NextGen Healthcare Inc (NXGN) 2024 Q1 法說會逐字稿

Welcome to the NextGen Healthcare Fiscal 2024 First Quarter Results Conference Call. Hosting the call today from NextGen are David Sides, President and Chief Executive Officer; and Jamie Arnold, Chief Financial Officer. Today's call is being recorded. (Operator Instructions)

歡迎參加 NextGen Healthcare 2024 財年第一季業績電話會議。今天主持 NextGen 電話會議的是總裁兼執行長 David Sides；和財務長傑米阿諾德。今天的通話正在錄音。 （操作員說明）

At this time, I'd like to turn the call over to James Hammerschmidt, Senior Vice President of Finance and Investor Relations of NextGen. James, you may begin.

現在，我想將電話轉給 NextGen 財務和投資者關係高級副總裁 James Hammerschmidt。詹姆斯，你可以開始了。

Thank you, operator. Before we start, please note that we will be making forward-looking statements during the presentation and Q&A part of the call. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Factors that may cause actual results to materially differ from expectations are detailed in our earnings release and SEC filings. This call will also reference certain non-GAAP financial measures. Information about non-GAAP financial measures, including reconciliations to U.S. GAAP can be found in our earnings release, which is available on our Investor Relations website.

謝謝你，接線生。在開始之前，請注意，我們將在電話會議的演示和問答部分做出前瞻性聲明。這些陳述是基於管理層目前的預期和假設，並受到風險和不確定性的影響。我們的收益發布和向 SEC 提交的文件中詳細介紹了可能導致實際結果與預期有重大差異的因素。此次電話會議也將參考某些非公認會計準則財務指標。有關非公認會計原則財務指標的信息，包括與美國公認會計原則的調節，可以在我們的收益報告中找到，該報告可以在我們的投資者關係網站上找到。

At this time, I'd like to turn the call over to our President and CEO, David Sides.

現在，我想將電話轉給我們的總裁兼執行長 David Sides。

Thank you, James, and welcome, everyone, to our fiscal 2024 first quarter earnings call. I'm pleased to report solid top and bottom line results to start the new fiscal year. Building on the momentum created during fiscal 2023, the company executed across all fronts and is well positioned to deliver double-digit revenue growth, create operating leverage and demonstrate effective capital management.

謝謝 James，歡迎大家參加我們的 2024 財年第一季財報電話會議。我很高興地報告在新財年開始時取得的穩健的營收和淨利潤結果。憑藉 2023 財年創造的勢頭，該公司在各個方面都執行到位，並有能力實現兩位數的收入成長、創造營運槓桿並展示有效的資本管理。

This quarter was a testament to the strength of our business and the investments we've made to position the company for future growth. We're living our mission as the partner and trusted adviser to the practices we serve, which creates strong retention, right to cross-sell solutions and net new client wins. Our integrated platform is clearly differentiated in the market and meaningfully addressed client concerns related to financial sustainability, physician experience, interoperability and staffing constraints. The commercial team continues to execute well. Our value proposition when serving attractive markets such as behavioral health and integrated care is clearly resonating, given 28% of our overall bookings came from net new clients with flagship wins in the space.

本季證明了我們的業務實力以及我們為公司未來發展的投資。作為我們所服務的實踐的合作夥伴和值得信賴的顧問，我們正在實踐我們的使命，這創造了強大的保留率、交叉銷售解決方案的權利和淨新客戶贏得。我們的整合平台在市場上具有明顯的差異化優勢，並有效解決了客戶對財務可持續性、醫生經驗、互通性和人員配置限制等方面的擔憂。商業團隊繼續表現良好。我們在服務行為健康和綜合護理等有吸引力的市場時的價值主張顯然引起了共鳴，因為我們整體預訂的 28% 來自在該領域取得旗艦勝利的淨新客戶。

Foundation to cross-sell success is ensuring our clients are leveraging the latest offerings we have. And I'm pleased to announce that the majority of our provider clients are on the latest and matured certified version of our product, and we have a clear line of sight to closing out the remainder. As we were the first and remain a leader in this transition, we believe it positions us well to further accelerate surround solution adoption and scale.

交叉銷售成功的基礎是確保我們的客戶利用我們擁有的最新產品。我很高興地宣布，我們的大多數提供者客戶都使用我們產品的最新且成熟的認證版本，並且我們有明確的目標來結束其餘部分。由於我們是這項轉型的先驅並且仍然是領導者，我們相信這使我們能夠進一步加速環繞解決方案的採用和規模化。

Our existing clients continue to adopt our surround solutions, which helps them optimize their financial performance and clinical outcomes, resulting in a clear return on investment and high growth across our diverse recurring revenue streams. We saw strong momentum in patient volumes, which led to higher demand in the quarter than originally planned in our transaction and revenue line, specifically our patient pay offering. This is a great example where we've created an integrated experience for our clients, leveraging our top practice management system in partnership with a leading player in the payment space.

我們的現有客戶繼續採用我們的環繞解決方案，這有助於他們優化財務績效和臨床結果，從而在我們多樣化的經常性收入流中獲得明顯的投資回報和高成長。我們看到患者數量強勁增長，這導致本季度我們的交易和收入線（特別是我們的患者付費產品）的需求高於原始計劃。這是一個很好的例子，我們利用我們的頂級實踐管理系統與支付領域的領導企業合作，為客戶創造了綜合體驗。

And finally, we saw acceleration in our business model transition, shifting from a license and maintenance-based model to a subscription managed service or transaction-based model, which best aligns with how we deliver value to our clients today. This transition continues to lessen our exposure to the lumpiness that comes with perpetual software licenses, which we've modeled a ramp down aligned with what we saw in the first quarter.

