Financial Data and Key Metrics Changes - The company reported strong year-over-year growth in revenue, gross profit, and adjusted EBITDA, with an overall improvement in margins, earnings per share, and free cash flow [18][24][25] - Consolidated non-GAAP EPS was $0.13 per share, reflecting a 63% increase year-over-year [25] - Free cash flow from continuing operations was $35 million, with $25 million in free cash flow generated [26] Business Line Data and Key Metrics Changes - The Veradigm business segment saw a year-over-year revenue growth of 8% during the quarter [18] - Veradigm non-GAAP gross margin was 52.2%, up 420 basis points year-over-year [21] - Adjusted EBITDA for Veradigm grew 24% year-over-year, resulting in an adjusted EBITDA margin of 25.8%, an increase of 330 basis points year-over-year [24] Market Data and Key Metrics Changes - The Veradigm provider platform added over 500 new practices and 6,100 prescribing physicians during the quarter [19] - The U.S. Department of State selected the company's practice management platform for deployment to over 200 health units globally [19] Company Strategy and Development Direction - The company is focusing on the Veradigm business following the sale of its Hospital Large Physician Practices segment, aiming for continued success and growth opportunities [5][13] - There is potential for future acquisitions to augment organic growth, but the immediate focus remains on organic growth [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining the revenue growth outlook for Veradigm at 6% to 7% year-over-year and adjusted EBITDA growth of 10% to 15% [29] - The company anticipates generating consolidated free cash flow from continuing operations in the range of $110 million to $120 million for the year [29] Other Important Information - The company amended its credit agreement to extend the maturity of the facility for an additional five years and secured improved pricing [28] - The results of the Hospital & Large Physician Practices business segment are reported as discontinued operations [14] Q&A Session Summary Question: Free cash flow guidance for Veradigm - Management clarified that the guidance reflects the consolidated entity and is indicative of steady-state operations [34][35] Question: Margins comparison between payer and life sciences - Management indicated that gross margins between provider and payer/life sciences are comparable, with improvements expected from operating leverage [37][38] Question: Revenue growth expectations for payer and life sciences - Management noted seasonality in the payer and life sciences segment but remains confident in achieving growth expectations later in the year [45][46] Question: Impact of early-stage biotech funding slowdown - Management stated there has been no significant impact from early-stage biotech funding issues, as their focus is on larger pharma companies [66] Question: Veradigm Touchpoint Media business growth - Management confirmed that the media business is expected to grow significantly, contributing to the overall growth of the payer and life sciences segment [73] Question: Net debt clarification - Management advised to add $68 million of cash to the balance sheet to arrive at the correct net debt figure, estimating it around $230 million [76]
Veradigm (MDRX) - 2021 Q1 - Earnings Call Transcript