NXGN - Earnings call transcript Q3 2021 | Nextgen Healthcare, Inc.

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Operator

Welcome to the NextGen Healthcare Fiscal 2021 Third Quarter Results Conference Call. Hosting the call today from NextGen are Rusty Frantz, President and Chief Executive Officer; and Jamie Arnold, Chief Financial Officer. Today’s call is being recorded. All lines have been placed on listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] Before we start, I would like to remind everyone that the comments made on this call may include forward-looking statements within the meaning of the federal securities laws, including and without limitations, statements related to anticipated industry trends and the company’s plans, future performance, products, perspectives and strategies. the that in results among these risks forth exist from differ others, uncertainties with set expressed filings those forward-looking in and may to cause materially those the Risk U.S. public company’s statements, including under quarterly Commission, the Factors XX-Q. report recent form on discussion most and XX-K heading on Risk Form Securities and Form the any the Exchange annual including in company’s other subsequent today. Any forward-looking as statements speak of only statements. any disclaims to or intent forward-looking company The update obligation these

our earnings remarks and today’s on include both financial Our contains which non-GAAP results certain call guidance, measures.

Investors be GAAP For results, discussed guidance. President earnings quarterly the measures earnings the qualitative non-GAAP our to of to our to financial in description SEC financial our posted Frantz, time, the Mr. that to found comparable release reconciliation call Rusty NextGen. the how over press CEO turn This can each provides financial we a financial the differences filed within of is section or may financial have used calculated begin. our I and with most would you At release non-GAAP the each GAAP measure contained also measure latest Sir, directly was like and between of of non-GAAP comparable and this measures and measure website.

Rusty Frantz

We're Nextgen. driving earnings truly across strong our accelerated another are every quarter include performance balance strong was We're you and as adding Nextgen's QX growth. continue great performance a flow. of and simultaneously XX we all Highlights operational an platform. our growth thank this our we improving for you and rate extended joining metric execute cash revenue, client at Thank in leading new booking great run operator complement free integrated delivering bookings, step our FY our call. experience QX to for ambulatory to QX client sheet. on delivering

as largest Another quarter is revenue now growth maintenance which in of services surpass our double-digit strong stream. subscription

experience and the feedback. client to commercial by market best in of continues the in independent the both show of base overall external up validated outside delivery Nextgen's wins and ambulatory inside

both well We for helping as the parts continue to enable play of administration our and vaccine as patients. process care our our frontlines providers as

revenue cash opening to collections execution up the of continue engagement a range earnings flow future importantly and and of growth options success. in robust continue free Nextgen be on employee full generate our all strong to Our and most core foundation culture the for

a robust We strong managed from on as clients our subscription to Let's engagement with and QX an million came of look patient $XX.X an bookings more service reported start bassist operations. office rack their Bookings high-water at including increase on in recent take performance. services mark focused for us increased recurrent acquisitions in XX% our year-over-year bookings bookings. strong as operational saw

in in Nextgen has revenue notable the came bring our Among line continued continued growth. basis. generate On year-over-year subscription reported QX increase continued an This clients growth. and at notably growth is that double life of recurring up [surround] the $XXX.X of delivery as for platform shown to the most solutions X% for on drivers digits

success continued win to and we fueled an primarily managed Digging where base our replace on drag line in the saw with XX% patient we aligned and our clients slowly or going failed most underperforming we a XX% XX% volume cloud objectives. of experience client’s our success more services the This specialty deeper to and to offering. the services in model at that's Managed saw maintained than a area our to quarter continue more We levels. is a to purpose-built applications. to provides that goals integrated client financial correlated replacement by platform also continued be services. service us XX% cloud strategic organizations continue RCM pre-COVID all-in seeking in RCM nice a fractured continuing growth see revenue of managed to little that be volume to area a the market to for the notably Furthermore quarter growth maturity given

We range through have modeled this QX.

with to Our resulting earnings was million days. numbers At flow performances DSO client bookings XX% XX% performance relationship in a Truly our new clients quarter. why provide level strong and license confidence support which impressive XX in great bit in traction from and success positively last into footprint in quarter a revenue the take integrated second the a from so to of strength strong continues market of our Jamie competitive in quarter license memory collections row would impacted clients. financials to of but of of wins is to power an by days of total is NextGen. this the This performance XX client good. over free a the one on gives These to of road resulted this continued another the to another recent and as represent full to and continue cash a step quarter experience sign already ahead. bookings reflects increased DSO sales will team of the and in best new the methodology. our our of news bring as our platform The come gain continues clients compared recap to be like in our broad strong also to continue teams $XX of perpetual prefer how us our solution, I our

of new term our It's to delivering and of new FYXX. this team quarters. that sales directing area see our great near as forward of reflects should three move we further or be will late an performance in this at spend produce in back in the fully four footprint [indiscernible] Looking investment XX% which

are also current with Our clients. capabilities our platform resonating

care. in patient have consumer-driven client success portfolio, around We our the our revolves cross-selling seen increasing as around broad especially experience base

the current deal new reality clients objectives. our of a our is to increasing in with the extended well we experiences a We're at truly seek and and requires. such deals quarter continuum success of satisfaction. size. enables and leading within outside is and to success rest when satisfaction time models, and a activity are is inside engagement quarter Telehealth resulting relying $X to And we from fact, sales with million function across the size was care. specialty and focus both deal a seeing that no from had that and reimbursement of interoperability, vision based change of strategy certainly integrated we're goals four point our over uniqueness base until great the interoperability operate transformation reports them the at multi-year also strategy score the client Ambulatory platform larger to very quarter of Sales the this of end on scalable provider delivering the platform In areas class. our patient ambulatory This that market work aligned are in To and flexibility the the progressive solutions continue fruits approach. exception. EHR as organizations XX We on transformation trend Every of address client on great for patient as the gratified Spring XXXX. on this and was top spring selling

and for growth annual we the excited more spring to a awards move the XX Telehealth where of through platform satisfaction into will little towards year. move our client see land best-in-class As the impact see deeper be we to we nice as excited continue Dipping we but here.

