Performant Healthcare Inc (PHLT) 2024 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Performant Financial's second-quarter 2024 earnings conference call. (Operator Instructions) This call is being recorded on Wednesday, August 7, 2024.

女士們、先生們，下午好，歡迎參加 Performant Financial 的 2024 年第二季財報電話會議。（操作員說明）此通話錄音時間為 2024 年 8 月 7 日星期三。

I would now like to turn the conference over to Jon Bozzuto, Head of Investor Relations. Please go ahead.

我現在想將會議交給投資人關係主管 Jon Bozzuto。請繼續。

Thank you, operator. Good afternoon, everyone. By now, you should have received a copy of the earnings release for the company's second-quarter 2024 results. If you have not, a copy is available on the Investor Relations portion of our website. On today's call will be Simeon Kohl, Chief Executive Officer; and Rohit Ramchandani, Chief Financial Officer.

謝謝你，接線生。大家下午好。到目前為止，您應該已經收到了該公司 2024 年第二季業績的收益發布副本。如果您還沒有，可以在我們網站的投資者關係部分取得副本。執行長 Simeon Kohl 出席今天的電話會議；羅希特‧拉姆昌達尼 (Rohit Ramchandani)，財務長。

Before we begin, I'd like to remind you that some of the comments made today, including our financial guidance, are forward-looking statements. These statements are subject to risks and uncertainties, including those described in the company's filings with the SEC. Actual results may differ materially from those described during the call. In addition, all forward-looking statements are made as of today, and the company does not undertake to update any forward-looking statements based on new circumstances or revised expectations. Also, all non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release.

在開始之前，我想提醒您，今天發表的一些評論，包括我們的財務指導，都是前瞻性陳述。這些聲明存在風險和不確定性，包括該公司向 SEC 提交的文件中所述的風險和不確定性。實際結果可能與通話期間所述的結果有重大差異。此外，所有前瞻性陳述均截至今日作出，本公司不承諾根據新情況或修改後的預期更新任何前瞻性陳述。此外，本次電話會議中討論的所有非公認會計原則財務指標均與我們新聞稿所附表格中最直接可比較的公認會計原則指標進行了調整。

I would now like to turn the call over to Simeon Kohl. Sim?

我現在想把電話轉給西蒙·科爾。西姆？

Thank you, Jon. Good afternoon, everyone, and thank you for joining us for our earnings call. This afternoon, we reported second-quarter results, highlighted by 17% growth in health care revenues compared to the second quarter of 2023, and positive EBITDA of $0.5 million. I will share our operational accomplishments, followed by Rohit, who will walk you through our financial results.

謝謝你，喬恩。大家下午好，感謝您參加我們的財報電話會議。今天下午，我們報告了第二季度業績，其中醫療保健收入較 2023 年第二季度增長 17%，EBITDA 為 50 萬美元。我將分享我們的營運成就，隨後羅希特將向您介紹我們的財務表現。

In the second quarter, our double-digit year-over-year revenue growth and positive EBITDA demonstrate our effectiveness in penetrating the significant market opportunity that lies before us as well as our disciplined approach to driving profitability. Our strategy to deliver these results has remained unchanged: prioritized client needs, continuously innovate and achieve operational excellence. I'll touch on each of these as we highlight our second-quarter results.

第二季度，我們兩位數的年收入成長和正的 EBITDA 證明了我們在抓住擺在我們面前的重大市場機會方面的有效性，以及我們推動盈利能力的嚴格方法。我們實現這些成果的策略保持不變：優先考慮客戶需求，不斷創新並實現卓越營運。當我們重點介紹第二季業績時，我將逐一討論這些內容。

Demand for our services remains strong as we continue to effectively demonstrate our value proposition to both current and prospective clients. This past quarter, we implemented 10 statements of work, including adding two new clients to our roster. And year-to-date, we have implemented 20 new statements of work, which we estimate will collectively generate approximately $9 million in annualized revenue at steady state. And despite the significant client bandwidth required for implementations, it is encouraging to see our clients continue to switch from their legacy partners and choose Performant, a testament to our ability to deliver timely and meaningful returns on their trust and investment.

隨著我們繼續向現有和潛在客戶有效展示我們的價值主張，對我們服務的需求仍然強勁。上個季度，我們實施了 10 份工作說明書，其中包括在我們的名冊中新增了兩位新客戶。今年迄今為止，我們已經實施了 20 份新的工作報表，我們估計這些報表在穩定狀態下將總共產生約 900 萬美元的年化收入。儘管實施需要大量的客戶頻寬，但令人鼓舞的是，我們的客戶繼續從其傳統合作夥伴轉向選擇 Performant，這證明了我們有能力為他們的信任和投資提供及時且有意義的回報。

Our business started with a single CMS RAC engagement, and government contracts remain an important backbone of our operations today. We have built credibility through our strong relationship with CMS, and we are optimistic about growing our business with the federal government as we continue to ramp RAC Region 2. This election year, however, presents potential uncertainty for our industry. We are seeing several agencies take a more conservative approach with oversight programs. So we anticipate this more measured approach will be limited to the current election cycle.

