Accolade, Inc.

Good day and thank you for standing by. Welcome to the Accolade Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, to Mr. Todd Friedman, Head of Investor Relations. Please go ahead.

Thanks, Operator. Welcome, everyone, to our fiscal fourth quarter earnings call. With me on the call today are our Chief Executive Officer, Rajiv Singh, and our Chief Financial Officer, Steve Barnes. Shantanu Nendi, our Chief Medical Officer, will join us for the question and answer portion of the call. Before I turn the call over to Rajiv, please note that we will be discussing certain non-GAAP financial measures that we believe are important when evaluating accolades performance. Details on the relationship between these non-gap measures to their most comparable gap measures and the reconciliation thereof can be found in the press release that's posted on our website. There are also slides to accompany this conference call that are available on the webcast. The slides will be available for download later following the call. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause the actual results for accolades to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement and our press release that are applying to the SEC, all of which are available on our website. With that, I would like to return the call to our CEO, Rajiv Singh.

Thanks, Todd, and thank you all for joining us today. Today's call marks an important inflection point for our company. We've delivered eight consecutive quarters of outperformance and a remarkable evolution of our business by being cognizant of the environment we're operating in and executing accordingly. Today, we're stepping back to acknowledge that the macro environment has an impact on our business and no doubt every business in our sector and beyond. This requires operating with even more discipline as it relates to profitability and growth. It is with this changing macro environment in mind that we're adjusting our go-forward forecast today. We make these adjustments having just completed a very strong fiscal year, where we dramatically expanded our footprint and exceeded our financial targets. And we see a go-forward environment supported by the largest sales pipeline in the history of the company. While there are tailwinds we're excited about, there are also headwinds. As you may have inferred from our press release, our relationship with Comcast will effectively end in December 2022. Given that timing, it is not a significant impact to FY23 revenues. However, combining that customer loss with a challenging macroeconomic environment is worthy of evaluation. Accordingly, we're moderating our annual revenue growth rate to 20% over the midterm while reducing our adjusted EBITDA loss on our path to profitability. We're adjusting our spend to align with the revised growth rate and now expect to achieve full-year positive adjusted EBITDA in fiscal 2025. This is not about being overly optimistic or unduly pessimistic. It is simply about being pragmatic and clear-eyed about the road ahead. Our updated forecasts are a reflection of that pragmatism. More on all of those points later. For today's call, we'll follow the following agenda. I'll quickly highlight the Q4 and FY22 results, and then we'll talk about what we're seeing in the customer and competitive landscape and how the pipeline looks for the year. Then I'll give you a broad overview of the steps we're taking to position Accolade for both near-term execution and long-term positioning to deliver against those growth and profitability goals. Steve will then give you more information on the financial results. I'll talk in a minute about Comcast and how we plan to adapt to the dynamics at play in our industry. But first, I'll recap the successes we achieved in fiscal 2022. First, I'd like to acknowledge the incredible efforts and commitments of our employees who delivered four quarters of our performance in the midst of an ongoing pandemic. These teams brought together four organizations in Accolade, SecondMD, PlushCare, and HealthReview, while maintaining exceptionally high satisfaction rates across all those customer base We went public two years ago with 1,000 employees, 50 customers, and $130 million in revenues. We exited fiscal 2022 with 2,300 employees, 600 customers, and $310 million in revenue and $366 million in the bank. Accolade today is more durable, diversified, and set up for long-term success than ever before. Before going any further, let's address the end of our Comcast relationship. First, let me express my appreciation to the team at Comcast for being our founding customer and for the visionary leadership that chose to reinvent the healthcare experience for their employees and their families by partnering with a company that at the time had no customers. That was 12 years ago, and through multiple contract renewals and changes in their business, including me joining as CEO almost seven years ago, Comcast has been a great collaborator. It's important to note that so much has changed over the years. In fiscal 2018, when we had fewer than 20 customers, Comcast represented 45% of our revenues. Today, we've got more than 600 customers, and Comcast represents less than 10% of revenues. And next year, based on the economic structure of their current evaluation process, that percentage would have been materially smaller. Our roster of Fortune 500 clients is the envy of the industry. For good reason. Customers of this nature oftentimes lead the way with innovation in healthcare because of their buying power and population size. Additionally, our