American Well Corporation Class A

Good evening. My name is Rex, and I will be your conference operator today. At this time, I would like to welcome everyone to the AMWEL 2Q22 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one once again. Thank you. Sue, you may begin your conference.

Hello, everyone. Welcome to Amwell's conference call to discuss our second fiscal quarter of 2022. This is Sue Dooley of Amwell Investor Relations. Joining me today are Amwell's chairman and 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. The 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'd like to turn the call over to Ito for his opening remarks. Ito?

Thank you, Sue. Q2 was another important quarter for our company as we make progress on the launch of Converge, our technology platform powering the innovative healthcare organizations leading the way to our hybrid care future. We are proceeding according to our plan for the year, and our team is engaged and inspired by our clarity of purpose and well-defined role in a digital-first future. I'll start by reviewing some highlights of the quarter. Then I'll take a moment to discuss the market for our solution and some customer examples. Bob will then review some key metrics, our financial results, and our guidance. Then we'll open the discussion with your questions. To begin, here are a few highlights from Q2. A key workflow in Q2 has been supporting CVS Health on the launch of the virtual care delivery platform they announced in May. This is a new consumer centric offering designed to bring together the many elements of CVS health ecosystem services into a single integrated experience with unified digital front door. The CVS virtual care digital front door is an exciting new initiative and we are honored to be selected as the backdrop for this vision. I want to take this opportunity to thank the AMWEL team members on the front lines of this extraordinary effort. Turning to development of Converge, we are making good progress delivering our industry-leading digital care delivery enablement platform. With CVS well underway, and a substantial part of our platform in live deployments, our R&D efforts are focused on bringing Converge over the finish line. We continue to prioritize existing customer migrations, demand for our solution continues to grow, and sales conversations are proceeding according to our plan. Active providers on the Amwell platform reach an all-time high this quarter, and are 45% higher than a year ago. Visits on Converge remain steady at 9% of total visits through the Armwell platform, which is reasonable and expected as we shift our focus to more complex, sizable Converge customer migrations, which naturally take longer. We expect a healthy growth in Converge visits in the second half of the year. We continue to add to the AMWEL team, putting in place some great additional talent to enhance the clinical dialogue around Converge. Dr. Kerry Nelson joins us as our chief medical officer. Kerry's clinical perspective will be crucial to the continued sales and implementation of our platform in collaboration with our sales and services teams. Regarding our sales organization and go-to-market efforts, we held our mid-year sales meeting in June. Our teams are gearing up to accelerate out of this transitional time, ready to expand with our new infrastructure software solution. We are going to market with a plan for Converge that highlights a well-defined role with messaging that demonstrates the ROI benefits of our future-ready enterprise platform offering that allows clients to select the modules and program they need now and expand when they are ready. And finally, we announced the accelerated integration of Silver Cloud Health, our comprehensive behavioral health solution. This positions us to deliver this compelling solution to the market more quickly enabling our payer and provider customers to reach more members and patients with best-in-class care, driving substantial cost savings and patient benefits during this time of great need. Now, I'd like to take a moment to provide a brief update on Converge development. Converge development is continuing at a rapid pace. We continue to extend and enhance the platform as a standalone connective infrastructure powering a seamless and elegant experience. We are also innovating real time as we deploy with our customers, creating digital first best practices that are setting the standard for broader industry utilization. For example, with Converge, we enable a EHR direct invite which requires no logins or passwords and no waiting room for patients. In a single motion, a clinician simply opens an instance within the EHR, texts the patient the link, conducts the consult, and documents the visit. In another example of converged differentiation, we introduce the next patient feature which creates a seamless way for providers and payers to connect patients and clinicians with speed and efficiency. The next patient capability allows providers to accept a patient without a previous appointment from a queue directly in their EMR or their provider portal, blending clinical networks to increase patient access and maximize revenue. Patients coming in through their provider or health plan portals are automatically matched with the next available provider, creating shorter wait times and an optimal patient experience. With this feature, the benefits accrue to all players. As we complete the build of Converge, and with each additional customer migration, we drive an ongoing transformation at our company. from being a healthcare services company to a technology company that enable meaningful transformation of our clients' digital care delivery. Now I'd like to take a moment to discuss the market and how we plan to pursue growth through a land and expand strategy. In my regular discussions with our customers, there is a strong recognition of the pressing need to evolve to a hybrid model of care that blends the physical, virtual, and automated modalities in a single digital first experience. Health organizations are facing a new world that is challenging for them in many ways. The need for operational efficiency, the staffing crisis, and technological fragmentation all combine to create an urgent need to achieve a vision for digital care delivery. Work flows, priorities, and timelines will vary, but the future that seamlessly integrates digital care delivery is certain and plays right into the heart of our value proposition. We believe Converge is the infrastructure to support this emerging model. Converge and our other solutions have been built on years of investing