Earnings call transcript Q3 2023

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Operator

Welcome to NextGen Healthcare Fiscal 2023 Third Quarter Results Conference Call. Hosting the call today from NextGen are David Sides, 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. [Operator Instructions] At this time, I would like to turn the call over to James Hammerschmidt, Senior Vice President of Finance and Investor Relations of NextGen. begin. may you James,

James Hammerschmidt

operator. you, Thank

current we start, forward-looking part will making uncertainties. on that the subject and to risks please during the note and management’s based statements are Q&A These we and presentation assumptions call. are be statements Before expectations and of the

measures, Factors about certain and which reconciliation from This SEC our including are that call results non-GAAP non-GAAP in can detailed will in our differ cause materially actual reference financial is Investor filings. Information measures. our financial may also GAAP found U.S. to expectations earnings on to website. available release Relations be release, earnings

to President this David Sides. I’d like over call and turn At CEO, our to time, the

David Sides

multiyear disciplined deliver leverage, important execution before Thank three growth, into in operating management. journey capital and revenue an all fronts you, to quarter. to like In described the to solid of James. double-digit report and May address topic. I'm last And my I'd But pleased year, across prepared strong remarks, go results our I we

our sophisticated and we have We January our returned was access part limited the a operations. the network. of of and we the aware contained NextGen target the a On threat, to of Upon executed company procedures unauthorized immediately investigation, became internal network, X, response learned cyber-attack. secured to normal

data. as we and impacted connectivity clients of employees. devices the noticed to some client incident files timely the patient total, have any this this evidence were an uncovered administrative or threat, X% used non-client date severed on affected of of we to not than abundance review or who network. a caution forensic of within as we and our manner. to ex-filtration ongoing Out In select soon in Our of to is our impacted access notified our date, systems Based by investigation less

operations restored all majority to disruption. of have operate continue have usual securely without systems normal. vast been returned Those and any The to clients as

While happy note previous to investments paid that in we're cybersecurity unfortunate, off.

systems We safe they employees, will serve. and clients, our the continue our for secure keeping and to invest patients in

Now, back with I'd to growth. our progress the to like start quarter, in

Our deliver platform partner to point This in behavioral, for clients to to improve allows medical, foundation the looking differentiation among holistic creates care. integrated organizations insights which the care, to deliver with is of leading outcomes. us especially solution for market, integrated care and dental a a resonating at

surround both despite continue bookings sales Bookings bringing Our in outside back where clients gaining XX% the quarter deals see our There $X new million in the XX%. over solutions. spanning we our represented approximately six to this in the above environment, net new the full-year average of success reflect differentiation were cross-selling from base. and macroeconomic and quarter logos inside

to address look practice today's deliver continuing see patient cloud challenges volumes. outcomes, the clients, our managed efficiencies quality as patient help to Such clients revenue solutions increases, staffing financial while cycle, continue wage shortages, our environment. These they services, improve demand and our engagement to in care. to face opportunity as We problems and and gain higher for

XX% factors These which revenues, our our growth been resulted retention strong revenue momentum in diverse has continued have building This in recurring especially to quarter. client and in addition clear in is acceleration streams. exceeded the across growth

development in beyond. offerings and XXXX While in fiscal on that our organization new fiscal innovating growth year delivering growth drive our commercial build are efforts and to XXXX, are focused solutions year

fiscal process the proof opportunity points patient front-end approach on expand intake forward We We platform, the and we are the progress believe year. early in making on our investment. strong new a the is with value when delivering to there that updating look is our clients. we clear our tremendous currently team are offerings all and return at you that when to look other testing especially I see start of solutions

on our we're making investments to scale. operations and to Moving

operating ability foundation survey the engagement employees conducted of leverage the employee, is which Our voice engagement that deliver recently measures starts annual of culture. with to our our vote We and just employee our dimensions. benchmark, for XX I'm strong across the well is culture, row in and in improvement to pleased client environment, a say year above has focus. employment increased and the sixth the working

excellence, us the sales in making throughout pools remote which work on to The a a thoughtful talent required headcount expansion access rep company our upgrade managing the center our and our of minimizing show creating organization, leverage. development footprint. been is anywhere first to the to from allows taking of actions investments while focused facility from on global operating year and scale, the program, We've moving

