OMCL - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Omnicell Corp Second Quarterly Earnings Call. At this time all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Kuipers. Chief would to conference I speaker your Financial Instructions] like the to over [Operator Officer, Peter you. Thank Please go ahead, sir.

Peter Kuipers

quarter afternoon, the Good welcome XXXX second you. earnings Thank call. and Omnicell to

This other implied. is materially today from to subject Founder, and forward-looking Lipps, Joining could call uncertainties cause me include and Randall will risks, differ or that Chairman, those Omnicell President expressed CEO. factors to results statements actual

refer as Form forward-looking and reliance impact to call any XX, based a the more the beliefs statements. July of of that description made our change in on forward-looking recent filed date update the these Future this should release information undertake obligation on to For these with place passage other please press made and Omnicell time the The risks in aware reports and to this statements you not call the SEC with these Omnicell statements, on that may are XX, forward-looking beliefs no annual XX-K of detailed today, this SEC. is the the conference cause events XXXX, are be today. of undue all more February in report filed on on date simply statements we only. forward-looking XXXX of Please

quarter is for XXXX auto Finally, for cover business. this Omnicell will conference will update our or quarter Randall the rebroadcast duplication Inc. taping, Randall's the XXXX. third call second of of without written our After any property I on is of the prohibited. guidance the provide and remarks, of expressed consent results and Omnicell our an

posted released and included Relations results earnings in quarter our announcement, website is which second earlier was the our omnicell.com. of section XXXX Investor at are today in Our

will also the same remarks in be posted Our section. prepared

measures are Additionally, most will our these included of some financial like to comparable financial non-GAAP the measures that we during call, earnings discuss announcement. remind this measures. GAAP to you we'd non-GAAP Reconciliations in

turn call me to over Let Randall. now the

Randall Lipps

like thank recognizing the once the and the afternoon I'd by nothing short and start and us heroic. in healthcare this to face challenging today. frontlines be are battling of pandemic of are again Good professionals continues courage who resilience your on the of you call for These COVID-XX. times to joining all

As impact partners long-term our our COVID-XX, believe remain strategy, is on healthcare navigate unchanged. which we continue to the of focused we

significantly We pharmacy are transform intelligence of the executing committed to cost. to outcomes improve automation, drive model lower autonomous vision services care pharmacy the delivering designed the and delivery help by to and

chain. to XX a pandemic were U.S. capacity, and approximately them our things. a only was our to regions spread analytics help different our equipment of visibility call, we as systems ICU but specific levels, hospital last More U.S. their not supply the there In we also in specifically, tools PPE in customers, develop platform found pharmacy. in that As that varying analytics hospitals, COVID-XX occurred rapidly supply health of in two discussed in and are focus drugs critical potential how several that a and strengthen months, there the did And health leveraged made pharmacy help response our and and for We better at lack industry recent help in internationally, patients. manual in to pharmacy critical and speaking and we inform and to COVID shortages response to systems health on COVID-XX of offering of of supply the to surge with smooth automate patient developed touches pharmacy, point sophisticated more also urgency system digitize And and automated recognize care. reduce business chain patients. is understand throughout a health processes that automation providers digitization bed increase on quickly to patient to launched in including medications, operations, react customers them systems, surges. a system to and rapid enable also healthcare for COVID-XX to care expand XT we capacity has groups

we more transformational willing are that result, believe value take they health our systems the what because a we steps in As customers these do. see significant to

pharmacy moment following We and development are are using we to invest on areas. the to doubling the in and our this Omnicell’s priorities of in vision focus time of strategic are transformation control within down that in on autonomous the those the accelerate

are in commercialization accelerating we last the of services the we announced professional that First, December year.