我們的業務始於單一 CMS RAC 參與，政府合約仍然是我們今天營運的重要支柱。我們透過與 CMS 的牢固關係建立了信譽，並且隨著我們繼續擴大 RAC 區域 2，我們對與聯邦政府發展業務持樂觀態度。然而，今年的選舉年為我們的行業帶來了潛在的不確定性。我們看到一些機構在監督計劃方面採取了更保守的方法。因此，我們預計這種更謹慎的方法將僅限於當前的選舉週期。

Having navigated multiple prior elections, we are confident that both the state and federal government's commitment to payment accuracy and transparency will likely remain unchanged, no matter the election outcome. Staying on the government theme, we continue to see an opportunity in the $300 million to $500 million state market. We have been active with state RFPs and continue to refine our strategy as we wait for the first contract award for both our recovery audit and third-party liability solutions. Change is constant within health care, and our clients face numerous challenges, including adjustments and reimbursements and evolving risk pools due to Medicaid redeterminations.

在經歷過之前的多次選舉後，我們相信，無論選舉結果如何，州和聯邦政府對支付準確性和透明度的承諾可能會保持不變。圍繞政府主題，我們繼續在 3 億至 5 億美元的國家市場中看到機會。我們一直積極參與州 RFP，並在等待我們的回收審計和第三方責任解決方案的第一份合約授予期間繼續完善我們的策略。醫療保健領域不斷變化，我們的客戶面臨許多挑戰，包括調整和報銷以及因醫療補助重新確定而不斷變化的風險池。

One challenge we would highlight is the Change Healthcare outage, which has had a meaningful impact on claims processing, adjudication and care delivery. The Change Healthcare outage has fortunately only had a minor impact on Performant to date. From an implementations and new sales standpoint, we are seeing slower decision-making by clients as they adjust their near-term priorities.

我們要強調的一項挑戰是 Change Healthcare 中斷，這對索賠處理、裁決和護理服務產生了重大影響。幸運的是，迄今為止，Change Healthcare 中斷僅對 Performant 產生了輕微影響。從實施和新銷售的角度來看，我們發現客戶在調整近期優先事項時決策速度變慢。

While we have seen isolated delays, the strength of our services continues to drive positive results for our clients, and we do not expect the Change Healthcare incident to impact our long-term growth strategy. We initially anticipated the operational impact of the Change Healthcare outage to be temporary delays in receiving claims, likely resulting in quick restoration with no loss in opportunity for Performant. And the results we have seen to date on our existing operations continues to support that assessment. We will continue to monitor for downstream impacts to our operations. But again, to date, we have seen minimal operational disruption.

雖然我們看到了孤立的延誤，但我們的服務實力繼續為我們的客戶帶來積極的成果，我們預計 Change Healthcare 事件不會影響我們的長期成長策略。我們最初預計 Change Healthcare 中斷對營運的影響是接收索賠的暫時延遲，這可能會導致快速恢復，而不會損失 Performant 的機會。迄今為止我們在現有營運中看到的結果繼續支持這項評估。我們將繼續監測下游對我們營運的影響。但迄今為止，我們再次看到的營運中斷程度很小。

On the topic of data security, I'd underscore our dedication to safeguarding the data entrusted to us through our robust multitiered security strategy. This includes encryption, role-based access controls, anomaly detection and comprehensive vulnerability and vendor management. We undergo regular internal and external audits and penetration tests to ensure compliance with industry standard data protection requirements and best practices. And Performant's rigorous security standards are validated by certifications, including HITRUST, SOC, and SOX, along with annual CMS control audits.

關於資料安全主題，我想強調我們致力於透過強大的多層安全策略來保護委託給我們的資料。這包括加密、基於角色的存取控制、異常檢測以及全面的漏洞和供應商管理。我們定期進行內部和外部審計以及滲透測試，以確保符合行業標準資料保護要求和最佳實踐。Performant 嚴格的安全標準通過了 HITRUST、SOC 和 SOX 等認證以及年度 CMS 控制審核的驗證。

While there will always be challenges for our clients to contend with, I firmly believe that our value proposition remains consistent as we help our clients more accurately pay claims, yielding greater predictability and allowing them to focus on what matters most: ensuring the delivery of high-quality, cost-effective patient care.

