American Well Corporation Class A

Good day and thank you for standing by. Welcome to the Amwell 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 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 Dui, 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 Dui of Amwell Investor Relations. Joining me today are Amwell's Chairman and CEO, Dr. Ito 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 .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 finalings 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 Ito.

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 execute one 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 markets. 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 LPTH 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 Amwell 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 lightest 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 in 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 goal 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 LADOS and the DHA as indicated in the October 2024 intent to award that specifically names Amwell. 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 -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's 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 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 AMOIL 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 AMOIL 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 AMOIL 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 healthcare 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. Thank you, Ido, and good afternoon to everyone on the call. Tonight, I will walk you through a few operating metrics and financial results from the first quarter and then review our guidance. The financial highlights of our first quarter include progress toward our key strategic initiatives. Software revenue grew over 30% from Q1 of last year as we drove strategic client deployments, including the Enterprise Go Live of scheduled virtual visits across the global military health system, the most significant growth initiative in our company's history. Also, we accelerated our adjusted EBITDA improvements for the fourth quarter in a row as we continue to focus on increasing our software mix and aligning our cost structure with our revenue base. Most importantly, as Ido highlighted, we have demonstrated continued progress with our most strategic objectives, specifically the staged launch of our full solution across the military health system and the cost initiatives that reinforce our confidence in our path to generating positive cash flows from operations during 2026. We have committed ourselves to executing these initiatives that will ultimately drive value to our company. So now let me share some of our Q1 financial results. Total revenue was $66.8 million for the quarter, which is 12% higher than Q1 of 2024. Normalizing to the sale of Amwell Psychiatric Care, first quarter revenue was 25% higher than Q1 2024. Revenue mix here is more important metric as subscription software revenue was 48% of total revenue at $32.2 million in Q1, up 30% from a year ago and compared to $37 million in Q4. You will remember that in Q4, our software revenue benefited from a material uplift in subscription software revenue related to deploying our solution across the military health system. Turning to visit metrics, we completed approximately 1.3 million visits in the first quarter, which is approximately 23% lower than a year ago. Normalizing for APC, this was 21% lower than last year. Visits in the first quarter were in line with our adjusted expectations for the quarter. AMG's first quarter visit revenue trended .3% lower than last year at $26.6 million. Normalizing for APC, however, visits were higher by .6% than a year ago. Average revenue per visit was $71, which is 8% lower this quarter compared to last year's Q1, but revenue per visit was 8% higher than last year after normalizing for APC. This increase was driven by a mixed shift within AMG visits towards virtual primary care and specialty programs. Our AMG business continues to be foundational to our overall business. It is highly visible to us and is strategically important to enabling client expansions and new client wins and for the overall support of our efforts to grow recurring software revenues. Our services and care point revenue was $8 million for the quarter versus $4.9 million last quarter. The nature of our business drives variable revenues due to consumer buying patterns for marketing programs and for care points, as well as the timing of professional service milestones that precede deployments. Turning now to gross profit, which continues to improve. Our quarter one gross margin was 52.8%. Higher by 4.3 percentage points compared to Q4, reflecting higher software mix and cost initiatives. Onto operating expenses. Our consistent efforts in reducing and aligning our costs are showing results down the line. We continue to make substantial progress towards normalizing R&D spending. While maintaining our focus on deploying our solution for the DHA, our R&D expenses in Q1 were $22.1 million. This represents a decline of approximately 17% compared to the $26.7 million we spent in Q1 of 2024. Sales and marketing expenses were $12.6 million. This is approximately 18% lower than last quarter and nearly 51% lower than last year's comparable quarter. And G&A expenses were $23.2 million, approximately 33% lower than last quarter and nearly 29% lower than last year's comparable quarter. G&A remains a meaningful focus of our ongoing cost initiatives. So we have now completed another consecutive quarter that underscores our key strategic initiatives. We are delivering on the promise of growing our subscription software revenue while being well on our way to reshaping our foundational cost basis. As a result, adjusted EBITDA for the quarter was negative $12.2 million versus negative $45.6 million in Q1 2024. Finally, with respect to cash and liquidity, we ended the first quarter with $222 million in cash and marketable securities with zero debt. And now I would like to turn to our guidance for 2025. This year, the high margin revenue growth we are guiding for is underscored by our focus on expanding our mix of subscription software revenues, taking conservative view on visit volumes while further reducing costs. With this in mind, we are reiterating our annual revenue and adjusted EBITDA guidance for 2025. We continue to expect revenue for the full year 2025 to be in the range of 250 to $260 million. As a reminder, this revenue guidance excludes the more than $25 million that we would have expected from APC in 2025. Importantly, with the most strategic elements of our revenue base intact, we anticipate subscription revenue to meaningfully grow to represent nearly 60% of total 2025 revenues. Our range for AMG visits is between 1.3 million and 1.35 million visits. We expect our 2025 adjusted EBITDA to be in the range of negative 55 million to negative $45 million, which demonstrates a 60% improvement year over year. Here's some additional context around our assumptions. We are on track to further reduce our R&D expense by more than 10% this year versus 2024. As we streamline and complete the bulk of our software configuration work for our existing commitments. Overall, we expect sales and marketing costs to decline over 25% year over year. We expect to reduce our G&A expense beyond 20% for the year as we continue to organize the company around a new lower cost structure. And I would like to repeat Ito's comment that our expectations are unchanged regarding the renewal of our contract with Leidos for the DHA as indicated in the October, 2024 intent to award that specifically names Amwell. Next, our guidance for Q2. We expect revenue for the second quarter of 2025 to be in the range of 62 to $67 million. As to adjusted EBITDA, we expect our Q2 adjusted EBITDA to be in the range of negative 12 to negative $10 million. There are some additional revenue timing related dynamics we wanna call to your attention. Ito previously mentioned that as a result of the top leadership transition at the DHA, we and our Leidos partners were asked to wait for final confirmation from the new DHA director before completing these last deployments. Reflecting this, we now expect that the remaining enterprise go lives of our automated and digital behavioral health programs will happen in Q3 rather than in Q2. So in Q3, we anticipate a one-time step up in DHA software revenue normalizing slightly below the Q3 level into Q4 with total software revenue ending the year at approximately 60% of total revenue. Wrapping up, we are encouraged by the strides we have made in our business. And in the first quarter, we made solid progress toward the goals which support our confidence and our path to generating positive cash flows from operations during 2026. We continue to anticipate that AMWELL will end 2025 with approximately $190 million in cash and in excess of $150 million in cash at year-end 2026. There's great energetic team here at AMWELL that is fully aligned with delivering the novel healthcare products, services, and efficiencies that we successfully deliver to our clients every single day. Thank you for participating this afternoon. And with that, I'd like to turn the call back to Ido for some closing remarks. Ido? Thank you, Mark.

