Ontrak Inc (OTRK) 2022 Q4 法說會逐字稿

Good day, and welcome to the Ontrak Fourth Quarter 2022 Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Ryan Halsted, Investor Relations. Please go ahead.

美好的一天，歡迎來到 Ontrak 2022 年第四季度財報電話會議。 （操作員說明）請注意，今天的會議正在錄製中。我現在想將會議交給您的發言人，投資者關係部的 Ryan Halsted 先生。請繼續。

Thank you, operator, and thank you all for participating in today's call. Joining me today are Brandon LaVerne, Chief Executive Officer and Chief Operating Officer; Mary Lou Osborne, President and Chief Commercial Officer; and James Park, Chief Financial Officer.

謝謝接線員，也感謝大家參加今天的電話會議。今天加入我的是首席執行官兼首席運營官 Brandon LaVerne；總裁兼首席商務官 Mary Lou Osborne；和首席財務官 James Park。

Earlier today, Ontrak released financial results for the quarter ending December 31, 2022. A copy of the press release is available on the company's website.

今天早些時候，Ontrak 發布了截至 2022 年 12 月 31 日的季度財務業績。新聞稿的副本可在公司網站上獲取。

Before we begin, I'd like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, believes, estimates, expects, intends, guidance, confidence, targets, projects and some other expressions typically are used to identify forward-looking statements.

在我們開始之前，我想就前瞻性陳述發表以下評論。本次電話會議中除歷史事實外的所有陳述均為前瞻性陳述。預期、相信、估計、期望、打算、指導、信心、目標、項目和一些其他表達方式通常用於識別前瞻性陳述。

These forward-looking statements are not guarantees of future performance but may involve and are subject to certain risks and uncertainties, other factors that may affect Ontrak's business, financial condition and other operating results, which include, but are not limited to, the risk factors described in the Risk Factors section of the Form 10-K and Form 10-Q as filed with the SEC. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements. Ontrak expressly disclaims any intent or obligation to update these forward-looking statements.

這些前瞻性陳述不是對未來業績的保證，但可能涉及並受制於某些風險和不確定性、可能影響 Ontrak 業務、財務狀況和其他經營業績的其他因素，包括但不限於風險因素在提交給美國證券交易委員會的 10-K 表格和 10-Q 表格的風險因素部分中有所描述。因此，實際結果和結果可能與這些前瞻性陳述中明示或暗示的結果存在重大差異。 Ontrak 明確否認有任何更新這些前瞻性陳述的意圖或義務。

With that, I'd like to turn the call over to Brandon.

有了這個，我想把電話轉給布蘭登。

Thank you, Ryan, and welcome, everybody. I'd like to thank the Ontrak Board of Directors for the opportunity to lead our company as Chief Executive Officer. It's a responsibility I accept with enthusiasm, integrity, conviction and confidence in the mission of our company, the dedication of our employees to our members and the support of our customers and business partners.

謝謝你，Ryan，歡迎大家。我要感謝 Ontrak 董事會給我機會作為首席執行官領導我們公司。這是我以熱情、正直、信念和信心接受的責任，對我們公司的使命、我們的員工對我們的成員的奉獻以及我們的客戶和業務合作夥伴的支持。

I also want to thank my partner, Mary Lou Osborne, for all her contributions and congratulate her on her appointment as President while continuing as Chief Commercial Officer. We are supported by a first-class executive leadership team with whom we have been managing all day-to-day operations of the company since August of last year. We do not anticipate missing a beat as we continue to refine our value proposition and work to secure new customer contracts and expand existing ones.

我還要感謝我的合作夥伴 Mary Lou Osborne 所做的所有貢獻，並祝賀她在繼續擔任首席商務官的同時被任命為總裁。我們得到了一流的執行領導團隊的支持，自去年 8 月以來，我們一直與他們一起管理公司的所有日常運營。在我們繼續完善我們的價值主張並努力確保新客戶合同和擴大現有合同的過程中，我們預計不會錯過任何一個節拍。

While I understand some of you listening may have questions regarding the news about Terren Peizer, because the legal processes are ongoing, we are limited in what we can say about it at this time. What we can say is that our customers appreciated our proactive outreach to update them and recognized our continued focus on caring for their members, delivering best-in-class service and business as usual.

