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spk00: Good day and thank you for standing by. Welcome to the Divity Health Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press part one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, head of investor relations, Matt Milanovich. Please go ahead.
spk05: Good afternoon and welcome to the Tivoli Health third quarter 2021 financial results conference call. Before we begin, if you do not already have a copy, the earnings release supplemental information and related 8K filed with the SEC are available on our website, activityhealth.com. I would also like to highlight that our financial presentation within today's press release and supplemental materials are reflective of the divestiture of the nutrition segment. Therefore, all results of operations related to that business are now reported within discontinued operations. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to note the directly comparable financial measure calculated in accordance with GAAP in today's news release, which is also posted on the company's website. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding activity health expected quarterly and annual operating and financial performance for 2021 and beyond. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words believed, anticipate, planned, expect, and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in CIVITY Health filings with the SEC and in today's news release. And consequently, Actual operations and results may differ materially from the results discussed in the forward-looking statement. The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. And now I'll turn the call over to the company's president and CEO, Richard Ashworth.
spk08: Good afternoon, and thanks, Matt. Thank you for joining the call today to discuss Tiviti Health's third quarter earnings results. Joining me on the call are Adam Holland, our CFO, Tommy Lewis, our COO, and Matt Milanovich, our VP of IR. As you saw in today's press release, our performance for the third quarter of 2021 was characterized by strong results in revenue, adjusted EBITDA, and cash flow. We reported revenues of $126.3 million adjusted EBITDA from continued operations of $40.5 million and free cash flow of $27.2 million. SilverSneakers continued its positive momentum during the third quarter, growing to 17.1 million total visits, a 12% increase compared to the second quarter of 2021. In-person SilverSneakers visits were 16.4 million, growing 13% from the second quarter, even though government mask mandates were still present in 11% of our fitness partner locations. While we experienced some headwind from the Delta variant during the quarter, our recent trends have strengthened during October as the effects of Delta have somewhat subsided, and we continue to expect that in-person visits will accelerate next year. Further solidifying our confidence in 2022, adults over 65 continue to have the highest immunization rate in the nation, with 85% being fully vaccinated and 97% having received one dose, according to the CDC. And our SilverSneakers poll surveys indicate that a significant percentage of our members have returned or intend to return to the gym. SilverSneakers digital visits were approximately 700,000 during the third quarter, a decline from the second quarter. Going into the fourth quarter, we are planning to increase marketing spend focused on digital and in-person visits. Our virtual platforms are an important channel for our SilverSneakers members. Through the first three quarters of 2021, 45% of the participants in our live with instructor virtual classes had never participated in SilverSneakers before, demonstrating that our proprietary virtual channel continues to attract and engage eligible SilverSneakers members who may not have otherwise engaged with us. The combination of physical and digital fitness remains core to our strategy because it allows our members to use the benefit where they want, in the gym, at home, or in the community. Looking ahead to 2022, we expect growth in virtual to be accelerated by social engagement and mental enrichment offerings in addition to our evolving virtual fitness programming. Our gym network remains strong as we enter the third quarter of 2021 with approximately 16,000 silver sneaker locations. On average, our national gym network offers members access to a location within 3.6 miles of their homes and 1.6 miles in urban and suburban markets. As we recently announced, we're launching a customizable premium gym network in the first quarter of 2022. This expansion is expected to increase our total available network to more than 22,000 locations, one of the largest senior fitness networks available. Network renewals continue to meet our expectations, with many characterized by multi-year contracts, providing both visibility and stability for the future. Moving on to prime, our prime business is meeting expectations. We ended the third quarter with approximately 12,500 partner locations, similar to where we began the year, and 226,000 active prime subscribers. Subscriber count remained consistent with the end of June, even with the impacts of the Delta variant, and remains higher than where we began the year. We anticipate that our subscriber base at