Sharecare, Inc.

Good morning and welcome to ShareCare's third quarter 2021 earnings conference call and webcast. Our participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Leading today's call are Mr. Jeff Arnold, Chairman and CEO, and Mr. Justin Ferrero, President and Chief Financial Officer. Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements. within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risk uncertainties and reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of some of the factors that could cause actual results to differ materially from these four looking statements are discussed in more detail in our followings with the SEC, including a risk factors section of the perspectives for our business combination filed with the SEC on June 3, 2021. In addition, please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press that is posted on the company's website. I would now like to hand the conference over to Mr. Jeff Arnold. Please go ahead.

Good morning, everyone, and thank you for joining ShareCare's third quarter fiscal 2021 conference call. I'm very proud that we delivered another strong corner of financial performance and further expanded the reach of our digital health platform to enable millions of members, employees, and consumers to consolidate and manage all their health in one place, regardless of where they are on their health journey. By partnering with leading payers, providers, life science companies, and employers, We make it easy for them to buy, implement, and engage with their populations to measurably improve their overall well-being. Now, let me provide a brief overview of our financial results for the quarter. The third quarter results reflect the momentum we are seeing in the market, exceeding our expectations. We beat our revenue in adjusted EBITDA guidance, delivering revenue growth of 32% to $105.6 million compared to the prior year period, and adjusted EBITDA of $7.9 million. The results demonstrate the continued execution of our land and expand strategy, the advancement of our business development initiatives, and the initial successful integration of our recent CareLinks acquisition. We also continue to bolster our team with key executive hires, including Jafri Muhammad, who led UST's healthcare business and was previously with Anthem, Kevin O'Loughlin, who ran Salesforce's healthcare sector, working closely with health plans, including Anthem, and our new head of investor relations, Evan Smith, joining us from Change Healthcare. Additionally, I'd like to congratulate our chief medical officer, Dr. Nirav Shah, on his recent appointment to the advisory committee of the CDC director. We are continuing to build momentum, which gives us great confidence for growth and profitability for the remainder of fiscal 2021 and in fiscal 2022. Let me provide some color on our performance by channel, starting with enterprise. In the second quarter, we expanded our relationships with key enterprise clients, as well as won several new clients, including Lennar and Aflac, which will begin to ramp in the fourth quarter and early next year. We also launched several government-sponsored and commercial health plans during the quarter. I would also note that we are executing well on the implementation of previously disclosed program wins, including both Centene and Humana's Care Plus, as well as with corporate clients like Nordstrom and Lockheed Martin, among many others. As a result, we continue to expand our base of lives and are on track to end the year with nearly 10 million lives on the platforms. In addition, we're also seeing increased engagement in our deployed digital therapeutics, which will be a significant growth driver over the next few years as we increase penetration with current customers and expand our total market opportunity. To further support growth in this area, we launched Unwindy by ShareCare, a broad-based mental wealth being app designed to help people better understand how their minds work, reduce their stress, and build healthier habits. It's based on more than a decade of research by renowned neuroscientist and addiction psychiatrist, Dr. Jed Brewer, who became Sharecare's Executive Medical Director of Behavioral Health when we acquired Mind Sciences in July of 2020. Unwinding complements our suite of award-winning digital therapeutics that are clinically proven to help people overcome behavioral health issues, including anxiety, smoking and vaping, and emotional eating, introducing new growth opportunities in both consumer and enterprise. These proven digital therapeutics address employers' increasing demands for science-based behavioral health solutions and seamlessly integrates into a comprehensive virtual care platform by empowering people to improve and manage the interconnected aspects of their physical and mental well-being. Lastly, I'm very proud of the team, given the integration of CareLinks. which is performing well against plant. With the increasing activity in home health right now, I'd like to take a minute to reinforce the competitive advantages ShareCare has realized through this acquisition. To recap on our last call, CareLynx is a leading in-home care technology platform with a nationwide network of more than 450,000 tech-enabled care professionals that deliver on-demand personal care services endorsed by AARP since 2018, with more than 1.5 million Medicare Advantage members having access to their services today. CareLink's tech-enabled care providers support the functional needs of seniors and patients living with chronic conditions while helping address isolation and loneliness. Through these home visits, CareLink's digital platform facilitates rich social determinants of health, data capture, population health analytics, and real-time care coordination with remote clinical teams to administer in-home monitoring and digital care plans to close identified gaps in care, ultimately delivering over 3.3 million hours of home-based care. Today, CareLinks is being recognized at a White House event with the Elizabeth Dole Foundation for the Respite Relief Program that supported over 1,600 military and veteran families amid the pandemic. In addition to CareLinks' strong performance in the corner, we see significant opportunities as we cross-sell their capabilities to our existing customer base, as well as leverage their capabilities to drive new integrated solutions, including becoming a unique component, differentiating the pair-agnostic advocacy solution we are developing in partnership with Anthem, ShareCare+. By building on the scale and strength of the ShareCare platform, Our advocacy solution, ShareCare Plus, will harness the power of ShareCare's industry-leading capabilities in data and artificial intelligence to drive more informed, precision health decisions and improve outcomes by leveraging our existing digital capabilities from benefits navigation and risk assessment to digital therapeutics and decision support. ShareCare Plus will have all the components to deliver a comprehensive, best-in-class, flexible solution to address the needs of employers, health plans, and providers. And we bring this to market working closely in partnership with Anthem, providing their customers seeking a pair agnostic solution where we are uniquely positioned to engage with people at every step of their health journey, and more importantly, engage with them how and where they prefer to engage, whether via a digital assistant or talking to a live person on the go or in the home. Now let me move on to our provider channel, with services approximately 6,000 physician practices, hospital systems, and health plans. We continue to see positive trends with strength in volumes and demand for our medical record retrieval, payment integrity, and value-based care solutions. Showing the strength and diversity of our opportunity across this channel during the quarter, we signed contracts with leading payers and regional hospital systems for our record retrieval business, which received the highest overall performance rating in the 2021 class ROI vendors report. We signed a new contract for our payment integrity offering with a division of one of the largest health and life reinsurance companies in the world. We launched our unified patient and provider solution suite with a regional medical center and multi-specialty physician group to share care enable their clinicians. and sign contracts for value-based care offerings, which will begin in the first quarter of 2022. Moving to our consumer solutions channel, which focuses on leveraging our platform to implement targeted, audience-specific messaging campaigns on behalf of pharma and life science companies, we had a very strong performance in Q3, which reflects Sharecare's ability to deliver strong results against brand goals and the power of our 108 million first-person database. The consumer solutions channel continues to build momentum, adding approximately 25 significant new brands since this time compared to prior year, with positive trends in average revenue per new brand supported by a significant increase in the number of million-dollar-plus campaigns. The team has already built momentum for next year, selling its suite of 2022 client solutions, featuring immersive content experiences and new advanced targeting capabilities which leverage insights from Sharecare's Community Wellbeing Index. We have integrated new capabilities from our DocAI acquisition to further efforts to decentralize clinical research and are actively marketing smartomics to pharmaceutical and life sciences companies to advance relevance, equity, and data integrity in research through artificial intelligence-powered, smartphone-based studies. In fact, a recent observational study conducted on behalf of global biopharmaceutical company UCB exemplified this futurist approach to research by building objective measures of symptoms of a rare disease, achieving diverse representation among the affected population, and automating a collection of rich patient-generated data streams. Through smartomics, we are realizing the future of medical research today by conducting these virtual studies. which yield highly relevant real-world findings at speed and scale. With partners like UCB, we are able to maximize not only our understanding of specific conditions, but also build a complete digital journey from research to care for people everywhere. We are excited about the potential in these areas, which will further support our growth in fiscal 22. As I've demonstrated by our results, Across all our channels, we have multiple avenues to drive growth, including signing new clients, cross-selling additional solutions to our current customers, expanding our digital therapeutics and value-based care offerings, and launching new products. Based on the strength of our platform and momentum to date, we remain confident we can deliver strong, recurring, organic revenue growth with additional growth opportunities as we further enhance ShareCare's capabilities through strategic acquisitions. And now I'll turn the call over to Justin for a more detailed review of our third quarter financial performance.

