Newtopia Inc.

Greetings. Welcome to Newtopia Inc. Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to Kimberly Estrican, Investor Relations. Thank you. You may begin.

Good evening, and welcome to Newtopia's second quarter 2022 earnings conference call. Joining me today are Jeff Ruby, founder and chief executive officer, Colin Swenson, chief financial officer, and Laura Dodo, chief growth and operating officer. Please note that today's call is being broadcast live over the internet and will also be archived for both telephone and online listening upon completion of the call. Details on how to access the replays are available in the company's second quarter press release issued this afternoon and can be found on the investor section of Newtopia's website at www.newtopia.com. Before we begin, let me remind you that certain matters discussed on today's call or answers that may be provided to questions asked during the Q&A portion of the call could constitute forward-looking statements, which are subject to certain risks and uncertainties relating to Newtopia's future financial and business performance. Actual results could therefore differ materially from those anticipated in such forward-looking statements. Newtopia is under no obligation to update any forward-looking statements discussed today, and investors are cautioned not to place undue reliance upon those statements. The risk factors that may affect results are detailed in Newtopia's Periodical Results and Registration Statements, which you can access via the CDAR database at www.cdar.com. Also, please note that all figures stated on today's call are in Canadian dollars unless otherwise noted. I would now like to turn the call over to Jeff Ruby, founder and CEO of Newtopia. Please go ahead, Jeff.

Thank you, Kimberly, and thanks to everyone for joining us today on our second quarter 2022 earnings conference call. I'll begin today's call with an overview of our financial performance and strategic and operational highlights for the quarter. I'll then turn the call over to Colin Swenson, our Chief Financial Officer for a more detailed discussion of the second quarter results. Lara Dodo, our Chief Growth and Operating Officer, will conclude today's discussion with commentary on our progress against each of our core growth drivers. Q2 was a solid quarter for Nutopia and one where we made notable progress with both current and prospective clients. Today, we have a very strong pipeline of new health insurer business opportunities in front of us, that are tangibly moving toward contracts. And we are as excited about the future of Newtopia as we have ever been. Newtopia generated second quarter revenues totaling 2.5 million, consistent with the second quarter of 2021. For the first six months of 2022, revenues of 5.4 million were up 5% from 5.1 million in the first half of 2021. Gross profit margin improved to 47% for the quarter, up from 42% in the prior year period. We also continued to see momentum in our industry-leading participant engagement, with the total number of engagements reaching 38,000 participants for the second quarter in a row and 76,000 for the first half of the year, a new company record. The record levels of engagement during the first half of 2022 bode very well for the back half of the year and particularly looking into 2023. Our strong engagement level continues to be driven by low churn rates and high participant stickiness, which surpasses that of any other health tech company focused on behavior change. After 12 months as part of the Nootopia platform, 70% of our participants remained engaged. Take that even further, after 24 months, 58% of our participants remain engaged. When we incorporate innovative behavioral economics design into the offering, the stats are even more impressive, at 86% engaged after 12 months and 83% engaged after 24 months. Employee and member engagement is the most important ingredient to building and stacking durable habits in order to prevent slow and reverse chronic disease. We believe we will be able to further enhance those figures going forward by leveraging our new platform. Subsequent to the end of the quarter, in July, we launched a new and improved platform that includes a state-of-the-art participant's experience for habit change and enhanced participant communications and nudges, which help create and enable the personalized programs that are core to Newtopia. Along with improving participants' experience and stickiness, the platform should also have a positive impact on our financials. Our new engagement platform will drive operational and technological efficiencies, so that we can enhance our tech-enabled service ratios that will ultimately result in expanded gross margins. Colin Swenson, our CFO, will discuss that topic in more detail. Newtopia is sitting at an inflection point. We have a new set of client health plans on the horizon and an opportunity to enhance execution with our new and existing clients using our upgraded technology, which will improve participants' experiences, increase the degree of digital engagement, and yield even greater operational efficiencies. Importantly, we are seeing encouraging signals that our current employer client base has returned to organic growth. Our employer clients are seeing the value of Newtopia's habit change platform and looking to roll out Newtopia as a benefit across greater portions of their employee base. This motivation is in part driven by the quick rise in health insurance costs. According to a study from the Centers for Medicare and Medicaid Services, National health spending in the United States is expected to grow 4.9% annually through 2024, and then 5.3% per year from 2025 to 2030. The biggest jump in healthcare expenses, the study found, would be in private insurance, followed by Medicare and Medicaid. Utopia is a proven resource to both private and public health insurers, and as companies and other entities look to mitigate rising healthcare costs, our personalized programs to prevent slow and reverse chronic disease have become one of the key answers to their troubles. Nothing in the macro environment suggests that self-insured employers are holding back when it comes to continuing to offer their employees benefits, such as Newtopia, that will result in significant cost savings, particularly when inflationary concerns are top of mind. In addition to cost savings, Newtopia has the potential to be a revenue driver for emerging health plan clients, as we leverage the trusted relationships formed between inspirators and participants to fill gaps in care and positively impact the quality metrics health plans, and in particular Medicare Advantage, so deeply rely upon for ongoing funding of their operations. Laura will speak to this theme further on in today's call. Along with increasing penetration into existing clients, we continue to expand the suite of products that make up Newtopia. As we spoke to on our last call, in June, we rolled out an expanded partnership with a brand name apparel company and global leader in jeanswear to provide support to its employees who are self-identifying as struggling with mental health. Thus far, the rollout has gone as anticipated, and we look forward to continuing to share more details as we have a more robust data set to analyze. Our continued current client expansion also includes our partnership with one of our long-standing Fortune 50 clients, who we are excited to begin servicing in new geographic markets at the end of Q3. Turning back to our new business pipeline, which as I mentioned is very strong, we remain in negotiations and are making great traction with six leading Medicare Advantage and U.S. health plans. While the contracting cycle continues to be longer than initially anticipated throughout the industry, we expect new health plan clients will have a positive impact on our top line moving forward, particularly into 2023. Overall, when assessing Neutopia's results, it is important to remember that we do not necessarily run our business, nor expect growth, on a traditional quarterly basis. Instead, we are tied to implementation and benefit cycles that take place seasonally throughout the year, ideally on a timeline when employees and members are learning about their health risks and proactively making decisions about how to avoid chronic disease and live their best lives. As such, we look at our results and consider our company's progress annually rather than quarterly. We believe this view on the business provides a more accurate view of our progress than neat 90-day report cards. From a financial reporting perspective, we've had a solid first half of the year. However, we've also made great progress behind the scenes when it comes to business development. We look forward to our new business generation efforts showing up in our financials over the next two quarters and especially as we enter 2023. With that, I'll turn the call over to our CFO, Colin Swenson, to speak to our second quarter results, as well as to provide some context on our outlook for the remainder of 2022. Colin, over to you.