Sharecare, Inc.

Good day and welcome to the ShareCare second quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Evan Smith, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you. Good morning and welcome to ShareCare's second quarter fiscal 2022 earnings conference call and webcast. All 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 Ferraro, President and Chief Financial Officer. Today's call is being recorded and an archive of the recording will be available for later today on the Investor Relations section of our website. 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 provision of the Private Securities Litigation Reform Act of 1995, which includes statements regarding potential strategic reviews and our guidance. These forward-looking statements are subject to various risks and uncertainties that 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 statements or reflect changes that will occur after this call. Descriptions of some of the factors that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC, including the risk factors section of our Form 10-K for the year ended December 31, 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 release that is posted on the company's website. I would now like to hand the conference call over to Mr. Jeff Arnold. Jeff, please go ahead.

Thank you, Evan, and thank you all for joining us this morning. Our second quarter results reflect the continued execution of our strategy with growth across three channels. We delivered revenue and adjusted EBITDA above our guidance ranges, which reflects strong recurring revenue, as well as benefiting from upselling and cross-selling within and across channels. We are continuing to see both RFP and pipeline build sequentially, as well as year over year, supporting our continued growth in 2023 and into 2024. Our expanded sales team is delivering higher productivity, driving new direct opportunities while also seeing growth from both our channel partners and brokers. I will also reiterate from our last call, we continue to have strong client retention and have limited client concentration and have a highly diversified business across all three channels. Additionally, we announced today that we've signed a memorandum of understanding for a multi-year strategic partnership with Carillon, the healthcare service subsidiary of Elevance Health. to integrate ShareCare Plus's capabilities into Carillon's health guide services that currently support hundreds of thousands of members, which will help drive additional and significant scale of our solution. While our 2023 is shaping up to be a strong year, the second half of 2022 is experiencing softness due to the timing of the start date of the Carillon partnership, which was originally planned to start in the third quarter. Justin will provide more detail about this in a moment. While we strongly believe in a long-term strategy for our business and the underlying value of the combined solutions across our three channels for our customers and consumers, we have initiated a strategic review of alternatives that have been presented to us from our non-enterprise segments. The board and management believe that this review, coupled with an ongoing focus on accelerating our strategy and cost initiatives, will create enhanced value for all stakeholders, including our customers, consumers, employees, and investors. Now let me move on to the second quarter performance. In the second quarter, we delivered revenue of $103.8 million, 5% ahead of the prior year, and positive adjusted EBITDA of $2.1 million, while continuing to invest in sales and marketing to support accelerated growth into 2023. With $211 million in cash on our balance sheet to support growth, no debt, and positive trends across all three channels, we remain in a strong position to execute on both our organic and inorganic growth objectives. In enterprise, we are seeing continued momentum, both in the size and number of new pipeline opportunities from 2023 and continued strength in RFP activity. Our digital first approach offering seamless and data-driven experiences resonating with existing and potential new customers. Customers are increasingly looking for a platform solution that can drive consumer activation, engagement, and satisfaction by simplifying the patient journey to not only identify gaps in care, but also to deliver the comprehensive solutions to address gap closures, including improved wellness and preventative screening, disease management with access to digital therapeutics, as well as integrated access to virtual primary care and tech-enabled home care. In addition, as our customers continue to look for ways to address the rising cost of healthcare, while increasing their commitment to their members or employees, our Digital First platform can help them lower their cost of administration while enhancing the experience and outcomes for their respective populations. We have over 11 million eligible lives on the platform with additional growth expected as we launch ShareCare Plus later this year. In addition, with our multi-year strategic partnership with Carillon, we will be able to add to the scale and revenue already in place for ShareCare Plus for 2023 to our current contracts and robust pipeline. We continue to see positive trends from our home health business CareLinks, which is delivering strong performance ahead of our initial expectations by expanding within its customer base, as well as further diversifying its business with new payer wins and the expansion into the employer market. Let me give you a quick example of the benefit CareLinks delivers. Working with an ACO of a leading hospital system, CareLinks rolled out a transitional care program focused on patients discharged from a hospital or SNF within seven days. The program provided in-home support, including managing the first visit and an average of four in-home visits for assistance with daily activities and ADLs, as well as transportation to and from medical visits. It delivered a 19% reduction in readmissions for this transitional care program after two years. The data is very impressive. and highlights the success of our program to reduce avoidable and costly readmissions. In summary, because of our new wins, strategic partnerships, and continued innovation, we remain confident for increased momentum and enterprise in fiscal 2023. In provider, we continue to see strong growth in our record retrieval business, with June being a record month driven by increased penetration of existing clients, the addition of new client sites, as well as continued strength in audit volumes for risk adjustment and HEDIS as we expand our presence of payers. Adding hundreds of new sites in the quarter, we remain on track to achieve our 6 million medical records retrieved target for the year. We also continue to build momentum in our record retrieval pipeline with positive underlining growth trends, including a solid increase in the average deal size and a more than 20% sequential increase in the number of opportunities. As we expand our direct and partner-driven marketing activities and across an increased number of use cases we discussed last quarter, underlying demand for the business remains strong. To further strengthen the business, and as I mentioned earlier in my remarks, we continue to implement cost initiatives to improve margins. In Life Sciences, we continue to grow with our top 20 pharma clients and brands, as well as find new opportunities for our digital patient engagement solutions for leading pharmaceutical brands. We continue to build new pipeline opportunities and maintain solid client retention. We now anticipate lower growth in the second half of the year. A significant slowdown in pharma DTC marketing spend has created a headwind for our growth rate, which is being driven by individual brand dynamics, including patent expiration and launch timing, as well as macro economic factors. That said, we remain confident that the strength of our content, first person data, and our personalized omni-channel approach continues to drive program execution and competitive advantage. We have had several strategic decisions in fiscal 2022 to streamline and advance new solutions like ShareCare Plus and believe these decisions have strengthened our platform and deepened our relationship with strategic partners, which will enable us to drive more sustainable, profitable growth as we move into 2023 and forward. In 2022, we have already seen the benefits of our efforts with increased momentum in our pipeline at four to five times where it was in the prior year, with new commitments in place for 2023. Our focus remains on selling larger engagements, creating more opportunities for cross-selling, and continuing to invest to deliver more value and product innovation to support our clients. Now let me turn the call over to Justin, who will review our financial results for the quarter and the fiscal year and share our financial outlook and assumptions for the remainder of fiscal 2022.

