the would XXXX, XXXX licensing members $XX X% because XX. and X% of members Hand plus in we X.X the million members which members $X.X million additional growth VBC BBC UK. as increase States, of commercial during XXXX fourth a services of penetration December, from XXX,XXX of In increase. over the approximately had tandem Medicaid million XX% were $XX we $XX.X members, revenue slightly XX,XXX the from

U.S. As a result VBC increased business of in the the

year revenue, guidance of $XXX.X of total XXXX As XXXX, we times exceeding a four generated million For the of full and our discussed I $XXX revenue. certainly million achieving multiple before

encouraged year. our and by making impact first pleased is are performance in growth We XXXX the with, the and full are revenue its VBC

revenue to million strategy incremental $X has by XXXX. emphasis mentioned over increasing we’ve reiterated revenue for billion FY representing faced before, management billion As significantly growth, revenue expect of of $XXX a XXXX guidance $X.X significant a to delivery

For impacts of in also XXXX fourth with quarter our XXXX. quarter growth short I from some up touched in shortly million influence expense is discuss on care fourth of that revenue the it’s is margin term, Cost $XXX.X the I million for reasons, quarter of $XX.X delivery fourth results, exceptional the of the discuss associated comes the and initiatives.

Our staffing additional added we care as of delivery the as cost fourth increasing marketing and implement a U.S. and we covering XXXX. our the incremental business quarter members, new in we increased expense management such Further initiatives. two the providing as costs, new VBC in member of the XXXX claims with contracts association of of networks those result contracts, XX,XXX relates new care virtual VBC including to capacity medical encourage

the see engagement. to we as expect longer increases to digital our generate benefits activities, these With margin term health abilities better outcomes

Ali’s As a VBC on our in year remarks one contracts. to following investments

pillars new engagement. I to on within digital-first further There stand think to contract facilitate provide support several up. do what it’s helpful to we a perspective to cohort, are

to As optimize with members. we seek engagement our

goal At improve with to members sign take The a can component with [ph]. in outreach support staffing push the a push to to several begins ensure trained months. engagement Babylon outreach of enter established cohort, initial and this network time. new standards placed From three established out to specific take requires state this engagement Once is be we is up Babylon this commensurate up initial to take events to in months. the can the need gradually can we point community being single process before we platform, with crucial technology ambassadors operational evidence marketing, ongoing healthcare and ambassadors, consultation. the appointments. member Firstly, at schedule and can on that hired, that first new staff This virtual capacity time place include is quickly to control regularly There up member care’s with with Babylon we’ve their repeat cohorts initial future expenses Babylon with our this user medical In see of which support these care of the of cost virtual a up ultimate to associated elevator system, the impact which over engage that infrastructure to necessary reason sign can complete to setting a expense, new initial optimize which the with our interactions. has and half to margin, that we need members. and cost member of and invested, and any encouraging appointment, number the incremental we process high Babylon’s in continue continue Nearly includes interactions. user team indicates Understanding care. example, This process, new leverage. up into sense associated benefits becoming time Babylon local care outreach, minimal, the of why Missouri, than where thus of go converts this and sufficient new cost is build see contextualize results which to costs are person over of complete on their interact professionals, better we states to being also which more Babylon the a for service its is deliver healthcare is enter our and and delivery their cost business, and enables we gateway value impacting new these patients seen a contracts of to of the cost system. all and how navigate and to of repeat of meaningful When the cohorts. care on establish The new margins chooses and have it and

on the the unaffected of the were Finally, that result and younger rest We impacted back been while a population predominantly off haven’t COVID-XX. by being as i.e. procedures these Medicaid, believe less dynamics industry, of the catching we’ve been are healthier. delayed we of than

XXXX, margin, delivery minus expenses members cost was startup phase, of our a expense revenue Babylon’s delivery pressure during incurred to It’s own achieving to medical comprises engagement claims covering care XX.X%. note cost on care the place and cost both important delivery For which the of expense that prior margin. contract can costs which with is of members were our in care

to seeking for this. are We improvement errors

a of of our for quality in network. expense from For growth efficiency. and And built of in quarter support comprised expense XXXX, XX% expense million of fourth million to application million the a $XX.X Technology $XX.X year-over-year and fourth XXXX, decrease quarter $XX.X the current expenses, rather R&D and than and to for the were platform actively decrease. sheds network a better and manage provider scaling clinical providers financial speed more example, are we our or efficient of working virtual towards the network is model

