Morning, John Ransom. Welcome to the 45th annual Raymond James Investor Conference. Hope everybody had a restful night and, you know, nothing good happens at the bar after 10 o'clock, believe me. So hope everybody was good. For the first time, we're excited to have Accolade at our conference. They're the only public company in what's called the navigation space. So I think the public market probably wouldn't pass the test exactly on what this company does. It's fairly new, and the concept is fairly new. We're a client. We hired Accolade in April of 2023. And this format is going to be fireside, and we'll leave a little time at the end for Q&A from the crowd. So, you know, the topic as yours obviously is AI. So just to kind of start, since you're a data company, what's the use case for AI and navigation? Well, first of all, thank you. Thank Thank you, John, for having us. We're delighted to be here. When you think about advocacy, advocacy is built off of an enormous set of information. It's built off of insurance claims information so we understand the longitudinal journey of the patients that we serve or the members that we serve, utilization management data that helps us understand where they are in their journey currently, and a whole slew of other information, including electronic medical records data. Add to that the interactions, the millions of interactions that we have with the members that we serve every single day. And we've accumulated a longitudinal data set about members that's extraordinary. Because of that, we have an opportunity, one, to use artificial intelligence to do really smart things about improving the quality of every interaction. We can watch every single interaction. So instead of the old-school days of quality assurance where you listen to 1 out of every 100 interactions, we listen to every interaction, score them on quality, and have an opportunity to improve quality every single day. At the same time, we can deliver self-service. Self-service meaning the capacity for members, oftentimes who want to get the data as fast as they can on their own, to self-serve that information using tools akin to OpenAI that everyone has used. And then finally, if you were to wrap all of that up into clinical journeys, the idea of being able to monitor clinical data and clinical journeys using data and make recommendations to our clinicians about what the next steps in their journey are, that's something we call true health actions built off of an AI engine. All of it gives us an opportunity to improve quality, gives us an opportunity to tangibly improve outcomes. And then finally, it's probably the single most significant area that could drive out performance from a unit economics perspective as well. All right. So we'll kind of (what's the cool term?) unpack that? Yes, sir. Is that the right jargon? Let's unpack that. Let's unpack that a little bit. First of all, you know, this data sometimes or does sit with the payers. How much of a fight is it to arrest this, even though they're supposed to give it to you? How much of it is do they play keep away, and how much time do you spend trying to make them do what they're supposed to do? Yeah, John, you know the space really well. And so 10 years ago, 5 years ago, the battle for data was real. And what really broke down the wall was employers like Raymond James saying, "I have X thousand, tens of thousands of employees, and I want my data, and I'm going to demand that data, or I'm going to make different choices." That happened often enough. Accolade had 5 customers in 2016. Today we have more than 1,000. That has happened often enough that the battle for data is largely between the carriers and Accolade is largely over, actually, in fact, entirely over. We still work really hard to ensure the quality of that data. Sometimes the systems that that information is coming from aren't as modern as we'd like. So we've implemented a whole set of tools to actually monitor that information to ensure that we're getting the right data. So let's say that you've uncovered some predictive you've aggregated claims data and Rx data and EMR all on different platforms, and you've got the intelligence now to make some predictive suggestions. How often is that happening where you're getting in touch with, say, the PCP for that patient and saying, "Look, we're seeing something in a pattern here. Maybe you should test for X or look to treat for Y"? How often is that happening now? You know, John, I'd say diagnostically where we're actually predicting a condition, not very often. Alternatively, diagnostically where we're identifying that a member hasn't seen a primary care physician in 2 years, hasn't refilled their insulin prescription in the last 9 months, and probably is headed for a diabetic crash, and therefore we're going to make an outreach directly to that member. That happens every day. And so we're really trying to intervene in the moments where that member may be headed towards a poor outcome or towards a high-cost outcome, grab the member, change that outcome, and/or engage with their care team, depending upon what the condition is. So I know this doesn't happen 100% of the time, at least at Rajeev, and I'm sure with your other clients. But you know, in a perfect world, you go see your primary care doctor. They want you to go see a cardiologist, for example. And you know, perfect world, they should call Accolade and say, "Well, who should I go see? Who's the best cardiologist?" And area code 3369. It's not required. And I think in our case, people probably still don't know they're supposed to. But what would you say the rate of kind of front-end engagement with Accolade is happening versus kind of where it should be? How much opportunity is there to close that gap? Yeah, John, it's probably important for the audience to understand what we do when we get a client like Raymond James is we'll replace on the back of your insurance card. Every single one of you has an insurance card in your wallet. When you look at the