RCM - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to the Q2 2022 R1 RCM Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Atif Rahim, you may begin your conference.

Atif Rahim

welcome call. and everyone, morning, to the Good in growth, Certain forward-looking harbor growth statements about expected during opportunities this of forward-looking future provisions performance future the including about and benefits cost-saving initiatives, be considered statements. call statements strategic are may XXXX, Act pursuant Reform the Securities statements acquisition, any Private our our and performance statements our our plans made of Litigation particular to of and the the Cloudmed safe liquidity position, financial These such statements would expect, may, are of often variations. identified by project, as intend, the use plan, and words or estimate, similar expressions anticipate, believe, design, not cautioned statements. are Investors place such undue reliance on forward-looking to statements made today's forward-looking risks on and involve All call uncertainties.

forward-looking future, so, in While at statements required we the may we no doing of some applicable the elect except intention to by current extent these update have point law. to

Our various of the of limited actual these our heading could Factors acquisition, as report and in and SEC statement proxy our to Cloudmed outcomes market factors COVID-XX discussed related benefits the Risk report annual economic realize statements a our ability filings. growth strategy, materially our under acquisition including, Cloudmed included those on conditions, other to factors the differ from XX-Q, most the recent results latest geopolitical XX-K, our and and pandemic and expected in result the but Form of quarterly forward-looking impacts the Form ongoing on and prospectus to, not

metrics on be performance call. We metrics non-GAAP referencing key certain also will and this

equivalent press and non-GAAP refer information our the investor metrics non-GAAP the of GAAP amounts release a For more and to on mentioned please their amounts, presentation. to reconciliation

call over to like turn I'd Now Joe. to the

Joseph Flanagan

communicated Patient our while EBITDA above and everyone, morning, we million the line business were quarter of quarter results operational outpatient of our and reflect year-to-date to report strong in June. $XXX.X emergency capacity. the second inpatient Atif. and XXXX joining million guidance volumes adjusted in Thanks, of to Revenue the call onboard of and high thank visits. slightly our ranges end on update deployment I'm expectations at for pleased us. ahead you office-based Good in With trending levels. execution new and second admissions and been costs surgeries absorbing visits with our and expand have $XX.X

acquisition With on next ready Cloudmed June embark we're the to of completion on of XX, the growth. phase our

in We expect Cloudmed our growth three to ways. accelerate primary

extend expand focus intelligence, in our proposition value Cloudmed's and on advantage. area our revenue enhances significantly our capabilities us positions this First, competitive to deep and

close, Californians one Coast. across revenue Sutter deliver as a on our and is the Cloudmed's providers. like and unlocks counties. this billion results I'd company. let X have I'll this, our our our actively priorities. to integration teams scope President integration chip topics: of combined and Cloudmed's assign executing how in West commercial together base with engine better two partner to to given in and care Commercial modular wins. health combined installed customer Second, Health XX we're newest RX's technology engaged XX-year leveraging Lee $XX presents for the activity important current under more two But patient systems sales in second, environment; on term, meaningful than cover operating leadership health role largest with historical continued to modular solutions. technology been finally, our his the to first, end-to-end in synergies serves We're blue country, the We're base pleased for growth meaningful Since the net investments our the end-to-end activity. and and macro win serving fuel our expansion proposition. of excited as on very potential growth comment world-class in platforms bring Sutter for an value million excellent And as reference new Starting even

to investments the honored to meaningful underway a capabilities capabilities were also patients transitions activities We with an have these health broader investments. Wage to delivering for Sutter. labor are in become Having activity expected drivers capabilities. phases, selection From significant once exceptional navigate for providers, of in and coverage, differentiator. fall into global increased a look our we pipeline. two inflation made competitive upfront Relative have labor-related Technology lens, to given The are and allow wave our the care of starting any XXXX. scale, and employee driving the we automation and dynamics selected to Onboarding in patient organization patient tight services this the without occur and concluding positioned been forward experience was automation concern our labor are decision challenges and end-to-end they by to current serve. [Audio process. Gap] experience Sutter in providers coming footprint first investments experience and half technology access are better a significant driver particularly main in providers benefits these conditions comprehensive financial shared again and fully and capital predominant market to to a critical

we pressures. company, not inflationary a are As to immune

our amount offset positioned in we pressures manual industry. However, currently to distinctly performed given of inflationary disproportionate the work are

Our are that investments environment. infrastructure and in us drivers position two well global current technology delivery the

business in XXXX. the new invest to we both quarter, a and these expand in capacity opened In aggressively center options. continue our services global solidify second We operating Philippines in to shared areas the of our resiliency further

of services be the help of talent, will Philippines will denial outreach range chose health care specialized scale patient We offerings. clinical PAS further offering which management. for from our its and service, customer utilization including availability known us and We this center, a

plan excellent over years. employees We to this with expand three We results are X,XXX current XXX seeing operation the over already employees. next in to

levers provider to our the to on the reliance available trends approximately are price labor operations. economy Overall, further readily automate has digitize are see to relative that to Our our same automation at and We ahead its points. by significant operations. not runway for in-house in and recognize us now manual favorable reduced not macro dynamics XX% them effort, these us. in which certainly or baseline is creating available Providers year, fourth our

a result, robust remains very activity As commercial and across end-to-end our channels. modular

