NXGN - Earnings call transcript Q4 2022 | Nextgen Healthcare, Inc.

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Operator

Welcome to the NextGen Healthcare Fiscal 2022 Fourth Quarter Financial Results Conference Call. Hosting the call today from NextGen is David Sides, President and Chief Executive Officer; Jamie Arnold, Executive Vice President and Chief Financial Officer; and Matt Scalo, Vice President of Investor Relations. Today's call is being recorded. And I will now turn the call over to Matt Scalo.

Matthew Scalo

Thank you, operator. the I'd this remind that related call within meaning start, comments that are to we including products, the on laws, perspectives the made may of future anticipated before industry like limitations, company's everyone to the forward-looking and trends, And without securities plans, statements performance, federal include strategies. statements and forth expressed cause in in with exist uncertainties differ to and those filings the results risks company's that others, the may set Exchange statements, Commission, public the report under and and Factors report Securities forward-looking Risk Form from Risks XX-Q. in the including, among company's those including any annual materially discussion recent Form the quarterly subsequent on most heading other XX-K US the on speak Any only today. of as statements forward-looking any disclaims or intent update obligation statements. these expressly company The forward-looking to

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

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

David Sides

during figure issued our ‘XX target EBITDA fourth and accelerating Investor domains: insights. of this including event event, a team. Enterprise, overview XX% our We performance month a and first quarter adjusted new to covered NextGen's growth business XX of top margin. leverage path financial of everyone. guidance fiscal revenue providing and Thank combines longer-term the ‘XX you, results which pre-announced we three revenue Earlier ground [indiscernible] rate hosted adjusted our Rule lot our Matt, our a operating goals, and and EBITDA Investor across We and management the as clear and metric, growth by afternoon fiscal fiscal office and highlighted expanding good

of those are attend you the reply on event, listen to the encourage who would Investor you For strongly able not to website. our I to

turn topic, me let to Now my favorite growth.

by X% fiscal year with event lines, product X% but ‘XX growth over across provide generated each I Investor growth a X% broadly I and and driven fiscal For the consistent fiscal XXXX. domain. revenue thought in comments NextGen practices ‘XX driven by growth acceleration define expanding area This in was breadth Starting of across few would enterprise, average, as revenue. faster our providers than wins new is existing growing with further and with solutions. the client which with penetration of industry largest And or more we are we clients practice XX our

solutions Last particularly $XXX point million on target enterprise such success remain this our is, transition three-year XXXX. is of at participants. to from of our number uncertainty Our on through surround track market built a long-standing and now with our group I'd client trusted in with is relationships incremental which in and industry on attractive fiscal like make year bookings area we

managed with our continues labor think of focuses revenue success management offering. well, SaaS XX SaaS solutions our our a services providing solution struggling multi-tenant Now service clients with the physicians grow and reflecting of during ambulatory the of than many to domain, practice we on smaller period shortages. which and cycle area strength when are which office, turning fewer independent our market, with to a second This practice our

and practices time event. specialties execute to the domain spent confident And offer We our double-digits slightly grow We office untapped and can area considerable as continue to larger insights potential. our we we over what significant outlining third domain, medical Investor in call the adjacent opportunities expanding time. continue at exciting are the this

here. it repeat won't I So

fiscal is strategies foundation However, entered across solutions this investing solid We're of $XXX execute and guidance. long to [Technical ‘XX guidance our also of outcomes into a our momentum to growth term. provide over introducing growth and that a in strong will reflects fiscal analytics and for adjusted in million ‘XX Difficulty]. our with continuing $XXX business revenue the connectivity, on number million solid EBITDA XXXX fiscal confidence in We our NextGen financial

as investors call now important another this out the step going on progress forward. of capital comment is track metric XX this we disciplined improve is think visibility, see company's Rule company to My deployment on our I strategy. the to making as final it's as particularly the

business generates has NextGen that access and significant an to has attractive free sheet cash flow, balance a model positive healthy capital.

business We on activities, our to contribute provide ask goals. development share longer-term continue fourth quarter with M&A to as have program fiscal to a in CFO we And our that, buyback I'll such details other the and our place and envision Arnold to growth Jamie board-approved outlook.

