TVTY - Earnings call transcript Q3 2018

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Operator

Good afternoon, and welcome to the Tivity Health third quarter conference call. Today's call is being recorded and will be available for replay beginning today and through November 12, 2018 by dialing 855-859-2056. The replay passcode is 4590706. The replay may also be accessed for the next 12 months on the company website. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most direct comparable financial measures calculated according to GAAP in today's news release, which is also posted on the company's website. expected contain Litigation within including XXXX Reform others, Tivity may the meaning statements, and call operating regarding Securities annual Private Act Health's beyond. conference forward-looking performance the statements of among and This financial and for quarterly of XXXX,

intended of forward-looking "believed", For purpose, are statements. similar the the words statements Without "plans," statements. made may "expects," be expressions call are during limiting identify this fact this deemed "anticipates," and statements not any forward-looking historical to to be foregoing,

The hereby cautioned from the consequently, will obligation future with And call and are results new turn the of Tivity set that sir. You publicly forward-looking to a Commission whether go be Please these I company release. materially information, over statements, filings Mr. affected the important forth any Chief no ahead, actual And update discussed now as otherwise. in statements operations by undertakes the Health's others, Executive Exchange forward-looking news may any Officer, Securities and company's and Donato factors, result results Tramuto. among today's to differ in the may events, or statements.

Donato Tramuto

well thank you me Holland, initiatives; will today. Relations working after CFO; space, Vice third his Welcome, experience who a our branding who Adam everyone thanks you Welcome much. with to Senior announced has joined executive Lewis, Arra roles. with joined movement Chief years the and We have of Transformation. marketing investor I update an healthcare Chip provide who recently been as in know retirement report Tommy Tivity who positive executive call continuing on of Tommy. Brand for Tommy leadership be our the team here Thank to Officer, of on our relations our of Today years Healthways Tivity. in and his the and already Many and contributions Yerganian, service. his President through company. quarter recently recent health numerous and good. I as valuable Very other Chip, has our will to very pleased missed. He demonstrating XX of am as to Tommy, our results overall XX Investor many the

of into all about acknowledge quarter, proud direct today of the to established is single of performance Before I every get effort the to fierce one to result Five and quarter. main do touch to of points about would take I of you colleagues. of execution objectives want the our at I Tivity specifics year. hard the I start for our opportunity work the their colleagues. are am of this The the the a upon hear like

First, million. we revenue growth at $XXX.X of tallied XX%; revenue year-over-year

strength we by the flu first was driven Second, SilverSneakers to of a consistent rebound segment, continue the quarter primarily and impact. where the growth see our in visits following weather

EBITDA from million engagement. enrollment been revenues. of financial believe quarter strength the I to opportunities to into Third, have quarter in for is lowered has has X.Xx approximately ratio strategic debt XXXX, of the has Since Fourth, the $X.X less for and our decade. continue we to XXXX and arrival prepares use of Free is my of the flow to now of than balance last analytics data better more our target we it in than best of million third the our where drive XXXX, been third for October sheet company one from CapEx X% X.Xx. cash clean populations this XXXX. to quarter $XX.X Tivity improved a health A the

members. that that to our programs targeted drive is revenue and SilverSneakers associated now of about starting X% efforts success engaged are year-to-date around We see with in more our enrolled

launch advice to And and our should on percentage expert potential when launch to SilverSneakers to know the marketing and healthy" the to was partner, year. based factual, that analysis finally, the of this AARP, XXXX we people This third given into consultation of on broader at we data Prime impact of seen the flipXX month maximize of start shifting decision the top XXXX. in decided patterns of is We first flipXX our the with the be to grow expect the the delay programs. with growth this both offsetting timing quarter align We our of for have of this better and in historically January of new in XXXX. investments "getting mind the

XX,XXX while year-over-year we increase and information of we that growth continue Additionally, to drive initiatives. an business that Prime, new new we acquire XX%, will nearly to have about members believe future added nearly

our That For anticipated. precisely timing more slightly be We EPS members right we eligible and have of testing to increased less is while big expenses, are the critical, example, years for happen our promotions activations sooner, targeted. over and marketing initiatives venues expectations. here, are Due is internal for because There and we manage that the of said, opportunity to results must to XX enrolled. analyzing ahead. our a XXX,XXX and than EBITDA and exceeded ability we both must actively had million of identify and this, the fell our we remember, short believe

Looking to XXXX, a over release. for Adam? through the call of of you, to the on quarter. expect today's deliver in the financial guidance now review detailed will Adam, we remainder turn the I provided

