Sharecare Inc (SHCR) 2021 Q4 法說會逐字稿

Good day and welcome to the Sharecare fourth-quarter and fiscal 2021 earnings conference call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to turn the call over to Evan Smith, SVP, Finance, Investor Relations. You may begin.

Thank you. Good morning and welcome to Sharecare's fourth-quarter and fiscal 2021 earnings conference call and webcast. This is Evan Smith, as the operator indicated. I am SVP of Finance and Investor Relations. After today's presentation, there will be an opportunity to ask questions. Leading today's call are Mr. Jeff Arnold, Chairman and CEO; and Mr. Justin Ferrero, President and Chief Financial Officer. Note today's call is being recorded and an archive of the recording will be available later today on the Investor Relations section of our website.

Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995, which includes our first-quarter and full-year 2022 guidance. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that will occur after this call.

Descriptions of some of the factors that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC, including the risk factors section of our filings. In addition, please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures in reconciliation of historical non-GAAP financial measures can be found in the press release that is posted on the company's website.

I would now like to hand the conference call over to Mr. Jeff Arnold. Please go ahead, Jeff.

Thank you, Evan, and thank all of you for joining us this morning. 2021 was an incredible year for Sharecare. We accelerated our growth and enhanced the capabilities of our digital engagement platform, both organically and through M&A activities. We strengthened our operational leadership, sales and technology teams and grew revenue year over year by 26% to $413 million and delivered $27 million in positive adjusted EBITDA. Sharecare ended the year with a strong balance sheet, with no debt, and over $300 million in liquidity to support for future growth and profitability.

In 2021, we expanded on our digital first wellness benefits and health navigation solution to a fully integrated digital front door with a connected suite of virtual care and higher touch offerings. Specifically, we integrated additional digital therapeutic programs, creating new revenue opportunities for current and new customers, introduced Sharecare+, our digital-first, payor agnostic advocacy solution, to seamlessly enable high-touch navigation and clinical resources, and integrated the acquisition of CareLinx, our tech-enabled home health solution providing care, collecting valuable data in the home and providing the key differentiation of our advocacy solution.

With these expanded capabilities, we're even more excited today about our future as we are in a very strong position to support our long-term growth. Our core digital platform drives engagement, consolidates point solutions, informs caregivers and advocates with real-time and comprehensive data and extends to the home. This helps enhance the member journey, lower costs and improve outcomes. The increased breadth of the platform positions Sharecare to drive larger, higher PMPMs and more strategic multiyear deals with our current and future customers.

While strengthening the platform, we also took a hard look across our portfolio solutions, and we determined that our vaccine and health passport solutions and our patient-centered medical home solution did not meet our long-term growth hurdles and have taken actions that we believe sets us up for even greater success. I will get into these details in a minute.

First, a brief update on our core business. Sharecare's platform helps nearly 10 million employees, plan members and patients better understand their health, optimize their benefits, discover and address critical care gaps, and improves health outcomes while helping to lower the cost of care. We have an extensive roster of clients, including leading employers, payors, health systems, and government. Our benefits and health navigation capabilities built on deep data analytics provide dynamic visibility into the cost of care and identify cost avoidance opportunities. This enables us to efficiently develop personalized care plans that determine the next best action to address gaps in care and health and social risk that impact an individual's well-being.

We are building on this engagement platform and reach with our new payor agnostic advocacy platform, Sharecare+, which was built and commercially available in under a year and includes health benefits and care navigation all in one place, a library of clinically validated NCQA-accredited digital therapeutics, a team of personal health and clinical advocates providing high-touch concierge level service, which can be extended into the home, and a holistic customer 360-degree care console with clinical and customer engagement insights for health advocates and employers.

We are already in contract with two large employers covering nearly 70,000 lives with Sharecare+. Both are anticipated to launch in 2023. We have a strong pipeline and are in active discussions with many other employer-impaired clients. Additionally, we strengthened our partnership with Anthem, establishing a collaboration agreement and developing a multi-carry advocacy solution to be offered to national employer groups and health plans.

