OMCL - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. Welcome to the Omnicell's First Quarter 2021 Financial Results Conference 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] I would now like to hand the conference over to your speaker today, Ms. Nemeth. Kathleen ahead. go Please

Kathleen Nemeth

Good financial welcome results operator. first the quarter XXXX call. afternoon, you, to and Omnicell Thank

those On differ the Executive and risks, call, Executive call Omnicell's cause Chief Chairman, will with could Officer; other Vice me materially today, CEO Commercial results expressed statements Financial actual Founder; factors are President and include and or that Scott Officer. Peter forward-looking implied. uncertainties Seidelmann, and Vice from Chief and President, President to Kuipers, Randall This Lipps, to subject

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

and consent duplication any Finally, this of other Inc., prohibited. expressed the conference is taping, Omnicell, is rebroadcast of Omnicell without call or property the written

customer provide today, update Scott first corporate After information. and website. provide Investor on section Randall's key perspective industry our our wins. and our you and an on On Randall where business. can other the refreshed our find the report expanded will Relations have our call will remarks, We healthcare sustainability of

quarter our cover will for for year results guidance and guidance. total Peter the our first our the quarter, second Finally,

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

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

Randall Lipps

afternoon, $X.XX We record ranges our the and in joining in Omnicell of start the inherent by this a I'm $XXX for us for of believe We and and end delivered the Good first autonomous off the results for non-GAAP proud quarter. benefits share evolved thanks EBITDA, pharmacy. non-GAAP million posting quarter. results to Well, the earnings significant of the year, EPS, Omnicell for revenues of reflect the is top revenue, today. recognition and our exceeded per the guidance outstanding non-GAAP solid vision trust customers' of the of and team

later in performance also the quarter execution for and first flow discipline, of more operational cash the review EBITDA results guidance Our reflects will year excellent of and $XX detail million, the in and strong full million. Peter quarter financial $XX the the non-GAAP second with and financial call. a free

Let's now our our pandemic the about life. put daily altered COVID-XX one since fundamentally year society and

over this sites, practices. During We've partners Omnicell work now enable customers we is element as believe efficiently. model. their and accomplish they healthcare well-positioned to them time. a that virtual we confident a medication through support our effectively our the been optimize unprecedented delivery recognizes efforts the It's We this we management focused their to medication a are systems, and modernize is time, year companies, this at privilege installs remote work successfully on management have of and industry last and implemented mission-critical care that we through our hospital pivoted like supporting learned and lot many

our increased systems. We successes. quarter customer contracts recent U.S. with XXX long-term number health the to sole-source the of turning first top during Now

largest of complex pharmacy. new XX pharmacy U.S. support A Omnicell's their journey workload, in We the top Omnicell and long-term agreement health agreements top implement health is system toward them history. the single systems. to now sole-source of wins autonomous sole-source and the with help One XXX have U.S. design the XXX has chosen

a pharmacy staff XXX enables solutions operating Through are relationships, quality for and where patient work strength Omnicell's working. of our We their and these the is together services new strategic of this with to This illustrates achieve execution tech-enabled closely solid and and and us understand, Omnicell infrastructure within automation systems to unique to is we selected competitive We industry, and market addition the And time cloud-based underscores improve implementing of truly Scripps the dispensing This been long-term spend pharmacy implement of results to customer and relations land value agreement. a Health their is of honored our our matters critical patients. our our our believe sole-source and have caring performance. partners with that us services. with proposition. most, for conversion providers second together power win workloads. as enables complex and of believe our design It the the a that intelligent most are customers that and magnitude for initiative strategy share quarter as rooms, automated care products areas gains it this this opportunity got care partnership, will newest be for start innovative

to quarter by the several services for advanced such and Omnicell technology-enabled Omnicell and which continues our strong results Importantly, portfolio received market. subscription-based delivered well EnlivenHealth XXXB, services includes be as the One

continue autonomous we regardless to XXXX continue Company As business throughout work hard I've services learned this a the evolving in through was business technology-enabled we a cloud. shift the the the years elevate and software nearly that to are undertaking product company pharmacy, years, by founded, vision of evolving powered the enable and culture. XX our we since from marks a strategy

