American Well Corporation Class A

Good afternoon, and welcome to Amwell's first quarter 2022 conference call. Today's call is being recorded. All lines have been placed on mute. If you would like to ask a question at the end of the prepared remarks, please press the star key, then the number one on your touchtone phone. We ask that you please limit yourself to one question. At this time, I would like to turn the conference over to Sue Dooley, Head of Investor Relations. Please go ahead.

Hello, everyone. Welcome to Amwell's conference call to discuss our first fiscal quarter of 2022. This is Sue Dooley of Amwell Investor Relations. Joining me today are Amwell's chairman and co-CEO, Dr. Ido Schoenberg, and Bob Shepardson, our CFO. Earlier today, we distributed a press release detailing our announcement. The release is posted on our website at investors.amwell.com and is also available from normal news sources. This conference call is being webcast live on the Investor Relations page of our website where a replay will be archived. Before we begin our prepared remarks, I'd like to take this opportunity to remind you that during the course of this call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to the risks and uncertainties described in AML's filings with the SEC and actual results or events may differ materially. Except as required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we'll refer to both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release. With that, I'll now turn the call over to Ido for his prepared remarks on the quarter. Ido?

Thanks, Sue, and welcome, everyone. Q1 was an important quarter for our company as we continue to make progress on the launch of Converge, our integrated technology platform that empowers and complements leading healthcare organizations as they pursue their business initiatives in a fragmented and rapidly changing digital care delivery landscape. We are proceeding according to our plan for this year, and our teams are engaged and inspired by the benefits of clarity of purpose and well-defined role in a digital-first future. I'll start by reviewing some highlights of the quarter and the full year. Then I'll take a moment to discuss the market for our solution and the key benefits assigned to patients, providers, payers, and innovators. Bob will then review some key metrics, our financial results, and our guidance. Then we'll open the discussion with your questions. First, we're making good progress on our development of Converge and the delivery of our industry-leading digital care delivery enablement platform, which has been our vision from day one. With substantial part of our platform ready for live deployments, our R&D efforts are now focused on bringing Converge over the finish line with several remaining capabilities that are in high demand from customers and prospects. We continue to prioritize existing customer migrations while sales conversations around Converge are proceeding according to our plan. We have moved past the rapid deployments of Amwell Now customers and are now beginning the most complex and innovative migrations. Work on deployments of some of our largest and most strategic customers continue on pace, and these are setting the standard for digital healthcare that solves the challenges of today and is built for the future. These close working partnerships are exciting and provide evidence of our expertise and role as the pure play digital care delivery enablement provider of choice in this new era of hybrid healthcare. With our focus on Converge, it is clearer than ever to both existing and new clients that we will continue to support, complement, and fuel their growth and never compete with their business. In addition to successful migrations, we are seeing growing engagement across our products. Our EHR integrated solutions are a big driver of our number of active providers, which grew 27% over the year-ago quarter and 12% compared to Q4. Visits on Converge grew 40% over Q4 and accounted for 10% of total visits in Q1. Our Conversa offering has a great momentum. The market increasingly appreciates that automation is a compelling new element of digital healthcare, and they require the trusted partner to provide and integrate automation into their care delivery workflows. Also, SilverCloud is off to a great start. We are hearing a very favorable response to this highly effective behavioral health program that enables our customers to reach more of their patients by combining automated features with virtual care, supporting the movement towards health equity during this time of need. Our sales leaders are gearing up, armed with powerful enablement initiatives. They are going to market with a plan for Converge that highlights a well-defined role as the leading digital care delivery infrastructure, as well as the value of our unified, future-ready enterprise offering that allows clients to select the modules and programs they need now and expand when they're ready. Now I'd like to shift to some highlights from our services team. We are on track with big deployments that we talked about last quarter. Our solutions are resonating with these customers and innovation is happening in real time. These deployments require an infrastructure that extends well beyond telehealth to connect providers to one another and to disparate tool sets used throughout these organizations. We are breaking new ground in digital care delivery with these leaders, setting standards that inspire other customers and prospects to choose Converge for pursuit of their own digital care delivery aspirations. Our services teams are busy migrating our customers onto Converge and the feedback is overwhelmingly positive. Many commend the experience on Converge as faster and more streamlined. They also appreciate the ability to add functionality thanks to the ease of integration that is fundamental to our solution