back of that card, there's a phone number on it. There's also a portal on it. All of those phone numbers and portals become Accolade, which means we take all of the inbound engagement. If you're looking for a new ID card, if you're trying to understand if this doctor is in your network or not, we're the people who aren't taking that engagement. We try to leverage that engagement into a relationship by delivering really high NPS services. And in so doing, you download our mobile app. You get to our portal. There you'll find a Find Care application that says, "Hey, you should find by the way, when you search on this Find Care application, we're going to identify the benefits programs that your company has already purchased for you, where you might have a musculoskeletal physical therapist that Raymond James is using. And we're going to show you the high-quality physicians in your network. We're going to try to keep you from going out of network unless you absolutely have to, because it's going to be more costly for you and more costly for Raymond James. Do you think there's room to increase those? Without doubt. Without doubt. Without doubt. So, how do you, I kind of call it, the last mile. So it's all there, but just connecting people to the solution. What could be done to improve that uptake rate? We're better and better every single day taking that inbound engagement, but also leveraging outbound engagement. In the year ahead, for example, this is calendar 2024, fiscal 2025 for us just started. If you were to think about in the year ahead, we're committed to every single one of our customers that anyone who spent more than $50,000 a year on healthcare, we're going to make contact with them. So like 100%, we're going to make contact with them. Not every one of them is going to want to engage with us, John. Not every one of those people. You might be spending more than $50,000 a year on healthcare because you have a particularly expensive drug that doesn't need any more engagement. But a huge percentage of that population is going to engage with one of our nurses, enroll in case management, enroll in one of our partner programs, or engage in some way, shape, or form with one of our own physicians. That capacity will drive engagement up and will lower cost. You know, Teladoc was in the news with not in a great way about virtual primary care hitting the wall. Maybe you could do a compare-contrast between PlushCare and Teladoc and how you see that opportunity, how it remains. Yeah, John. John refers to PlushCare. PlushCare is the consumer primary care offering of Accolade. Accolade has a corporate or enterprise primary care offering called Accolade Care that the vast majority of new customers who sign up for the service are taking advantage of both advocacy and Accolade Care, our primary care service. And of course, for those of you familiar with Teladoc, Teladoc has traditionally been and continues to be. And I think if you're not that I'm a particular student of all their earnings calls, but if you were to listen to this last earnings call, their CEO talked about the urgent care market being sort of somewhat saturated. The primary care market, on the other hand, is completely underpenetrated. If you were to look at the primary care market in the United States, which is really where we play. We were playing in primary care, and I'll explain how in a moment. But first, on the macro level, in the primary care market in the United States today, we spend about 5% of total healthcare costs on primary care. In other OECD nations, all other OECD nations, that number is 3x, 14%-16%. They get better outcomes. They have lower costs. They do better on almost every clinical category. What Accolade does is embed those primary care physicians into our care teams. Because those care teams are already achieving, to the conversation John and I just had, 70% engagement with all the families in those populations, we have an opportunity to insert primary care into moments where people traditionally were getting urgent care, traditionally going to the ER or traditionally avoiding care. In our universe, those physicians have the longitudinal data set that we started this conversation with to understand every condition they're facing, medication they're on, and other physician that they're seeing. They can deliver the treatment inside of 15 minutes virtually and then push that data back to the primary care physician. So John, I just took that was a long and winding answer to Teladoc is an urgent care company. Accolade is a primary care company with extraordinary engagement, filling a need for both health equity and access to care in a way that corporations haven't seen up to now. Great. So you know we've spent a little time dissecting some of your private competitors. And you know Quantum is not shy about engaging you know with people like me. Just when you go to market, I mean, our soundbite, if you will, is we're huge believers in the near-term growth and navigation because CFOs need us something to deflect trend. I mean, it's just going to grow at 7% forever if they don't have us something. You're something. And I think your time is here. But when you beat one of your two big competitors or when you lose to one of your two bigger competitors, what do you think the when you go back and dissect, you know why did we win that one? Why did we lose that one? What do we need to what muscle? And I know Quantum, for example, has dialed down some of the heavy-handed UR. They had a reputation for the Quantum-like product they've had some success with. So how do you keep your edge? And how do you, for the audience who just sees one public company, just kind of do the compare-contrast between you and your competitors? Speaking of a long and winding question, I could have asked that a lot simpler. Well, first of all, John, you started with a really important point. And I think it's maybe the most important point for this audience to grok in the context of why companies are looking at advocacy. Aon's