All right. Thank you for joining us here today. My name is John Ruge with Goldman Sachs Healthcare Equity Research. Joining us from Amwell, we have CEO, Dr. Ido Schoenberg, and CFO, Bob Shepardson. Ido and Bob, thank you very much for being with us here today. Great to be here, John. Thank you. Just to kick us off, for those who may not be familiar with Amwell, please begin by giving us a quick background on your company, its mission, and your role in the healthcare technology landscape. Absolutely, John. For almost two decades, our mission is to help customers enable hybrid care delivery, resulting in efficient and effective care. Hybrid care means digital-first access to coordinated and integrated in-person, virtual, and automated care. It means care anywhere, anytime, in a way that is fully connected across the continuum. We empower and connect payers, providers, innovators, and consumers. We provide them with the technology, infrastructure, and services to realize their hybrid care needs and ambition. We serve a sizable customer footprint, over 2,000 hospitals, and payers that cover over 100 million lives. Efficient and effective hybrid care requires a common platform between all ecosystem players, and that is uniquely possible with Converge. The same platform is used by both payers and providers, and this allows for many benefits, which I'm sure we're going to cover later today. Perfect. Thank you very much. If you would, please talk to us briefly about the evolution of Amwell from your legacy business as more of an urgent care provider to a technology enablement platform. Let's dive right into Converge. Sure. Essentially, we saw a lot of change in the past few years. Pre-COVID, we all remember telehealth was mostly focused on urgent care as an affordable and convenient alternative to trusted care and informed relationships. In COVID, providers and patients were forced to connect digitally. As a result, psychological barriers to adoptions were removed, proof points of the value of hybrid care accumulated, and digital care became legitimate and a covered benefit. Post-COVID, forced demand for telehealth evaporated, as patients preferred to connect, often in person, with their trusted providers. The focus moved to hybrid care, enveloping in-person care with technology to make it much more accessible, reproducible, and improved. Payers promote digital-first to offer members choice in routing them effectively. Digital-first emerged also as an important way to increase member and group loyalty. Providers promote hybrid care to improve provider and patient retention, improve efficiency, and grow revenues in nontraditional ways. It was apparent to us early in COVID that these changes are happening. We placed a big bet and decided to re-platform and build Converge. It was not simple or easy decision, I couldn't be happier today that we made this decision. Converge fits very well with the needs of the market today and is fully future-ready. Excellent. Thank you. Moving to Converge, as your flagship digital enablement platform, if you could talk to us about how it arrived at its current state and in your mission of this digital-first care delivery, you really become a broker of sorts, which brings aside or brings together different sides of the care equation. Sure. Converge features super modern architecture and is based on almost two decades of institutional knowledge and client feedback. You are 100% correct, John, that rules-based brokering between patients and the service and information they need is a key value driver of Converge. In many ways, the platform is logistically redistributing care to benefit all the players. At its core, Converge is designed to support multimodal hybrid care delivery, fully integrating in-person, virtual, and automated care across all types of points of care in the full care continuum. The platform connects and matches a cohort of patients with trusted providers, data, and services that are appropriate for them based on choice, clinical, regulatory, operational, and financial consideration. A single code base is supporting all types of ecosystem players, including payers and providers. This single platform also allows any operator of Converge to exchange information and services with any other operator. There are many benefits to this exchange, but key is the ability of payers to engage with providers to enable value-based care. The platform is designed to integrate with existing clients and third-party digital assets to help create a unified, simple, and scalable experience. It creates virtual integration that is very helpful for our clients as they face fragmentation driven by growing number of vendors working in parallel to enable hybrid care. Excellent. Thank you. Just expanding on that point, if you could talk to us a little bit more about your emphasis on not directly competing with payers and providers, and how has that contributed to Amwell's growth story? Absolutely. Our mission is to empower and enable our customers to offer hybrid care, resulting in more effective and efficient delivery. We think we are unique in taking this approach. Our clinical services are there to complement our technology and accelerate ROI for our customers, not to compete with theirs. Our platform is designed to integrate with our client digital assets and not replace them. In short, our offering is focused on growing our client business and never overlaps with it. We never see our platform as a vehicle to sell competing services with our clients. As the market becomes more competitive, our focused mission allows us to work with very large part of the ecosystem. Clients rely on us to help realize their hybrid care ambitions without being worried about potential conflicts. As a result, it is much