and will empower them to adapt as digital care evolves and expands. In Q1, we had recent go-live at Westchester Medical Center, Marshfield Clinic Health System in Wisconsin, and the City of Hope, to name a few. I'd like to speak to a couple of other customer examples in more detail. First, El Camino Health is fully migrated to Converge, and early feedback is great. they are seeing significantly improved speed and user experience, as well as powerful in-visit features that deliver seamless collaboration with colleagues. El Camino views provider and patient experience as crucial to their efforts to build trust for digital healthcare, a key initiative among the Silicon Valley systems operational groups. The CIO of LMH Health echoed these comments. After going live on Converge, the team at LMH Health immediately recorded much better speed and greater ease to instantly connect with patients, eliminating the headache of managing disparate credentials across disconnected systems. We're delighted to be providing the core functionality supporting LMH Health's strategic initiatives around efficiency and outcomes, and are honored to have been chosen as their partner in pursuit of true digital first care delivery. In a great example of Amwell as a chosen partner in true digital first healthcare, we recently announced a partnership with LG. By combining LG's extensive product portfolio and market presence with Amwell's deep digital healthcare knowledge, We aim to unlock the last mile for patients and providers and deliver greater access to health services through devices they use every day. Our goal is to simply and intuitively connect provider to patient, leveraging the LG user experience while relying on the expensive capabilities of Converge to do much of the heavy lifting behind the scenes. As in-person, virtual, and automated modalities converge to create significantly improved healthcare experiences, unlocking the last mile connecting to patients is more important than ever. Moving on to modules and programs that enhance the value of our platform and set the stage for us to expand our presence within our customer base, We had a few exciting announcements recently that I'd like to highlight. We recently announced two new programs to add to our arsenal. We are bringing to market a compelling new musculoskeletal program designed to keep treatment on track with digital interactions. This program provides access to physical therapy, virtual coaching, a digital sensor kit, and engagement services to achieve better program adherence and outcomes. We partner with SWORD Health for this program, which is a great example of growing our ecosystem of innovators and the expansive power of converged integration. And our new dermatology program offers quick and easy access to quality care with board-certified dermatologists who can treat nearly 3,000 conditions helping to solve for the nationwide shortage of dermatologists. The program provides a more convenient alternative to traditional in-person dermatology care in faster turnaround times, allowing members to identify and address issues early and potentially mitigate future costs. These programs address two of the most pressing pain points among the cost containment initiatives of health plans. They augment our list of well over 40 modules and automated programs that deliver hundreds of powerful use cases that we will use to drive expansion of high-margin reoccurring revenue within our existing customers and also provide the ROI motivator for new customer adoption. To wrap up Q1 highlights, I want to add that I'm proud of the way our teams are executing, putting in place the crucial elements of our solution, landing new names, driving engagement, and executing towards our mission to define and deliver the fundamental infrastructure enabling the future of healthcare. Next, I'd like to spend some time briefly reviewing what we are seeing in the market for our solution. In my many conversations with leaders of healthcare organizations who describe the challenges they're facing, they speak to the need for a true long-term partner to support and accelerate their aspirations for digital care delivery, and it's clear that the market is moving to us. Q1 was a busy quarter for our industry with big events like VIVE and HIPS. Our booths were busy with lots of lead generation traffic, and it was great to be back to in-person meetings. Perhaps the biggest challenge cited in these discussions is the enormous fragmentation of technology that characterizes digital health technology today. It's a very confusing world with telehealth, a small element of a world in which digital healthcare is a certainty. Healthcare industry CIOs currently have hundreds of tools that are being used by a disparate population of users, most of which are not connected. And an endless stream of new tools is on the way. While some may choose to build custom components and integrations in-house, I believe, in the end, healthcare will choose to specialize in the business of care, and its leaders will choose to leverage trusted partners who complement, not compete with them, to ensure best practices for digital healthcare are enabled and future ready. We are fortunate to be entirely complementary to empower these large players and further assist them to assume their important role in the future of care delivery. The current crisis in care team burnout is making the resilience of clinicians and staff a top priority for hospital CEOs, and the struggle to unify disparate solutions to create more efficient workflow is very real. With our solution, Built on years of mindshare with our customers, we are bringing the electronic glue, the connector, to organize and create a secure, safe, and seamless experience. I'd like to take a moment to describe how our solution benefits the full care continuum. First, our solution is designed to improve patient experience and