the end of 2021 will position us nicely to grow subscribers in January, which is the beginning of gym season. Next, I just want to provide an update on our SilverSneakers health plan relationships. We're pleased with the continued strength of our client partnerships. As mentioned on our last call, this year's renewal season was very successful in the high 90% range consistent with prior years, and some of our largest accounts are committed to contract lengths that are longer than our average duration. We play an important role with our clients during the Medicare annual enrollment period. So far this fall, our teams have facilitated nearly 400 events and trained close to 12,000 brokers across the U.S. In addition, we built an online resource center at silversneakers.com for clients and brokers that includes educational overviews, member-facing materials in multiple languages, videos, and testimonials. Our clients are integrating these resources into their sales messaging, broker and agent training, and television commercials. as a key element of 2022 annual enrollment because the SilverSneakers brand is a key differentiator. Our clients love the brand for its ability to draw new MA members and drive decreased medical costs for our members. As a reminder from research earlier this year, an Avalere independent research study concluded that the total cost of medical care for SilverSneakers participants was 16% lower than for non-participants. Now moving to an update on our strategy and our brand. We previously stated our intentions to expand beyond a gym access company into a member-focused, data-driven engagement platform company. Our objective of engaging members through our trusted 30-year SilverSneakers brand beyond physical fitness is continuing to materialize with our recent partnerships for mental enrichment with Get Setup and social connection with Stitch. In 2022, we expect these partnerships to contribute to top-line growth and profitability. Our SilverSneakers brand is extremely strong and valuable. We recently refreshed our Net Promoter Score survey, and it increased from 81 to 83, demonstrating growing brand equity. Our brand awareness among the general population of Medicare Advantage enrollees is 78%. This includes SilverSneakers members and non-members and is far higher than the next most recognized senior fitness brand. And for seniors that are not yet of Medicare age, when asked what comes to mind when thinking about wellness and fitness plans, nearly 40% are already familiar with the SilverSneakers brand. We are continuing to leverage the strength of our brand when building our member platform to drive additional channels of engagement. Before wrapping up my prepared remarks, I'd like to highlight the strength of our balance sheet. Over the last 12 months, we've divested Nutrisystem, reduced our leverage ratio from 3.81 to 2.02, refinanced our capital structure, and announced a $100 million share repurchase authorization. Our strong cash flow generation, as further evidenced by this quarter's results, allows us to continue investing in growth. and return cash to our shareholders. I'm really excited about the future of Tiviti Health. Our core business is strong and growing. We're adding new channels for our members to engage with the SilverSneakers brand. We're broadening the access that our members have to physical locations and digital access points. This gives us confidence in our expectation that we'll grow revenue, adjusted EBITDA, and free cash flow in 2022. We would not have this type of strong performance without a fantastic team behind me. I'd like to thank our team for continuing to execute with great results to help our members and our clients. I'll now turn the call over to Adam.
spk05: Thank you, Richard. Today we reported adjusted EBITDA of $40.5 million, reflecting the continued strength of our business. Revenues for the third quarter were $126.3 million. SilverSneakers revenue was $95.8 billion, an increase of $27 million, or 40% over the prior year, driven by an increase in revenue-generating visits. As expected, revenue from fixed per-member per-month fees declined to 44% of our total SilverSneakers revenue, compared to 59% in the same period last year. We expect this percentage to continue to climb as we move into 2022 and generate more member visits as part of our overall revenue mix. We ended the quarter with 17.8 million health plan members eligible for silver sneakers, an increase of 7% year over year. Through anticipated monthly age ends, we are on track to meet our goal of approximately 18 million eligible members by year end, an objective we stated at the beginning of the year. Total Silver Seekers visits were 17.1 million during the third quarter of 2021, compared to 9.1 million for the same period last year, with monthly average participation of 4.2% compared to 2.4% last year. Within the 17.1 million visits, 714,000 visits were live virtual with Instructor. And now to Prime. We generated 24.3 million of revenue in Q3, an increase of $2.6 million over the same period last year. We ended the quarter with 226,000 active Prime subscribers compared to 227,000 subscribers at the end of the third quarter in 2020. We had approximately 3.3 million gym visits from Prime in the third quarter of 2021 