Second, to development. cloud-based and we momentum products services increasing the shift are of the

simplification, the to up that quote to continuing on better digitized pandemic believe engineering speeding We and these actions stronger processes. virtualized And we're fourth, in result efficiencies and and processes. even commercial and position cash of speed a will Third, conditions. post these drive we are implementation

be prescriptive key terms another announced out One, In will building with One predictive real offering, to time of actionable Omnicell on week, generally data supply the operational across clinical, cloud-based help insights August. and in outcomes pharmacy our that Omnicell the financial available chain. milestone visibility recommendations we Leveraging optimization which fully journey workflow autonomous pharmacy, last and analytics, and improve provides will the

provide ramping last customers of Shelter and systems towards time As parts a our had We been to in our little believe patients. impact a in enforced into that call, an Europe. of treat the U.S. COVID-XX of represents throughout we customer and demand Elective leveraging order had the of meet efficient our hospital One manner. many base. on the have to were a up COVID-XX was step surgeries place postponed COVID-XX, visibility analytics critical significant enable customers supply care prioritized to chain our optimization Omnicell At result of to in patients.

managing engaging customers were patients were As potential sales teams treating our were consumed Europe the new some bookings hospitals pandemic reopening, the our in implementations had their and the preparing difficulty are a COVID-XX of visibility time some U.S. with COVID-XX and also, base or with patient result, through with being increased. hospital customer a on admissions. call parts surge into businesses backlog last for our have delayed Since how they as from the for

patients better of while to how their and more a operations. COVID-XX treat accordingly addition, customers normal capacities understanding have returning to In adjust

greater products We for believe scenario planning levels. pre-COVID also have services for of environment We indicator and our customers' and the compared forecast. spend a that into to is visibility financial our surgeries leading the elective level

to levels We recent around availability base. have next surgery quarter, will to that seen and in to fourth elective elective XX% survey pre-COVID the our second levels in quarter, of to estimated XX% in the an L.E.K increase surgery XX% XX%. and quarter levels XX% budgets customer improvement in from approaching of the the A versus in spent XX% year Consulting third

vary believe regionally this the on a While may is and will sustained and of encouraging, that extent overall the duration surgeries predicated COVID be electric and drivers outbreaks. of we recovery likely

last disruptions business significant Turning and on to discuss to to as it was predict our disruptions be our would product second call results time, we product expected our outlook, these well that how difficult quarter implementations as new for for our the bookings. At business.

environment. plans the gained And revenue to the bookings, As product we impact time that we quarter. significant was during the for we progressed, as non-GAAP business and visibility own exceeded report expected. I'm pleased to internal our our EPS And of second as not each more the into

to more While business. our see positive indicators the for environment continues are we to beginning change rapidly,

experienced activity. in the encouraged to overall made regions, and delays point, surgeries no quarter know, level chain product fully available been we’ve The believe supply seen XXXX. increasing. quarter. the and we have what which In we have I'm were and during less has was disruption sales this At progress that have in we able and new elective by throughout some year. to the COVID-XX, second onsite some has that implementation bookings, knowing also in quarter resume second also resumed the we revenue lowest areas capacity, system by implementation Although many of we our represents the bookings pleased impacted been our been

of bookings and fourth the We sequentially through third that expect will revenue XXXX. and quarter increase

enable this the for services. automation of to technology extremely have virtual our have our that onsite to customers a of to continue teams through without certain self-install solutions implemented tools to We valuable, these customers be time, implementations some products enabled variety tools to difficult based we've perform need that our and assist been

transition with our engage tools have of In these intend We leveraging product successful we been to use pandemic. post our environment. leverage did implementation to continue these in virtual in to remote demonstrations, to a which technology addition, systems team and has virtual and sales to the accelerate tools, enabled

we've already element us go the we've years, Today, these like off. I'd really many our agreements. understand a is going to forward, in to depth the source as agreements. talked value of our customers strategy to For enables sole This long-term on important it signed about

XXXX, have two we health successfully market been with represent success the for expanding structure executives, implementing systems dedicated and vast XXX they U.S. the In top the realigned we believe the commercial strategy our target. majority focus available customer to last We in we this as on the of years.