Adam Holland

the metrics thank good everyone. third some the financial start you, to quarter. and like Donato, Well, I afternoon, for of would recapping by key

last were of compared Donato third $XX.X XX% increase an third of Income million, an increase million, year. to from of continuing revenues earlier, over for million from XX.X%, quarter was XXXX. the operations third $X.XX the $XXX.X Income As quarter diluted for margin $X.XX a was $XX.X mentioned per of of of third to of XXXX, $XX.X million, margin. the continuing $XX.X XX.X%, increased EBITDA to share quarter compared XXXX. XX.X% operations compared for million quarter a XX.X%,

grew quarter, representing These X%. total profile XX% and of percentages revenue WholeHealth SilverSneakers XX%, are approximately comprised comparable the with remaining Regarding our during QX representing the to Prime revenue, Living approximately finally, our revenue business of at XXXX. million, XXXX, the prior-year $XX.X in to of increase approximately XXXX XX.X%. $XX.X million SilverSneakers QX third period. compared quarter the of or million an for over X.X% $XX.X visits revenue came

We came also month, portion a visits experienced PMPM which per a members number model. of per average of under member higher a significant from

but under model do As the on not gross a a PMPM reminder, incremental quarter. which in generate create created with costs, revenue members visits, margin pressure do third

X.XX the XXXX, second in X.XX to quarter end last of million and compared in in quarter the are with with the SilverSneakers year. strength at of million X.XX enrollment our of business, We the pleased XXXX continuing of QX third million,

of by Moving compared Prime Member-pay $X.X or on QX approximately to to of excluding during XXXX. XXX,XXX decision contribute mentioned, flipXX, did launch year. of million, revenue, as XXXX, subscriptions Also, QX. QX to at Donato XXXX, move Prime, grew QX end to to XX.X% over flipXX totaled at primary flipXX's XXX,XXX, the the due Prime during last not QX revenue our QX day end of

to revenue and comparison $X flat of to QX to an to in in XXXX cost million. margin SG&A of year. as down EBITDA, $XX.X a was percentage was of other recognized slightly QX QX relatively just for down dollars, led for a activity under this last last percentage compared of XXXX, to as year XX.X% EBITDA million Combined, pressure lease revenue. due services to related expenses increased of as for Certain revenue, Moving unfavorable visits. a last that mentioned, were settlement compared experienced of within we some except benefit year, on

delayed expected, draw As was interest $X our represented QX revolving from and credit facility. which XXXX million, costs expense our approximately interest

during of proceeds aggregate X, delayed borrowings amount facility available $XXX announced cash million. using and XXXX, call, from our under $XXX of the the combination As principal convertible term repaid cash on a notes last draw July loan we of million

$X.XX share year-over-year comparison in and per approximately count diluted result in from a includes of shares. diluted improvement as rate, Our the decreasing approximately our XXX,XXX earnings share improvement tax $X.XX share a per approximately favorable our per share of

as federal Cuts with the positive at the in treatment Act, Our of options the a rate in Tax utilization, of and benefit effective reflecting pay tax exercising million during the for Jobs million of We federal XXXX. QX. tax restricted of available credits investing shares $X and came entered as and we than XX.X%, taxes and well of impacts less cash to during XXXX state expect NOLs and approximately $XXX from

on flow million cash free to for and strong approximately Moving and expected, as cash flow, the million, quarter totaled year-to-date. was third $XX.X $XX.X

from flow As $X.X million we operations less ended free with define cash a We debt, flows and expenditures. capital QX $XX.X on hand. outstanding million cash of as of XXXX reminder, cash

the the XXXX. end Agreement end trailing total Our as This EBITDA, to XX-month QX X.Xx compares at debt X.Xx ratio calculated is XXXX. of QX of at under our of Credit to

of remainder completed Now we've done the me balance outlook for the third our year. allow full of on Having outlook comment the review for Revenue. XXXX. our quarter, the to also of a

guidance updated of This a X% to revenue midpoint. million range in growth a represents of $XXX million, million. previous range now the approximately Our compared to our $XXX $XXX million of $XXX is to full-year rate range at

mentioned, this previously informed I As were there updated that range. several factor

flipXX our XXXX. of First, postponement the our until launch impact of

and activations, Prime impact member-paid and during weather discussed of calls, flu the as Second, prior on lower the QX.

members more XXX is approximately through XXXX, remain than year and anticipate with EBITDA. to million SilverSneakers of core end strong program we and Our end the expected million visits. the to X.X enrolled,

narrowed been has a of million to from to million. $XXX $XXX XXXX $XXX million for range guidance EBITDA $XXX the to Our million previous

revenue factors are gross margin influence to our several and In the updated EBITDA. addition QX other to range, expected

members PMPM plan SilverSneakers expect our anticipated. we visits visits mix more of a our than under will First, from originally include

annual preceding of Second, fourth we year X. as our expenses January the quarter, we of on see benefit new normal move a start some into will the enrollment

impact, this as continue for leadership expenses a team. this this of company been expect some executive prudent smart has effectively to under offset manage and in EPS. manner, Diluted help to Third, the we to case

tax adjusted by for $X.XX diluted share $X.XX primarily adjustment from per earnings is to guidance has of to range a been This rate. driven up $X.XX upward slight the $X.XX. to Our

quarter. average for free like third the I'd generation full With for turn for the cash will fourth the the back We remains the remain that, over relatively flow Donato. quarter finally, expect to diluted our was $XXX our million. count guidance that to strong, quarter compared excess share to flat and of third Donato? in call And year