雖然我們的客戶始終面臨挑戰，但我堅信，我們的價值主張始終如一，因為我們幫助客戶更準確地支付索賠，產生更大的可預測性，並讓他們專注於最重要的事情：確保提供高品質的服務-優質且具有成本效益的患者護理。

Turning to our operational efforts, in the second quarter, we achieved positive EBITDA of $0.5 million, $1.8 million ahead of the prior year's quarter. To achieve this, we have prioritized productivity and efficiency to drive profitability. Rohit has often shared that while our primary path to profitability is through increased revenues, we do have opportunities to drive greater efficiency, particularly in our claims-based business. The acquisition of RecordsOne technology earlier this year, which has folded in nicely to Project Turing will be one of the major components in achieving these margin gains. As a reminder, this artificial intelligence-based solution integrates into our audit workflow, improving the accuracy and efficiency of our medical auditors.

談到我們的營運工作，第二季我們實現了 50 萬美元的正 EBITDA，比去年同期高出 180 萬美元。為了實現這一目標，我們優先考慮生產力和效率來提高獲利能力。羅希特經常表示，雖然我們獲利的主要途徑是增加收入，但我們確實有機會提高效率，特別是在基於索賠的業務中。今年稍早收購的 RecordsOne 技術已經很好地融入了圖靈計劃，這將是實現這些利潤成長的主要組成部分之一。提醒一下，這種基於人工智慧的解決方案整合到我們的審核工作流程中，提高了醫療審核員的準確性和效率。

The integration plan for this technology has been progressing according to plan, and we are pleased to be doing so alongside key team members from RecordsOne who have joined Performant and remain active in the integration, adoption and development process. We remain highly encouraged by the prospects of this powerful AI technology.

該技術的整合計劃一直在按計劃進行，我們很高興與 RecordsOne 的主要團隊成員一起完成這項工作，他們已加入 Performant 並在整合、採用和開發過程中保持活躍。我們仍然對這種強大的人工智慧技術的前景感到非常鼓舞。

As we continue our journey to becoming a best-in-class, pure-play health care company, I am thrilled that our shareholders have approved an employee stock purchase plan. This initiative is a significant step towards fostering a culture of ownership, which is one of our core corporate pillars. By encouraging an ownership mentality, we empower our employees to deliver the best results for our clients. And there's palpable excitement when I speak to our team about the direction and growth of our company. This plan will enable a greater number of team members to share in that growth, aligning personal success with the company's accomplishments. I couldn't be prouder of this development, and I am confident that it will strengthen our commitment to excellence and accelerate our collective success.

當我們繼續努力成為一流的純醫療保健公司時，我很高興我們的股東批准了員工股票購買計劃。這項舉措是培育主人翁文化的重要一步，而主人翁文化是我們的核心企業支柱之一。透過鼓勵主人翁心態，我們授權員工為客戶提供最好的結果。當我與我們的團隊談論我們公司的方向和發展時，我感到非常興奮。該計劃將使更多的團隊成員能夠分享這種成長，使個人的成功與公司的成就保持一致。我對這一發展感到非常自豪，我相信它將加強我們對卓越的承諾並加速我們的集體成功。

Overall, I am encouraged by our second quarter results. We continue to deliver for our clients, which has led to more opportunities for future growth. Operationally, our technology investments to increase productivity and efficiency gains are paying tangible dividends. And finally, from a macro perspective, the need for payment integrity solutions to help control costs within our health care system remains as strong as ever.

總的來說，我對我們第二季的業績感到鼓舞。我們繼續為客戶提供服務，這為未來的成長帶來了更多機會。在營運方面，我們為提高生產力和效率而進行的技術投資正在帶來實質的紅利。最後，從宏觀角度來看，對支付完整性解決方案來幫助控制我們的醫療保健系統內的成本的需求仍然一如既往地強烈。

With that, I'll hand it over to Rohit Ramchandani, our Chief Financial Officer, for a discussion of the financials. Rohit?

接下來，我會將其交給我們的財務長 Rohit Ramchandani，以討論財務狀況。羅希特？

Thanks, Sim. Our results in the second quarter of 2024 have exceeded expectations, and we remain encouraged by our prospects for the remainder of the year. Total company revenues in the quarter were $29.4 million, which included health care revenues of $27.9 million. Our customer care/outsourced services business accounted for $1.4 million of the revenue during the quarter, a decline of $0.1 million from the previous year. We are eagerly anticipating a resumption of numerous federal student loan programs, which would allow us to achieve our guided targets and the future growth expectations for this service line.

謝謝，西姆。我們 2024 年第二季的業績超出了預期，我們對今年剩餘時間的前景仍然感到鼓舞。該季度公司總收入為 2,940 萬美元，其中醫療保健收入為 2,790 萬美元。我們的客戶服務/外包服務業務佔本季營收的 140 萬美元，比前一年減少 10 萬美元。我們熱切期待恢復眾多聯邦學生貸款計劃，這將使我們能夠實現我們的指導目標和該服務線的未來成長預期。

Our second-quarter health care revenue grew 17% year over year as a result of successfully ramping prior year implementations. Our claims-based business, also known as claims auditing, led the way with revenues of almost $14 million in the quarter, representing an increase of roughly 40% year over year. Both our government and commercial clients contributed to this growth.

