CloudMD Software & Services Inc.

Good day and thank you for standing by. Welcome to the CloudMD first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll 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, Mark Kinderswa, Head of Investor Relations.

Thank you, and good morning, everyone. Thank you for joining us for our first quarter 2023 conference call and webinar. We'll start the call with our CEO, Karen Adams, followed by CFO, John Plunkett, who will provide a recap of the company's Q1 2023 financial results before opening up for a question and answer period with our covering analyst. A reminder that today's discussion contains certain forward-looking information. which involve 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 an assurance of future performance or results. The risks related to forward-looking information are described in the company's MB&A, which is available on CEDAR. We encourage you to review our public disclosure in the context of all forward-looking information that you may hear today during this earnings call. Investors are cautioned not to place undue reliance on such forward-looking information that such information is considered reasonable based on information available to management as of today. However, the company disciplines 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. That is my pleasure to send the call over to Karen Adams, CEO of CloudMD. Karen, the floor is yours.

Thank you, Mark, and good morning, everyone. Welcome to CloudMD's Q1 2023 earnings call. I will provide an update on our strategic initiatives of generating high-quality organic growth and operational improvements through integration, cost efficiencies, and cash flow management. Our key financial metrics trended positively in the quarter and demonstrate our commitment to stability, profitability, and growth. In the first quarter, we generated $26.1 million in revenue, which represents sequential growth off the baseline of reoccurring revenue we saw in Q4 2022. This comes after the one-time COVID mandate revenue losses behind us, and it is the first time we have seen organic revenue growth since Q1 2022. This is attributed to a new customer acquisition and an increase in multi-service sales. Our shift in focus to health risk management, healthcare navigation, and the employer group's benefits market is resulting in sustainable, profitable revenue growth. I have spoken to you in previous calls about the importance of strengthening the business and the balance sheet. we identified the strategic initiatives that we felt as a leadership team were important to right-size the organization for sustainable growth that would provide shareholder value. Those initiatives were, one, generate high-quality organic growth, two, find operational improvements with integration and cost efficiency, and three, improve cash management. During Q1, the leadership team continued to work on the back office workflow integration and organizational design. As I previously reported, this is required to take advantage of our business model of one company with diversified services that need to be interdependent with each other for scale and to achieve profitability. This work is in the execution phase, and we are seeing improvement in growth margin and cash flow. We've reduced our core operating expenses by 4% sequentially and realized a $0.9 million improvement in adjusted EBITDA. These measures indicate that we are executing on our strategy. We added 228 new customers in the first quarter, and 39% were multi-product sales, which exceeded Q4. We added over 2.9 million in new ARR. We are also experiencing a shorter sales cycle over prior quarters as our brand and capabilities are gaining momentum in the marketplace. Our pipeline expanded to 57 million, which is balanced across all services from both our operating divisions. Larger opportunities with longer sales cycles are not included in the pipeline, but continue to progress well. In our health and wellness services, we continue to see strong momentum in cross-sell, new customer wins, and a growing pipeline. New customers represent a U.S. casino, manufacturing company, a municipality, a hospital, a transportation company, and a national insurer, to name a few. In Q1 and subsequent, we added three new distribution channel partnerships who are committed to providing health risk management and navigation services. We expanded our partnership with Benefits Alliance, a national group benefits consulting firm that manages over 8,000 employer benefit plans across Canada to include the availability of our full spectrum of employer health services. We also became a vendor of record for Mohawk MedBuy, a shared services group that supports hundreds of hospitals across Canada which included a first hospital customer for our employee assistance program, ICBT, mental health coach, and nurse navigation services. And we assigned an agreement with XTM, a FinTech provider to the hospitality, personal care, and service staff for EAP and telemedicine. These partnerships enable us to supplement our direct sales team with partners who are focused on high-quality clinical programs that address the needs of their workforces. Both XTM and the Mohawk partnership are aimed at supporting workplaces that have been most impacted in the last few years and require clinical support for employees' health and well-being. We expect the impact of these new partnerships to be felt gradually over the course of the year. These relationships are examples of how we are partnering with organizations that are trusted advisors to their clients in providing industry-leading programs that solve health, wellness, and well-being issues. Post-quarter, we signed a new agreement with a national insurer to provide mental health support treatment for complex claims. We were selected based on our navigation and ability to support individuals in treatment for a return to function. Product enhancements during the quarter included live chat for nurse care coordinators and new content in our resource library. In Q1, we launched ICBT in Spanish and English in the US, which can now be offered in our life and health application that we will discuss in a moment. These initiatives are aligned with our efforts to increase the lifetime value of a member and provide better delivery systems for our healthcare provider network. In our health and productivity solutions division, we continue to diversify revenue with a shift to build pipeline for our digital life and health platform, which is the primary driver of a remote patient monitoring offering. In addition, the platform helps to create interoperability between health system services in the United States. We have been successful in developing a channel partner network for distribution of this solution and expect a higher degree of traction in the market in Q2 and Q3. This platform has evolved to be our digital front door for our US customers. Our health and productivity navigation tools positively impact engagement and health outcomes in gaining market traction. Specifically, there is a large pipeline growth for our remote patient monitoring services. and we are working to convert some large opportunities. Remote patient monitoring is the key to digital delivery of patient care and the ability to show health outcomes. Telehealth is a $92 billion market in the U.S. and is expected to see a 30% KGAR to 2030. Remote patient monitoring coupled with our life and health app is a focus of our U.S. growth strategy. This provides a simple and rapidly growing revenue opportunity that when integrated with our other CloudMD offerings such as ICBT and our content management system, will provide a foundation for implementing a market-leading solution. We are realizing the customer benefits of the integration of the assets that are resulting in large pipeline opportunities. Last quarter, I spoke about our focus on operational improvement. I continue to be proud of the team's focus on aligning the cost structure of the company and the results that they have achieved. Since the beginning of 2023, we have action cost reductions, including organizational redesign to align to client needs and corporate shared services costs. Our savings going forward will focus on improved efficiency. We are effectively using our 22,000 healthcare providers through our consolidated call center. This enables the effective use of our intake personnel and the network of providers. All things I've spoken about today signifies our strategy in action. I am proud of the team as they focus on the path to profitability. Now, I will turn the call to our CFO, John Plunkett, to discuss our financial performance.