We fiscal year XXXX. will productivity mix, improve we [re-think] and resource vendor [ph] to and optimize of the rationalized spend, technologies as out continue our processes to final closed our quarter

and our deployment. and to to turning taking deliberate Now disciplined believe shareholder acquisition capital return We by capital allocation a total is approach enhanced effort.

on through in focused [accelerating] [ph] M&A, is strategy buybacks. and investing through growth shareholders to capital Our returning innovation, opportunistic

convertible Following of purchased million offering. raised as debt we the in our approximately earnings $XX X.X part concurrently last million million and $XXX call, shares for

in to provides execute inorganic on addition credit generation our proceeds capital growth our These facility cash ample and to agenda.

the market as Healthcare, the unlocking company new demand, by long years. three addressable TSI of pulmonology. the specialties done rheumatology, acquisition served the announced cardiology, almost acquisition enterprise our standing has in and a first also in attractive expands TSI We partner such

built commercial which clinical strong provides when line differentiated with long-term a line paired and purpose sustainable service our content bottom will offering, drive top and channel company The growth.

say well I'm we back into going foundational making investments in and is start similarities as the the business. the the strategy, Given in to line pleased effort integration culture

future that M&A behind opportunity for acquisitions, an to be data, and will continue believe to it to active especially effort assess We value-based Looking to we pipeline enablement insights. forward, NextGen company analytics, will our maintain care an capabilities and as relates continue the pursue. accelerate attractive

clients, innovator. of records health workflows, Founder, the mandating and [Shelly] EHRs. NextGen Act Healthcare's passionate an passing Sheldon acknowledge By Razin. and digitizing was and all. the thousands automating the will [ph] tens to HITECH than deliver thousands decades upon of [ph] like I'd be patients. millions of innovate of has of improved the In legacy, ever [Sheldon] better Lastly, missed. focused healthcare outcomes building more providers, for entrepreneurial to use of is before his intensely of and He company the lives

And now, call Jamie to provide on to Jamie? the I'll quarter. financial performance turn the in over our details

Jamie Arnold

David. you, Thank

year turning to Total X%. Now quarter from XX.X came increase bookings million. fiscal represents in year last the last third quarter a results. XX% from growth a XXXX to financial increase of This year-to-date bookings third and bringing quarter at [XX%] the

which were trends, impact on below both bookings has an recent earnings. outsized revenue quarterly license and Software

XX% XXX.X of revenue an to year-over-year. Total revenue. for accounted million Recurring growth. increase the million, year-over-year quarter XX% XXX.X equates This for total X% was revenue or

Excluding due X%, of TSI managed to data and our growth the impact strong services. the primarily performance transactional in services recurring revenue acquisition, organic the was from and

contribution XX.X the Non-recurring decrease, and and of to quarter from last from line. quarter million acquisition year represents quarter. revenue last subscription the decrease a same Most is TSI a the XX% was reflected for the XX% in revenue compared the

the environment. client we to software purchasing QX watching the changes by macroeconomic six closely in we be return affected will are While preference trend, quarter expect that could for bookings prior

XX.X% down quarter. to XX basis the down the basis approximately and of Gross prior margin year XXX to points, same points, last compared compared was quarter

in the are on recent noted discussion margin software a significant which trends, off had revenues revenue, As non-recurring decline. gross impact about

mix. related in Additionally, we well product quarter's year of should made as as start investment continue call, the be center shift fiscal half as significant upgrade last our services, to discussed a excellence spend will to a to on Margin in back and professional have rate upgrade in focus XXXX. of and improvement

was represents of XX.X the Net such quarter variable increase, total for is X%, decreased compensation, cost compared revenue. same as last year, of year. XX.X the million facilities have reducing Turning quarter been well reduction quarter the to executing expenses, actions footprint. to last X% as and same lower XX% due compared operating R&D a SG&A This we as million by to to expense

a effective tax million rate We had XX.X%. $X quarter tax of with GAAP of GAAP a this provision

