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spk04: Good morning and welcome to CloudMD's Q1 2022 Earnings Conference Call and Webinar. My name is Gigi and I will be your conference facilitator today. As a reminder, this conference call is being recorded. 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. The company invites its covering analyst to ask questions during the conference call by pressing star, then the number one on their telephone keypad. If a covering analyst would like to withdraw their question, please press the pound key. Thank you. It is now my pleasure to turn the call over to Julia Becker, Vice President, Investor Relations, with opening remarks.
spk01: Thank you, Gigi, and good morning, everyone. Thank you for joining us for our Q1 2022 conference call and webinar. We'll start the call with Interim CEO and President Karen Adams, followed by our Interim CFO, Sean Carr, who will provide a recap of the company's first quarter 2022 financial results before opening up for a question and answer period with our covering analysts. A friendly reminder that today's discussion contains certain forward-looking information, which involves inherent risks and uncertainties and other factors that could cause actual results to differ materially from management's current expectations. Forward-looking information should not be interpreted as insurances of future performance or results. The risks related to forward-looking information are described in the company's MD&A, which is available on CDAR. We encourage you to review our public disclosure in the context of all the forward-looking information that you may hear today during this earnings conference call. Investors are cautioned not to place undue reliance on such forward-looking information and that such information is considered reasonable based on information available to management as of today. However, the company disclaims any intention or obligation to update or review any forward-looking information as a result of new information, future events, or for any other reason, except to the extent required by law. With that, It is my pleasure to turn the call over to Karen Adams. Karen?
spk03: Please remain on the line.
spk04: Your conference will resume shortly. Again, please remain on the line. Your conference will resume shortly.
spk01: Apologies, everyone. It appears that we've had some technical difficulties and Karen Adams and Sean Carr have been disconnected, but they are rejoining the conference call momentarily.
spk03: Thanks again for your patience.
spk00: Pardon me, Karen Adams has rejoined. She may proceed.
spk02: Julia? Karen, the floor is yours. Thank you very much. We apologize for the technical difficulties and being put back into some music instead of being able to deliver the results. So here we go. Good morning and thank you for joining. Last night we released our Q1 2022 financial results. I will review some highlights from the first quarter and progress on some key strategic initiatives. I will then ask Sean Carr to provide more details on the financials. We had solid performance in Q1, reflective of our ability to execute on key strategic initiatives. In the first quarter, we delivered $41.4 million in revenue, a 372% year-over-year increase. We also delivered improved growth margins of 32.5%, strong cost management, and realized synergies from the acquisition of MindBeacon. In Q1, we created further operational efficiencies and preserved cash flow, which we will address later in this call. I would like to spend a few minutes on strategy. As you may recall, in 2021, we required well-established and proven entities to create our transformational connected care program. This has resulted in our ability to provide the widest breadth of healthcare capabilities We now also have one of the largest clinical networks with over 51 professionals and over 54 subspecialties. This is a key proof point of being able to support individuals' mental and physical health needs. In 2022, we remain focused on profitable execution through specific initiatives that will optimize and strengthen our business. We have aligned cross-functional teams in the organization around the following strategic initiatives. One, maximizing the performance of our assets. Two, integrating and streamlining operations to recognize cost savings through further synergy. And three, organic growth. Our success depends on profitable execution, operational efficiency, generating positive cash flow, and top-line growth. We are anchoring to profitability, and our strategic initiatives will help to ensure that success. I am happy to report that the team has already made significant progress against the strategic initiatives I just mentioned. Over the last six months, we have repeatedly focused on integrating our offering to lead the market in delivering personalized healthcare that meets the needs of individuals and provide a return on investment for payers. We are focused on maximizing profitability from our core business which is EHS, Enterprise Health Solutions, supported by DHS, Digital Health Solutions. We are doing a strategic review with intent to divest small, non-core assets. This will enable us to focus on a long-term growth strategy to integrate all our core assets to support our comprehensive integrated service offerings. Optimization through integration in order to standardize processes and leverage capability has been another key priority for us. As you can imagine, consolidating