It's homerun scaling it satisfaction of we delivering and have XXXX, having leverage X.X. capability less our again a we patient and than of delivering enabled end an well the patients over great increasing high Telehealth shown can completed million increased March satisfaction at only integrated Now of we considering level shareholders. XX,XXX balance and X pretty December XXXX. with rating our X.X already acquire visits organizational combined the capabilities visits for our from that while and amazing score deliver By to clients sheet once with of a this in

platform we're base. deliver on the spring breadth XXXX track platform of well that to release clients to Moving our the to

patient ensure to our in pursuit can the that population. [indiscernible] approach of they in the We leverage a provider practice with of will for the integrated partner the journey better them workflows the

our a XXst century future meet we XXXX planned are coming As regulatory them for in bright requirements ensure Act. take ready the to the December clients advance we deadline in that also CARES will implementation with into planned the

be XXXX naturally was our have this Group UGM, went attendees the was my Instead I Our X,XXX out plus that the wrong. and about concerned normally of quite had turned Meeting User year. over XXXX virtual light actually year. we we attendance to not and I this expected team being

educating engaging, and tremendous value at year feedback, was job certainly did little and team the We a group I clients. we together just a our program so user ready get even and put a our wasn't meeting we bidirectional of tougher. was much phenomenal Fortunately and great because inspiring time the this really and if

we group benchmarking continue user employee an NextGen evolve we'll every the on so our in meeting. forward at standpoint, to From and pace. together an we accelerated in-person increase be late the look every dimension increased to dimension We And hopefully XXXX all year above in when Orlando this in across really satisfaction for culture are board. we back and survey engagement

fully end on survey our engaged. we fully have of our or XX% based annual of organization As the year of the nearly

that's this from than XX% mid-XXs again Our culture year and the increased in XXXX. score XX year-over-year to more

We experience we diverse as continue inclusive to our engaged and organization. become an fully more evolve employee even

created play safely to document, these mission XXX% be most fight that to we've and of working are notably we against important scores Touching enable vaccinations. really optimism, advance immunization and the to the privileged these report role and continue collaboration, clients alignment, effectively COVID supporting and our health care. humbled joy specifically, task journey internal ensure to to but on track Our force able COVID in we’re will an represent

the support software the help being a the efficient For true their our very the the and faces the regulatory guidance COVID is can more heroics of to small where going all advice or where of the broader in streamline to part of in. administration said, for clients. analysis we're to the actually education that. That we Thank frontline and and we're process data of effort process you it's see broad weight make

the to the turn Jamie over into to Jamie? like call to dive a deeper on go financials, I'd Now

Jamie Arnold

who the is to and Rusty joining you everyone call you today. Thank thank

strong revenue additional QX future. compared XX% on or $X.X million Now years past the and $X.X solutions X% $XXX.X same These recurring in year. with the maintenance or increased our reflect QX our pre-COVID to rate X% line preceding volumes the XXX,XXX X% of million $X and consistent and results to XX% Subscription remain and quarter increase from To maintenance and of services to of is X% quarter. Recurring or million X% of FYXX. was increased prior Managed services or XX% quarter-over-quarter several provide million revenue revenue quarter. a our $X.X compared of million increased comparison line that with that period of last the in year recurring offset services, Total increased to of decreased over the same increased provide for revenue, decline line average support results. $X.X our the and an I'll support. services to increase $XXX,XXX. increased over also a Quarter-over-quarter X%. demand million XX% revenue last current services million or data year immediately Recurring of Non-recurring the year $XXX,XXX with in by in the quarterly or expectations with subscription revenue $XXX.X total and managed color EDI X% and in quarter prior revenue X% ago levels. $XX.X or which for increased revenue X% X% was a the with million QX and

Software million of or license $XXX,XXX and year-over-year. increased hardware revenue $X.X XX%

the of ahead margin X% came goods declined profit were hardware $XXX,XXX higher million we preceding the of year XX.X%. X% services slightly in and increased to of by in significantly the replacement solution prior NGE QX sales this and with higher million quarter a declined opted wins ago. XX% put due to increased demand had host the and QX ago. reflects at perpetual of two development revenue Software strong $X.X QX QX was Gross contracted a us cost. the license to last cost reorganization large and results. FYXX and compared several with performance compared in where capitalized announced $X.X instances up the and in producing amortization Bookings X% or of Solutions subscription new for line FYXX. Non-recurring but is net the to in services holistic a to where license market million or solutions quarter quarter, to that our million We in We Cost quarter same based compared the for $XX.X customer year them. $XX.X gross model including believe the in and for of management the of client year year to XX.X%

SG&A San with QX reduces and which our office announced the decrease in primarily that in our acquisition of and operating year principal million $X.X increase to net due expense. file year board The million we approved the Turning R&D expenses. XX% decreases $XX.X impairment We bylaws to by the million offset office. travel, in decreased today of lease vacating due R&D is from $X.X from Irvine. mostly XK, of year ago. the increased compared $XX we expenses conference X% our a regarding floor eighth last associated increase higher legal QX in of to ago. recorded amendment of personnel Diego facilities an a executive The charge an or an or to costs million location to and $X.X million cost. is terminating our R&D In capitalization, in our

will As facility. Atlanta be executive we vacated we existing office have the to office our executive Irvine principal in our changing

