Streamline Health Solutions Inc (STRM) 2017 Q2 法說會逐字稿

Good day, everyone, and welcome to the Streamline Health to report second quarter 2017 financial results conference call. Today's conference is being recorded.

And at this time, I would like to turn the conference over to Randy Salisbury. Please go ahead.

Thank you for joining us to review the financial results of Streamline Health Solutions for the second quarter and first half of fiscal year 2017, which ended July 31, 2017.

As the conference call operator indicated, my name is Randy Salisbury. As Senior Vice President and Chief Marketing Officer here at Streamline Health, I manage all communications, including Investor Relations.

Joining me on the call today are David Sides, our President and Chief Executive Officer; and Nick Meeks, our Senior Vice President and Chief Financial Officer.

At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. If anyone participating on today's call does not have a full text copy of our press release announcing these results, you can retrieve it from the company's website at streamlinehealth.net or at numerous financial websites.

Before we begin with prepared remarks, we want to be sure we are clear for everyone on the record how certain information, which may be provided today, as with all of our earnings calls, should be viewed. We therefore submit for the record the following statement.

First, statements made on this conference call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those we may discuss. Please refer to the company's press releases and filings made with the U.S. Securities and Exchange Commission, including our most recent Form 10-K annual report, for more information about these risks, uncertainties and assumptions and other factors.

As always, we are presenting management's current analysis of these items as of today. Our participants on this call should take into account these risks when evaluating the topics we will discuss. And please note, Streamline Health is not undertaking any commitment or obligation to publicly revise any such forward-looking statements made today.

Second, we'll discuss non-GAAP financial measures, such as adjusted EBITDA. Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those which another entity may reach using their own non-GAAP measures. To help you compare these amounts on consistent terms, please refer to our website at streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.

With that said, let me turn the call over to David Sides, President and Chief Executive Officer. David?

Thank you, Randy, and good morning, everyone. This morning, I want to comment on our second quarter and first half of fiscal year 2017 performance and, as usual, look at our third quarter performance to date and comment on what we anticipate seeing for the remainder of our fiscal year.

As released yesterday afternoon, for the second quarter of fiscal 2017, we generated revenues of approximately $5.9 million, same as the first quarter of this fiscal year. We projected during our Q1 earnings call back in June that we believe we had arrested the downward trend revenue as a result of the impact of last year's client attrition and the revenue reduction in the trade-off from selling our patient engagement solutions as compared to adding our coding audit services.

Our second quarter revenue performance proved this to be the case. Second quarter revenue was down approximately 7% as compared to the same period a year ago when including $1 million of perpetual license revenue in that quarter. It continues to be difficult to predict the timing of perpetual contract execution, primarily through some of our channel partner relationships, but we identified opportunities in the reseller pipeline that we believe will generate material revenue contribution before this fiscal year is over.

Recurring revenues were 82% of total revenue for the second quarter, about the same as last quarter.

Turning our attention now to professional services. Revenues were approximately $570,000 in the second quarter, an increase of approximately 36% over the first quarter of this fiscal year. This was primarily due to additional service hours sold to existing ECM and coding and CDI clients as well as the completion of several milestone projects that had been in the pipeline.

Our bookings for the second quarter of 2017 improved over Q1 to $1.1 million and consisted primarily of new auditing services clients, as mentioned in our press release yesterday, and additional professional services as well. We continue to be pleased with the addition of new clients, which are the lifeblood of any organization. In all of last year, we secured 4 net new clients to our roster. So far, through the first half of this fiscal year, we've added 6 net new clients to our roster, 2 in the first quarter and 4 in the second quarter, and have added 2 more net new clients in the first month of our third quarter, for a total of 8 net new clients year-to-date.

More specifically, in the second quarter, we closed new clients like Aurora Health, a Boston-based network of 25 physician practices throughout the United States and for whom we will conduct hierarchical condition criteria (sic) [hierarchical condition category] audits, known as HCC audits; Union General Hospital in Louisiana, for whom we will conduct in-patient, emergency department and outpatient audits; and Saint Francis Medical Center, a 300-plus bed hospital in Missouri, for whom we will also conduct inpatient, emergency department and outpatient audits.