compared to 2.3 million in the prior year period. For Whole Health Living, during Q3, we recognized 6.2 million in revenue, a 1.2 million year-over-year increase. Turning to our Q3 2021 ballot sheet and cash flow, we ended the third quarter with cash on hand of $51.8 million, total liquidity of 151 million, and a leverage ratio of 2.02 times. As of September 30th, 2021, net debt totaled $333.3 million. During October, we made all required amortization payments through 2022. Our free cash flow for Q3 was strong at $27.2 million, reflecting positive operational performance, partially offset by working capital. Year-to-date, we have produced free cash flow of $56.3 million. Now turning to guidance. We raised our 2021 revenue, adjusted EBITDA, and cash flow guidance in today's press release, given our continued strong performance in both SilverSneakers and Prime. Specifically, we tightened our revenue range to $475 to $485 million. We increased our adjusted EBITDA range to $156 to $159 million, and and we increased our free cash flow range to 70 million to 79 million. We now expect SilverSneakers participation to return to approximately 60% of pre-COVID levels by the end of 2021 and total SilverSneakers visits for 2021 to range from 60 to 63 million visits. Finally, with respect to capital deployment, we will maintain a disciplined and thoughtful approach to capital allocation by deploying capital where we believe it can drive the greatest value to our shareholders. Our recently announced $100 million share repurchase program is aligned with that commitment and underscores our company's ability to generate strong cash flow. I'll now turn the call back over to the operator to open the call for Q&A. Operator?
spk00: Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad. And to withdraw your question, press the pound key. Your first question comes from Ryan Daniels with William Blair. Your line is open.
spk03: Thanks so much for taking the question, and congrats on the strong quarter. I want to dig into the virtual visits. You mentioned that 45% through the year now are new members, and I'm curious, how sticky are those members, and are you seeing them convert to gyms, or are those new members sticking with the digital platform?
spk08: Hey, Ryan, thanks for the questions. Richard, I'll start, and maybe Tommy, if there's something you want to weigh in. I think, you know, in general, the virtual members are starting to switch back to in-person, which is what we've seen, you know, all the way along. And, you know, we stated virtual will continue to be important for us in the omni-channel offering. I think that the biggest point is And to the heart of your question, we see 45% of those virtual users are new to silver sneakers. That's about double what we see for people walking into our fitness locations as being first-time users. So we see it as a great acquisition channel. In terms of stickiness, we're finding them to be pretty sticky right now. Now, we're still early on in digital. But we are finding some comfort in the fact that those users are maintaining. Tommy, anything you want to add?
spk04: Yeah, the only thing, hey, Ryan, the only thing I would add is that the 45% that are new to silver sneakers, they have never utilized the gym benefit before. So this is a great acquisition vehicle for us. And we're finding those that came in through the digital channel. tend to be their preferred channel. There is a little bit of crossover there, but those that join and begin in virtual tend to stick with virtual.
spk03: Got it. That's helpful. And then, you know, great expansion of the gym network up to 22,000. I'm curious, can you go into a little bit more detail about about the opportunity that affords you. I think you mentioned it's a customizable network, so I'm curious if you're going to allow payers to kind of pick and choose what gyms go in the network based on their location and maybe how that changes the revenue model or how that impacted renewals or contract terms during the period, as it sounds like those were pretty favorable.
spk08: Yep, good question. And, you know, in general, the short answer to your question is yes. We're going to make this available for health plans to consider. We've made it where it's customizable so that they can have some some choice into which locations are really important to them and they want to add. What we were doing is listening to our members and our health plans. You know, the boutiques are kind of an important part of some of our members' lives, and by adding them into our premium network, we can make those locations available. Again, it's still going to come down to a discussion with the health plan, to your point, on how they want to construct that, how they want to construct it.
spk03: Okay, and then final one, and I'll hop off. I don't know if you want to go into this level of detail, but on the contract renewals, given that you're seeing an uptick in virtual visits, which are probably lower cost and higher margin for you, were there any pressures you faced or concerns among payers about continuing with the same fee structure, such that we might see a shift in the level of PMPM and per-visit fees? you know, absent a change in the end market utilization just because of any contract changes? Thanks.
