American Well Corporation Class A

Good day, and thank you for standing by. Welcome to the AMWEL first quarter 2025 earnings conference call. At this time, all participants are in a listening 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 star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sue Dooley, Head of Investor Relations for Amwell. Please go ahead.

Hello, everyone. Welcome to Amwell's conference call to discuss our first fiscal quarter of 2025. This is Sue Dooley of Amwell Investor Relations. Joining me today are Amwell's Chairman and CEO, Dr. Ido Schoenberg, and Mark Hirshhorn, our CFO and Chief Operating Officer. Earlier today, we distributed a press release detailing our announcement. Our earnings report is posted on our website at investors.amwell.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 call, we'll 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. 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 the 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 good evening, everyone. I'm pleased to report that Q1 was an impactful quarter for our company. One that provided a strong start to an important year for us. As a reminder, on our last call, we shared our guidance for a big mix shift in software revenue in 2025 that will help us achieve our positive cash flow from operations goal in 2026. We exit Q1 with a strong sense of purpose. In a dynamic time for our industry, our goals remain steady and our mission to transform healthcare remains as relevant as ever. Our solution is built to deliver on goals that are universal and timeless, enabling our clients to leverage technology-enabled care for efficiency and to improve outcomes with better access to more affordable, convenient, and effective care. To begin tonight's call, I'd like to provide you with some more detail on our performance in Q1 before discussing what we're seeing in the market. Then Mark will review our financial results and our outlook for the second quarter of the year. First, together with our latest partners, we advance our progress in the stage launch of our full solution across the military health system. We are inspired by the alignment of our mission with that of the LPDH as we collaborate to achieve important and enduring goals for members of the military and their families. With efficiency defining the urgent agenda of the present day, we see a natural fit for our value proposition. We are hopeful this partnership position has to be a major contributor in the federal market landscape for many years. Second, we made significant progress in our path to achieving positive cash flow from operations in 2026. These initiatives are showing up in a steady better than expected quarterly improvements in our adjusted EBITDA and this is the case again also in Q1. We are driving for efficiency with ongoing focused cost reduction measures while improving our quality of revenue and profit margins. We have successfully increased our mix of subscription software revenues and aligned our costs. we are targeting meaningful margin expansion this year. And with another strong EBITDA performance this quarter, we take a step closer to our goal to improve our adjusted EBITDA by over 60% this year as compared to 2024. In other news, Dan Zemanski joins Armwell this quarter as our Chief Product and Technology Officer. Dan comes to us from Amazon Healthcare. His proven track record leading global and cross-functional teams responsible for platform services, artificial intelligence, and product management gives him the right mix of experience to drive synergies and support our path to profitable growth. Dan is already an excellent addition to our leadership team as we continue to sharpen our operational focus on key priorities, driving efficiencies, optimizing cash flow, and fueling growth. Continuing with the Q1 highlights, here are some more details on our performance. Our teams are working well with our latest partners. As of early April, the entire global military health system enterprise is now using our platform for virtual visits. This milestone puts us in a very strong strategic position as we continue to grow our programs. patient and provider satisfaction on our platform is reported as very high, at well over 90%. As we continue this important work of implementation, many of our programs are now fully deployed and extending their reach across the military health systems around the globe. Regarding this initiative, I would like to spend a moment updating you on deployment timing of our automated and digital behavioral health programs. With our solution now live across the entire military health system for scheduled visits, our dedicated teams are completing the work that precedes the go-lives in the remaining territories for these programs. We are on time and on budget with deliverables for this initiative. However, as a result of the top leadership transition at the DHA, we and our latest partners were asked to wait for the final confirmation from the new DHA director before completing these last-mile deployments. Reflecting this, we now expect that these remaining lives will happen in Q3 rather than Q2. In our conversation with the DHA and LADOS leadership, both remain confident in the DHA's unwavering commitment to providing the high-quality care associated with the Digital First initiative. Importantly, our expectations are unchanged regarding the renewal of our contract with Leidos and the DHA, as indicated in the October 2024 Intent to Award that specifically names Armwell. Moving on to some highlights from our commercial growth organization. We had a healthy quarter of building pipeline, and we drove important client renewals across payer and provider clients. These included Penn State Hershey, the University of Chicago, and Corwell Health. Corwell continues to document measurable success with our automated emergency room discharge program. On the heels of a big expansion in Q4, we also had a sizable renewal with the HSC in Ireland, which continues to improve access to care through its growing use of digital behavioral health programs. On the heels of good progress in Q1, we continue into the year with momentum and focus, with market dynamics working in our favor. I would like to speak to these trends for a brief moment. Increasingly, we believe that the fractional care that people get in their day-to-day lives is going to shift dramatically from brick and mortar into technology-enabled care. Consumers are showing greater appetite to seek care online and the inventory of technology-enabled care clinical programs is quickly expanding. While this change brings incredible opportunities, it also creates new complexities to solve for. First, payers and health systems struggle to make sure that consumer engagement is efficient, that care experience is streamlined, and that demand is matched with the right services. Services need to be covered, appropriate and have demonstrated improved clinical and financial outcomes. Second, clinical program vendors are challenged with high customer acquisition costs and they need to integrate their offering with whole person and even whole population care. It's becoming harder and harder for them to independently show a viable business model offering a program around a single therapeutic area. That is exactly where Amul platform comes in. With our single, unified platform for technology-enabled care, we believe we have cemented our role as the enabler of this movement. Here is how. First, we help payers and health systems offer a single, unified member and patient experience that is attributed to their own trusted brand and features all their sponsored care programs. With a unified platform, payers and providers can offer exceptional consumer experience, helping individuals receive the most appropriate care in the simplest and most reliable way. Leveraging our technology helps our client optimize customer engagement costs and improve clinical and financial outcomes, making quality care more affordable and accessible to all. We also make it easier for our clients to document, analyze, and report whole person outcomes across the full patient and member cohort and sub-cohorts. On our platform, payers and providers remain agile and flexible in offering the most effective programs at any given time. And our platform makes them future ready. so that as new innovative and AI-driven solutions become available, we make it simple to switch programs while maintaining a consistent experience. Second, we offer our own comprehensive array of out-of-the-box native and integrated Armwell clinical programs. These programs cover a big part of the care continuum, including urgent care, virtual primary care, behavioral health, and growing number of specialty care programs. With appropriate safeguards, we embed artificial intelligence, advanced automation, and other technologies to power exceptional user experience and better outcomes. The ecosystem of high-quality on-wall programs make us a simpler choice for our clients, especially in comparison to point solution players. And finally, we help third-party clinical program innovators improve their market reach and stickiness by integrating their solution into our platform importantly this provides a high quality revenue source for armwell as we grow together the value of our platform approach to technology enabled care is meaningful to all players and we believe our large customer footprint deep integrations and vast deployments form a long-term bond with health organizations that make up a big part of the US ecosystem. In terms of market penetration, our client reach is significant, and we believe we are just getting started. For almost two decades, we have proudly served some of the largest and most sophisticated health organizations in the US. Yet, according to McKinsey and others, only a handful of percent points of care is done online today. We think this is beginning to change in a very significant way, and our unified platform sits at the heart of a growing theme that embraces technology to drive outcomes and efficiency. We believe we are exceptionally well positioned to take advantage of these market forces. We see this reflected in our conversations out in the market, in our growing pipeline for new business, and across our own clients we were targeting an attractive opportunity for expansion growth. With that, I would like to turn the call over to Mark to review our financials and our guidance. Mark?