James Arnold

Thank you, David.

‘XX services fourth the clients grew X%, broaden clients our as continue Surround our results, put into compared that On and comment of ago. diluted earnings enterprise. support of full to contest. I proxy quarter like primarily fully the diluted with with first partnering $X.XX share against want plans. would fiscal to a year ahead basis GAAP to a execution long-term approximately had a of place non-GAAP compared efforts investments $X.XX results to year year fiscal year the X% management $XXX.X our who revenue fully $X.XX to a was XXXX on in across due at on use are to significant million year the the On Perpetual ago. of These we guidance Total share of half software on balanced a the the existing the of adopt their per expenses into reflection per diving the earnings was our the deliberate at basis start growth compared and standardize success onset to NextGen revenue provided in side $X.XX made the increased cost grew Recall, strong commercial prior XX% year. and licenses solutions. Subscription accomplishments. pandemic, Before associated of to

for Now basis. turning managed to year-over-year the with at Starting services bookings, quarter services, saw fourth fourth million in financial on particularly strong of the came patient XX% an which and in results. increase a $XX.X demand pay. professional We quarter,

clients. accounted both expect These based as for new close XX% reflect solutions that market's wins the the the and from -- seven of core with inside several of existing to to In partnering example provider outstanding of in quarter appreciation bookings NextGen bookings working experience. different the an wins ability strong other to for excess focused systems Surround growing to NextGen's scalable closed are we our capabilities an -- $XXX.X and of are existing subscription full patient the was million return this our away revenue proposition. recurring with with NextGen's figure Both X% the We commercial client for year. clients on are and New legacy value enhance we have total solid adopting consolidation. as which We fixed and X% upgrading David's solution. -- year-over-year. the quarter moving generated from their well XX% the $XXX.X is on portfolio clients and productivity and case fully of instances, to led total fiscal independent are managing in new All of in and and in of businesses. This we services, in XX% in, provide. by or quarter, from is the and of performances revenue driven total, of Of grew seven increase offerings multiple accounted transactions million integrated our services base EDI managed revenue to execute,

in million fiscal Surround improve Software management. X% better cycle EDI mobile cloud in fourth quarter, physicians over generated to of expectations. such of NextGen million data telehealth volumes year-over-year. Growth $XX.X volumes as engage offerings, Enterprise enables in patient subscription the in their the revenue transaction an X% the Managed of period this ahead XX% year strong were experience. performance $XX.X strong. performance to came ago up due revenue increase and which our well solid and patients strength office and as generated $XX.X encounter our provider continued client in revenue managed almost grew fiscal as quarter, from as and million, services NextGen QX services by services, fourth remain

year upside Software million and the last we in to decrease prior pursue over $XX was maintenance period. retention of Nonrecurring strong support $XX.X up some contract model. revenue X% maintenance same of reflects and million past. the license approximately over continuing client a have of the expansion quarter clients, large a year or timing lumpiness X% mentioned some the This perpetual and reflecting of

expenses. Turning and by SG&A cost offset period. $XX Tight G&A year in controls increased ago to operating sales compared investment X% marketing. to increasing million of and a

of large will For the user like our meeting, aware sales period. in fiscal in timing create ago of quarter. modeling year our client in not lumpiness the did certain -- events, be purposes, This that please our national group happen fourth first person

a into process ago on we overall quarter, us begin a first R&D both second activities, early off investment. expense $XX.X the number in fourth million quarter revenue. to some return Net in due investments us to spend from XX% the well which gross these and improvement to fiscal earlier, the related kicked XX% year R&D nice continue and office projects roll total as $X quarter include rate, the automation new As allowed fourth of David in represents then of high see had as from revenue spending in the XX% insights XX% capitalization million forward quarter, and decreased and clients having Fiscal existing our quarter. total off alluded previous of quarter net process to higher These R&D of and wins investments spend year. and domains. A on pull robotic represents we in current to the

in approximately GAAP Our per tax of QX basis, On $X.XX fourth diluted for $X.XX fully year per fully was compared share GAAP to a fiscal per tax a the of $X.XX On of loss a with $X.XX non-GAAP share non-GAAP XX% XXXX. rate basis, XX%. quarter the the quarter. compared quarter was diluted earnings in of fiscal ago income fourth XXXX rate net was to share