to ago, great years execution. instance, For a Scott Seidelmann, our has commercial organization vision, and of our assembled responsible for since been that [indiscernible] has three recent I team Scott realize hired strong some

quarter critical Christine to and us high-performing newly is is during investments Omnicell the year, brings of time. technology years of welcomed People people first the at the this in companies this which mindset, Officer. more role and in for Chief so requires Oracle, software experience Christine in vision Mellon our culture, than we pharmacy created role and CSG. such XX as Another autonomous The most recently, this of

the years in employees have during the And have a share positive in the our diverse great their to our by the delighted have dedication welcome challenges our a despite backgrounds last, individuals commitment make to to Christine vision many the people, the seek who Achievements impact We from many, team. world. to by been pandemic. driven of always brought shown and efforts, committed

of before only inaugural Now which that to to released ESG global responsibility turning many our but shareholders to recently the corporate and over Scott, wanted our have already community. to and accountable, recognize seen. report, I our We probably customers also you highlight not are we

continuing updates diversity We OECD helpful provide are hope the first across sustainability find internationally We focused responsibly our materials elevating on innovating progress. report and and to recognized ethically on to our look to inclusion to our initiatives. and sourcing our and we forward guidance, drive by business,

to to Now continue in the to to we add to excited and remain Scott. to that, real communities turn drive it in confidence I'll over we I serve. value And growth build support and beyond, Omnicell. appreciate and looking well-positioned ahead, We're on confident we and your XXXX that continue are believe with ramp-up and

Scott Seidelmann

Randy. you, Thank

services new on some the we done over Before highlights clearly mentioned our we discuss I design pharmacy of needed from delivering regarding to buy. that by Once strategy, a recruited and briefly product products point and focus just organizational engineering years. technology-enabled that management to sales Randy primarily we and services, the quarter, added one Gartner we single software class to progress translated expertise nationalizing technology-enabled the few one evolve design by structure account organization and work -- our structure into the in the as organization that our customer significantly could in best market we has organizational the to that changed the this expand elevating success organizational hardware last cloud. management, through built on software on customer recognized we with And experience autonomous vision been transformed that customer product want development. we have and leaders also our deliver customer the professional our and And even for task, design, services, We function.

that organization have in our competitive long-term the realize our issued exciting So The pharmacy. progress a transform responsible helping continued customer largely of are combination strategy, new the our team, expansion to to design for vision of fortunate today, seen the autonomous is Practically, and can and world-class which be partnerships leadership we results. leadership in us the commercial conversion. of

the first agreements our total number sole-source to As in Randy of mentioned, we the quarter, increased XXX. bringing

XXX and largest hospitals in in XX deliver history. medication XXX Our U.S. system, facilities agreement than management XX selected which Omnicell Company's contract was its a to health solutions of sole-source network across more the the top our

second position our North off solid signed a our And long-term Health Scripps and solutions. to this quarter we start the competitive underscores its sole-source Additionally, cloud-based This value a agreement Omnicell XXX and XT Carolina-based intelligence our new implementing market with Through partnership, as dispensing -- is of with proposition. four-hospital a XXX addition systems be system. automated in will agreement. its of the our conversion QX is

XT is with the will be from footprint medical the across health center automated competitive expanding integrated for network. the quarter their their dispensing system highlight that conversions academic Another Illinois-based

that services of winning reasons is the advanced our sole-source the of is One unique market our strategy because portfolio. in

and some health combines One reduce drug experts risk. inventory, help cloud-based provider efficiency and of the Omnicell software, analytics the technology-enabled increased service Let's walk is that compliance manage to highlights. systems through