those of end most XXX U.S. into by term systems, with a than the the more source years. with entered to quarter, as healthcare second of sole of the health customers. of of a as Omnicell have are long And XXX definitive duration us, So, XX half five defined top current agreements

accuracy, management majority of drive the medication automation of sole to medication have deliver automation improved outcomes. source management levels patient and financial a we the to multiyear arrangements, With co-developed increased plan

So, an how XX five with we customer compliance, people. works the of the KPIs deck an understanding and each included a outcomes to This multiyear of Relations to location medication customer and increased portion medication deliver health of on website. to in example in automation our example plan automation next the health practice, planning of Investor have and posted in safety shows your system assist in efficiency, management Omnicell system years invest investor

wins will care. robotic their quarter -- Orlando improve West combines patients successfully compounding customer the location supply intelligence, six during with in-source region largest Medical IV staff synchronization enhance second Automated data pharmacy will the with expertly Yorkshire our all North health new at of Central Program, the West United in safety Population Compounding an to the Cone in million care, Carolina some medication innovative more in of an comprehensive of Harrogate cost. Walmart patient recently market, deliver sterile Health serving implement model systems in first and collaborative. of customer trained Moses X.X their will solutions, across Association to technician reducing eight quarter, to The the overall point advanced platform a Central Trust, than that Acute of during share the and our Now rollout x wide new expanding this and we our moving Pharmacy clinical one the supply hospital In while Dispensing H partnership system, data part chain be of service system our Kingdom. be Health, Also Center enterprise implementing collaboration technology, XP software openly Florida's to operational as success, international Omnicell its of include Solutions of our the locations. division Trusts Yorkshire Walmart launched announced Trusts a consistency NHS improve supply across help chain, NHS across to efficiencies

these We organizations. are thrilled to partner with

to efficient With to during our deliver patient for and working landscape committed challenging navigate back care. it a safe, will these help that are second intelligence Peter providing quarter We technology I'll times quality rapidly results. partners over the healthcare changing turn them high and that, with and

Peter Kuipers

Randall. you, Thank

the has in discuss both That has had their As quarter. product said, hospital in certain bookings Randall locations. will as in said to revenue restricted I been more a we the our access COVID-XX ability negative results implementations new are detail and staff impact and systems and has delayed later, for by on and bookings encouraged as second

was revenue over from COVID-XX. Our to point second XXXX. was revenue delays The due of of care, of $XXX X% and related year second decrease quarter series largely the million XT quarter in down implementations to of XXXX last

of in posted to was with lower $X.XX to share earnings XXXX. decrease as in largely the quarter The This earnings is a the in share share earnings compares of to Moving GAAP per a due in accordance share loss period reconciliation A decrease $X.XX. tax revenue, results share, our a as per per last operating result is same per second website. of well quarter profit second per as second to lower full included press non-GAAP offset on impact the release year. has of these income higher quarter it's factors expenses The GAAP of earnings expense. our the and in partially and compared

per earnings tax a again to was decrease year, was Second representing largely partially revenue, compared XXXX per to XX% quarter by on the in offset period expense. last share same EPS non-GAAP basis lower $X.XX $X.XX income is share share, which The lower decrease. due non-GAAP per in a

free activities cover flow uncertain it is was June and Now from to Net XXXX of at collections resulted six receivable March our days from up our were in our million from XXXX. Accounts generated last second was by capital, XX primarily improvements year. particularly cash second We $XX net during days, capital. working same lower million, during second due believe quarter. last balance cash partially business, we XXXX The unchanged during improvements record around these down year the $XXX provided $XX million offset million, quarter had cash like quarter period up receivable days increase flow primarily primarily by the strength accounts quickly liquidity, of $XX within in I'd and the sequentially. increase the cash sales operating as our income. $XXX the XX, outstanding period the was At in same to by million, quarter of for XX, driven from times. The working

remained liquidity strong. Our

million that we have As no XXXX. access capital to $XXX in place revolving XXXX, facility debt of June to of put we the in XX, credit committed had and November

savings second; in last capital the fourth; other of on discussed fifth; the hiring tradeshow delays first expenses These half we of and consulting reduction related XXXX. of certain As reduction actions delays, cost during all took and costs, cost elimination call, quarter certain expenditures. travel, of marketing non-essential elimination one; a third; include: we actions