outcomes. Today, each time a plan member seeks care, the experience is different and disconnected. Virtual visits can be inconsistent and delayed with multiple logins and disparate portals made even more confusing by referrals to specialists. Patients struggle with lack of information on what is covered and how to follow up. which converges their foundation, our customers will deliver a seamless patient experience, one that is also electronically unified. A best-in-class telehealth experience will be table stakes. Patients will take rapid, seamless connectivity as a given, and through a streamlined user experience driven by our infrastructure, will be able to navigate across various providers And through one unified experience in the payer portal, they will know what is covered, which provider is in network, and can make payment on an ecosystem empowered by Converge. Second, our solution is designed to address care team burnout and the struggle providers face as they cope with mounting workloads and fragmented, disconnected digital healthcare tools. Whether a provider sees a patient in person or virtually, the experience will be fast and seamless because many points along the continuum of care are connected to the platform. Converge is designed to connect the care team to the information they need, help them coordinate for consults, accelerate next steps, and deliver better outcomes. Converge offers options for managers to load balance and offload cases during peak times and can improve the standard of care by simplifying integrations with new automation programs that enhance continuity between visits. Designed to do the heavy lifting, Converge incorporates rules and regulations plus the documentation and payment systems that makes digital care delivery so complex. Our solution can unify the care team's resources and drive new, efficient workflows to achieve sought-after efficiencies so that the teams can focus on the delivery of care. Third, turning to payers, our significant install base and close partnership with payers have informed the development of Converge which is optimized around their needs. Convert is designed to accelerate payers' efforts to unify disparate operations that include member services, provider networks, employer clients, PBMs, and care management requirements. Beyond the hard work of connecting today's digital resources, we enable payers to further optimize their models with add-on modules across additional use cases and with automated care. With our ecosystem further expanded by programs like SilverCloud, payers can offer their members best-in-class behavioral health, driving substantial benefits on both savings and improved patient experience. And all of this can be done on the payer's existing platform in a white-label experience that maintains their close connection with their members. In a digital healthcare reality that is built on converged infrastructure, the participants and their digital resources will always be connected and informed, care will be customized and optimized. Like Amazon's distribution framework does the heavy lifting of integrating disparate sellers, customers, and payers With fulfillment, technology, and security, the role of Converge is clear. To be the engine to empower providers, patients, and the industry that supports them by connecting the tools they require to realize a better overall healthcare experience. The most important element of Converge is not a single program, but the intersection and integration of all of this. and the opportunity to begin with specific instance and add-on functionality over time. In summary, as digital care is rising as a priority across the industry, there is a growing need for enterprise-grade care delivery infrastructure, and our solution is leading the way. The challenge is fragmentation of technologies and tools, and the goal is to improve outcomes. by allowing care teams and payers to leverage the best of in-person, virtual, and automated care across the continuum. And, unlike Poland's solution telehealth vendors, we are enabling, not competing, by providing a powerful connective infrastructure layer that extends well beyond telehealth. We are helping the various players on all sides of the equation to leverage our platform to design and deliver the method of care they choose and the tools they select. And in pursuing the strategy to deliver the leading digital care delivery infrastructure, we are building on our deep knowledge of healthcare, leading with technology first. At Amwell, our future is about supplying the infrastructure to accelerate our customers' own unique vision for digital care delivery. And that means selling an infrastructure offering that drives long-term, high-margin subscription software growth as we pursue our path to profitability. Before turning the call over to Bob, I wanted to highlight an important development. We recently announced the arrival of our new Chief Marketing Officer Susan Worthy Susan is replacing our outgoing CMO, Mary Modal, who is retiring after 10 years leading our marketing organization. Mary has been a great partner over the years and we wish her the very best. Susan is a tenured marketing executive with more than 25 years of experience as a leader in enterprise-level healthcare services and technology companies. She possesses a deep understanding of healthcare and technology, and she brings to Amwell a creative, data-driven approach and experience that comes from years of leading world-class marketing organizations. We welcome Susan and believe her skills will be instrumental as we turn the page from telehealth to Converge. Now, I'd like to close my commentary by saying we think Q1 represents a good start to a very strategic year for Amwell. At Amwell, our role in our industry is clear, our opportunity is large and expanding, and our mission has never been more relevant. Now, I'd like to turn the call over to Bob. Bob?