NextGen Healthcare, Inc.

Welcome to the NextGen Healthcare Fiscal 2022 Second Quarter Financial Results Conference Call. Hosting the call today from NextGen is David Sides, President and Chief Executive Officer, Jamie Arnold, Executive Vice President and Chief Financial Officer, and Matt Scallo, Vice President of Investor Relations. Today's call is being recorded. And now I will turn the call over to Matt Scallo.

Okay, thanks, operator. And before we start, I'd like to remind everyone that comments made on this call may include statements that are forward-looking within the meaning of the federal securities laws, including, and without limitations, statements related to anticipated industry trends, the company's plans, future performance, products, perspectives, and strategies. Risks and uncertainties exist that may cause results to differ materially from those expressed in forward-looking statements, including, among others, those risks set forth in the company's public filings with the U.S. Securities Exchange Commission, including the discussion under the heading Risk Factors in the company's most recent annual report on the Form 10-K and any other subsequent quarterly report on Form 10-Q. Any forward-looking statements speak only as of today. The company expressly disclaims any intent or obligation to update these forward-looking statements. Our remarks on today's call include both our earnings results and guidance, which contain certain non-GAAP financial measures. For our earnings results, the GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found within our latest quarterly earnings release that was filed with the SEC and is posted to the investor relations section of our website. This release also provides qualitative descriptions of how we have calculated non-GAAP financial measures contained in our guidance. At this time, I would like to turn the call over to our new president and CEO, David Sides.

Thank you, Matt. And thank you to everyone participating on the call today. In the month or so since I joined NextGen, I've spoken with many of you but for those who I haven't already talked with, I want to share how excited I am to join a company with great products, low customers, and a team focused on client success, all of which has manifested in the strong results we produced in our fiscal second quarter. Well done, team. Let me start by sharing why I joined NextGen. I've spent many years in executive roles in this exciting industry. I've watched NextGen's progress with interest from a distance, And I found the company's rapid rise in product quality and reputation, as reflected in improving class research scores, was quite impressive, as it is difficult to turn around customer perception. Once I engaged in the CEO search process, I learned that this rapid turnaround was driven largely by insightful, long-term investments made by the current leadership team. And that NextGen addresses attractive markets with a well-defined strategy and an enhanced ability to execute through both its commercial capabilities and expanding portfolio of solutions. And finally, with a constant focus on enabling and improving the interaction between the healthcare provider and consumers, the company has a solid foundation to support accelerating growth. All of this makes me quite bullish about our opportunity. Now let me tell you what I've been doing since joining the company. I've met with every member of the board and the leadership team as well as many of our team members at all levels of the organization. I've spent time with a wide range of clients, and I've participated in many of our discussions with investors as the company prepared for its annual shareholder meeting on October 13th. From these encounters, I wanted to share a few observations. First, the NextGen team, from the board to the front line, is first class. And I'm especially excited about the new members of our board in the expanding breadth of experiences and insights They bring to an already diverse and experienced board. They add human capital, retail health, payer, and clinical expertise. I believe our engaged board will be vital to shaping NextGen's future direction. I'm encouraged by the depth of the experience and capabilities of the executive leadership team as well, as their attitude and focus on doing what is best for our clients, employees, and shareholders. We have a great culture throughout the organization. And I look forward to promoting the same high level of dedication and focus in everything we do. Second, our clients are unique in so many ways, whether in terms of size, specialty, or mission. But what they have in common is that they are putting their trust in NextGen. And we know we have to earn their trust every day. For my ongoing client discussions, I can't emphasize how strongly these providers want NextGen Healthcare to succeed, which includes winning in the markets. And in the quarter just ended, we continued to win business against all competitors, big and small. In fact, over the last six years, this was a record bookings quarter and includes a handful of transactions valued over $1 million each. Our clients also shared that their health care providers continue to seek ways to produce better outcomes for their patients. And our clients share their insights into where this industry is headed, which in turn help shape our long-term strategy and future offerings. Our dedication to the ambulatory healthcare provider and their patients is unwavering, and we will continue to strive to help physicians be physicians again. And finally, our shareholders. Ongoing investor engagement is important at NextGen, and we are acting on this feedback. At our recent annual shareholder meeting, investors sent a vote of confidence in the board, this leadership team, and our growth strategy. shareholders approved the plan to reincorporate NextGen Healthcare in Delaware, an important step for the company's future, particularly considering how much the company has paid out in litigation costs in fiscal second quarter alone. On corporate governance and aligning pay for performance, the Board is taking action to eliminate certain roles, like the Chairman Emeritus Board seat and the associated fees, as well as eliminating meeting fees. As for fiscal year 22 executive equity grants, The Comp Committee approved performance shares with vesting types solely to increase shareholder value. We also clearly heard the need to deliver shareholder value. I know I speak for the entire leadership team when I say we take our responsibilities as stewards of shareholder capital seriously, and we continually strive to generate long-term shareholder value. We also heard the request to return excess capital to shareholders. We want to do so in a tax-efficient way so the board approved the share repurchase program. Jamie will provide more details in his section coming up. And with the goal of applying shareholder value and appreciating shareholder value in mind, I'm already applying my experience and a fresh set of eyes to the entire company. As I review the company's product offerings and pipeline, I see considerable assets that with focus, investment, and execution can unlock the full potential of next-gen healthcare. We will continue to drive adoption of solutions addressing the provider and the consumer, what we call the surround solutions, to drive significant growth from this high value offering for the foreseeable future. I also see potential opportunities to further unlock value by more effectively pointing certain of our assets toward attractive high growth markets which potentially offer significant return on investment. While it's a bit too early to provide details today, the growth potential is exciting. I look forward to discussing these opportunities at a more appropriate time. Before I turn the call over to Jamie, I want to provide an update on Spring 21. At the investor day in March, the company spent considerable time reviewing the benefits of the enterprise Spring 21 upgrade. I understand the excitement and value around this program. Upgrading both the enterprise system and a new patient experience platform together is a first for the company and our clients. Plus, NextGen is approaching this program in a new way, adding significant resources, and working closer with our clients than ever before. Our early adopter phases provided an opportunity to discover and overcome obstacles that typically arise in a real-world setting before rolling out to the entire install base. Working closely with our early adopters, challenges have been identified and resolved. We've established an upgrade center of excellence, which provides our clients with both resources and best practices in order to accelerate the upgrade process and ensure an excellent experience for Spring 21 and all future upgrades. Approximately 40% of our target clients have signed up to implement Spring 21, indicating that our clients are anxious to move onto our patient experience platform, what we call PXP. As you may recall, PXP will help the client simplify and streamline the process of adding incremental surround products as needed. We believe that interest in our PXP platform is a strong signal to future cross-sell opportunities, and we are confident in achieving our target $100 million of incremental contracted annual recurring revenue from our surround solutions by the end of fiscal year 24. Spring 21 is a multi-year program, and we plan to provide future progress updates, but at a less regular cadence and quarterly. Instead, I would point our investors to our quarterly revenue lines, such as the positive trends in our high margin, recurring revenue, and subscription revenue growth. And with that, I'll ask our CFO, Jamie Arnold, to provide the important details.