MultiPlan Corporation

Good morning, everyone, and welcome to the Multi-Plan Corporation First Quarter 2024 Earnings Call. My name is Angela, and I'll be coordinating your call today. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I would now like to hand the conference over to Shana Gassick, AVP of Investor Relations. Thank you. Please go ahead.

Thank you, Angela. Good morning and welcome to Multipline's first quarter 2024 earnings call. Our speakers today are Travis Dalton, Chief Executive Officer, and Jim Head, Chief Financial Officer. The call is being webcast and can be accessed through the investor relations section of our website at Multipline.com. During our call, we will refer to the supplemental slide deck that is available on the investor relations portion of our website along with the first quarter 2024 earnings press release issued earlier this morning. Before we begin, a couple of reminders. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from those forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description in our annual report on Form 10-K and other documents we file with the SEC. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Multiplan's underlining operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measure can be found in the earnings press release and in the supplemental slide deck. With that, I would now like to turn the call over to our Chief Executive Officer, Travis Dalton. Travis?

Thank you, Shawna. Good morning, everyone, and welcome. I'd like to begin my first earnings call by expressing how excited I am to be leading the Multi-Plan team and how inspired I am by the opportunity to work with great clients, passionate associates, and serve a mission that really matters, which is to bend the cost curve in healthcare. I would like to share with you some of my thoughts about my first two months, which have been quite eventful at the helm of Multiplan. As you heard me say during our last earnings call, I chose to join Multiplan because I saw the critically important and valuable role we play in reducing the cost of healthcare. We combine data, analytics, and technology with expertise to make healthcare more transparent and affordable for all. I believe we have a unique opportunity to take this value proposition and serve constituents across the entire healthcare ecosystem. Leveraging data and insights to better serve our core clients and create value across the broader ecosystem is fundamental to how we will complete our journey to becoming a world-class public company that delivers sustainable growth. In my first two months on the job, I've engaged with our associates, our clients, strategic industry partners, and many provider health systems. These engagements have demonstrated the incredible integrity and professionalism of the Multiplan team, reinforced my confidence in the potential of the company, and validated my commitment to helping this company carry out its critical mission in the healthcare market. Positioning Multiplan for accelerated and sustainable growth begins with a devotion to business fundamentals that drive performance excellence. Business success will come as we serve clients, understand the problems the market is trying to solve, and create mechanisms to deliver value. I've taken two important initial steps that reinforce accountability and build upon our longstanding record of service excellence. First, I've established a core operational framework centered upon the principles of clarity, alignment, and focus. Clarity of mission and purpose, alignment of accountability and leadership, focus on operational metrics that matter. To that end, we have established over 30 corporate key performance indicators to measure and manage the business proactively. You are what your record says you are, and we will keep score and be accountable. Second, I'm also focused on alignment of our talent. Multiplan has an exceptional leadership and management team with deep domain experience and dedication to our important mission. Combining that talent with new leadership and perspective will be an accelerant for us going forward. To ensure rigor, discipline, and operating cadence as we proceed, I've established a new chief operating officer position that will report directly to me, and I've already onboarded a new leader to fill this important role. Jerry Hogg joined Multiplan on March 11th and has already begun a structured assessment of the organization and will lead the team that designs and defines the new Multiplan operating model to enable and support our growth. Another key addition to my executive leadership team is my chief of staff, Jackie Kwan, who along with our chief operating officer will drive our key performance indicators and deliver timely management reporting that will enable real time course adjustments as we manage the business. This will enable us to drive top line growth while proactively managing bottom line performance with predictability. Jerry and Jackie both have extensive experience in publicly run product-focused growth companies. This will be invaluable to us as we proceed. In addition, given the revenue growth potential of our existing product portfolio, we added three new senior sales leaders to our team, each of whom have deep experience and relationships in key adjacent markets. The expansion of our sales team demonstrates our commitment to investing in growth and our intent to compete more aggressively in all of our market segments. Furthermore, we're also focused on what we call fit for growth, which includes initiatives like product lifecycle management, data science, data platform development, and process automation. These initiatives will support accelerated growth that we will achieve with strategic enhancements to existing products