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

sheet. our line X.X ended to cash balance the million. the credit. We million fiscal was the Turning flow Free and negative on quarter XXX.X outstanding balance for and cash quarter equivalents in a of with no third

rate, five-year call debt price net terms noted, or issuance notes period, As proceeds November, a David them Key and senior convertible issued on November cost. We [ph] [XXX.X X.XX% can to $XXX million of a XXXX. coupon include XX, million] after $XX.XX. we after with the company of conversion maturity in

to our please debt detail, more the refer in For financial footnote statements.

the with $XX, an of million a debt repurchase cost shares share of share. have convertible million in shares share. of average X.X total [ph] offering, we of X.X fiscal XXXX, million cost for of XX.X [$XX.XX] our $X.XX purchased an the $XX and we Since program average at authorization for at Concurrent per million QX purchased per

we authorization. XX, have remaining XXXX, $XX the in As of still repurchase share December million

of since On to Healthcare. minimal provided performance financial The November one acquisition only we actuals. impact month TSI acquired QX XX, our represents it

million $XX be revenue acquisition We fiscal contribute will of and to year $XX and for within million accretive expect to earnings XXXX a year. the between

the impact earlier call, be the in revenue mentioned will the revenue to As line. subscription mainly in

our Turning XXXX to fiscal guidance. financial

the $XXX TSI in fiscal represents and revenue are X.X% the the to to for midpoint. at debt in total release, range million, $XXX updating of the now to guidance noted we We of press be the acquisition which XXXX year-over-year million of a our As account convertible prior growth expect offering.

we fiscal EPS prior and to Moving million are $X.XX million, maintaining $X.XX. our $XXX range $XXX prior of to our range to adjusted of guidance EBITDA, non-GAAP

is on smart capital believe like our I QX, to meet operational company In of based our deployment disciplined well objectives and TSI. positioned bookings closing, strong in execution, for acquisitions performance long-term the

for call And turn now me let the closing to back David comments.

David Sides

Jamie. you, Thank

focus for execute and on growth driving and we're deliver profitability making our to continues both long-term investments and the scale. NextGen clients us to with required a

care, tailwinds focusing our and driving on Our our on overall resilient focus positive created business model, outlook by value. shareholder reflects the we ambulatory solely

double-digit targeted sustainable growth us for quarter's XXXX, our in in we May, summary, results. which at In which Day for year am this I sets fiscal said one-year fiscal XXXX. in with starts earlier in is growth April. revenue This it Investor double-digit And than up us pleased year

we will results. each to both fiscal care other And provide our year I announce May shown clients. commitment after incredibly NextGen to the fiscal and proud am year family guidance We and of in XXXX the XXXX year-end by our

comments. concludes This my

to Let's Operator? questions. move

Operator

Securities. [Operator Instructions] We'll SVB question from our take first Davis, Stephanie

Stephanie Davis

question. my taking for Thanks guys. Hey,

one about a think me most time. your of Just from when takes quick guys' I up what

think to about first, progress first of your growth like user he experience. to had that around target. double-digit getting focus I really felt priority the that was turning as NextGen your [indiscernible] It on

you're execution pure in that or your next is mind anything as Now goal? it else there, is to just there

David Sides

here. execution pure from it's think I

organic So, some within good of early we're interest. new domain, insight the we're seeing the coming products that out client

And Last about health. behavioral the had but those for of good area like, really we so, some more, organic a us. we'll things health, new quarter which a quarter, for talk is behavioral we sales talked are

of quarter. contribution sales the a to So, part those record having were

have then from and here getting on we smart acquisitions. and that expansion the should that know is we capital to new products doing really think us here, go. we I where want from So, the margin now out we've be execution, revenue smart how get deploy just growth raised that to there driving continuing make we those just that It's it's

Stephanie Davis

just license to And uptick of a to the think should bad Not sales from helping I when cadence XQ, margins place for year. that’s a then in Is XQ shifting be. follow-up quarterly XQ I and the quick margins? just about the the assume

David Sides

for think before. we’ve recognizable that's taking revenue. mean in this account We higher that some and We're by I then that basically our more cost time our reduction as temper talked octane plan next know And it. going for for year sell you to year too, over I next Yes. expectations to in, kind subscription. allow out about we've, we think of

license a we you'll mainly revenue, in growth we're comments can his for next the the as recognizable it's quarter, – see about said as from year talked or in see mean, in guidance. next year, I yes, on be, next looking that we as So, full-year number we'll – Jaime we but projected rebound the that and the

Stephanie Davis

[indiscernible] Super helpful. Congrats a on year.