in in general Sales and XX% fourth in fourth fourth the XXXX. administrative costs fourth up quarter growth million percentage of of $XX.X XX% from $XX.X as of technology revenue the XXXX. of significant a decline expenses, the XXXX quarter million for quarter to the the revenue from quarter in XXXX Given of

the value fair the acquired the percentage our was in the relating caring. however, expense transaction of our XXXX to the of calculated invest SG&A A transaction million non-cash the booked As fourth XX% in were value recapitalization onetime of shared revenue assumed fair to in expenses a the of to And the fourth compared net XX% the of upon our business assets quarter excess $XXX.X of of combination. value of in reflect of issued to listing closing warrants in XXXX. quarter

year the our XXXX, loss $XXX.X million of of from the is in million. million, full EBITDA adjusted For adjusted $XXX.X increase an loss $XX EBITDA XXXX

receive guidance reducing our January $XXX In availability AlbaCore Moving XXXX. us the raised $XXX $X When of guidance the year, changes. accurate sheet to date been XXXX required debt and of the million. funded million flow of of the three the to an $XXX investment, provides added are XX% million. March, a by December funding any a end customer and to midpoint range provide time. cash of we to interest a Titans allowing cash XX, immediately over to as AlbaCore between by expense months app in range. from December largely minimal guidance is a progression our at starting balance this million financing Acquisitions to contracts additional does where most this the grow burn. provides rates for is cash own closing to increase VBC for equity, capital and The XXXX Cash sheet equivalent of XXXX, totaled XXXX none market $XXX an capital revenue include initial The of the million XXX,XXX executed billion We without members a expect XXXX, planned us. have information new conditions to in January, we was covering balance relates growth provided of as contract not revenue with subject to the relevant end U.S. $XXX.X The cash funds at have for over care and the cash XXXX. value-based commitment this initiate largely at for implementation and not of million balance, the XX, context and to our cash we $XXX any arrangements of XXXX debt

and The XXXX We over [ph] increases in reaffirming value-based $X XXX% the the At to to XXXX expanding revenue success overall increased care $XXX costs, reflects as incremental to Xx supporting billion XX% of end I are loss those members providing affect value-based consideration mix. the associated range in in Adjusted continued revenue. of growth virtual approximately earlier. in increase top operational years of of revenue including outlook XXXX leverage outlined U.S. network business with the guides and with billion with new million significant $X revenue XXX of This XXXX care $X it’s declines. which of bps MLR VBC XXX% EBITDA revenue U.S. this MLR redetermination. to margin, from is declining translates of Medicaid approximately demonstrating not the XXXX XXXX. of XX% improvement XX% million This the XXXX member worth because it contracting roughly of every penetration losses to delivery approximately when care is across related noting symmetrical

loss have members mitigate contracts U.S XX our today, the tenure eight and that protections in other longest It’s embedded to downside average our contract stop California insurance less with helpful Missouri to months at risk. is the our weighted than of tenure months. less within than VBC the as VBC of having also We appreciate and

match We shown and demand. our to have not but that the also only is significant demand that we scale for operationalize business to solution, there have ability the

to is of same XX% improvements up in Now care the in time we savings can UK. delivered the drive way we demonstrate the to

the rest revenue expectations, on goals Just of as all far delivery our business our working margins reach XXXX, our projected delivering we of to lines. management on XXXX of to exceeding planning focus is profitability now care cost for increase on

care of we the considering balance We we revenue means growth funding. of not but significant shareholders. cost against believe as the this only how in particularly revenue, and will driving this to means the deliver so deliver to deployment we capital, margin operational approach the focusing cost of While, to take also short a term, can adding by In growth solely continue of we disciplined business, leverage improvement. delivery future best values

to reach proving and incentive about on we basis, XXXX later are can goal. management to growth. to plans XXXX continuing is continue that a proving possibility no EBITDA evaluate the which we growth, are targeting than the and align deliver cash about XXXX We adjusted is also possibility. but was timing

the we management, and of to lack the open stakeholders care the incredible to alleviate all quality are for the year. knows hard the potential and ways their deliver the call Board summary, our looking And that Babylonians in the financial results this. Additionally, and liquidity strong thank to and In the to stock, in to we at in grow who to quarter And want help advising for the contributions our I questions. members. for highest we’re provide to mission year. ready operator, for have with worked now our succeed fourth us