the anticipate new Our in active activity opportunities deployment the years, grew pipeline to year half elevated of sufficiently the for therefore, of our end-to-end replace are to level Sutter. an signing investing in of and the expand coming first capacity. We

in to We are increase billion $X NPR XXXX. we as on track capacity exit our annually to

continue on early solutions the we've make well trends acquisition as macro see for started are solutions, Cloudmed in modular expected. current basis. synergies RX to XX strong activity the discussed to now The second progress interest out our to On Cloudmed's quarter a the more stand-alone of into modular revenue that expanding side, and in market we signed I earlier as selling integrity playing share customers with driving on agreements revenue point we our complete, lastly, commercial new with And signs as customers. thesis also

laid manual in are end-to-end under performed Turning billion $XX in have in scale Cloudmed, numerous distinctly we and to relationships positioned building cycle integrating standardizing reinsured NPR business touched process the the across the years billion several by revenue care $XXX cycle next and and when settings. automation effort tasks technology. automate approximately our NPR subprocesses to revenue The process. technology and significant ago this With in of management systematically by for blocks we our workflows were core end-to-end

integration capabilities, quarter, on XXX with that up RX the able we RX positions of RX's Cloudmed's goal more example As in of revenue that processes we have class second am automate to automation years capability of In team close, leveraging clear new prior to automated, million encouraging, at that another and at annual and The Cloudmed use The additional three shortly has a late-stage and from and manual one we These XXX customers XX of million management. expect systems our with we scale. to million denial how solution been highlighted automation. capabilities. announce exit a differentiators. top-ranked after with XXXX automation XXX automated an on grow productized technology basis. a cases our five already effectively expertise have expect began with a we stand-alone for prospects tasks. customers negotiations. including have result, we rapid our cycle to solutions significantly follow-up more automation been handful excited than and than coverage health combining Cloudmed's be implemented based with million we've we automated the Immediately in I to the been of tasks tasks ahead. Combined in leader the very breadth with automation in combination are AR monitoring launched from after modular combined authorization, implementation, area our first and is as response This key robust scale domain of support close have our the signed

Lee turn asset two to partnering It's a the with to it's past is Before together. high-level Cloudmed's with us. organizations pleasure it clear Lee I for pleased with a very the integrations our on teams few months, for coming more over successful I'm integration efforts. like thoughts and share detail, over few significant been the how I'd very that are experience a

engine, as I start completed. view our about with By favorable remain Cloudmed's result, dynamics can we've revenue received for integration of a value our from a Market modular to feedback a business. providers commercial acquisition positive prospects In present all to very customers to cost The As leveraging teams our we are embedded thesis. in large. starting to reinforces the backdrop. strong synergies best-in-class entity is the unlock at deliver and stakeholders combined off optimistic organizational closing, commercial that the our superior well integration

strong, motivated, expansion components look addition see These margin to the forward highly for growth. competitively our are critical to platform, opportunity top all of in engaged long-term a growth, have we differentiated long-term and and teams and on ahead line for are opportunity strong us. executing We we

over to like Now call turn to I'd Lee. the

Lee Rivas

our I'd Cloudmed's positioned focus future progress we'll on with for I'd now cover some our like to integration. Joe. the cover businesses And you, are our to last, performance. on technology expand Thank like how platform. combined on

personally largest and Regarding first but modular our first our services portion automation performance, I'll with Cloudmed tracking is about our half had strong physician with the modular talk are solutions goals. performance. a to in year focus help the I'm customers first opportunities full modular the with and revenues RX Cloudmed's and ahead I'm our a patient team solutions our of experience, of very solutions, advisory on excited solutions. to that to equally half our pleased at EBITDA report

As providers they provide. Cloudmed's get services a reminder, for paid mission to help is

We patient help connected fundamental and members We a large-scale to leading is deep hospital loss analytics-centric team on centered recover longer hiring complexity, related starts platform. Our and of providers footprint. reimbursement changes our buying more. revenue $XXX very revenues cycle our customers. that a term billion go it solve customer by are driven by expertise and is data regulatory hiring mission, data towards to care, provider medical problem revenues. directly with our focusing challenges helping driven data scale and medical to professionals help system success and technology our This and year-to-date Part approach around equipment, this

by by billion and systems. Joe payment analyze of program, complex customers over of data top XXX and mentioned, and insurance and system our NPR $XXX vary records, over customers XXX help the state touched As hospital have medical models, we We system. which XX

technology how platform a policies and myriad hospital for to outcomes of Our deliver services. receive a governing payment system purpose-built on is identify

at is platform the customers. Our deliver how to results we superior core of our

to domain clinical of like intelligence I'd data. the given combines platform and our just bit automation and revenue detail in financial platform a to mission. importance base of the customer and expertise components large of to to volumes Our on go our analyze our

cloud-based our data is component infrastructure. first The

built applications flexible latest Our cloud to using computing be and the technologies scalable. are

and to Our large and of formats systems elastically expand data query ingest quantities daily.

of days. to data costs. customers Our weeks allows This customer or matter implementation in cloud-based us a as architecture to and architecture structured some even single stack minimize remotely onboard hosted is a

component and second is The intelligent AI. automation

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a is premium domain to expertise enables care deep our which results Our in payments to us health customers. critical capability, deliver

so Our our data platform our of the scientists use powerful. to expertise domain make that and role and experts network effects that enhance deliver platform

platform Cloudmed helps about Now let and and how RX me our and talk current customers. shift future the combined

