Accolade, Inc.

Hello, and thank you for standing by. Welcome to Accolade 4th Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Todd Freeman, Senior VP of Investor Relations. You may begin.

Thanks, Operator. Welcome, everyone, to our fiscal fourth quarter earnings call. With me on the call today are our CEO, Rajiv Singh, and our CFO, Steve Barnes. Before turning the call over to Rajiv, please note that we'll be discussing certain non-GAAP financial measures that we believe are important when evaluating Accolade's performance. Details and relationship between these non-GAAP measures to the most comparable GAAP measures and the reconciliations thereof can be found in the press release that's 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 to accolade to the materialism those expressed or implied on the call. For additional information, please refer to our cautionary statement in our press release and our follow-up to the SEC, all of which are available on our website. Additionally, there are slides that will accompany the CFO presentation in this call that will be available on the webcast. The slides will be available for download following the call. With that, I'll turn the call over to Rajiv.

Thank you, Todd, and thank you to everyone for joining us today on our fiscal 25 kickoff earnings call. This is an important moment for Accolade and for our shareholders. Over the last several years, markets, including healthcare, have fundamentally changed. Success today requires a balanced growth mindset with a focus on execution, discipline, and profitability. Speaking specifically to healthcare, it's time for digital healthcare disruptors to prove their business models have product market fit in the large market, operating leverage, a discernible competitive advantage, and teams that can execute through a challenging environment. Some will succeed and others will not. Accolade is amongst that select group that has succeeded by checking each of these boxes. Today, we're a well-positioned company, positioned to build a strong and enduring business for our customers, shareholders, employees, and partners. With those high level remarks behind us, let's begin to zoom in on our business and where we stand. We just completed a fiscal year where we delivered north of 20% top line growth and improved our adjusted EBITDA approximately $30 million year over year. Both of these achievements are above the expectations that we set at the outset of the fiscal year. As a brief aside on the consistency of our execution, with the exception of a quarter where we lost a large customer two years ago, we have consistently met or exceeded expectations since we became a public company in July 2020. Our outlook for fiscal year 25 is also strong. Consistent with our long-term guidance, we expect top-line growth in the neighborhood of 20% and profitable adjusted EBITDA on a full-year basis. Today, serving more than 14 million lives across more than 1,200 customers, we are a scaled healthcare services company with a direct line of sites becoming a Rule of 40 company in the years ahead. Our growth in the year ahead is driven by several things. First, an annual recurring revenue growth rate of 20% in the last fiscal year, reflecting the strength of our business-to-business employer, government, and health plan offerings. Second, the continued strength of a direct-to-consumer business that again grew over 20% last year and is highly differentiated in a competitive market. And third, the exceptional growth of what you will hear us refer to today as platform-connected revenues. These are revenues from offerings, either our own or from our partners, that are delivered because they are connected to our healthcare navigation platform. More to come on platform-connected and usage-based revenues later in today's call. Let's get into more depth on each element of our business and offerings and why they continue to grow at rates that outpace the market. Our business-to-business offerings, focused on employers, health plans, and the government, are highly differentiated, valuable to our customers and members, and scaled to deliver growth and profitability. Our healthcare navigation platform is seamlessly integrated with our own primary care and expert medical opinion capabilities and with our trusted partners. This seamless integration is particularly compelling to employers and unique from our competition. From an employer perspective, we solve the physician gap. helping people get access to the right care when they need it, from us, our partners, or from brick-and-mortar health systems, something that is particularly challenging for underserved, urban, rural, or minority populations. That seamless integration from navigation all the way to care delivery is enabled by a technology stack which is at scale, state-of-the-art, and market-leading. It is extensible, and as new capabilities have emerged like generative AI, we've been able to embrace them at pace and deliver leverage to our businesses. We were recently the recipient of the Artificial Intelligence Excellence Award from the Business Intelligence Group. AI and our investment in technology writ large are key contributors to the significant improvement in our profitability over the last several years. That seamless integration enables platform-connected revenues. These revenues reflect visits with our primary care physicians, second opinion consults with expert specialists, and enrollments in our trusted partners program. These revenues grow in two ways, through customer adoption of new services and through member utilization of those services. Once we see customer adoption in any given year, we expect member usage of those respective services to grow in each following year up to an appropriate threshold based on the relevance of the respective service to a given population. The flywheel is extremely simple. Customer adoption of the service, deployment of the service, employee engagement of the service, which grows each year as a cohort. One final point on our business-to-business offerings. The diversity of our offerings gives us access to a variety of growth engines. In previous quarters, we've discussed the demand for our offerings from both employers and the government. In today's call, I want to give you more depth on our appeal to health plans. As many of you know, for many years now, we've maintained productive relationships with health plans, such as UnitedHealthcare and Aetna, that resell our expert medical opinion service. We're increasingly seeing health plans interested in relationships where certain of our capabilities are embedded into their own employer offerings. Just this past quarter, Blue Shield of California published the results from the first full year of offering a virtual first plan design called Virtual Blue, powered by Accolade. The results were outstanding. Here are some highlights. Reduction in overall cost for the population of 8% to 10%. emergency room claims down 11%. 85% of members received a mental health screening. And bringing you back to the physician gap, two-thirds of their members received an appointment within a single day. In addition, recently, as some of you noted, Blue Cross Blue Shield of Arkansas launched an employer offering powered by our navigation platform where customers have the option to also add accolade care or second opinion capabilities. We expect our relationships with health plans, both reseller arrangements and partnerships focused on offerings where accolade capabilities are fundamental to the new solution, to be a growth engine for the business in the years ahead. And Steve will give you more color on how to model these revenues in his remarks. Moving to our D2C offerings, we offer a compelling and differentiated virtual primary care and mental health offering that continues to grow faster than the rest of the markets. Let me outline for you why this growth has continued to outpace other telehealth offerings in the employer and health plan markets and why such growth is sustainable. First, most telehealth offerings in the market offer urgent care, meaning the physicians do not have access to the longitudinal care record of the patient or any information on their corporate benefits. Patients cannot ask to see the same physician again, and most physicians are employed in a gig economy part-time role. Our plus care direct-to-consumer offering is the opposite of those solutions. Our physicians utilize a built-for-purpose longitudinal EMR system. Patients can select a primary care physician and stay with them, and our physicians spend at least 60% of their time serving accolade patients. Second, we've built an integrative collaborative care model that embeds mental health care into our primary care model. As Blue Shield California noted in their study, We perform mental health screenings on the majority of our patients, and we have behavioral health specialists embedded in every care team, thereby providing a scalable mental health service that patients love. Third, our service is powered by a state-of-the-art digital experience and dedicated physicians from the top 50 medical schools in the country, a combination that yields net promoter scores of around 90 consistently. We simply have an easy-to-use service that delivers exceptional patient value. One final point, we've tightly integrated the team's services and capabilities from Plus Care since our 2021 acquisition in a way that has fostered the continued growth of the consumer business while allowing us to extend access to the same exceptional care experience from these dedicated physicians to our employer customers. Notably, approximately 80% of the new Accolade customers that launched on January 1st of this year deployed Accolade Care. PlusCare and other acquisitions have flourished since being brought under the Accolade umbrella, both individually and as critical components of our B2B offerings. As I turn the call over to Steve, a closing thought. I have never been more bullish about the strength of the market we compete in, the scale and the leverage of our model, and the team we've aligned to execute against our vision. As one of our investors, Andreessen Horowitz, said in a recent blog post, it's time to build in healthcare. Accolade is leading the way. Steve?