雖然我知道你們中的一些人可能對有關 Terren Peizer 的新聞有疑問，但由於法律程序正在進行中，我們目前可以說的有限。我們可以說的是，我們的客戶感謝我們積極主動地為他們更新信息，並認可我們繼續專注於照顧他們的會員，提供一流的服務和一如既往的業務。

I'll be sharing some updates with you on some enhancements to our go-to-market strategy in a moment. But first, I'd like to turn the call over to our President and Chief Commercial Officer, Mary Lou Osborne.

稍後我將與您分享一些關於我們上市戰略的一些改進的最新消息。但首先，我想把電話轉給我們的總裁兼首席商務官 Mary Lou Osborne。

Thanks, Brandon, and congratulations on your appointment as our new Chief Executive Officer. During our last earnings call, I outlined in some detail the progress in our pipeline, which has continued to evolve as we conduct meetings and refined proposals across our base of health plans, value-based providers and self-insured employer prospects.

謝謝布蘭登，並祝賀您被任命為我們的新任首席執行官。在我們上次的財報電話會議上，我詳細概述了我們管道的進展，隨著我們在我們的健康計劃基礎、基於價值的提供者和自我保險的雇主前景中召開會議和完善提案，該管道不斷發展。

Two health plan prospects that are furthest along in the sales process have asked us to expand our proposal to include more lives than the typical 2% to 4% of members and expanding our offering to include lower acuity members. While this request temporarily delays their final business decisions, it provides us an opportunity to expand our product offering to include a significantly larger member population. Their requests are consistent with feedback we have been receiving from a number of prospects and has resulted in enhancements to our product offering that we are pleased to share with you today.

在銷售過程中走得最遠的兩個健康計劃前景要求我們擴大我們的提議，以包括比通常 2% 到 4% 的成員更多的生命，並將我們的產品範圍擴大到包括視力較低的成員。雖然此請求暫時延遲了他們的最終業務決策，但它為我們提供了一個機會來擴展我們的產品範圍，以包括更多的會員群體。他們的要求與我們從許多潛在客戶那裡收到的反饋一致，並改進了我們今天很高興與您分享的產品供應。

As we continue to move prospects through our pipeline, we are also creating momentum with our existing customers. We are pleased to announce we have just expanded our relationship with a Medicaid-based plan to include a new 18- to 20-year-old cohort of members. This is in addition to a new amendment signed in January with another long-term customer focused on their highest acuity commercial members.

隨著我們繼續通過我們的管道轉移潛在客戶，我們也在與現有客戶一起創造動力。我們很高興地宣布，我們剛剛擴大了與基於 Medicaid 計劃的關係，以納入 18 至 20 歲的新會員群體。這是對 1 月份與另一位專注於他們最敏銳的商業會員的長期客戶簽署的新修正案的補充。

We are also in conversations with our current customers about opportunities to further expand our services to more of their members in 2023. As we listen closely to our customers and prospects, we are hearing some important themes that are informing the future development of our product strategy to closely align with their goals and priorities. These include identifying a broader population for care coaching, network development and support for quality improvements. I will elaborate a bit more.

我們還在與現有客戶討論在 2023 年進一步將我們的服務擴展到更多成員的機會。在我們密切傾聽客戶和潛在客戶的意見時，我們聽到了一些重要的主題，這些主題正在為我們產品戰略的未來發展提供信息密切配合他們的目標和優先事項。其中包括確定更廣泛的人群以進行護理指導、網絡開發和支持質量改進。我會詳細說明一點。

First, regarding care coaching. While prospects are interested in our clinical focus on the 2% to 4% highest acuity, they are consistently asking us to expand our reach to a larger, broader population that includes our evidence-based care coaching model for lower acuity risk.