Before we take your questions, I'd like to briefly wrap up. We enter Q2 with a strong sense of purpose and unprecedented focus on our key operational initiatives for the year, which center on unlocking value in our company and pursuing our mission. To summarize, we are delivering with our latest partners the promise of the Military Health System Digital First Initiative, a model for modernizing healthcare and the value of technology-enabled care. We have focused our strategy to fuel higher quality revenue mix and to achieve the promise of our vision. As we bring our unique differentiated solution into a very large yet under-penetrated market opportunity, we are set to achieve our goal of positive cash flow from operations during 2026, as well as for long-term, or for growth for many years to come. With that, I would like to open the call to questions. Operator, please go ahead. Thank you.

Thank you, Ido. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Craig Hettenbeck with Morgan Stanley, your line is now open.

Great, thank you. Just outside of the DHA, can you talk about just bookings trends for Converge more broadly, and then also just with the hire of Dan from Amazon, perhaps some things he can leverage from his experience or key strategic priorities as he gets on board there.

Absolutely, Craig, it's good to hear your voice and thank you for the question. In general, we see very good receptivity to the AMOIL platform in its new format. We see a lot of people in the market well beyond the DHA. Overall, there is growing understanding and agreement that more and more people are going to go online and they would need a singular experience to match them with growing number of clinical programs and the data infrastructure to report on those programs. Of course, we deployed it in very large scale. In some of the largest organizations, including the DHA, Elephants and others, but we also deployed it in smaller scale opportunities generating very similar value, all to mid-size and even smaller customers. All that results with a product that is much more focused, proven and scalable is not lost on people as they think about creating a technology-enabled care infrastructure for years to come. A lot of the activity is happening as we speak and it will be more apparent to more people as we move forward. As to Dan joining, Dan was a very well-known leader in Amazon, he founded Health AI in AWS and then led the platforms for Amazon. He brings a very broad network of expertise and capabilities, including a high proficiency in AI. With him and other talent in the company and some new relationship inside and outside the company, we are transforming our offering with some new technologies. The key focus areas for Dan in World of Product includes streamlining the consumer experience, improving the way we match people with growing number of clinical programs and the data, the bidirectional data we exchange in order to further optimize their results. And finally, the data infrastructure to create sophisticated analytics to help our sponsors understand the value that is generated by those programs. We Dan, Mark and other new leaders in the company, I know we have what we need in order to very efficiently realize the mission of the Amul platform and grow successfully going forward in the market.