由於成功提高了上一年的實施率，我們第二季度的醫療保健收入年增了 17%。我們的基於索賠的業務（也稱為索賠審計）在本季度以近 1,400 萬美元的收入領跑，同比增長約 40%。我們的政府和商業客戶都為這一成長做出了貢獻。

Within commercial, existing implementations scaled as expected, contributing to this strong top line growth, while the RAC Region 2 contract in the government sector continued to successfully scale. We anticipate continued growth with our commercial clients as well as continued scale of RAC Region 2, though we do recognize the more conservative approach that federal oversight programs have taken as the election draws near. Looking forward, we continue to anticipate healthy growth with commercial clients, alongside a strong CMS foundation, state RAC or other federal RAC region wins would support meaningful growth in the government beyond the ebbs and flows of existing programs and the ramping of RAC Region 2.

在商業領域，現有實施規模按預期擴大，促進了收入的強勁增長，而政府部門的 RAC Region 2 合約繼續成功擴大規模。我們預計我們的商業客戶將繼續成長，RAC 第 2 區的規模將繼續擴大，儘管我們確實認識到隨著選舉臨近，聯邦監督計劃採取了更保守的方法。展望未來，我們繼續預期商業客戶的健康成長，加上強大的CMS 基礎，州RAC 或其他聯邦RAC 地區的勝利將支持政府在現有計劃的潮起潮落和RAC 2 區的擴張之外實現有意義的增長。

Eligibility revenues for the quarter were $14.3 million, representing an increase of roughly 1% in comparison to last year. As we think about 2024, a reminder that the eligibility business includes our mature relationship with CMS MSP, now on our new CRC contract. With our commercial eligibility clients and opportunities, we continue to refine and optimize our data assets, aiming to use our data more effectively.

該季度的合格收入為 1,430 萬美元，比去年增長約 1%。當我們思考 2024 年時，提醒我們，資格業務包括我們與 CMS MSP 的成熟關係，現在已在我們的新 CRC 合約中。憑藉我們的商業資格客戶和機會，我們不斷改進和優化我們的數據資產，旨在更有效地使用我們的數據。

Additionally, we leverage advanced analytics and additional services to eliminate false positives from our workflow, further improving our operational efficiency. This approach not only streamlines our processes, but also ensures we deliver high-quality, accurate results to our clients. We are setting ourselves up well for sustainable future growth. As Sim mentioned, we are now at year-to-date implementations worth approximately $9 million in annualized revenues at steady state. As we've often discussed, the value of these statements of work can fluctuate on a quarterly basis.

此外，我們利用先進的分析和附加服務來消除工作流程中的誤報，進一步提高我們的營運效率。這種方法不僅簡化了我們的流程，還確保我們為客戶提供高品質、準確的結果。我們正在為未來的永續成長做好準備。正如 Sim 所提到的，我們目前的年初至今實現穩定狀態下的年收入約為 900 萬美元。正如我們經常討論的那樣，這些工作報表的價值可能會按季度波動。

This quarter, we did welcome two net new clients, continuing to support our value thesis amongst middle market players. Our ongoing efforts to secure and execute these sticky contracts are a testament to our strong market position and commitment to growth. We remain confident in our anticipation that the total annualized revenues from new implementations in 2024 will match or exceed the $18 million in estimated annualized revenues from 2023 implementations.

本季度，我們確實迎來了兩位淨新客戶，繼續支持我們在中間市場參與者中的價值論。我們為確保和執行這些具有黏性的合約所做的持續努力證明了我們強大的市場地位和對成長的承諾。我們仍然充滿信心，預計 2024 年新實施的年化總收入將等於或超過 2023 年實施的預計年化收入 1,800 萬美元。

Shifting to operating expenses. These represented $32.1 million in the second quarter, or roughly $3 million higher when compared to the second quarter of last year. This was primarily driven by an increased spend to scale implementations, IT investments related to Project Turing and investments in sales and business development, all of which we discussed earlier this year. We are encouraged by the early results of Project Turing as we see positive scale and incremental margin growth and adding roughly $4 million of revenues year-over-year, while only adding $3 million of operating expense. We have strategically positioned our business to drive profitability and sustainable growth. We are pleased to report an adjusted EBITDA of $0.5 million in the second quarter or $1.8 million ahead of the prior year period.