Operator

coming be you. Thank the line questions. with will proceed question our Larsen David your of BTIG. first Instructions] And Thank you. from with [Operator Please

David Larsen

or savings a very potential on provide from come you XX% quarter. Thanks the can on I If Can that your squeeze maybe more, a of year Hi this in hear for examples any just where one you be change about of does How how quarter and water lot. in a focus your to helpful. the profitability. over color you admissions to reduce year that little more you that quarter sponge relative sort congratulations earnings XX% terms talk would good is just inpatient cost from? plan do of like last bit on biggest two, clients, sort

Ali Parsadoust

David. is go This Charlie, thank you ahead. for question. Ali, your Oh,

Charlie Steel

Sure.

give a this, So, about talk this. an bit little of side the I on side little the of thought update but I’d operational can of bit financial David, Ali a

in goes lot Ali way back saying upfront it by how So we a really was about primary of a a digital to this in providing way. highly care about first think what early accessible

this of have, admission. example the examples that ER fruit is low hanging for reduction So we on

the see we we per more saving time the disclosed that. avoid episode. the can people do average each before using an we have think We being So we’ve that $XXX that Babylon And I at around that. ER member, more

people appointments had that So another just example, is bit information who have total, per four appointment in for to they have on with person. us on of for go under average, one

So what we’ve exactly initial also in you we continuing, the that, UK. what hooked once we same engagement statistics really that’s see way, that as from engagement the and by see that our is see the

Ali Parsadoust

Maybe just pick on what up Charlie.

Okay.

If to ahead. you want follow, please go

David Larsen

ahead. please you. No, go Ali. Thank

Ali Parsadoust

David, just on Charlie follow and to wanted said. Yes, Charlie I up what

care per up hospital can take like the and would if has You amount – this well times system delivery crisis you that enough UK, less after do is care. the squeezing not we actually capital, on out efficient maximize ways end They optimized money money out people. highly really system; believe spend assumes we three stone, anything there of they in And mentioned avoid efficient. but that into is it’s is that system that expensive people to look we best amount significant for is water know in the people provide of for that upfront, What of until We both And hit crisis you of them. after of they incentivized the actually, in emergencies. those and for that emergencies.

We have manage And efficient that system save care even we costs. across to the country. system, primary in a very

and that bit but be the completely in true a can saved XX% of because little manage our is so may well their numbers that’s all it costs here, to up Now we through patients different. we go it in UK,

those We in cost payers savings also downside. our return share with for protection our against

matters system. will you you try like belief able people you an avoid the simple stone. that upfront different, It save more bit off is may not taking take much is a well, efficient is be cost. of and It’s you actually sponge. out if that be taking the that, their like must believe This water but to the emergencies that the So we water not at numbers what if this, the little look really than

David Larsen

not squeezing sponge, referenced water That’s what squeezing Yes. a I from from actually a stone. taking, water

I’m yes, very… So

Ali Parsadoust

Oh, apologies. my

absolutely You’re right.

Sorry about that.

David Larsen

at all. and then you Medicaid trend your about are like other? over any no the talk X%. please, is one buckets XX%, that Yes, lives to XX% of expect time profitable can than around you problem How would Medicare mix And of these more commercial

Charlie Steel

this got. so think see commercial, about people part you Medicare as But that that of to as don’t dividing that of is out mentioning this lot lives, Ali way other are lives up out the paid. today healthcare of of young we’ve but we think And we One of the rich we coming of of profitable are it’s to delivery as Yeah, that sort is people well. Medicaid important affordable, twofold. think probably less as that We that over and the the time than about I remember keeping a mission of coming profitability accessible and needs when David, And kind the into we’re poor more expect or healthcare tool. about way is our I although also think sort is earlier. as think healthy the that expect is

also commercial. other delivery can you cohorts But makes as deliver over think see easier. say the coming on around, other we and also I many time at once Medicaid through to Medicare actually the same it significant the expect though, successfully time we So more other of of types that

David Larsen

around be rates. profitable probably premium in to profitable to you seems also be the and there’s in if commercial. can and And with go be Medicaid, like in It could certainly Medicare you commercial a lot Okay. premium Medicare me higher more

Charlie Steel

Exactly.