Home care has proven to lower cost of care, create savings for health plans, and significantly improve patient and member satisfaction. This has made home healthcare a must-have in any integrated solution, providing Sharecare with a unique competitive advantage. As a quick refresher, we acquired CareLinx last August, and it's delivering above our expectations. CareLinx leverages a network of 450,000 caregivers as a single-source, nationwide home care platform that provides intermittent, on-demand personal care services in the home of patients, while leveraging mobile technology that facilitates rich data capture, population health analytics, and the enabling of real-time care coordination with remote clinical teams via Sharecare.

CareLinx expanded rapidly in 2021 and into 2022, now serving more than 400 Medicare Advantage plans, including several of the nation's largest payors, as a free in-home personal care benefit to more than 1.5 million Medicare Advantage members. We expect this growth to continue along with the high demand for traditional home care services from our payor clients. CareLinx delivers a complementary personal care service, which is a critical link in their home-based strategy. And these services are a significant benefit to employers to reduce absenteeism and improve productivity.

All of these activities underscore our commitment to manage our solutions with a focus on digital-first and tech-enabled capabilities that will deliver the best long-term value for our customers, their populations and shareholders. So let me reiterate. Our focus is on expanding our core platform to drive higher PMPMs and broader patient engagement -- platform engagement to drive better value to our customers, which lead us -- led us to the decision to suspend support of our vaccine assistant and health passport solution, which is part of our health security portfolio, and transition our legacy patient-centered medical home or PCMH business to a more tech-enabled model.

During COVID, as a digital healthcare leader, we felt it was important for Sharecare to leverage its development and platform capabilities to support its customers and communities we serve. Therefore, we quickly mobilized to develop our vaccine assistance and health passport solution. Having successfully responded, enabling over 5 million vaccine registrations and supporting over 80 vaccination sites, we achieved our objective. But today, the outlook has changed. And thankfully, people are moving back to a normal lifestyle. Therefore, other solutions do not meet our performance hurdles going forward, and we've made the decision to suspend our internal support.

In addition, in conjunction with the renewal with one of our largest payor clients, we will be working collaboratively to transition and streamline our legacy patient-centered medical home or PCMH business to a more tech-enabled model that when redeployed will drive improved productivity, increase coordination with clinical teams and community, and enhance member engagement. We will continuously review our portfolio with the objective of optimizing our capital allocation and resources to deliver the highest long-term revenue growth, profitability and shareholder value, and ensure that we continue to simplify our story to make it easier to track our progress.

Before I close, let me give a few more highlights on our 2021 performance. We are focused on two objectives for our enterprise business. One, to increase the number of covered lives on our digital engagement platform; and two, to integrate new digital and tech-enabled capabilities into our platform to drive larger engagements and help our customers activate and engage their populations, improving health outcomes by focusing on the cost, quality and access to care.

During the year, we grew eligible lives on the platform to approximately 9.7 million, expanding our relationship with existing customers while activating new customers like Aflac, Delta, Centene, Humana and several others' leading employers and payors. And more recently, we signed an agreement with Centene to expand into Louisiana. As a result of our success, we increased our potential serviceable lives to 91 million across the existing contracted client populations, presenting a material upside opportunity to grow within our current client base.

In our record retrieval business for payors and providers, we retrieved approximately 5 million records in fiscal 2021, a 19% increase over the prior year. In payment integrity, we processed over $6 billion in claims and identified over $100 million in overpayments and continue to expand our pipeline and add new clients, including two new Medicare supplemental insurance companies.

And in life sciences, we delivered strong growth, leveraging the strength of our award-winning content library and first-party database of over 100 million users, providing digital patient engagement solutions for life sciences brands to improve consumer activation and potential health outcomes. During the year, we increased our penetration with top 20 pharma companies as well as expanded our revenue with the top 50 pharma brands.