XX $X.XX GAAP conclude GAAP compared non-GAAP of my tax with statement QX ago. benefit FYI XX%. was Our income our on a the rate rate EPS a for year was comments tax to QX $X.XX a of To XX%

$X.XX $X.XX the the in compared $X.XX of was to of EPS prior year. an increase non-GAAP Our

from balance with million $XX balance to the us mid paid cash repaid. XX's. million quarter and decrease credit of down December a line in quarter ended on were equivalents. we target the revolving $XX.X XX range After from a we our our days in have flat outstanding Turning the and days with line of last X on the below last XX sheet on having This quarter the DSOs which million of now XX year, left credit. in

R&D for expenditure excluding $XXX,XXX, capitalized capital the was Our $X.X capitalized was R&D quarter. million

Turning on headwinds to first touch QX in expenses. I both revenue guidance to update full-year expected the and our in want

previous are each in than during of less First days there three work XX less quarters. three in X days the are means visits the to are business QX there days previous for work QX hours. This days is less There normal work the which than doctor quarters. average for the

from beginning of the Second, year managed calendar essential patient EDI the doctor typically revenue deductibles reduces reset and which at services now as patients visits. referring

R&D spring expenditures will less we release. imminent Third, due to XX capitalize the

Finally, there uncertainty preference our regarding will the client how technology. is licensing in environment impact current

quarterly Non-GAAP announced $X.XX third the organization be $X.XX to to I the the $XXX million Rusty. quarter of from EPS significant over the follows. the XXX market As to client million range $XXX strong This a have I my call guidance their is headwinds closing from in of four stability the the these month now expected. to review and full-year to $XXX the in million in to variability in progress. forward noted revised will up in we the continued as I of disproportionate am considering software high QX determination. After with continued $X.XX on comments This the am earlier In up we previously preferences. performance margin of Revenue impact million. looking and to the in and pleased this previously last our procurement proud quarters seen has our concludes due decision our $X.XX and earlier performance on for results licenses. earnings the to resilience turn financial back quarter in expected range

Rusty Frantz

we of this post it the do All I culture the looking organization process, you, to a great of and be but down just me forward look forward. execution to along an quarter right. confidence as able our is lines and road here I great I ton Jamie with without as momentum see Thank gives of great kind expect and to current continue heroics move

will In addition prime continue forward as I look NextGen focus. be to

strongly. sequentially performance continue be and a sales was perform XXX% beat come QX. engagement us into tenure one a in see do. do QX, community the booking a to great commercial enables are just absolutely with we that It we focused is fuel That'll great to to the creating and we NextGen From the from that standpoint. to really do own because standpoint we our expect to driving on We our in tough robust but capability what a that

to investment digits as will little cycle Looking the continuing in pressure both double expect but see we expect to during overall and services. the revenue an certainly more COVID to see discuss delayed the see us forward we're portfolio standpoint and some as at now I'd headcount in headcount to services come financial top back and build management, that we growing line we services gotten some that cloud start QX on working definitely managed to in annually From services and subscription delayed the look Jamie of certainty notably a we've be growth of run-up table. to to we

our dry end show expected from bolt so that that really we that as investment longer available implementation deliver continue over success opportunity, to increase also of near began term. opportunity we liquidity of to opportunity that course further creating have sales opportunity to standpoint, discussed We on I in an investment then in and seize grow our QX. R&D to and expect From the a begin because powder have and ahead of to to

the enable to us move dry forward few and to for further be ways looking be we'll to we over certainly years. opportunistic As next powder that expand

We're is virtual At deployment. of three finally investor recognition and a few that weeks clients power move our as to of today continuous actually them, then day. of achievements of proud of of release drive our of XX we new will complex in QX in and we [beta] those the three enhancement large gratifying the our clients. analyst client experience current in through We and clients mid-March will And and point beyond. We're broader demonstrate platform will being the our be client within also XX with us illuminating to really about continue base. visible live

so release and is the through be the will do the And our so be at the that really our walking broader and the clients for workflows to to at release general that focus looking point of commercial truly as what of going investor will deployment point really that community we differentiate really as is weeks within well that be to platform broad bringing life. and

their provide release that both We swoop and [full] course really our will that effort. opportunity effort regulatory on clients, us. also opens commercial patients and delight and deployment them significant opportunity an creating become experience compliance, one up doing That for and in for update, in all compliant has the great to of regulatory about excited bring to so

want and my all I a very-very one this trust the of start I everyone earnings to want from my close myself investor first on an as different NextGen transformational one, had our client, the and with I So place XXnd journey most our and every and but been faith teammate clients. call of a to journey, thank every in every amazing and It's thank team.

that you. is at And this with serve to take like Our repayment a we'll questions. our well your trust. you of ability truly Thank time

Operator

[Operator first Instructions] with Company. Garro from Blair question Our & Jeff is William

Jeff Garro

and mark afternoon mentioned good on you recurring start a with I'll was quarter taking high-water questions. And off a this couple bookings. thanks that bookings for Yes. my guys. for

further or then if simply appears this grow that from there from So progress. high to was gap as a room quarters is up mark? incremental water And it prior

Rusty Frantz

to want and Jamie that I'll you jump take in.