We and outstanding balance cash Now turning ended to of line with fiscal million $XX.X quarter balance sheet. fourth equivalents credit. no our and in the on

strategy. continuing million to quarter. this to to believe quarter. We the execute Our over of DSOs our cash any strong the XX the strong three were while days to offset days year, period software operating balance operating third decrease fiscal shares capacity ample a buy quarter but just from growth flow. quarter Free fiscal capitalized same momentum end flow not $XX our of positive third from an in We increase cash fiscal by partially days, from the $X.X fourth cash compared on year costs. activities, was back million, rose did quarter reflecting the cash due to last in return shareholders three provides

Now our financial XXXX onto fiscal guidance.

guidance are prepared EBITDA As into commentary are weeks we an of mentioned to the our Rule guidance noted confirming the metric his visibility David event forward. improve remarks, in going in two Investor at And adjusted the provided ago. XX our press into release, as we we adding that

The believe offered of in and is financial half to of as subscription around ‘XX recent management. Within revenue other which the management, growth Key connectivity includes cycle to initiatives Let million X.X% services fiscal impact office a services, services, SaaS, of year fiscal ‘XX review event X.X% Investor the our which and upsell our discussed to we domain of in timing fiscal multi-tenant important. chronic main me million consistent to ’XX. insights guidance. RCM expected or our Fiscal second $XXX be is $XXX range enterprise various continue managed drivers revenue and core, is are ‘XX managed condition the growth and at domain we in growth. start year-over-year components see our a in between results to include our insights in

investment we for year in R&D year to areas to are mix of of absorb lower range easier fiscal ‘XX insights momentum slightly For period. forecasting -- -- of full of with reflect fiscal [indiscernible] the a as growth to the the sales modeling services higher incremental and leans ago centers we first purposes, be X% and X%. to expected Gross second fiscal half margin excellence, year-over-year the compress growth half to half we in such more ‘XX would first margins ‘XX towards the shifts comparisons the infrastructure. and in due and product year are in of as expect

expense Our the attractive be year position back in of ‘XX sales a level beyond. cost of the will half for off fiscal then in and growth leverage year and in

We year R&D investments off continue and to ’XX. generation to enhance XXXX fiscal will before accelerate make ongoing through These and investments in fiscal demand our sales leveling offerings. year in

EBITDA adjusted million to EPS to Our $XXX XXX of this in to guidance fiscal million X our compares for million, ’XX. We $X.X. confirm is XX.X% $XXX or $X.XX non-GAAP fiscal total $XX.X guidance of revenue

non-GAAP quarter ranges are fiscal the slight spend of comments growth revenue on EPS the earlier first factoring our half in at the margin, ’XX, in R&D in in combined we increased with digit mid-teens. first We fiscal for first mid-single fiscal arrive the quarter, compression gross

level progressively in fiscal overall diversified growth to throughout the and am this In pleased We quarter. the year. we generated expect improve with I momentum EPS closing, the

on for We closing deployment, and comments. as consider me to both the turn long-term shareholder now, externally drive continue let to will internally focus we David growth profitable value. And back call to capital

David Sides

I'd has growth. it today's been the driving company's on it. I'll for event, based May at us the by here say worth Certainly Jamie. reiterating up wrap from our positive overwhelmingly busy on but profitable NextGen, well feedback it's Thanks, focus accelerating and call a investor

a the to and high-growth have assets opportunities. market go attractive We after leadership, right strategy clear

respect in ’XX, position right would of we in to the future. impact win to have NextGen will these expect to We the investments fiscal continue the that and With the bigger a make early now investments part to year.

Lastly, Jamie. see the mission receiving to His County the NextGen's over to to success last see Jamie the is Arnold company's a undeniable. contribution Award day. years Business It's Orange great we I every being attributes congratulate want for you, Lifetime to Achievement recognized Journal. Jamie six by and commitment overall for Thank

you, a that more think few more lot for concludes years for comments. back work got my we've a While about yet. This nine playing

Let's move to Operator? questions.

