Ontrak, Inc.

Ladies and gentlemen, please stand by. Your on-track Q2 2021 earnings call will begin in two minutes. Again, please stand by. Your conference call will begin in two minutes. Thank you. Thank you. Thank you. THE END Good afternoon, ladies and gentlemen, and welcome to the OnTrack Q2 2021 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Ms. Caroline Paul of Investor Relations. Anne, please go ahead.

Thank you, and thank you all for participating in today's call. Joining me today are Jonathan Mayhew, Chief Executive Officer, and Brandon Laverne, Chief Financial Officer. Earlier today, OnTrack released financial results for the quarter ended June 30th, 2021. A copy of the press release is available on the company's website. Before we begin, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, believe, estimates, expects, intends, guidance, confidence, targets, projects, and some other expressions typically are used to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, but may involve and are subject to certain risks and uncertainties, other factors that may affect OnTrack's business financial condition, and other operating results, which include, but are not limited to, the risk factors described in the risk factors section of the Form 10-K and Form 10-Q as filed with the SEC. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements. ONTRAC expressly disclaims any intent or obligation to update these forward-looking statements. With that, I'd like to turn the call over to Jonathan.

Good afternoon, everyone. Thank you for joining us. During the second quarter, we made important progress on our growth initiatives to expand our addressable market and our value proposition. Our journey to become a truly consumer-centric organization is now underway, and I and the management team have been on a listening tour with on-track customers, prospects, providers, and members, and I'll share some of my learnings with you momentarily. Our second quarter total revenue was $26.5 million, an increase of 54% compared to the same period in 2020 due to the strong growth in our government lines of business. We are just getting started on our journey to engage not only care avoidant, but also care seeking individuals and to broaden our reach within Medicare, Medicaid, commercial, and at-risk provider groups. Regarding our outlook for the remainder of the year, we are reiterating our revenue guidance of 80 to $85 million. While we saw some high-cost members dropping below their medical expense threshold during the quarter due to the lingering lower utilization, which resulted in a slight decline in our effective outreach pool, we expect a commensurate rebound in the second half of 2021. I would now like to provide an update on what we've learned from the customer prospect and provider listening tour and give you a sense of their feedback on our growth initiatives, at the core of our strategy is the continued development of a whole-person health, coach-supported and AI-enabled identification and engagement system. First, our customers find it difficult to engage high-cost, high-acuity individuals who do not generally seek care. Most of us find the U.S. healthcare system difficult to navigate. Imagine how much more challenging it is for the individuals with behavioral health conditions and chronic disease. Those who suffer from anxiety, depression, and substance use disorder are likely to have six or more chronic conditions that cause severe mental and physical pain. They face a host of socioeconomic, medical, and health system barriers that cause the severity of their disease. their receptivity to care, and their medical cost profile to change over time. OnTrack finds those who have fallen through the cracks. Our proven experience in managing claims data using our AI and predictive analytics to impute behavioral health conditions allows us to identify those who would most benefit from care. This is uniquely valuable to our customers and prospects because these complex cases drive 44% of medical costs, according to a recent known study. These individuals tend not to proactively engage with healthcare programs, whether digitally, telephonically, or in person. We will deepen and on track core competency, namely the timely identification and engagement of these most vulnerable members, so that we can support readiness for change in more individuals. We will continue to invest in machine learning models that identify those who are most suitable for behavioral health interventions and assess their underlying needs so that we can align those needs with the right amount and the right type of care. We're also continuously retraining our model to identify and predict members likely to have a change in the severity of their disease and cost profile over time. Second, our customers and prospects need partners who can screen and monitor those who may not have a diagnosed behavioral health condition. OnTrack provides deep human engagement and AI-enabled eligibility assessments based on 14 years of experience in caring for the most complex behavioral health populations. From a care pathway standpoint, we have continued to refine program eligibility in our process for screening and assessments. We've increased the alignment between behavioral health and social needs by administering screenings such as PHQ-9s and social determinant of health assessments that help us understand risk factors and how we can heighten upfront engagement in clinical support. The more deeply we understand each person's medical and behavioral needs, the better we can match them in a timely way to the right care pathway. Customers and providers value our measurement-based care, check-ins, monitoring, and follow-up assessments because these are integration opportunities with primary care physicians, providers, medical programs, community support programs, and value-based measures. Third, customers and providers want individuals with behavioral health conditions to complete treatment. Those suffering from behavioral health conditions often face insurmountable barriers in between their clinical visits, which makes treatments complex. Together, the member and their on-track care coach embark on a customized care pathway specifically curated for the member's needs. and supported by dozens of meaningful connections with their on-track care coach during the course of treatment. We advocate for members and connect them to what matters most in their lives, whether that's a therapist who specializes in PTSD, help with transportation, or finding a local church who can