Jamie Arnold

to and the question? this. Jeffrey It from going high is water back room Sure. second part Is the your mark second of several that is up years there question go

Rusty Frantz

Yes.

second the one. Let me take

number a the of a what over bookings water all, when mark he's number, high which think number recurring I buckets is actually Jamie of I'd just total is talking first get water growth, about you you revenue mark. a the not and it years from says say look revenue by it's We and number the So higher the get away growing also to that close is continually see to see mean I but that over in the total shown that time can close growth bookings up subtracting number. one-time

out broken model table platform and the we but the continue haven't edge every see business we think really SaaS assets expect in We time to broader you much a and the starting brought in to more really to contribution that the SaaS model. are around deliver that in fact to about the all we're necessarily when business of that

just And going continue see recurring continue to pump so to that grow. are you to

Jeff Garro

I follow-up question Excellent. have on bookings.

in telemedicine the call-out Your script.

rate solutions the a highlights clients in other their meeting Just broad there or the adjacent terms and own needs. the curious if from is of just portfolio are any from where in base with quarter [indiscernible] it unique at it's they're

Rusty Frantz

we're as seeing grower managed we would been of robust for really have Yes. emerging. patient the be patient attachment and implementing whole built a we're especially the an certainly as just a because for a broad-based. nice basically expansion AWS. more experience There there's framework capabilities portal easy say as really primary interesting a us, it's around have at client It's I very face mean certainly been That's aspect of especially but have clients cloud a experience Med they're portal I We're where them. services doing fusion. trends at swab implemented this

cycle And nice a very on then revenue as really on round we strong so well. nicely a quarter financial flourished management managed that's really and saw -- services,

not that's to take focus what different individual they're that client to rather on looking the portfolio what at their journey are their capabilities. where their It's really it really starting it's look base patient then meeting at and the and clients a them more looking kind than base, at processes and really journey meeting and not looks started like their seeing capabilities, as at. So we're as clients is. of actually much they're and where

Jeff Garro

about to there. to that and previously guidance you're the great success about It's with talked goal to having advisor. trusted I like Excellent. a turn becoming would hear one questions

of You March at outlook. takes quarter. came the this end and the range the Clearly you mentioned some in and quarter the high reiterated puts in

seasonality a quarter. wider March by explained imply sequential trend and than Some typical the still but range for

could the the momentum forecasting. you for approach business seen maybe you’ve the with rationale in balance So conservative to

Rusty Frantz

Yes, we've I the just I it wild presidential there. in mean, pretty don't volume. is look happened. bit out know at got and seen inauguration There just a little some we that We've shifts a in market of volatility

one So be we keep just but handling is a of downs make Jamie sure perpetual simply ups on to a are other. range going We any little predict. way especially right it of lumpy the It's license a line of the certainly natural more our as this and outside also and that because very, tilted that always range of we're the now. little to or said have earnings bit the bit in that it's kind company to there don't showing a of is things hard demand up control

them are clients they tried really, hard for to have recurring the really capital convince sometimes are that's meeting predict. We but to where and just attach

a line us, another us of line And on in that fluctuation margin some that of behind that's you'll because tighten the a still wide wider because it us to and contributor that be but be the dynamic. will to XX-plus just as range see that leads of generally starts we EPS and so will revenue percent slightly there start that revenue little to approach will line it it up, fall way COVID

Jeff Garro

agnostic taking approach versus Makes license to subscription given Okay. the base questions. sense again that for perpetual Thanks

Rusty Frantz

Yes.

Operator

Sandler. is Piper from Wieland with question next Your Sean

Unidentified Analyst

question. on for taking Hi, it's Sean. Thanks actually the [indiscernible] for

you describing Interested around wins conversions. maybe those driving are think some sizes types do replacement start of some about the in think convert you or good for is or provide I of market. you're there So the could the wins wanted practices sales color what any we you seeing and that guys to if

Rusty Frantz

Yes.

specialty our stressed. large of a much of small the base of the success partially types We've mean because to sizes, the I of end market. BHX great all success Well, client lot sure. sizes are It's and all it's seen our to like end efforts in single everything For multi-specialty quite and from market. the seen types we've

market Our around segments. salesforce is stratified different appropriately

position of goal to we deliver we our became up outside really goal that our little lose And in so volume it's think us a not good at to and wallet from mean after our the the of clients. happier bit all when Shortly capabilities thing I it's point late we're to it was of start of a and actually standpoint I place came for share to interesting same kind but it place additional base that about all little open time. in the so RFP been it's some yes certainly, very which weren't in seeing didn't over clients a come in because honestly we in made a competitive over more bit kind been XXXX but

investing sit more gives ahead and improved not much has now As little here wins being our that the that. on XX% bit focused external clients. so our Right at the existing of headcount significantly sales we're our we're market. we and of through on year at a in XX% bookings is year of of and confidence and brand we at new kind came And last before purely us yet today as very of

continue a so client us base focused that also on now forward, to of add plus base that opportunities, or minus, more look wins we opportunity. already supports in headcount So continue expect as to kind larger of primarily team see says that the but explore the we but and this focused kind to more level that's on new the to

Unidentified Analyst

That makes sense.

as interested about of I come as as kind the COVID and new of of think think a back. should of spend SG&A What just we suppressed receives sales? T&E a it's range begins to percent normalized a follow-up some

Rusty Frantz

really that. ready not I'm to comment on

it's we think start revisit I next to in don't a longer year? question. about May we Why talk that term as

Unidentified Analyst

All right.

you. Thank Sounds good.

Rusty Frantz

Thank you.