Operator

Guggenheim from from Wallace Securities. Our Jack next question comes

Jack Wallace

for the thanks Hey, questions. taking

Has incident. follow-ups. clients? couple hacking question of got had current on quick I a Just potential your that and any the impact a both And

David Sides

common more We compromised data. Unfortunately, data, at not no were far. to data, systems so No, No it contain no all. were than no patient glad of think client affected to would nowadays. client systems at you all. provider those None it's

So, a less than we compromised. X% few were had devices that of

within down that shut quickly day a realizing We of that.

and didn't or policies of contained a it this. call overall, answer well with everything, might done us clients we've that all during we have we then practice So, but who kind of communicated had the because other, all process served ancillary disruption support any things, a our restored and procedures and

They our fortunate We've strong we've the that a even affect planned. not culture implemented honesty you in can It's in financially. investments and As speeding number weeks. overall, appreciate had do it with last to up of clients. it. from we're to we'll we're material, our really learned we the had another cyber the It's couple and results one do, doesn't some it imagine, of those transparency. tabletop of good And our exercise. it's adopt practice. conversations We in thing a from here, And

well think now. we're practiced I

Jack Wallace

forward? helpful. follow-up talked you about the as industry participants can other timeline everyone Got the to level little wondering the other operational? application impact about a the then or as quarter, encouraged the Are And how by then live, you're last that that business And just the that, just going then becoming Thanks. talk go applicants? a you QHIN can it. of And That's bit you for in goes about to and interest? the

David Sides

our QHIN So, ability of the we're scale level. encouraged of kind by software to, to

about We our have a number [Cloud-Connect] of [indiscernible] opportunities [ph]. clients there with talking

from QHIN that offering application of like the the it's for process technology connect we feel kind we're yet, come clients to perspective. out hasn't scale. but So, We a see there to time for helps any And when at guidelines any, work clients. need clients because the doing kind about through, what But of those I'm encouraged and one with it, commercial we'll talk of idea interface are. terms the we all source an

connected all Phoenix, having kind interoperability for did got connect one of in can without So, you're lower more a example, both It's and through hospital work. be at of healthcare our in do Phoenix to it just to of clinics you if speed time. the and to, hospital efficient so then much we that it's us that price because

it's So, substantially just from effort perspective, better. an

QHIN’s, So, we're NextGen be our us sudden the one a is between all already clients. in all supplier's of other about of the encouraged and to of to all with people another industry just QHIN straightforward connected connection really thinking this know a our could interoperable connect same that We're from to way. then both. you QHIN It

management medical and domains how across their another connection to all marketplace if care could healthcare well that was the So, supplier do venues. and things enormous connected clients, advantages bring one across like records, you improve to de-fragmentation as as and

right, So, encouraged. summary, we're really in

technology, good turning the as becomes I we the it, process in the us. think right out have a but it's for place, I good of and through – work move right clear, we're application we'll to it's think rest a be the

Jack Wallace

the of of industry with, let's will other the some or info that, you plumbing the the all necessarily this flow suspect eliminate standpoint? information this, of blocking information on a set guarantee And from a of decision-making acting say, the highway, bad in getting the the up end of free does presence that not

David Sides

before. come QX Yes. than out make But this premise with application. agree it your and it. was through much will on It going that the more Jack, sorry, liquid data misspoke we're has I I

our down some should of other too, slow think any blocking set-up whether of other those information suppliers or suppliers or QHINs others. commonwealth any like it it's from aggregators I some

we're like We those the I and all of And can of So, every already. to handle said, our connected already the suppliers good. are clients. of can, all think is I to kind one built of volume – this

us and run really, we at do step So, to next we from national we through, system, how the how the do do how it. think is take do scale, value get okay, this for

healthcare I regulations of the good we it's American intend them. So, and these, into that effect all system think for coming to capitalize kind are on

Jack Wallace

hop in I'll Thanks. queue. back Great.