Looking ahead to the second of our fiscal year. We continue to believe that our bookings projections will improve, and we will see new bookings from our direct sales efforts as well as through existing and new reseller partners, such as an expanded reseller agreement with Optum, which we signed just a couple of weeks ago. This new agreement will enable Optum to bundle our Abstracting software solution into their existing computer-assisted coding offering. This expansion is initially anticipated primarily for their existing base of more than 400 CAC clients and, of course, any of their new prospects.

We also are seeing activity under the reseller agreement we completed this past spring with Allscripts as anticipated. As mentioned before, we expect the bulk of any Allscripts client deals, being in the form of a perpetual license, to have a more immediate impact on revenue and cash on our balance sheet than standard term license sales.

I should point out that Allscripts recently announced its intended acquisition of McKesson's health IT unit. If that transaction closes later this year as reported, this effectively doubles Allscripts' footprint among U.S. hospitals by combining McKesson's Paragon product for small hospitals with Allscripts' own Sunrise EHR system for larger hospitals. We are hopeful that this new expanded client base will enlarge the total selling opportunity we have with our Abstracting software solution through Allscripts.

I stated last quarter that we were in active contract negotiations with multiple health care systems and that we anticipated closing our first eValuator deal in the second quarter. But given that our industry is not known for quick purchase decisions or adopting new technology quickly, we didn't close our first eValuator client until August instead of July. But as previously announced, we've signed a new deal in Q3 of this year with South Shore Hospital in Chicago. And we anticipate selling our new eValuator cloud-based automated pre-bill software solution in the coming weeks to additional clients and prospects. And we have also sold in the third quarter our financial management software solutions to Nobilis Health. They will deploy it to aid them in their focus on accounts receivable management.

Adjusted EBITDA for the second quarter improved as expected by nearly $1 million over first quarter of this year to approximately $0.5 million. The improvement in adjusted EBITDA in the second quarter was drived (sic) [driven] by several actions taken in Q1, by just making improvements in our own systems, using our AR reserves and bad debt as appropriate and capturing almost all of our annual audit expense in the first quarter only.

In GAAP terms, our net loss for the second quarter was $1.1 million, down from $2 million in Q1 of this year. Nick Meeks, our CFO, will address these items more specifically in his prepared remarks coming up in a few minutes.

Every quarter, we state that we are always focused on reducing operating costs, generating incremental cash flow and reducing our level of bank debt. One area in which we believe we can be more efficient is in the use of various data centers. We are currently pursuing an effort regarding backup data at rest and in motion to enable us to decommission one of our remote data centers. Moves like this will help reduce costs, also supporting our strategy of leveraging best practices with regards to data management.

At the end of the second quarter this year, our cash on hand decreased from the previous quarter, almost to the penny as our debt declined. Our cash on hand was approximately $2.9 million, a reduction of approximately $700,000. Our debt was reduced from $5.6 million to approximately $4.8 million. Part of this debt reduction was mandated by the sale of our scheduling assets back in December. Going forward, we do not anticipate paying down our bank debt at such an accelerated rate. We continue to anticipate that the amount of cash on our balance sheet will increase in subsequent quarters, as it has in years past, with our fourth quarter being the most productive of building cash.

We are just 5 months into the process of refocusing our company to better help our clients and prospects with the middle of their revenue cycle processes. We have a particular phrase we like to use with prospects, and it's on our website, which is, "We help transform revenue cycles into revenue streams." Because that's what it's all about for our primary purchase decision makers. CFOs, revenue cycle managers and HIM directors are under increasing pressure to improve their organizations' financial performance.

As the CEO, I can see signs of improvement in our performance in many areas. Operationally, we are working better as a team across all facets of our business. From our CDI and coding technology to our legacy ECM software, our development teams have made improvements to our offerings in a more timely and more efficient manner.

And the creation and go-to-market launch of eValuator was accomplished in less than 5 months. And with the deployment of machine learning, we can see eValuator getting better and more proficient the more we have patient bills running through it. We've talked a lot about eValuator, and I plan to do so again in a minute because we really do see it as an industry game-changer. I'm also pleased to see our sales pipeline include opportunities for all of our technologies.

On clinical analytics, the CDI and coding, more potential for our financial management and business analytics tools, the number of product demonstrations and proposal requests is up this quarter over last. Currently, we have over 100 active opportunities in our sales funnel, with more than 20% coming from our existing client base. With these metrics, we believe we can close more eValuator deals in this quarter and more than that in Q4. As it is, the positive growth signs that we see in our reseller channel, and it adds up to multiple sales opportunities for many of our services and solutions, heading into the second half of this year and on into 2018.