I am proud of our team and their significant accomplishments in 2021, to expand the platform, placing us in a very strong position to sell larger, integrated digital platform engagements, which will solidify Sharecare's role as a strategic long-term partner to our customers. We will continue to drive growth by upselling complementary tech-enabled solutions, growing eligible lives with both existing and new clients, and cross-selling services. We are confident we can deliver sustainable long-term growth and improve profitability going forward.

Now let me turn the call over to Justin, who will review our financial results for the quarter and the fiscal year and share our financial outlook and assumptions for fiscal 2021. Justin?

Thanks, Jeff, and thanks to everyone on the call for your interest in Sharecare. As Jeff indicated, we delivered strong results for the quarter and full-year fiscal 2021, with both revenue and adjusted EBITDA. Our fourth-quarter revenue grew 34% to $118.5 million from $88.4 million a year ago. For the full year, our total revenue grew 26% to $412.8 million from $329 million a year ago. The fourth-quarter and full-year 2021 financial results were impacted by approximately $2 million to $3 million in expected revenue related to the timing of contingency payments in our payment integrity business, which is now expected in our fiscal 2022 financial results.

Revenue growth for fourth quarter and full year was primarily driven by life sciences, CareLinx, health security, and new client wins across the entire platform. Adjusted EBITDA for the quarter was $5.4 million and $27 million for the full year. Adjusted EBITDA reflects positive performance across the business as well as increased investments in product and technology and sales force expansion, as well as the impact of a one-time increase in COVID-19-related employee health care expenses of approximately 1.5 million. We expect these investments to support our long-term growth and drive additional operating leverage as we gain greater traction for the Sharecare digital platform with existing and new customers.

I will now turn our guidance for the first-quarter and full-year 2022. Guidance reflects the actions Jeff mentioned with our health security portfolio and our patient-centered medical home business. Combined, these two actions represented approximately $65 million in revenue and $20 million in contribution margin, which was included in the 2022 guidance we provided in connection with the initial SPAC transaction. Our Q1 guidance for revenue was $95 million to $98 million, an increase of approximately 7% over fiscal 2021 using the midpoint of the range. And adjusted EBITDA is expected to be approximately breakeven. Again, this includes the two items I mentioned, as well as the seasonality in our life sciences business, whereby the first quarter is our lowest quarter and ramps as we move through the year.

For the full year, revenue guidance was $470 million to $500 million, an increase of approximately 15% to 20% over fiscal 2021. And adjusted EBITDA is expected to be $30 million to $36 million. While we continue to invest in the platform, expand our sales force, and support the rollout of Sharecare+, we anticipate adjusted EBITDA margins in line or better than 2021 as a result of the inherent operating leverage. Similar to the prior year, we expect revenue to be split approximately 40% in the first half of the year and 60% in the second half of the year.

In addition, because of the step up in revenue in the second half, we anticipate a majority of our adjusted EBITDA guidance will occur in the third and fourth quarter. While the product line suspension and streamlining of our PCMH business impacted our guidance for 2022, we believe the redeployment of resources and the addition of large new client relationships, combined with expansion of our platform, places the company in an even stronger position to accelerate growth in fiscal 2023 and forward. Sharecare remains uniquely positioned in 2022 to generate strong revenue growth, positive adjusted EBITDA, and be cash flow breakeven by year end.

Our full-year guidance assumptions reflect the following: increase in eligible lives from 9.7 million at year-end 2021 to approximately 12 million lives by year-end fiscal 2022, a 24% increase over fiscal 2021; enterprise revenue growth of approximately 15% compared to fiscal 2021, which includes the impact of suspending support for the majority of our health security solutions and transition of our PCMH business; provider revenue growth of approximately 30% compared to 2021 -- this reflects an expected increase in records retrieved to 6 million records, an 18% increase over fiscal 2021 and additional growth in payment integrity; life sciences revenue growth of approximately 11% compared to fiscal 2021, which reflects continued market penetration -- the channel is expected to have similar seasonality patterns, including approximately 35% of annual revenue expected to be reported in the fourth quarter; capital expenditures of approximately $35 million to $40 million; free cash flow between negative $15 million to $16 million, which reflects increased working capital needs and investments to support growth, but excludes any nonrecurring items which may occur during the year; depreciation and amortization of between $40 million and $50 million.