最後，我們看到了業務模式轉型的加速，從基於許可和維護的模式轉向訂閱管理服務或基於交易的模式，這最符合我們今天為客戶提供價值的方式。這種轉變繼續減少了我們面臨的永久軟體許可證帶來的麻煩，我們已經按照我們在第一季看到的情況模擬了逐步下降的情況。

Now I'd like to cover the progress we're making as we invest in innovation. I mentioned in our last call that we are continuing to invest and create new organic solutions in several areas, such as data and analytics, interoperability and value-based care, which is key to delivering on our growth agenda. We've made good progress over the quarter in advancing all these initiatives.

現在我想介紹一下我們在創新投資方面所取得的進展。我在上次電話會議中提到，我們將繼續在數據和分析、互通性和基於價值的護理等多個領域投資和創建新的有機解決方案，這是實現我們成長議程的關鍵。本季度我們在推進所有這些舉措方面取得了良好進展。

We continue our investment in the enterprise data cloud in partnership with AWS and Snowflake to deliver a broad set of data solutions to our customers. Working with them, we started to unlock the value of our clients' data along a few dimensions, including the ability to access and visualize clinical data for those using health quality measures. We found through our advanced practice intelligence and benchmarking capabilities that NextGen customers outperformed the national average in 27 of 32 CMS clinical quality measures. This is just one of many opportunities we have to leverage our core platform and help clients thrive as broader reimbursement models evolve.

我們與 AWS 和 Snowflake 合作，持續投資企業資料雲，為客戶提供廣泛的資料解決方案。我們與他們合作，開始在幾個維度上釋放客戶資料的價值，包括為使用健康品質衡量標準的人存取和視覺化臨床數據的能力。透過先進的實踐情報和基準測試能力，我們發現 NextGen 客戶在 32 項 CMS 臨床品質指標中的 27 項表現優於全國平均水平。這只是我們利用我們的核心平台並幫助客戶隨著更廣泛的報銷模式的發展而蓬勃發展的眾多機會之一。

We completed several deals this last quarter with farm and life sciences companies to support advanced clinical research studies, which expands beyond our current data partnerships. Working with our clients and partners, we're excited about the potential to open the aperture to include new specialties with a focus on high-value research studies.

上季度我們與農場和生命科學公司完成了幾筆交易，以支持先進的臨床研究，這超出了我們目前的數據合作夥伴關係。透過與我們的客戶和合作夥伴合作，我們很高興能夠開闢新的領域，包括專注於高價值研究的新專業。

I'm also excited for the opportunity we see in interoperability, specifically in supporting global clients who also have scaled needs. We are now GDPR-compliant, which gives us the ability to market leading solutions like Mirth Connect for use in over 40 countries.

我也對我們在互通性方面看到的機會感到興奮，特別是在支援同樣具有規模化需求的全球客戶方面。我們現在符合 GDPR 標準，這使我們能夠在 40 多個國家/地區銷售 Mirth Connect 等領先的解決方案。

And finally, touching on value-based care, we have been partnering with clients seeking to achieve superior quality and financial outcomes when participating in ACOs and other alternative payment models. We believe the ability to deliver insights at the point of care through the provider's current system of use remains a differentiating capability for enabling providers to take on risk.

最後，談到基於價值的護理，我們一直與客戶合作，尋求在參與 ACO 和其他替代支付模式時實現卓越的品質和財務成果。我們相信，透過提供者目前的使用系統在護理點提供見解的能力仍然是使提供者能夠承擔風險的差異化能力。

That's why I'm excited to announce that for the 2024 CMS enrollment period, we've successfully enrolled approximately 200 providers in Medicare Shared Savings ACOs, representing nearly 30,000 attributed lives. These providers are using NextGen's leading population health analytics solutions and wrap-around services to improve care quality and generate significant savings.

因此，我很高興地宣布，在 2024 年 CMS 註冊期間，我們已成功將大約 200 家提供者註冊到 Medicare 共享儲蓄 ACO，代表了近 30,000 條生命。這些提供者正在使用 NextGen 領先的人口健康分析解決方案和全方位服務來提高護理品質並節省大量成本。

Now turning to scale in our journey to deliver operating leverage. We see opportunity to further optimize our operating model, ensuring we have the right capabilities in place to deliver growth at scale for years to come. Focusing on cost of sales, we've made investments in the past to support the Cures upgrades effort and deliver growth in professional services.

現在，我們轉向規模化以提供營運槓桿。我們看到了進一步優化營運模式的機會，確保我們擁有適當的能力來實現未來幾年的大規模成長。我們過去注重銷售成本，進行了投資來支持 Cures 升級工作並實現專業服務的成長。

As we near the end of the upgrade cycle and fall into a predictable service cadence, we have plans in place to reduce our reliance on third-party staff augmentation, optimize our own billable utilization and redeploy upgrade resources to new value creation initiatives. These actions will start to be apparent in the back half of our fiscal year as our cost of sales as a percentage of revenue supporting maintenance, professional services and managed services begins to moderate.

當我們接近升級週期結束並進入可預測的服務節奏時，我們制定了計劃，以減少對第三方人員擴充的依賴，優化我們自己的計費利用率，並將升級資源重新部署到新的價值創造計劃中。這些行動將在我們財年後半段開始顯現，因為我們的銷售成本佔支援維護、專業服務和託管服務的收入的百分比開始下降。

Looking at operating expense. We've always been thoughtful on how we invest in growth-oriented functions like R&D, sales and marketing, while rationalizing our G&A expense. We developed our product development group to a more modern, agile model, which should improve delivery speed and quality while also maximizing capacity without significantly growing the organization. We continue to leverage sales development representatives to improve our client acquisition costs with higher lead to sales conversions on a more favorable cost basis. And when looking at the back office function, we've been investing in systems and automation to even further streamline how we support the business going forward.