Thanks, Jeff, and thanks to everyone on the call for your interest in ShareCare. As Jeff indicated, we delivered strong results for the second quarter of 2022 for both revenue and adjusted EBITDA. I'll walk you through the second quarter results and then discuss our revised outlook and specific cost actions we are taking to enhance our performance. Our second quarter revenue grew 5% to $103.8 million from $98.5 million a year ago, exceeding our guidance. Growth in the quarter was positively impacted by year-over-year increases in eligible lives on the platform and an increased number of records retrieved. Year-over-year growth was impacted by our previously disclosed decision to sunset certain businesses, which resulted in a revenue reduction of approximately $11 million over the prior year period. Adjusted EBITDA for the quarter was $2.1 million from $6.6 million for the prior year, exceeding our guidance. Adjusted EBITDA was driven by incremental public company expenses and increased investments in Salesforce expansion to support growth. We expect these investments to support our long-term growth as we gain greater traction for the Sharecare digital platform expand our record retrieval business, and execute in our life sciences channel with existing and new customers. We remain in a strong financial position, ending the quarter with $211 million in cash on our balance sheet and continue to progress towards becoming cash flow breakeven by year end. As Jeff mentioned, while we continue to have a significant build in our pipeline and RFP activity for 2023 starts, Macroeconomic conditions impacting our life sciences channel, as well as the timing of a large contract start date with Carillon, a subsidiary of Elements Health, have impacted our outlook for the second half of the year. Due to the uncertainty and timing, we are withdrawing our previously issued guidance and will no longer be providing financial guidance for fiscal 2022. While these factors make it difficult to provide guidance in the interim, let me provide some colors. With respect to the large payer advocacy contract, we're in the process of finalizing the implementation timeline of the Carolina agreement. Our focus is on a long-term partnership, which has taken additional time to bring to completion. In our life sciences channel, while our underlying business continues to perform, a significant slowdown year over year and DTC spending by the pharma industry has caused greater uncertainty in our forecast for the remainder of the year. Note, a recent IQVIA study indicated DTC spending by top pharmaceutical companies was down about 32% from the first half of 2021 compared to the first half of 2022. As such, with 35% of our channel revenue historically being generated in the fourth quarter, we remain cautious on the level of campaign extensions for the remainder of the year. And in the provider segment, while year-to-date we have continued to see strong performance in our record retrieval business, we are currently seeing the slower rollout of certain payment integrity contracts. With respect to cost initiatives, these include the streamlining of corporate functions, a reduction in our real estate footprint, optimization of our provider record retrieval business through automating and offshoring certain functions, as well as other initiatives to improve our operations and drive performance as we move into 2023. In closing, we believe the momentum and opportunities for 2023, supported by a strong balance sheet, will enable us to drive new opportunities for growth with existing and new customers while enhancing our long-term financial performance. With that, we will move to Q&A.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press star then two. Please limit yourself to two questions. You may re-queue if you have more questions. At this time, we will pause momentarily to assemble our roster.

