Greetings and welcome to Allscripts' first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stephen Shulstein, Vice President of Investor Relations. Thank you. You may begin. Thank you very much. Good afternoon and welcome to the Allscripts' first quarter 2021 earnings conference call. Our speakers today are Paul Black, Allscripts' Chief Executive Officer, and Rick Poulton, our President and Chief Financial Officer. We'll be making a number of forward-looking statements during the presentation and the Q&A part of the call. These statements are based on current expectations and involve a number of risks and uncertainties that can cause our actual results to vary materially. We undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our earnings release and SEC filings for more information regarding these risk factors that may affect our results. Please reference the GAAP and non-GAAP financial statements as well as the non-GAAP tables in our earnings release and the supplemental workbook that are both available on our investor relations website. With that, I'm going to hand the call over to Paul Black to begin. Thanks, Stephen, and thanks everyone for joining the call. We appreciate your interest in Allscripts. Let me begin by saying that I'm very pleased with our solid first quarter results. These results reflect the hard work and tough decisions we made last year and continue to make to position the company for long-term success. Looking back a year ago, it's gratifying to see the dramatic transformation Allscripts has made improving our financial performance. We adjusted our priorities to help clients respond to the COVID pandemic, and we optimized our balance sheet and solutions portfolio. I'd like to once again thank our associates for their unceasing devotion to our clients and for delivering these results. While the COVID pandemic has not ended, we are becoming more optimistic given the trend lines for decreases in COVID infections in North America, increases in the percentage of population who have been vaccinated, and the efficacy of vaccines' impact on preventing COVID severe outcomes. We also believe the pandemic highlighted the significant value that health IT solutions and data bring across the continuum of care. We are proud of the actions we took and are taking to lead our clients in positioning them and us to succeed post-pandemic. When the pandemic became known to the medical community, Allscripts immediately set up a team to respond to the crisis by ensuring our solutions were updated with the necessary alerts to quickly identify at-risk populations. We were recognized by Reaction Data as having outperformed our competitors in the delivery of new functionality and services to support provider organizations throughout the pandemic. Throughout the early months, we continued to assist our clients in their recovery from the crisis. During that time, many healthcare organizations saw a reduction in elective procedures and challenges to their financial position. Once again, Allscripts was there to help our clients recover by offering full telemedicine solutions, workforce management tools, and more access to data to help them make better decisions for the business. Now as we enter into the recovery phase of the pandemic, Allscripts is uniquely prepared to help consumers and our clients protect themselves and their organizations from future crises with open access to data in analytics, telemedicine, and cloud-enabled services. From the beginning and throughout the pandemic, Allscripts has been a trusted partner to our clients. Let's go to some highlights for the quarter. In the hospital business, we experienced momentum with our Sunrise platform of health as we benefit from strategic R&D investments. We built a patient record across multiple care settings and revenue cycle. Our Microsoft partnership leveraged with human-centered design, driven by our longstanding vision of open, connected communities of health, is resonating in the marketplace. During Q1, we welcomed a new all-in Sunrise platform of health client, Mercy Iowa City. After a highly competitive process, Mercy selected Allscripts' Sunrise platform of health, operating on Microsoft Azure as a core EHR for its community hospital and clinics. Mercy was searching for an innovative partner ready for the future of healthcare by cloud-capable features built on Azure. Mercy Iowa City's commitment to Allscripts is an important validation of the vision and R&D investments we strategically deployed over the past few years. A single medical digital record with revenue cycle, inpatient, outpatient, delivered through the cloud and connected to the community. The integrated EHR is a complete ecosystem that optimizes software-as-a-service model. Microsoft Azure will deliver high availability, cybersecurity, disaster recovery, and business continuity features. We look forward to our long-term partnership with Mercy as we drive continuous improvement in patient and financial outcomes with them. In another validation of our health system strategy, our long-term client, Blessing Health System, substantially expanded its Allscripts relationship with Sunrise. Blessing will be adding two new hospitals and one large multi-group specialty practice to their Sunrise platform. Included in this expansion, Blessing will also use Allscripts Managed Services. They extended their agreement through 2028. In addition, our largest client, Northwell Health, is also expanding its Sunrise platform at an additional hospital in their system, Peconic Bay Medical Center in Long Island. These new wins in Q1 have provided