Now let me comment more specifically on eValuator. With this new innovative software, we see ourselves as leading an industry movement to improve health care providers' financial performance by moving mid- to late-revenue cycle interventions upstream, optimizing coding accuracy for every patient encounter prior to bill submission. The fact remains that our target buyer is under increasing financial pressure. As I've mentioned before, the Centers for Medicare & Medicaid Services, CMS, reported that 10% of Medicare fee-for-service claims submitted are denied, with many of those denials resulting from invalid codes or incomplete or invalid information.

Today, almost every hospital in the country determines their level of coding and payment accuracy after the fact by conducting post-billing audits. These retrospective audits are often comprised of patients selected randomly but, at best, only look at 1% to 2% of all coded and billed patient encounters. From this limited look back, hospitals try to close accuracy gaps and maintain CMS' inpatient coding accuracy standard of 95%. Few hospitals reach that goal today, yet this post-bill audit practice is the accepted method throughout the industry. In fact, Donald McGruder, the Chief Information and Revenue Integrity Officer of our newest eValuator client, South Shore Hospital in Chicago, said that he was intrigued, to say the least, when we approached him with our idea to analyze all of his patient records after coding but before billing. It was the assurance eValuator could provide them that made the difference. He said, "The idea of using eValuator to screen every coded record for potential errors in real time before billing made perfect sense." And he doesn't think it would be long before every hospital would look to improve their coding accuracy by checking their work before billing instead of long afterwards. We agree with him.

We've stated before that in our industry, referenceable clients are a must. And we continue to believe that as we gain a foothold with clients who have experienced a strong return on investment in eValuator, we will leverage their testimonials to help us accelerate the pace of closing new eValuator agreements.

I stated this last quarter, but I think it merits repeating. We believe, like many other business practices before, that they were the accepted way of doing business, until they weren't, it is past time for our industry to change this post-bill audit practice. Our Streamline Health eValuator solution enables hospitals to move accuracy evaluation from the back to the front of the cycle before any patient case is released for billing. This solution can score the accuracy and financial implications of inaccuracy for every encounter better than a sampling, using a sophisticated set of algorithms and rules. This can reduce incorrect payments and denials and help mitigate potential risk.

As important, Streamline Health eValuator can provide the coder immediate feedback that can help improve ongoing coding accuracy and coder education. It allows the client to better identify and correct trends and patterns in coding and clinical documentation practices and, yes, key performance improvements and sustain revenue cycle best practices.

The market opportunity for this industry movement is large and can be approached in phases. Phase 1, where we are today, is to offer eValuator to hospitals focused on their inpatient coding and billing performance. This is where the biggest individual revenue opportunities lie. We believe that total market opportunity in this sector is approximately $320 million. Just a small percentage share of this marketplace would be an incredible contribution to our revenue stream. As a pure cloud-based SaaS offering, this incremental revenue stream is a highly attractive economic model for our company and for our shareholders. Once our eValuator revenue stream is meaningful, we will consider breaking it out individually to better eliminate its growth rate and contribution to our companies and their price valuation.

Second phase is offer eValuator for outpatient coding and billing performance. In this category, there are usually many more patient records, but the average dollar amount per record is smaller. As more hospitals have expanded in outpatient clinics and facilities, their needs for this capability have grown as well. We estimate the market opportunity in this space is approximately $0.5 billion, and we anticipate rolling out our eValuator solution for outpatient records later this month or early next.

Final phase addresses professional services practices, doctor visits, et cetera, where the volume of patient bills is exponentially greater than in the inpatient sector, but average invoices are usually the lowest of the 3 sectors. Our plan is to offer this eValuator capability at the end of this year or early next into 2018. We believe the market opportunity in this sector is approximately $350 million. Again, capitalizing and capturing even a small percentage of this market can have a material impact for us.

The benefits of our cloud-based, automated pre-billing technology are many and easily measured in all 3 phases of use. If we can execute on this strategy, our eValuator solution will enable hospitals, outpatient facilities and physician practices to greatly improve their coding practices, gain potential benefits like cutting their days in AR, improving their cash on hand, reducing the number and dollar amount of patient bills being denied by payers and reducing the need for post-bill audits. We believe we can accelerate the pace of decision-making as we gain more users. We know that unlike other technology, our SaaS solution is designed for a very light deployment, which shouldn't take more than 1 month to implement for a standard go-live.