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will time, unlocks dictating manual In cycle to a optimal with innovation we technology the patient journey, single algorithms on over worked to addition, processes believe are Revenue and the cycle. inherently accelerate ability workflow which more technology the the sophisticated process, eliminate routines early data Having automation platform optimize run later. end-to-end the platform interconnected to in our it. supports work in

leverages platform common develop new entirely the and even data workflow reducing as drastically engines core a extendable or Our time components such model, new products. to and rules functionality

also optimize operational necessary RX's all last scale like are driving our to solutions. topic cloud-native as integration built and a being the performance control model, company's the these while to In allows over efficiency. our to rapid combined is due Finally, when in a growth to the us support provides The end-to-end platform to system I'd architecture, and businesses whole, coming process particularly together. point steps how discuss compared the

point, our VisitPay first RX's us significant well leveraging opportunity team has excited asset revenue at will drive one engine customer RX's half a We portfolio. first led the XX% and commercial company. and Cloudmed's as the we very customers. track I'd XXXX of to one is such engine key as This in as of over to to modular our solutions bookings record leverage Cloudmed's combined base, solutions is significant growth the like in make and patient-facing that commercial of XXX-plus this engine is strong as strong into growth have to The cross-sell drivers over modular be to see serving that

to today we we trillion systems NPR also health this not of believe covered $X.X new net leveraging frequent RX's CFOs, we uptick We billion $XXX NPR commercial believe sell Revenue via strategic end-to-end revenue of help our engine we teams we can another as and an solutions. of heads Officer. by them. and physician In serve are the close, weeks teams asking interactions already with the since have Integration opportunity higher several groups By complexity had challenging struggling manage with the with systems given who cycle led environment have discussions large we we health the few can cycle implies accelerate of Chief Cloudmed's is commercial can the do our our and highly into. are sales customer revenue a how system of teams underway with modular

started some We results with the pipeline. have see our to immediate expansion of

next the customer focus patient on and integration, creating modular CRM solutions one marketing cross-selling the months, Cloudmed X we'll base in Over message.

analytics deliver are of rule billion analytics on people. through delivery team also operational value. our to is our we the ensure customers results directly our sets expertise high-quality second The our opportunities. are platform with to and our technology results to who AI customers same how operations further consult the effectively. Cloudmed and integration on driver leveraging members used are our to drive customer-facing implemented customers learning the for is XXXX most matter our integrity and RX, of operational revenue structure with focused on The engage integration team consult component customer to and strengthen ecosystem by the to ROI customers is of from related we customers our Through of members delivery the in platform with our we We premium to over machine services deliver. subject A key $X.X revenue delivered and our key value in

important talk people. most driver more resources integrations in more for work component well of faster. part by would backlogs key value customers as several us value, Last, third most our faster reduce realize customer important about integration, and developing as us offshore helping having view, synergies cost our RX's and retaining is the been and of people. our to Additionally, even I like inventory deliver The of large-scale enable to

and in As Among to the best Cloudmed's, all throughout and our integration Chief do the pleased theme the in of these organization also year. leadership performance of combined Officer, integration. a Operating off incremental organization we add levels to are half excited RX. getting to first the putting rationalization, solutions people systems, the of work Officer, roles with value is system new culture leverage have Chief integration people key for resolve organizations pleased significant are our we in focus to office the the we of say expanded what modular Revenue In roles Product Cloudmed both are summary, key about organizations holds customers. true to an is strong areas I'm opportunities duplicate example, for Officer, the start, to Chief and Integration all and

to Now Rachel. turn the I'll call over

Rachel Wilson

report everyone. revenue up XX.X% $XXX.X Thank you, morning, and good Lee, million. XX.X% and another with to up year-over-year to We're million pleased $XX.X EBITDA adjusted to solid quarter

our net of revenue across to we're $XX.X adjusted million performance associated of as offset primarily offset the $XX.X positive of volumes shift June a associated in high for of relatively On billing revenue, in less $XX.X applicable $XX driven customer million Net of onboarding contractual of the grew and due recent $XX compared to As And operating end-to-end previously quarterly discussed, Cloudmed, fees declined partly the $X.X report fees from operating for Other contribution fees million over this customers the sequential million million, basis, of second driven modestly million prior to expected was large year pleased in from million, new fees customer prior $X.X by cost million a excluding planned million by of million contracts incentive net which quarterly QX, ranges. one decreased by Incentive million, incentive services and partly Relative 'XX year-over-year, update driven costs million. to customers' $X.X fees quarter, $XXX.X XQ at new our operating fees were of includes guidance of for our sequential there VA thus results we $XX period basis, up and completion revenue improved patient day one now change. base. discussed revenue costs $XXX on a On was the flat. since over million, year-over-year of a and customers, by by customers was $XXX these related quarter. call by in end-to-end million, the XX, $XX acquisition, Cloudmed Sutter. to the million, $XX on to RevWorks. $XX.X primarily end EBITDA and onboarding services and cost to the from delay $XXX.X onboarding increased by up the with to million Scion Non-GAAP QX attrition contract acquisitions. due a non-GAAP Health with our to

by initiatives. to contracts. and million sequential increased automation our was of result we quarterly and the million savings were execution, up contribution to period offset automation year-over-year associated driven of and due On Sutter are $X.X year-over-year. was million increase relative over COVID-XX-related a and cumulative track efforts digitization $X.X $XX.X by increase travel million, expenses as Scion Cloudmed a cost growth basis, in lifted. $XX.X of costs recent $X.X million sales XXXX. for to as expenses continued as costs and exiting to on strong up with as spend well by Our a of EBITDA operational cost costs acquisitions, support SG&A driven generate business declined the $X.X EBITDA million, onboarding in million adjusted to XXXX, from the to X-year Adjusted related restrictions This QX Non-GAAP quarter digitization and marketing remain $XX services, lower and