Operator

Jailendra Truist question Our from Securities. next comes Singh from

Jailendra Singh

so. to you in I which Thank fiscal the Healthcare you I months, accretive for want synergies? next that? flush but understand the line maybe or TSI? year, seems the Just year margin thanks EBITDA drive questions. is deal drivers, and cost XX just understand improving cost EBITDA that some Is like a and just becoming growth TSI any what deal key will there? in it details to for not better what taking margins adding little Maybe are my is top bit longer-term. about the It about which talk in talked out Like XXXX, profile a at management, the

David Sides

question. good a It's

making own get talked Investor ourselves, NextGen. we're of in ways So, from operating to Day internal went When the still we we'll investments we're automating leverage technology this about, we year. meaning our automating some that

automate suggests deployed systems support things We've talking with we one client might our when better a we've staff how here So, be like handle support AI of answer. to possible the process. that that deployed our

or another with away effectively that capability set about generating will the through that's those large of investment bring Act been that get as of So, and we'll and talked productively grow, into employees. turn Cures scaling will process kind excellence. date and sometime a an can which this year, We're one-time end revenue It's we this to hiring to more XXXX, but then fade center that have that investment big up their to we're obviously we Spring of making do people in also and job upgrades quickly. as online all more a we've

that that to now scale up to a the it following be to why up years some other the this our similar margin that's last leverage we're we're for that and growth. because hand comments. to planning and then going our have we us for journey. things And take So, Jamie business. we for some to doing to I'll set on invest operating EPS there's sets next said year And of And as try multi-year ourselves year, own being we're in this year

Jamie Arnold

think our some I show we leverage. will think revenue is of a multi-year as expect, I year. more we on David accelerate scores, and operating we've laid XX plan his David, remarks, growth the bit so indicated out would Rule a But prepared we in next will progress also

David Sides

on And side exactly the EPS, spend. we EBITDA can with too, that land

fiscal of part, I XXXX part then just that we feel And recurring double-digit nature revenue, XX% on a which harder growth easier equation are So, certainly revenue I year our year a very see now to that's QX, achieve achieving in like the can XXXX. We've, work or clearly fiscal think, the on. perspective. revenue worked the the from record and is of

our our give to money we're for one-time. in range, our and of we're take call using things May, a year money our things years more that still care have that good spending productivity but of in us NPV improve but do value We'll improve present some to to this these these hit for and guidance automation process EPS profile robotic guidance to cyber will to

Jailendra Singh

of was [ph], referring I initiatives, that's Healthcare to [transaction] your those kind right? what TSI actually all assuming I'm apply to,

David Sides

Right.

like standard years for from owned with company organization many taking SOX-compliant, which to a taking up the public we've company, investment. the TSI, people, So, takes love really a worked privately them

said through investments first how accretive the get run, it's as those we're IT while so, in side, side, finance working year. the And on And it, we’ll we those. then be we the we'll but through

Jailendra Singh

to looks call you have decision clearly, no Okay. in just Have put bit watching this of think comments little change previous it's guys or early or why call you're I talked still macro and and impact. any environment, among time, your And reflect as sales a but spending the bookings curious the impact if trends know any cycle about me. just more know in then made like the seen like there, hold, don't some impact in your in impact process you're about such? on that I of don't is like maybe on tone you I clients there cautious macro is you any this mean, but even indications this we there indications it the too

David Sides

the doing does clients we're Well, bookings, lines, impact our it from point their to staff, recruit I a from to record mean, ability sales bottom their right. perspective. well of But right,

QX impact the We good of the we're quarter So, to in about end we're that feel year. there. seeing not an current

seen it's is, But internally and perspective. Obviously, that. So, not our where us we we're have main mitigating affecting about cost it affects us. from We've own I'll anyone, that Jamie. that the it hand to but feeling like that, good piece