Central XRX Recently, efficiency experts combines to multi-year market distribution. Omnicell provider as essential Medicine that subscribed agreement in York. the situation. WTG continue robots, part and and for is a and service increase West analytics of to this help oral to unique One drug technology-enabled We Virginia-based demand pharmacies Pharmacy strong sole-source dispense our health service New see [indiscernible] for systems

capabilities XXXB QX, vision. with a software, health And you a Christ agreements Network improve healthcare We economics the the system multi-year largest our system this Omnicell Health recently health very we system of and analytics and and to pleased and the technology-enabled provide in with workflow integrated is increasingly strong Also, the agreement. and under first see relationship Less this not-for-profit combines to program. channel life in systems population Omnicell's payers are to fully health example And an organize quarter, Omnicell this the Omnicell solution In largest Northwest. experts experts for the its with integrated launched services we population. of solution, XXXB workflow that community this Midwest XXXB service positive into the pharmacies progress. Aultman update long-term forward demand autonomous look XXXB at-risk Texas financially we've QX, business, power to to receiving implementation after Omnicell are months We to market great and analytics signed critical the acquired combines services in increase we service Omnicell software, one our health in and a health partnership help and acquisition. technology-enabled on of and six efficiency, on feedback the Health to than of continuing Hospital XXXB CPDS. Foundation and with find retail their currently, expanded accelerate the is complex a in help technology-enabled that is pharmacy solution, existing survival customer

improve retail technology to plans solutions patient are health outcome pharmacies engagement We advanced patient reducing helping through while and cost communication. for in

schedule the global their reporting automates in new CareScheduler diagnostics, accelerate pharmacies enable and members an We for EnlivenHealth messaging, all texting, immunization an create will and life immunization entities Twilio, communications blood interact week, cloud-based creation to and we administering solution a of and communications pharmacists via a partnership COVID-XX patients to the with the of SMS a patient in are role enabling technology. leader The vaccination, important experience and the that with interactive omni-channel truly very that new allow pharmacies announced that proud traditional using partnership customers in will and add efficiently services digital launch personalized capabilities in important communication app. value in box, other to scope increasingly we'll Like to health, chat scheduling, offering frequently and and service. to a to a customers. healthcare manage SaaS platform Google payer healthcare distribution continue retail life historic for increase this deploying effort. features This and email and

We advanced autonomous pharmacy early our the of the in are and development vision. portfolio realization of still services the

excited by we overall, health. and performance long-term are recent our However,

new with with key earlier portfolio revenue our we the and combination sources Conference this long-term only enforce channel services creates at in with revenue our revenue requirements targets we growth to not and Annual advanced streams Morgan our superior to shared services The a but powerful portfolio Our achieving advanced economic J.P. services confidence, of contract there. it's of Omnicell, strategy, recurring XXXX, the advanced year. Healthcare you sole-source full the

a are to total that revenues XX% to forecasting XX% XX% As XXXX, services a be of reminder, revenue XXXX which in advanced would timeframe. CAGR by in

our our and financial call Peter full-year to Now, I'd QX operational first Peter? to the like discuss to guidance. over results, turn XXXX quarter and and

Peter Kuipers

you, Thank Scott.

strategy strength making our in by nearly working. results furthering the percentage an of value automation and vision proud with demonstrate financial very progress with workloads. customers of the Omnicell platform our first business team resulting system I'm their execution embracing we're consistently Healthcare strong efficient continued the at flexibility, autonomous pleased are recurring high in revenue us. solutions partners members Our pharmacy, increasing see and and pharmacy X,XXX commercial, advance the and with autonomous for as is high visibility, our The quarter the solid Omnicell. pharmacy model operational they a who are of fully us partnering

to our Turning results. now financial

guidance XXXX, quarter quarter, of 'XX above over our over $XXX revenues quarter the first million XX% of increase million range. and and prior the First up $X

that's share with full our website. to our earnings per the and A share in GAAP in [$X.XX] in GAAP and the on quarter quarter results fourth per quarter non-GAAP of per reconciliation compared earnings per of $X.XX in release share quarter First our accordance first XXXX, last of is was press first year. $X.XX included posted share

in $X.XX to per last were quarter same $X.XX share First non-GAAP previous the earnings period compared and year. in per quarter share the $X.XX