spk08: Yeah, thanks, Ryan. Three good questions. So what I would say in general is that the macro setup for virtual and the value equation of it is resonating with our health plan clients. So they really appreciate that. the virtual, the level of that visit, the engagement that they're getting from their members, and the value that you get from it. Look, like any contract negotiations, those conversations are always ongoing on the revenue side, just like it does on the cost side, on the network side. The way I would describe it is that it's going to stay in line with what we've historically seen. And as we drive more volume into digital, you know, there may be more margin there. But in good faith, we work with our health plans to make sure they're comfortable with the economics. Tommy, is there anything you're seeing in health plan around digital?
spk04: No. Those that were hybrid or utilization-based tended to renew that way, and the same for PMPM. We're really excited about the renewal season. As Richard mentioned in the prepared remarks, a high 90% renewal rate. We were able to add some new geographies to existing clients, as well as add some new plans, some new logos, so a good renewal season.
spk08: And those all include digital, too, right? So I think that's an important part of a demonstration of the value of the digital channel.
spk03: Yeah, definitely. All right, thanks, guys. I appreciate all the time.
spk08: Yeah, thanks, Ryan.
spk00: Your next question comes from Jay Landersingh with CreditSys. Your line's open.
spk01: thank you and thanks for taking questions um so i understand we need to wait till 4q results for 2022 outlook and dollar color you guys just gave about new plan edition new geography with the ma ap underway and based on your current contracts with ma plans and they're positioning their market i was wondering if you're willing to share any expectations with respect to the eligible lives for silver sneakers in 2022 of course excluding the uh unh contract And related to that, will 2022 be the first year where we start seeing some meaningful impact of all the initiatives around engagement platform, deepening relationship with health plan partners, et cetera, or is it still too early?
spk08: I'll just start, and then Adam, and I think I'll take the latter part first. Yeah, we believe that our new initiatives will contribute to top-line revenue and to profitability for 2022. And then, you know, you're right, Jalendra, we'll wait a little bit until the Q4 comes out on more specifics. But as we said, I mean, revenue, adjusted EBITDA, and free cash flow will all be greater in 2022, and that will be, of course, funding with an increase in life count.
spk05: Yeah, Jalendra, appreciate the question. Hope you're doing well. With United taken out, we still won new business this past year. We had expanded markets with other clients. And, of course, we have the natural organic tailwind of Medicare Advantage growth. So those three combined offset the loss of the United markets. And we expect to start next year with more eligible lives and then grow with the normal course age ends as we proceed through 2022.
spk01: So at least a minimum in line with the overall market growth for Medicare Advantage, right? That's probably at least a good starting point. Yeah, that's a decent starting point when you adjust for the United Lives being taken out. Got it. And on SilverSneakers Visit Outlook, which was reduced for both total and virtual visits, Was that driven by visits in third quarter falling short of expectations, or is it that you're taking more conservative view about Q4, or is it a combination of both? Can you just provide some color there?
spk05: I think it's a little bit of both, Jalindra. We saw a bit of a slowdown from our expectations in kind of the later part of Q3. As October matured and Delta subsided, that has rebounded a bit. But where we got it, it's a slight decrease in visits. We do have the normal holiday seasonality, which we're also accounting for, which happens every year. But overall, still feel very strong about where the growth prospects are. We're still increasing participation percent, and we see a lot of great green shoots coming out of the ground for next year's gym season, which, as you know, starts in January, and think that what we're doing internally plus the increase in eligible lives will be a good starting point for 2022.
spk01: Okay. One last one to hop off here. With respect to the Get Setup platform you guys plan to launch in January of next year, is that essentially one more way of deepening your relationship with your members, or is there any direct financial benefit from health plan, which we should be keeping in mind, just trying to understand what exactly the benefit will be there for you?