We remain confident in 2022, delivering strong year-over-year revenue growth and solid adjusted EBITDA performance while building a strong runway for fiscal 2023. With that, we will move to the Q&A.

(Operator Instructions) David Larsen, BTIG.

Can you talk a little bit more about the vaccine assistant and health passport decision to basically migrate away from those businesses? It seems like they were generating revenue and earnings and were not really through the pandemic yet. Just any color or thoughts there would be really helpful.

Yeah, sure. So what was driving a lot of the revenue for the health security portfolio was the vaccine assistant. So when the pandemic hit, we said, let's build a platform for our clients -- our government clients that would help them do mass vaccinations. So like the Miami Dolphins Stadium, for example, we were registering people there and 79 other sites. And so with the pandemic winding down and being able to get vaccinated through your doctor and other places, we saw that trend ending. Although we have a great platform, so we repurposed the platform for the health passport, and we saw a lot of opportunity there as well.

As you might remember, there was the Biden mandate for employers over 100 that they were going to have to show their vaccine card or a recent test. And we saw some six-figure deals in the fourth quarter, but we saw that that's not being core to our business going forward, although it was good revenue, although it was good EBITDA. We're listing the feedback that we're getting from investors that, hey, your story is a little complicated and you've got a lot of things going down. Could you get more core to your enterprise platform and your other assets so that it's easier for us to model your business and understand your business?

And we looked at kind of our growth hurdles and said, long-term, is this a business that we're going to be in? Is it going to meet our growth rate? Is it going to meet margins? Is it going to drive profitability? And so we made the decision that now is the right time to say, let's stop pursuing that, let's redeploy our resources. Not that we couldn't pull it off the shelf if it was needed again.

Okay. As we look at the number of COVID cases on a daily basis decline very significantly, it seems to me like that's the right decision as we get past Omicron, and it does seem like all these mandates are lifting. So quite frankly, it seems to me like that strategic decision makes a lot of sense. And then with regards to the patient-centered medical home transition, if you're moving from a more service-heavy sort of concentration to a tech-enabled solution, I would think that that would benefit EBITDA. So why wouldn't -- I mean, why is there such a material impact to earnings contribution in 2022 if you move into a tech platform? Just any thoughts there would be helpful.

Yeah, how about, Justin, I'll give the color on that? So we have been in the patient-centered medical home business for a decade. We inherited that through our Healthways acquisition. And it's part of a contract to our biggest client, which is one of the big Blues in the mid-Atlantic. And we just went through a big renewal process on the digital piece of our contract, and we won that. And that was a big deal for us -- it was to win the digital component.

And once we got through that, we said, let's focus back on this patient-centered medical home model that was a high revenue driver for us in 2019 and 2020. But when COVID hit, and we could no longer get into the doctors' offices, that model started losing money for us. We just got into the negotiations with the client in a very friendly partnership way. We can't lose money on this business going forward, so how do we retool this and so that -- where there's still revenue opportunity but we don't lose money? And that's a very recent conversation early 2021 that you'll start to see the impact in the second half of 2022.

Is there anything you'd like to add to that, Justin?

Yeah. Just that is -- I think Jeff hits it on the head there is that, historically, it has had pressure as an EBITDA contributor. And streamlining it over the year, we do believe it will come back as an EBITDA contributor. But it's been impressive so far.

So within the patient-centered medical home business, it sounds like there was very significant EBITDA margin pressure. You may have been making some money from it, but it was very lean, or were you losing money on the PCMH business?