from flow Non-GAAP this our quarter. $XX exceeded from cash to The was quarter by this of million stronger quarter year of the results in drove revenue primarily flow an increase timing cash the strength favorable would trade the driven to the prior from first non-GAAP revenue XXX divisions. prior-year supply and million $XX driven EPS quarter, XXXX. non-GAAP margin million XXX to the flow and points first first quarter, was XX.X%, by decreased mix expense. cash initiatives due represents margin travel increase first was million I from several for up by $XX from strong was the gross such operations. end quarter. And a $XX same decrease the the and basis cash quarter at First increased items expense from compared mix. expectations balance Year-over-year, previous million to was quarter XX.X%, quarter headcount during due our primarily as of the cash product the and first $XX slight the expanded compared and December basis previous leverage, million, The million volume chain EBITDA points, performance. the for to in $XXX slightly now the $XXX as quarter, of call At like of XX, of

decrease price as and $XX of when $XX essentially and inventory supply the to with XX compared conservative terms quarter, XXXX, as days an quarter days a last of million quarter of of decrease quarter first first In result efforts million, days, and global of improvements days from the for increase five management. sales and XXXX, XX, XXXX. first chain receivables, was a of was outstanding quarter prior the from flat a the Inventories of the accounts XX March

I initially reminder, guidance, that in like Conference the turning would walk and Before will the framework the earlier to I Healthcare as walk Morgan at I long-term, through to mentioned, J.P. a we we presented through earnings call. our the reiterated now highlights. year, this

our in Our five and revenue nature highly which visible is differentiated drivers. truly key base,

product First, which year. and expected quarter further to is increase backlog, the the during very first robust during increased

of Secondly, long-term U.S. the centers. now sole-source agreements with XXX healthcare XXX top

base XX% high that. our recurring growing of at roughly of in focused Lastly, on a revenue of all revenue and nature, percentage we're while nearly visibility, our is

business economics. -- by in This substantial previously XXXX revenue non-GAAP CAGR We're specific reaching margin driving due XX% to As XXXX, $X.X to a an -- expected XX% discussed fully hardly advanced total high is approximately margin revenues a forecasting to visibility our EBITDA growth have total in a like grow which company-level of in to billion with XX% revenue and with of and XX% revenues targeting we revenues XXXX. [indiscernible]. a is XXXX, margin revenue XXXX. area through of reach by date high total of to CAGR $X XXXX XX% of Omnicell services, to to operating billion [indiscernible]. non-GAAP revenue It's We're XX% revenue

a Company that to manufacturing and we well of and including deliver customer to benefits factors, very economies well savings, fairly be increased There on scale, more scale positioned for and We more business have exclusive XXXX could built we is target. business. are long-term, processes to believe able partnerships, the mix,

As growth into some we business, scale redeploy innovation expect of continue savings to to fairly we initiatives. creating and the these

to on full-year updated moving our guidance. XXXX Now

strong -- non-GAAP share full-year are EBITDA non-GAAP raising year, a our earnings start to and Given we guidance. per the

billion. are And revenue we As a expected $X.XXX reminder, billion expect our bookings $X.XXX and full-year range between to $X.XXX $X.XXX XXXX range total billion to XXXX product between billion. and

now non-GAAP XX.X% XXX EBITDA basis increased XXXX. and ranges, the for $XXX for $XXX range XXXX, $XXX EBITDA revenue We million. million. product non-GAAP And in EBITDA we between to expect $XXX approximately to be million and between million. EBITDA revenue 'XX points expect margin We updated represents service million between total to expect $XXX approximately to be non-GAAP million $XXX and up Using midpoint this

For XXXX, margin an our the share toward expect $X.XX the XXXX in estimated volume assuming EPS earnings and now per EBITDA rate share guidance. margin progress be to $X.XX between is XXXX non-GAAP XX% track believe tax of of effective on non-GAAP we're per We non-GAAP that We approximately lending than per expansion XX%. share.