spk08: Yeah. I appreciate the question, Julian. The way I think about it is two main areas. One is Absolutely for the member. It's a great experience of, you know, continuing, you know, educating and learning and, you know, being able to establish new relationships all under the eyes of a kind of mental enrichment. Similar with our Stitch relationship, which is more purely social, where Get Set Up has some kind of mental stimulation and learning to it. So we know members are valued from that. We know that social connection and loneliness is a big issue and drives health care costs, and isolation is a real problem within that. our member base so we love for what it does for the members from a health plan perspective they want engagement of this group they want this group to want to look forward to things to have things to experience and to just be you know healthier and happier and we know that mental enrichment social connection and physical activity are the three top drivers of your overall outcomes cost outside of your genetic code and so for us that's why we went after social connection and mental enrichment and so it'll be similar to silver speakers in terms of the commercial setup um depending on how it applies for hybrid and for for pmpm what we're excited about is to see how many people we can get you know engaging in this new uh this new experience a new offering great thanks and congrats on good quarter thanks your next question comes from steve halper with cantor your line's open
spk06: Hi. I was just wondering about sequential decline in virtual visits again. And where did that come in relative to your expectations? Because I understand that people are going back to the gyms, but I felt as though that number would have been higher.
spk08: Yeah, it's a great question, Steve. Good to hear from you. Remember that our virtual visits kind of came in two main buckets, right? One was our live instructor-led visits that are done by our trainers. That was about roughly half of the virtual visits. And the other half came from our flex instructors, which are smaller, more community-based, more local. The significant reduction in virtual came from our flex instructors. Our live instructors have actually held very consistent in volume. over the months and over the quarters. We haven't put any marketing against it at all, really. We've been very quiet about it. And the drive back to physical took a lot of that volume out. To your point, what we'd like to have seen more in digital, for sure, and that's why we're going to invest in Q4 in that and believe that we're going to have a really strong start for for Q1 moving on. The one thing we're still continuing to see is more first-time users. If you recall a quarter or two ago, we were in the 35% to 36% range for new through that channel, and now we're tracking closer to 45%, 46%. And so we're going to invest behind more acquisition, which we know our health plans also appreciate. So we'll do that going into Q1.
spk09: Great. Thank you.
spk08: Thanks, Dave.
spk00: Your next question comes from the line of Shauna Wayland with Piper Center. Your line's open.
spk02: Hi, thanks very much. So I just want to confirm, given what you're talking about on the United contract that we're we should still be modeling a $20 million hit in that business next year. And have you renewed the remaining all of the remaining group contracts that you need there?
spk08: Hey, Sean. It's Richard. So, yeah, I mean, the same value that we had placed on that contract remains the same. Nothing's changed there. If your question is on the remainder of the United group lives, we still have those contracted through the end of this year, and we're having active discussions with them to finalize for 23 and beyond. We feel really positive about that. It's going well. it's going well. In terms of all the rest of the group lives plus the individual lives of all the contracts that need to be renewed, all of those are secured, and that's why we're seeing life growth for the beginning of next year and then, of course, throughout the year with the agents.
spk02: And so all of those group lives amount to how much approximately in revenue a year?
spk05: I don't think we've disclosed that specifically, Sean, but I'll get back to you on it.
spk02: All right. Well, that's why I was asking. And then, so when, I think you said that silver sneakers is at 60% of pre-COVID levels. Is that right? Correct.
spk05: That's right. And the way we measure that, Sean, just to be clear, is that that's the monthly average participation rate, the total number of participants in a given month divided by the total eligible compared to pre-COVID. So call it December of 2021 versus December of 2019. And so we think we'll be at roughly 60% of those 2019 levels.
spk02: Okay. And so what is the path back to pre-COVID levels look like? You know, how long will that take and, you know, and what are the levers to get you there?
spk08: Yeah, I think, you know, the levers are, you know, not having restrictions at gym networks and across the state. um you know new cycles around variants and things like that the delta variant plus you know having 10 11 of our partner locations having to have some restrictions and the ability to attend timing mask wearing and things like that i think still still have some some pressure on us going into q4 which is normal gym gym kind of lol season And so we've got plans for marketing to make sure the awareness is there. Our fitness partner locations are driving heavy on safety and making sure they're following the rules and doing what they're supposed to do. They've been good partners in that. And I think for us, continuing to drive an acquisition channel in digital and to work like we have through AEP with our health plans on co-marketing and messaging, which we were very prominently displayed through AEP and still are, I think will be a big driver of getting people back into the program. Exactly when that is, you know, it's hard to know at this point. The recovery, in quotations, has been somewhat volatile as a generality, not just in fitness season or fitness business. But we're looking for a strong start in gym season in January. We're still confident about that based off our survey data and what we're seeing in October thus far.