Lastly, costs, Cloudmed we other the incurred costs $XX.X primarily in to due with million associated transaction.

the balance sheet. to Turning

from revenue statement As quarter. calendar cash balance the we that Cloudmed XX Cloudmed reflect and activity on close June costs despite days used as acquisition. update of fully equivalents receivable end consolidated capture as the in Net quarter, the acquisition. guidance whereas and a of at cash We $X.XX primarily March of debt the flow were XQ $XXX.X Cloudmed billion on was XX, June in of a transaction to incurred activity. to indicated million are agreement operations the March. consolidated fact end shown Cash $X metrics to $XX.X part June debt million inclusive the Accounts the combined of Net income other represents the at sheet, Cloudmed up close for to such limited in balance compared end credit approximately X.Xx and the related was debt related combined billion, in of purposes post million cash as at items $XXX.X other call. the from due sheet leverage immediately the basis, previously

to previously decline our to floating at of as by SOFR. At close interest We to be debt early across the expect a of In swap debt in of rate post a the our vast to net debt rates, July, arrangement into The of $XXX year. debt to stated we the range. leverage expense was our entered X% expect rate majority portfolio end tied current exposure the X.X% X.XX%. fix SOFR average million we

over We quarter. repurchase Our share the $XXX with position remains liquidity conduct million activity did not of in available strong liquidity. any

the of Cloudmed, provided generate billion revenue call to in EBITDA our NPR outlook late in of in for June, than our onboard upfront update to This deployment $XXX XXXX. the billion, accounts and to $X.XX $X with XXXX. of Consistent adjusted guidance capacity contribution related expansion $X.XX to million financial costs $XXX our million year guidance on expect investments outlook. to of to billion from and Turning partial more we new

continued and delivered of proud full EBITDA, the performance reflects XX% team's second to our results first We QX, Cloudmed and I'm for half. and the closing, the respectively. the year ramp expect in In XX% RX's contribution from our typical This in adjusted QX in in EBITDA half. accounting operational and of approximately higher strong ramp execution

in to deliver our superior forward to complete, future. look now updating integration and successful With the shareholders. focused customers our on long-term on a you the acquisition progress to value I Cloudmed we're

I'll operator the Now call turn operator? to over Q&A, for the

Operator

come Instructions] from Rhyee [Operator first from Charles Your question Cowen.

Charles Rhyee

Congrats on the results here.

really. questions two Just

the you First, remind costs about could Joe, the much us quarter. the in I of onboarding know just that Sutter talked about if the should How we fourth the how that client? NPR you as of agreement, you think on guidance That's gave? into within part in of factoring of that Or should we of kind year? be consider should first most next the question. we that

Joseph Flanagan

Yes.

you in we characterized basically second The XX% major If think phase as kind it, conversion we on as you of NPR on it's to on on was that we've speak, And the but And year. consistent deployment it that year so economics. with thing directionally, second a of calls, onboarding stream, the say, bit the have this perfect, to the mobilization drivers we'll think that and in phases. is characterized waiting this expect lot deployment, all XX% the onboarding no fully first if to Sutter a prior of the convert I in for Charles, work transitions November Charles, now to about costs It's looking not revenue of our the -- first near from of we the of occur and in phase very prior highlight incurred to first expect would two term, standpoint. occur to that activity I Obviously, little kind phase. from phase, is but would being how views, in I right over change the and view of directionally, about underway. that. employee in contract consistent. is wave That's we And

Charles Rhyee

quarter. like And when of of in end will more you fourth say the the -- part sounds first it hit though, phase, the it

to from So standpoint, want yes. get we -- wouldn't a modelling

Joseph Flanagan

correct, then so of That have and year 'XX. Charles. seven weeks full activity going in this to start November, in into of kind that That's yes, will that and eight -- you'll basically

Charles Rhyee

guys at we you talked that the about Cloudmed year? that then of the gave or quarter Okay. plan of really Was guidance Great. the through in captured this end upside the tracking you for of as call. the And that start at rest of potential ahead secondly, additional think the

Lee Rivas

captured the guidance. for in It Thanks Charles, the question. was

we're also what said reiterate feel with Just what a modular Cloudmed obviously, is to and we've solve for we customers of that. problem our touch part seeing about today. strong and doing customers -- significant making said, as don't solve progress physician in with solutions, a what our very I customers. big net And complex groups new and customer and we earlier, we're both current base, We opportunity, we is

So of next for we feel very good the about into year year. and rest the prospects

Operator

comes Glen from Your Santangelo next question Jefferies. from

Glen Santangelo

that to Joe, And June for funnel to the fiscal NPR of growth the sense we're what billion NPR up of out to to follow XXXX? your the NPR, you now post we XXXX? is of as correctly, also want I end sort the think the Rachel, is heard a question. how trying on -- in XX% some curious just at sort I was figure for expectation I what much of I is in the be that XX% sort will $X already if comments expected reconcile us you're that you NPR said rate if you you XXXX. for of just 'XX could give XX of

Joseph Flanagan

Yes.