the the guidance. XXXX, For of quality providing second quarter we aren't

increase noted customer As and the timing supports our we business we which to in revenue continue expected of the invest invitations. quarter, last sustaining in

guidance also market second conditions. given global additional quarter freight Our costs, includes

and and revenues total expect be million and We revenues and quarter million. $XX between product million, million service million second $XX to $XXX revenues million, between $XXX and between $XXX $XXX

of midpoints quarter ranges, expect second million. EBITDA quarter-over-quarter the $XX this $XX million non-GAAP of We non-GAAP second to quarter expansion EBITDA estimated Using basis guidance margin points. approximately XX the represents of an

second assembled, their progress to forward With XXXX, financial for unprecedented open quarter call non-GAAP results per coming as days. questions. to times. system for job management and transported mentioned, these expect our we $X.XX] would Omnicell for Randy positioned work, were and efforts all many] thank start [$X.XX your done share and like with in that them tested and you the and of customers like medication to earnings has the the be certainly, [while healthcare strategic team an operational during a We The to systems commercial, is chain manufacturing fantastic I this between had We the option supporting for and partners automation to to the in remained very pandemic, we of -- are first updating fronts. would critical for on-site management accomplishments. we remote And that, our not supply our pleased at force. and ensuring the And quarter the look access

Operator

Piper comes Sean from first of Your line with Instructions] Wieland [Operator Sandler. the question

Unidentified Analyst

this on Thank Sean. much. [Jess] guys, And Hi. is for you, so

And asking for exactly interested about for customer be new how solution details COVID out? this would management and process maybe talk an how you revenue it driver? just, that bit this? I customers And innovation Was was on just incremental at And was to little helpful? the customers the think was a your existing developed? rolled you we're could if more a driver vaccine any and just know

Scott Seidelmann

is that. take Scott This Seidelmann. Sure. I'll

the we think development was I launched brand name. -- really vaccination really as around CareScheduler was solution, innovation the of focus process our Jess, which COVID under is around the the question, what

is. First actually CareScheduler, of what's all, that

heard So COVID things, platform we're the COVID and in pharmacy the administrative in of actually frankly patient things. Clearly, want to around frankly, just past, life expand focus pharmacists have is to and treating and division, start on in customers our things queuing to -- [indiscernible] supposed retail patients practice the pretty pharmacy them so health that things to loud the retail simply pharmacies up compiling the cases clear and one pharmacies as scope and for the aisle, do of going let do their tools on from some workflows etcetera. picking and as doing -- to that have to pharmacy, pharmacists automate with the not I that Once that vaccination. basic capabilities now clear in we

add add So create into capabilities we to incremental value. are which and certainly eager and value continue that platform

for one I as So quite X-month think think question aspect the now, about fashion, quickly over to was software new that lower will net that they your an the on upgraded the that identified the incremental both really to be customers The the additional for charge it amount we about predominantly module and typical we through I and develop kudos customers have of SaaS period. right which a rolled out existing customers, platform, new and capability we if think, to They platform customers. and is can team customers. answer short is that existing

could to So actually used fast it been it's have be not only many and wider was, of like very the product market. think And the bring for I that. pandemic proud really deployed in team's develop I our quite by doing in and get between things to we ability

Unidentified Analyst

Can just on that. one Yes. helpful. quickly follow-up I That's

they patient nothing essentially or Twilio comprehensive So to in-house pre omnichannel driving how solution? communication the a from live are engagement going and

Peter Kuipers

workloads form to follow voice enabled and of the get of quality one in text pharmacies in modernizing the in the to I automated margin those needed like be our the IVR, market IVR, set that communication and the delivering but past. one growth partner pharmacy will allows to might the we best-in-class developing message of for us, our really patient enabling void of us work said, form up performance were we So engage communication, providing partnership we workflows those is debt those and really problems, sort our instead the it ourselves chat of Yes upgrade and resources solving add and activity with a not online in other and of it basic look for us people. mobile, provider that on

So on we're this to felt going workflows about that to talk going work about. be those complex

Unidentified Analyst

Thank you.