首先，關於護理指導。雖然潛在客戶對我們對 2% 至 4% 最高敏銳度的臨床關注感興趣，但他們一直要求我們將覆蓋面擴大到更大、更廣泛的人群，其中包括我們以證據為基礎的護理指導模型，以降低敏銳度風險。

Second, regarding behavioral health network development, our prospects consistently tell us they need support with network development, including contracting net new behavioral health providers for their plan networks and enhancing their current networks in key geographic areas for timely access and availability within 7 to 10 days versus the 2 to 3 months they are currently experiencing.

其次，關於行為健康網絡的發展，我們的潛在客戶不斷告訴我們他們需要網絡發展方面的支持，包括為他們的計劃網絡與新的行為健康提供商簽約，並加強他們在關鍵地理區域的現有網絡，以便在 7 到 10 天內及時訪問和可用性與他們目前經歷的 2 到 3 個月相比。

Finally, quality is always a top priority for health plans. Prospects are asking for assistance with closing gaps in care for HEDIS, Stars, CAHPS, member experience and member retention.

最後，質量始終是健康計劃的重中之重。潛在客戶正在尋求幫助，以縮小在 HEDIS、Stars、CAHPS、會員體驗和會員保留方面的護理差距。

I believe with our track record of successfully delivering positive outcomes for members coupled with our latest AI-enabled program enhancements, we are uniquely positioned to support health plans, providers and self-insured employer groups with their goals and needs to improve health outcomes, achieve high-quality measures and reduce avoidable emergency room and inpatient utilization. We are moving quickly to provide the solutions prospects need, which Brandon will now outline.

我相信，憑藉我們成功為會員帶來積極成果的記錄，再加上我們最新的 AI 支持計劃增強功能，我們具有獨特的優勢，可以支持健康計劃、提供者和自我保險的雇主團體，實現他們的目標和需求，以改善健康成果，實現高質量的措施，減少可避免的急診室和住院病人的使用。我們正在迅速行動以提供潛在客戶需要的解決方案，Brandon 現在將對此進行概述。

Brandon, over to you.

布蘭登，交給你了。

Thank you, Mary Lou. I'm excited to share some important enhancements to our go-to-market strategy to leverage our core strengths while broadening our base of members whose health we can improve. We continue to market our traditional Wholehealth+ solution, which focuses on the 2% to 4% of members who are lost to care, have high-cost thresholds and chronic physical conditions with un- or under-addressed behavioral health needs, which our coaching and therapy model has been proven to address.

謝謝你，瑪麗盧。我很高興與大家分享我們的上市戰略的一些重要改進，以利用我們的核心優勢，同時擴大我們可以改善其健康狀況的成員基礎。我們繼續推銷我們傳統的 Wholehealth+ 解決方案，該解決方案專注於 2% 至 4% 的會員，他們因護理失誤、成本門檻高和慢性身體狀況未得到或未得到滿足的行為健康需求，我們的指導和治療模型已被證明可以解決。

But we believe we can help health plan payers, value-based providers and self-insured employers in their support and care for their members. And they continue to ask us for this help. As a result, we will begin to segment our product portfolio to provide single or combined solutions depending on a customer's needs.

但我們相信我們可以幫助健康計劃付款人、基於價值的提供者和自我保險的雇主支持和照顧他們的成員。他們繼續向我們尋求幫助。因此，我們將開始細分我們的產品組合，根據客戶的需求提供單一或組合的解決方案。

We have already begun sharing these distinct solutions with prospects. First is Ontrak identify, which provides the market with their proprietary AI-enabled predictive algorithms and imputed diagnosis to find those members who are hardest to reach for our prospect base. Whether these members remain in the Ontrak program or are referred back to our customers for their follow-up in treatment, we believe there is value in tailoring solutions to meet the particular needs of each customer.