bring food to the members' home. This ensures that the members are more likely to have the capacity and the receptivity to meet with their providers who lead their treatment. As I mentioned a moment ago, the healthcare system is intensely difficult for those with behavioral health disorders and chronic disease. Fourth, the debate about the effectiveness of a digital versus human experience is a false dichotomy. The power of both should be embraced because there are times when high-tech tools can motivate an individual to manage their health. Weight loss, for example. And there are times when high touch human contact is crucial, suicide ideation, for example. What matters is engagement. When individuals are engaged in their care, they get well. The on track engagement program, which can last up to 12 months, delivers durable clinical and economic outcomes for those who are hardest to reach and engage. We use multiple channels and personalize our approach to engage members at the right time and the right place with the right message, whether that's online, offline, or both. Our treatment effect study shows that OnTrack members are still benefiting from the program 24 months after enrollment. Customers are interested in our ability to deliver similar levels of multimodal engagement for lower acuity, behavioral health populations, and additional lines of business. Fifth, access to high-quality behavioral health providers is critical. We are building out individual person-centered care that connects an ecosystem of stakeholders to the much-needed solutions. Our personalization of care extends to customizing therapists through clinical matching. For example, we might identify an individual with depression, diabetes, and hypertension. Since we focus on the member's goals, We might start by working with this member and their stated goal of weight loss while matching the member to a mental health professional who works with depression. We also consider the member's health plan, their line of business, language, and preference for face-to-face or telephonic provider visits. We review the health plan's programs as well to see whether after receiving care, the member would benefit from enrolling in a health plans program that, for instance, works with members to improve management of their diabetes. That being said, by linking our members with the best mental health treatment and providing intensive coaching support, these individuals may not need to enroll in further programs because their medical condition often improves through better health literacy, treatment adherence, and attention to their mental health and social risk. Our ability to match members to the most suitable health care professionals has been especially well received by health plan customers and by provider networks we wish to partner with. In light of the severe national shortage of behavioral health providers accepting insurance, our partnerships with over 14,500 behavioral health providers continues to be a clear differentiator for OnTrack in the marketplace. And sixth, government programs, commercial partners have a keen interest in how OnTrack's value-based care can drive overall customer satisfaction scores. OnTrack has a high net promoter score that has the potential to increase how members rate their health plans and providers. Importantly, we have an opportunity to explore how we can impact customer HEDIS scores stars ratings, caps scores by engaging members in ways that create high satisfaction levels and help members successfully access and complete treatment. Key account leaders within our customer organizations tell us that their major accounts value the OnTrack program. We're well positioned to heighten the value that health plans create for commercial populations by building trust, engagement, and readiness with employees. so that their employers experience higher enterprise loyalty and commitment levels. As we've begun testing receptivity to the growth initiatives, not only with our customers, but with prospects and providers, the feedback has been very positive. We've seen an increase in initial discussions in recent weeks in our sales pipeline. While it's still early, we're encouraged by dialogue we're having with health plans, provider groups, and employer organizations. We're investing to roll out our enhanced product and service capabilities over the third quarter and the fourth quarter this year as an engine for growth and expansion into more channels, population segments, and lines of business. With respect to our existing customers, we continue to see meaningful levels of engagement as we discuss our product development roadmap, develop strategies to maintain and increase return on investment, and enhance our reporting of insights and analytics. During the second quarter, we announced an expansion with a large healthcare system, which was officially launched earlier this week, and we remain on track to expand this particular relationship into additional geographies over time. With respect to a previously communicated customer termination, we would note that in the spirit of providing the best member experience, we've mutually agreed with the customer that there's benefit to supporting this commercial membership through the course of treatment and graduation from the OnTrack program. For this reason, we did not disenroll their commercial members as of June 30th, as originally planned, and we look forward to scheduled discussions this month on our evolving product roadmap and capabilities and how these might align to this valued customer's needs. I'd also like to note that we are building out a world-class executive team and anticipate sharing important news very soon on selected candidates for three key positions, which are expected to advance and accelerate our growth initiatives in the second half of this year. Those are the Chief Customer Officer, Chief Medical Officer, and Chief Information Officer. In summary, I'm pleased with the progress we've made on our product and clinical roadmap these past few months. I continue to see a massive addressable market for those who can benefit from our integrated intervention platform, and I'm looking forward to continued invigorating discussions with health plans, employers, and providers on the outcomes that we deliver and the collaborative partnership they would like to create with us. We are intently focused on mutual growth and achieving our mission of helping save the lives of as many people as possible. I'll now turn the call over to Brandon Laverne, our Chief Financial Officer. Brandon.