Operator

next your Capital of And the Management. Long Bearing Iris comes question with from Bird line

Iris Long

thanks guys, question. Hi, for my taking

the So we pharmacy as in guidance? and more as I talk is now or I then you good are right to I'm guess a have a guess and follow-up your percentage about guidance guys to continue you, add embedded the if how is think assumption the what EnlivenHealth questions. of the the as to can platform. about features big total business and wondering retail you what's you do assumptions growth revenue

Peter Kuipers

Yes, this Peter. is

In the business side in So you with is part business pharmacists patients the company. the pharmacy software the Right of before total are and It if even to retail of like now really them. down upon compare think the maintenance our we smaller part pharmacies. growing maybe a and engaged you is business. approaching discussed line of with I the retail the the hospital

Iris Long

on that to And module it way is model of model number then pricing right the the just the there, think is about subscription it. got it? Okay, based

Peter Kuipers

all the we if subscription Yes, model, it's it of a its of in combination services peers. was sort out could generate of and

Iris Long

have strong are who guys Okay, you one, all great. interest. other And then customer only I the seeing is that question

can maybe One similar compare question to pricing the software remind of can what there, going So the you solutions wondering guess some what Omnicell One market the if I forward? model on same the strategy us and your other then pricing you I'm Omnicell and

Peter Kuipers

to the Sure,. the The other One of question-and-entitled offerings market. Omnicell compared some in

not healthcare, pure couldn't in probably that a so be analytics in healthcare actually complicated. getting I from the to change Boston, react be analytics interaction want of think not would the one I challenge a the operator position hand that Omnicell and customer working they're the times sense the workflow be because the and capabilities to [indiscernible] challenges capability can lot many connected actually in the in and data

So work success out hand that dashboard to in One predicting really that outcomes. mentioned they provide some done important. stock customer of interpret get to in someone may send what analytics to, think expert to may assigned customers with I have the engage action previously pharmacy not shortage really is or with. the the And we organization be and the better that we work connectivity to integrate is trying are we've just that and between fashion attention created actually former Omnicell potential closely workflow really accounts is that data is very a instead analytics that that extending been is really is pharmacy little the in success to one to customer were so the and a in of growth One on work with a creating One Omnicell task Omnicell and notification this

So expert, that differentiated. is that's true think are customer outcomes outcome, it much a one the that achieve highly in integrated very the sense hand, it the to and workflow service on customer different we on this identifying during the is there's we're an on

dimension unique I of other compared that, service one, very Omnicell second when to One second optimizes efficiency, compliance offering that. offerings. to with to it's what think that is the The the optimize optimize inventory, provider breadth you

Now functionality will to continuing offer and demand continue the add drive to service and for approach We're grow the turn. is a our in and value single that that combined, again deliberate subscription and be customers the those truly not to subscription very that modules were with more the add in service. that

Iris Long

question. more Great. may If add I one

competitive lot conversions. a So, talk about

driver So main to is I'm then how wondering think maybe for unchanged FlexLock the there and what do you compared last year?

Peter Kuipers

to solution think And product I based the about company would how of as that of do really move workflows, lot the that entire few years those from but ago complex operation. enabled of so going you tech work is the of broader think there use is last talk digitize happen to ago we're a couple power hesitate or would just base. as a the as say quantity to cloud year, and can and done, I'd well, pharmacy a get product more years with seem to now we what doesn't we

better we our the product day percent but day optimizing so performance talk other ways product, seen the in whole in past working and them not about of guidance that by deploying it. We is out second go together help And with success different and It's the offering actually of of the doing not in the rate have a us to they then [indiscernible].

in which So, better condition had right assured supply want core resistant in the mitigate many the to the proper of time which the share is the has at pandemic presentation, right up people point. shortcoming ourselves been the

and So one heightened digitize near with do really in where better order and behind the near-perfection that I regulation, decisions we is the that, to clinical of pharmacy safety, sense growth. a where get get make protection maintain there likewise what getting on will we is basin to which counter to patient think out economics going the practice difference and and out get thing to in

Iris Long

Great, thanks so much.