Donato Tramuto

just you shared Adam summary Thank following. with of The the has is you, what Adam.

execute of the progress to on board. continue each showing are We our ABCD strategy, imperatives our XXXX fiercely strategic continued across and

As our traction. are our growth levers release, SilverSneakers in stated gaining earnings

our increased Adam, visits from eligible and heard enrolled You members SilverSneakers year-over-year.

XX% are a equal results. Here historical eligible a selected effective, XX of Call territory an the are now enrollees enrollment not the involving deployed and the just campaign. are stand-alone are produced XX These integrated increased the and generating of pilots enrollment in program one proven the The present. the to counties twice both results. yield On how working, not around of variety employment notables is rather territory that lift mail multi-touch of are showing over that sauce is our where center results engagement. markets are managers basis, a focus amount saw the a efforts managers where levers to to programs few calls a now also have program, in integration per secret outbound simply few member and specific the of markets starting

study which ease Additionally, the SilverSneakers important of there promoting of market SilverSneakers the believe the we for it October checks, and store launched members and and nothing now the ranked an The and in is benefits in is and offered today on Applied Gerontology in of as metric gaining addressing soon overall improving study loneliness, that that The regarding To outcomes as we punchline perhaps by appointment conducted through the was and are experience SilverSneakers XX% the programs and Android, app, like eligibility is both engagement announced traction social a now that This loneliness fewer of SilverSneakers connections have us in physical terms identified the isolation. that gate, Tivity an after in we my Journal in SilverSneakers suffer in and first right the It's is CEO, Apple's X, from excellent Lab. of fitness apps. MIT published point, we app segue in for members enrollment. Top is Age of and in the health isolation. into less live of XX% as belief as a social valuable XXXX out the determining free is members. XXX is social our Apple Go

eligible that this the increases the field. beyond a by important risk was An help or high are greatest health activity. Social direct in physical risk identify in XXXX including them XX%, intend obesity, benefits death to of conclusion SilverSneakers We benefits meaningful condition toward to more who SilverSneakers for that and premature would programs isolation early to according a launch cholesterol by researcher Julianne those exponential to leading this than program a Holt-Lunstad, drive program study successfully will connections, align members greater provides activity. of at health these the that physical

We are connect this center, adding for develop this the our discussions the members meaningful for and for so SilverSneakers, with as Go, health opportunities members. believe including of our of if launch app, could to some the largest The serve topic, activities, locations will very stream SilverSneakers example SilverSneakers having enrollment other can social benefits and plan and our for I Health. to costs will into Tivity initiatives will that tuned. small improving XX,XXX and call we on and different where highlight connections. Allow a partners social we me, revenue believe wellbeing paid of medical stay of our as I a lowering from social partner health engagement provide a get other value conduit may, collectively and

visited of As month. Concord share to calls, I YMCA in Hampshire, like my I last a case Concord, a story in SilverSneakers our the the has New been at about Family SilverSneakers most class earnings members.

that that in in to the had me plan, one met During XXs, their fact despite they shared had years. been first surprised XX-year-old XXs. how visit, late that The two couple I and My their about until other for Yet, their point. of members they learn plan this they the with were the knew they X health last nearly program through April. never couples; SilverSneakers

with months both husband, friends. health, new a awareness instructor's vision is social on three increasing about of the couples of program has because these a could when provided two was classes than now transportation such had and improved April, problems that and SilverSneakers by social couple them program husband homes six shared the months and couple in their class, all wife nuggets that because their XXs, their are an news was how benefit the interesting, a Today, friends. were SilverSneakers they have now SilverSneakers company. week drive. the they the one to hardly keep The seem now entire In XXs circle significant who eligible couple later, for their is their unable now less to growth membership even of significantly, attending a mobility move. of able they connected conversation the spreading to the the and words, Here their that our this both three happier, our though butterflies is isolated. instructor have more The being are is has profound to to that attorney, become of leave who them physical prominent the isolated better me last SilverSneakers and who overhead Even their the in because with they two joined golden

into has the brought more must met commitment with them his hesitation, SilverSneakers they working that because even Now, have to the to more I increase story awareness with share many did President of health I with invest you member life to and shared enthusiasm Tivity new their this to plan, share programs and he without enrollment. new friends.