Got it, thanks for all that.

Thank you, our next question comes from the line of Charles Wright with TD Cowling, your line is now open.

Yeah, thanks for taking the questions. Hey, just a couple of quick questions around sort of the results here and really as we think about the guidance, obviously great performance in the quarter, particularly in terms of margins and managing the EBITDA loss here. Is this sort of the right gross margin rate? Cause I think you had guided sort of north of 50%, obviously did more like 53 here in the quarter. Mark, is this sort of the right run rate we should think about for the rest of the year? Could we expect that to get a little bit better here? And cause it looks like a lot of the revenue was from care points in the quarter, which I would imagine is lower margin. So if we kind of back that out, does it seem like our software gross margins are running closer to 90% or so? Is that the right way to think of it?

Yeah, you're on the right track Charles, it's going to be an improving number as the software revenues represent a greater percentage of total revenues and you're exactly right. Timing of care points would bring that overall number down. We should see that impact from the, let's call it 75 to 90% software revenue margins that we would profile going out over the next several quarters. As long as the timing hits appropriately, we should continue to see quarter over quarter increases in margin.

And if we would expect then loss to be improving then, any reason not to adjust maybe the EBITDA guide given where we're starting off here and what you've got for the second quarter, thanks.

Yeah, we're not changing the EBITDA guide principally because we still have that considerable amount of revenue that we need to generate over the remaining quarters of this year coming in with regard to the expansion work. We're very confident that the contract extension is now within a month or two of being finalized. We're far along in that contract negotiation and again, high degree of confidence with respect to that. It's the expansion that Edo noted and I also noted in the prepared remarks that from a conservative view of 2Q to 2.3, we wouldn't go ahead and change any of those EBITDA ranges today.

Okay, that's helpful, thanks.

Sure.

Thank you, our next question comes from the line of Jeevinder Singh with Truist, your line is now open.

Yeah, thank you and thanks for taking my questions. So all the macro noise data for economic uncertainty, excuse me, have you seen any impact on your sales timeline as health systems continue to evaluate their IT budgets? Just curious how have been your conversations at least in the last couple of months and related to that, can you guys talk about your direct tax exposure?

Absolutely, I'll take it first and then I'll turn to Mark for his point of view. Essentially, there is a palpable pain in the market. People are uncertain and people are worried in the way of when they think about their financial viability going forward. That includes many of our customers. The encouraging part is that they see us as part of the solution to this issue. The AMOLED platform is all about efficiency, it's all about saving, it's all about growing revenue and there are long list of examples also on our website to show you for it. So the ROI for implementing AMOLED platform is very significant in way of efficiency, savings, growth, things of that nature. And therefore, we actually see the trend becoming accelerating rather than decelerating despite the overall market sentiment and headwind.

Thank you.

Thank you. Our next question comes from the line of Stan Berenstein with Wells Fargo Securities LLC. Your line is now open.

Yes, hi, thanks for taking my questions. Maybe just a couple on the government side. In terms of the DHA contract, assuming it's signed, is there any chance of the economics change at all or is the expectation that they're gonna be somewhat similar to the current contract? And then tangentially, you previously have spoken about six possible government-related opportunities that you're pursuing. Just curious, any updates there, anything going along in that direction? Thank you.

Sure, hi Stan, it's Mark. With respect to the contract extension, we don't really anticipate any material changes in the economics that we provided to LIDOS over the past year. You need to recall that that contract is relatively recent. It's essentially, it's in its first year of workings, especially at the enterprise level, which is certainly in months one or two, in quarters one or two. So no indication there that there'd be anything significant. And then I think for the opportunities, perhaps I'll hand it over to Ido.