轉向營運費用。第二季的銷售額為 3,210 萬美元，比去年第二季增加了約 300 萬美元。這主要是由於擴大實施規模的支出增加、與圖靈計劃相關的 IT 投資以及銷售和業務開發投資所致，所有這些都是我們今年早些時候討論過的。我們對圖靈計畫的早期成果感到鼓舞，因為我們看到了積極的規模和增量利潤增長，收入同比增加了約 400 萬美元，而營運費用僅增加了 300 萬美元。我們對業務進行策略性定位，以推動獲利能力和永續成長。我們很高興地報告第二季調整後 EBITDA 為 50 萬美元，比去年同期增加 180 萬美元。

Over the past several quarters, we have emphasized our commitment to efficiency and productivity initiatives, notably through Project Turing, which, as Sim noted, is progressing well. We have eVen focused on this operational efficiency without compromising our capacity for top-line growth. This balance ensures that while we streamline processes and reduce costs, we continue to expand our market presence and seize new growth opportunities. We are confident that these initiatives will not only sustain but accelerate our profitability trajectory.

在過去的幾個季度中，我們強調了對效率和生產力計劃的承諾，特別是透過圖靈計劃，正如 Sim 指出的那樣，該計劃進展順利。我們甚至在不影響營收成長能力的情況下專注於這種營運效率。這種平衡確保我們在簡化流程和降低成本的同時，繼續擴大市場份額並抓住新的成長機會。我們相信，這些舉措不僅會維持而且會加速我們的獲利軌跡。

As we reflect on our strong first-half performance, alongside taking the consideration in direct impacts of the Change Healthcare outage and this tumultuous election cycle, we are excited to reaffirm our guidance for revenues and profitability. This confidence is bolstered by the success we are seeing in our commercial growth strategies and operations. To be clear, we are reiterating our guidance for 2024 health care revenues to be in the range of $117 million to $122 million, full company revenues to be between $124 million and $129 million and for the full year 2024 adjusted EBITDA to be in the range of $4 million to $5 million.

當我們反思上半年的強勁表現，同時考慮到 Change Healthcare 中斷和這個動蕩的選舉週期的直接影響時，我們很高興重申我們對收入和盈利能力的指導。我們在商業成長策略和營運中看到的成功增強了這種信心。需要明確的是，我們重申 2024 年醫療保健收入在 1.17 億美元至 1.22 億美元之間的指導，公司全部收入在 1.24 億美元至 1.29 億美元之間，2024 年全年調整後 EBITDA 在該範圍內400萬至500萬美元。

And looking at our balance sheet, as anticipated, we have marginally drawn down on our debt facility in support of our ongoing implementation ramps and a recent technology acquisition. We are pleased to see our credit relationship with Wells Fargo continuing to grow in a positive manner. The investments we are making in our people, technology, sales and business development efforts are on track with what we communicated earlier this year. This measured approach is already showing progress as we push toward our 20%-plus adjusted EBITDA margin targets.

看看我們的資產負債表，正如預期的那樣，我們已經略微減少了債務融資，以支持我們正在進行的實施進度和最近的技術收購。我們很高興看到我們與富國銀行的信貸關係繼續積極發展。我們對人員、技術、銷售和業務開發工作的投資與我們今年稍早所傳達的情況相符。隨著我們努力實現 20% 以上的調整後 EBITDA 利潤率目標，這種經過衡量的方法已經取得了進展。

From a scale perspective, we anticipate being able to achieve such margins if health care revenues reach $150 million to $160 million. We maintain our goal of hitting our EBITDA inflection point in the near term and achieving self-sustaining cash flows at some point in the next year without sacrificing the ability to invest in future growth. I'm very pleased with the revenue growth and the profitability scale we have demonstrated, thus far, in the first half of the year, giving me confidence in the remainder of 2024.

從規模角度來看，如果醫療保健收入達到 1.5 億至 1.6 億美元，我們預計能夠實現這樣的利潤。我們的目標仍然是在短期內達到 EBITDA 拐點，並在明年某個時候實現自我維持的現金流，同時不犧牲投資未來成長的能力。我對上半年迄今所展現的營收成長和獲利規模感到非常滿意，這讓我對 2024 年剩餘時間充滿信心。

Operator, would you please open up the lines for questions?

接線員，請打開提問線好嗎？

(Operator Instructions) George Sutton, Craig-Hallum Capital Group.

（操作員說明）George Sutton，Craig-Hallum Capital Group。

So I wondered if you could walk through the Medicaid opportunities more broadly that you're seeing now. You mentioned some activity there. Obviously, we know New York is coming up. So has there been any changes to the New York timing? I assume not. And I'm just curious about other opportunities outside of New York.