I don't to exiting Rachel why So NPR the ask kind just cover XXXX. of

I to 'XX. think 'XX that's your question, back And then at looking how Glen. we're come I'll and

Rachel Wilson

Sorry.

thought $X that of -- part taking planned guidance, And that Sutter had away. $X.X in that $X billion initial is billion was very billion original for we that our we had our guidance being, So to that NPR. original

and to landed talked million have for And the what since? we've Scion million that answer $XXX $XXX under it's is is, question contracting. about. the the So we about that physician We talked

in year incurred So the have that X.XX that's about for additional we NPR total.

addressing. And so that's something are that we

Joseph Flanagan

Yes.

Just update one physician. there quick on the

have characterize as relates June XX I nothing's as one context, commentary, million that's system for expect that $XXX what would short course the Glen have term. that we still it we in we communicate due plus and And problem, then changed to Rachel. just helpful as Rachel end-to-end in our and contracting, QX, over to Scion contract, physician, said, no and from in in be might thing So

look So exiting first for accounting of the at just that or what when half that's first the phase year, you exit rate. kind the that bookends

part We base, earlier, 'XX. very with capacity but 'XX systems, deployment we're new essentially when Cloudmed it's you comfortable and And activity we and Sutter billion kind our Phase kind installed be synergies want I's independent 'XX, installed very, and look on that with. normalize 'XX based really I of Lee I your of look 'XX. will at at gets and we're second would comment, occurring covers be you the NPR at 'XX. we're Cloudmed 'XX in Glen, that the you because discussions, Now entering et least actually for bit that revenue relevant, okay? deployment 'XX, into combination, That's revenue out characterization net triangulation little guide X, end-to-end of and normalize for that, a The Sutter on And the this with question, by of a coming on very, look if at view to see of and very you as as I'll look of I'll of contracted cetera. think comfortable as that, end-to-end delighted $X of it of occurred base the at then portion -- of

presenting. the the backdrop excited the prospects right now that us to really growth about are and that us that's the make So gave get is for market we us investments long-term really confidence the

Glen Santangelo

ask we helpful, the if it's quick on detail. all again, Joe. on And June side. really Maybe call. profitability the appreciate one may follow-up I super something just I That's on, XX be touched it's that

just -- I'll had numbers get I kind was and laid that one’s that 'XX said point even to you think And wondering just was the not in what Cloudmed think running the announced. and on that at those stop thinking maybe not call, said give with amounts in coming clarify the very than you and to in It's of you then proxy that was comments above that? beyond a on And around you faster you I think you I maybe in that I'm of time had of were there. you if were call, some some time, kind trying I that of comfortable that the guidance. here. could the But earlier synergies then anticipated, be Cloudmed were may at bit you proxy. all you little any you out deal And said the

Joseph Flanagan

Yes. Glen. No problem,

call, it So we're do going recap not color and but we to on moving we call, directional parts, 'XX give just provide the makes all sense the context. to think, guidance XXth basically given this said to

million we start the in characterized the stand-alone in the right businesses that on good converting second we now, synergies million feel businesses. as call So to 'XX the proxy. then $XX We 'XX XXth see thing $XX of of stand-alone kind to with And range. the about we is said in

Lee the very addition bottoms-up the of vendor Lee that cost categories year, thing mobilizing between team And the the most on in synergies, fully the Corporate feel the et it a active pleased synergy synergies finance the I'll very exciting and doing to and very, at I'm converts us on the that now on, are to. just what quicker, on that really out controllable in our is on for with we I'm working those have a exactly on cetera, us going you from opportunity. I book thing that's And with say do this, that comment range trajectory you the very is coming functions. are about channel synergy to now, that will focused call. finance good we about we third-party teams The And and Lee we've some I budgeting, footprint not on numbers business. modular and the laid give would Now basis been discretely that of to. been right work work you commercial with about are excited only sales because a end team's on and revenue standpoint, I'll earnest what this, expect structure, and look of When working say Cloudmed and business our rationalization heard and the I'm the engine rationalization.

we collective working. And to so been the closed teams we our sales haven't transaction. -- have we're closed, able Until just

building And a think our to I that on opportunity I's And so what that's that we'll has momentum basis. area, but in that teeth Cloudmed the into opportunity channel yields, on it's sink and really, from perspective. really excited I'm great see an Lee and stand-alone

Operator

Cherny of comes question Bank Michael next from Your from America.