看看營業費用。我們一直深思熟慮如何投資研發、銷售和行銷等以成長為導向的職能，同時合理化我們的一般管理費用。我們將產品開發團隊發展為更現代、更敏捷的模式，這將提高交付速度和質量，同時在不顯著擴大組織的情況下最大限度地提高容量。我們繼續利用銷售開發代表來提高客戶獲取成本，並在更有利的成本基礎上提高銷售轉換率。在考慮後台功能時，我們一直在系統和自動化方面進行投資，以進一步簡化我們支援未來業務的方式。

We also aim to improve the leverage we get from the vendors and strategic partners we work with. One I want to call out is our collaboration with Amazon Web Services as we successfully transitioned our colo operations for NextGen office into a secure and extensible AWS environment back in May of this calendar year. We see potential to expand relation partnerships like this beyond the product and into the commercial setting, taking advantage of their marketplace and bringing offerings into new segments and geographies where these partners already have an established channel.

我們還旨在提高我們從合作的供應商和策略合作夥伴中獲得的影響力。我想強調的是我們與 Amazon Web Services 的合作，早在今年 5 月，我們就成功地將 NextGen 辦公室的託管營運轉變為安全且可擴展的 AWS 環境。我們看到了將此類關係夥伴關係擴展到產品之外並進入商業環境的潛力，利用他們的市場並將產品帶入這些合作夥伴已經擁有既定管道的新細分市場和地區。

I want to close by providing an update on the TSI acquisition. The integration is on track, and our unified sales and marketing team had a great start to the year. We exceeded our first quarter sales targets and we're excited for the opportunity to get in front of even more clients as we plan to host over 200 attendees at our Leaders in Rheumatology conference where we will deepen our relationships with new and prospective clients and partners. What's exciting about the acquisition is it further strengthens our position in the health data arena. In collaboration with our NextGen Insights team, we're actively pursuing new and expanded agreements with health data partners, which will drive future revenue growth at an attractive margin.

最後我想介紹一下 TSI 收購的最新情況。整合工作已步入正軌，我們統一的銷售和行銷團隊今年取得了良好的開局。我們超越了第一季的銷售目標，我們很高興有機會在更多客戶面前展示，因為我們計劃在風濕病學領袖會議上接待200 多名與會者，我們將在會上加深與新客戶和潛在客戶及合作夥伴的關係。此次收購令人興奮的是它進一步加強了我們在健康數據領域的地位。透過與我們的 NextGen Insights 團隊合作，我們正在積極尋求與健康數據合作夥伴達成新的和擴大的協議，這將以有吸引力的利潤推動未來的收入成長。

And with that, I'd like to turn the call over to Jamie to provide an update on the financials. Jamie?

因此，我想將電話轉給傑米，以提供有關財務狀況的最新資訊。傑米？

Thank you, David. Now turning to the first quarter results. Total bookings came in at $38.9 million, roughly flat year-over-year. Recurring bookings increased 7% as our bookings mix shifted towards higher-value recurring revenue streams, which aligns with the comments David made earlier on our business model transition. There were 4 transactions greater than $1 million in the quarter. And as a reminder, bookings represent the annual contract value, excluding renewals.

謝謝你，大衛。現在轉向第一季業績。總預訂額為 3,890 萬美元，與去年同期基本持平。隨著我們的預訂組合轉向更高價值的經常性收入來源，經常性預訂增加了 7%，這與 David 先前對我們業務模式轉型的評論一致。本季有 4 筆交易金額超過 100 萬美元。提醒一下，預訂量代表年度合約價值，不包括續約。

Total revenue for the quarter was $178.2 million, a 16.2% increase year-over-year on an as-reported basis and a 13% increase year-over-year on a pro forma basis. That is excluding the historical contribution of TSI pre and post acquisition and the commercial dental assets we divested in July 2022.

該季度總營收為 1.782 億美元，按報告年增 16.2%，按預計年增 13%。這不包括 TSI 收購前後的歷史貢獻以及我們於 2022 年 7 月剝離的商業牙科資產。

Recurring revenue of $163.4 million grew 17% and accounted for 92% of total revenue. Subscription services revenue of $52.5 million grew 23%, transaction and data services revenue of $37.6 million grew 38% and managed services revenue of $34.8 million grew 13%. The growth was fueled by a combination of revenue from the acquisition of TSI plus the acceleration of organic solutions. Nonrecurring revenue for the quarter was $14.8 million, a 10% increase compared to the same quarter last year.

經常性收入為 1.634 億美元，成長 17%，佔總收入的 92%。訂閱服務收入為 5,250 萬美元，成長 23%，交易和數據服務收入為 3,760 萬美元，成長 38%，託管服務收入為 3,480 萬美元，成長 13%。收購 TSI 帶來的收入加上有機解決方案的加速發展共同推動了這一成長。該季度的非經常性收入為 1,480 萬美元，比去年同期成長 10%。

Software revenue of $5 million was down year-over-year and under the 6-quarter trend, but in line with the longer-term trend and in line with our internal plan. Professional services revenue of $9.9 million grew 34% as we continue to work down the backlog to bring new customers live and there was also a benefit from closing fixed fee contracts, which resulted in a onetime uplift.

軟體收入為 500 萬美元，年減，低於 6 季趨勢，但符合長期趨勢，也符合我們的內部計畫。由於我們繼續減少積壓工作以吸引新客戶，專業服務收入達到 990 萬美元，成長了 34%，而且關閉固定費用合約也帶來了好處，從而導致了一次性增長。

Looking forward to the next quarter, we expect revenue to be flattish sequentially due to 1 fewer business day and one-time benefit in services revenue. Gross margin of 44.8% was down approximately 300 basis points compared to the same quarter last year.

展望下一季度，由於服務收入減少 1 個工作日和一次性收益，我們預計收入將環比持平。毛利率為 44.8%，較去年同期下降約 300 個基點。

As discussed on last quarter's earnings call, we have made significant investment in our Upgrades Center of Excellence and professional services as well as a shift in product mix. Margin improvement will continue to be a focus and spend related to the Upgrades Center of Excellence and services transformation should start to moderate towards the end of fiscal '24.

正如上季財報電話會議所討論的那樣，我們對卓越升級中心和專業服務以及產品組合的轉變進行了大量投資。利潤率改善將繼續成為焦點，與卓越升級中心和服務轉型相關的支出應在 24 財年末開始放緩。

Turning to operating expenses. Net R&D expense was $20.9 million for the quarter. This is a 4% decrease compared to the same quarter last year, which included several one-time pull-forward investments.