The time to revenue with eValuator should also be much quicker as compared to our other technologies. This chart illustrates our new eValuator cloud-based, automated pre-bill auditing software only requires a health care provider to install lightweight VPN client and then simply send us a copy of their billing HL7 messages. We estimate that it will require no more than 10 hours of our client's IT department's time to configure to our specifications and that our client can be realizing the benefits of the eValuator solution within 30 days of contract signing.

I will now turn the call over to Nick Meeks who'll provide greater detail on our financial results for the first quarter. Nick?

Thanks, David, and good morning, everyone. As always, allow me to begin by thanking my team, the whole of Streamline Health and our auditors for a smooth reporting effort.

Beginning with the income statement. David has covered revenue and EBITDA. I would first note that equity-based compensation was the only material adjustment to EBITDA in the quarter.

Operating expenses were down both year-over-year and quarter-over-quarter. Expenses were managed down almost universally, with G&A and R&D both decreasing by at least $500,000 relative to the same quarter last year. The $1.1 million net loss for the fiscal second quarter includes $1.4 million of noncash depreciation and amortization.

Moving on to the balance sheet. We finished the quarter with approximately $2.9 million of cash on hand. That represents just short of $0.5 million in cash generated from operations in the quarter. That cash was then deployed to make a debt prepayment of the same amount on our term loan. The requirement for that prepayment arose with the divestiture of our scheduling assets in the fourth quarter of fiscal year 2016. No further special prepayments on the term loan are on the horizon, and the closing balance of the term loan at the end of the fiscal second quarter was down to approximately $4.8 million. I would also note here that in the coming quarter, we will fully retire our last non-real estate capital lease.

With respect to future visibility, backlog decreased over the end of the first fiscal quarter by approximately $1.5 million to $46.4 million. As I did on the last call, I would also note here that due to the variable nature of some of our audit services engagements, we only record in backlog those agreements with clearly definable backlog terms.

That concludes my remarks. I will now return the call back over to David Sides. David?

Thank you, Nick. Before I open the call to questions, I want to comment on the selling process behind our eValuator solution. Some investors have asked why sales take so long given the powerful return on revenue we can demonstrate with this new solution. Certainly, we have learned a great deal about how to sell eValuator and to whom over the past 6 months. We are still learning. CFOs understand the return on revenue benefit that our eValuator solution brings to the table. As opposed to the more traditional return on investment, we talked about how eValuator can help clients with their revenue integrity, which really means bill the full amount allowed under ICD-10 codes for the patient care delivered and, at the same time, ensure that our client doesn't overbill for the patient care delivered.

Mitigation of revenue risk is a very real benefit of our eValuator capability. For revenue cycle directors or managers, the eValuator benefits are very similar to that of the CFO, not bleeding money on the table through undercoding, by improving the accuracy of the bills going out the door, reduce denial rates and improve accounts receivables.

For HIM directors, the eValuator message is best understood when we focus on how the solution can help make coders more proficient. Both HIM directors and managers don't like to confront the fact that their coders may not be performing well, and the most common guidepost is the CMS' published target of 95% coding accuracy, which few health care providers obtain today. We focus our presentation on the ongoing, real-time training coders can get every time they submit a coded record to eValuator. The percentage rate of potential error for any code submitted as low, bills accepted and sent for payment, and the coder simply moves on to the next case. If the percentage of error is projected to be high, anywhere from 50% or greater, each client can set their own parameters here, and the coder is guided as to where the potential issue may be and is advised as to how to correct the code and resubmit it to eValuator. This capability is a good selling point to most HIM personnel.

We also have kept an eye toward the ever-expanding role of IT departments within health care provider organizations. We continue to design eValuator to allow for a simpler implementation to help avoid unnecessary lift or time drains with the client's IT department, who often are strapped for both time and resources. We include in presentations a slide we showed you earlier that demonstrates how simple it is to get up and running with eValuator, how little involvement we typically need with the always overburdened and understaffed IT department.

Clearly, we are excited about the eValuator solution, and we are investing accordingly. However, in no way is that meant to say that our other services and solutions aren't realizing success in the marketplace. I continue to believe that there is great growth potential for many of our company's offerings going forward.