for story program have impact years. the a lives seniors, on we confirming another are yet great day significant is what we this of every few While making of the is SilverSneakers the known

our a to brand. Chief plan our in increase executive the on is phone. SilverSneakers our the Growth the when is case they through CallerID, quintessential plan. SilverSneakers A up that established see members admitted to opportunity with engagement not pick and the recently Officer, have inherent health We awareness trust That the health always

a tenure. let imperatives may, see campaign Brand to observations enrollment I business our the six of increase Officer Chief that a last awareness XXXX. gained and expect Arra? heightened over if share XXXX some me SilverSneakers month So end, quarter in his for first the to To the for have moment,

Arra Yerganian

Tivity's in good intend checks. of television channels Remember, XXX% more enrolled increase on and Facebook a eligibility reach in members We to increase million with enrolled. location XXX% along Donato, our digital now XXXX, afternoon, in moving use members. indispensable them never everyone. whopping print. has digital generated to to focus engaged as to and eligible, likes; you, checks; XX over was focused our have increase From XXXX around and Thank Traditionally, marketing XXX% eligible

wants Our active. of data physically suggests than be that half cohort this more to

messages us these that characterized to to provides help have success to enroll. will level get personas, a precision where of greatest recruitment tailor members members analytics in way the these We into

As delayed launch the intentionally Donato of mentioned earlier, flipXX. we full-marketing he

our However, us marketing has Quigley-Simpson. the tips. product again valuable outreach. over This we our this will exercise approach soft conducted feedback a direct-response that of and are firm we early earned launch X.X January. to media million award-winning, intend AARP to in from broad Los Dr. This in prior Angeles-based, with our as us, from launch partner, limited provided with October XXXX. very January say us to getting than with XXX% and enjoy Oz with more the to We double launch to health-related like or that allow and now proud and SilverSneakers, members email hearing proves have contacts, Related we up fine-tune

a digital same efforts than the year, QX year via period. cost-per-acquisition through for marketing this lower of have achieved Additionally, we last

enrollment. positive has in a digital attributable SilverSneakers back you. investment see As increased, lift to in to directly we Donato, continue

Donato Tramuto

we you with opportunities at before number typically Arra, early opportunities for selling optimistic the I the To following year's not narrative last continue work. season. this great play the us, the into you, pipeline the call, in shared by earnings Thank remain that selling of on

be We to these quarter of expect sometime first commentary in of initiatives progress greater on to able the XXXX. the offer

I after Tivity comprehensive today agreement as with RFP partner is Prime process, am share However, very set a product. for the you a pleased with to renew a top-tier health an long-term that to plan

at last signaled it plan While we to schedule speaks Tivity approach agreement was process. in years, that we intentions innovation, customers. X through generation next far to renewal XXXX, as had our the the bringing new the current very The in ahead power are of trust of RFP so and renew our a well the to as the for the precision has contract of went the fact leadership comprehensive analytics for and its to the up

We new will provide Officer, more you the RFP. and brought Thank innovative mid-to-late and product opportunity they about in this Growth XXXX. sales Steve his details Janicak, entire the our team for to to approach Chief

prospects We relationship by to will are of the future provide excited revenue growth. what our this

a beyond Net like by I'd population, lower Moving improve of in to costs members brands. house lifestyle Score this health the our other for consistent with health unique our XX-year company, you by solutions legacy our SilverSneakers' potential aspiration plans and a opportunity the unmatched have is XX, our that more of become Tivity has with this to and history Promoter value as of as and the exemplified plans a a to share the to wellbeing ABCD members. and strategic lifestyle social coupled provide to of offering strategy, medical to brand, the lifestyle of and fitness physical more than trust With senior that a now

more taking fitness suit by following Additionally, to holistic Prime added with benefits. through as approach and flipXX, relaxation nutrition a is

Rather, looking lifestyle not be I we highway product are Those for you members looking will are we products. a members. of oriented. have the a a for with reminder, from beginning As shared products

growth long-standing into beyond. accretive that venues, well digital we current discipline Lifestyle our the brands summary, and positioned XXXX innovation, brand to both identifying well product as believe continue CapEx around strategic, expansion, course, our we Of opportunities XXXX. keys as expanding are into fortunately in we and and new footprint media we're optimization to move expansion In as are our light. across entry will maintain and

open In EBITDA, and revenue, strong a to understand the are previous the cash working during the enrollment is overall now for began we XXXX allow Medicare XX. enrollment our of health call, overall clean October made success phase This reflective balance which year-over-year and strides and into shared outlook, by growth, design annual important enrollment period, XXXX terms have as enrollment. to We Advantage growth of sheet flow informs for EPS, of in take SilverSneakers, part Tivity. us in We on with of our our partners our the plan closing, and member business, advantage have plan. revenue next plans to important earnings mosaic in of this

now. we earnings will you. data Operator, quarter preliminary have final Thank We not have quarter. we'll That at change our to this no XXXX our take fourth said, until outlook time. questions