轉向營運費用。該季度淨研發費用為 2,090 萬美元。與去年同期相比下降了 4%，其中包括多項一次性提前投資。

SG&A at $48.2 million decreased by 2% compared to the same quarter last year. On a GAAP basis, earnings per share was $0.09 compared to $0.02 in the same quarter last year. On a non-GAAP basis, earnings per share was $0.24 compared to $0.16 in the same quarter last year. Our non-GAAP tax rate for the quarter was 21%.

SG&A 為 4,820 萬美元，與去年同期相比下降 2%。以 GAAP 計算，每股收益為 0.09 美元，去年同期為 0.02 美元。以非公認會計原則計算，每股收益為 0.24 美元，而去年同期為 0.16 美元。我們本季的非 GAAP 稅率為 21%。

Turning to the balance sheet. We ended the quarter with $226 million in cash, cash equivalents and marketable securities, and we had no balance outstanding on our line of credit. Free cash flow for the quarter was a negative $16.8 million and was impacted by payments for TSI customer financing sales arrangements, annual bonus and convertible debt interest payment. We expect free cash flow to be negative next quarter due to the DOJ settlement and then return to a more normalized cash flow conversion rate for the remainder of the year. We did not repurchase shares in the quarter and have $74.3 million remaining on the current share repurchase authorization.

轉向資產負債表。本季末，我們擁有 2.26 億美元的現金、現金等價物和有價證券，且我們的信用額度中沒有未償餘額。該季度的自由現金流為負 1,680 萬美元，受到 TSI 客戶融資銷售安排、年度獎金和可轉換債務利息支付的影響。由於司法部的和解，我們預計下個季度自由現金流將為負值，然後在今年剩餘時間內恢復到更正常化的現金流轉換率。我們本季沒有回購股票，目前的股票回購授權還剩 7,430 萬美元。

Turning to our full year fiscal 2024 financial guidance, as noted in the press release, we are raising the bottom end of our revenue range based on the solid start to the year. We now expect total revenue to be in the range of $714 million to $722 million. Our adjusted EBITDA and non-GAAP EPS guidance remains unchanged.

至於我們的 2024 財年全年財務指引，正如新聞稿中所述，我們將在今年良好開局的基礎上提高收入範圍的下限。我們現在預計總收入將在 7.14 億美元至 7.22 億美元之間。我們調整後的 EBITDA 和非 GAAP 每股盈餘指引保持不變。

And now let me turn the call back to David for closing comments.

現在讓我將電話轉回大衛以徵求結束意見。

Thank you, Jamie. NextGen continues to execute with a focus on driving growth for both us and our clients who are making the investments required to deliver long-term profitability and scale. Our overall positive outlook reflects the tailwinds we created by solely focusing on ambulatory care, a resilient business model and our focus on driving shareholder value.

謝謝你，傑米。 NextGen 繼續專注於推動我們和我們的客戶的成長，這些客戶正在進行所需的投資以實現長期盈利和規模。我們的整體正面前景反映了我們僅專注於門診護理、彈性商業模式以及我們對推動股東價值的關注所創造的順風。

I want to close by thanking the 2,700 mission-driven team members and thousands of clients I've had the opportunity to work with on a regular basis. They are the champions behind our success and the foundation of making our equation for sustained growth and operating leverage work.

最後，我要感謝 2,700 名使命驅動的團隊成員以及我有機會定期合作的數千名客戶。他們是我們成功背後的支持者，也是我們實現持續成長和營運槓桿的基礎。

And with that, I'll turn the call back to the operator to open up for questions. Operator?

然後，我會將電話轉回接線生以提出問題。操作員？

(Operator Instructions) Our first question will come from Jeff Garro with Stephens.

（操作員說明）我們的第一個問題將由傑夫·加羅和史蒂芬斯提出。

I appreciate the comments on bookings and giving that recurring bookings metric, that's quite helpful. Want to ask further on the demand environment. Any color that you would give on the current level of sales activity in the quarter, how your win rate is tracking and where the pipeline sits currently?

我很欣賞關於預訂的評論，並給出了定期預訂指標，這非常有幫助。想進一步詢問需求環境。您對當前季度的銷售活動水平、您的贏率追蹤情況以及目前的通路狀況有何看法？

Thanks, Jeff. So it was a good quarter from a sales perspective, from a SaaS -- especially from a SaaS perspective. You probably saw that we went down, some in perpetual, which is expected. We expect the long term to kind of go down or trend down as we really are pushing SaaS for all new clients. The environment is still good. So our pipeline looks good for this quarter, looks good for the year. It looks good for continued growth, a little up and down. But otherwise, from a buyer's perspective, we're feeling pretty good.

謝謝，傑夫。因此，從銷售角度、從 SaaS 角度來看，這是一個不錯的季度，尤其是從 SaaS 角度來看。你可能看到我們陷入了困境，有些是永久性的，這是意料之中的。我們預計長期來看會出現下降或趨勢下降，因為我們確實正在為所有新客戶推廣 SaaS。環境還是不錯的。因此，我們的管道在本季度看起來不錯，在今年看起來也不錯。看起來有利於持續成長，有一點上下。但除此之外，從買家的角度來看，我們感覺還不錯。

Got it. That helps. Then wanted to ask on the profitability side of things. Any further comments on gross margins. You had some helpful comments around the timing. But maybe you could help parse out how much of the recent headwind to gross margins is attributable to revenue mix, specifically you have some strength in that transaction and data services line where presumably you have some partners in some of the areas, and then how much can be attributed to that implementation work to get clients upgraded on that Cures version ahead of that looming regulatory deadline.