Operator

Cantor. Steve next Your with is from question Halper

Steve Halper

in where winds guys appreciate vendors, Is and terms question talked always clients for the of been coming to characterize that from? Hi, don't the caller previous just a small expansion your to the expand so the time? they why there, it's and are fragmented you on you going large legacy those first cloud the your these the of about footprint lot it

Rusty Frantz

not Some many.

going cloud are full kind them of of versus hybrid. part Some

into are time more framework of was more security, some So robust cloud full certainly really the have upgrading, cloud a just for seen first migration and we've that had so assets some etc. going the that already footprint in of a the for a some it's management larger

it's we're our we so because side. So in an and we're own the your I'm gives the of on question? just can Steve that it's actually because inherent of was the us not sorry rest advantage deliver experience cloud what in kind that that a stuff hosting

Steve Halper

Where's footprint coming the of from new –

Rusty Frantz

vendors. that much in that right in it's we dig still. it I some like It's, point some single vendors from said, don't from too coming as Look Yes. Footprint. think because this a legacy much we have want don't fallen really swimming coming would in the the toe ocean I time. really we're now. to swimming as vendors I at wayside to with almost coming toe of worked by say the it's how It's it we're pool new into there's

Steve Halper

you really that well how that is with done important initially --? and Appreciate capabilities at least telehealth have the to appear

Rusty Frantz

telehealth. the very integrated of it's that It's workflow. important But would fact clients. say it's into the for fact truly our their it's this I Yes. not

way them experience for it's the portal than that. of space higher standpoint, from volume maybe kind see know, probably in say practice or is adoption is, to do the super we medical I depends patient a with provider going our It just patient we and scheduling but I'd into It's handheld it's space a platform, certainly the I the than It's going the experience the is see frictionless XX% the I'd been more understandable. virtual a sometimes. them on not. what whether we interesting somewhat see much and same we do patients But integrated don't don't see we volume say, the and XX% maintain it's which for virtual of volume. it's health mean, clients so So patient the behavioral same in

mean essential communicating the your clinician ability I another way patients, an an your It's the the is what to in engage happen. that is that together think is and for captured. is news but real way just effectively interact and informed telehealth is ability. of I actually it to telehealth patient So is the actually part and not That's health

Steve Halper

Great. Thanks.

Rusty Frantz

Yes.

Operator

is from Your Truist. Sandy next with question Draper

Sandy Draper

mix or us some that just and trying to growth the prior it sort I push-up are I'm Thanks upside of One, pre-released see trying the to is one Jamie bookings you more in right to would bucket but the couple when much much. guidance compared think guidance? license the about target maybe A just I'm very guidance, questions. if that recurring? came the and of how guidance pushed in of be shift to by already the more main time driven know the guys how things that to

Jamie Arnold

software is I would higher first pushed say the he guidance was is the licenses. up

think and of talked throughout part I quarter why is again seeing about remained earlier that have relatively we're is them stable. continue now and we now. also looking it mention I stay think we and it It strong entire to that that's this the had volumes

part the part recurring of other the lines. that's then reason revenue the So the bookings and third is in

Sandy Draper

it I XXX one, be just this maybe with your millions year. last I flat to of answer ballpark That's I to can in if Got booking of year a Rusty and the look want and say you year don't way next helpful. that's that follow-up it. sort in And it's get guidance. tough going a you I it, When about into booking, this know to try comments ask Okay. it.

XXXX is That's to think I think terms still I'm apples. apples the to XXX. number of just algorithm. trying in

If with still if you have because tough – I'm it the know just again, flat is consistently really it's depends sort just thinking you you mix, on where but of bookings that and okay, drive I stay

Rusty Frantz

building be question going. here I This weren't to like It saver million QX is million bookings million, what net is $XX the QX QX telehealth. QX in clear. vacated your And $XX $XX where million of forecasting year all. about said of I of in see to just $XX of because first we Telehealth because saver was let's in a about COVID. but be a was

as look year flat at And so this don't as year when this I I flat look all. a at at a

when it We're Now company QX with one a hard. client sequentially is sequentially say calendar I it's hard QX at base.

And adding stout mark so what years. water always to I and based three expect what in to say people say to there that interesting build It's said past our we're continues going bookings generally high is so did model QX an it's going to at a if model. be. the wrong you and sales be up. I for you're staying XX number is always I us on a increase get momentum probably float said one said I and the know to to but I being XXX don't your is build going I'd

Sandy Draper

Appreciate helpful. Okay. it. That's really

Rusty Frantz

Yes.

Operator

Your Sean Markets. next RBC with Dodge Capital question from is

Sean Dodge

that other release Thanks. a you've about Good modules. being talk talked afternoon. Rusty, the to clients about ‘XX to your spring opportunity good

on putting to you I release expand proportion So good of new you rate? a implementing table –? can the the what kind cross-selling think as do be release new your guess would of start the what attachment cross-selling you those implement

Rusty Frantz

question. great a It's

that not I'm that Sean comment I what get the if saying. to on rates We We're start ready analyst think on attachment really to know we'll further on commenting on little you yet. more we comment before want into a process day.

Sean Dodge

Sure.

Rusty Frantz

right Because implementing patient experience the now platform. we're

we'll through not into including as and spring So implementing we're we patient in experience the the attachment I quarter move ‘XX either there and say summer have then seeing didn't patient we're experience because the in commenting spring we'll which earnest bookings really starts May the likely so platform what that already but is and would what have record March enough is rates. or have because strong track more start a attachment on but we crappy in we

very I for think satisfied but we're seeing. stay what tuned we're with more So

Sean Dodge

this zoom If went just look narrative ‘XX like there pretty – fiscal, re-platforming of that's of some of fiscal now and if the was Fair It we you flat be all at on would while was that ‘XX fiscal weathering your we're delays through $X.XX $X.XX at despite look midpoint pandemic. EPS through that we out kind at Okay. enough. about the guidance sounds a hiring the and year based ago to looking the growth year

Rusty Frantz

growth to borne $X.XX reduction to cost of one-time that's $X.XX $X.XX $X.XX short-term NextGen. by $X.XX of growth with a

Sean Dodge

Okay.

maybe else the with that's software to there? helping licenses So mentioned or lower $X.XX Jamie the end T&E then and the $X.XX something out higher delays and higher