Our first question comes from Craig Hattenbach with Morgan Stanley.

Please go ahead.

Yes, thank you. Outside of the timing issue with Caroline, can you just talk about enterprise more broadly, you know, given some of the macro headwinds, you know, what you're seeing from a sales cycle perspective and any sensitivity to price on the enterprise side?

You know, I think you know, we're, we feel good about the pipeline that we're building. I mean, I think the sales cycles don't feel like they're changing. I mean, it's still a long sales cycle, but, um, our pipeline is robust. Uh, our RFPs are way ahead of last year. Um, you know, this Caroline partnership is a, is a massive one for us and we're kind of still staying within that range based on client size of, on the, on the PMPM. We haven't seen a lot of, uh, uh, headwinds there yet. You know, we've kind of set price and we've been kind of holding to it. Um, but yeah, no, we feel, we feel good about the enterprise business. We think, you know, if you think about how we're selling, we've got, um, our current Salesforce, which continues to grow. Um, we've got the national accounts team and Anthem that's opening up opportunities for us. We've now added Caroline. So, you know, their book of business and hopefully, uh, the ability to grow that. And, um, you know, sales cycle remains the same and we haven't felt the price pressure.

Got it. And if I could just follow up relative to some of the other headwinds you're seeing, you know, CareLynx looks to be kind of a bright spot here. Can you just talk a little bit more in terms of since you've purchased that business, just some of the momentum you're seeing and how you think about that business as you head into next year?

Yeah, so it'll exceed our revenue expectations for the year. We have secured more business from our largest payer client for next year, you know, within that business. And we've won our first Blues plan for next year for that business. And our sales force is now trained on it. And so it used to just be the CareLynx team, you know, that brought their historical business. Our salespeople are actively outselling that right now. And then in addition to that, we're adding new capabilities. So kind of go more up the clinical ladder. And I mentioned a little bit about that on the work that we did with one particular ACO a minute ago in the script. So happy clients, growing clients, bigger sales force, and new capabilities.

Great. Thank you.

Thank you.

Next question comes from David Larson with VTIG. Please go ahead.

Hi. With respect to the enterprise division and the sort of previously expected onboarding of lives in the back half of 22, is Elevance and Caroline, is that delay sort of the only change relative to your previous thinking, or were there also other clients that you were going to onboard that have also delayed, or is there an elongation sort of across the board? Thanks.

David, no, we signed this MOU several months ago with Caroline and have just been working through the transitional services. It's hundreds of people that are involved with this. It'll be our largest contract ever. And the date has slipped. And so we're confident it'll hit this year. It'll be full year next year. but it's a large contract that's moved on us. But the other implementations are happening on schedule.

Okay, so it's only the Caroline Elevance contract that has pushed. It's probably going to deploy in the back half of 22, certainly in 23. And quite frankly, it's so big and so large and so important, that's what's leading to the delay. It's not like there's a cancellation of the contract.

No, it's only the con the contract negotiation contracts only longer now than it was in the beginning. Um, it's just a lot of work, you know, like, um, you know, they've got hundreds of health guides that would be, will be transitioning, uh, and, uh, into our partnership. And, uh, and there's a lot of detail in the implementation work and, um, but it's all, all the conversations are all the work is being done around. you know, that transitional services and implementation work.

Okay. And when I listened to Elevant's earnings call this quarter, they talked a lot about their digital health strategy. They talked a lot about value-based care. And it sounds to me like share care is a key element integral part of that. And if anything, it's such a large deployment, that's maybe what's leading to some delay here. It's not headwinds or a potential recession that Elevance is facing. It's simply the size of the implementation.

Yeah. Hey, David, thanks for the question. This is Justin. We don't see this as a systemic issue. This is a timing issue around this relationship. And there's uncertainty as to exactly when that will come in, but we are highly confident that that relationship will come to fruition this year.