easier for our customers to accept us as their partner. OuR interests are fully aligned to help them be more successful. Great, thank you. One of the points you consistently seem to emphasize is the modularity of Converge. I believe you mentioned there was something along the lines of 60 different components. How do you think about customizing solutions for clients which address a specific need, versus creating solutions which will address a larger group of participants? In other words, how are you going about scaling the more specialized aspect of the platform, being mindful of the trade-off between revenue and R&D? What do the economics look like for very sophisticated strategic clients? Yeah, that's a great question, John. You know, we built Converge to be a one-stop shop, hybrid care enablement platform. It now features 72 different components, which are really unique capabilities. With Converge components, we can enable growing number of solutions, which are addressing various business goals for our customers. This modular product architecture allows us to offer our clients solutions they choose to buy today, with the peace of mind that they can expand very easily when they're ready. It also allows us to sell to different client sizes with different needs and appetites, without affecting the integrity of our product. It allows us to shine and offer most unique and complete value to larger clients, that appreciate our integrated comprehensiveness. Some very large strategics often want to go even beyond the full offering, with custom development work to help them further differentiate. We execute this development while retaining our IP. These SOWs come with reasonable margin and are considered professional services and not part of the R&D budget. Excellent. Now, moving to migrations, how are they going? What's new on the migration front? With 2022 more being the year of Converge platform development, you stated your 2023 priorities are to migrate the balance of your clients to Converge, focusing on your remaining provider clients. Deployments for payer clients have also already begun. I understand payer clients are more focused in 2024, what's the feedback on the provider side? That's right, John. We've been very focused on migrations. 36% of our visits in the first quarter took place on the platform, and that's continued to move up since. We're laser-focused on getting our provider clients migrated, for the most part, looking at that base this year. The back half of the year, also, really beginning the process in earnest with our payers. We expect to get a lot of our larger payers done this year, but won't see their visits present, really, until next year in 2024. The focus is definitely on providers this year, increasingly payers in the back half. We'll see the provider visits come on, but the payer visits next year. Okay, excellent. The feedback from these health system clients on the platform, what are they reporting to you on the macro front? Are there any objections you hear from these clients in moving to Converge? Generally, how do you balance the speed of conversion while still meeting the client's needs? How do you meet clients where they currently are? As Bob mentioned, the feedback from migrated clients is excellent. They love the new user experience, simplicity, speed, scalability, modularity, and reliability. Health systems are struggling with tighter budgets and shortage in staff. These luckily do not influence their decision to migrate, but does influence timeline. We address that by making migrations as easy and simple on their end, as much as humanly possible. A growing body of proof points from other clients is helping influence priority of clients' migrations. We never attempt to compromise client needs to accelerate migrations. The confidence and trust of our clients is our most precious asset. Great, thank you. For these health payer clients, I think you've mentioned them being heavier lift. What are they looking for in digital care delivery, and how is Amwell addressing those needs? Sure. Payers focus on enabling digital-first and VPC services to their customers. The digital strategy has moved to the frontline, as evident by the public payers' earning calls. They see digital-first as a critical tool to improve member experience, control utilization, and improve provider engagement. Converge is built to enable the digital ambition. Our large provider penetrance is also available to payers, since the payer Converge platform is able to connect and integrate with a growing number of provider Converge platforms. Thank you very much. Let's talk about churn, and what have you seen during the Converge migration? I think for the most part, they've affected your smaller customers. What are you seeing with some of the mid-sized customers? You're right on that, John. We expected churn when we embarked on this road of re-platforming. We have seen churn concentrated primarily in the low end. Difficult to hang on to the commodity end of the market, especially with, you know, timing uncertain of when Converge would be available and how competitive that part of the market has become. We have fortunately held on to our strategics and our larger customers, and notably, our largest customer, Elevance, just re-signed, announced they're they were going to re-sign in the 4Q, signed in January. That's all predicated on them migrating to Converge. We feel good about where we are from a retention perspective. It's in line with our expectations, and increasingly, with Converge now, commercial, and in operation, we feel like we're in a very good position to go back and win back a lot of these customers that have made other decisions. Why do you think specifically you've been so successful in retaining your strategic