predicting an 8.5% trend line in 2024. That's up from 4.5% two years ago. Healthcare costs continue to go up at an unsustainable rate. And employers having now investigated solution after solution after solution are looking for someone who's willing to take at the highest level a guarantee around reducing trend line. What we do at Accolade on an advocacy basis is look at your entire trend line and say, "We'll move the whole thing down." That's extraordinary and not something you'll get in condition-specific or necessarily from your carrier. So now to the competitive question. You're right. The market is moving in this direction. Competitively, there's probably two different buckets. Every carrier has an answer here. The carrier answers. So United, CVS, Aetna, Cigna all have solutions that they sell. They typically sell them at very low price points, significantly less expensive than Accolade. And where we succeed there is largely by going to the customer, warranting engagement rates, and making trend line guarantees that the carrier is unwilling to make, because at that price point, you can't deliver it. You can't deliver that kind of engagement. John also referenced a direct competitor by the name of Quantum Health, a company we respect. In the context of our competitive landscape against Quantum, we do really well, largely because not only do we deliver the advocacy service that Quantum delivers, we pair with it the capacity to add primary care physicians into the care teams as opposed to pushing you to your network, pushing you to the brick-and-mortar care world for primary care. We add expert medical opinion, the idea of medical certainty when you've been diagnosed with a condition, whether that's a surgery or cancer or something along those lines, the idea of being able to talk to one of the best specialists in the country to ensure that you're getting the right treatment, or our trusted partners. We've built partnerships across significant categories like diabetes, musculoskeletal, behavioral health, as well as reproductive health. All of those categories have we've built integration via a Trusted Partner Ecosystem. That incremental layer on top of what we view as kind of sort of advocacy 1.0 is what makes us different and why customers are compelled to us. Great. Okay, a couple CFO questions. You've been caught over there. Yeah, Raj and I, I think we could talk for a little bit. You guys are going strong. I don't think we have, so you've got to convert out there. Just talk about that and just sort of where you are in your process of looking for Plan B. Yeah, absolutely. Good morning. Thank you, by the way, John, and the Raymond James team for having us as well. We do have a convertible debt outstanding that's not due for about 2 years. We raised in 2021 about $285 million in converts at very attractive terms. We actually, over the past 3 months or so, back in November, we took advantage of some discount there and bought back some of those converts. The most really important thing to think about Accolade now from a financial standpoint is this year, fiscal 2025, will be our first year as an EBITDA positive, free cash flow positive company. It's been the most important kind of financial focus for us as we've been on this progression of attractive growth, as you and Raj have been talking about, some really strategic acquisitions over the last couple of years in terms of PlushCare and 2nd.MD to round out the portfolio that you've been talking about, and then finding all of the integration opportunities, cost structure opportunities that are now taking us into that profitable growth period. You line that up against our balance sheet. We've got about $230 million in cash, that convertible note outstanding due in a couple of years. We think there will be plenty of optionality to pay down, refinance, and do what's smart for shareholders there. But the company is well positioned to drive to cash flow positive from here. We're really pleased with where we stand from a balance sheet perspective and against the opportunity in front of us. So a couple more for you. The 20% growth algo, you could maybe talk through that in terms of just the simple new customer ads versus more revenue per customer. And do you think that will change, or do you think that's a pretty consistent outlook for the next several years? Sure. If I could just step back for a second and you think about the company has been driving growth rates 20%+ consistently. We laid out recently over our last fiscal year, we put a target out there. If you look 5 years out at the growth rate, we see our business getting to about $1 billion in revenue, driving 15%-20% bottom line, adjusted EBITDA from there. The way we get there, top line has been growing organically in terms of new customers. But to your point, as Raj was just explaining, we're seeing more and more of our customers. In fact, almost every new customer we booked in calendar 2023 for advocacy, we also sold what we call a bundled opportunity: primary care, expert medical opinion, Trusted Partner Ecosystem. So if you look a couple of years out from now, we fully expect that a lot of that revenue growth will come from within the customer base, if you will. So as that 20% comes primarily from core new bookings, a portion of that, certainly, and a growing portion is coming out of that customer base, which tells us we've got really a healthy set of offerings, a diversified set of offerings that employers see so much value in buying all of that from one place where it's integrated and getting that value from strictly those partners, those point solutions that companies have acquired but have really struggled with utilization. We're driving better utilization and incremental revenue there. So kind of back to a strategic question. This is more me making this up right now, but talking to a bunch of private companies. It seems to me the employer Medicare Advantage has had a lot of innovation, particularly on the primary care side. The employer has gotten