Rusty Frantz

to where and high basically we also I've here with as spring now stream, along got what the we licenses we're and investment the the of first you told but more platform do saying and includes And of through underlying stream. okay now part. a really We've most COVID. going up we're some still different of a a revenue do it's subscription a see need is more for third revenue was actually we've growth we're line thesis. Right that to digits think to passing well great of that sit much forward we're top mid way line ‘XX what closing expect revenue all along of We're that were a we're arc lift to we growth line as we said platform got and high which now that you're it's through top we're going in R&D that services recurring invest so kind What comments it actually to third-party to done on no. in it work subscription standpoint so some you going about today Well long driving implementation what so that a work efficiency release process kind double was starting it's we're growth if from as actually services focus a on what and a enough kind really just competitively my COVID meant sales. of and but and as with efficient after and seeing and in talking is what move of force. we're us Expect us micro all I done management focus about is ahead interestingly an workforce we

massive are line, in where focus Now step I'm once we the accumulation about the on from not that's here but actually focus that somewhere I'm recurring again growth, dry creation us powder single today. got value digits talking focus on story functions on subscription because top and saying to

Sean Dodge

That's helpful. Thank Okay. very you.

Operator

with is Your from KeyBanc. next question Donald Hooker

Donald Hooker

Great. Good afternoon.

So maybe one mundane question.

run reference at that I'm I which you want I and guidance an don't earlier Can costs that you know about there head much to just there. trying expenses Jamie but understand can give that elaborate I was think to of right referenced as you and least normalized legal were on time be you maybe SG&A up mentioned a costs so sort you what think legal understand On those question one of or might count. we not? how the

Jamie Arnold

Yes.

to cost The with we the lawsuit standpoint non-GAAP shareholder uptick removed. with a quarter lawsuit from in And this the biggest so do legal which shareholder. had the

earnings just that Hopefully you're basis helps here non-GAAP reconciliation it to The GAAP which on dealing to the clear. are question. discuss see a expense if GAAP basis. legal to at and your so non-GAAP I on release gets it look the you when tied So removed of with you'll the a impact answer numbers the earnings

Donald Hooker

to see obviously Thank I you does. then you. It are can topic maybe replacement Yes. I bookings And guess market guys, the the back that. maybe fantastic.

to know the be quarter. maybe to physician don't there is change are over for seemed systems. guess reason waiting groups of to we're at point out a might there point some want the all it's I attribute to some that such I interpret You end at it in older any also mean kind market salesforce. don't any one think I going kind I switch to market. fragmented around of

Rusty Frantz

meeting XX. was The Yes. meaningful use. But look, use mean meaningful what is XX I what to I'd is one say

at goes windows just you how so good never whether about have replacement you actually relationship the and stability about because a offense market why walls time satisfaction enables client but competitive the is. play. RFP no how think people matter mean else I the is large it bad when generally seven start, do really that it so you existing that's whether how hand do isn't play you better get be vendor out with they a or that you you defend which hit on it. can depends to have to conversation or what even and the evaluate around and years six the, a your you something you there about as out the you generally not community. think of in there to drove is your about It's in So information base you system those just

Donald Hooker

Thanks that for insight. Okay super. that's

Rusty Frantz

Yes.

Operator

question with Jeffries. next Dave Windley from is Your

Dave Windley

on Rusty JP industry, couple of also at Hi, powder Morgan's and the help even off looking even can't my expanding year ways. returning kick question. the to and in industry capital think good conference afternoon big for I thanks times but dry expanding, like might to you mentioned like I ask shareholders. mentioned you a call the at you've mentioned taking conference be some capital maybe your base what

you to of kind two So directions wanted very different I -- to

Rusty Frantz

we mentioned what balance sit consider we've a some didn't, to but shareholders the very here is to of not our it greater demonstrated point then will for at we use track record I I better leveraging create time creative wins sheet today in No. should returning find effective a capital for shareholders. we as

great look a opportunistic bandwidth and accumulate we've market and a along. know. to to to both posture for look we something that then good a dry however time know that advantageous that business begets do and larger this We've string the should kind is doesn't we're What use next and pearls that don't of come for It ways broadly at even is externally showing that the built potentially at that although a different necessarily at industry created in we have cycle the done we've an life right interesting So team really success senior simply in our great spot. the at but means and question mean ambulatory and more and that and more awesome powder just now. that's what we that our is of is that

Dave Windley

you When it. take, a patient even carte clients experience can at you seeing do that? Got down are rolling la that Can out talk all? they take about they

Rusty Frantz

Yes.

Dave Windley

are inclined? that a more that that is attachment can is of during them are more in or call You've telehealth really the kind part vision and rate or the they that they purchasing is doing the fulsome if regard hinted that discussion? mostly for And different or of they

Rusty Frantz

comfortable continue compliance are clients on in That's our century first ported existing what's of On client be of we experience clients couple taking regulatory client that are alone So ‘XX of clients When that top On are have to the a and under that are have happening. be Med XXst well needs portal spring our I forward. say patient to are need an agnostic top though were capabilities it folks that every to we clients all cures. clients of platform great with our some that to ‘XX. client of deliver that base within new spring the patient Fusion of who base but happening not there of capabilities be some that NextGen. has needs that in old are

integration the not experience and patient the into the the directly that It's So is back telehealth but provider between patient. what affects It's handhelds the the the the platform. it's works platform. really fence kind entire directly integration seeing that's of we're broader It's with that interoperability thing.

entire their see record can the patient So mean. I

integrate own rules API their ambulatory the that certainly broad think you the integrated can into having platform patient which our the platform. the a great so out forward rule entirety kind experience I go a These when around of come access information. are an we patient As of things are

we're don't, see going less and that's much more to hitting that and a this that's much I to XX the XX as clients as so fragmented rollout And month to XX I this. a XX approach where with