additional underwriting of our health system strategy and Microsoft partnership. We expect this to provide additional momentum as we compete for new business. We have also received third-party validation for our solutions in the health system segment. We've been recognized again by Black Book as number one in its 2021 Community Health Systems Vendors Report for the fifth consecutive year. Black Book's comprehensive survey shows our commitment to providing smaller healthcare organizations with the support, cloud technology tools that they need. In our ambulatory business, we continued with our momentum from last quarter, as we were able to sign another six new clients in the independent ambulatory marketplace. Our second quarter pipeline remained robust. As we benefit from the investments we've made across our ambulatory team, our ambulatory platforms, scale, and breadth and depth of solutions, which is further supported by our number 1 market share positioning. Our portfolio of offerings is highly attractive as clients look to consolidate vendors and for a complete end-to-end solution covering consumer, clinical, financial, and revenue cycle outsourcing. Our RCMS business continues to gain traction as clients pivot from COVID to the recovery in their patient volumes. An example is Springfield Clinic, one of our largest revenue cycle management services relationships. Springfield Clinic has grown its footprint in central Illinois. As a result of the Springfield Clinic trust in our revenue cycle management services, we were awarded a large expansion of our existing partnership. With Veradigm, our business is at a key piece of our strategy to address the present and future needs of healthcare delivery. Our industry-leading data analytics platform and bi-directional connectivity with providers at the point of care provides a substantial value to life sciences companies, payers, and providers. We have made purposeful investments across Veradigm to position us for relevance across multiple addressable markets. By leveraging a vast and growing electronic health record of ambulatory footprint, along with strong provider relationships, Veradigm is helping to transform biopharma product development and commercialization. We are extending point-of-care workflows to include clinical research, and our vision for the future is to provide a research as a care option for our providers and patients. Let me highlight a number of areas where we're seeing progress at Veradigm. In the Veradigm payer business, we signed two new clients from the top 15 health plans in the first quarter. We're providing our eChart Courier clinical data exchange solution to one of these plans and our Veradigm Payer Analytics for another plan's Medicare Advantage and ACA lines of business, which includes almost 400,000 lives. Our Veradigm StudySource platform modernizes clinical research while extending our EHR systems to include research workflows. For instance, identifying eligible study patients, efficiently enrolling them in studies, and utilizing the healthcare data to assist with their research. Before I hand the call over to Rick, I'd like to discuss how we are leading corporate social responsibility and the impact our solutions can have on improving health outcomes. We published our first CSR report quarter. Here are some updates on how we are envisioning our role within the healthcare ecosystem. The pandemic has brought to the forefront the inequities in our healthcare system. We believe healthcare IT and Allscripts have the power to reduce these inequities and help address social determinants of health. The more detailed information an electronic health record can provide to a clinician at the point of care, the more likely a patient will have a better and positive health outcome. More data enables a physician to provide a more precise, effective treatment plan for that patient. To be truly effective, that data can't be limited to only previously documented care and treatment information. This is where data integration plays an important role. Housing status, financial situation, education level, access to nutrition, neighborhood crime rates, these are all important factors contributing to overall health. To capture community data that includes insightful information based on, say, geographical areas, requires strong partnerships with multiple community organizations and local health centers. They all must come together in an API-centric, open, interoperable health IT system. This has been the philosophy of Allscripts for over a decade. We are focused on delivering solutions that help bridge these gaps we see often in healthcare. This includes data analytics and expert consultation that provides support for at-risk patient cohort identification. Software enabling the ability to direct patients to care and a service that they can afford through price transparency tools. A means of understanding out-of-pocket costs associated with routine needs, such as prescriptions, taking into consideration patients' insurance coverage and out-of-pocket fees that can vary based on where it is filled. Importantly, mobile patient engagement strategies that include proactive outreach to encourage telehealth visits. Today, that helps patients understand their eligibility for vaccine distribution. We believe our vision of open, connected communities of health position us to help address some of these issues, while at the same time provide substantial value for our clients. To summarize, I remain very optimistic about our performance in 2021 and our ability to deliver value to our shareholders, associates, our