知道了。這有幫助。然後想問一下獲利方面的問題。關於毛利率的任何進一步評論。您對時間安排提出了一些有用的意見。但也許你可以幫助解析最近毛利率的逆風有多少可歸因於收入組合，特別是你在交易和數據服務領域有一定的優勢，大概你在某些領域有一些合作夥伴，然後是多少這可以歸因於在即將到來的監管截止日期之前讓客戶升級到Cures 版本的實施工作。

Jeff, I would say it is -- I'm trying to -- it is probably split about evenly the headwinds between the 2 factors you talked about. Clearly, we're very happy with the increase in the transaction and data services. But it does come with a lower margin, so it becomes a very sticky solution and helps round out the solutions our customers are acquiring. And we did see a continued increased spend in the Upgrades Center of Excellence and a little bit of upgrade -- of increased spend on the services line. So the combination of those 2 are probably about half of the gross margin headwind.

傑夫，我想說的是——我正在努力——你提到的兩個因素之間的阻力可能是平均分配的。顯然，我們對交易和數據服務的成長感到非常滿意。但它的利潤率確實較低，因此它成為一個非常黏性的解決方案，有助於完善我們的客戶正在獲得的解決方案。我們確實看到卓越升級中心的支出持續增加，服務線的支出也有所增加。因此，這兩者的結合可能大約是毛利率逆風的一半。

Our next question will come from Jack Wallace with Guggenheim Securities.

我們的下一個問題將來自古根漢證券公司的傑克華萊士。

We've got a couple of follow-ups on the bookings in the quarter. Was there any impact? Have you seen any impact in the office space since the data leak? And then also with the upgrades going on, has that had any impact just from a timing standpoint of some of the surround upgrades and add-ons? Just kind of any other color there would be great.

我們對本季度的預訂進行了一些跟進。有影響嗎？自從資料外洩以來，您是否看到辦公空間受到任何影響？然後，隨著升級的進行，僅從一些環繞聲升級和附加組件的時間角度來看，這是否會產生任何影響？只要有其他顏色就好了。

Yes. I think from the office, we did see some softness in the base. So ironically, outside the base, we're getting new clients, no change. But in the base, we saw some softness. That started to already recover. So we're expecting that to be back to our normal steady state in this current quarter.

是的。我認為從辦公室來看，我們確實看到了底部的一些柔軟度。諷刺的是，在基地之外，我們正在獲得新客戶，但沒有任何變化。但在底部，我們看到了一些柔軟的地方。那已經開始恢復了。因此，我們預計本季將恢復到正常的穩定狀態。

On the surround, not seeing really an impact, so the surround still doing well for us. We should see a lot of the final clients get live on the Cures edition this quarter, by October, which should set us up, we think, well in that a lot of synergies could come through that. For example, when somebody calls support, we know what version they're on. When the salesperson calls a client, they know what version they're on. So they're -- it sets up some things for us that we think are helpful from that perspective.

在環繞聲方面，沒有看到真正的影響，所以環繞聲對我們來說仍然表現良好。我們應該會看到許多最終客戶在本季度（即 10 月）之前使用 Cures 版本，我們認為這應該會為我們帶來很多協同效應。例如，當有人致電支援時，我們知道他們使用的是什麼版本。當銷售人員致電客戶時，他們知道他們使用的是哪個版本。所以它們為我們提供了一些東西，我們認為從這個角度來看是有幫助的。

As well as just adding on to the last question a little bit. In the second half of this year, you'll see us start to ramp down that Upgrades Center of Excellence. You'll see improvements on the gross margin as those really good people are redeployed to other parts of our business hopefully into more billable roles going forward. But that will gradually go down, and we're excited to keep all that great talent that we've built up here going forward.

以及對最後一個問題進行一點補充。今年下半年，您將看到我們開始縮減卓越升級中心的規模。隨著那些真正優秀的人才被重新部署到我們業務的其他部門，預計將在未來擔任更多可計費的角色，您將看到毛利率的提高。但這種情況會逐漸下降，我們很高興能夠保留我們在這裡培養的所有優秀人才繼續前進。

Great. That's helpful. And then can you just comment on how the M&A pipeline has changed last quarter and just your thoughts around your private market valuations?

偉大的。這很有幫助。然後您能否評論一下上季併購管道的變化以及您對私募市場估值的看法？

I think the private market valuations are continuing to improve, at least from a buyer perspective, from our perspective, especially if the Fed continues to raise rates. I think one of the things that people haven't factored in maybe to the rates that we've thought about a lot of the cost of health care coming through later this year in insurance premiums, I think they're going to be high. And it will set a higher floor. So we'll see how that feeds in through next year. But at the same time, we'd be a beneficiary of that in that our providers do better from some of that higher payments coming through.

我認為私募市場的估值正在持續改善，至少從買家的角度來看，從我們的角度來看，尤其是如果聯準會繼續升息的話。我認為人們沒有考慮到的一件事可能是我們考慮到今年稍後保險費中的大量醫療保健成本的費率，我認為它們會很高。而且它會設置一個更高的樓層。因此，我們將看看明年這將如何發揮作用。但同時，我們也將成為受益者，因為我們的提供者會從一些更高的付款中做得更好。

So it's an interesting market, and I say all that just to say this may not be the last rate increase if health care spend increases come through at 8% or 10%. And those increases are helping bring private market valuations closer to public. So we like those new prices. That also takes out some of the competition for the assets that we like from private equity because they're not -- they're financing it with debt, and we're financing it with cash. So we have cash on the balance sheet to do what we want and are still seeing good opportunities out there. We have a good team that's working on M&A focused on it. So like the pipeline that we see right now.

所以這是一個有趣的市場，我說這一切只是想說，如果醫療保健支出成長達到 8% 或 10%，這可能不是最後一次升息。這些增長有助於使私人市場估值更接近公眾。所以我們喜歡這些新價格。這也消除了私募股權對我們喜歡的資產的一些競爭，因為他們不是——他們用債務融資，而我們用現金融資。因此，我們的資產負債表上有現金可以做我們想做的事，並且仍然看到了很好的機會。我們有一支優秀的團隊致力於併購。就像我們現在看到的管道一樣。

Our next question will come from Sean Dodge with RBC Capital Markets.