Dave Windley

Understood thank -- for that you

Rusty Frantz

ahead best the of on the bolus also implementation opportunity and see side. why is Which once sales a us you'll again of

Dave Windley

your a consolidated not that or kind trying that the the problem is any it as now there good function call. people the I'd guess that me say was war a so on get of Okay. is it you sign I curious the the book Good haven't become client was. clients consolidation. time Is of just out memory COVID distant really even that of a that of is Maybe question year last attrition of a your touched element are could back. were has once through somewhat highlight. acquisitive be Last for to this are not on business? clients in of and come heavy probably views

Rusty Frantz

in attrition report doesn't over again year matter on and P&L never it that broader five maintenance I'll look the period. we've shown a Yes, because

on only last just goes XX will and only of X.X the of time kind point this fact Now it above for question answer the comment I a that's I'll right now. time it's asked one

and five this growth a not business and is line of now maintenance X.X, back on that is that like and of it's on closed is focus kind not we're X.X others ago. focused kind always and bit little and is the there that growth always to and always great really so look are consolidate on focus for and there but where be the matters. around really on bouncing not focus We're we're number the it's recurring. that And you're a bookings X.X, of are that then at people really growth a are decides there going going and them that's focused is client that job there to What and doing so the a is going we've a already off to The so then years on fence so it.

Dave Windley

Understood. Right.

Rusty Frantz

from take that deliver powder and line people them that. and to we love different dry think our because great raise powder free puts $XX acquire other than on ways which generates the it dry about and a we're give a when going little awesome our is basically balance that's you million so out we It's flow dry mean sheet value powder. or clients cash I for that

Dave Windley

you Thank it. Got the for answers.

Rusty Frantz

Yes.

Jamie Arnold

have to delighted and If pleasing clients day focused them service is sure work be. to I giving that up a that change up. you why quietly so gone don't large Rusty are not to what said. would of and Every that I go on level could it focused just we're our Rusty and add on rate it. a get that we make that retention has we're said we

Rusty Frantz

on focused business we're we're metric I because the maintenance absolutely don't anymore. to When attrition. spy attrition of not We're say material it's view focused think on a not financial attrition metric focused on the we

Dave Windley

Again answers. appreciate the

Rusty Frantz

No worries.

Operator

is Your from with next question Deutsche George Bank. Hill

George Hill

any that's client provide around whether penetration then yet can update into second one that's in taking guys Hey for and thanks and bookings revenue Rusty the maybe paradigm have afternoon we and I two and guys on the an a your the about you telemed provide the of your solution of to guess where into questions. and and Jamie good can telemed you life base is relationship and kind the you meaningful started metrics something of think Rusty you are scale just is contribution? telemed cycle talk first

Rusty Frantz

say the I'd it we're at standpoint have to what we're you'll broader of and as we're of moving the my so workflow first what on is in but still and be in it's kind is we're seeing seeing what one growth. and a provider into think can RFP smaller their cycle integrate some horizontal less it's I continue folks the of and enterprise growth our is is end end does platform cheerful and still moved a lot we've the more it and stratification success telehealth looking we'll are how of which So larger but into see market part cheap growth it still you increases view adoption life now and seeing on see solutions. successful in non-integrated the kind We'll the transaction is the of utilization from of

second the one On George.

relationship broader I'd paradigm out On to say because that honestly second of it's message. the forecast and really that's stay built beyond starting company's our is another we public more one kind that produce of into revenue that what the of and say I'd have I

George Hill

to really relates to guys the I it just economic you Yes, focused but that was as contribution Okay. on –

Rusty Frantz

not would have say we material I hopes. it's yet Yes. but

George Hill

you. All appreciate right. color. the Thank Okay. I

Rusty Frantz

Yes.

Operator

from with Stanley. Your Goldwasser Ricky next is Morgan question

Ricky Goldwasser

Yes hi, good evening.

a I on pop So have health. question

uptaking? now. are preparing I minds your pop a tool is and topic maybe think for using assuming health to in with that your right terms it's distribution. you of you pop are physicians a in your everybody's that's vaccine for share as tool you talked health what you it about customers what assisting us Can Clearly budget seeing start on for in

Rusty Frantz

which I sorry was the I that the didn't of most I'm hear thing for sentence didn't was what one hear important [indiscernible]. the

Ricky Goldwasser

Just kind distribution of mean about you like when are customer the if like pop like I they order accommodate to sort base when of kind start timeline? do you think think kind you, going happen your in and of tool going when of like to that's kind health of vaccine using in to

Rusty Frantz

that providers actual act do of little is right as we're bullets and to coming them have big seeing the cohorts then and that much we're the use, of I'm not. the than distribution because view cohort We're but for to good our capabilities population. doing so tool whether Honestly into the providing passing as is put around sure really a the challenge so we certainly tell close it. know as that not or out pop kind intelligence we a a a cohort supporting to our to now not bit outreach we clients Ricky and can vaccine so health identification finding overall broader patient use more seeing there we're within those We're for you high-risk the get what

cohort is cohort comes delivered actually a that when to for challenging And so how being but from identification we it are lot that's one of a like to answer. seeing us much identification

Ricky Goldwasser

mean is XXXX like user to demand was what of back with XXXX? I areas call you're strategies, kind clients kind focus your development areas and you of on kind on should going all seeing and emphasizing think from of this we client most for when interest and like about, that telehealth. the the and initiative Okay where seems we like the it think focus like about products aligning When group growth about the or XXXX are the

Rusty Frantz

care, very think for you year appreciation come time with has this short really Well, period valuing an what achieved of deductible December of between level was base went healthcare and our I of a went impending client leaders of that while, when the was last really, as in healthcare health [Bernal] and about This with about was galvanized everybody we we met entire across conversation all we for this and the a so going. providers company, from all patient a the time especially scarcity not at get different risk. It's truly years them from across how actually engagement year I ago see patient this make tell market. two about health a mean high I in experience to part clinical and patient our do of about when it activate conversation Dr. our the patient, absolutely of the year was consumerism and primacy we a the the in how entirely we consolidating a it appreciating outreach plans system perception that become the of because a population conversations our the out consumer-driven real do the we do that all in truly truly matters and patient really how

Unidentified Analyst

you very much. Thank Great.