Operator

take will first Jeff [Operator our Piper from We Sandler. Instructions] question Garro with

is Your line open.

Jeff Garro

Yeah. momentum you for on bookings by term, start I see to is to thank growing the target, pipeline, And on but growth what more the asking Congrats converge your for with fiscal of In FY about the recent comparables bookings Good well and are headwind to questions. revenue XX%, bookings off bookings. bookings want afternoon. we extending revenue ‘XX taking I last growth quarter target. ahead tougher expect longer would year growth the based or you in the growth? a that bias towards above target think

David Sides

Thank your Jeff. question, for

expect as growth not I just think given mid-teens. should year, so year the as as bookings probably But in it growth double-digit Maybe year. next quite in last maybe about ‘XX much above we last well. the it's

James Arnold

Sorry, let me correct.

but to next expecting range for guidance on to -- are bookings, we to will be but to are year. It's there target be close X% it somewhere giving in the we continue Our XX% bookings, year for next grow to we're for in going growth. projecting not

Jeff Garro

Fair enough.

near to into hear Sounds momentum a continuing good little the is ‘XX term, then bit there. outlook. like maybe And to the FY so deeper dig

ask clients wanted variability what areas are guess assumptions the and revenue what patient specifically, First implementation the retention, potential to client guidance? maybe in pacing around more volumes? And are of the I

David Sides

approach ‘XX. retention consistent a that taking into of to we're kind So last year's

variability hire Some to services of are our more could to lead generate revenue can -- that position fill quickly. side the services to things if from we

board to and train of services services. those quite got -- more we're get we So quickly, focused can people more a that on we've quickly people on backlog

same are we be would the question level your that answer assuming to -- year. of last on So retention,

licensed be the and sale, quickly if we either of roles services. the that could can happens those if of usual services variability some around And existing lumpiness and hire software for actually deliver to client more Jamie? those fill

James Arnold

Jeff, clear, that software I margin, because it scenario probably be but gross question, has think affects such line that now affect revenue, you about the the COVID, that volume we because it on and asked high it the would and the in the pre-COVID any to not I volume has -- we've to mean, be here I for change we than the most think, been a better have largely we back running say would and potential are be negative. won't we're there variability four from recovered assuming only to we focus would area Related much to pretty quarters levels.

going that's assumption and continue we like of dramatic that again. COVID is won't our because that So, see to something a change

Jeff Garro

taking for guys questions. the Thanks sense. Makes

Operator

with will next Davis SVB from We Stephanie Securities. our take question

open. line is Your

Stephanie Davis

for many some what quarter. was under could you past give Thank you many, pressure color bit given my I players end market, on one you more hospital guys. into on us just taking coming Hey, are in the demand-wise seeing of hoping a the of little questions. just cost this

any how So and color of helpful. sort the IT health wallet [indiscernible] for on ambulatory check

David Sides

ambulatory We good pickup on still side. the see

lot As we us, -- of short comments, least term the of disruption the officer in adjacencies, is is the players health we in [indiscernible] urgent term in the fair moved overall just bit a centers, at think and in into a little market and some mentioned we some moving move started or some industry but slight federally that care. short, for the that other medium did good physician not qualified we've the but

some look be our health promising could us, we're taking care there seen with We behavioral after at that well. combined sometimes with as where care are offering I've risk. clients seeing opportunities also urgent primary investments initial

is support, we special So starting and see an we the expand in the health is to we've [indiscernible] traction some some that care ambulatory market our the like specialty, but moves not pipeline. to got additional the of we are that the a need, behavioral -- urgent specialties made

James Arnold

And Speakers] some of [Multiple the

Stephanie Davis

Continue.

James Arnold

I have Stephanie, them, management to proactive space we system. was the is thing the and that are some from going based consolidators are the in the been practices our consolidating that, particularly of other ambulatory strength say, interest we where continued of seeing on

into we we that So as new as go the see positive a year.