clients? Previously, you've quoted up to 100% retention. What do you think is behind that? We are very proud to be the backdrop to CVS's new hybrid care platform. The system is live and in production. Our relationship with CVS is excellent, and we look forward to further expanding our activity. Our partnership with Elevance is precious and dates over a decade. We are thrilled by their decision to renew their multi-year agreement with us and see it as an important vote of confidence in Converge and in Amwell. Largest health larger health organizations are affected most by fragmentation and really transform with integrated connecting platform. Converge was built to deal with the huge complexity of these large clients and also works well with a large array of existing digital assets. I know they appreciate that. You are right to note that we are seeing some really exciting outcomes in client ROI studies. These are probably our best marketing tools. There are quite a few examples. I'll just give a few. Prisma, for example, that was able to save $4 million just by activating the Amwell ED discharge program. Horizon was able to reduce the wait time for psychiatric services from five days to one. NHS was able to change the ratio between therapists and members and patients, six times over. You can also suggest that the cost was reduced by 85%, and the clinical result is equivalent or better, even with those changes in efficiency. We continue to build on the use cases. We recently launched a new webinar that is available on a regular basis on our website, that I really recommend the viewers and the audience to visit. There is a lot coming down later this year as it relates to really interesting proof points and case studies of a newly deployed Converge platform. Great, thank you. For these same larger customers, have any of them attempted to build out the solutions themselves? If so, what is their feedback? They have, but we feel that we are unique. No one else does all what we do, combining tech, services, clinical knowledge, it's a big lift, and it's a very big effort. While there are point solution competitors, like video visits companies, there is no single one-stop shop, modular, yet comprehensive infrastructure, like a Converge. We've heard organizations try to do that themselves. We feel it's validating that our approach is the right one, and we think that no one else can offer what we do. Excellent. Thank you. Now looking at KPIs, Bob, you mentioned the percentage of visits on Converge is up to 36% in 1Q from, I believe, 28% in 4Q. How might that not always be the best KPI when you're considering your success and migrations, and where do you see it at 2023 year end? You're right. It's a good but not perfect measure of our progress. We also look at, you know, monitoring number of active providers, and also look closely at quality metrics, things like system uptime, sums up reviews of experience from providers, double tickets. Across the board, there is no comparison between the legacy platforms and what Converge is putting up now. On migrations, as I said, we expect to make good progress with payers this year, we won't see their visits come on until next year, during the new enrollment season is when we expect to see those. While the implementations and the migrations will be happening in earnest, it's not like the provider market, where you see them turn up initially on pilots and then throttle up over time. This will be a bit delayed relative to when the migrations are done there. So it is kind of, especially as we've been focused on the provider market, it's been a very good indicator of how the migrations are going, but not perfect as we bring on the payers. Great. Thank you very much. Now with the majority of Converge development complete, how are you equipping your sales teams for expansion with current clients and new logo wins? If you could, talk to us a bit about your evidence-based, solutions-oriented selling approach. It's a very important question, John, and thank you for asking it. Converge is one product, highly strategic, and this sale requires transformation over sales teams, one that is underway. We sell the way our customers want to buy, solving today's pain points, ready for the future. The sales process is now consultative. Every customer has different challenges and priorities, and our solution is designed to easily adapt to each client's needs. Our client-facing team is focused on understanding client needs and goals. It then maps the appropriate solutions for each client and the related components. Our sales team then needs to explain the process required by us and our clients to realize each client's business goals. This requires deep knowledge and skills, which we armed our teams with. Excellent, thank you. Given any new client would purchase Converge, the legacy system is no longer available to them, at what point do you sunset the legacy platform to expedite this migration process? I believe recently you mentioned as late as 2024. Yeah, we're not gonna use that as a stick for our clients, unless we really have to. I think, you know, we'll be making those ROI decisions later in the process. You know, as we've talked about, we're making good progress with migrations, and we're driving to the end of 2024 as kind of a target to sunset the legacy platforms. Cost benefit at that point will be relevant, I think. We look, we think most of our clients, and we certainly haven't heard from any clients, that they don't see the benefit in migrating. We don't control 100% the timing of that, but we certainly see the intent, and it's consistent with how we're thinking about it. There's a lot of benefits, obviously, to sunsetting from a cost savings perspective. The bulk of our cost savings, though, are