We started to lose money on it. And so -- yeah, so it's 140 caregivers that we manage on behalf of our client. And so, yes. But we have a strong vision for it. We think connecting it to the core digital platform to the primary care doctor and to the specialist is a great service that will drive down cost and have a lot of value. But in partnership with our client, we said, look, we -- going into 2022, this can't -- this doesn't meet those growth hurdles that we talked about. It doesn't meet our growth rate, it doesn't meet what we're trying to do for our EBITDA and getting cash flow breakeven, et cetera. And we need to take these losses out.

Okay. So it sounds to me like it was your decision to basically transition to patient-centered medical home piece to a tech solution with that client. It's not like they told you that, hey, we want to change the nature of this contract. It sounds to me like it was your decision and then longer term, we should see an EBITDA margin lift as a result of that proactive decision on your part.

Yes. It was a proactive decision on our part. But these large payors are partners of ours. And so we wanted to do it in a coordinated way that add value for everybody, and we've been able to achieve that, renewed the digital contract, now addresses piece that has started to lose money, that needs to be tech-enabled. And we are in a good place. But yes, it was our decision but very much in partnership in support of our client.

Of course, you're there to support the clients' members, you want to make sure that they're taken care of, absolutely, totally understood. So in terms of the $65 million in revenue and $20 million in earnings contribution for 2022, it sounds like a lot of that or most of that is coming from the vaccine assistant and health passport business. Is that correct? If you were to sort of break even --

That's correct.

Okay.

Yeah. That's correct.

Okay. Very helpful, really appreciate it. I'll hop back in the queue.

Richard Close, Canaccord Genuity.

Justin, maybe with respect to the $2 million to $3 million associated with the contingency revenue that's pushing from fourth quarter into 2022, how much of that -- if you had it in the fourth quarter, how much of that $2 million to $3 million would have dropped down to adjusted EBITDA?

Almost all of it. Had we gone with an accrual-based accounting methodology for those contingency payments, rather than what we ultimately did which was closer to cash-based accounting, then all of those -- that $2 million to $3 million would've dropped to the bottom line. You couple that with the $1.5 million of increased healthcare expense around COVID and -- we exceed all of our targets.

Okay, great. I was going to ask around those COVID costs. And then as we look forward, I'm curious on the 12 million lives that you're expecting, I guess, to help drive the enterprise, 12 million lives that are live for 2022. How should we think about when those new lives launch during the year? And then are -- the entire Delta between the 9.7 million and the 12 million lives, is all that signed? That's not business you need to go get or is it?

So we'll see those lives come on throughout the year, very similar to last year how we grew from 8.8 to 9.7. So that target of 12 million is like the 9.7 million, which we would end the year with 9.7 million lives, which we did. And so we expect lives to come on throughout the year. And some of those -- although we are well on our way to achieving that target, but some of those will come on in the second half of the year.

I'll just -- to add, remember there also now is the CareLinx lives in that number.

Could you repeat that last part?

That was Evan and he was commenting that we now have CareLinx who we add those eligible lives into our total lives. Just making sure, that CareLinx is part of our enterprise business. And so we're including eligible lives that we'd bring onto the platform through CareLinx and that number as well.

Okay. So how should we think about the number of CareLinx lives that are contributing to that 2.3 million increase year over year?

I would go around half.

Okay. And then just to be clear, on the remaining lives, not including CareLinx, are those contracts already signed like some business that you signed in 2021 that you're implementing currently? And so the contracts are already signed? It's not like you have to win new business?

Yeah, they're either signed -- the lion's share of additional lives are signed. We've talked about that. It's -- Q1 is a big part of that. We onboard them. They're not always onboarded immediately in Q1. That can come in in Q2 as well. And then there is a -- you'll see lift in the back of the year. We talked about the cadence of our revenue at a 40% front half, 60% back half. So we expect lives to come on as well in the second half of the year. But yes, a large number of those have come on in the first half. The CareLinx lives will come on throughout the year, and we expect some second-half uptick as well.

