Accolade(US:ACCD)2022-01-11 05:22Financial Data and Key Metrics Changes - The company generated $83.5 million in revenue for Q3 2022, representing a 117% year-over-year growth on a GAAP basis, significantly beating the top end of guidance [25] - Adjusted gross margin for Q3 was 47%, up from 41.8% in the prior year period, reflecting positive revenue performance and investments in staffing [28] - Adjusted EBITDA loss for Q3 was $11.9 million, compared to a loss of $11.4 million in the same quarter last year, ahead of guidance due to performance guarantee revenue timing and lower spending [29] Business Line Data and Key Metrics Changes - On a pro forma basis, revenue growth was 44% year-over-year, with Accolade Advocacy growing by 45%, Accolade Expert MD by 28%, and direct-to-consumer virtual primary care (PlushCare) by 53% [27] - The company added over 20 new enterprise customers for Accolade Advocacy and Accolade Expert MD, indicating strong demand for integrated services [13] Market Data and Key Metrics Changes - The addressable market has expanded from $24 billion to over $200 billion, with the customer base growing from 100 to more than 600, representing over 10 million members [10] - The company has diversified its customer base, with no single customer now representing more than 10% of total revenues, compared to 25% at the time of the IPO [11] Company Strategy and Development Direction - The company is committed to delivering 25% topline growth and aims for adjusted EBITDA breakeven by fiscal 2025 at approximately $600 million in revenue [18] - The strategy includes expanding partnerships with health plans and enhancing the integrated offerings to drive customer engagement and satisfaction [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, emphasizing the importance of integrated healthcare solutions and the company's commitment to treating healthcare as a human right [19][22] - The management acknowledged the challenges posed by the current healthcare environment but remains focused on long-term growth and profitability [21] Other Important Information - The company expects Q4 revenue to be in the range of $90 million to $93 million, representing a year-over-year growth rate of 138% [32] - For fiscal 2023, revenue is projected to grow approximately 25% to about $385 million, with adjusted EBITDA loss expected to improve to about 11% to 12% of revenues [37] Q&A Session Summary Question: Insights on the growth profile and executive hires - Management highlighted the positive growth in the middle market and the addition of key executives to enhance customer satisfaction and service delivery [58][60] Question: Clarification on EBITDA expectations - Management confirmed that the EBITDA loss for fiscal 2022 is expected to be around $50 million, with improvements anticipated in fiscal 2023 [64][65] Question: Impact of customer relationship decisions on growth - Management explained the decision to walk away from a low-margin customer relationship, emphasizing a focus on core business areas that align with strategic goals [70][72] Question: Trends in performance guarantees and customer interest - Management noted increased customer interest in performance guarantees, which are tied to the value provided through integrated offerings [90][91] Question: Future of in-person care and collaboration with virtual services - Management discussed the importance of collaboration between virtual and in-person care, highlighting partnerships with laboratories and pharmacies to enhance service delivery [97][100]