我們已經開始與潛在客戶分享這些獨特的解決方案。首先是 Ontrak 識別，它為市場提供其專有的支持 AI 的預測算法和估算診斷，以找到我們的潛在客戶群中最難接觸到的那些成員。無論這些成員是留在 Ontrak 計劃中還是被轉回給我們的客戶進行後續治療，我們相信定制解決方案以滿足每個客戶的特殊需求是有價值的。

Next is Ontrak outreach, which leverages our best-in-class member enrollment specialists and evidence-based outreach approaches to reach and enroll new members into a plan's existing offerings. Ontrak has developed superior enrollment expertise through years of successful refinement. Whether we enroll members in Ontrak's own coaching program or use our expertise to enroll members in our customers' existing non-Ontrak programs, there is value in tailoring solutions to meet the particular needs of each customer.

接下來是 Ontrak 外展，它利用我們一流的會員註冊專家和基於證據的外展方法來接觸新會員並將其註冊到計劃的現有產品中。通過多年的成功改進，Ontrak 已經開發出卓越的註冊專業知識。無論我們是在 Ontrak 自己的輔導計劃中招募成員，還是利用我們的專業知識在客戶現有的非 Ontrak 計劃中招募成員，定制解決方案以滿足每個客戶的特殊需求都是有價值的。

Next, Ontrak engage is our cutting-edge coaching model, which includes evidence-based techniques and consistent coaching sessions that drive meaningful behavior change. We will offer this in a coaching-only solution for low to mid-acuity cohorts and in a coaching and provider network solution for mid- to high acuity populations with flexibility to support member-specific needs.

接下來，Ontrak engage 是我們最先進的輔導模型，其中包括基於證據的技術和一致的輔導課程，可推動有意義的行為改變。我們將在針對中低敏銳度群體的純教練解決方案中以及針對中高敏銳度人群的教練和提供者網絡解決方案中提供這一解決方案，並靈活地支持成員的特定需求。

Our recently announced partnership with a leading AI natural language processing platform now enhances our coach's effectiveness through real-time insights on how they engage with members. Whether we provide coaching alone or marry it with access to our top-notch provider network, there's value in tailoring solutions to meet the particular needs of each customer.

我們最近宣布與領先的 AI 自然語言處理平台建立合作夥伴關係，現在通過實時了解他們如何與會員互動來提高我們教練的效率。無論我們單獨提供輔導，還是將其與我們一流的供應商網絡相結合，定制解決方案以滿足每位客戶的特殊需求都是有價值的。

And last is Ontrak access, which gives customers the opportunity to build out their behavioral health networks and improve access and availability whether or not paired with Ontrak engage or other components of our program.

最後是 Ontrak 訪問，無論是否與 Ontrak 參與或我們計劃的其他組件配對，它都讓客戶有機會建立他們的行為健康網絡並改善訪問和可用性。

We are excited that our NCQA accreditation for Ontrak providers should be complete within the next 60 days, which would further allow customers to delegate credentialing to Ontrak as needed. Each of these 4 segmented products builds upon our strength in each area, the whole of which forms the basis for our Ontrak Wholehealth+ comprehensive solution that is still available.

我們很高興我們對 Ontrak 供應商的 NCQA 認證將在未來 60 天內完成，這將進一步允許客戶根據需要將認證委託給 Ontrak。這 4 個細分產品中的每一個都建立在我們在每個領域的實力之上，整體構成了我們仍然可用的 Ontrak Wholehealth+ 綜合解決方案的基礎。

I'm confident these customized solutions, each with their own pricing model, give us and our potential prospects the flexibility to design the most relevant and effective programs for their members. Based upon our initial data analysis, we believe this enhanced approach will allow us to expand the number of members we serve from the historical 2% to 4% to approximately 20% to 30%, which we believe puts us in the best position to accelerate our return to growth.