stale. I think the offerings from the carriers have gotten stale. There's a lot of just ASO deals from a trend and disconnected point solutions. I mean, I think that's kind of the norm. It seems to me like what needs to happen is you've got to bundle primary care, on-site, near-site, virtual navigation. And talking to some of the private equity sponsors, I think they're starting to make some moves in that direction. Talking to Premise, for example, Marathon just announced something. But I just wonder if you see yourself part of a bigger ecosystem and also layering in plan design? Like, here's door number three. If you want to narrow network, you got to use our primary care doctors. You got to stay within our specialist network. But we'll go more at risk. So that, to me, is where I see this going. But the pieces are not all together. A, do you agree with that? And B, if you were to be part of a bigger entity, what do you think that looks like? John, I agree. I don't know if I asked that question. Right. But that's. No, no. I totally understand the question you're asking. I think if you were to step back, I agree with major components of what you just talked about. I think the critical element in our mind to improve on-site clinic utilization, to improve downstream specialty utilization, to improve primary care utilization writ large, is long-term engagement with the member at a level that you can actually guide the member to those options, to those outcomes. That means navigation as a platform is the foundation of every single one of those capacities. So 100% agree that our capacity to light up those capabilities is really high. Obviously, we agree on primary care. We've now embedded Accolade Care physicians into our navigation teams. In fact, when you think about downstream more controlled options, one of the things we do really well at Accolade is partner with health plans who are trying to deliver options like the one you just described. Blue Shield of California is offering a virtual-first plan design where they're actually going to their customers, using our primary care service, and saying, "If you want this offering, much like the one you described, you've got to go to an Accolade physician." Now, in their particular service, it's called a California Blue Physician. But it's an Accolade Care physician who's actually seeing that member and then guiding them into the Blue Shield of California network. That will happen more and more. And I'd say now completely agreeing on the last point, that type of innovation has been happening in Medicare Advantage populations for 10, 15 years now. It hasn't been as profitable for carriers to deliver that type of innovation in the commercial space because of the nature of risk. But we're starting to see opportunities like Blue Shield California where there are great green shoots of opportunity showing up in our pipeline. I know, for example, Premise talks about if you stay in the Premise ecosystem, they'll go at risk and try to deliver something like 30% savings. I don't know how widespread that is. But they're integrating with Cedar Gate, and they've got the Epic stack. And so they're kind of thinking in that direction as well. So this is an in-the-weeds question, but I'm just surprised how few healthcare people really understand this. I didn't understand it until probably later in my career. But when you flip a carrier, like in our case, from a PPO to the TPA model, so United, UMR, there's Meritain, just talk about what that does, why you need to have the TPA structure, what is a TPA, and how that allows you to do more steering, if you will. Yeah. Oftentimes, in the case of ASO platforms, administrative services-only platforms for the carrier, those ASO platforms are fully assembled platforms from end to end that have a more difficult time partnering with third-party services like ours to engage. ASO platforms also happen to be significantly more expensive because of that end-to-end capacity than third-party administrators. Every major carrier today, United, Aetna, Cigna, owns a TPA, which means they can implement on that third-party administrator service, and you get to keep the exact same network. You make no distinction whether you're on the Aetna service or the Meritain service. You have the exact same doctors in your network. I've heard it's as wonky as open networks or any willing provider. Whereas TPA, you can say, "I want you to go to Dr. Smith, not Dr. Jones." Contractually, you can't do that with a PPO structure. That's what has been explained to me. That's right. That's right. That's the way it is. Okay. way it is. Okay. That's 100% right. And so that openness is less expensive for the customer, which in turn actually helps pay for the Accolade service because we're replacing a lot of carrier services otherwise delivered by those carriers. And it improves the optionality for the customer in terms of the network. So I mean, just to put that in plain English, when we were doing our modeling, our consultant had a 58-page report that nobody understood. I said, "I want three numbers. Number one, what are we paying Accolade? Number two, how much less are we paying United than we were? And number three, what are the savings that we're going to get? And so what's the net?" It was three numbers over three years. I call it the CFO slot. He didn't do it. And then the CFO who went to Georgia like I did, state school grads, we're very simple. He said, "Why don't we just look at it this way?" I said, "I told you we just need three numbers. The executive summary is only three numbers." So anyway, it was interesting that, yeah, part of how we got the pay for it was we paid United. They didn't enjoy the fact we paid them less, but we were paying United less. So just kind of coming back to a hot topic, your business has performance guarantees. You go at risk for some of your fees. Trend has been elevated. A lot of this is very seasonal with the calendar year, so you don't really know. But just how do you guide to that? And