Streamline Health Solutions, Inc.

Hello, and welcome to the Streamline Health Solutions second quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jacob Goldberger. Please go ahead, Jacob.

Thank you for joining us for the Corporate Update and Financial Results Review of Streamlined Health Solutions for the second quarter of 2022, which ended July 31st, 2022. As the conference call operator indicated, my name is Jacob Goldberger. Joining me on the call today are T. Green, President and Chief Executive Officer and Chairman of the Board, Ben Stillwell, President and CEO of Evaluator Solutions, Javad Shaikh, President and CEO of AdLead Solutions, and Tom Gibson, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. If anyone participating on today's call does not have a full-text copy of our press release and out-of-views results, you can retrieve it from the company's website at www.streamlinehealth.net or from numerous financial websites. Before we begin with prepared remarks, we want to be sure we are clear for everyone on the record how certain information which may be provided today, as with all of our audience calls, should be viewed. We therefore submit for the record the following statement. Statements made on this conference call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those we may discuss. Please refer to the company's press releases and filings made with the U.S. Securities and Exchange Commission, including our most recent form, 10-K Annual Report, which is on file with the SEC for more information about these risks, uncertainties, and assumptions, and other factors. As always, we are presenting management's current analysis of these items as of today. Participants on this call should take into account these risks when evaluating the topics we will discuss. Please note, Streamline Health is not undertaking any commitment or obligation to publicly revise any such forward-looking statements made today. On today's call, we will discuss non-GAAP financial measures such as adjusted EBITDA and unaudited figures related to our acquisition of equity. Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures. To help you compare these amounts on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. I would now like to turn the call over to T. Green, President and Chief Executive Officer.

Thank you, Jacob, and thank you all for joining us this morning. Following my opening remarks, Ben Stilwell, President and CEO of Evaluator Solutions, and Javad Shaikh, President and CEO of Avalit Solutions, We'll be giving updates on their respective businesses, followed by a financial update from our CFO, Tom Gibson. As a reminder, on August 16, 2021, we acquired Ivy League, and their financial performance will be included in our GAAP results from that date. With that, I'll get started. Beginning with a financial overview of second quarter 2022, we ended the quarter with 5.2% million in new bookings, $4.4 million of which were SAS bookings, at the upper end of our $3 to $5 million quarterly SAS PCV goal. Bookings for the six months ended July 31, 2022, totaled $14 million, $12.5 million of which was attributable to our SAS products. Our strong bookings performance is the result of the significant investments we made into our sales force and attestment to the power of our strong partnership channel. Operating conditions within acute care hospital systems have improved from the peak of the COVID crisis last year. However, headwinds associated with staffing and backlog of projects at hospitals remain. Despite the headwinds, we maintain our expectation that our SAS bookings performance will be on average in the $3 to $5 million per quarter throughout fiscal 2022. Our bookings pace has improved. However, we believe in a normalized environment, our bookings performance would accelerate. Given the pace of our bookings during the first half of this quarter, we wanted to share a new metric to provide additional insight on the growth in our business. As of July 31st, our booked SAS annual contract value totaled $14.3 million. As a reminder, our GAAP SAS revenue in fiscal 2021 was $8.1 million. Our CFO, Tom Gibson, will provide additional details related to this metric and the timing of revenue associated with our bookings during his portion of today's call. But please note that contracts only impact recognized revenue once the software is live. Moving now to our GAAP consolidated financial results for the three months ended July 31st. Total GAAP revenue for the second quarter of 2022 was $6 million. 109% increase from the second quarter of 2021. Notably, our SAS revenue grew 138% year over year. Recurring revenue accounted for 71% of total revenue in Q2 2022 compared to 84% during the second quarter of 2021. On a pro forma basis, total revenue for Q2 2022 increased 19% from the prior year. VAST revenue grew 11%. Second quarter 2022 adjusted EBITDA was a loss of $1.1 million compared to an adjusted EBITDA loss of $800,000 in second quarter of 2021. As of July 31st, 2022, we had $5.9 million of cash on hand and $10 million term loan. Our cap table remains clean with only one class of common stock. Tom Gibson, our CFO, will provide additional details about our financials during his prepared remarks. Both Avalit and Evaluator continue to improve the innovation and service functions of their respective businesses. Avalit is driving significant bookings with new and existing clients through its Cerner relationship, and the business is maturing rapidly under Javad's leadership. Evaluator has made rapid progress as well. Over the past nine months, we have made investments to extend Evaluator's reach to the professional fee environment as our customers have asked for a consistent coding environment across all claims. Evaluator now offers inpatient, outpatient, and professional fee modules. Both new and existing clients purchased the Pro Fee Evaluator module during the second quarter of 2022. Before I turn the call over to Ben, I want to acknowledge the progress we have made in building a successful sales structure within our company. As we have discussed, our model is innovation plus service equals growth. We have made great progress within our innovation and service functions. Beginning in the second half of last year and culminating with the addition of Amy Severo, Evaluator CRO, we made significant investments into our growth functions. This investment in growth was key as the hospital system software market requires C-suite relationships to effectively move contracts through to execution. Today, we believe we have a powerful growth function. One, CRO Amy Severo, three seasoned business development personnel to manage channel relationships, three inside sales personnel that generate leads and push promotions, six direct regional sales personnel that have C-suite relationships inside hospitals in their regions, and five marketing and advertising personnel. The team has a sales administrator coordinate all these activities along with the demonstration personnel. We have worked hard over the last year to build this structure and make the right investments. Today, 18% of our total headcount is dedicated to growth. We believe the current investment level is sufficient to meet or exceed our bookings goals. I'll now turn the call over to Ben to provide an update regarding evaluator.