我相信這些定制的解決方案，每個都有自己的定價模式，讓我們和我們的潛在客戶能夠靈活地為他們的會員設計最相關和最有效的計劃。根據我們的初步數據分析，我們相信這種增強的方法將使我們能夠將我們服務的會員數量從歷史上的 2% 到 4% 擴大到大約 20% 到 30%，我們相信這使我們處於加速發展的最佳位置我們恢復增長。

As we expand our go-to-market approach, we are also implementing a series of AI-enabled solutions that create more efficient engagement, less administrative burden and better use of resources. This allows our coaches to spend more time coaching and less time with lower value-added administrative activities.

隨著我們擴展進入市場的方法，我們還實施了一系列支持 AI 的解決方案，以提高參與效率、減輕管理負擔並更好地利用資源。這使我們的教練可以花更多的時間進行指導，而將更少的時間花在低附加值的行政活動上。

In fact, we've already seen a 40% increase in coaching caseload capacity with the opportunity for more in 2023. Once again, I want to express my thanks to our customers and everyone at Ontrak as we embark on the next chapter, all in the service of helping to improve the health and save the lives of as many people as possible. It's a mission we continue to pursue every day.

事實上，我們已經看到教練案例容量增加了 40%，並有機會在 2023 年增加更多。我想再次感謝我們的客戶和 Ontrak 的每個人，因為我們正在開啟下一章，一切都在幫助改善健康和挽救盡可能多的人的生命的服務。這是我們每天繼續追求的使命。

Now I'd like to turn the call over to our Chief Financial Officer, James Park.

現在我想把電話轉給我們的首席財務官 James Park。

Thanks, Brandon. During the fourth quarter, we recorded revenue of $2.5 million, a 76% year-over-year decrease due primarily to the loss of 2 large customers we previously discussed.

謝謝，布蘭登。第四季度，我們錄得 250 萬美元的收入，同比下降 76%，這主要是由於我們之前討論過的 2 個大客戶的流失。

At the beginning of the quarter, we had 1,365 enrolled members and ended with 1,333 at the end of the quarter or a simple average of 1,349. That equates to revenue of about $552 per health plan enrolled member per month for the quarter compared to $506 per health plan enrolled member per month in Q4 of 2021 and $515 per health plan enrolled member per month in Q3 of 2022.

本季度初，我們有 1,365 名註冊會員，本季度末為 1,333 名，簡單平均為 1,349 名。這相當於本季度每位健康計劃註冊會員每月的收入約為 552 美元，而 2021 年第四季度每位健康計劃註冊會員每月收入為 506 美元，2022 年第三季度每位健康計劃註冊會員每月收入為 515 美元。

To go a bit deeper into Q4 enrollment, we enrolled a total of 754 members during the quarter compared to 1,014 in Q4 of last year and 533 in Q3 of 2022. Dividing Q4 gross enrollments by our outreach pool, which averaged 4,538 for the quarter, it annualizes to a 66% enrollment rate compared to a 51% enrollment rate in Q4 of 2021 and 53% in Q3 of 2022.

為了更深入地了解第四季度的註冊情況，我們在本季度共註冊了 754 名成員，而去年第四季度為 1,014 名，2022 年第三季度為 533 名。將第四季度的總註冊人數除以我們的外展人數，本季度平均為 4,538 人，與 2021 年第四季度的 51% 和 2022 年第三季度的 53% 相比，它的年化入學率為 66%。

Our average monthly disenrollment rate was 11% in the current quarter compared to 8% in Q3 of 2022. Further, we graduated 356 enrolled members during the quarter. This equates to about 26% of the enrolled members in the program at the beginning of the quarter, which has been steadily increasing from prior quarters. The net impact was a net enrollment decrease of 32 members in the fourth quarter.