how should we think about performance fees in a world of elevated trend and the risks to them? Sure. Absolutely. All of our customers, I think it's safe to say, over the past year, certainly saw RX numbers going incredibly high, GLP-1s being the primary driver there, and certainly elevated utilization for various factors. The way our performance fees are set up is essentially, we're lining up to beat an index. We sometimes use, if you're a portfolio manager, the alpha we create is by doing better than you would do without Accolade. You said alpha. So you guys like that. It understands that one. Yeah. No, it's just audience. I said it. So think of our baseline as doing better than market, which is that 8.5% number or something like that for this coming year. How do we do that? All through the engagement, utilization, guidance, and right place, right setting, right cost for a member. All of that triangulates back to us being willing to put a portion of our fees at risk. And we have a track record now of more than 10 years of serving customers where, even in lower utilization environments like during COVID, for example, that index was lower. We beat that index. In higher-cost environments like this past year, we've been able to beat the index. There's obviously volatility in healthcare cost savings. So the way we do our guidance is we assume some number. We're typically earning 90%-95% of the total PE/PM opportunity within a customer by putting a portion of that at risk. Then the portfolio effect. I'll grab the audience again one more time. The portfolio effect of having a diverse customer base, we can predictably guide financial guidance to Wall Street, having a good set of track record and regular monthly cadence with clients. Kind of in the weeds, how do you negotiate the trend line, the bogey? How is that negotiated, Daniel? Back to your example, it usually starts with the customer and/or their consultant who's looking at the cost trends. What we're essentially signing up to do is beat that index by some percentage. I'll bring it back to Accolade's track record. We're typically saving a customer something like 4% off their healthcare cost savings in the first year of launch and then doing better than that over time. We're signing up to some portion of that in terms of the performance. So vanilla contract. Let's say that they've hired Mercer, and Mercer says, "We've done our survey. We have 8% trend this year." So you'll negotiate off, "Hey, if we do five versus eight, that's 6.5." Is it something like that? It is something. You just take the baseline, and then you negotiate what you. That's right. And then let's say the PE/PM on the customer to use around number is $20 per employee per month. 10% of that, maybe a little bit more than that, will be at risk just for cost savings. And then that's how we'll determine that PG. And we also sign up for other types of things like engagement rates, engagement of your diabetic population or some other part of your population that an employer is struggling with, to try to tailor the needs of, certainly for large employers, to align with the battle that they're trying to deal with, which is provide great healthcare for their employees and also control trend line. I would expect with your larger employer, there's always going to be some consultant. So it's kind of a three-party negotiation. Or maybe even four, CFO, HR consultant, and you guys. It's pretty complicated conversations. It is. Almost every single time, there's that consultant in the middle and someone, either CFO or CHRO or head of total rewards or benefits, leading the way for the customer as well. More CFOs would be better, to be honest with you, John. More CFOs, more CFOs and CEOs paying attention to healthcare trend line and healthcare services would be better for, I think, a lot of the disruptors in the category. Oh, I think CFO attention on healthcare trend is at an all-time high. I mean, anecdotally. Okay. Last one. I know you guys are excited to talk some more about GLPs. You haven't probably had enough questions about that. So we started with AI. We finished with GLPs. I'm checking all the boxes. But the GLPs, the adherence rates, the off-ramp, I mean, a lot of that's still in question. We're not seeing really much change in employers covering it, kind of 30%-50%, depending on who you talk to. And State of North Carolina dropped out, for example. So do we have how well developed are we in terms of the off-ramp and keeping the weight off? Because the outcomes are quite poor as people go off these drugs. So has Accolade devoted any time to this? And what's the answer there? We've devoted a material amount of time to this. Ever seen one of our customers is engaged in trying to understand how they're going to deal with this? I agree with you. It's early days. 30%-50% seems like the exact right number in terms of people who are actually paying for this beyond diabetic usage towards weight loss. That said, what we've tried to do for those customers who are engaged in a way with our advocacy and navigation services, plus our primary care services, is offer the capacity to ensure that any one of their members who's prescribed the medication is getting the proper clinical rigor around the prescription. I mean, do they meet the criteria that this customer is defined, number one? And number two, as they go through this off-ramp, we have partnerships with companies like Virta who are actually grabbing that member and pulling them post-drug usage towards lifestyle changes, which are required in order to keep that weight off. And you'll see us sign more partnerships in that category as well, where we have the opportunity to actually hand somebody to a dedicated team of individuals that oftentimes includes behavioral health, John, to help manage that process. Don't eat that cheesecake, that kind of behavior. Stay away from the cheesecake. Well, I think Omada announced something yesterday, their off-ramp program. All right, everybody. Thank you. We'll head to breakout.