I want to pause at this point, as we are now halfway through our fiscal third quarter, we are not on the run rate to reach our original guidance for this fiscal year. Even though I remain optimistic regarding the prospects for Streamline's financial performance, primarily driven by the interest we're seeing in eValuator, the volume of new clients engaging with us for audit services and the scale of opportunity represented by our channel partners, I feel it's only prudent to revise our guidance for the fiscal year to $26 million to $27 million, with the potential upside from that number based on channel partner activity. The reasons for this adjustment are centered primarily around 3 key elements of our growth projections.

First, while we have captured almost 10 new audit services clients since our acquisition of the Opportune IT business this time last year, the average size of those engagements has been smaller than we anticipated. Until the pace of recovery audit contractors, RACs, picks up to the levels the industry was experiencing before the move to ICD-10 codes, health care providers are not feeling the need, meaning pressure, to conduct larger, more broadscale audits.

To the positive side, we're seeing repeat purchases from this client base. Ultimately have audit services contribute to Streamline's growth in the manner I feel confident that it can, we will have to continue to accelerate the pace at which we sell into new clients and maintain a strong client management program to ensure that we capture the maximum available wallet share for audit services.

Second, while we have signed our first eValuator client, we've deployed various new incentives to secure a group of early-adopter clients that can serve as a reference for future sales. As such, I'm expecting a measured financial impact from eValuator clients this fiscal year, ramping up rapidly through fiscal year 2018 as sales success compounds.

Third, we, just last week, have expanded our Optum relationship and are bullish on the prospects of that relationship given the size and scope of their current CAC client base.

Further, Allscripts' recent acquisition of some of the McKesson assets, while potentially distracting in the short term, can expand the potential addressable client base with that partner as well. While we continue to anticipate that we will realize a meaningful perpetual license revenue deal with one of our larger reseller partners, that revenue contribution is not in our control, which has always been the case.

Given the impact of these factors, we have lowered our go-forward estimate accordingly. That said, our strategy going forward is exactly the same. First, we're working on coding accuracy with our eValuator solution for inpatient and outpatient and in professional services. With that experience, we think we can then take that knowledge through our work with machine learning and start to automatically code cases going forward in reverse order, starting with the simpler professional services then outpatient and then building the inpatient services. We will have the ability to check accuracy and then autocode based on experience from there. We think this will be a transformative way to increase the efficiency of coders in computer coding compared to the industry's current computer-assisted coding. We're making meaningful progress there, and we'll continue to update you in the next quarters' calls.

That concludes my prepared remarks. But before turning the call over to the operator, I want to thank our Streamline Health associates for their continued hard work and dedication to our clients, to our shareholders and to each other.

I will now turn the call over to the operator for our Q&A session. Operator?

(Operator Instructions) And we'll take our first question from Matt Hewitt with Craig-Hallum Capital Group.

First up, let's not dig into this guidance a little bit. So is this incorporating the large perpetual deal? Or has that been trimmed from the current guidance?

I'd still have some perpetual in it. We actually have an opportunity for multiple perpetuals and have line of sight on a couple of them. So it still has some perpetual in it but maybe a little bit less than before and a lot of the reductions from the audit services and just to run rate so far this year where we haven't gotten as much there as we thought we would due to the deal size and some delays of starting audits.

Okay. And specifically, within the perpetual that -- I think previously, you anticipated one large deal yet this year. I think you've signed one a year for the last couple of years through Optum360. Is that what's basically come out as, you call it, $1 million, $2 million perpetual deal from them? And then the smaller auditing contracts, is that the delta?

Yes, essentially, yes. So we still think we'll have a perpetual this year probably in Q4, but we've got actually good line of sight to several opportunities. We just need one of the several to come through.

And -- but that's to hit the $26 million to $27 million?

Yes. So if multiple comes through, then you'll see us succeed.

Okay. Okay, fair enough. Regarding the Allscripts relationship -- and I understand there may be some distraction with the pending acquisition. But walk through those -- the opportunity there that the pipeline -- and maybe explain why it's taking a little bit longer to get some of those deals closed.