layering in now through the R&D line items and also driving sales efficiencies. That benefit is one that will really influence, I think, our gross margins and will provide, I think, a nice tailwind from that perspective in 2025. Excellent. Thank you. Just moving to modules and products, are there any that are resonating particularly well with your clients? I believe you mentioned your initiative to drive adoption of your automated care programs. What's going on in the behavioral health front? If you could talk to us a little bit about your partnership with DarioHealth. You know, John, the concept of a single, comprehensive, modular platform is resonating well with our clients. It's less about one solution versus the other. Both payers and providers appreciate simple, fast, scalable, reliable platform experience. Payers are also focused on digital-first and VPC solutions. Both providers and payers appreciate the efficiency and impact of automated care programs, especially when integrated with virtual and in-person care options. In automation, there is indeed great interest in AI and special focus on behavioral health programs. All these more than justify our M&A of Conversa, SilverCloud Health, and Aligned, which are now part of Converge. Dario, which has some great automated programs, demonstrates the value of our investment in easy onboarding of innovators that we internally fondly call the App Store architecture of Converge. Great. Thank you. Now just moving to financials, Bob, your 2022 revenue came in ahead of consensus, as did your adjusted EBITDA, but I think your 2023 guidance came in a little bit below where the street was expecting. Now, once in 2023, you said your results were in line with your own expectations. Now that we're almost through with 2Q, how has your outlook changed on 2023, if at all, and are you still confident in your initial 2023 guidance? We gave the initial guidance in February, which incorporated some conservative thinking about revenues and how that will progress through this year of transition for us. We saw platform-related churn create headwinds and the macro backdrop as well, especially on the health system side, as key inputs into our forecast. Also, from a visit perspective, last year, we kind of had the benefit of COVID and a very strong flu season. And we didn't want to make a similar assumption that for this year. That was all kind of what went into our guidance in February, and we reiterated that at the end of on our first quarter call. Without a product to sell last year, we need to rebuild sales momentum this year, which will drive revenues next year, just given the implementation time, timelines. It's a huge strategic initiative for us this year, along with the migrations that we've talked about. I'm pleased with how we're executing on this, and hopeful that as the year progresses, we'll continue to put the pieces in place to return to growth on the top line next year. All right. Excellent. Subscription revenue was down quarter-over-quarter in your first quarter, as you expected, given your 2022 focus on Converge development. What's new on the bookings reacceleration front, and do you expect subscription softness to continue? Well, yeah, and it's really all part and parcel of this replatforming impact, with the limited ability to upsell, given the platform wasn't available, and new logos kind of want to see how the platform is going to perform. That's all influencing the revenue growth this year. Many of the features of Converge really just launched commercially with CVS in January. It's early days, I would say, in terms of just the sales force really having the tools to go out and change the game a little bit here. Ido Schoenberg discussed our relaunch of the sales and marketing approach. That takes time, but we're very happy with the progress we've seen. Again, implementation timelines mean limited opportunity for much in-year revenue growth, and it's really more of a 2024 impact, though we do expect to see some in the back half of the year. Excellent. For visit revenue, what are you seeing there? Broadly, how does AMG fit into your plans as the subscription business continues to grow, in the past, contribution from subscription visit has been relatively similar. Yeah, we guided just to focus on the very near term, for. I talked about this, but guided to flattish-. Mm-hmm. on the visit side, just given the setup from last year. AMG, I mean, we talk a lot about Converge, and we talk a lot about the focus on the software piece of the business. AMG, though, is a very strategic asset, especially when you think about the payer market. Not everybody, not every payer out there has a roster of provider and clinician assets, and so our ability to help them, not just on the urgent care side, but when they think about rolling out virtual primary care and products like that, relying on us to either help supplement what they have or drive it from an asset perspective, is really, I think, highlights the criticality of that of that asset. Now moving to Carepoint and services. It seems to be lumpier, but also margin accretive. Talk to us about that segment. You've referred to it as being a bit of a leading indicator for future business and illustrative of your partnerships. I imagine that's more qualitative than quantitative in nature for correlation. Yeah, especially as we think about taking R&D down over time, you know, maintaining, kind of the cutting edge nature of what we offer on Converge, for our clients increasingly is gonna be driven by what they want to see happen from a custom perspective. They're paying for that. We saw a lot of activity from that perspective in the 4Q of last year with custom development and implementation. We'll see a decent amount of that this year as