所以我想知道您是否可以更廣泛地了解您現在所看到的醫療補助機會。你提到了那裡的一些活動。顯然，我們知道紐約即將到來。那麼紐約的時間有什麼改變嗎？我想不會。我只是對紐約以外的其他機會感到好奇。

Yes. George, so specific to New York, to your point, that did get rebid, and we went ahead and submit our proposals. The time frame on that looks to be what they originally committed sometime early September for decisioning, with implementation early next year. So that looks to be on track. We remain excited about that. Look, any time you go through a rebid, there's things that you have to step through, et cetera. But I think we were pretty confident on the first round for good reasons, and we continue to be cautiously optimistic on the rebid.

是的。喬治，就你的觀點而言，具體到紐約，確實得到了重新投標，我們繼續提交我們的提案。時間框架看起來是他們最初承諾的九月初的某個時間做出決定，並在明年初實施。所以看起來一切都步入正軌了。我們對此仍然感到興奮。看，任何時候您進行重新投標時，都必須完成一些事情，等等。但我認為我們對第一輪非常有信心，這是有充分理由的，我們繼續對重新投標持謹慎樂觀態度。

And yes, we are actually seeing quite a bit of activity with other states. And so our team is working very closely in responding. We have a few proposals out right now with other states. We're watching closely with additional states, et cetera. So as we've indicated on the last call, our team is really focused and making sure that we are closely watching new opportunities as well as kind of refining our proposals and our responses.

是的，我們實際上看到了與其他州的大量活動。因此，我們的團隊正在密切合作做出回應。我們現在已經與其他州提出了一些建議。我們正在密切關注其他州等。因此，正如我們在上次電話會議中所表明的那樣，我們的團隊非常專注，並確保我們密切關注新的機會，並完善我們的提案和回應。

Great. I wondered if you could explain the conservative oversight that we might see relative to the election, just what's happened in past election cycles. And what exactly do you mean by the more conservative oversight?

偉大的。我想知道您是否可以解釋我們可能會看到的與選舉有關的保守派監督，以及過去選舉週期中發生的情況。您所說的更保守的監督到底是什麼意思？

Yes. And look, we've seen this before. Any time there is an election period, especially when you're dealing with some of these oversight programs that the agencies are managing through. You have legislative constituents that are involved. You have folks that are being audited pushing back a little bit. You have policy determination. You have concepts that get reviewed, et cetera. And so history has shown that when you get into those cycles, things tend to delay a little bit more. There's some more sensitivities. There's lots of eyes on things, if you will.

是的。看，我們以前見過這個。任何時候都有選舉期，尤其是當你正在處理各機構正在管理的一些監督計畫時。有立法選民參與其中。有些正在接受審計的人會稍微推遲一下。你有政策決心。你有需要審查的概念等等。歷史表明，當你進入這些週期時，事情往往會延遲一些。還有一些敏感點。如果你願意的話，有很多眼睛在註意事物。

And so as you move through that cycle, it gets a little bit more and more focused around some of those concerns and having the eyes on the agency. And I think this particular cycle is just how unique it is, which, I don't think anyone will doubt that. I think it's disproportionately driving it. But as I said in the prepared remarks, and we've been through this, regardless of the administration change. We fully believe that whether it's CMS, HHS or any federal government agency, that the focus on payment accuracy and transparency is likely always to remain.

因此，當你經歷這個週期時，它會越來越關注其中一些問題並關注該機構。我認為這個特殊的周期是多麼獨特，我認為沒有人會懷疑這一點。我認為它的推動力不成比例。但正如我在準備好的發言中所說，無論政府如何更迭，我們都經歷過這個過程。我們完全相信，無論是 CMS、HHS 或任何聯邦政府機構，對支付準確性和透明度的關注可能始終保持不變。

Got you. One other thing, I wondered if you could give us a broader update on Project Turing and, in particular, any impact you're starting to see from the RecordsOne integration?

明白你了。另一件事，我想知道您是否能為我們提供有關圖靈計劃的更廣泛的更新，特別是您從 RecordsOne 整合中開始看到的任何影響？

Yes. I think as Rohit called out, we have a number of initiatives underway that are kind of grouped under the Project Turing, all driving all aspects of our business, right, trying to drive greater efficiencies. The RecordsOne AI piece, the team has done a fantastic job tightly integrating that into the overall architecture of Project Turing. And so as we've talked about, it's not just simply one claims aspect. We're really excited about how this technology could be broadly applicable to our business.

是的。我認為，正如羅希特所指出的那樣，我們正在進行一些計劃，這些計劃都屬於圖靈計劃，所有這些計劃都在推動我們業務的各個方面，對吧，試圖提高效率。RecordsOne AI 部分，團隊做得非常出色，將其緊密整合到 Project Turing 的整體架構中。正如我們所討論的，這不僅僅是一個索賠方面。我們對這項技術如何廣泛應用於我們的業務感到非常興奮。

And so we're already seeing it's going to be a bit of an iterative process. There's not a big bang. It's complete on ex-dates, right? We are working through a process really trying to prioritize areas that we think we get the largest bang for our buck. And I think Rohit noted that the claims business probably is the first one out of the gate. And we are already seeing some impact and some value props in terms of how we are selecting claims and how the technology is helping us just improve the process. But again, we have lots of areas of spend. And so we're prioritizing where we think we get the largest bang for the buck out of the gate.