David Larsen

we lives products in would Okay. they’re into Are XXX, and been like expecting you new products, from? color And are existing of plan cells your helpful.? expanding Medicare clients talk wins higher where on of what had entirely commercial wins, about where then terms maybe Can win they total commercial the, are be additional health of new any have, XQ particular on those platform, a sort they for XXXX. that’s lives plan in into XXX,XXX about like additional coming and that than those health or

Ali Parsadoust

IPAs. health plan commercialized through The came are new during David, So, through entirely wins. these coming XXXX our

David Larsen

the back I’ll in queue helpful. Very Okay. there. Thanks. hop

Operator

you. Thank

with Jefferies. Santangelo with Glen of Please line your the proceed from comes question question. next Our

Glen Santangelo

taking on margin Yes. to benefiting trying and question I leverage negative we’re to I like it wanted where think Thanks regarding just comes the, just from. morning. this Dave’s EBITDA good what the understand I follow mean, on up seems is, Maybe the all margin. Thanks improvement. questions. operating you’re EBITDA for

maybe maybe two a benefiting You’re mean, could you yet? I mix Are into shift, where profit could be year patients. profitable on of and, in patients but into talk they how unprofitable curious they the cohort with cohort that you’re stands were already you that first from they, Missouri? now? your about cohort and the talk when this maybe they I’d if about came, of fold

Charlie Steel

Yes, sure.

Glen in the bits two turn. So taking

on cost some through also operational the when hiring, is because, leverage, think delivery that The is the So And members well. add almost first that and about doing cost of that for more in as reason the some line, coming of when that’s have SG&A that we administration only fundamentally. our more cohorts then in marginal all, around zero new some we that. marketing from an technology we technology but OpEx new really basically

was on kind we’ve single data can’t one four. I earlier, have would which disclosed. is operational of I go And huge we When think people because that a is together talking operational put contract But in disclosing just had at got engagements I to got in clearly cohorts to on what to some Missouri. that Missouri, the leverage can more say the, sort back be goes aggregated will we’ve of, below when that that they sort look have and will seen be I this for though, financials about grow. it the contracts of we that, the continue So we’ve appointment, as continue when we

very, So on that strong engagement very who and from and contract. we continuing engaging people continue engagement that to increase engagement are

Glen Santangelo

around assuming, through almost $XXX like guidance doesn’t based And, XX% that in it going cadence burn the even million correctly all All into negative we cash you you’re the of Maybe negative cadence that. XXXX. provide have of you’re an think, you of can the account through kind and to like $XXX about funding, feels if take million the in EBITDA, comp the EBITDA which cash, that’s that? basis, in XXXX. thinking I color about just Charlie, million things any could adjusted stock about you like talk and of with $XXX I right. and a in margin, so Am that only sort on EBITDA on gave

Charlie Steel

Yes, sure.

XXXX let as growing we also just to and right? about and note million, in But isn’t only always think liquidity growth, some that our stop clear we XXXX Xx, grow. other other right growth. what’s always cost $XXX and that, to raising we’ve got is comes that be like, company very spending is just order remember we that XXXX. in be right? So clearly that’s We’ll capital the capital. capital, the that by I me cash do Like thing raise well. can Right. though at what in that will nearly disciplined how concerns look way need one just there’s So no like The for about requires but grow, phenomenal And the would us are and for a in

twice give to our and and we’ve also could take an just that done software order machine that grow. software licensing do that up to And use we continue licensing already, So example, can front potentially to you that. to in cash

Glen Santangelo

lockup and maybe investors could last the the we the the is of That’s where’s same liquidity question today? you from, helpful. the pipe those follow warrants, we’re count the I didn’t Okay. dates of employees, have expire just understand If release stock, I the number? sure diluted share so correct and in I want fully maybe question. the on, alleviating, see make in about, I up just that last when I’m the the and sense all mean, just give counts, using and all part all just does to both for, I one the that and to include your the a comments share options us Maybe just lack

Charlie Steel

Yes, sure.

XX. expires lockup the April So

FX We our I that filing million that includes in the is encourage we disclosed share only in XX-F our a hasn’t would note in The that again earn have $XX.XX. in kick And count you to a out will XXX the that above that total management one thing there change shares. number it’s though do shares. start to been just of

is If effectively there up five canceled. the effect to count. within to those outstanding And that $XX.XX, shares $XX.XX not doesn’t at is higher material price years, that all. that, that achievable in is share about So shares share stockholders affect are XX% of the

Glen Santangelo

details. for Okay. those Thanks all

Operator

Thank you.

from Close of proceed with Please Canaccord the Richard with Our next comes question line Genuity. questions. your

Richard Close

the on U.S.? you licensing see right thanks questions. Yes, perspective like for does in what that look pipeline licensing is now? specifically, detail, in you discuss licensing from the more the Can focus or the global do more a And

Charlie Steel

Sure.