In addition fees other actions, have compensation to incentives. for and reduced have we management delayed XXXX these

a We efficiently to autonomous zero-error we of our organization of accelerate transformation operating fully restarted as also are the parts pharmacy. certain ensure that as as possible we

organizations. As previously primarily decisions. eliminated and reductions of a XXX engineering, result, these of were within result Approximately related our announced to manufacturing two-thirds we approximately the organization a surface strategic roles

million $XX require shift offerings market. actions Our operating calendar an competencies approximately that business professional facilitates realize for actions. this costs to Overall, in restructuring, to the through one-third the second expect million hardware-based of our result our of development quarter expense different traditional during the and Strategically, volume cost year. to and reduction that we as these services, a to and savings additional was recorded shift here from to when we match cloud-based accelerates announced To $X.X this compared the to current better and skill expenses related the expect XXXX of engineering sets. XXXX, $XXX We $XXX pre-COVID change on-premise to million enabled XXXX between guidance, on And now us a almost original and this February services maintenance Xth, severance last million. restructuring year. accelerates services provide from we be this and additional operating capabilities color approximate

investments to these to business overtime our we operating We XXXX cost of growth. expect with to manage will and expenses continue savings performance demand driven increase as be the begin future majority to market limited of line in the the to would support

non-GAAP revenue Now to and our guidance, EPS. moving our

longer remains believe we uncertain, do outlook that to visibility term near-term. reasonable have into mid the the we While

quarter XXXX. result, a guidance we providing the As for third are following of the

to We $XXX expect total be between million million. $XXX revenues and

product We be between to $XXX million expect million. and $XXX revenue

between expect revenue And share service expect and $XX be be We $XX per to between per $X.XX we and share. non-GAAP million earnings $X.XX to million.

pipeline one budget, at by bookings availability varies there's the as approach of and COVID-XX times, within level impact our taken have a variation And regional region. We to of also resources, region.

third bookings the the do third provide the expect to quarter from do quarter the fourth quarter for second and increase quarter. we through product we this While guidance at time, from bookings not product through

go-to-market assessment, term refreshed long partnerships. our source including have of strategy we term market sole our Lastly, long

updated Now income. as we to a of revenue we return framework flow our free XX% believe margin long We towards that operating post financial path percentage term a the pandemic goals. conditions, net and XXX%, have strategic XX% XX% offs XX% cash non-GAAP growth, GAAP can to and between organic goals

we'd While the of open the to will for we like than to With duration that questions. suffice initially this believe uncertainty given on your take long achieve longer we and term COVID-XX. that, call framework, expected, may

Operator

Hewitt Instructions] [Operator first question line Matt the Capital. Craig-Hallum of from comes from Your

Your line open. is now

Matt Hewitt

thank little and regarding a giving and you us QX. at afternoon, bit Good questions least of the the for help taking

current a And from procedures, environment, selling those evolved where the in how has environment discussions starting you bit changing? little elective the maybe about are could maybe as to are Given for the talk some to June you? today, at areas what are reopen how May customers telling we're hospitals to

Randall Lipps

and The of month in we're of where Well, discussions almost I sort quarter, access. every were we've getting kind or every was every of, in are they QX metric I think, almost continued mode. can continuing dip off, below left think on a discussions virtual those more

to healthcare even just And So, at decisions time. to just that for think discovered have that make with more systems tactically, have they're deploying present. like operate medication over capacity, I good sure, strategic continuing that but to going full automation includes not COVID

sort been remember good the that in their a out it's good think everybody but level is they or just, you've everybody normalcy. to L.E.K it and and how running So, full And made I making and full at but study that. are a watermarks eventually that just hospitals, good businesses mode is indicator I the hear yet, to keep got surgery decisions. has of has point And, on toward movements XX/X really live the back these elective not conversations, proper they're think discussion to the figure of XXX and to entity