Unidentified Analyst

This is [Charlotte Kobe] on for Mike.

kind about term? to you You whether little the Could have those just a in talk the any process? bit of the would could environment. pressures change outlined macro on it's contracting inflation recessionary demand changes of some you near or how And customers that more pressures pandemic noted your a seeing, are medium potential or

Joseph Flanagan

Yes.

we in really I think macro market. dynamics inflationary supply off or theme the the and and environmental that correlating demand driven the the kind labor demand impacting biggest labor see market of is

continue you of is, And Now digitization, driver break if do down, businesses other and to that. we on I think we been think from over early can will has about you we're return And seen, committed for that meaningful that commitment and that at scale services digitization, a have we long-term that the scale period, for growth to to have and with holistic look a excited solution robust the that our us. we demand standpoint, achieved provide. and that as create multiyear think our

environment on Now our impacts that macro same structure. us cost

important, commented the have it's very commitment automating so maniacal And commented a this, I on processes. manual Lee and that this, we on to

that's and view And structure, technology net-net a and scale returns on in is thing. biggest will that to our do multiyear we that cost we for the we business. the strong leverage can long the result so as that and will I -- and and growth convey probably trajectory And the it our think generate leverage customers,

we talked we've provider have about to revenues. as year-to-year, watch Now before, do

feel I our the because every do in provider it's acuity part to what process biggest good job driver revenue the as doing, what's budgeting year, formal our about my best comments, economics. doing and contract on we triangulate really always we've 'XX. to of is can And As in is do said we the probably assumptions we made that through, end-to-end flows

Unidentified Analyst

Great. especially given going do those recent think macro how And the versus when think in landscape of you about competitive you differentiating of Cloudmed? factors, competitors, then acquisition again, that, off factoring and just you're the

Joseph Flanagan

there that, you of XXX out that's run in year. is And geographies. addition real good in would we a When have of what We decision Board we first very the I'd people we're let Cloudmed's very Lee benefits that what operation and committed to in terms the scale. the is like most out about a the have of we me of think have on the from scale right my first other services comment deployment of are well stand-alone talk to people our in And we at last in delivering Well, actually year. delivering A is Philippines established this At impact meeting and that the capability example as end that external global sophisticated to August look differentiators, competitive sophisticated of to of QX rapid I standalone operators to standpoint. do X,XXX on a delivery expect on just sit that's delivery. on in position size relatively most to services entity the are, We're by We recently, we Philippines. year. then interesting But formal legal basis, the convey as Cloudmed. highlight a RX now, I providers. global perspective because made

thing scale. So global first is

ago our digitizing engagement. thing is patient competitors or on four with commitment a technology, enabling coverage to position think market the second we that the we're comprehensive our a and process because And higher other of and at participants with comprehensive self-service technology. are. a to of then coverage than And in of automate process rate penetration The finally, five years

are RX those stand-alone. I would highlight things So

things Now interfaces, one offering, we are our middle is fully for those very very, us. revenue clinical areas of valuable the recognized intelligence,

his their combination, And on how they excited and to Lee And about that like they've impacted the technology so space Cloudmed with and capability. expertise. can end-to-end incremental with what have I provider from do impact extremely at is the how comment large am I'd domain perspective,

Lee Rivas

just about building [Charlotte] Joe. make few Cloudmed Joe's a Thanks, point. RX and just I'd off , like points to

said are filed either us The helping customers And a first as helping solve calls. point identifying leakage errors, the we to space, pre Joe and claims and is underpayments this in the just them revenue revenue adding denials. say, middle of revenue both would make identifying clinical all to the $XXX what claim heard previous way integrity in is code or billion problem manage along I is on post you've have coverage, cycle when Joe

has position, of to and billion mentioned, with have I already, a we health point. top want of touch leadership systems XX just the covered. So Joe this as $XXX over and on XXX NPR

The second is scale. point I'd make data at

of The matters. mentioning keep why the top one is touched data -- the So reason do with systems. we only XX sold XXX billion $XXX solution into the scale data of the

can the see just And problem, customers. XX models into types, clinical across own of hospitals across their that customer states, predict ability all our only kind is payer customers So what to see backing develop we codes all when help that we up XXX data. an get and across identify trends

limited customers do and We systems. RX across country, Cloudmed where is existing the combined apply areas our leakage. of country to data sets. apply the across visibility across there how that across of We models customers. payer thing base. on identify RX. I want those We're We to revenue of and customer different current types, on. helps touch They're this for can same RX's data across see So and platform the the data to also clinical they're entire can care episodes reimbursement, types so codes, seeing getting then on not able

but point maybe is of bit, component proposition thoughts talked We give RX our Cloudmed I much the that is to but the detail talked architecture our infrastructure, point in the more on it and anecdotally RX, remarks the very cover engage of just platform. the model. customers. key applies I in you bit about much value prepared the won't a Cloudmed about with at make the of it value to Cloudmed a platform, third I how a make I'd because to cloud on mentioned the I bit but is commercial built customers. want and the prepared a The the we on So proposition scale we RX to last in the comments, broadly.

most in Our Cloudmed proposition primary over data Cloudmed some In the to into value of in can complex some about that, evolved cases, what why some even their and enables those being of inability challenges, that problems. mentioned is integrity. our focusing have revenue we linger days, revenue to [Charlotte]. to Joe of over we've Hopefully, Joe on technology very problems But solve of hospital's head been the the of and that invest broadly? issues customer the billion behalf solve because of us highlighted, you help and cycle, much inability $X confidence the true and intentional the RX leads helps, so customers. more NPR have that XX time, last And conversations to larger on of