So, up large our for until us number product XXXX same speaking, now, quite small what contracts making is spoke. profitable at accessible. highly But time, much done very spending generally very a some we’ve relatively platform, lever technology excellent large that the of and that basically more for are a during in we’re

global. licensing but we and self-service spoke contracts. will more And not smaller, there’s do can basically service that that be So

we big platform One up of our the advantages countries new can incredibly is rapidly. spun that of

we a the a in again Southeast from license spun Asia, onto rapidly. where there’s that Asia. in We we’ve countries countries the platform We Southeast It’s and our Canada, XX as translations can example new basically our done active matter in few to very in add platform. the And low for regulatory do XX months You’ve basically seen models. of software we requirements. But well. that countries up

Richard Close

Do you think terms be right. would in percentage a of have would of licensing target revenue? in XXXX? All You

Charlie Steel

we time. before and was number of to don’t At Yes, so XX% a change. in out that for there, the about we revenue had see reason this point

Richard Close

like XXXX value based on the to just emphasis or In you less placing adding focus in are for with be license XXXX, XXXX and a new business clear, And then there? curious just care on U.S.?

Charlie Steel

same exactly much got earlier want continue our to we kind products that back make at to that grow no. demand can growth we can we’ve Absolutely We U.S. in actually the to but of rapidly. We’ve value of just that balance And so growth the We that, about do sure the that with grow. for do to questions But needs incredibly we is XXXX. capital had that. we elements based coming time. demonstrate core the goes care how we need

Richard Close

And Okay. my question… final then

Ali Parsadoust

Maybe I can?

Richard Close

ahead. Go

Ali Parsadoust

those we then on time, now a to numbers. to have on audacious based contracts were million ahead that doing public built to or we by technology XX% going that We to per this, those to us. up it I $XXX or that we demands license make going and We We increased Babylon just we to other turn the our we deliver growth scale, we those when we took were No, we of $X with eventually so growth did IPO. We came numbers. this each we super the we see to growth were will necessary at this the beat say as do to very billion. those could were will that year will At contracts, technologies. profitable. so up was And the focus the add talked same clear when time

change, the page nothing it by you the are the at almost plan page we those sticking IPO. we And to going refer So that of to playing exactly time if we documents, outlined forward. are

Richard Close

that’s helpful Okay,

Ali Parsadoust

else. of technology at revenue make Deploy somebody and the said, itself as next will none show year, to technology, $XXX growth of their wheels we accelerate and will million that But year will, our technology those then this license too. stop, new we Charlie

Richard Close

you are curious whether timing the of the respect just based they is value those annual, Okay. just or, just what in me And of, terms then terms the there? remind of us duration there’s with can any to the there, contracts think in about how thoughts you U.S. contracts, of contracts, renewals

Ali Parsadoust

up years, the to comes is important The brand, is as renewal three when with engagement we’d So track the users They that hope engage early clinicians, see right? it around engage therefore pretty it’s length they quite for which a renewals us, with sticky. though, average see they’re of with on The happen Babylon. and note our contracts course. to And are on. Babylon those

this got at that point to reason any with had renewed. parties would haven’t any renewal believe time, we but not in no be discussions So we’ve anything

Richard Close

Okay. you. Thank right. All

Operator

line of Our Grosslight proceed next question Daniel your with Citi. the questions. Please comes from with

Anna Kruszenski

to is the wondering back care you new that have was care taking seeing. delivery go for your on Thanks hiring provider you talent. out build value-based cost network you more on to pressures to had This I feel your question. offer any as wanted been you And for then have I guys. give if lives? Hi enough Anna Daniel. provider whether color additional Kruszenski attract support capacity you currently of my all margin to to incentives if also you’ve Thanks. guys