Okay, that's great. Thank you. And then the PMPM range had been like in the $2 range. But I think with the advocacy solution and the ShareCare Plus solution, it's in like the $6 plus range. Is that what we're talking about with this kind of deal? And can you just remind me what are the incremental services that you provide in ShareCare Plus relative to like the legacy solution?

Yeah, so that's correct on the pricing. And then if you think about our platform, you know, think of it as wellness services. Think about it as digital therapeutics. And now think about it as navigation and care management. So adding the navigation and the care management to what's driving up the $2 PMPM. And then we're maintaining the upsell opportunity of CareLynx.

Okay, great. Thanks very much. Appreciate it. I'll hop back in the queue.

Thanks, David.

Our next question comes from Eric Crutcher with Innofront Research.

Please go ahead.

Thank you. I wanted to focus on the strategic alternatives for provider and consumer. And I think you made a comment around alternatives presented to you. Are those alternatives presented by the businesses or presented by outside parties? And any thoughts about what strategic alternatives may be attractive to you?

Yes. That's a great question. So, you know, since last year, you know, since we went public, we've been really trying to focus on how to simplify the story. So, you know, we stopped doing some COVID work, some PCMH work, and we've continued to look at all our assets and think that we're undervalued. And so how do you unlock that value? And we know enterprises is the core business, right? That's the business we've mentioned in the past that we need to win at. And we think some of the partnerships that we created is a great step in that direction. And we also are believers on how the three segments fit together. So when you think about medical records, the reason we're in that business is so I could, you know, provide my enterprise clients with access to the medical records. There could be an opportunity that we could sell that division and still maintain data rights, as an example. And it's growing fast, it's profitable, and we've had conversations with groups about that asset. And similar on the life science side, you know, what's really important to us with the life science business is access to the content. So the same way we need access to the data, you know, with medical records, we need access to the content through life sciences. And we've had, so we've been exploring conversations with third parties of, Are there ways that maybe we could unlock those assets, maintain those rights, and then reinvest those dollars into our core enterprise business?

That's interesting. And I know you haven't provided the EBITDA contribution for those businesses in the past. I'll ask you if you'd be willing to. And if not, could you at least provide some commentary on are these major contributors to the acceleration you're expecting for 2023? or is there any impact on cashflow profitability if you were to say goodbye to those businesses?

Um, well, yeah, we don't break it out. So Eric, thank you for the questions. Justin, the, um, the, all of these units are profitable. Um, so, so on a standalone basis, they are profitable. Um, the, um, you know, the, the growth, We've talked about historically has been strong on the life sciences, but we're having headwinds this year. So it wouldn't be one of the divisions that we'd say would be the core driver for next year. Our growth is very strong on the chart business. It remains strong. But we'd have to weigh whether or not selling an asset like that and reinvesting in the enterprise business is ultimately better to drive shareholder value. But the core asset is around our enterprise business. And as you saw, we didn't include that as part of one of the areas that we're looking at a strategic review. So in short, both of them are profitable. Both of them perform well. There's been headwinds on life sciences this year, as we talked about, and the largest growth driver to our business is the enterprise business, and that's not the one that we have taken inbound interest on. Got it. Thank you for all the detail. Sure.

Our next question comes from Richard Close with Canaccord Genuity.

Please go ahead.

Yeah. Thanks for the questions. Just to dive deeper on the life sciences side of things. So Justin, I'm just curious, have you seen cancellations there? Just talk about, you know, what's going on here in 2022, what's changed from the first quarter. And then you guys seem pretty positive on the opportunity in life sciences in 2023. Um, but I guess my question is, is how, how strong is that confidence?

Yeah. So the answer is, is we typically never have cancellations and we have had some this year. It's not significant. Um, I'll say that, you know, and I, I said it in the script that, uh, the campaigns continue to perform. That's where we, we really Excel, uh, and drive an ROI for the customer. but there is, there is headwinds. And, uh, you know, with that IQVSA, it is DTC, you know, farmer spending is down 30%. And with so much of our business, uh, gets booked in the second half, 35% of our, of our full year is in Q4. Um, you know, there's headwinds there. And so to bracket what those headwinds can be is, is, um, has been a bit challenging. So hopefully that answers your question. Yes, there's been cancellations. They're not major, but it's unusual because that does not happen to us historically. All that said, the campaigns are performing, but it's just a big unknown of how much buy-up we're going to have in the back half of the year. And it is a significant portion of the revenue.

Okay. And then the confidence with respect to 2023 and that, I mean, you talked pretty favorably on, um, sort of the pipeline for that.