customer retention rates have been north of 95% for many years. While this isolated event is disappointing, it is just that, an isolated event. In many ways, the diversification of our revenue stream, offerings, and customer base were all in preparation for an event like this one. While we're always sad to say goodbye to an old friend, we wish Comcast the best of luck. With that, let's turn our attention to the future. Our conviction regarding our strategy, our offerings, and our company remains very strong. First, we're in the midst of an exceptionally strong demand environment. We're participating in more RFPs across every market sector, including the middle market, enterprise and strategic, and government sector than ever before. Our performance early in the selling season has been strong. Building off that point, we're in the midst of renewing the TRICARE Select Navigator Program for the third year of the pilot. Year one of the pilot resulted in us achieving the majority of our performance incentives, and we expect our results in year two to be equally strong. Importantly, we're well-positioned to grow in other areas of the TRICARE program as well, such as our early success with the autism care demonstration. Second, our offerings are differentiated and compelling. Accolade is a personalized healthcare company that combines the strength of an advocacy platform with clinical capabilities like primary care, mental health support, and expert medical opinion. Those capabilities, increasingly tightly integrated, creates a data-driven, personal, and value-based healthcare solutions that healthcare buyers need. Our customers and prospects agree as our new sales and cross-selling momentum remains strong. The utilization of primary care and mental health or expert medical opinion capabilities is exceptional when delivered in an integrated fashion. Importantly, we've replaced our competition in those categories at a number of existing advocacy customers where customers were keen to work with their proven front door to healthcare for services of this nature. Additionally, this broader portfolio is more interesting to health plan reseller partners who want to take Accolade's capabilities to their member base. This month, we announced a partnership with Priority Health in Michigan, who's incorporating advocacy, primary care, and mental health into their offerings. Much as we already have in place for Accolade Expert MD, we see health plans as a key distribution partner for Accolade Care. Third, our ability to address the inequity in health care makes our solution essential for employers. Where health care has fallen dramatically short is in providing care to those who don't have easy access to it. Those impediments could be related to geography or social or economic factors. We're leveraging our deep customer relationships, clinical depth, and expertise and machine learning to narrow those gaps. Finally, our disciplined approach to building our business will differentiate us in uneven economic times. Our cash position provides the foundation to execute on our strategy. And our commitment to delivering on our path to profitability is even further strengthened in our outlook today. I raise this point to address the changing macroeconomic environment and competitive book behavior that we believe is not sustainable for the long term. Our success over the years has attracted our fair share of competition, and our win rate has remained very high. That said, more recently, we've seen some of our competition begin to lower prices to levels where we believe they must either sacrifice fiscal discipline or quality delivery to members. In the end, strong businesses with a commitment to operating with discipline survive and thrive in environments like these, and we're positioning ourselves today to do exactly that. To that end, while the vast majority of our pipeline is made up of companies evaluating advocacy and personalized health care for the first time, we also have a meaningful number of prospects who previously chose a lower cost, lower engagement competitor years ago and have now reopened RFPs after coming to the realization that low cost, low engagement solutions do not produce the outcomes, experience, and ROI desired. Now I want to revisit how our core principles shape our view on go forward guidance. Our company has always been focused on creating a new category of healthcare solutions that put people at the center of the service. And today our personalized healthcare solutions are doing just that for more than 10 million people. We've been focused on growing our business on the top line while progressively improving profitability each year. That commitment has been unwavering since we went public in 2020. That said, as an operating team, we're also committed to confronting the facts in a changing market. We believe it's smart business to moderate our growth expectations for the year. At the same time, we think fiscal discipline is important and are also reducing the adjusted EBITDA loss for FY23 and FY24 from our previous guidance. We expect to achieve positive adjusted EBITDA for the full year in FY25. Our guiding principle in challenging environments is to redouble our focus on execution and discipline. Our addressable market is growing, and our demand environment remains strong. With our focus on discipline and execution, we expect to emerge from this challenging environment even further differentiated from the rest of the market. With that, let me turn the call over to Steve Barnes, our Chief Financial Officer. Thanks, Raj.