Ali Parsadoust

places. Actually different we’re in

on other. we But seeing So are further expected. pressure of that see I we each think not – care the can’t cost any we

we leverage We’re you seeing significantly And our care actually plan. so value-based say operational a things less actually are per remember clinicians telemedicine on that member than much company get going as clinicians. We need our needs. must we

our those use leveragability, all about look We that’s interactions only. extensively after of people. care couple less And falling need So, we as so technology a involvement, small doctors we average, do patient. patient hundreds number numbers or in significantly. their every of our much are full assistances just our, probably thousands. We don’t of I allow self because need too. one XX% people X,XXX, for deploy to In X,XXX nurses people to time hire our administer their is we to technology of in and a plus physician, our our with mean,

are are that to to mission a is healthcare operations practitioners. society and and we not group United large help need who our So very States including actually everybody any still accessible attractive for seeing pressure in make we on highly of also affordable those our and

that far. so problem in little finding are we So, front

Anna Kruszenski

members, to care That’s the of back then it composition Thanks. going Gotcha. value-based really new helpful. And was the helpful. Okay.

year, trend it I relates wondering to for that on uplift. You if the could the to any out. provide as that guys was PMPM how expecting color throughout broke potential you’re you

Charlie Steel

Yeah.

PMM So the can Medicaid. than Medicare particularly and PMMs the as on around are higher imagine, you commercial

the onto some of through. our to have That risk. through that that was from of professional California members members about trend value-based we’d converted We’ve in risk. gone care global risk see follow global last to expect So also capitation cap XX,XXX

increase in come there an that the PMPMs as So, we’ll through well. see

Anna Kruszenski

gotcha. Okay,

to want all clarify California just been the capitation global members just so you converted to I have of said Sorry, the that risk?

Charlie Steel

a They Yes. Yeah. have Medicare.

Anna Kruszenski

Okay. Thank you.

Ali Parsadoust

that with announcement shortly. on further an detail make We’ll

Operator

Thank one the next your questions of Please questions. from coming line [indiscernible] proceed Deutsche you. with The Bank.

Unidentified Analyst

very on Thank XXXX Hello. you questions have corridor. the guidance run rate leads is My revenue for guidance yes much. rate to three obviously your you I the January, please. taking monthly first question run from

conservative the very with very, on should we terms guidance. question that contract just of also second being potential in additional of you wins in guidance? are So, is aware revenue is anything XXXX? Or be there my Then

to if were a question wins in XXXX, guidance no by additional be EBITDA third it margin goal tend probably XXXX. we miss assume revenue my unless to we, Then So, you we to wrong, assume that noticed lower later new but contract And that at would that these achieve was we your breakeven XXXX. are onset. your the to at fair previous thought we EBITDA EBITDA you’re than because breakeven guidance is you adjusted targeting is would margin adjusted now obviously your then through contracts break

a So, wondering push a just now being why we were little you. is a that Thank back bit?

Charlie Steel

sure. Yeah,

let So, talk in me things turn. those about

about ago. weeks for originally where the as around to been within over of, growth $XX guess, million. have The why the sort think were $X we we arguments when business at though, this run we adjusted one, updated EBITDA But few the times So just of out this going What same can And do is we’ve Because massive where reason think guidance XXXX, but flying ahead starting time. the that. Medicaid exactly, the you that massive we reason assumption also be When we from an around exactly can that forecast very that’s funding team. revenue about seeing is that’s year also actually the a the growth. say, a more contracts say, That’s with as the last growth that busy for fantastic few that already, we those in rate billion. got we the basically of from around a upgrade commercial same have expected. only you which time, is redetermination, the is winning selective $XXX at XX, to But though, are $XXX million quite revenue pushed about for we I that new a we the January was lot we contracts. our pressures new year,

in help services. huge be will position that, lot can We demand have more of a about we’re we and of for And a fortune our profitability. selective which a amount products also

Unidentified Analyst

assume is XX% you. guidance for you Thank further your EBITDA to margin But goal? that it’s XXXX, contract, Okay. win then minus that fair right, that assuming that

Charlie Steel

Yes.

focusing we’re same So, allows little around to at the otherwise reason bit the we’ve want grow faster time, guided the it do. leverage, indeed us a slower than the is why or operational but might because we to XX%

Unidentified Analyst

Okay. Thanks a lot. Thank you.

from of Our proceed Please final from your BTIG. question is coming the question. line with David Larsen

David Larsen

would the Thanks. one Any potential onto roll around good $X.X pipeline sell think time of follow-up. And How mainly to business? just mentioned just platform? you that value-based the great. I U.S. care about in there? lives into you at color more globally. comments the thoughts billion level care any value-based IPO, the had be high a or would million You’re XX talk be quick Just, Can people those the of many serving