Stephanie Davis

be Dovetailing other increased guys the have have market private space, wage gotten some quarter, competition that answer disruptors players kind a private I'd competing a are on heard on. in haven't I competing the some seen you of that the you still and earnings in funding. seeing about from that new market we that ups that still you. what of of of on how you're guys market with you're grow lot lot also on gave, curious

David Sides

not -- that, we a talking NextGen even I guess the group seeing quarter, we we're were Yeah, entrants picking example for it's necessarily not [indiscernible] where last got that acquisition. newly and those for we new us so are so -- any that consolidators from in are of didn't that and they far that we're they level so to acquired an competition put have into far,

so [indiscernible] forward path acquired actually when to able company those they and do it So they other being of a really we company. of NextGen as up for is move job acquired this when a they resonating kind with systems, some had went doing us really strong a was acquirer ours multiple us. client very that a part in of financial The in brought the that they took good way, for of into acquirer which way value better [indiscernible] to

great a win was and meaningful. us that that unexpected for So was

have continues, go with demonstrate that value we really good to to forward trend we and and is, them. So clients achieved them with outcomes with the that align goal

Stephanie Davis

market. a queue. I’ll be in hop to this Good back consolidator in

Operator

question take Wallace And from we Guggenheim. Jack our next with will

Your line is open.

Jack Wallace

a a that want bit. to this all-in Thanks the is I deals you for quarter. of talk the and number bookings questions. there about David, mentioned pipeline taking

for all-in that. Looking on see I deals got at the momentum pipeline, couple we and then a the follow-ups of

David Sides

say looks robust. I'd the pipeline

more in going lighter came us, that of year. I it's through results the give quarter a the the other don't what So our bit Jack, but in pipeline, and history of on the continues but can on go specifics. for largest quarter, this quarter that’s little kind out sales recent did good quarter usually as colleagues the third well I this some you last know

Jack Wallace

much services kind that business when to what’s Yeah. there of, me And suite and insights includes then, seeing insights that interesting is of you specifically there. How the you're with How the And assuming all of the in, I'm maker? going the of service, deal competitive this the benefits that those replacement. is in. capabilities shiny was real -- a much of was all

David Sides

that, so or with moving to So six far, -- not most those to been those our nine of I'd much, months. love sales tell you deals cycle have deals to

moving have of any without most been deals thing. So the

the that a people have. be think most the I get will goal nice consolidation is are or at a clients now. kind But number for we in we the the the -- accelerant it they new reduction starting ambulatory start overall of of thing to to is looking that stage perspective in suppliers as from end

trying And and we the that’s we all first as out in we're visits offering so when the virtual as come hosted to with especially the management, win. them are cycle of possible space not clients, take new revenue winning much analytics our to one together

so a great for And been us. tailwind that's,

couple that analytics it of I moved another that analytics be we with clients. should have into of some of think progressive we've really our couple the a developed already clients, additive

we'll add we're some you And We differentiator member towards to on that's that, but with there, moving try because the end go is clients or everything helping there, in third to it. top winning that don't new have Tableau for especially party get Right. like else time, I first may agree so, then of the, but and seeing the movement buy for good they something a to of and insights it growth see early, we're here needle some ’XX. really actually

at bringing solution are whole the once. We

think -- in to do to practices for able the it’s the everything simpler it from start. right makes I be So to

Jack Wallace

that bookings just helpful. convert revenue Got segments insights, on the the you. – And if That's had confirm revenue to are to which

David Sides

a be will be Insights services most that. for should to the there'll mainly part, component and subscriptions there subscriptions hit

both revenue needs with get associated as client what service the revenue will subscription it on well building from as some you us. So,

Jack Wallace

Got you. helpful. That's you. Thank

Operator

And time. it -- over turn further turn at there closing are David for back no the remarks. Sides to call this I back will will questions I

David Sides

Thank July. for at everyone. you, you And concludes with again end in look that interest your NextGen We forward today's the Thank to you again Healthcare. speaking of call.

You disconnect. now can

Operator

concludes Thank this you conference gentlemen, your today's disconnect. call. you and for participation, now Ladies may

Nextgen Healthcare (NXGN) 18 May 222022 Q4 Earnings call transcript