我們的下一個問題將來自加拿大皇家銀行資本市場的肖恩·道奇。

Maybe just going back to the gross margins one more time. David, you said those should begin to moderate later in the year, spend on the upgrade center winds down. When we think about how much and how quick gross margin improvement, I guess do you see it pass back to the low 50s, like we saw in years past? Or was that just helped a lot by license sales, and Jamie's point, I think, around revenue mix, just make that a little bit tougher to achieve?

也許只是再一次回到毛利率。大衛，你說這些應該在今年稍後開始放緩，升級中心的支出逐漸減少。當我們考慮毛利率改善的程度和速度時，我想您是否會看到毛利率回到 50 多歲的低水平，就像我們過去幾年看到的那樣？或者說，這只是透過授權銷售提供了很大幫助，而傑米的觀點，我認為，圍繞著收入組合，只是讓實現這一點變得更加困難？

Sean, this is Jamie. I would say that the payout to 50 is a little longer. We do expect to see -- as David said, we expect to see the margins start to increase in the back half of this year. But the path to 50 is going to take a bit longer and particularly will be enhanced. When I think about the insights, the revenue that will be generated in insights will be higher margin revenue and will help to lift the overall corporate margin.

肖恩，這是傑米。我想說的是，支付到 50 的時間有點長。正如大衛所說，我們確實預計利潤率將在今年下半年開始增加。但通往 50 的道路將需要更長的時間，而且尤其會加強。當我考慮洞察時，洞察將產生的收入將是更高的利潤收入，並將有助於提高整體公司利潤。

I think the NextGen Enterprise is probably going to settle in, in this kind of -- at its current gross margin. It will pick up a little bit over time but not dramatically. I think the bigger improvement comes as insights revenue starts to pick up. And we identified that a year ago is starting to produce meaningful contribution in '25 and '26.

我認為 NextGen Enterprise 可能會以目前的毛利率穩定下來。隨著時間的推移，它會有所回升，但不會顯著。我認為隨著洞察收入開始回升，更大的改善就會出現。我們發現一年前就開始在 25 和 26 年做出有意義的貢獻。

Okay. Great. That's very helpful. And then on the bookings, is there any more color you can share on the $39 million you signed in the quarter? Was that in line with plan? Were there any kind of pushes or pulls? Anything that slipped or was pulled ahead from adjacent quarters? And then maybe give us a sense of the kind of cadence you need there in order to achieve the guidance for the year. Is $39 million a quarter good enough? Or do you need something a little bit higher than that going forward?

好的。偉大的。這非常有幫助。然後在預訂方面，對於本季簽下的 3900 萬美元，您還有什麼可以分享的嗎？這符合計畫嗎？是否有任何類型的推力或拉力？有東西滑倒或從鄰近區域被拉到前面嗎？然後也許可以讓我們了解您需要什麼樣的節奏才能實現今年的指導。每季 3900 萬美元夠嗎？或者你需要比這更高一點的東西嗎？

We need something higher than that going forward. But certainly, for -- especially when you think out till '25, I mean, we've kind of talked about that before when the first quarter -- the first quarter does feed in into Q3 and Q4. But once we get to the third quarter, you're really talking about the following year.

未來我們需要比這更高的東西。但當然，特別是當你考慮到 25 年前，我的意思是，我們在第一季之前就已經討論過這一點，第一季確實會進入第三季和第四季。但一旦我們進入第三季度，你真正談論的是下一年。

It's -- the beauty of our recurring business model is 91%, like we have really good visibility. So people are like, how do you know that you -- you have confidence around your kind of revenue forecast. It's because it's still recurring in nature. But we need better than $39 million in Q2.

我們的經常性商業模式的優點是 91%，就像我們擁有非常好的可見性一樣。所以人們會問，你怎麼知道你對自己的收入預測有信心。這是因為它仍然在自然界中反覆出現。但第二季我們需要超過 3900 萬美元。

The current forecast looks better than that. So we're not nervous about that. But you're starting -- when you get into Q3, really setting up for '25. So this quarter was good. Next quarter should be better. We feel good still about the year. And the latter half of this year's bookings will really be about how do we continue to grow at double digits into '25.

目前的預測看起來比這更好。所以我們對此並不緊張。但當你進入第三季時，你就開始真正為 25 年做好準備。所以這個季度表現不錯。下個季度應該會更好。我們對這一年的感覺仍然很好。今年下半年的預訂量將真正關注我們如何在 25 年繼續以兩位數成長。

Our next question comes from Jailendra Singh with Truist Securities.

我們的下一個問題來自 Truist Securities 的 Jailendra Singh。

I actually want to [dive deep] on the data you shared around 200 providers and 30,000 attributed lives for 2024 CMS enrollment in MSSP and HCA products. A few questions there. First, how many of these 200 providers were your existing clients versus clients who are working with you just on value-based care or these MSSP solutions? And second, maybe can you dig a little bit deeper on the key differentiation you guys have in your solutions compared to several other vendors out there doing like single value-based care solutions?

實際上，我想[深入]您分享的關於 2024 年 MSSP 和 HCA 產品 CMS 註冊的大約 200 個提供者和 30,000 個歸屬生命的資料。有幾個問題。首先，這 200 家提供者中有多少是您的現有客戶，與僅與您合作提供基於價值的護理或這些 MSSP 解決方案的客戶？其次，也許您可以更深入地了解您的解決方案與其他幾家提供基於單一價值的護理解決方案的供應商相比的關鍵差異化嗎？

Thanks, Jailendra. So they're all existing clients. So everyone we've targeted so far has been existing. And what we're bringing is we're bringing them to tech and the technology and insights integrated into the workflow so that they can actually achieve those savings without having to do a lot of work, right? And what I mean by that is -- so all of our population health applications and analytics, we bring that kind of pace up in the application. As they're going through a clinical encounter with a patient, we're telling them you need to check the following things to get the outcomes that will generate the better shared savings. So that's what differentiates us.