technology platforms has been very important, as we had many independent platforms from our numerous acquisitions. The team is currently consolidating our financial systems to enable better, more streamlined financial reporting, analysis, and governance. Along with the financial platforms, we are optimizing the product technology platform. By doing this, we can better manage and collect the data and metrics within these platforms and provide our clinical network with the best analytics to improve health outcomes and improve the member experience. On January 14th of this year, we closed the MindBeacon acquisition and used this opportunity to do a comprehensive review of our entire business. with a lens on improving overall member experience and, from a financial perspective, improving long-term growth margin and sustainable profitability. Through this process, we not only created a stronger business model, but we identified $7.5 million in cost reductions that will be realized throughout 2022. Our cost optimization success to date was achieved by leveraging talent across CloudMD and integrating capabilities to maximize scale and user experience. I would like to reiterate that this is not just about cutting costs. It's about providing better access, better care, and a better experience for the user, the payer, and our clinical provider network. Throughout the year, we will continue to focus on cost reduction and the ability to drive margin expansion through lowering client acquisition costs, improved use of our national clinical provider network, and streamlined operational functions through integrated metrics. The next strategic initiative I'd like to address is maximizing the performance of our assets. This is also key to creating shareholder value and achieving operational excellence. We have built an ecosystem of services that employers have typically had to purchase from multiple vendors. Our business model is to provide those services not as programs but as care pathways that empower individuals, take control of their own health journey. We are now able to create value through a comprehensive treatment for mental health. The addition of MindBeacon enables us to offer comprehensive mental health solutions with the addition of a comprehensive clinical network, ICBT, and a clinically proven therapist-led program. Individuals who have access to our programs will now be navigated to a personal care plan that will best support resolving their mental and health issues using ICBT, traditional EFAP offerings, and mental health coaching. We are in the process of fully integrating ICBT into our employee and family assistance program as part of our overall mental health offering. Therapists in our employee assistance program now have multiple treatment options to empower individuals and provide the right treatment for their needs. ICBT provides patients with the opportunity to engage in therapy at a time and location that is convenient for them. It has proven clinical efficacy and is a more cost-effective delivery modality. It is a strong addition to our employer health solution and enhances the patient's experience as they get the right treatment during their care journey. We have also made mental health treatment options available in our absent services programs. where we're seeing mental health claims rising in significant absenteeism as people await treatment. We feel confident that our capabilities enable us to maximize performance of mental health services and create value for members and our clinical network. Integrating capabilities, though, is not enough to be a leader in this market. Last week, we announced the launch of Key, personalized and connected care, the new brand identity, and our transformational integrated health platform. Key represents the strategy we embarked upon last year that focused on proven industry capabilities and integrating them into a comprehensive offering instead of a traditional transaction and siloed program. The key promises to provide personalized care, a key enabler to an individual engaging in their health and well-being. Key empowers individuals to take control of their health and engages them in a modality of care best suited to their needs. KEY is a program that enables individuals to receive mental and physical health information through a digital experience or through our nurse-led call center to connect with care plans tailored to the individual's preferences and needs. Unlike traditional providers, we don't face the common barriers of limited access options, such as debating which group benefit program someone should use, lengthy wait times, or undersized provider networks. KEY removes these barriers by using personalized intake and navigation services from various touch points, including in-personal, virtual appointments, phone, video sessions, and guided or self-guided experiences. We are also using our core capabilities and connected care programs to support the issues of rising mental health issues impacting disability and employee absenteeism. We recently onboarded a new client, a health care service provider, that was concerned with the burnout of individuals in their organizations. In the first 35 cases we received using our nurse case navigators, we reduced the average disability duration by 73% by connecting them to the right treatment modality and provider. An employer can directly attribute the number of work hours saved, which in turn creates a very simple return on investment thesis. I