Thank you, Mark. So Stan, I think that some people underestimate the enormity of what took place in the last couple of years implementing the DHA. It was a giant undertaking for us, and we went through it. We are now live, as I mentioned earlier, across the globe enterprise for the military health system. That required us to migrate our platform to the cloud and check infinite number of boxes and requirements, which we checked and complied with. It works now well, and it works scale. The impact that we have on the military health system should not be different than other similar government entity. And our partner is very proficient in that environment. LIDO serves so many other organizations. So we believe that with this good execution, in the sense that, as far as we're concerned, we were always on time and on budget, and we generated the efficiency for our customers here. So that track record, that was very fraudulent, is going to be very helpful as we compete for other opportunities in the sector.

That's it. Thanks so much.

Thank you. Our next question comes from the line of Eric Percher with Nefron. Your line is now open.

Thank you. I thought I heard this asked, but I'm not sure I heard an answer on the tariff question. Can you just speak to any exposure across the business and maybe specifically on the endpoints?

Sure, Eric. Although our direct exposure to tariff is minimal or non-existent, as you may know, we no longer manufacture. Most of our hardware comes from third parties, and the hardware business, generally, is a very small part of our business today. Our business is a software that's manufactured mostly in the United States and very proudly, and therefore, we don't see a cost issue for us directly. Having said that, tariff obviously impacts the sentiment in the market overall and do create some problems for our customers as it relates to their relationship with other suppliers. However, as I mentioned earlier, we are really conceived as part of a solution, adding efficiency, growing revenue for our customers. So in that environment, there is a good ROI for investing in AMWELL. Maybe very briefly, just to give you some very quick examples. In one of the reducing cost and driving revenues, in WellSTART, we just had a study show 35% increase in net revenue for virtual consult. Cornwall, as I mentioned, the prepared remaps and one million cost reduction, just with one ED program that created 30 fewer nurses per day. For the North, we reduced the cornwall's cost by 48%. Another area is that we throw a path to very significant improvement in outcomes. Again, very quick example. In the NHS, we helped change rate times from 16 weeks with psychiatric care to one week. That's very dramatic. And the value is very well recognized there. Even in the US with Horizon, they reported 40% reduction in patient waiting time for a psychiatric care. And we have very high sentiment with providers and burnout of clinical staff productivity over network is a giant topic for our customers. The fact that you're fully embedded in the EHR, the fact that we help prepare and match patients with the right doctors and much better prepared in an automated fashion and providing additional access to different specialties, these are just examples of why we believe that our platform still continues to be very relevant and in demand and resonating, even in those times of great uncertainty and rising tariffs is a good example of that.

Thanks for the detail.

Thank you. Our next question comes from the line of Kevin Caliendo with UBS, your line is now open. Hey guys,

this is Jack Sonston for Kevin Caliendo. Thanks for taking the questions. I know you're talking more about the contract extension through like more of a conservative lens, but maybe if that renewal does not come to fruition, are you confident that you will still break even on a free cashflow basis next year without it or is that contract kind of needed for it? And then maybe just as a quick follow-up, it might be a little too early, but do you have any updates on how the selling season kind of has progressed thus far?

Jack, we are quite certain that the contract will be extended. We have no reason to believe based on where we stand and the many reasons I gave earlier in the call that it will not extend. So it's a bit of a theoretical situation. There's always a theoretical chance, but we believe it's very, very small. Overall, in our work in the market, we have a product that is extremely well-defined. We divested APC, as you know, we did some other measures. So our core offering today is high value, high margin, high quality, with very strong right to win in the different market segments that we serve. That's not lost in the market. We see it in how people react to our fees. We see it in sales meeting and we see it in some of the results that you saw today and hopefully we'll continue to see over the foreseeable future. So that's how we feel about it. Mark, I don't know if you have anything to add.

Or Jack, both of you actually. I would add that we clearly are in a position today to rely on that contract extension. Again, we have every reason to believe that we are going to see that extended based on where we stand today with our partners. And of course, if that did not come to fruition, we would have to pivot in order to reach a cashflow from breakeven operations number in 2026. Again, that would be a worst case scenario and not something that we actively plan for, but it could be viewed as an existential threat.

Thank you. As a reminder, to ask a question at this time, please press star one one on your touchdown telephone. Our next question comes from the line of David Larson with the BTIG. Your line is now open.

Hi, congratulations on the good quarter. Can you just remind us how much revenue in the quarter came from the Defense Health Agency contract? And then what will that figure be, like on an annualized basis by say four Q of 25? Thank you.

Hi, thanks for those nice remarks. We don't break out the exact contribution as that we've guided in the past that that contract is expected to represent our largest revenue component on an annualized basis when it's full enterprise. So we were not yet at full enterprise for all three products. As we noted, we're there for scheduled visits and we're waiting for the extension of the automated care and behavioral health, but we did have a quarter and a full quarter of the portion of revenue that comes about from our enterprise wide revenue for scheduled visits.