Operator

SVB Leerink. Your comes next from from question Davis Stephanie

Stephanie Davis

leaning one start day Health, versus [Thought] win more your Joe, quarter. biggest roots. you. for is your first system Joe, the let's one got Epic two on I've the Congrats with that questions, for Sutter was Lee. the Cerner surprise

or us color lifting around integrations if anything how end? could your hoping impact give And that faster, on could that If have go your what, was can into process? more initial win you on that any, require factored and more I like onboarding process? some So there's your that, ramp-up

Joseph Flanagan

that No, I that we win, -- diversity ambulatory EMRs. the with a for would side acute have interface is the the the business both of that on $X statement end-to-end or or the make we argue the start differentiator book would is ecosystems on EMR we us all of even competitive into we contract nominally of a before what on Sutter And XX we side. sizable and And before is ourselves say the things Yes. given Sutter, we to Stephanie. of business pride one billion thanks, and -- into, the

a Now activity, Cerner. have because with of we some of M&A obviously, the relationship

necessarily We around have with prior but other installed look any that you necessarily, Cloudmed value. and wouldn't about the We're I we're partnership that is systems you anomalies say, we have and all deployment at an Sutter into integrating system, have do well. as host as experience. I because don't significant base with that have organization highlight mentioned as the before, that. Sutter into. coming experience we I And as experience significant understand systems in working epic. understanding it then relates of to they But integrating deliver their actively the deployment the Stephanie, in, on And excited to Epic -- significant as

expertise, domain especially on So and about we're that excited interfaces. technology deployment data

So kind I we're the of footprint Sutter we're generally And and EMR very credibility the encouraged. Stephanie, excited with as that that contract. said, comes with

Stephanie Davis

come. of modular wins saw Lee, And it more to there's Epic means that I the on a wins your Hope lot end, just in quarter.

expect So we I it that the b, swung was team, par curious wins you since like if with given that cadence? this looks Cloudmed printing how Or course a in joining? is more ever the and guys started you should for really that

Lee Rivas

Yes.

me our think about commercial so wins just and let how frame year. far we model this So

market. wins what mentioned to XX done up just we in the answer is very first and good the the I So backing our feel into approach question how we we've Stephanie, first your this half. modular call. about

success A we've I give of of net we're solve and outside area. system and new XX% of expertise, customers, XX% current matter directly that model and customer grouping the customers than systems we're kind engaging a over field platform outlined, And revenue the we that lot which as really approach you help our a a coming today, engage we mentioned, if those kind with groups XX% we've commercial is base, that strategy health customers. experts. customers of to with business, integrity, more I from of pods, with them physician booking the with also won't approach seeing of problems had numbers, less those the across intelligence penetrated with current geographic our subject in don't specific selling high-end touch health is think have the lot success. fits growth X-plus growth. about That our solutions is call but third We plus a lot very is revenue them, but classic experts with solution component of of

feel very just about good year. to your so we answer have And what's happening. this So bookings far been strong question,

we add I other already feel the very solutions about would on thing to The related RX has side. good RX that modular as is

head clearly into say. of I There's we've our patient close, into have things would opportunities future a highlight, physician So very a been of base. but year customers, our into about sell our had modular bit solutions base. since those we Stephanie, discussions with, start only opportunities These a RX feel we've to good that solution. it's are year experience weeks and little clearly advisory services prospects started sell the to to next couple There's about that with this things but to

Operator

comes next Anne from question Your from Samuel JPMorgan.

Anne Samuel

was you some about could the cadence opportunity drive maybe more that? talk of timing the we to and expense be of hoping I synergies, to automate Cloudmed about these at and how should thinking

Lee Rivas

Yes.

this is Anne, So Lee.

me on Let bit. touch just automation a

and applies level, to platform there's Cloudmed RX. highest huge the customers. We technology at automation believe opportunity the apply a So across and RX this to

of tasks, record, go a examples. many you nuances tasks retrieving whereby want too into struggle repetitive are as as So and a claim, technology. Hospitals to few process don't such can authorization apply just cycle. retrieving with let medical -- management the revenue an that And But a repetitive with prior I detail. are give example, you just dealing much me there

you've the Cloudmed heard customer couple say, has significantly So so, Joe processes, years, the last current already RX over into last of five over automating interestingly years. as has invested

is applying So define automation that's helps both kind RPA is automation, how automate the that analyzing base, platform a platform, RX's. scale of across broad across first thing I'd I data customer and collecting, plus ingesting, the say so approach, our

use where addressing The think mentioned a been we've to specifically to automation to able service. and end-to-end history on problems there's not And customers would but is approach, we to as help specifically our content, cases we call the as having opportunity other customers modular a have this is obviously with our specific tackling also of I those on they ready In personal We have just I basis. here. this ones or directly what more not an help can an an move behalf thing end-to-end on customers such speak say to the I would say I because what cases customers. basis, our call a they're that

and Cloudmed see has additional here, with couple a over to very we the What cases. huge last Joe plus use it's So automation. a apply opportunity brings table years to said the consistent incremental what platform of is technology automation

Operator

comes Your Barclays. from Steven next from question Valiquette

Unidentified Analyst

Joe, Steve. mentioned warranting sales investments expanding earlier you and [Tiffany] continued in type activity the high is levels This capacity. is of like for on that,

out if you Is sort the forward? of years? idea expect expansion at think some of the of there expansion degree maybe increasing this rate, an by is capacity over efficiency potential years in in rate about going to in you I each continue any NPR. billion has exit couple $X for Could rate past of increase us sort give the 'XX of been

Joseph Flanagan

Yes. Yes.