spk02: All right. Thank you very much. Thank you, Sean.
spk00: And your next question comes from Mike Patuskins with Barrington Research. Are lines open?
spk07: Hey, good evening, guys. A few questions. Richard, have you guys, I guess I should ask, do you have the ability to sort of look at the folks that have not come back to the gyms and have not engaged virtually and sort of target market and sort of you know, really sort of drill down to those folks that have just simply not come back but are still around and, you know, theoretically capable of coming back.
spk08: Yes, and that's one of the benefits of the investments we made in the data platform and the omni-channel, you know, investments. Those are enabling us to target market direct plus using social and other ways to go at the You know, the way we talk about it here is kind of the low-hanging fruit, right? People who have demonstrated in the history the willingness to want to engage in the program but recently have not. So we do that in our prime business as well for those that suspended or those that canceled. We know that those are good places to start to try and get that behavior gems back up again. So short answer, Mike, is yes.
spk07: And then I guess on, you know, this is sort of a longer range question. I'm not exactly sure how to ask it, but as you sort of look at, you know, the 4.2% participation rate and, you know, obviously you're making progress from, you know, over the last several quarters, but if you sort of think about that longer term, I'm just curious if we're looking out three to five years, this isn't official guidance, but if you're looking out three to five years, I mean, is 10% participation, is that the right figure? And let's just say if it is the right figure, how much of that would be, in your view, physical versus social and mental enrichment and maybe other down the road? I mean, how much of sort of the ultimate target do you think is related to your physical offering?
spk08: Yeah, it's a good question. I mean, obviously not giving specific guidance around this type of question, but I understand why you're asking it. I mean, the way I see it is three to five years from now, we'd be much higher than 10%. So I think we'd be at significant engagement levels that are much higher than 10%. And I think exactly what the compartmentalization would be between the two new offerings we just launched plus the many more that are coming in addition to our existing fitness business, I think if you put it all together, we should be a significant and material engagement driver for health plans in the MA space with seniors. And it'll just depend, you know, Mike, on which ones are really successful, which ones, you know, members are finding a lot of, you know, value out of the engagement on. We're going to keep getting smarter. We're going to keep getting better. We're going to keep offering new content, new class times, new genres, new opportunities across all three of these. businesses between physical, mental, and social. And so it's hard to give you an exact. Obviously, we've done a lot of work in thinking about what the future could be like, but in terms of getting guidance around it, obviously, we're not doing that. But I would just say that it's going to be significantly higher than what we've historically had here.
spk07: Do you think it's likely that social enrichment and other could someday actually be more in aggregate than physical in terms of the participation rate? I mean, is that what you envision long-term, or am I getting way ahead of myself?
spk08: Yeah, probably not. I mean, maybe an actual quantity of events occurring, but in terms of value and things like that, I think physical has really demonstrated a strong value proposition over the years. You know, a significant number of health plans continue to invest behind physical fitness for supplemental benefit and Medicare Advantage, and it's a true differentiator for acquisition and retention, not only for the health care benefit. So I think as social engagement and mental enrichment over time continue to prove contributory to outcomes, that that will get better. But I still think our fitness business is going to be very, very large and continue to grow from where it is today into the outer years.
spk07: Okay, last question. On the social connection mental enrichment piece, you alluded to the fact that you expect to actually see a financial impact from those initiatives in 22. Can you just give an example or two of, hey, this is how we monetize this. This is what mental enrichment looks like. This is what social connection looks like. This is how this actually occurs with the end user customer.
spk08: Yeah, so the end-user customer comes into silversneakers.com. If their health plan allows them to be eligible for that experience, they have that opportunity to, once they sign in, to be able to go to that experience. They consume the experience just like they do with our live virtual classes on fitness because these are all live classes that are actually, you know, encounters that are live. with individuals. They can do that on the social side or they can do that on the mental enrichment side. And that is similar to our SilverSneakers fitness economic setup is the way that I would, you know, think about it. And then that's just remunerated back to the plan who, you know, who funds those as part of their portfolio of SilverSneakers experiences.