I think that, so we have strong conviction in our team that runs that asset. Um, and, and then we have also been bringing, uh, new products to, to them. Um, You know, so we remain strong as long as, you know, let me put it this way. There's 30% decline in the industry. We aren't seeing that. And that's in part because of the strength of our team. And so we believe that we'll fight through this and that this asset will be a revenue grower for us in 2023. We're going to do a business update in Q4, as we talked about in the press release. And we can give more clarity, but, but we're a big believers in that team and the asset that we've built. Um, and, and we're not taking the same pain that a lot of others are because of that. But, um, I think it's a little too early to give that guidance, but we will give a business update in Q4.

And Justin, maybe just add one thing to that. The brands are staying with us. They're just pulling back some of the dollars. That's less about the cancellations and it's more about the amount of spend.

Okay, that's helpful. And then just maybe on the enterprise side, you know, the comments seem pretty positive. With that being said, have you seen any degradation at all or, you know, purchasing decisions, you know, being elongated or anything along that side on the enterprise?

Well, you know, what we've seen is, you know, we've made a pretty big pivot into ShareCare Plus. I mean, we didn't have ShareCare Plus when we went public. So if you recall, you know, we got Anthem to invest. We took the money and we built ShareCare Plus, which was adding the navigation and care management to the platform. We got some, you know, even with just the demos, we're able to get some significant contract wins. Um, we were able to cut the different relationships that we cut with Anthem, like their national accounts team. And then the one thing that we, that we were finding and, uh, and, and because accounts were familiar with share care and knew it was kind of a, this always was sort of an advocate, you know, as a digital first advocate, we just needed a couple more capabilities to complete the solution set. Um, you know, if anything, they wanted just to see who else are you doing this with. And so, um, And so that's why we've focused so hard on the Carillon piece is that we wanted to show that we could do more business with Elements. That's one thing that we had heard from investors, like, show us Anthem, Elements, we'll do more business with you. Go beyond DocAI and other things. And being able to partner with them now to kind of unlock hundreds of thousands of their members that they're using for, that they're servicing for advocacy and put that on the ShareCare+. gives us a reference account. And so if anything, what we've just seen in our sales finalist meetings is it's a new offering that Sharecare hasn't offered before. And so getting them comfortable that we can execute these new capabilities has been where a lot of the dialogue's going. But just because we have so many more channels of ways to get the clients, we don't feel the softness because we're up so much year over year because we were coming from a smaller base. And now I think it's just a matter of getting the deployments, getting the references, and continuing to win new business.

Okay. Can I slip one final one in?

Sure.

Yeah, so on suspending the guidance, so it sounds as though you've got some weakness, you know, potential headwinds on the life sciences, Enterprise, you know, you have this delay a little bit. And then provider seems like it's going okay, but you have some lower audits. Why the decision to suspend, you know, all your guidance rather than just make some sort of, you know, cut to it?

Well, So I can start, we can do this together, but it's the breadth of the moving pieces, you know, to there there's brackets around timing of the carillon. Um, there's brackets around, you know, 35, sometimes 37% of our business and life sciences and Q4 alone. Um, you know, we have inbound interests on the strategic review, um, You know, and if it was really just one variable around that, I think we would have. But in order to, and each of those impact not only revenue but EBITDA, that bracketing all of those together, you know, would have created a wide bracket that we don't think it would be helpful to you in the modeling. That's why we suspended and said that we will give a, an updated business update when we know that timing comes in. I mean, it's just, just the timing of the Carolina piece alone. It could be tens of millions of dollars. So it's that's, that's why it wouldn't have been helpful because we'd either have to go a low to a much, much higher number and it wouldn't have been helpful.

Just one clarification. Our audit business is going really well on provider. I don't know if I heard that that was down.

I think what you're referring to, Richard, was the PI. The audit business is doing great.

Just to reiterate what Justin said, we're sitting here now where it's like Like we've got really strong visibility on 2023. And, you know, we've built the product. We've got the go-to-market. We're going to have pretty significant scale. I mean, if you think this is going to be hundreds of thousands of ShareCare Plus members in the first year of launch. And as we're sitting here right now in this moment of kind of the back half of 22, we're saying, do I peg that start date or do I continue to thoughtfully work through the transition plan? Do I know what's going to happen in our life science business? Our leader there has never missed. And so she's really very good at this. And she's just saying the brands are still there. They're pulling back the spend. And I'm not positive what that looks like. And then we're looking at these strategic alternatives that we think are interesting for the reasons we articulated and aren't going to take know by the end of the year i think we'll have a path a go or no go if we're going to pursue that or not um and then we've got some other you know cost optimization things that we're doing with automation and outsourcing there that is a moving date as well and so we said do we give that big range like justin said or do we give you give strong conviction for 23 based on what we just talked about and then have an analyst day um you know, in Q4 where we can demo the products and go into more detail for next year. That's the thinking.