謝謝，賈蘭德拉。所以他們都是現有客戶。所以到目前為止我們所針對的每個人都已經存在。我們帶來的是，我們將他們帶入技術以及整合到工作流程中的技術和見解，以便他們實際上可以實現這些節省，而無需做大量工作，對吧？我的意思是 - 所以我們所有的人口健康應用程式和分析，我們都在應用程式中加快了這種步伐。當他們與患者進行臨床接觸時，我們告訴他們您需要檢查以下事項以獲得能夠產生更好的共享節省的結果。這就是我們的與眾不同之處。

We're not -- some places are taking lots of tech and then putting it together. We're able to bring all of our tech to it and bring with that some of the clinical change support. And importantly, too, I point out that we have a proven model here. So you've seen us put out press releases with some of our clients that are generating $100 million in shared savings. We're learning from those clients, and we're learning together, and we're further refining our models to do better in this construct.

我們不是——有些地方正在採用大量技術，然後將它們組合在一起。我們能夠將我們所有的技術引入其中，並帶來一些臨床變革支援。同樣重要的是，我指出我們這裡有一個經過驗證的模型。您已經看到我們與一些客戶發布了新聞稿，這些客戶分享節省了 1 億美元。我們正在向這些客戶學習，我們正在共同學習，我們正在進一步完善我們的模型，以便在這個結構中做得更好。

It's kind of related to that, I think there was a proposal a couple of weeks back from CMS around some changes to the program. And I know it might be a little early, but just curious if you had any early conversation with any provider clients because it seems like CMS expects more participation and more lives to be attributed because of those changes. I'm curious, like have you hired anything in the last couple of weeks or so?

這與此有關，我認為幾週前 CMS 提出了一項關於對該計劃進行一些更改的提案。我知道這可能有點早，但只是好奇您是否與任何提供者客戶進行任何早期對話，因為 CMS 似乎希望由於這些變化而有更多的參與和更多的生命。我很好奇，例如你在過去幾週左右僱用過任何人嗎？

We haven't heard anything in the last couple of weeks. We still have time to sign up more providers. So we're optimistic that this won't be the final number that we end up at. But we haven't heard it come through the marketplace yet from those changes.

過去幾週我們沒有聽到任何消息。我們還有時間簽約更多提供者。因此，我們樂觀地認為這不會是我們最終得到的最終數字。但我們還沒聽說這些變化會透過市場出現。

Okay. And one last one. On the free cash flow trend, I think you talked about that. So just any guidance you can provide for the year, like any number just to make sure we are in the ballpark?

好的。還有最後一張。關於自由現金流趨勢，我想您已經談到了這一點。那麼，您可以提供今年的任何指導嗎？例如任何數字，以確保我們處於大致範圍內？

We tried to share that for next quarter, we're expecting it to be negative because of the cash payment. It's -- almost $33 million went out with -- on the cash payment related to the DOJ issue. And so obviously, that will be negative. I believe afterwards, we will expect cash conversions in the back half of the year, and I think of it as probably 50% of EBITDA is able to give you a pretty good target area.

我們試圖分享下個季度的情況，但由於現金支付，我們預計該結果將為負數。其中將近 3300 萬美元用於支付與 DOJ 問題相關的現金。顯然，這將是負面的。我相信之後，我們預計下半年會出現現金轉換，我認為大概 50% 的 EBITDA 能夠給你一個相當不錯的目標區域。

But for the year, still generating free cash flow on the entire year, not limited free cash flow for the entire year.

但就全年而言，仍產生全年自由現金流，而不是全年自由現金流有限。

(Operator Instructions) Our next question comes from Jessica Tassan with Piper Sandler.

（操作員說明）我們的下一個問題來自 Jessica Tassan 和 Piper Sandler。

So I have a few more bookings-related ones, hopefully you can bear with me. So are the majority of the 72% of bookings from existing customers coming from customers who are upgrading to spring '21? And if so, just is the completion of that upgrade cycle going to moderate the volume of existing customer bookings? Or are you seeing kind of same-store sales in the months and years subsequent to the upgrade?

所以我還有一些與預訂相關的內容，希望您能耐心等待。那麼，現有客戶 72% 的預訂中的大部分來自升級到 21 年春季的客戶嗎？如果是這樣，升級週期的完成是否會減少現有客戶的預訂量？或者您看到升級後數月和數年的同店銷售額？

So the -- I mean the 72% are from the base, and now the majority of the base is on the Cures Edition. So I guess it stands the reason that that's where -- but it's not because of the Cures acquisition kind of absence or presence that's driving the bookings, probably. It's just do they need these things.

所以——我的意思是 72% 來自基礎，現在大部分基礎都在治癒版上。所以我想這就是原因——但這可能不是因為 Cures 收購的缺席或存在而推動了預訂。只是他們需要這些東西。

From an implementation perspective, it's certainly getting easier that almost everyone is on the Cures Edition. So when implementation goes to check, it's whatever it is, you can put it on this where I think probably 2 years ago, without that, there are some newer surround solutions that require that.

從實施的角度來看，幾乎每個人都使用 Cures 版本，這肯定會變得更容易。因此，當實施進行檢查時，無論是什麼，你都可以把它放在我認為可能是兩年前的地方，如果沒有的話，有一些更新的環繞聲解決方案需要這樣做。

That's pretty much all there now. But there's no -- there's less work to do to implement at this point because people are all on -- most clients are on the same release at that point.

現在差不多就這些了。但沒有——此時需要執行的工作較少，因為人們都在使用——大多數客戶此時都使用同一個版本。

Got it. So just the bookings from existing customers, those are kind of coming through irrespective of the guidance -- of the upgrade and should continue to.

知道了。因此，無論升級的指導如何，只要現有客戶的預訂都會通過，並且應該繼續下去。

Yes, I think so.

是的，我想是這樣。

Got it. And then just in the ambulatory market, kind of broadly. Do you have any sense of what practices are now 2015 Cures Update compliant? And what does that mean for just net new bookings prospect? Basically, does a recent update or compliance with the 2015 Cures Update mean that a competitive client would be harder to convert? Or is that kind of a neutral factor or irrelevant to competitive conversion?

