Amwell(US:AMWL)2025-05-01 22:02Financial Data and Key Metrics Changes - Total revenue for Q1 was $66.8 million, a 12% increase compared to Q1 2024, and a 25% increase when normalizing for the sale of Amwell Psychiatric Care [23][24] - Subscription software revenue accounted for 48% of total revenue at $32.2 million, up 30% year-over-year [24][29] - Adjusted EBITDA improved to negative $12.2 million from negative $45.6 million in Q1 2024, reflecting ongoing cost reduction efforts [29] Business Line Data and Key Metrics Changes - The company completed approximately 1.3 million visits in Q1, which is about 23% lower than the previous year, but normalized visits were only 21% lower [25] - AMG's visit revenue trended 14.3% lower year-over-year at $26.6 million, but normalized visits were up 6.6% [26] - Average revenue per visit was $71, which is 8% lower compared to last year's Q1, but normalized revenue per visit was 8% higher [26] Market Data and Key Metrics Changes - The company is experiencing a shift towards technology-enabled care, with increasing consumer demand for online healthcare services [15][21] - The military health system is now fully utilizing the platform for virtual visits, positioning the company strongly in the federal market [11][12] Company Strategy and Development Direction - The company aims to achieve positive cash flow from operations by 2026, focusing on increasing the mix of subscription software revenues [6][30] - The recent hire of Dan Zemanski as Chief Product and Technology Officer is expected to enhance the company's technological capabilities and streamline consumer experiences [10][40] - The company is committed to driving efficiencies and optimizing cash flow while expanding its market presence [11][20] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic uncertainties, the demand for their platform is increasing as it provides significant ROI for clients [52][63] - The company remains confident in the renewal of its contract with the Defense Health Agency, which is expected to be finalized soon [32][70] - Management expressed optimism about the future, highlighting the potential for growth in technology-enabled care [21][35] Other Important Information - The company ended Q1 with $222 million in cash and marketable securities and zero debt [29] - The guidance for 2025 includes expected revenue in the range of $250 million to $260 million, with subscription revenue anticipated to represent nearly 60% of total revenues [30][31] Q&A Session Summary Question: Can you talk about bookings trends for CONVERGE and the impact of Dan's hire? - Management noted good receptivity to the platform beyond the DHA, with Dan's expertise expected to enhance consumer experience and data infrastructure [37][39] Question: Is the current gross margin rate sustainable for the rest of the year? - Management indicated that gross margins should improve as software revenues increase, with expectations of reaching 75-90% margins [44][45] Question: Have macroeconomic factors impacted sales timelines? - Management acknowledged market uncertainty but emphasized that their platform is seen as a solution to efficiency and revenue growth [51][53] Question: What is the status of the DHA contract and other government opportunities? - Management expects no significant changes in the economics of the DHA contract and highlighted the successful implementation of their platform across the military health system [56][58] Question: What is the company's direct exposure to tariffs? - Management stated that direct exposure to tariffs is minimal, as most hardware is sourced from third parties, and the business primarily focuses on software [62][63] Question: How is churn being managed, and what is the outlook for the selling season? - Management reported lower-than-expected churn and noted increased interest from both health systems and payers in their products [82][84]