would like to provide one other example. We recently won a contract with a property and casualty insurer to offer assessment and treatment plans in a more proactive way to those injured in a car accident and suffering from mental health issues. This approach demonstrates the insurer's desire to access and care and return to function and the ability to ensure that costs are deployed correctly. We provide members with a personalized experience how, when, and where they want it. This approach empowers the member and produces positive outcomes. We believe this is a very important differentiator and a key to our success. Next, I'd like to briefly address the Digital Health Services Division, which plays a large role in increasing our operational performance. This division has capabilities that focus on proprietary healthcare technology solutions that support and empower practitioners and healthcare professionals to streamline and better manage their businesses. Our digital health solutions play an important role in Key and create value for the user, our clients, therapists, and provider networks. It enables the infrastructure and support of interoperability, creating a seamless user experience, and ensures both privacy and security. The underlying technology embedded into the Key platform includes our patented real-time intervention platform, enabling the transfer of consistent and secure data as well as e-commerce distribution of eyewear, proprietary electronic medical records, the patient portal with online booking scheduling and telemedicine support, and our educational platform. Our ability to move data with the individual creates a better experience and enables us to report on health outcomes. The health data is important to the treatment providers because it enables the person to stay engaged in managing their health and provides an opportunity to report on progressive measurements critical to return on investment. Without these technology solutions, we would not be able to connect our healthcare services scale or growth. The last strategic initiative I will address is organic growth, which is the market adoption of the innovative services and programs we provide. In this quarter, we onboarded over 200 customers representing over 55,000 new lives with clients across industry sectors, switching from legacy providers to CloudMD enterprise health solutions. Notable wins include a North American transportation and logistics company, a large Canadian teachers union, a leading Canadian financial institution, one of Canada's largest specialty clothing retailers with over 200 stores. Our consulting services require new mandates in EHS and DHS, strengthening our relationships with clients as we address health issues in their organizations. We will continue to see growth in these consulting services in this area in the coming quarters. In addition to educating prospective clients, a key driver for organic growth is our ability to support our strong, loyal client base of organizations of all sizes and over 500 blue-chip companies. Through our partnerships, we are emphasizing the importance and benefits of offering our full spectrum of mental and physical health services to their employees, whether they are at work, on casual absenteeism, or on disability. In Q1, we formalized our cross-sell and our commercialization strategy. We have centralized our complete client database into one connected customer relationship management system. Currently, a significant portion of our sales pipeline is already using multiple healthcare services, and as we continue to position Key in the market, we expect to accelerate and increase the adoption of clients utilizing our integrated multiple services offering. A brief comment on our commitment to our governance structure. As previously announced, we welcome Duncan Haney and Gaston Tano to our board. We have a strong pipeline of candidates and look forward to welcoming some additional members over the coming quarters to the board. I am extremely proud of the team's ability to leverage our capabilities to ensure we continue to evolve our core products supporting individuals' and employees' health issues. We have a strategic plan that our team will execute on. We continue to attract top talent and clients to Team CloudMD. We know the levers to help us drive top-line and bottom-line growth in the quarters and years ahead, and I am very confident in that outcome. With that, I will ask Shankar to provide the Q1 financial overview.
spk00: Thank you, Karen. Overall, we reported a solid Q1 financial result with a clear path to profitability and strong roadmap for growth. Q1 2022 total revenue was $41.4 million. compared to 8.8 million Q1 2021, which represents 372% year-over-year growth. Revenue increased 7% sequentially from Q4, revenue of 38.7 million. The growth compared to Q4 2021 is primarily attributable to the consolidation of MindBeacon into CloudMD's results and organic growth from the...
spk05: Please remain on the line. Your conference will resume shortly. Again, please remain on the line. Your conference will resume shortly. Please remain on the line. Your conference will resume shortly. Again, please remain on the line. Your conference will resume shortly.
spk04: Our speakers are now back. You may continue with your presentation.
spk00: I apologize for we have the interruption, so I will just begin again, and the rest will repeat myself.
spk01: Thanks, Charlie.
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