Operator

[Operator of first Blair. comes William Your Daniels Instructions] question from Ryan line from

Your open. line is

Nick Spiekhout

Thanks taking is questions. Nick This in the Hi. Ryan. Spiekhout for for

you comfortable guys thoughts updated Just out story to still are you quarter? start have on it Or do your XXXX you last any guys off, or impact mosaic? with growth the United contract laid growth

Donato Tramuto

preliminary the to into Baked comfortable. Still you, Ryan, last August. guidance we Yes. provided

Nick Spiekhout

then going that that the weather QX, macro revenue quarter. that at bumped there? and now flipXX? I that, effects. Because the just a And so the midpoint. like couple the going flipXX listed And last to I only most knew wondering, I'm about quarter-to-quarter Perfect. Is of other and just you be you range down the X% we what's of was know mostly X% changed stuff on

Adam Holland

Yes, Nick. is This Adam.

then you about as flipXX think about it a member-paid and member-paid the the third. You the Prime, certainly Prime back gave third, flipXX, QX, flipXX with a affecting the and and third, and half can in that Prime August. revenue Weather, last we guidance think a

Nick Spiekhout

in renewal the are guys update so how you trending for and XXXX any SilverSneakers plan for other renewals Okay, great. for Prime, on know do have the but far? I mentioned Then you you

Donato Tramuto

Officer. have Growth Steve our Janicak, Let Chief me

three I've this now as As tell not is third years the those and let Steve comment, my I comments, in stated I'll in is you, to and that CEO year seen my have I of earlier. really let clients I'll getting that that. heightened decisions But interest in a - terms my from Steve positive indicator. on are is very comment very - in assessment we making a that

Steven Janicak

we're on up saying, what Donato great follow a To renewals. having of season yes, is

We early are some of have customers. the based health plan started actually into where traditionally on ahead year, this a the feedback conversations our we are little of time and XXXX from

Adam Holland

Yes.

I'm we why don't would historically comfortable that's have reasonably in that updates know think probably some quarter, you until the quarter. happen you I the they first for because second

Nick Spiekhout

right. Great. night. good I'm All Thanks, a guys. Have good here.

Adam Holland

Thank you much. very

Operator

from Your Styblo next question Jefferies. the of from line Dave comes

Your line is open.

David Styblo

Hi why it there, more be bit relationship you about what all meaningful contributor, revenue and year different good based that to like, exclusive had something you a a to that program on looks joint and would little afternoon. address with Donato, health few and first sold have give the question more to the is that Can out that social that a about is you would insurers? the or color just topics that plans be think the want there each you roll on to us one you of unpacked next loneliness. engagement

Donato Tramuto

of hi, David. all, First

One you of the - this I shared it's this benefits we've doing already. When that is initiative and and many advantages think have look of at of very you. it funny. been I

connections physical of it's I biggest mean socialize. going get we What from complaints indicative members there how locations is social the is that they coffee are that much to the of our serve. One that by

is this developing fortunately, space So shuttle. not next the

weights. be What that the gone to number will are now for pushed of there treadmill. why are should analytics very and We have analysis persona. - and longest is identify comprehensive We - in the through time we need free a that do pushing have activities we Who a the precision the social last SilverSneakers have. happening help - we We've months. called Well, that's us there. we that push program

identified that of lonely. are have of eligibles socially We and in about isolated category our X million believe we

it going we'll on. them at now to putting a much whatever or gym, just so YMCA, the interventions fact, but are, in social connect that so them, it those the not be be. fitness connect that may to activities will develop to hour Whether begin centers the to And

to to they all want whole with us involved them people them new move, Our out keeping getting costs, in can with we them us. be a getting will, costs. the if partner of plans are where down saying world is getting open, that i.e., know Because home, other terms you of medical to to

if Morgan conference, we'll have next the earnings more So, details. J.P. it I'm certainly my which we call. goal, will at have confident is at not the

David Styblo

That's helpful. Thanks, is I've the Donato. the on range question getting been One implied revenue about just from investors here. growth concern lowered

that. going in adjust to revenue growth So the there? up Curious driving mechanisms half couple year, for behind to year-over-year be of would is quarter happen understand the Prime? on that of back if something I fourth the quarter rate. relative tick going third hurricanes a growth that what's the more Is points primarily the to Or else that

Adam Holland

Dave. Yeah,

guidance of in year X.X%. imply you that, XXXX, look QX-QX grew This more same the last direction. generally would about than slightly we at but If

You're spot on.