for our core business and by introducing new innovative products that expand the value we provide to adjacent and new vertical markets. This framework of clarity, alignment, focus, talent, and fit for growth will enable us to sharpen our focus on our horizons for growth, which include the following. Horizon one, or what I call the now, delivering on our 2023 and 2024 product roadmap, attacking competition and target markets, and driving value into our core client base. As you see on page nine, we are progressing on schedule with our product development roadmap and I am encouraged with our focus on achieving our milestones. Horizon 2, or what I call MIR, is accelerating the evolution of organic product development while bringing to market new data and decision science products with insights to serve clients across the healthcare continuum. We are doing market and partner research now. I am excited to continue to update you on that as we progress with more to come. Horizon 3, or what I call NEXT, a world-class product company strategically positioned to take advantage of licensed software, platform products, and data assets across multiple market segments as healthcare evolves. We will do all of this while continuing to manage our financial position, repay our debt, and prudently allocate our capital. This will be a multi-year journey, but I believe we are well positioned for the future and will complete our transformation to a company that has diverse product set, strong organic revenue growth, and fortified business and financial models. Turning to the quarter, we had several notable successes. First, we received a positive 73 net promoter score across all of our clients, which is 25% higher than the prior year and in the top quartile of the global benchmark, demonstrating our value proposition to our clients and our dedication to service and operational excellence. We will continue to earn that reputation and our clients' trust every day. Second, we increased our sales pipeline and closed 73 opportunities, representing a 36% year-over-year increase in new sales. Third, we signed four new logos with HST's value-driven health plans, and we've made progress going to market through our HST platform to sell our new balanced bill protection product. Fourth, we closed our first plant optics sale in the first quarter, and our pipeline of plant optics business is gaining momentum. Platform transparency products and predictive analytics will be an important part of our future, and we are beginning to see our efforts converting in the market. Fifth, we closed our sale for auto pay in our supplemental carrier products. And finally, with regard to strategic partnerships, we are expanding and deepening our conversations with potential partners about how we can work together on promising new growth opportunities, which I plan to tell you more about in the coming quarters. From a financial point of view, our quarter was impacted by a cybersecurity incident at a major medical claims clearinghouse, which disrupted claims flow across healthcare and ultimately downstream to our platform. Despite this disruption, first quarter revenues were $234.5 million and first quarter adjusted EBITDA was $146.8 million, both slightly below the low end of our guidance range. Excluding the disruption in claims flow, which we estimate to be five to six million of revenue in the quarter, our first quarter results would have been in line with our guidance. During the quarter, we generated free cash flow and reduced the face value of our debt by over 24 million. Despite dealing with several exogenous events, it was a solid quarter and we made material progress on key priorities. Looking forward, we expect our second quarter results to show improvement over our first quarter. And based on what we know today, We are affirming our FY2024 guidance at this time, as Jim will discuss in a moment. Before I turn it over to Jim to review the financial results for the quarter in more detail, I want to make a few additional comments. I am pleased with the performance of the team as we navigated several notable external events in the healthcare market. Every challenge presents an opportunity, and we were able to pull together quickly as a management team and respond as a unit. the team and company remain focused on delivering value and service to our clients. We will not be distracted by extraneous noise or uncontrollable events from this important mission in healthcare. It's been an exciting and rewarding two months on the job. I want to reiterate that one of the most important reasons I came to Multiplan was my belief in the mission of the company and the integrity and dedication of our associates to that mission. Multiplan has been bringing affordability, efficiency, and fairness to U.S. healthcare for over 40 years. This includes over 1.4 million providers that we contract with directly through our network today. And we work with those providers and many others daily to ensure that they are compensated for their critical services with accurate and swift reimbursements using our solutions to minimize friction. I had the pleasure of serving providers for 22 years and I still do. I wouldn't have come to Multiplan if I didn't believe we provide an important service for all the constituents of healthcare. We will continue to serve our mission by bringing data, analytics, and innovation in an objective manner to the healthcare industry to reduce costs and administrative burden for all, eliminate balance bills, and lower out of pocket expenses for millions of healthcare patients. It is my firm belief that there is enormous potential value yet to be realized as we expand our clients our product offerings, and bend the cost curve in healthcare. I will now turn it over to Jim.