think that off. don't I So, far it's

Matt Hewitt

table American and talking $XXX medication net you was the I for Association the when dispensing are hospitals. hospitals five the the of maybe Historically, and being I'll this cabinets talked to quickly just and back to think can given then of elective losses and budgets CARES know hop up the ’XX. follow to and that's how to How necessarily Act. but environment as back And these that I a the close and top get quickly expecting challenging, behavior item after procedures their first to look not rebound Okay, trying enough. back obviously quickly how equipment there's current well, about able your back a at that? you black about but you've a software think them are with, then maybe purchasing ’XX Maybe half buying very kind you. disruption queue. as start the there get into of Heart billion and in dealing to and environment, I'm year, of contracting? they're Thank return? But the to into return

Peter Kuipers

Yes, is this Matt, so Peter.

So in of we've I infrastructure priorities. two past, the the always automation think the our top that or be we've top to considered three in said solutions

of we that at hospitals, if we May. the Randy that's third So through the of well views the and you in think that increase will, the fourth they quarter the month will polled positive from momentum, that a net activities product like from year through third quarter the margins and the second hospitals couple operating the believe But the as bookings. on pipeline, in quarter. you And unchanged. said report in through see earlier, sequentially profitability we the Kauffman There's a in little also bookings bit can the of different Hall as more kind for look on quarter

of would from hearing question. and you a guess, I than positive think perspective, we your more caller ever So were

Matt Hewitt

Thank you. Understood.

Operator

Investment. Your of from line Variety next David comes question from Larsen the

Your line is now open.

David Larsen

various done I so beat a of estimate you about your to I product mean, your Can consensus please? well. versus bit you're some Thanks. obviously ability revenue think these mean, in remote I be deploying products, talk I much can virtually a deploy onsite manner? how little as mean, our and your solutions Hi.

Randall Lipps

do the Well, new system of a when wizards that if up to these it's of it's make employ, that impossible There's really technicians they last including systems I almost deployed think not customer. technologies, first to if almost XT it's it virtually steps can make a set a Care mistake can live. majority bring the customers or Point time be particularly

only So, been quarter. right manner. fact, deploy deployments of And that that, we in and and virtual wizards our that kinds in technologies just systems, these a like of found of was deployment have most to out recent choice as response our done the and these oppose things rapid away, in

our single and having in a So every hardware people can few. that's now we And of people set there. the actually reviewing gaining or up some activities some installs of or robot quite are help to the of be pre shipment carousels. that go pre But up bit more without done, a it's come set being product live

most software. having the avoid of time side can't the of most installation there, our those even side but You the people software, on is and customer

think there. I and have So a lot we flexibility of

David Larsen

mean, Okay. counterintuitive, just seems was bit little very a given I hospitals good cash very flow more, And in low. then your quarter. like rates one this low, it actually It's were that occupancy

that? any that not? that, expect thoughts continue And what on would I or trend Just to drove mean, you

Peter Kuipers

three questions are David. Yeah, those there,

the we this So strong a We base were customer very collections and overall. believe quarter. very cash healthy have strong

see. down a COVID we that's strong prior much forward, that forward of good actually admission flow understand is from X% giving currently levels. specific anymore cash it Cash So our From so are expect and not going that of guidance. have level, perspective, without providers collections to within admissions partners going pre we flow hospital an to

deliver had and cash to flow. a the quarter we’ll we So believe good continue result in second

David Larsen

great. Okay,

to of are though think elective I admissions themselves you're of back at heard So saying. I even time it's to a XX% just little pre levels. say ramp you bit procedures That's going COVID take what for up, that

Peter Kuipers

we've heard capacity providers a to some well, so... COVID XXX% and that pre XXX%. what is obviously them then I systems can they the as what hear admissions to Yeah. versus That's are at of are what see we down above maybe hospitals Depending talk we health on we to, who above talk X% and and But heard. roughly some

David Larsen

a good quarter. on Congrats thanks. Great,

Peter Kuipers

you, Thank David.

Randall Lipps

Thank you, David.