QX the to rate Our maybe would slightly year-over-year. growth. Prime in we would that be SilverSneakers growth about, at below contribute or saw

David Styblo

know the you I issue to enrollment enrollment they all once can of their once focus Prime typically, past their then cycle, with think Is maybe maybe Okay. But a understood whether now you for you - ago all But Then it's the for as we engagement in member, customer passed don't would that they're on that geared it because there rationale focus the a benefit few they're what I you not simply marketing? right? at versus did delayed this it. it. delaying what a think flipXX, is more type guys quite I look know out from months more plan this target in employer activity?

Donato Tramuto

then comments. and comment Arra have me let Yes, give my I'll you

Arra Yerganian

Hi, Dave.

along. the and to I we is we delaying previous we diligence return whole and a think with reaction recognized and to of beginning our right, haven't my due testing by importantly, on refining marketing to be But in noted that on I did the comments, further been investment what that You're Getting there'd learning. the delay. sitting QX. gone as messaging a We've know better of consumers' bunch After this we've been our hands. experts,

hopefully of get with January. we'll flow out So a in chute strong the

Donato Tramuto

just couldn't it's we me Let Listen, not add to have that. launched that it.

once said, don't get to was the want we return. I make "You mistake." Berra the wrong Yogi understanding could As the how greatest think reality

factor Dr. this loneliness on thing did the lose the holidays, sense and we he we The Dr. focusing brought goes up Oz, they're turkey in It to is of for that doing quarter in of loneliness, everything program. is in - was this After table that dinner last programs want how the one the Oz. to way, to after that the is and felt terms so as thinking by strong up. joining his weight. defaulted else his this being And January people talking things the about to holidays, and the talk

said, we'll terms I we in the would that you the be late that to the take I with greatest felt start move of responsibility. this investment where make that in if media. the would So return January, dollars will, December,

David Styblo

going fourth quarter. on you Obviously, it the to you you're imply go sounds third think your like, bit said that What fourth guidance that gives you Coming the quarter? confidence back, would The okay. an have visibility already the of your that have the you as would attribute Or Do uptick? uptick, in from what you that to uptick little I helpful. just on to? it one was short Right, Prime. expectations. That's guys be last does a internal

Adam Holland

this do largest Adam. has nature the A segment to lot the of is promotional which of Prime, member-paid Prime. is Dave, the with that of

member-paid more Prime know, a As direct-to-customer is model. of you

we strong. the last at as end been more of the we last where And again terms able year. for the were quarter, in drive rate interactions these last this subscriptions year, with promotions We regarding already some the of is saw inside year, was higher experimenting, promotional in the organic What the timing rate, the the promotional mechanisms and that repeating as pretty promotions quarter which of quarter, third different have some fourth of begun than the with growth to nature a not augment of some starting against learnings year of the user. at comparisons to were the we've some well end

there's promotional that from do really of driving growth So which to calendar, lot have parts moving to with higher QX there a QX. is rate in that

Donato Tramuto

to doing will, which - eligible, if and these partnerships the one the you this that we to is is do comment learned. we fourth can help two that to learned you to of the what get one And our want you we're lessons quarter, or some Steve while that on want also generate comment what's maybe partnerships, in the things Steve, have - is happening of employers,

Steven Janicak

support of the a and enrollment the things customers some throughout of of employers from and be one a country. lot large - our we're plans Yes, there's to programs going able got our with that health lot are doing, on is we've that open

people be there. part able to what a Now large right doing and be of able conversations have events We'll some We'll those up fairly there. We'll we're some sign that communication be be a we're do we'll to actually materials. they're those is part so of while a events doing, have where booth.

employees haven't past, next that that directly we'll the those to well. and We done focus more as have year and to employer getting on in

David Styblo

we many doing, are do you recall? how And

Steven Janicak

We're doing XX events.

Donato Tramuto

activated So months there is right at good you open them to three commit is activated what the people Prime and thing the have and to. that it, Remember, to engaged. you to several, an have get begin Prime commit they have that to opportunity they about speak about to get opportunity and enrollment

and through So we one intend that's XXXX. to another lesson learned continue that

David Styblo

others. Got it. Thanks, I'll step back for

Operator

Piper from Wieland of comes question line from Jaffray. next Sean Your

line Your is open.