本季度我們的平均每月退學率為 11%，而 2022 年第三季度為 8%。此外，本季度我們有 356 名註冊會員畢業。這相當於本季度初該計劃註冊會員的 26%，與前幾個季度相比一直在穩步增長。淨影響是第四季度淨註冊人數減少 32 人。

Our gross margin in the fourth quarter was 61.2%, which increased sequentially from 49.5% and also increased from 60.4% in the fourth quarter of last year. The increase in our gross margin sequentially for Q4 was primarily due to the restructuring plan and operational efficiencies with our member facing teams completed throughout the year. We ended the quarter with 30 team members included in cost of revenue, (inaudible) at the end of Q3, reflecting no material change in our net enrolled members at the end of the quarter.

我們第四季度的毛利率為 61.2%，較去年第四季度的 49.5% 和 60.4% 有所增長。我們第四季度毛利率的環比增長主要是由於全年完成的面向會員的團隊的重組計劃和運營效率。本季度結束時，我們在第三季度末的收入成本中包含了 30 名團隊成員（聽不清），這反映出本季度末我們的淨註冊成員沒有發生重大變化。

Turning to the balance sheet and cash flow. Our cash flow from operations in the fourth quarter was negative $1.4 million compared to negative $15 million in the fourth quarter of last year. We ended the quarter with cash and cash equivalents of $5 million, down from $7.3 million at the end of the third quarter in 2022. Including restricted cash, total cash was $9.7 million at the end of the quarter, down from $11.9 million at the end of the third quarter this year.

轉向資產負債表和現金流量。我們第四季度的運營現金流為負 140 萬美元，而去年第四季度為負 1500 萬美元。我們在本季度末的現金和現金等價物為 500 萬美元，低於 2022 年第三季度末的 730 萬美元。包括受限現金在內，本季度末現金總額為 970 萬美元，低於末時的 1190 萬美元今年第三季度。

During the quarter, we completed an amendment of our Keep Well Agreement, which extended the maturity date from September 1, 2023, through June 30, 2024, increased the remaining available amount for borrowing from $10.7 million to $14 million as of December 31, 2022, and the ability to add accrued interest into principal rather than pay cash for the interest monthly.

在本季度，我們完成了對 Keep Well 協議的修訂，將到期日從 2023 年 9 月 1 日延長至 2024 年 6 月 30 日，截至 2022 年 12 月 31 日，剩餘可用借款金額從 1070 萬美元增加到 1400 萬美元，以及將應計利息加到本金中而不是每月支付現金利息的能力。

We continue to make appropriate updates to our cost structure, including the reduction in force that we just announced and operational improvements to preserve and maximize our capital. With the initiative that we have just completed and a few other near completion, we expect our cash burn rate to be closer to $1.5 million per month with the current customer base. Regarding our outlook, we're providing revenue guidance of $12 million to $14 million for revenues from our current customer base for the year.

我們繼續對我們的成本結構進行適當的更新，包括我們剛剛宣布的裁員和運營改進，以保護和最大化我們的資本。憑藉我們剛剛完成的計劃和其他一些即將完成的計劃，我們預計當前客戶群的現金消耗率將接近每月 150 萬美元。關於我們的前景，我們為今年來自我們當前客戶群的收入提供了 1200 萬至 1400 萬美元的收入指導。

Operator, we can now open it up for questions.

接線員，我們現在可以打開它提問了。

(Operator Instructions) I'm showing no questions in the queue at this time. I would now like to turn the call back over to Brandon LaVerne for any closing remarks.

（操作員說明）此時我沒有在隊列中顯示任何問題。我現在想將電話轉回給 Brandon LaVerne 以聽取任何結束語。

Thank you, Sherry. I'd like to thank the entire Ontrak team for their dedication to our mission to help improve the health and save the lives of as many people as possible. Have a great afternoon.

謝謝你，雪莉。我要感謝整個 Ontrak 團隊對我們幫助改善健康和拯救盡可能多的人的生命的使命的奉獻。祝你下午愉快。

Thank you for participating. This concludes today's program. You may now disconnect.

感謝您的參與。今天的節目到此結束。您現在可以斷開連接。