Operator

from the from Fitzgerald. of comes line Halper Steve Cantor question Next

now open. is line Your

Steve Halper

that there Hi. just you relationship the some additional mentioned Walmart details provide on call and what doing you the specifically? during you're Could

Peter Kuipers

our platform that side connects case, this Yes, use. Particularly designed has is the our the Walmart voice retail IVR the enhance platform pharmacies. other our and and options revenues is is in but patients with the most they med some recently, synchronization of of PHS pharmacy just need or other your retails on go to platforms they month a some so where of premise patient month, the the once all have filled by platform And systems or and you that -- a should appropriate did get a the meds get them one list find their delivered that through really into reduce come contact and it once to time. really side at

And take so it retail with over I to out had all customers. which rollout at months we're this rolling longer Walmart, before sized least capability probably other to customers to medium now maybe six and will Walmart a think large, we've little to

Steve Halper

get to all pharmacy? is intent Walmart the So, into

Peter Kuipers

it. and Yeah, they're controlling managing

still yeah, So, matter it's wide, already one a been just that's of the believe I approved, enterprise rollout. the

Steve Halper

Great. Thank you.

Operator

from question Wieland Sandler. Next Sean Piper from is

Your line open. is now

Sean Wieland

thanks much. Hi, very

for I want COVID the the watermark, now right numbers confidence the better and that, gives QX So, getting all uncertainty considering lives any was say what outlook our of the understand on bookings, back to the half for aren't year? low you the to of that these in the better just

Randall Lipps

have down likely confident with stages about think spend, And are where capital think I the to it. they track spend, with customer the our the we our so just and we there's at heightened I a activity with bit. model, levels quite and Yes, likely every of carefully to various in inputs, sophisticated pretty shut feel pipeline

that coming remember quarter quarter that of or for have in quarter. to they even XX maybe so bookings second first bookings delayed been months, in lot really may X the things got and You discussion are a are from months, been have

accelerate. And in three continue can we of quarters time cases long two have is pretty some a that decisions, to these they delay for these pretty high so of confidence so a or if

Sean Wieland

for will full comment, And or the if be you bookings sideways XXXX care year versus down to up, ’XX?

Peter Kuipers

original found on be that we it's last full to guidance What the the going call is year. for below

Sean Wieland

but at Right, original year-over-year. guidance, below just the looking I'm

Peter Kuipers

bookings giving number time we're a year. Yeah, the at for this

Sean Wieland

Thank you. Okay.

Peter Kuipers

yeah. excellence, of Order

Okay.

Sean Wieland

you. Thank

Operator

Next line question from the comes from Colliers. Gene of Mannheimer

Your is open. line now

Gene Mannheimer

conversions, raise amount afternoon. make changes impact Good issue of appetite about wanted you're of from this seeing regarding hesitancy that swap XX% competitive have hospital’s bookings. to there's to in Thanks. I here it I so, talk you the imagine I environment a just competitive about historically, outs of fair of now? can been think that? how Thanks. an XX% much your How's trending to

Peter Kuipers

Yeah.

us have upgrade Omnicell it's but well some did biggest now. on So, pipeline not the on conversions of competitive year just we XXth Also competitive course, some we've platform Investor bookings conversion, we quite bookings well. growth, the a one as we've drivers to able had important believe little actually new I got for are the year, the revenue this on number as cycle. this good historical the time expansion to color be have important driver conversions. with Maybe at Day, that earlier a say to current more customers, also and then Competitive the we actually customers December think care,

Gene Mannheimer

Right.

Okay, there just of for examples? a if as about others, more or you Peter. And Thanks. And that a that’s couple reduction the that, in talk thank certain more whether you force you could were than Medicare fair IV bit impacted enough. product implemented. little Were lines

Peter Kuipers

Yeah.

of remarks we So had what thirds the right. in really about two are there the strategic, realignment prepared

services professional services. from service our or we accelerating of fix that to last break transformation services the So announced we're December, maintenance

the So one-third about of there. that's realignment

The the to based capabilities from the will. hardware other really second -- more cloud skills on-premise move is sets engineering third third if skill sets, we where you

that's over is it related, and volume third, a by So locations. various

Gene Mannheimer

Okay. Perfect. Thank you.