Sean Wieland

Thank you much. very

under So of business? us about a do some how what us is that tell the you of the more are think model? current that mix remind And you forecast in little and PMPM also coming visits why the

Donato Tramuto

ways. the I'll have Quite two. it can't frankly, let both Adam you answer

are We are under our awareness, isolate. reality increasing to is that in can and a revenue while model, hybrid increase point in you the can't who those terms of we this

an So the comment you I'll awareness on reaches Adam, you everyone. that do quickly give that other? want campaign to

Adam Holland

reflective of our generally Yeah, Sean. enrollees. visits The of is mix

we profile year the seen you to that. recall, with match from started members generally this off our against I'll lot As what Donato says. more hybrid echo What visit say model. a quarter-to-quarter We've is under

best into members not increase That and members, That we've science, the quarter. along pure said, can paid as is some drawing our certainly hybrid engagement and be the XXXX, bleed-over pressure we're some the that our of hybrid a our we've year efforts to is telegraphed said, not lines visits, the something visit going substantial. seen over focus under hedge perfect While move. PMPM this, one we we we've there next marketing a expect smart seeing with increase that of remedies overly the the effect. will the last plan seen for are we've which on will which we year against of and natural is It's percentage this it's in do of been this as small past

Sean Wieland

And of in members can what are your us the tell hybrid you model? percentage

Donato Tramuto

about of plan around your XX% under from hybrid a up it's are Yes, XXXX. lives That's in XX%.

Sean Wieland

Okay.

do Is where that under there preference to SilverSneakers And is the driving that? is today? gravitating so And you hybrid purchase market toward? what the model a think is

Donato Tramuto

interest getting can and this, with an we're appreciation, Yes, is plans in I there in health around prepared appreciation shared there's we're there in tell I several things. my of doing approach is the what as deep a terms you from deep you engaged. a Well, more remarks, awareness terms this seeing because holistic of what Sean, is

that we that are really this model who way fact Just aligned the go. the as where speaks, are, in this fact, same you've an to that's recognizing up. I like will, end that to seen a point suspect last virtue recognizing you health increase the engaged But of path. over year X getting by if year members benefit to plans would

Sean Wieland

Thanks Okay. very much.

Operator

& the question next from Mohan from Company. of Your Oppenheimer Naidu comes line

open. is line Your

Mohan Naidu

you type following prior type my contracts higher based of for now contract? Sean. what Donato, up when do differentiate Or markets of question there Thanks have? go on engagement of you mix taking you questions. the right just one Do the from try certain to on

Donato Tramuto

have model. on Well, still the clients PMPM of we who certainly Listen, are number a try. we

and that treat we an to responsibility a the treat way obligation others. have We those customers in the same

alignment and I those defined. get this plans going of that more to we Steve's move is the to directional have our around we're think the job that is in health way job

out going is we be have treat that's I been enough member pushing have But I've don't I've this to CEOs been member. a so at get back, Steve's I I to there think the with plans. and three of engaged. responsibility to tell see other years. we to that for think I them health have you now anyone to job. a member And as that

Mohan Naidu

in that specific actual one also we more comments, this enough. enrolled Can these talking got there of X% are members or you that? about in we any members. programs Yes. you Fair is new SilverSneakers out your about engaged Donato, elaborate metric year-to-date saying threw talking revenue? coming from revenue who or Are generated on

Donato Tramuto

Yes.

hoping So would come that to in that been we because two guys me, half. really very the and many back is I year for last you always was hard ABCD. working the respects what been a that introduced to It's years we've

result can specific a let members have got the in that as But programs enrollment, us the X%. being point who program levers, we a tie and that able defined of that's programs. how to to perspective. to enrolled of don't I now have member the put into get it me XX,XXX we the this So to want to north as we

in coming off? back of movement. that investments. these has tell this with paying are growing. so the we great been a rightfully obviously, Obviously, certainly, been pressuring you, that. I see what indication this is of to saying It's a is our So flywheel. to Board We've It's a want like very have terms me on good investments

and a then it get You more. little X,XXX-pound bit, it moves moving and this moves flywheel

now the So labor X, programs levers, the we that the yes, have beginning June to fruits that at day the generate we on defined expended. on are investor those levers

Mohan Naidu

one confidence to levels X last XXXX, I one. your On That's drivers by you're there guess to here million multiple that Maybe that are getting enrollees about. great. talking

about over you of what to a million it, bit you're couple get greatest little members Can years? you you to gives think next talk that X that on�� going If the confidence the

Donato Tramuto

The say can't TV fact there; our the on we fact have the that or these managers; territory have that rely going that As program great, can loneliness The with in touchpoints, to path serve they here. and same postcards, we serve all as great to enrollment. have multiple - call the fact fact center, terms the the of I the that addressing now lead that say, we you we that of fact first a programs, down digital can all we conduit great roads Rome. are put certainly to we tested awareness digital. will of but metrics, multiplicity the as just a have now begins i.e., now applies that integrated out increase CollegeSave

now why December Quite so the we we ward. this. and in, this going start XXth you'll And brought why you're - on to Arra seeing next and believe frankly, see and

You'll be TV. seeing on SilverSneakers

using the we get to a correctly You right of operating we're come once and kind have in have And get then like them you interventions. sure make them surgeon to and enrolled. enrolled

All to members end of by road that XXXX. is the X we're of still why on million I feel the maintain that and

Mohan Naidu

lot my a questions, for Thanks taking Great. Donato.