Great. Yeah, no, thanks. That's very helpful.

Good.

Our next question comes from Cindy .

Please go ahead.

Thanks a lot. Thanks for taking my questions. I know that you don't usually give the segment breakout for EBITDA, but you usually do comment on the revenue. So I'm just curious, like maybe we'll see it in the queue as well, but it looks like the enterprise revenue X CareLinks, maybe CareLinks is about 8 million, a little over 50 million. And then maybe the medical records is about 27. Consumer, if it was flat with last year, would be about 18.6 million. Am I correct there in the ballpark?

Yeah, you're in the ballpark. The enterprise business is in the $60 million range. All in with Caroline, yep. And then the provider business is between $26 and $27 million. And then life science is between $17 and $18 million.

Okay, great. And then just in terms of, you know, I guess the EBITDA, like, So to get to the 2.1, obviously we have the non-recurring cash stuff, some of the, I guess, renegotiations, the severance, about $8.6 million. You had said last quarter, too, that you expect that to slow down, right, or start to stop in third quarter and fourth quarter. I mean, that's the way you'd get to, I guess, cash flow break even, correct? Do you still expect that towards the end of the year?

Yeah. Yeah, it does. Yes, so we are still focused on cash flow breakeven. Of that $7 million or so, really half of it is around severance and cost cutting. As part of our plan, our go-forward plan around cost optimization, I think that this line item will continue to remain elevated, and then we'll see it start to come down in 2023.

Okay. So just so I'm clear though, so the non-recurring costs, there's still cash costs though. So they're still going to happen like third quarter, I kind of expected, but then in fourth quarter as well, we're going to see some of that.

Yeah, I think you'll still see some of that as we're taking a hard look at all aspects. And so you know, things like the optimization of the HD, you know, of our, our record retrieval business, a lot of that might not hit until the fourth quarter. And so, so that's why you'd see a, you know, elevated there as well. But again, we're focused on it. So I think it'll remain similar to where we are today, but as we go out into 2023, and we implement these operational efficiency plans kind of through the back of this year, you could model that that will start to come down.

Okay. And just on the strategic initiative, so if you're looking at provider and consumer, it sounds like you're not looking at like maybe an outright sale because you want to keep rights to the data and the content. So it's more like a licensing sort of arrangement or a partnership that you might be looking at. Is that right or?

No, I think there's a lot of different ways it could go, but you could sell that business and partner with the buyer to have access to the data. Okay. Yeah.

And if I could just get one more in. On the share buyback, can you give us just a comment about what you've bought back, if you've bought back any, or how that's going?

We haven't bought back any yet. It's all in place to be executed on. But we haven't acted on it yet.

Okay, thanks a lot.

This concludes our question and answer session. I would like to turn the conference back over to Jeff Arnold for any closing remarks.

Great. Well, thank you for everybody's time today. Yeah, I'd like to reiterate what we've discussed. You know, a strong Q2. There are big initiatives underway. that can provide positive impact to our enterprise business, anchored by some of the large partnerships that we've been working on with a particular client, but also across our entire book of business. And so feel good about that. The product is looking amazing. We're going to do an analyst day to show it to everyone. You're going to see the commitment from our partners behind it. And 2023 is going to be a great year. Um, I think the strategic review is, is very timely, you know, just this idea of like, is our business too complicated for investors and the belief that there's a lot of value in our assets that needs to be unlocked. Um, but as I mentioned to Sydney at Cindy is, um, we also believe this is very much on strategy. And so as we look to potentially. make moves in that area or evaluate making moves in that area, maintaining data rights and content rights. And some business relationship is important to us because we think that really differentiates our offering, the strength of our data, the strength of our content. And I can't underscore how well providers doing. And we hired a new COO last year who's joined us who has incredible expertise in automation and outsourcing. and have put together a really solid plan that we have begun to implement that should drive tremendous EBITDA next year for ShareCare. And we'll start to see some of that even in Q4 of this year. And we appreciate everybody's interest with ShareCare. And as always, if you have any questions or thoughts and want to reach out, we're available anytime. So have a great day, and thanks again.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.