Jamie Arnold

was a Yeah, quarter. about context we it [non-cost] the about this software of the kind when was was of of We in three were the more were, made in X% David. up our more quarters it in said, timing. Last level. about quarter, it talked through Jailendra, bookings it and we bookings total. – and And bookings the it first revenue today, this we up clearly software year, kind [ph]

we lower see software – level. – this did quarter the that's called that makes sort of was we out What that

and conditions this so, that affect trends, we're about our potentially discussion And monitoring a this year the all macro recession clients. other

than We develop product the to see pipeline are we seems we – preference seeing were of license commenting there product the the as on. what and for be SaaS a that's more

Jailendra Singh

a Thanks lot. it. Got

Operator

comes question RBC Capital next Our from Dodge from Markets. Sean

Sean Dodge

Maybe Good point Jamie jumping last on there. afternoon. Thanks. just your off

you quicker have I guess pipeline in I start Are you actually the this already your pickup seen Was quarter was, with have QX. of going those a to those license in QX in QX, previous deals from this slipped up simply in historically? around in a to are off softness had, a some than sales guess or QX? you point conferences there pick that then sounds you David, bit like little from there's to back are QX. So, that

David Sides

it's little of bit Sean, a Yes, slip. a

some of may have because so, we high And even closed by now. those have confidence

this it trend So, own I in because quarter you expectations lumpiness. budgetary we're an answer, we're everything as the good, confidence think year that earlier of I next the revenue down because I subscription. do but move looks said going to selling our gives we're from that And think like license seeing

So, that's It's expected. zero, of be kind but million. years. of before down ago we've offerings subscription. our five bit and go XX it's coming won't been all said smaller to million] now a [XX to used It and little all as offerings around new It years [ph] multiple for it'll keep surround are getting as

we're that's seeing growth So, where of the a lot in business.

Sean Dodge

Okay. That's ahead, Go helpful. very Jamie.

Jamie Arnold

the just as have working very see set We're No, you is we to a this was it we for trend come an It – adequate as X or change Dave just of longer-term years, if clear but we're trend, to at quarter. – out you it going started said I being line. out, calling look X [ph] [overall] did say, COVID.

highlight to try So, transparent. be wanted We we just to it.

Sean Dodge

on seamlessly Okay. price all a more an And ancillary the to solutions bundle – NextGen, kind element there And your could? these in systems then get you these some offering? is together, of swap bit just clients more important I'm forward. and kind than the growth a backdrop there way of all of factor what with mentioned strong and it's that ability and that integrate them when is being with main present solutions you little these can David, Or all part. that's for cross-selling one the you like of the continuing just is competitive be What's point consolidate important to an just motivation standalone of part there algorithm now? solutions trying going out the to to

David Sides

Yes.

So, think wins. integration we

an manage is system. integration So, easier the way to

protect, in right? So, integrated less maybe our host us you to easier solutions, and to everything as a it's manage. cyber and can have host, well point AWS and to for from cloud-offering So, an client less perspective we less it's have a interfaces as between in

I'm have you're So, a less thinking, you're [ph], under perspective, revenue if pressure a to okay, office] [physician you're systems. from going

And people. there. expect internally. they have the you that work. looking return our simplify systems we think do staff work at know number there's thing because to And suppliers less a how fewer We you to when own more, with. else suppliers to want more see to of We as Nothing from same own integrated we'll with your we're to pick that do cost the

think So, is that trend out. I playing

think with it's provider to I to go it new go We continue. for us still is favorable on perspective. easier that these integrated people from see add buy it than It's an to one should wanting somebody solutions. and And through process. contracts

Sean Dodge

That's Thanks again. Okay. great.