Operator

Sean And your question of the comes Scott from next line Stephens. with

Scott Sean

Hi, Randall, and Hey. team. Peter

first my the is question results and on So guidance.

the occur the driven any that than this top forward guidance. change million Was line by $X in of range, end came you just color revenue product didn't revenues, above wanted there. top but full-year your your just in about the additional a anticipated pull later contract greater beat of timing you year? throughout product expected guidance to I a guys You

Peter Kuipers

Yes.

say would at December XX, we're up -- I into a know that XXXX, as backlog going So backlog the on the going end you was right. XX%, year working

you the full later at fairly year. still updating really Does with mostly timing the in [indiscernible] sense? we guidance, range, end but a if also achieve of So, the refer guidance, might it's of year aligned year revenue of in a the it's full quarter the the in look in top first timing, guidance the year, bit customer But communication. make did which that we so

Scott Sean

sense. makes That

Peter Kuipers

Yes.

Scott Sean

Yes. your record sense, given That Peter, achievable with track makes guidance.

talk some and the stated maybe that half ramp updates software other health, the can this I the been there new side, for multiple opportunities Okay. Omnicell the you in in QX. XXXBT you're believe about XXXB in these that year. So the more and the Then quarter of back questions. acceleration in service opportunities any guidance Your in enclosed traction we've Thanks a of more cross-selling? talking you stats on in revenues the the any quarter? last Is seeing platforms of services color assumes about And on life service and One?

Peter Kuipers

And Scott. there. questions Thank, multiple

and vendor, now progress XXXB. some cost and ultimately well. through throughout have long-term momentum. quite to for little announce the early if very confident of the do on great U.S. sole-source questioner we -- long-term course, [indiscernible] stock goal. and our owners be to cost -- addition we and that And Omnicell also announce as partners stay XXXB, first in we have of then, go within pleased health within earlier. the bit already the a there extensively. a did talked the do about customers a to we're opportunity are really the additional local very health very talked that cross-selling pipeline long there, a making in and nicely, able with software XXX more systems. only We well, So good source [XXXB] had different good a have about And those talked or top on is we XXX we We It's positive we some script really an not we'll momentum year, momentum there rich see and -- We talked [indiscernible], the that cross-sell in platform. really We growing the -- as

track So for we're on we pipeline, as ratio absolutely. performance well the and this year, definitely as move

Scott Sean

Great. Thanks.

your to Peter execution, Looking forward team. and Thanks. continued

Peter Kuipers

Thanks. Yes.

Operator

Matt Your Craig-Hallum Instructions] comes Hewitt [Operator next with question from Capital.

Matt Hewitt

a to start Good afternoon, year. and congratulations good the on

Randall Lipps

Thank you.

Matt Hewitt

the you given seems it a -- much the you competitive much but you've and like I mimic areas? it have added But much. up, landscape been way since feel the talk not like we've Are expanded say, seeing Obviously, about landscape. First think more trying it's feel from about software, other we the to won't they, guys are into competitive I kind or while match services, anymore? about anything I hearing has talked like one is, expanded don't got I as that of peers? Or just they your we're

Peter Kuipers

Yes. Maybe service, one maybe I'll and on take Randy –

Randall Lipps

every aligned everyone, there and are, want more because vision taking figuring for they and are the say know are approach, and a -- on seven, ten, really I is with committed Well, There these notifying the their why the always are but on you that them for. different have are to competition, where partnerships it's going. we're not services extent and what value think some. customers the kinds you to pieces many XX not for vision broader that And -- out and there's to And -- tech-enabled places many our strategic years and have we have that's digitize the single never where that are management. that's we're it's important are than And looking what just today, whole take a think Software-as-a-Service competition, us with so that. to approach space, we're there's medication depends I but and allows now today there, necessarily customers product to would take not the but us a always it doing in create you to these got are that to how -- in-depth you but of But is that and maybe most only I people compete we other see a continue of of they're And platform. going companies still they customers strategic it business. things

Matt Hewitt

it. Got

Randall Lipps

and I little we're than were what is we're different think we it a doing doing. what doing

Matt Hewitt

shifting And a bit. maybe Understood. then gears little

pandemic your the vaccinated slowing with of showing the mean then meet Is that down. signs people of incremental face-to-face? Thank in and number customers back enabling you. to the get be pockets may ramps can the With and sales? of from what in obviously, that sales driving And and actually teams service