Justin? Thanks, Jeff. And thanks to everyone on the call for your interest in ShareCare. As Jeff indicated, we delivered another strong quarter with both revenue and adjusted EBITDA exceeding our guidance. As evidenced by the results, we continue to gain momentum in the business, delivering strong sequential and year-over-year revenue growth and positive adjusted EBITDA while continuing to invest heavily to support our future growth. During the quarter, we hired several key executives, as well as attracted great talent across the organization to support our growth. Digging into the quarter, our total revenue grew 32% from $80.2 million a year ago to $105.6 million, which also represents more than 7% sequential quarterly growth. This was primarily driven by increased client penetration, executing on our land and expand strategy, and new client implementations and wins across the entire platform. On an organic basis, we grew total revenue in excess of 20 percent compared to the third quarter of the prior year. I would also note that recently acquired CareLinks is performing in line with, if not ahead of, our initial expectations. Adjusted EBITDA for the quarter was $7.9 million, which was also ahead of previous guidance of $6 to $7 million, and which reflects increased investments in the current period for both technology and Salesforce expansion. We expect the investments to support our long-term growth and drive additional operating leverage as we gain greater traction for the ShareCare digital platform with existing and new customers. I'll now turn our to our guidance for the fourth quarter and full year. Our Q4 guidance for revenue is 120.3 to 121.3 million, and adjusted EBITDA is expected to be 8 to 9 million. The fourth quarter guidance reflects strong sequential growth as various initiatives ramp, as well as seasonality in our consumer solutions channel, which generates more than 30 percent of its revenue in the fourth quarter as life science companies typically increase their spend before the end of the year. In addition, adjusted EBITDA includes the previously disclosed negative impact from CareLinks and additional investments in sales and technology, as well as the seasonal impact of certain marketing-related expenses which occur in the fourth quarter. For the full year 2021, we are reiterating our revenue guidance of $414 to $415 million, while increasing the midpoint of our adjusted EBITDA guidance, which is now expected to be in a range of $29 to $30 million, increasing the low end of the range from $28 million to $29 million. This reflects the strength of the third quarter and that we are essentially fully booked for the remainder of the year. Now, I'll hand it back to Jeff for some closing remarks.