Okay. And maybe looking (multiple speakers)

But I would say we're in late conversations -- yeah, we're either booked or in contracting with all of them.

Okay. And then let's just talk about the overall pipeline if we can in terms of obviously what you're doing now, builds for 2023. Can you talk about what you're seeing in the pipeline, how it shapes up versus last year? And just any qualitative point there would be helpful.

Okay, Justin, maybe I'll just set you up. This is the strongest pipeline that Sharecare has ever had that is for much bigger deals at higher PMPMs. We were successful in bringing 30 salespeople on last year, like we talked about. And we are getting many, many at BATs, and our close ratio I think is really high. And I think our clients are really buying into this idea that advocacy is great, but when you add engagement it's even better. Because an advocate that has engagement can get the best results.

And then when you add in that we can also extend that now into the home and help the people that need help in the home, or provide CareLinx as an employee benefit, so that -- if I had to be honest [on the] phone call right now about my mom needing to go to the doctor, I could use CareLinx as the benefit. And I think we have a leading position in our social determinants to health work, where we can really show health risk. And then we throw on the doc.ai, and that one platform strategy is really resonating, and the pipeline is growing like it never had before. The salespeople are trained.

And maybe, Justin, you can translate what that means into our pipeline numbers.

Yeah. I think -- we've never given exact pipeline dollars as a KPI. We may do that going forward, but maybe I'll just tell you, on a percentage basis, is that our pipeline is up 4x to 5x year-over-year. And so it is stronger by a multiple of 4x to 5x than this time last year, which puts us in a really good place as we move into 2023.

Excellent. Thank you for that. And my final question is just on the life sciences. I appreciate the 11% expected growth. It happen to be back-end weighted here for 2022. What was the life sciences growth -- maybe I missed that -- for the fourth quarter and the year 2021? We'll start there, and then I have a follow-up on that.

Yeah, it was significant. So like we talked about, the fourth quarter is always the biggest quarter for the life sciences business. And so that grew to over $27 million in the fourth quarter, which, in Q3, it was around $18 million. So $9 million in growth, it's roughly a 50% growth from Q3 to Q4. And then just -- hard numbers probably easier for me to give is that we grew from $61 million to $78 million from 2020 to 2021.

So when you come off such a significant growth year like that in that business, almost 30% growth, we just want to be mindful of that when we gave our pro forma for this year. So currently, we're projecting that 11% is around $87 million, but we're coming off such a large growth year last year that we wanted to be a little conservative.

Okay. That's helpful. Thank you very much.

And Richard, I would say just on that business, as I know you noticed, but what's so great about that is we spent tens of millions of dollars in developing this award-winning content that we used to service those life science customers. But all that content we repurposed in our enterprise platform, and we think that is what drives a lot of the engagement, and it would be really hard for someone else to replicate, that they couldn't offset the cost like we do with life sciences.

Eric Percher, Nephron Research.

This is Dolph on for Eric. First out, we appreciate the move towards simplification. Do any of today's announcements affect the enterprise sales expansion? And then if you could remind us, the new sources that -- sales resources that came online were last year, when do we see the productivity ramp over 2022?

Yeah. So, no, it does not impact. We are going to continue to invest heavily in sales expansion. As we've talked about before, our target was around 30 per year. We met that target. We expect to do the same this year. So we are continuing to make a significant sales investment across the platform. We expect that growth to start to bear fruit in the second half of this year and especially as we go into 2023. (multiple speakers)

The pipeline growth is -- we're getting more at BATs, responding to more RFPs, we have more feet on the street, and that's why we're seeing the significant expansion in our pipeline. That sets us up for H2 in 2023.

Great, thank you. And then on the digital -- within digital therapeutics, is there any part that you're seeing higher demand for, or getting greater traction with, versus others at this point?