spk07: Sorry, can you just give an example of like a mental enrichment experience?
spk08: Yeah, sure. So, I mean, you know, one example could be, you know, someone wants to learn how to do healthy cooking at home. And so there are classes on our mental enrichment platform to get set up that are how to cook healthy for low dollar amount. You know, so how to cook a healthy meal under $5 could be one of the classes. You can go on there and learn how to go to the grocery store, which things to buy. Then you can actually cook your meal while others are cooking their meals too. And you have a person leading that who is a, you know, retired chef who was – you know, a chef for many, many years. And so that's one example. There are others. There's even mindful games that people can play, and they can compete with each other on there. We have, you know, and that gets set up, you know, if you go and even look at it on your own, you'll see all the types of content. The content is so wide-ranging. It's crazy. There's so many opportunities. Okay. Fantastic. Thanks, guys.
spk00: And our last question comes from David McDonald with Truist. Your line is open.
spk08: Good afternoon, guys. I just have one question left. I wanted to circle back and actually just follow up on Ryan's question from earlier around contracting. You guys mentioned length of contract and seeing some of your renewals, renew for longer contract cycles.
spk05: I've always thought of this as kind of three-year contract, about a third of the book up for renewal every year. Should we be thinking about, you know, a lower percentage annually up for renewal, maybe moving more towards every four years and about 25% of the book?
spk08: Or, you know, how much are those being extended, I guess? Yeah, that's a great question. So, you know, two of our top five plans renewed for five years, and so that's just two data points. I think in general what we're seeing is more of a spirit of, you know, less from vendor and more kind of partner. And so it's like, hey, maybe if we go into a longer arrangement, we can invest more together, we can do more together over time. And so I don't know if it's every four or, you know, if it's 20% or 25% every year, but it's definitely going to come down a little bit from the kind of third to third to third. because we're seeing longer contract terms with many of our larger clients too. So we go into these conversations trying to figure out how to get a win-win best for the health plan and for us. And the longer term those contracts are, I think the more stability there is. We still have to perform. We have to do everything that we say we're going to do for our health plan, of course, and that's our commitment. But the longer terms, I think, are a demonstration of the value that those health plans find with activity health. Okay. And then just last question, when you guys talk to payers
spk05: is there actually a preference for some of these remote visits where they can actually tell, you know, when someone signs on, when they sign off, how much they're actually exercising, as opposed to, you know, they go to the gym and once they sign in, it's a little bit of a black hole in terms of, you know, knowing exactly how much exercise that person's actually getting.
spk08: Yeah, great question. And it's a little all over the place to be honest, but we're seeing a lot of our health plans are finding the data that's coming back from virtual to be very helpful. To your point, when they go to the gym, we're not exactly sure what they did that day, how long they were there, how many calories they burned, exactly what equipment they used or didn't use, et cetera. And in our digital visits, we know a lot more because we know how long they're there and we know the type of activity that we're doing with them. I would just say that the plans are just really appreciative that the digital channel was created and exists. and that they're getting their members to use. Back to an earlier question around the volume of digital, I think another thing we're going to start to find here is plans are going to help us in trying to point their members to digital as one of the choices. We want to be where members are. and not force them to go anywhere. So if they want a community activation or if they want a gym network or if they want a virtual, we're going to have all three of those available for them. And I think our health plans are becoming more a part of the process than that in terms of making those other options like Flex or like virtual, in addition to the gym network, in their messaging to their members. And I think that's going to help over time and overall volume.
spk00: Okay, thank you.
spk08: Thanks, David.
spk00: All right, thank you. I'll hand the call back to Richard Ashworth.
spk08: Thanks, Jerome. Hey, I want to appreciate everybody's time and attention. Thank you for dialing in. Hope everybody has a wonderful week. Take care.
spk00: Thank you, ladies and gentlemen, and that concludes today's conference. Thank you all for joining Give Me Now Disconnect.
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