知道了。然後就在流動市場上，範圍很廣。您是否了解現在哪些做法符合 2015 Cures Update？這對於淨新預訂前景意味著什麼？基本上，最近的更新或遵守 2015 Cures 更新是否意味著競爭性客戶將更難轉換？還是這是一種中性因素或與競爭性轉化無關？

I think it's -- for somebody if they're not on it, I think it's a positive for us in that, if you're not on it, we could get you live by the deadline still. So we'd be happy to take any of those clients through the conversion process to get them live in time. So that is still good for us. And I think that's mainly a problem on the lower end.

我認為，對於某些人來說，如果他們沒有參與其中，我認為這對我們來說是積極的，因為如果你沒有參與其中，我們仍然可以讓你在截止日期前活下來。因此，我們很樂意協助這些客戶完成轉換流程，讓他們及時上線。所以這對我們來說還是有好處的。我認為這主要是低端的問題。

Most of our larger practice competitors are certified by now. So if they're not upgraded, we'd still offer them an opportunity to come to NextGen. So -- but if they're already on an addition, we could still get them to come to NextGen or not. But the ones that aren't, I think there's still probably some movement to happen there in the market.

我們大多數規模較大的競爭對手現在都已獲得認證。因此，如果他們沒有升級，我們仍然會為他們提供加入 NextGen 的機會。所以 - 但如果他們已經加入，我們仍然可以讓他們加入或不加入 NextGen。但對於那些沒有的，我認為市場上仍然可能會發生一些變化。

Got it. And so then would you expect kind of the mix of bookings or just the pace of bookings from net new customers to moderate or that should remain strong despite the market generally having upgraded to be compliant?

知道了。那麼，您是否預期淨新客戶的預訂組合或預訂速度會放緩，或者儘管市場普遍升級為合規，但仍應保持強勁？

Yes. I think it stays strong. Like you've seen, we've been very consistent around 25%. We did a little bit better this quarter at 28%, but it's consistent. And the nice part about those clients is they're bringing a lot of applications in surround solutions they once always hosted. So another way of saying that is they're buying everything and it makes them sticky. So the part that we like about that is we see the more -- like most things, the more solutions we get installed, the stickier they become.

是的。我認為它會保持強勁。正如您所看到的，我們一直非常穩定在 25% 左右。本季我們的表現稍好一些，為 28%，但保持穩定。這些客戶的好處是，他們在他們曾經託管的環繞解決方案中引入了許多應用程式。換句話說，他們什麼都買，這讓他們變得有黏性。因此，我們喜歡的部分是我們看到的越多——就像大多數事情一樣，我們安裝的解決方案越多，它們就會變得越黏。

And the new clients that are coming to us are buying everything they want. So they're sticky from the start, which if you think about our base, they made us [start at] somewhere 10 years ago, we've been moving them along over time. It's nice that our sales process is mature enough to sell everything at once and create a very sticky client right from the start.

來到我們這裡的新客戶正在購買他們想要的一切。所以它們從一開始就具有黏性，如果你想想我們的基地，他們讓我們在 10 年前的某個地方開始，隨著時間的推移，我們一直在推動它們。令人高興的是，我們的銷售流程足夠成熟，可以一次銷售所有產品，並從一開始就創造出非常黏性的客戶。

Got it. That's really helpful. And my final one would just be, are the providers that you all have signed so far for MSSP, are those providers who are already participating? And if so, what were they using previously to support their participation in MSSP?

知道了。這真的很有幫助。我的最後一個問題是，到目前為止你們都已簽署 MSSP 的提供者是那些已經參與的提供者嗎？如果是，他們之前使用什麼來支持參與 MSSP？

Yes, it's a good question. So thanks, Jess. Most of them are new to the MSSP process. But we did have some conversions from competitors that aren't our normal competitors, right? So it's not like we've converted them from Epic or Athena or whoever. We converted them from the kind of that different class of competitor that is still yet to prove out the profitability of their business model. And the way we're looking at it is we're trying to create a profitable business model right from the start with the very first 200 providers.

是的，這是一個好問題。謝謝，傑西。他們中的大多數都是 MSSP 流程的新手。但我們確實有一些來自非我們正常競爭對手的轉化，對吧？所以我們並不是將它們從 Epic 或 Athena 或其他任何人那裡轉換而來。我們將他們從那些尚未證明其商業模式盈利能力的不同類別的競爭對手中轉變出來。我們看待這個問題的方式是，從一開始就與前 200 家提供者一起創建一個有利可圖的商業模式。

So it's one of the differentiated way we're going to market is that we're not spending -- it's going to be profitable from the start. Let me just say that. We're not spending tons of money to make an unprofitable business model. We would rather move it to size and scale for our providers, and we think there's a lot of movement here, but we're moving, over time, profitable from the start.

因此，我們進入市場的差異化方式之一是我們不花錢——從一開始就獲利。我就這麼說吧。我們不會花費大量資金來建立無利可圖的商業模式。我們寧願將其轉移到我們的提供者的規模和規模上，我們認為這裡有很多變化，但隨著時間的推移，我們正在從一開始就獲利。

There are no additional questions at this time. I'd like to now turn the conference over to Mr. David Sides for any closing remarks.

目前沒有其他問題。現在我想將會議轉交給 David Sides 先生做總結發言。

Thank you all for joining the conference and -- the conference call. We really look forward to talking to you again in the fall, in October, for earnings call and potentially for an Investor Day in November. So I appreciate everyone's interest. We'll talk to you soon. Thanks.

感謝大家參加本次會議以及電話會議。我們非常期待在秋季、10 月的財報電話會議上再次與您交談，並可能在 11 月的投資者日與您交談。所以我很感激大家的興趣。我們很快就會和你談談。謝謝。

Thank you. Ladies and gentlemen, this concludes today's presentation. You may now disconnect.

謝謝。女士們、先生們，今天的演講到此結束。您現在可以斷開連接。