Digital therapeutics continues to perform. We've talked about this in previous calls, but, really, it's the prevalency obviously around diabetes and diabetes prevention, typically gets a -- kind of outweighs some of the others. But we're seeing traction across maternity, MSK, sleep, hypertension, other areas as well. But if you had to pick one, it would be in the diabetes and diabetes prevention.

And maybe I'd add one. Thank you for that, Justin. The company that we acquired, MindSciences, which is all based on mindfulness, and we have programs for anxiety, we have programs for weight loss, for smoking, very research-heavy, mindfulness-based, has become almost like a table stake in all our sales now. And so we own those assets, it's very high margin, we bundle it in with the core platform. And so almost every deal that we're selling now, you always see those therapeutics included.

And then as Justin said, we're getting really good at using the data to be able to inform our clients what are the right therapeutics for their population. And then together, via the platform, how do we target them and get them enrolled. And because 80 million people are prediabetic, that's always a big driver.

Cindy Motz, Goldman Sachs.

So it sounds like, basically, what you're doing here is streamlining the business a bit. You gave the revenue cadence for the year. Just on the EBITDA as well, I'm guessing if we see breakeven first quarter, and then to get to your numbers we're going to see a pretty decent ramp, particularly in the fourth quarter, so that means we exit the year -- I'm just putting out there -- maybe 11%, 12% EBITDA margins. Does that set you up, like for -- so essentially for 2023, I know you're not giving guidance, but it would seem like we'd get back to maybe where, at least we were expecting in 2023 -- not just to put guidance on your mouth -- but as you exit the year at that, hopefully that would be something I'm thinking about it the right way. That's the first question.

And just on -- if you could just give us a little color on some of the transition investments that you're making, because I did notice that G&A was pretty high this quarter. Is that something -- I mean, is there like a retention bonus, employee wage inflation, something going on there? And I guess, over time, do we see that also come down? Also product and technology was up a little bit. But just if you could give any color there and I'll stop.

Yes. So on the first question, you're right on. We expect to be in double-digit operating margins by Q4. And then obviously, we think -- we're not giving guidance for 2023, as you said, but we expect that to kind of continue into 2023 and beyond. So you're right in line with our expectations. And just want to reiterate it that we're also focused on -- by the end of the year to get to cash flow breakeven, which we think is -- we're one of the unique companies in our space to achieve that. So that is -- your assumptions there are right on.

And then on the P&T piece, I think what we've talked about, we added over 70 resources in product and tech. In a lot of our calls, we talked about investing in innovation, which is heavy on product and tech, and we're investing heavily in sales and marketing. So you're right. The sales and marketing grew in Q4, P&T grew in Q4. And then there's a number of things that grew, kind of the corporate G&A item, but we're investing in our senior team which has been built out. We're investing heavily in our new assets, like CareLinx and Advocacy. So all of those together kind of drove the growth in our OpEx.

Okay. And we're going to expect that [there], so there's not like a one-time employee retention thing in there. But we're going to, over time -- and there's not expenses in there, like with some other companies that we've seen that are transitioning the platform and it takes kind of a while, that's not what's going on here, it should be pretty straightforward. I'm just looking for a little clarification there.

Yeah. We had a marketing expense, and I talked about the one-time fee for COVID expenses being high. So I would say that 25 million is high. I wouldn't expect that to continue on into the first half of the year. So yeah, there were a couple of one-time expenses. But we're investing -- I mean, I think the bigger point is we're investing heavily across the board.

You could pull that back in the first half of the year, but as we move out to the latter part of the year we're going to continue to invest in our advocacy products and our CareLinx home health products. So year-over-year, our corporate G&A is going to grow from 2021 to 2022.

Okay. All right. And maybe some of that is like wage inflation that we're hearing from other companies as well, but it's not. It sounds like it's manageable. Correct?

It's definitely manageable.

Okay. I don't recall you giving it, but do you have any guidance at all on the PMPM, or anything like that? And just with CareLinx, as I recall -- I mean, that guidance is still intact, right, with the revenue there? I think you said, focused on about 35 million for the year end. Just those last two, thanks.