Operator

next Jessica Tassan Sandler. comes from Our question Piper from

Jessica Tassan

steady because you are you just the of margin different profile follow-up TSI also business, there I the will be guys and on that Thanks maybe little then for a Hi. Thanks. specialty the that EMRs just maybe think scale then wanted business? EBITDA I taking bit a can state margin the questions. And questions, of you that as to profile? near-term talk about couple gross margin maintaining

David Sides

Well, multiple it's EMR. not

specialties, content our EMR. we but to to attractive cardiology. specific and we they those the because three really us pulmonology, That's that's our haven't have So, after rheumatology, use use specialties, EMR. They gone

EBITDA looks profile. do. ways, might So, some EBITDA over good. time like in that the look we better in our they than And some places do profile really It'll own

long-term, EBITDA think color margin? the ours. don't any profile know I on to approach I the Jamie, So, gross add if want you And will

Jamie Arnold

which is is is acquired acquired – pulmonology. didn't to content. are to content customers, provide that we TSI more had level they And reason and specialty than to about look it. their go talking areas their TSI – in that high These the the and specialty rheumatology, have going of they are but service built so going cardiology, their I'm why content David. we so Yeah, to pretty the margins back we similar ours, to

They So, it is, those and and new the their our they NextGen some clients thing for opens their growth the enterprise services up bring will offerings customers we some customers. of us think that our things also. we have value And NextGen the provide areas domain. to other accelerate for can help to

it I So, more is creates opportunity line the how it's about think the about top it. on

Jessica Tassan

then were TSI of sales fiscal the business wondering just Thanks. for that fully at might And you force discussing it. the the kind then might were associated sales reflected not, just those have to the I as force of investments the that limited mentioned time think acquisition. And the Got potential, ramping I'm costs revenue was, begin you with the appear? when if in acceleration XQ?

David Sides

long asset XQ. the own that in didn't we Well,

see it but with too. ongoing, think see So, growth offset from it we the business you'll should that we'll

be in guidance. it's our forward, going it'll all So, of but

Jessica Tassan

it. you. Got Thank

David Sides

Thanks.

Operator

next comes George from from Deutsche The question Bank. Hill

George Hill

look staffing layoffs on is an to of evening, hard of guess, had macro always cutting opportunity staffing? company you expected. of what was during Good this to talent ask the as below know and a match kind it a feel hire I'd the be how lot levels a to in the slightly I is for seem see SG&A sensitive question. end topic, but quarter upswing. HR levels downswing. the you does trying down or from questions, thanks people and I kind this cost year-over-year the this Yes. And of you kind spend to staffing this where a flattish to a I of was, across employees at We're lot that we market? kind macro know trend seeing you're levels demand David opportunistically and sectors the to hire And of the and during as environment, and industry. something and bring cost more structure tech question spun the across as taking guys, and Jamie,

of headline kind question cost and a So, please. just headcount

David Sides

Yes, for George. your question thanks

talent. an we think see I to opportunity acquire it as

So, organizations when numbers, wow, in of we more see think, a with Twitter, architect who of be building kinds those software us we off in probably in resilient there's healthcare. could Salesforce, there laying industry large great a

thinking us can about time great be how start this we're as and talent. A good. So, thinking acquire to good really to is it about we growing

systems about to of and getting automate talked a making bit and cost That'll our how always look productivity the earlier staff own in own teams. our continue. basis and we're at We efficiency we investments our little about thinking

year. most kind earnings of this I think why that's And be growth. that see, we'll in then through we'll fiscal of

it's year, but to pleased in be environment. the for leverage us, one points of we're this Next hiring

color. provide Jamie let I'll some

Jamie Arnold

would worked the infrastructure. say really we years last I over build few a what scalable to David, hard is,

that a hard We for opportunity And of growth managed will to continue during skill David's the we we get sets have over that the year us headcount layoffs, point find. and some even it's very to increases bringing technology will half. invest last And certain the about continue on periods these tightly to in our of been – efficiency. for our

the So, in and years. we our will be selective demonstrate it of all part over operating coming leverage plan to that's

very So, to have be make you disciplined to a reality. that

George Hill

color. appreciate the I Okay.

Operator

[Operator Instructions]

David Sides

shortly as joining. other was here up Thanks no market. as quarter year in Healthcare. XXXX April excited It there's great Still NextGen growth for your continued start double-digit about this X. coming questions. good perspective. to the interest Well, going very in we in Very sell Thanks quarter, forward, our bookings being as for fiscal far prospects able

Operator

for Thank your participation. today's conclude does program. you This

now may disconnect. You

NextGen Healthcare (NXGN) 24 Jan 232023 Q3 Earnings call transcript