Operator

of comes Barrington question from Research. line next the from Mike Your Petusky

Your line is open.

Michael Petusky

terms kind are in it, the spend Donato, you since Hey about of you guys. questions. taking talking just Thanks of for what mentioned television?

Donato Tramuto

guys Well, you ask. going I want do Arra, knew you to… to were

Arra Yerganian

we to at position of our Hi, are efforts. and television we the Mike. work a be we're question. be what of for through in marketing, through we'll the the vast we campaign, this the reach majority TV. the seniors with really our territory about start excited will anticipating approach Thanks an We're modified to in field. about do the that by TV managers beginning really talking objective and The digital will of integrated so year, and do The

is the is like that next up. with gone level at period. In fact, above, to what about the and this an over can goal of six audience. spot spot brings to XX consumers This response, post We target this. everybody imagine, our already our from the do don't It help get know seeing and an will is awareness, imagine, get work higher of as that The it's on done of feel we our but disclose you to views do. They enough some to and XX% the them four-month least pre-testing be their think can dollar healthier. going we to a good has we ad pre to Brand brand we've you amount, exist. definitely news hefty a them sentiment and terrific we've opinion seen tremendous as of uplift

pretty bring So this will about excited to fruition. what

Michael Petusky

such? it or going nationwide is to targeted be to be going Or and places Florida, Arizona like nationwide? Is it toward

Arra Yerganian

model. a done of We've media on the work lot

nationally. be be to ensure right Again, members impact model, going we broad-based. as will more national the help televising that pretty are The get route. we the the a door, hybrid into campaign. it but It's perfect go us going We that to cost-effective we it'll is think be to

Michael Petusky

Okay, fantastic. you. questions. Thank A couple more

that couple X last Is you How chunk years. that you at lost that risk risk identify Just social with in isolation. out people that of on people figure here, identify social up been the trying X would one The I've for million. are Thanks. of X do at have is how isolation? scratching million head folks for spouses program to the for you think coming thing maybe I'm a million? my that

Arra Yerganian

actually social - actually it's population being actually lonely million of communities. senior million are and isolated. rural venues. isolated of XX not XX our It's feeling it's Again, two in

in mailman. don't to to spouse. only Donato out. a person not very day we of that lonely. that - to going cohort because has A algorithmic So every lot the with that Maine. approach he's even in start have going But lives now a live rural doesn't certainly saying very, we're you're The is and that through a He's lot provide there's develop just to tools is you lost a Maine mean Donato there. research it you seeing a of great automatically clear out

nobody's say the measures investing millions away thinking The from walking that here are just get there to he's can we're that that lonely. So dollars hundreds you want I to make again, developing interventions. of sure in to, of interventions,

We the have interventions.

what Our partners plans we that Remember swipe the if what to I've health argument go January/February to the the to community to get cards them period. our go room? the of treadmill is their get The time paid have to social make in swiping their this the cards. is how swiping members of they're comprehensive give is We you a their either the I more that review intend we on would into or So have tuned. it stay on majority to interventions. made ask does difference cards

Michael Petusky

for is repurchase moved share priorities, kind distant Great. And in has it last up I'm one, terms from where program down list still fairly Adam, that thing? allocation is stock fourth internal wondering or just quick obviously about development significantly Adam. ago. capital of real Thanks. sort it that of third relative of year was or and still to a possible maybe partnerships and a

Adam Holland

share Yes, repurchase been has last never off table. about fall. it the We talked

strategic something allocation. say Board have say. to capital there's when to of expect We options to all and evaluate work with related more we'll to are our our I continuing

Michael Petusky

year? Okay. Is changed that traditionally been last essentially the where it's nothing's from

Donato Tramuto

wouldn't that say at I all.

there significant healthy amount dialogue the with very on of that is think Board. a going I

As you the I balance have investing clean a We're are here heard as company, There today. shared we in sheet. very you, with have opportunities.

carefulness and they interaction executive to this this approaching Board's So very will in I'm team. short with the is how certainly are have tell to unfold I with the you, pleased Adam correct. order. This

Michael Petusky

guys. Great, thanks

Operator

time. this are at further you. turn the no Donato, I questions There to call over back

Donato Tramuto

continue want - speak, all we're very to here the joining the commitment, who to want I we you. thank holiday very colleagues Thank and by to much. of year, once I much end reaching their us thank happy be Well, again you you for of to I don't today. inspired just a the thank and dedication the if and entire

Operator

This concludes today's conference call.

You may disconnect. now

Tivity Health (TVTY) 5 Nov 182018 Q3 Earnings call transcript