Performant Healthcare, Inc.

Greetings, and welcome to the Performant Financial Corporation second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Zubek, Investor Relations. Thank you, sir. You may begin.

Thank you, Operator, and good afternoon, everyone. By now, you should have received a copy of the earnings release for our second quarter 2021 results. If you have not, a copy is available on the Investor Relations portion of our website. On today's call will be Lisa M., Chief Executive Officer, Simeon Cole, Senior Vice President and General Manager of Healthcare, and Rohit Ramchandani, Senior Vice President of Finance and Strategy. Before we begin, I'd like to remind you that some of the comments made on today's call are forward-looking statements. These statements are subject to risks and uncertainties, including those described in our filings with the SEC. Actual results may differ materially from those described during the call. In addition, any forward-looking statements are made as of today, and the company does not undertake to update any forward-looking statements based on new circumstances or revised expectations. Also, all non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I would now like to turn the call over to Lisa Im. Lisa?

Thank you, Rich. Good afternoon, everyone, and thank you for joining us for our earnings call. The decision to streamline performance into a healthcare payment integrity company remains on schedule and was reinforced by our results in the second quarter with healthcare revenues growing by over 27% on a year-over-year basis. The wind down of our recovery business is nearly complete and we anticipate exiting that business entirely by the end of the year. As we see the world slowly revert back to pre-pandemic levels and emerge from this COVID thaw, we anticipate our quarterly healthcare revenues will continue to grow. We are focusing our efforts to drive new business while expanding our existing contracts through the combination of innovative technology products and new services. Despite the impact from COVID, our healthcare business over the past three years has progressed largely in line with our expectations. As we indicated to you back in 2018, most of our large contracts required a significant amount of upfront investment. for people, integrating systems, et cetera, before beginning to turn profitable towards the latter stages of year two. However, it really wasn't until year three, which would be where we are today, that these contracts reach maturity and begin to show more applicable steady state margins. But just to clarify, not every new opportunity is going to have this long of a wrap-up period. If we are expanding a scope of services with an existing client, we can implement that in three to six months since their systems are already integrated with ours. We believe that there are multiple avenues for us to win new business and continue to grow our healthcare brand and operations, whether through our land and expand strategy or unseating a competitor in a new client. And to that point, The competitive landscape within healthcare payment integrity has dramatically changed in the recent past. Our biggest competitor in eligibility was purchased by a private equity firm that previously purchased another large payment integrity competitor in 2018. In addition, currently there is a separate pending merger among two of the other significant payment integrity companies But that transaction is under some additional scrutiny right now, so we will have to wait and see what transpires. Overall, we're excited about the prospects of our healthcare business growth. And at this time, I would like Simeon Cole, our Senior Vice President and General Manager of Healthcare, to take you through the results and some of his outlook. Simeon?