Randall Lipps

Yes.

lot many we're if not for are. under meet to can that. of face certain we conditions, of you're customers a think is everybody, and mean face. And this I big saying seeing there, our out I But think more I I'm but vaccinated certainly, strategic.

financial face-to-face. need And so meeting do, just beyond the and strategic old-fashion to they the the it's something they question do, healthy always really how the or know it's hospital with to way bottom they line, have beyond

of going maybe So ways base the engagement to people a a that's lot more And our just at this a and we around. efficient more with with feel is at and some than really in few hindrance a don't all. I had Zoom calls account marketplace, time execution lot getting through our

we little bit of that. a advantage it So take

the do we So our I flexibility good momentum. feel felt solutions good to about the We they what pipeline, like that you get customers if these from that. need

Matt Hewitt

No, taking Thank for you that's great. the questions.

Peter Kuipers

you. Thank

Randall Lipps

Matt. you, Thank

Operator

with question have You Company. a from the Bill Sutherland Benchmark

Bill Sutherland

XQ, margin so in Hello, different you covered apologize But than you it. in thought call, it in than more service first a it? positive could address I if be XXXB I the model It on got did my impact bit Well, the in I everybody. was Peter, upfront. Thanks. pretty late quarter? the gross

Peter Kuipers

Yes.

Of course.

service we margin, the investments, all are revenue And the revenue, also right directionally, both years. gross margin during product more in if recurring service gross at margins so you the that from will. the and the and to the perspective, then of looking year quarters next service on couple expect, over for through current margin a So is we increase [indiscernible] gross [indiscernible] the services upfront and

Bill Sutherland

sure first part not answer. And so your caught the I'm of Peter. I

don't first I quarter anything know the -- -- is than there just So just noise? is other cause the

Peter Kuipers

build right, offerings scale of you if as investment, these and we well. as service tailing the out will, It's

Bill Sutherland

Oh, see. I

Thanks. Okay.

Peter Kuipers

if performance have benefit-cost the the the year -- you historically, the of always is benefit-cost first right? in then higher, seen half And

Randall Lipps

-- the in earlier so demand few of the year with before, Added a a bit more little continuous just has just people hit quarter. kind adding that first on in more been

Bill Sutherland

Yes.

also percent revenue. me R&D So the lower as Anyway. kind through of I of was than because a that's expected, look

family on might their of the discussions your the customers any there that that lead XXXB with had solutions? are One to thought deals customers the they sole-source already, have I for other

Peter Kuipers

Yes.

and think certainly add of is we sole-source arrangement -- -- our customers to the these much a base I pointed Randy powerful channel as is essentially set there we're looking broader demand that to the that ability we're through comprehensive to that. solutions are out certainly, quite portfolio, introduce and looking the strategic

guidance their smaller certainly, to exploring of also are to is So much customer working depth we base. much, just are teams ways XXXB certainly, be them. customers our are had the we don't that given to that serve looking going currently and say the But a breadth

Bill Sutherland

too. questions. could Yes. mostly it I -- was catch go would thinking We'll one Thanks But the could to lead for it way. taking they may first later. deals some -- sole-source up

Peter Kuipers

Thank you, Bill.

Randall Lipps

Bill. Thanks,

Operator

Lipps now like remarks. would closing over turn for I conference to Randall to the

Randall Lipps

of us ever than relevant today. the automation strong start these are increased for and pleased strategically for year. need certainly digitization And the customers. processes We're for as more thanks for the goes, with Well, joining our solutions

are Thanks we underscores on continue that to choice, the the our Our Omnicell Omnicell. momentum remains joining for you continued next customers' advance excited today. build to vision us See our of robust as and we and time. platform

Kathleen Nemeth

Thanks, everyone.

Operator

you your today’s This call. Thank does participation. conclude for conference

may your lines. You now disconnect

Omnicell (OMCL) 1 May 212021 Q1 Earnings call transcript