Operator

from Sidoti. line comes from Next Ramgopal question of the Mitra

now is line open. Your

Mitra Ramgopal

Hi, Yes. afternoon. questions. Thanks the for good taking

that the and First, you growth at seeing XX%, Peter, growth and as buckets retail talked about know How from? the long-term XX%. is based where cetera. going et look you we've pharmacy in you're talked Walmart, care on central I relative forward, you do coming terms the of think institutional those conditions to I of of about see And point

Peter Kuipers

the provide roughly Mitra so as we of year, pharmacy breakout central of direction the kind December That’s then, unchanged. roughly growth specific XXth directionally the presented to kind between we is two. And point compensation, care. are of of to is XX% so Yeah, same but where last of numbers institutional that want right, XX% the in of on points retail a they don't higher couple than in

Mitra Ramgopal

have then use I was the continue has thanks. been Okay, if goals it any objectives building or keep of just building? let you are And pan right or obviously, or wondering cash nicely. terms now there in

Peter Kuipers

keep strategic is that as part so, used if also that part potential building, be could M&A of strategy, well. our as strategy, Will acquisition of attractive there's cash depending remains

Mitra Ramgopal

for Thanks again taking Okay. the questions.

Peter Kuipers

Thank you.

Operator

from Stephen. line Scott question from the Next comes Schoenhaus of

now Your line open. is

Scott Schoenhaus

afternoon, know the Thanks but you apologize missed taking base out. I this, for dispensing usually was I my if quarter? on with your you guys. installed your automated did percent your what -- comment Good that question. I for the of legacy give

Peter Kuipers

Yeah.

back So today. on assume we our we're go you website. remarks, XX% in find we program now, at will prepared and didn't have it but And the

Scott Schoenhaus

Is the commented you earlier stable see guess regards see there's a that to you or upgrade going up to birch. up that easier case? Thank less more pick installation and that. that as I you, in Peter. to remotely follow the that the do percentage continue is call, And believe risk that I as even forward? to Do should in So you

Peter Kuipers

old answer, made it's you will. call. the said recycle we not we that is that past believe a think a cycle what this if But, you year yeah more perspective, an steady there. with when if a curve, was What from will. Randall I that the And in expect that of upgrade Now, we our nine

to also benefits rate, customers the perspective and far as has walk and expect speed, the just XX the mid-XXs in the the well. because as percentage We be as it the the also functionality from Windows narcotics capacity

yeah believe overtime increase strongly that we will So, that here.

Scott Schoenhaus

it. Great. That's

Randall Lipps

you, Thank Scott.

Operator

line of question Your from Bill last from comes The Sutherland Benchmark Co. the

now is line Your open.

Bill Sutherland

doubling a detail. not four more hear if some quite your comments about little down in talked on on I or question through in those not, Randall, you're those this couldn't answer. everybody. thanks, James activity Hi, the development areas? maybe But I'm initiatives. four sure, When go touches

Randall Lipps

Yes.

more important as need them we pharmacies, process, workflow to workflow the more what's of our are in to of think their that analysis involved move process. the particular in operations we get customers is the sophisticated I

technology analysis, services which to have have and call up how professional roadmap unlimited center, the of because which becoming almost clinical. to its consolidated so is there's compute the so that of much equipment gain chain to what places storage cloud. bandwidth. setting many we've capacity operation, do unlimited standard. and customers I service up our for got sophisticated generally supply many cloud do includes getting move they that front And understand power, So, a more to functions the safety, and exist, And because that, efficiency really gives to and to more locations, a up And the us