and understanding the current and future needs of our customers and our focus and clarity of purpose is resonating with them. As we migrate customers over to Converge, we are engaging in the sales conversations which demonstrate the ROI benefits of digital-first approach to healthcare that includes various programs and modules that are optimized on Converge. These sales conversations are specific and compelling. Our teams work together with our customers to identify clinical and operational pain points and configure our programs and modules to provide a seamless digital extension to their care delivery to define new, optimized workflows that are more important in today's environment than ever before. At our sales meeting in June, it was great to be reunited in person with our teams and to experience the energy and depth of talent of our teams. Our leaders shared stories highlighting the powerful benefits of our solution that are defining the sales dialogue, and I'd like to review a few of them. We are delivering efficiencies that reduce costs and extend our customers' ability to deliver care. For example, St. Luke's University Health Network is leveraging our solution to unify multiple care delivery platforms and deliver care directly from the EHR. They have extended their ability to reach thousands of patients with virtual behavioral health services and in-hospital monitoring around the clock. Our solution is also enabling improvements in health equity that enhance patient outcomes with multiple paths of care, including automated programs and coaching. Specifically, SilverCloud Health Research has found that up to 80% of users show improvements in their depression or anxiety and 56% of patients with clinical diagnoses are diagnosed free within three months of commencing care. Our modules and programs also drive better outcomes, which also directly impact the bottom line. For instance, our dermatology program successfully reduces the wait time to see a specialist from an average of 35 days to less than 24 hours. And Sword Health MSK programs have demonstrated 60% lower rates of surgery intent, lower reported levels of pain, and reduced medication consumption by nearly 50%. When a program can address a health concern in a timely manner and return the patient to work with less complication, the value to payers and employers is significant. We are empowering data collection that can inform and validate the benefits of new and efficient workflows. The Dignity Health Digital Behavioral Health Team told us they aim to make virtual care indistinguishable from in-person care, thanks to insights from the data they are using to demonstrate quality outcomes. With our programs, they were able to drive behavioral health visits up from 300 a month to well over 1,000 per month, allowing Dignity Health to dramatically leverage their providers and extend the benefit of digital care in the behavioral health realm. Additionally, our solution empowers and accelerates our customers' urgent need to reduce burnout and retain their teens. Last quarter, we told you how Spectrum Health were saving $1 million per year by lowering ED readmission rates. Specifically, Spectrum used our technology to create a new transition team that stands between patients and the ED to buffer the demand, to manage care, and to allow care providers to spend their time appropriately. This solution is resulting in such a compelling provider experience that Spectrum Team uses the program as a recruiting tool when competing for talent. Our Conversa automated engagement programs increase patient touch points while reducing unnecessary outbound calls to patients by as much as 50% and have demonstrated more than doubling of nurse capacity for post-surgical patients. Also addressing the crisis in clinician burnout, our automated care programs augment the care team, enabling them to practice at the top of their license. Conversa programs are increasingly being recognized for their important role in the future of digital care. A recent article by authors at the University Hospitals of Cleveland described the benefits of our automated care programs in helping to overcome obstacles to conventional care management outreach. The authors highlighted earlier interventions when problems occur, improved outcomes, and stronger trusting relationships between patients and care managers as key benefits. The patient experience is excellent with Armwell's Conversa programs, with research showing that 97% of patients say our automated programs are important in their care. If you want to experience the power of these solutions firsthand, text HELLO to 77877 for several impactful demos. These are some of the examples shared at our sales meeting, and they are great stories to tell out in the field as we are gearing up our teams to sell to new customers and expand within existing ones. Now, there is one additional element of differentiation that I want to spend a moment on. We are delivering a powerful, multifold ROI benefits of efficiency and revenue generation with the superior patient and provider experience of our AMG providers. AMG allows us to deliver the benefits of an extended and highly available team without competing with our clients in any way. When customers choose, we provide much needed bandwidth to help alleviate burnout and solve for critical care team shortages like behavioral health, dermatology, or neurology. They can even turn this capability off and prioritize their own providers when they choose. In fact, as we engage in sales conversations with our customers around their digital care delivery aspirations, we are finding that our history as a service provider is a differentiating advantage for us as a software vendor. Our clinical experience awards our team the ability to have the clinical sales conversations that will result in new workflows that deliver on the promise of digital-first healthcare. This gives us a powerful seat at the table. To wrap up Q2 highlights, I would like to close by saying that we are evolving our platform to help our customers make the transition from transactional healthcare to continuous healthcare. Our aim is to empower our customers to achieve important ROI benefits while delivering their organizations into the future of digital healthcare. Before closing, I want to add that I'm proud of the way our teams are executing during our transition year, putting in place the crucial elements of our solution, driving engagement, and executing on our mission to define and deliver the fundamental infrastructure enabling the future of healthcare. With that, I want to turn the call to Bob.