所以我們已經看到這將是一個迭代過程。沒有大爆炸。截止日期就完成了，對嗎？我們正在製定一個流程，真正嘗試優先考慮我們認為能獲得最大收益的領域。我認為羅希特指出，索賠業務可能是第一個走出大門的業務。在我們如何選擇索賠以及技術如何幫助我們改進流程方面，我們已經看到了一些影響和一些價值支撐。但同樣，我們有許多支出領域。因此，我們會優先考慮我們認為能夠帶來最大效益的領域。

Kyle Bauser, B. Riley Securities.

凱爾·鮑瑟 (Kyle Bauser)，B. 萊利證券 (Riley Securities)。

Great. Thanks for the updates. So you implemented 21 commercial programs in 2022, and then 41 in '23, and 20 year-to-date. So really strong tailwind that should just get stronger over time, given the ramp to scale is about 12 to 24 months. Going forward, can we expect kind of quarter-over-quarter step-up in earnings leverage? I know there's seasonality, but perhaps the tailwinds are strong enough that we could potentially see a step up? And maybe a follow-up to that is, do you expect to kind of continue at this clip of 10-ish per quarter? Just kind of curious on how we should think about that, too.

偉大的。感謝您的更新。因此，您在 2022 年實施了 21 個商業計劃，然後在 23 年實施了 41 個商業計劃，今年迄今實施了 20 個。鑑於規模成長大約需要 12 至 24 個月，因此，隨著時間的推移，這種強勁的推動力應該會變得更強。展望未來，我們能否預期獲利槓桿會較上季上升？我知道存在季節性，但也許順風足夠強勁，我們可能會看到上漲？也許後續的問題是，您是否預計會繼續保持每季 10 左右的速度？只是有點好奇我們該如何思考這個問題。

Yes, Kyle, good questions. Happy to take those. So in terms of your first piece of the question, I think, yes, we do anticipate that leverage to start clipping up. It kind of aligns with what I was mentioning in the prepared remarks about getting close to an EBITDA inflection point at some point next year if the self-sustaining cash flows. What that means, right, is as we continue to sign up new implementations, the old existing ones have generated enough profitability to start paying for itself. And so we do see that coming in the near-term horizon here with some of those older implementations.

是的，凱爾，好問題。很高興接受這些。因此，就你的第一個問題而言，我認為，是的，我們確實預期槓桿率會開始下降。這與我在準備好的評論中提到的一致，即如果現金流能夠自我維持，那麼明年某個時候將接近 EBITDA 拐點。這意味著，隨著我們繼續簽署新的實施方案，現有的舊實施方案已經產生了足夠的獲利能力，可以開始收回成本。因此，我們確實看到，在不久的將來，一些較舊的實作將會出現這種情況。

As we think about the go-forward implementations, we have been sort of reorienting due to the fact that they can range in size and scale of focusing more on the dollar impact of the estimated SUVs. And so that's where, as I shared last year, our estimate was $18 million in annualized revenues added from implementations this year, with $9 million in the first half. We remain committed to meeting or beating that $18 million as we think about what we bring on this year and then into next year. So I can't tell you whether it's going to be $10 million a quarter. But as we do look at the year, we're committed to getting ahead of that $18 million number.

當我們考慮未來的實施時，我們一直在重新調整方向，因為它們的規模和規模各不相同，並且更關注預計 SUV 的美元影響。因此，正如我去年分享的那樣，我們預計今年的實施將帶來 1800 萬美元的年化收入，其中上半年為 900 萬美元。當我們思考今年和明年的成果時，我們仍然致力於達到或超過 1800 萬美元。所以我無法告訴你每季是否會達到 1000 萬美元。但當我們回顧這一年時，我們致力於超越 1800 萬美元的數字。

Got it. I appreciate that. And maybe just following up there. Is capacity an issue? I mean, it's a lot -- a really impressive number of new implementations over the past couple of years. Do you feel like you've got the ability to add head count and you've got the infrastructure to kind of support this clip?

知道了。我很欣賞這一點。也許只是跟進那裡。容量是個問題嗎？我的意思是，在過去的幾年裡，有許多新的實施，數量確實令人印象深刻。您是否覺得自己有能力增加人員數量並且擁有支援該剪輯的基礎設施？

Yes, we do. And I think you might be remembering, I know some previous years, hiring would come up from time to time, but we're not having any of those capacity issues in the current macro climate. And as we think about the implementation, I think we've already seen a lot of good work and the fact that we were able to hit that 40 plus, with a similar-sized team that was doing the 20s in the other areas you mentioned.

