NextGen Healthcare, Inc.

Good day, everyone, and welcome to today's NextGen Healthcare second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one keys on your touchtone phone. Please note that this call is being recorded and that I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to James Hammerschmidt, Senior Vice President of Finance and IR. Sir, please begin.

Thank you, Operator. Before we start, please note that we will be making forward-looking statements during the presentation and Q&A part of the call. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Factors that may cause actual results to materially differ from expectations are detailed in our earnings release and SEC filing. This call will also reference certain non-GAAP financial measures. Information about non-GAAP financial measures, including reconciliation to U.S. GAAP, can be found in our earnings release, which is available on our investor relations website. At this time, I'd like to call over to our president and CEO, David Seitz.

Thank you, James. How time flies. It's hard to believe I recently passed a one-year anniversary as CEO at NextGen. It's also hard to believe that we are more than halfway through fiscal year 2023. Let me start by saying that we have improved confidence, and due to our consistent execution and client results, we are increasing our outlook for the remainder of the year. Our updated guidance implies that we will have made up for the lost revenue and earnings from the commercial dental divestiture we announced last call. In my prepared remarks today, I will touch on three areas supporting our positive outlook. Number one, our ability to execute. Number two, our clients. And number three, our approach to capital allocation. Let's start with execution. Bookings were solid for the quarter, with five flagship deals over $1 million. Net new client wins accounted for approximately 20% of total bookings, as our differentiated value proposition aligns with the needs of integrated care organizations, federally qualified healthcare organizations, behavioral health, ophthalmology, and orthopedic practices. These clients are purchasing multiple solutions at once, and we continue to have success selling the surround into the base. As a reminder, our surround solutions include the patient experience platform, patient pay, virtual visits, mobile, population and financial analytics, manage cloud services, and revenue cycle management. We remain on track to achieve our target of $100 million in contracted annualized recurring revenue for surround solutions by the end of fiscal year 2024. Client adoption of patient payment and engagement solutions has materialized faster than originally planned. Testament to the investments we're making to modernize our revenue cycle capabilities and provide an end-to-end solution for managing payments, coating and clearinghouse services. We believe there is real upside here, which should lead to increased penetration into the base. As the first EMR to be 21st century Cures Act certified, we've made investments in our upgrade center of excellence, tooling and automation, and best practices to support our clients as they migrate to the latest version. We are pleased to announce that as of today, we are nearing 400 NextGen Enterprise clients live on the latest Cures compliant version. well ahead of the submission deadline. We believe this provides a timely competitive advantage, especially as it relates to the smaller end of the market, which is why we're also very excited to announce that we've received confirmation of Cures Act certification for our next-gen office solution. Our base has the ability to be compliant more than a year before the deadline, giving them ample time to upgrade without undue pressure. We can now turn our attention fully to deliver on next-generation improvements for the provider experience, while others are still working on certification. Our pipeline is strong with net new prospects, sizable cross-sell, and inside the base expansion opportunity. The underlying strength of our commercial team, current working set of opportunities, and solid client retention supports our confidence that growth will further accelerate in the fiscal second half, which carries into fiscal 2024, given the recurring nature of our business. Now moving on to our clients. We are strongly encouraged by the engagement we see in our base. They truly want us to win. In September, we had an executive roadshow where the top leaders in our organization, including myself, spent the month on the road meeting with over 100 clients to understand their practice strategy, challenges, and opportunities for us to serve as their strategic advisor. This was also a great opportunity for us to both listen and share our own vision, strategy, and multi-year roadmap, these conversations reaffirmed that we are focused on solving the top issues faced by the market. In just under two weeks, nearly 2,000 client leaders will convene in Nashville to kick off our annual user group meeting. The event will be in person for the first time since 2019, and the enthusiasm is high. The theme of UGM 22, Better Healthcare Outcomes for All, embodies our company vision. We intend to partner with our clients and help them improve patient engagement, reduce physician burnout, target higher risk patients to close gaps in care, assume risk and value-based care models, exchange and utilize meaningful health data, and achieve better financial outcomes. We plan on showcasing results from our NextGen Community Health Collaborative, where a group of highly innovative clients have partnered with us to leverage NextGen's vast data pool representing the largest footprint of community health center data assembled today. We've launched Insights as a service on the back of our enterprise data cloud to streamline outcomes reporting and benchmarking of clinical quality and operational measures for members of the collaborative to inform best practices and truly drive results. Speaking of results, we'll also be discussing the Medicare Shared Savings Results from a group of NextGen ACO clients we utilize our value-based care solutions. These clients were able to generate $81 million in total Medicare savings and $41 million in shared savings, a 33% increase compared to the prior year. We're just starting to unlock the power of NextGen Insights, and I'm excited to share more about our progress as we get closer to fiscal year 24. Lastly, moving on to our capital deployment efforts, We continue to manage capital in a disciplined and thoughtful manner. Last quarter, we announced the divestiture of our commercial dental business, which we considered a non-core part of our portfolio. This helped to strengthen our balance sheet and provided us with increased flexibility to pursue attractive acquisition opportunities. As of today, we have effectively transitioned the core dental operations to the new owner, and our team is now solely focused on our core strategy, serving the integrated needs of the ambulatory care market. When we look at buy-build-partner, our approach is to focus on return on invested capital, where we not only look at traditional mergers and acquisitions, but also leverage strategic business development partners where we're able to generate an attractive return. Our corporate development pipeline is active as we continue to look opportunistically at M&A as a means of broadening our portfolio, expanding our share of wallet, gaining market share, unlocking new markets, assessing new capabilities, and driving efficiencies through vertical integration. Today we announced an update and extension to our share repurchase program, allowing the company to continue returning capital to the shareholders. This is just one of many examples of how the Refresh board and management team were acting on the lessons learned from the proxy contest just one year ago. Now I'll turn to Jamie to provide details on the financials. Jamie? Jamie?