So from a pipeline perspective, we're really excited about the Allscripts relationship, especially given their expansion with the McKesson Paragon solution as well. So now they have essentially twice as many clients in need of our Abstracting solution and query solution. So we signed that deal in Q1, so we've been working through demos with some of their client base. We think we're a good fit to that base. I think the acquisition of both the Nant assets and the McKesson assets -- done in kind of short order, completed both of those within the last 90 days, has obviously taken appropriate focus from them, which has maybe slowed down our deal a little bit, but we think that'll pick back up. And we've got some near-term opportunities with them where we've spoken with their clients, and we've done a work-through on how we implement those. It should be completed here in the very near term.

Yes. Matt, this is Randy. I would add to that by saying that the first one, we can tell, is always the hardest because it's setting up a new paradigm, right? So you work through the service people. You work through the implementation teams. And that's what we've been doing on their first prospect, as David just mentioned. So I think we shall see that here soon. And hopefully, that will break the dam and establish procedures that others can follow to say, "Okay, we know what to do and how to do this, mostly on their prospect's side, not our side.

Okay. Maybe 2 more. One -- thank you for providing the detail on the eValuator, specifically kind of breaking down the market opportunities there. How should we be thinking about average deal size for those respective markets?

We think of the average deals -- I mean, it varies on the size of the client obviously. But I think the average deal size will be somewhere between $100,000 and $400,000, depending on the size of the organization or hospital, per year. So that is kind of the annual figure. We price it by encounter because that's where they get -- where we see the value. So if you run things through, we say this is good or not good and then move from there. So that's kind of the average deal size we expect to see.

Okay. And then the one last one. Nick, there was a little bit of a pop here in DSOs. Was that just a function of timing? Or how should we be thinking about that metric going forward?

Yes. Matt, I don't think it was any special disruption. We had decent collections, not -- it's never as good as I want them to be, but decent collections in the quarter. The way that the invoicing cycles just hop into fall is -- we had a spike of invoicing in the last month of the quarter, which pushed up AR a little bit.

(Operator Instructions) And we'll take our next question from Frank Sparacino with First Analysis.

Maybe first, can you just talk about the Nobilis deal in terms of who the competition was there or how that came about?

So it was a deal that we found through some of our revamped fleet generation activities of our website, outbound calling and others. We were competing with Craneware and some other established players in that space. We think we still have some really good and we've made some improvements to the business analytics software, as we've gone to really differentiate it on the way that it is efficient for people to use our workflow. So for example, if you're trying to do accounts receivable management and a payer doesn't pay until day 62, we set up rules that say, "Don't call until day 62." And so when you're actually working that queue, you don't even see it show up even though it may be 59 days overdue. For other people's software, it will show up 59 days overdue. They'll call. There is no response because they don't pay until day 62. So that -- call on day 61, it's too late. Wait until 63. And so it's a good deal for us. We like working with them. There's a good opportunity there. We think we can grow that business substantially. So this is just for less than about 1/3 of their existing facilities. We've already kicked that project off. It should be live by the next call or soon after. And from there, we want to get the opportunity and earn their business to get to the other 7 or 10 hospitals. So this is a deal that we really like, and it's one that we think can probably double or triple over time.

And maybe one more. You made some reference to size of the pipeline in terms of the number of opportunities. Any way for us to sort of calibrate that? I mean, how does that compare to 6 months ago or 12 months ago? Just trying to get a better sense of lead generation and sales activity.

I would -- so I have to look at the numbers and get it for sure. But it feels 25% or 30% more than where it was, say, 6 months ago. I think a lot of that's driven by bringing the new solution to market. So the new eValuator solution is one that we think has a lot of legs. I think you'll see a sign of that more this quarter and then more again next quarter. It's a higher-quality pipeline from a new business perspective. You've seen us sell additional new clients, which for us is really good news. I think I talked a little bit about our land and expand. We've seen that with one of our first clients that we signed in Q1, some additional business with them, and now they're a very near-term eValuator, we think, client. And so that -- quantitatively, I'd say 25% to 30%. Qualitatively, I like that there's a better slant to new business in the pipeline than maybe there was before.

And that does conclude the question-and-answer portion of today's conference. I'd like to turn the call back over to Mr. Randy Salisbury for additional or closing remarks.

Thank you again for your interest in and support of Streamline Health. If you have any additional questions or need more information, please feel free to contact me directly at randy.salisbury@streamlinehealth.net. We look forward to speaking with you all again in December when we'll discuss our third quarter 2017 financial performance. Good day.

And that concludes today's presentation. Thank you for your participation, and you may now disconnect.