是的，我們願意。我想你可能還記得，我知道前幾年，招聘會不時出現，但在當前的宏觀環境下，我們沒有遇到任何產能問題。當我們考慮實施時，我認為我們已經看到了很多出色的工作，並且事實上我們能夠達到 40 以上，並且有一個類似規模的團隊在您提到的其他領域做了 20 多歲。

And so I think from that standpoint, we're seeing pretty good from a capacity point as well. Now if you were to say, go do 80, 90, 100 implementations a year, then I think that will require the completion of some of the pieces of Project Turing to be able to handle, but it's well underway.

因此，我認為從這個角度來看，我們從容量角度來看也相當不錯。現在，如果你說，每年進行 80、90、100 次實施，那麼我認為這需要完成圖靈計畫的一些部分才能處理，但它正在順利進行。

Okay. I appreciate that. Maybe just lastly, your goal of 20% EBITDA margin on, I guess, in the next few years. Will the commercial side of the business have an inherently higher profit margin on the government side? Just curious if you could talk about how these businesses differ from a margin perspective at scale.

好的。我很欣賞這一點。也許最後，我想，您的 EBITDA 利潤率為 20% 的目標是在未來幾年內實現的。商業方面的利潤率本質上會比政府方面更高嗎？只是好奇您能否從規模利潤的角度談談這些業務有何不同。

Yes, great question. I think we generally view them similar. Now I think one typically would have expected that our government side would have a slightly lower margin. But I think, where that balances itself out is, the efficacy of how much of our work converts into a final dollar back in the door, if you will, and that's where the government tends to follow a stricter rules engine than some of the commercial plans. And so they tend to end up pretty balanced.

是的，很好的問題。我認為我們普遍認為它們是相似的。現在我認為人們通常會預期我們政府方面的利潤率會略低。但我認為，平衡自身的地方在於，如果你願意的話，我們的工作有多少會轉化為最終的美元，這就是政府傾向於遵循比一些商業機構更嚴格的規則引擎的地方。所以他們最終往往會非常平衡。

Jacob Stephan, Lake Street.

雅各史蒂芬，湖街。

Apologies if I double cover something here. But I just kind of wanted to get an update on Project Turing. Obviously, RecordsOne, it sounds like things are integrating nicely. You're kind of finding new things that may provide kind of synergies across the business. But I'm curious, is there any kind of additional things that you're finding that you may not have expected originally? And any color there?

如果我在這裡雙重掩蓋某些東西，我深表歉意。但我只是想了解圖靈計畫的最新情況。顯然，RecordsOne，聽起來事情整合得很好。您正在尋找可能為整個業務帶來協同效應的新事物。但我很好奇，你是否發現了一些你原本沒有預料到的額外事情？那裡有什麼顏色嗎？

Jacob, not at this point. I mean, I think we have a pretty good handle on how the technology can help us as we think about kind of our core offerings that we have today, as we've discussed, kind of driving efficiencies in various selections and then how the technology can help us decision, if you will. There's some interesting opportunities downstream, but I think it's too early in the game yet. And we're so focused at really trying to apply the technology, where we know there's some immediate benefit.

雅各布，現在還不行。我的意思是，我認為我們很好地掌握了技術如何幫助我們，正如我們所討論的那樣，我們今天擁有的核心產品可以提高各種選擇的效率，然後技術如何幫助我們如果您願意的話，可以幫助我們做決定。下游有一些有趣的機會，但我認為現在還為時過早。我們非常專注於真正嘗試應用這項技術，我們知道這會帶來一些直接的好處。

If there are no further questions from Jacob, we will conclude the question-and-answer session. I would like to hand the conference back over to Simeon for closing remarks.

如果雅各沒有再提出問題，我們將結束問答環節。我想將會議交還給西蒙致閉幕詞。

Thanks, operator. Look, as we wrap our Q2 earnings call, I really want to extend my gratitude to our dedicated team, our customers, our shareholders for their unwavering support, and we're so proud of the accomplishments this quarter, and we remain super focused on driving growth, innovation and continued value to our stakeholders. So thank you, again, everyone, for joining us, and we look forward to reconnecting in Q3.

謝謝，接線生。看，當我們結束第二季財報電話會議時，我真的想向我們的敬業團隊、我們的客戶、我們的股東表示感謝，感謝他們堅定不移的支持，我們對本季度的成就感到非常自豪，我們仍然非常專注於為我們的利害關係人推動成長、創新和持續價值。再次感謝大家加入我們，我們期待在第三季重新建立聯繫。

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路，感謝您的參與。