well. That really, you know, if they are having us do that type of work for them, it usually brings with it more traction, deeper, broader integration across their assets and more, you know, more solutions that they would like to bring on to further differentiate their offering. We see it as, you know, I think, a very positive, forward-looking service that we provide and we think it makes us obviously much more sticky in how they're going to market. Great. Thank you. Then moving to margins. You've previously said that your gross margin profiles of subscription and visit can get to 70%-75% and then 25% respectively. Is that still the case? Also, what timeline are you seeing for achieving north of 50% overall gross margins? Could you go higher than 50? The growth and mix shift dynamic is really a critical aspect of our model. We have the platform now. It's unique, and we're creating two-sided market in addition to today's existing use cases. The high end of the market, we believe, has voted that this really is a unique asset, and will really help to drive top line there. We're reorienting our sales and marketing efforts around a repeatable modular platform-based solution sale. This is gonna gain traction in the coming quarters, and we believe ultimately drive our margins through 50%. Great, thank you. For R&D costs, you've spoken about it, please remind us what you have mentioned could be the 4 Q 2023 exit rate? Yeah, as I said, the process has started for that to come off. We're down 14% first quarter relative to 4Q. We expect the 4Q relative to the 4Q of last year to be down mid-20s. Great, thank you. Given this consultative selling model, extremely interesting, how do you see yourself creating operational efficiencies on that front? I imagine that would actually be slightly more labor-intensive. What happens to the margin profile when you flip the switch and sunset the legacy platforms? I think it's not really. It's not more labor-intensive. You could argue you need fewer- Okay. -bodies, just, a different approach and different training, which we've, we're well underway on, you know, in terms of, that approach. We also think that, this model, has the potential, on a consultative basis, to drive higher revenue per sale. Getting, you know, a higher, a lower per dollar cost of that sale is very much in the plan. We definitely see the ability to at least leverage that line item as we go forward and maybe even bring it down over time. Excellent, thank you. Just a few minutes left. What this is ultimately leading to is your EBITDA margin profile. How do you feel about your previously established 2025 path to profitability? You've made a great point that your $500 million in cash would allow you to weather any delays. How do you feel about it, and how do you think about growing the business versus hitting these near-term financial targets? Just to, remind everybody, the previous messaging was a framework. Mm-hmm. and not a forecast that we presented in early 2022. With that, with Converge done at this point, we have so much more flexibility in our cost structure that I think we have a, we can really put a finer point on where we see and toggling and linking our cost base to what's going on on the revenue side. Our goal is still profitability late 2025, but are absolutely fine if that takes a little bit longer, given that cash position. Our cash position, it allows us to really do the right thing for the business in balancing that growth profitability algorithm. Excellent, thank you. Then moving to capital priorities and M&A, you've had successful, excuse me, successful acquisitions and integrations of both SilverCloud Health and Conversa Health. How are you thinking about M&A in the current environment? I believe you've mentioned you do not really see an unmet need, but if you were to, it would likely be a technology asset. What size acquisitions would you consider if you were looking to acquire? As we look at where we are with Converge right now, there's nothing really missing. Okay. We have a very active corporate development effort. We know everything that's going on in the market and the types of assets that are out there. We really are looking to a partnering model and an enablement model at this point, especially given our, you know, just what the market looks like in terms of our currency and our desire to really preserve that cash for a rainy day. We don't really see anything transformative, certainly from an M&A perspective. Given where we are from a capabilities perspective, there could be small extensions or tuck-ins that might make sense over time, but we don't expect to see anything near term. Great. Thank you very much. We're just about out of time. In closing, this question is for the both of you. What most excites you for the remainder of 2023, and what message would you like to leave with investors? You know, John, great way to end a good set of really good questions. Many things excite us, but 4 come to mind, especially. One, continuing the migrations, creating more happy Converge customers, and collecting stories of success, ROI, benefits, and sharing those stories with the market. Two, our sales transformation, both Bob and I discussed, taking a seat around the table to solve our industry's biggest problems and guide our clients to evolve their digital hybrid care aspirations. Three, seeing Amwell continue to evolve as a company. Our hires have been amazing. We are very proud of who is choosing to join our mission. Last, exiting the year with everything we need to accelerate profitable growth. Bob? I think Ido covered it very well. All right, perfect. Thank you very much, Ido and Bob, for joining us here today. We really appreciate it. That's all, everyone. Thank you very much. Thank you. Thank you.