Great, and then can you maybe just talk a little bit more about like the usage from the Defense Health Agency? Like how many lives actually use the platform in one queue across how many countries or regions? What was the nature of the services? Is it all behavioral health or are there other things in there as well? Does it include military families as well, their dependents? And what I'm kind of getting at is like, it seems to me like they can't cancel the contract, right? I mean, if the military is dependent on this for large amounts of their care, if they were to cancel that, I mean, that would be optically and medically a very difficult thing to do. Just any color around the usage of the platform would be great, thank you.

Hi, David, obviously we cannot speak on behalf of the military health system and not even on behalf of a LIDOS and what we can say is very restricted, but you were right to suggest, and I think it was public information, that the audience for our project is huge. It's 9.6 million people in the military, including the men and women uniform and their families. So the visits, the telehealth visits, the schedule visits that are now live enterprise is serving all of them. And we are connecting all of them with the providers at large of the military providers. The different use cases are very diversified and include the different things. As it relates to chronic care programs and behavioral health, which is such a big area of focus of the military, we are live in the five regions. So we already followed what we did with schedule visits before. That's the initial launching pad, if you will, of the military and then following that, we fully expect to go enterprise, especially as the new head of the DHA takes place. So, and I mentioned earlier that we see very high satisfaction scores, we see efficiency, we have reason to believe that the client and our partner are very pleased with what they see. We obviously don't speak on their behalf. And that's why I said earlier that we believe that the likelihood of renewal is very, very high. It's not 100% in theory, but we believe that there was a giant lift to get here. It's performing as planned. It's generating very important results. Just to give an example, the new administration talked about their goals for the military health system. And they mentioned four pillars. And we believe we check all those four boxes. So the first pillar was readiness first, ensuring that service members have access to world-class healthcare. Obviously we check that box. The second initiative is medical modernization, advancing digital health, which of course we do. The third one is force optimization and strengthening the medical workflow force. And now we are embedded inside their EHR, the Oracle EHR, connecting them to other patients, improving their lifestyle, improving their efficiency, and it's overall, we're very relevant there. And the last one is really encouraging the military to forge more meaningful strategic partnerships as enhancing collaboration across the DOD VA and of course, MHS with the private sector. And we're also relevant in that box. So with this track record, with the fact that we are very well positioned to really focus on efficiency, which is such a key element in the new administration, we believe that we have a long future ahead of us together serving this client, which we cannot be more proud of.

Thanks very much, Ahataka Mikyu.

Thank you. And our last question comes from the line of Ryan McDonald with Needham. Your line is now open.

Hey guys, this is Matt Cheon for Ryan. Thanks for taking the questions and congrats on the strong quarter here. Curious if there's anything on the churn side to call out in the quarter. And as we think about the remainder of the year, how are you thinking about intentional churn from here? Do you feel good about the core client base at this point or still some less profitable contracts to clean up? And then just circling back to the selling season question, any color on the selling season would be great. And then any differences you're seeing in terms of demand from say health systems versus payers. Thanks guys.

Sure, hi Matt, it's Mark. With regard to your first question on churn, we had budgeted for a very conservative churn number and clearly we were very pleased with the fact that churn came in much lower than we anticipated. That actually helped to contribute to the increase in the bottom line. We had some challenging years prior to this year and fortunately I think most of those heavy churn periods are behind us. We continue to budget conservatively but there's been nothing that we've seen and now that we're five months in, nothing that we've seen to indicate that there's gonna be any change in that assumption. On the pipeline growth, on the attractiveness of what we're bringing to the market, we have also seen significant activity far greater than last year on both the payer side and on the health system side. We're currently involved in a number of RFPs, RFIs, the amount of interest in the product in these different sectors has fortunately been intensified over the last few months. So contrary to I think what a lot of people are talking about with respect to constraint as tariffs and other indicators have put some apprehension in people's minds, we seem to be in a good place with prospects that are interested in pursuing our products.

That's great, thanks Mark. You're welcome.

Thank you, this concludes the question and answer session. I would now like to turn the call back over to Ido Schoenberg for closing remarks.

I want to thank everyone for their time. Thank you very much for your continued interest in AMO and look forward to talking with you offline, take care.

This concludes today's conference call. Thank you for your participation, you may now disconnect.