whole resolved got technology process as time, to We've on now. convenient more be an for the things build opposed drawer both predictive And us RXT on. that the before it's cash, predictive acute lands our send when on when can really cabinets that us And so costs. simplification down Omnicell the the way fails. when that the will operations to sent is We've of way throughout And groups the to And for anything it's and long the be over just calls service being allows eventually and now And as that automatically. example situation all calls to with shrink arrange the would people immediately. are manually. that, after we several can really and how company to to the cycle. everything do this launched it major someone done predicted One of great able now its a way out fails a the hospital it on out and turned internally, And maintenance much digitization, we the way of speed room service then us. these we it lower us, cycle just ship, a so calculations do normal and door doing where when product, the lands, land. the commercial, the then collaborating does We're enabling whether be invoice, get we is big to of because it's for more more our get we collect, shrinking backlog installs This to charge, and or

to through went about in set huge different minutes to And and both both with the instantly, nine wizard to to customers, results. menus both and with take July And with that's just we go installing So success ahead and just up XX the one. with launch like XX a unit. of that huge then an success, example used for service people our and -- lastly

it Now through appropriate consistency these way. seconds less setting systems a XX wizard the as takes land well when as the and they of up than

that, really things on quickly efficiently So these and forward be being to of deliver this during keep our are we're customer. to moment to COVID, But out been push the has done a to in to able stuff people hospitals roadmap. guess and more to of time the I all them the

Bill Sutherland

benefits, So and going benefit I'm as of or way to there’s here be a mainly see this lots well? margin to Is a far beneficial growth obviously, as as you for do accelerate about it you to see the to all. as wondering I customer.

Randall Lipps

a down over benefit will well Well, has margin of Right. gross the the cutting big cycle. margin sending it the as time the And think component of out. line. as be I pretty a people And it been cost just

to you over starts a in when out play, time. big be have present, it send can impact to when just when And people don't you you certainly makes and you plug don't so have it there will, or to if

the the us present. don't we and to easier there or definitely to there have is have need over is, of the us but so to lot don't us. can that the do have a of which they to and do physically, more be because helped a phone things customer accept having self-install the We customer, easy virtually it mindset easier be might ready something, now it's for they and One for present

Bill Sutherland

Peter on up? What or highlight going main quickly Got just of it, percent on the and impacts would for sales revenue a cost sales of you a of as percent products. then as

Peter Kuipers

main in compared quarter. less to prior the driver the is quarter leverage falling the there Yeah, second

revenue biggest course, modest of and the increases the the in gross margin and this percentage as expect expect leverage earlier, as of well lowest like the a quarter quarters the of related resulting control Randall we and revenue. of we in And falling as to lower be costs that's I well, in year it some for impact. to so bookings So year, this second call quarter through

Bill Sutherland

That's Okay. figured. Thanks I what guys.

Operator

see don't Lipps I over back I for remarks. any closing turn the questions it queue. in Randall will to

Randall Lipps

believe their out elective believe operate not thanks it's again. Well, run summary, position or just we know And whether figuring in hospitals We the this how us a in in They And do full. low be full, QX patients. do environment. for can’t They us. to thanks to joining where is COVID for surgery today. hospitals patients of they're are

little we to first you the our the helping roll a about now time move with the I of COVID importance the that the we gives during is so, uplift us to organic digitization the bit necessary as they supply chains understanding were more through And hospitals Northeast us were of to I that of the of XX% XX% and a supply decisions hope after source as believe good COVID. in strategic pharmacy And future return drugs critical, our and The of to chain, and and that growth the strength patients. breaking in seen business will today partnerships with driver a is talk were the systems. make down. as that growth apex the deployment making think, we the explanation COVID we long-term forward that XX the have that for to really need treat the as the sole shortage we on are they the engaged the

strong And So we we well. strong our And -- really the move not move other clients just and we I think forward. retooling use future. time is our that we're liquidity constantly I wasting forward. information think, position to been With continues position help as for to have flow, company the our it and cash

Omnicell to like I'd work challenging that, and healthcare continuing forward. with they during again move for these the team difference in very their thank Thanks times do much. everyone So a to as for making great

Operator

Ladies for and Thank conference participating. call. this gentlemen, you today's concludes

disconnect. now You may

Omnicell (OMCL) 28 Jul 202020 Q2 Earnings call transcript