American Well Corporation Class A

to one question. Thank you. I would now like to hand the call over to Sue Dooley, Head of Investor Relations with Amwell. You may begin.

Hello, everyone. Welcome to Amwell's conference call to discuss our first fiscal quarter of 2024. This is Sue Dooley of Amwell Investor Relations, and 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. Our earnings release is posted on our website at investors.amwild.com and is also available through normal news sources. This conference call is being webcast live on the IR 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 the 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 our 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 would like to turn the call over to Ido.

Thank you, Sue, and hello, everyone. I'm pleased to report that Q1 was a busy quarter for our company, one that provided a strong start for an important year for us. As a reminder, on our last call, we shared our guidance for a step function in our growth that will help us achieve our profitability goal in 2026. Before I share some highlights on our first quarter, I would like to open with a few general comments. It is now clear that the need for digital care enablement is significant. It is also clear that Converge is performing well and powers sophisticated solutions across diversified clients on a large scale. And finally, it is evident that new large customers are recognizing the value of our platform as reflected by the size and revenue mix of our recent wins. Importantly, as we deploy our offering in the government sector, modernizing the military health system we also expand into a new, sizable market. In addition, we believe that implementing our platform in the demanding government environment is demonstrating important proof points that are also relevant in our existing commercial markets. Those include scale, versatility, and cybersecurity capabilities that will shine a spotlight on our market differentiation across all our segments. During the past three months, we have taken major steps to adapt and transform our organization that will result in a greatly reduced cost structure as reflected in our forward guidance. In addition, we have good visibility into strong top line growth in 2025, coupled with greatly improved margins. The guidance we gave on our last call describes a 30% jump in our 2025 top line, rich with subscription software that will drive gross margin expansion to over 50%. We believe this is a clear indication of the completion of our re-platforming investment period. We believe our technology offering is unique and will continue to drive favorable high margin software revenue mix. And our strong balance sheet fuels us well beyond our needs to achieve profitability. We are proud of our many clients, big and small, that are now committed to and utilizing Converge as their platform. Converge connects their healthcare services with millions of healthcare consumers. It drives efficiencies and fuels new revenue opportunities for them on a foundation of very high user satisfaction scores and NPS ratings. The market for digital health is just starting, and we are well positioned to benefit. What we do is complicated. The value to patients, providers, and pairs is significant. And we believe our deep integrations and vast deployments form long-term bonds with healthcare organizations that make up a big part of the U.S. ecosystem. We are proud of what we have accomplished in the past three years and believe it is beginning to pay off. And now I would like to review some highlights from Q1. First, we are delivering for our clients. In addition to the successful go-lives and migrations we completed this quarter for several clients, we are steadily completing critical milestones as we deploy our solution for the military health system, working alongside the latest partnership for defense health. Following our successful rollout of our digital behavioral health solution in Q1, we are now targeting the next capability offering go-live for Q3. Our efforts are on schedule, and we look forward to supporting the MHS in the full enterprise deployment of our solution scheduled for Q4. Interesting, the work we're doing together with the DHA is growing. Earlier in Q1, in its health.mil website, the DHA also announced its launch of our digital behavioral health solutions at the beginning of this journey. Also, recently an article from Modern Healthcare described the DHS commitment to modernization with our offering at its core. Second, we solidified important initiatives in our growth organization aimed at re-accelerating our bookings and increasing our mix of subscription software revenue. Our growth org is embracing the changes we have put in place, and tonight I will share an example of our booking success. Third, we continue to drive for efficiency. We are optimizing our company by instituting a cost structure that provides a baseline for meaningful profit extensions as our growth scales. In a very active Q1, we successfully migrated a large portion of our visit volume onto our Converge platform via some of the most strategic payer migrations, including previously announced Elevents and Highmark. Visits on Converge were nearly 70% in Q1, meaningfully higher than 54% in Q4. Our platform is scaling and performing well, and client feedback remains strong, with sums operating consistently well over 90%. And now, I would like to provide some color around the successful Q1 client expansion, demonstrating the growth potential within our existing client base. We're a sizable expansion with an existing East Coast Blue Pair client that will deploy several of our automated programs to drive engagement, reduce costs, and compete for members in a crowded regional market for health insurance. Leveraging our programs, this pair intends to identify high-risk members and proactively encourage them to engage with high-value care programs like diabetes management. We also have a good quota for client renewals. including Highmark, Intermountain, El Camino Health, Penn State, and Cleveland Clinic. Concluding my discussions on our growth initiatives, we think we have the right team structure in place and engagement with existing and prospective clients is high. We've completed detailed client reviews and creating rigorous account plans with metrics and compensation plans that emphasize a high-value ROI selling approach and a focus on selling subscription software. Our new org has seen embracing a robust enterprise selling motion that we believe will accelerate our growth, fueled by demand for our hybrid care expertise and a differentiated approach enabling hybrid care delivery across the healthcare landscape. Based on these achievements, we continue into 2024 with high conviction regarding our guidance for meaningful growth next year and our plan to achieve profitability in 2026. With that, I would like to turn the call over to Bob to review our financials and key metrics and our guidance. Bob?