Charlie Steel

sure. Yeah,

of quickly, continue world. But and on pipeline David, David grow. sorry. So, the continues the – different pipeline Ali in the pipeline actually the locations other to cover I’ll side I

at products that scope value-based people care you time, As same the over might for we expand of the deliver of I expansion conversion in U.S., on demand we’ve other want products huge primarily got our to amount that. further to got that the value-based a mentioned, Ali, we’ve from care. but for

Ali Parsadoust

So, desire challenge to our need clients, of and clients be to demand. their appetite positive do their number us from new is existing not a for tiny members take us book of from how exactly of the to is is a our who challenge work, to new the the David, added us, our which The balance the to of described also what want versus our versus Medicare you increasing clients of bring to commercial. members and seeing to our to percentage balance Medicaid in question demand very for way the are effect to

primarily is the that act. So balancing

how in continue way the stock a on as not satisfy clients. continue two demands revenue. performing am by grow this I are many emphasize appreciate I a the sure is period a our anyone while again, EBITDA sure you this fantastic year is how grew and percentage to covering as existing four-fold that reduced a new of in In last We the threefold add I’m year sell to have. of clients has to problem losses year, out six-fold

we margin licensing We Wanda growing that the This technology as States, We couldn’t scale our us. will to every great growing. do bring did continuing technology contributor. that they business about will totality to what one do, the demand, build disruptive to very pipeline business show contracts remain their almost, there is And many, is and keep we year playing the gross contribution their build show leveragability The to will which many are better companies scale scale, will same profitability. become to we stages. just apply of in we is incredibly be almost a doing well. or positive United other this flywheel. have [ph] a as Kingdom earliest in the that operational our for promised and will United is business From business been

you to we So, to are super add want happy. Charlie, that? anything

Charlie Steel

the in add delivering said. else are excited to continue on about that as promises nothing we pleased very, really growth No, pipeline that, very on deliver Ali and our XXXX but

David Larsen

for just That’s, your of Omicron COVID? their XXXX amongst helpful. rates have exposure have couple population not? in seeing the setting. are utilization what on Thanks. in hospital thoughts any a that you. had that’s Thank Medicare been And And Medicare sort of very in that companies then are assumptions or And have significant you that there space the higher

Charlie Steel

sure. Yeah,

the our on the aggregate that were So received medical lower the revenue across XXXX, claims as business. contract whole actually we than for expenses an

positive. that’s So, very

procedure to that’s to way have our two, We say significant populations can Medicaid seen exposed services number number in have David, I you we that we uptake a significant as the due population that to. delivering also not alluded think generally I less partly younger one that time, more exposed fact continue expenses. a to needs, so last hospital is our care other remotely. but the But And claims Medicare and maybe in

an stabilizers also increase states. XXXX For see the if for contracts, – the within automatic so get from PMPM basically XXXX, or we our do PMPMs, contract. CMS that some example from into the We translated because through in through from our get we

So it’s coming not we out as and lose back. we that though automatically by save therefore see from that

David Larsen

great. Okay, much. very Thanks

Operator

to I’ll you. Parsadoust turn the of end reached remarks. now over the Thank the we’ve question-and-answer At time, closing this for session. call Ali

Ali Parsadoust

very you you Babylon. your for everybody in much. Thank Thank interest

month with the or delivered delivered of continue We and sometime States this projections in We the started we our more said our on growth company United million the I revenue. in as do. we deliver very $XX will of a revenue significantly year. leveragability single year We earlier we to ago to to are, times model. as times We early growth our on entire XXXX, that a revenue revenue three did three trying least times are days in at at four did focus in we that of XXXX. January, we In what coming this demonstrating –

are beyond not promise anything We we do. doing to what

global in but industry. the We think potential that significant We’re days have create that will is to healthcare early for take company us. we this valuable very delivering on that promise, that a

to that be all before to after all to need. that as of about hassles treat, impractical. with We or I, that until and proactive and all reactive sick convenient has that sector us. us wrong things the company things that’s dealing go then people to wait need primarily to are care all a been opposed We have look As it’s about need going healthcare into happen that we

we more excited but long your front. there’s change. and of days, about way be needs that group of So this part to fundamental time. early couldn’t Thank a a you go. will we’re that seeing in And industry interest that change, you but companies can that deliver Thank long for what way be to an is a your go, I a for we hope

Operator

Thank you. This conference. concludes today’s

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

Babylon Holdings Limited (BBLNF) 10 Mar 222021 Q4 Earnings call transcript