Yeah. So we've talked about it. We don't provide guidance on the PMPM, but you can back into it on our enterprise business, which is a little over $2. What these larger deals, the advocacy deals and others -- as we look out to 2023 and beyond, we think that that will expand. CareLinx is continuing to perform right in line with plan, if not ahead. And feel like we made an excellent acquisition for the shareholders, and it's performing, and it's performing ahead of plan.

David Larsen, BTIG.

What was the revenue either for the quarter or the year in enterprise and then also provider? And I think you said in consumer for the year, it was $78 million.

Yeah. So you want to break out each for the quarter and the year? So enterprise for the year was $243 million, which was up from $188 million the year earlier. Our provider business was $91 million, which was up from $79 million the year earlier. And then obviously, I gave you $78 million on the consumer piece, which adds up to right at the $413 million.

Okay, that's very helpful. Thank you. And then can you talk about the in-sell or cross-sell potential for CareLinx in particular? It's my understanding that they have a presence in some very, very large health plans. Are you talking with those plans about other ways that you can serve them with the Sharecare suite of products? Just any thoughts on how those discussions are progressing.

Yeah, and that's a great question. So where I think we've made so much progress as a company is in this [full one] platform. So when we first met, we talked a lot about an engagement platform, the importance of that, and how hard it is to get people to engage in their health, and why we think we do well at that. And then we talked about the ability to upsell digital therapeutics. Once you get the data, how do you enroll the person into the right program and put that under one platform.

Now on the last year, I mean, what has taken some folks a decade to build, we built a full advocacy solution in less than nine months, in partnership with Anthem, and we brought that to market and we've [sold] clients, adding sometimes 12x to the PMPM that we were getting for just the engagement platform.

In addition to that, we now -- in every presentation we make, the same way we added advocacy to the engagement platform, we've added CareLinx. And so when we're in a finalist presentation for a large employer, we're saying, you should add CareLinx as an employee benefit that fits the commercial client. And doing the same, coming at it from the other side of the table, which is the question you're asking, from the CareLinx side is they've made a lot of traction with a big -- one of the big payors, and they kicked off and are having great results in Q1 with another one of the big payors that complement the payors that we have, and we're actively educating those clients on the Sharecare capability.

Put it all together; put the engagement with the therapeutics, with the advocate, and with the home care. And so what Evan often says is it doesn't matter how you come into the platform. Are you [an adult] employee coming in initially for wellness? Are you a Medicare Advantage member initially coming in through CareLinx? Let's get them to buy all the services because we think this one platform approach is best for the member, and most comprehensive, and one-stop shop for the client.

Okay, that's very helpful. And then in terms of the salespeople, how are they actually paid? Are they all commission-based? Just any color on the percentage of their comp that is commission-based.

Yeah, they are heavily incented on commission. And they all change somewhat, but they're all a little bit different from the divisions. But ultimately, these are -- we bring these colleagues in at relatively low base and they can make a lot of money, based on the number of sales that they make, so it's really aligned. We do better and they do better.

There are no further questions. I'd like to turn the call over to Jeff Arnold for any closing remarks.

Well, just in closing out, I'd like to reiterate that we had, I think, a really strong 2021. We've got the company public. We made two really key acquisitions. We showed 26% growth, $27 million in adjusted EBITDA. We have an incredibly strong balance sheet, in which we're going to continue to be active in M&A. And the company has never been in a stronger position. We have a huge pipeline. Our value proposition is resonating with our clients. We're getting the outcomes that we want with our users. And we're listening to the feedback that we're getting from investors, that it's important that we simplify our story.

And hopefully, you can see it from the actions that we've taken with health security and PCMH that we're aggressively taking those steps. And we think that we can sustain these growth rates and meet our investment hurdle that make Sharecare a great investment for all our shareholders.

And we appreciate your time today and look forward to talking to you in May. Thank you.

This concludes the program. You may now disconnect. Everyone, have a great day.