Rusty Frantz

Thank you.

Operator

David with is from next BTIG. Your question Larsen

David Larsen

are I bit the existing bookings little of happy a cross-sell If were that talk you that the augment right came or what I Will that's version? or good not? in from in you just you with where opportunity? It can what correctly footprints, base. thoughts heard XX% like now potential into Hi, then on exactly you said a that is cross-sell Are is performance I there? XX% or ‘XX think supplement to spring that? me And new all mean across there. sell the about sounds Thanks. your

Rusty Frantz

Yes.

let truly on would capabilities, platform. kind second what's calls. So the day actually ‘XX underlying one But augment light we first But about great say but integration what what's past. integrated workflows on an spring some of tell the in is at to delivered absolutely release foundational platform. know don't I They We've our We've of show first, analyst it's me have all, in the some really to will the in. the earnings that stuff you done have integration platform. now microservices entire that up span

Ricky's For example back to question.

a make Then managing understand has directly approach need you're cohort. the provider able the want is sure then a identify need go And into the the management to of to risk this absolutely similarity. pop the you to you're that the straight want that do be that they and treat time. to a On Well, coordination, If care those all be done then actually tasks you that to of there your in things you're risk what top truly you to make EHR and actually wanted to you reduce outreach. how that that you hear to there subpopulation apply at cohort, up. portal of you've identified license to treat to that which and cohort that and to and into integrated you right is or the when and handheld going assigning experience. decide population patient take from cohort on allowing consistent reduce whether a it's to right why and From clinical to sure

to the taking end experience Patients and through our to from down journey practice, called on to attracts provider-patient written back financial and paid lived the we've so and want seamless is hassle because down and a they've want analytics so about pleasing What population And of have to going platform. those then you're patients maps to integrated practice journey because that's organization gets all maps. engages patient the these make really through all course through consistent and your journeys the is there's that things sure what clients hassle that they activates, practice. a

advantage look when of like what the the XXXX that's and so I release I And that's see the coming.

happy cross-sell are. from Now I'm standpoint where incredibly we

we've of really they prepared the are piece and the transformation told seen us got tell a in true trust or of for different into organization were what was job they when something. We're advisors months good but remarks, we leaving we clients as me not because even in cross-sell the not that's XX than large that's a were this clients we're this clients, And I as in today, And middle Our us. great selling like tenure. I've it you and about here came they said the sit them. vision success. doing in five entirely of partners I foundation job a my selling of as I and partners to

and it got of I off. think question more we're question. One close running then out we to

David Larsen

I'm all set. Thanks.

Operator

Your from with is SVB Leerink. next question Stephanie Davis

Stephanie Davis

guys quarter and the Hey questions. thank on you my congrats taking

Rusty Frantz

you Thank Steph.

Stephanie Davis

you at was where left a You guys XXXX catch-up sidelines we made this? are of given ambulatory healthy a your cash are flow. really on ton there quiet the any demand gaps playing should practices portfolio XXXX of of just think given end in the and How Are are? acquisitions environment about valuation of and or free kind

Rusty Frantz

too on no. in time Do acquisitions number time time. of great afield? start to complete And those question. at certain other any of competing It's is is same that's stuff. because just if we we when what point got leverage won't with comment at further I I -- in pearls at don't pearls would this What Well, acquire I then look going point I no, different up if you a and string wallet. think do be say careful each had you I But don't the to on for yes and there have many actually in a further same I and the directions? them of say attacking adjacencies And to a is look the there's dollar you a pretty and start you're you string string build actually mean looking of point pearls a

very-very accretion at look always we seriously. and strategy a towards building are We

I that as say spaces filled of of new XX you what, market direction a going current organization. we've we and to interesting And get up come bought now a different that pearls we I'd and buy so at car have could pearls, I think there's in know XX. but say string step I into at the would kind a ones for some possibility shoots perhaps that off entirely back of is different string and build What augment this there I is actually didn't an because nice clothes

integration, opportunities was revenue really turned continued was to forward. it's XXXX into focus, we'll then we'd create money we on making so do And how the all focus going focus and be sure going actually spent the XXXX growth. shareholders to different about that growth execution on to returned and continue of and

Stephanie Davis

same a before cash what free all other ask folks the flow? that question asked few the happens To

Rusty Frantz

free free the investing cash getting to to growth revenue of digit then All that company and double more shareholders with returning cash at value and and range. bias to hopefully an into evaluate we with equity what through some this do growth revenue sits our in towards grows growth the point absolute through

Stephanie Davis

doesn't Hope take sounds All it -- like a Well plan. right.

Rusty Frantz

of I to at would broader time. idea say an talk than much it's a this and you when Plan framework. lay more in point plan a out we comes

all at us, analysts in time with and spending for I've you our for got today. to day. mid-March talk that's everybody we'll you Thank So

Operator

call gentlemen, conference thank participation. and your for today's you concludes and Ladies this

You disconnect. may now

Nextgen Healthcare (NXGN) 28 Jan 212021 Q3 Earnings call transcript