I improvement on continue. increasing of without that the doubt, then cover just saw expect and get adds, a forward. using It's on to most process human looking capacity combination think We capacity we the cost of increasingly technology a efficiency we capital capacity. in that investment expect of that part recent that the would to and to

trend to for continue. sure So expect that would we

Rachel Wilson

Yes, guidance. with our that's consistent

Joseph Flanagan

Yes.

Unidentified Analyst

to then Okay. potentially the seeing transferability technology you're if to the of overall topic, implementing speed could you line. talk kind process? Are in was just overall to onboarding any on up same onboarding maybe Great. the wondering through And you I strategies time up RCM maybe Cloudmed's speed

Joseph Flanagan

is to get that. to frankly, doubt, a for ingestion economics, biggest we're Cloudmed that technology to contract opportunity do innovate to platform, Yes. tied play a a that without the of lot The the big we're continuing of because it. And cycle I'm accelerating implementation very and Lee's time -- very role us it's onboard in and to about excited to area commented data excited about in kind of the just data to

along that's would I lines. thing highlight So those the

Operator

Wallace from question Your comes Guggenheim next Securities. Jack from

Jack Wallace

zoom putting numbers want investors, kind a and of the a some out as here around value as just or refresher that. reminder broader for proposition, Just to

a So as And through in going also being they just a versus thinking that thinking customers engagement about typically between but more about for contracting the as what about environment a when customers forward, What haven't the at chosen much your looking how talked be a is spend driver we've customers percentage you're end-to-end of delta issue the after? spend and just NPR. your labor what might big potential process, then going your such you're an RX? burden in of provider cost, changes the reimbursement cost as if before

Joseph Flanagan

Yes. Thanks, Jack. contractually What of our with we terms underwrite. that very we in prop, comfortable reduction very, can double-digit a value is cost feel

excited Now to to expanding. have, is revenue has I thing We're cost would the frankly, technology the see second that. we advantage a And convey say, as grow and greater and, that and owners of we impact, we that the only we about customers as business can then lift.

platform, the heart is revenue commented of at on lift Lee's Now that. Cloudmed the

that's position impact up intelligence and very a a be prop very, to rerate platform, lift our are we value very the as in of direct meaningful. revenue So to excited revenue on

changing things them. can value the to systems Jack, with earlier health does that forma one their inflationary Now of that assumptions labor. What prop that to seeing greater is the to they question, kind a increasingly that we on translates give of are is pro we're

period, for period think manifesting that contractually. And So us underwrite of accreting execution then been to our kind responsibly the or related the experience macro that. on their patient over this forma labor is directly comfortable customers, is higher the inflation. reason they a direct patient KPI. we to unique a prop That a and technology And to that's in position -- itself have we're we've years. is investing contractual experience. improving the do in in in higher a value But that that of expense do third that even that a some a based some the Lee, over are end-to-end rate value planning lock mature a a prop -- to component of in XX-year at And sense I we to And pro on are include improvement for environment. position been as X-year architecture on the only we're of result in ability

Operator

last Dodge Sean from RBC question from for Capital And the today comes Markets.

Sean Dodge

labor to regarding or of deal back going Maybe of portion economics long-term Yes. partnership? anything because that else locally billion Epic. your is to alter for the said that historically California the scope costs that your deal, Joe, that $XX a expected keeping laid it’s in deployment what end-to-end But there impact contract, to out you long-term other margins or of commitment you've no versus

Joseph Flanagan

very mind health labor local that system nothing uncommon a It's I on and that balance work we've footprint. not very got with have No, dynamics the a high. And comes Attrition would big for to my us is highlight. to there.

so position flexibility. And there's in we're -- unique a a where we have of lot

would I lines. that Sean, along nothing highlight, there's so those And

Sean Dodge

can that terms quantification of scale can much Philippines, any the you how as Okay. can you new I the market think would employees? center is guess the maybe U.S. doing in there in around share generate with in India maybe the local in with And the you in something cost versus around, provide of the anything that work cost you be? then differential X,XXX or savings

Joseph Flanagan

points Yes. been business kind favorable We've been investment. have when to -- we made cost the our of that plans

journey to early still have that we'll how there. our in see -- it's Now

our see just Sean, So we of locally. advantage. But with that dynamics have remember we a out we interactions prior quick centers. as and global for economics, that was delivery important patient those And economics in we XX-year terms in to very contract, for us A play when Ascension interface you that the you'll referenced of centers XX-year favorable other line global out the was to renewed big see cumulatively how driver contract. cost reminder, characterize would delivery

really of mobilization the that so with and that's And we're price encouraged comparison the basis activity, anchor points as well. along

Operator

back And I the for will Flanagan closing now turn remarks. call Joe to over

Joseph Flanagan

today us. you, help moderating for your everybody, call. First, Julie, for And the thank thanks, joining all

this on growth. and excited we morning. for look just it's to team, on you of future updating and partner commented, participation of forward I'm chapter we're embark Lee his next our thanks I we As on very know with excited incredibly And again to this to all progress calls. busy.

Operator

This concludes today's conference call.

may disconnect. You now

R1 RCM (RCM) 3 Aug 222022 Q2 Earnings call transcript