Voya Financial(US:VOYA)2022-05-06 15:25Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $61.2 million, representing a 6% year-over-year decline, primarily due to software services revenue [19][20] - Total software services revenue was $49.7 million, down 7% year-over-year, with subscription revenue at $43.1 million, down 5% [19][20] - GAAP gross margins were 51%, compared to 56% in the prior year, while non-GAAP gross margins were 53%, down from 57% [21][22] - Adjusted EBITDA was $11.2 million, exceeding guidance by approximately $2 million, with an adjusted EBITDA margin of 18%, down from 23% last year [23][24] Business Line Data and Key Metrics Changes - Professional services revenue was down 1% year-over-year, while platform revenue decreased by 16% year-over-year due to the timing of true-ups [20] - The acquisition of Tango Health is contributing positively, with expectations of improved customer performance and revenue growth through bundled offerings [8][46] Market Data and Key Metrics Changes - The employer market is experiencing a return to more normalized sales activity after a slowdown during COVID-19, with increased broker connectivity and sales leads [35][44] - The company expects a significant impact on revenues from the employer market sales season, which runs through August [13][27] Company Strategy and Development Direction - The company is focused on a three-pillar strategy: strengthening the core, growing with intent, and increasing operational efficiency [6][11] - Investments are being made in service excellence and product offerings to enhance customer experience and drive growth [11][12] - The company plans to prioritize customer service experience, accelerate product road map, and pursue select acquisitions to support growth [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's path to sustained growth, emphasizing improvements in customer service and market share [5][14] - The macro environment, particularly labor market conditions, is seen as a potential tailwind, with benefits becoming increasingly important for client retention [43][44] - The company maintains its guidance for a revenue growth inflection point near the end of 2022 and a return to low single-digit growth in 2023 [27][28] Other Important Information - The company ended Q1 2022 with approximately $59 million in cash, reflecting a decline of about $10 million from the previous quarter [25] - The new Chief People Officer, Kristin Adams, is expected to enhance the employee experience and support the company's strategic goals [15][16] Q&A Session Summary Question: Contribution of health plans reducing engagement - Management indicated that the remaining contributions from the two health plans are stable, with no expected rescopes in the near term [32][33] Question: Impact of COVID on contract activity - Management confirmed that there was a slowdown in contract activity during COVID, but a return to normal levels is being observed now [35] Question: Metrics for measuring open enrollment success - Success is measured through quantitative metrics like net promoter scores and qualitative feedback from clients regarding their experiences [37] Question: Current macro environment impact - Management noted that the tight labor market is a net tailwind, with clients focusing on benefits to attract and retain employees [41][43] Question: Performance of Tango acquisition - Tango is expected to contribute about 3 points of growth year-over-year, performing as anticipated in its initial quarter [46]