Accolade, Inc.

Good day and thank you for standing by. Welcome to Accolade's second quarter 2024 earnings results conference call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during a session, you will need to press star 101 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 101 again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Todd Freeman, Senior Vice President of Investor Relations. Please go ahead.

Thanks, Operator. Welcome, everyone, to our fiscal second quarter earnings call. With me in our Houston office today are our Chief Executive Officer, Rajiv Singh, and our Chief Financial Officer, Steve Barnes. Dr. Shantanu Nundi, our Chief Health Officer, will join us for the question and answer portion of the call later. Before turning 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-GAAP measures to the most comparable GAAP measures and the reconciliations thereof can be found in the press release that is posted on our website. 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 in our press release and our filings with the SEC, all of which are available on our website. And with that, I'll turn the call over to our CEO, Rajiv Singh.

Thank you, Todd, and thank you, everyone, for joining us today. Having now completed the first half of our fiscal year, there are four clear takeaways we'd like our shareholders to take from this call. First, we came in ahead of guidance and consensus in Q2 on both revenue and adjusted EBITDA. Second, with each passing quarter, We're closer to crossing the threshold of becoming a profitable, scalable business that will improve people's lives by changing the way healthcare is experienced. Third, the demand environment for our solutions remains strong. And fourth, we're presenting the market with a unique and differentiated perspective, grounded in our roots in advocacy and powered by care delivery that our competition does not offer. That differentiation is bearing us fruit today and will continue into the future. I'll give you more color on those bullets in a moment, but first, Let's head to second quarter highlights. First, revenue and adjusted EBITDA were both ahead of our guidance for Q2. Revenue in the quarter was $96.9 million, with an adjusted EBITDA loss of $8.8 million, both ahead of our previous guidance. Revenue highlights in the quarter were marked by continued strength in our virtual primary care and mental health offerings and some early recognition of performance-based revenues. Steve will give you all the details in his prepared remarks shortly. Over the past couple of months, there have been a number of consistent questions and themes in our investor meetings. I'll take this time today to hit on those topics and provide some current color. The first question we usually hear is about the selling season. The demand environment remains strong and the selling season continues at a solid pace. I'll remind investors here that with the growth of our middle market visit and customer selling motion, selling season is a year-long process at Accolade now. We've seen strength across verticals and customer size. As we've said before, more of the deals in the pipeline include multiple offerings and one or more trusted partner solutions. We view this as powerful validation of our overall vision as well as the importance of embracing the ecosystem. This is reflective of continued interest in our category and our ability to win more than our fair share of the market with our differentiated personalized healthcare suite. The customer additions continue in both our traditional direct channel as well as our rapidly growing health plan business. On the direct side, advocacy and bundle deals have included brand name manufacturers, retail, automotive, CPG, medical, real estate, public sector, financial services, and many others. And our health plan channel has delivered both quantity and quality, including some notable competitive takeaways. Through a combination of our direct sales force, expansions of existing relationships, and new logos through our health plan partners, Accolade Expert MD added fantastic customers, including Nissan North America, Tyson Foods, Phillips, TIAA, Spirit Airlines, Mutual of Omaha, and Clorox this quarter. We also signed another major health plan partner to resell our advocacy and care solutions. In the quarters ahead, we'll give you more visibility into this partnership and how we see the target addressable market within our health plan relationships continuing to grow. We view these partnerships as incredible opportunities to drive sustainable growth for years to come. Next, let's talk about the competitive landscape and do it on a couple of vectors. First, in a traditional employer sale driven by a consultant RFP in the strategic and enterprise account space, our competitors remain the usual suspects we've talked about in the past. Our win rate remains strong as evidenced by our growth in bookings over the last several years. Second, in pursuit of health plan relationships, Our breadth of product offerings, our technology stack, and our open platform oftentimes have us competing with low engagement tech-only platforms instead of advocacy competitors, and our win rate there is very high. Why are our win rates strong? Because we're deeply differentiated from the rest of the market. Our customers know that one of the primary underlying causes of the dysfunction in the healthcare system is the complete fragmentation of the patient experience. from understanding their benefits to how they're passing through the care journey from specialist to specialist with little coordination or empathy. A fundamental principle of Accolade's strategy is to embed the physician in the entire care journey and to do so with advocacy at the core. Accolade connects physicians longitudinally with members through our advocacy and healthcare services. Accolade's treating physicians are uniquely positioned to connect brick and mortar physicians with members' benefits and pharmacy coverage through claims and benefits specialists. We can refer to and provide collaborative care with specialists, therapists, and point solutions for specific medical conditions that are covered under these members' employer health plan. This is a unique role that only Accolade plays with our customers. By providing the benefits advocacy and navigation services their members need to fully leverage their healthcare options, as well as operating a large and growing care delivery organization, we can fully engage the population identify and reach high-risk members, and guide them down care pathways for major costs and misery drivers like cancer, MSK, diabetes, and more in a measurable, scalable, and deeply differentiated way. This is the next generation of advocacy and accolades leading the way. Recently, we've also fielded a number of questions about GLP-1 drugs and their impact on our business. On this topic, the healthcare industry, employers, and consumers continue to learn from their experience with treatment regimens, usage patterns, and drug availability. Drug availability has clearly driven some fluctuation in usage on a month-over-month basis, and we expect that volatility, both upward and downward, to continue in the quarters ahead. That said, demand continues to be strong, and we've also seen the growing attractiveness of non-pharmaceutical alternatives like Virta, a company in our trusted partner ecosystem that we profiled in our capital markets day and specializes in diabetes reversal. We're also beginning to see new approaches to managing the cost and prescription of these drugs. The University of Texas system decided to stop covering weight loss drugs after seeing its cost for the drugs increase from $1.5 million monthly to more than $5 million monthly over 18 months. And BCVS of Michigan has changed its policy so that patients will be required to be on a lifestyle modification program for at least six months before granting approval for weight loss drug therapy. What all of these data points reflect is the clear importance of engaging physicians in the weight loss treatment and a strong advocacy program to help ensure proper usage and program adherence. Finally, regarding the DHAT-5 agreement, we continue to await the final resolution of Health Net's protest, which we expect to hear over the coming months and we'll have more to report after that process resolves. With that, I'm going to turn the call over to Steve to review the financials.