clients, and to communities. Our scale, R&D investments in building integrated platform solutions with a differentiated payer and life sciences platform, and our partnership with Microsoft have positioned us to deliver relevant and long-term value-added solutions for our clients across the payer, provider, and life sciences landscape. Our improved and sustainable cost structure allows us to drive more earnings bottom line and generate meaningful amounts of free cash flow. With that, I'll turn it over to Rick to provide more detail about our financial position. Thank you. Okay. Thanks, Paul, and thanks everybody for joining us today. Just one more reminder, as Stephen indicated, additional financial details are available in the supplemental financial data workbook that's posted to our investor relations website. We were very pleased with our start to 2021. Overall bookings and revenue performance were in line with our plan, and our continued discipline on our cost structure created significant operating leverage, resulting in adjusted EBITDA, EPS, and free cash flow all coming in above our expectations for the first quarter. This is the cleanest quarter of financial reporting that we have had in years, and I think the numbers really speak for themselves as they reflect the performance trend that we've now seen for several quarters. My prepared comments will be shorter than usual. With that overview, let me highlight a few items, starting with our bookings performance. Generated $194 million of new bookings in the quarter, which was up 6% year-over-year and 7% sequentially, in what is typically a seasonably weak bookings quarter. The first quarter result was higher than what we have reported in any quarter of 2020 on a like-for-like basis. This reflects a continued modest improvement in the overall sales environment as our clients continue to recover from the pandemic and turn their focus to improving their operations and optimizing their healthcare IT environment. As Paul mentioned, a particular strength in our Sunrise franchise, with four new hospitals in the quarter, and our ambulatory business continued its momentum with six new competitive business wins in the quarter as well. As Paul discussed around Veradigm, our business there saw some very good deal flow across its solution set, including provider, life science, and payer clients. These partners continue to recognize the unique value proposition we bring with our differentiated data and analytics platform, along with the bidirectional connection to the provider and patient point of care. Turning to our margin performance in the quarter, consolidated non-GAAP gross margin was 43.1%, which was up 480 basis points year-over-year. This improvement reflects the dramatic turnaround in our client services organization over the past year as we right-sized the cost structure in that business to reflect the current revenue environment, as well as enhance the productivity of this labor base. As a result, client services margin was 19.8% in the first quarter, which was up more than 1,600 basis points on a year-over-year basis. That strong gross margin performance, along with our cost discipline around R&D and SG&A costs, resulted in a consolidated adjusted EBITDA margin of 18.3%, which was up 860 basis points on a year-over-year basis. This reflects $31 million, or 83% growth, in year-over-year adjusted EBITDA compared with the first quarter of 2020. As a result of our strong margin performance, along with the benefit from a lower share count, we reported first quarter non-GAAP dilute EPS of $0.19 a share, which is up from $0.02 a share that we in the first quarter of 2020. It is worth noting that we did not record any restructuring charges in the first quarter of 2021. This, along with our lower R&D capitalization rate, is improving our overall quality of earnings, and we expect this trend to continue to help drive our free cash flow conversion. During the quarter, we generated $56 million of cash flow from continuing operations and $35 million of free cash flow. This is a dramatic improvement from the first quarter of 2020 and a great start toward our full year goal for 2021. Subsequent to the end of the first quarter, we settled our income tax receivable, as well as all remaining tax obligations related to the divestiture of CarePort. To make sure everybody understands our cash position, if we pro forma these transactions back to our March 31st balance sheet, our overall cash position exceeds the principal balance on our debt obligations by approximately $60 million. I will finish today by commenting on our previous comments that we have provided. We are reaffirming the full year outlook for revenue, adjusted EBITDA, and free cash flow that we provided at the end of February on our year-end earnings call. We're doing so because trends we saw during the first quarter remain stable. Given the divestiture of CarePort, I'd like to provide an update on the long-term segment margin outlook that we originally provided last year. Our long-term Core Clinical and Financial Solutions segment adjusted EBITDA margin outlook remains unchanged at a range of 18%-20%. Our long-term Data Analytics and Care Coordination segment adjusted EBITDA margin outlook is updated to a range of 23%-25% to reflect the divestiture of CarePort. At the business segment level, seasonality effects and revenue mix will drive quarter-to-quarter volatility. These targets are intended as full-year goals that we will continue to drive the business towards. To illustrate this point, although the first quarter adjusted EBITDA margin in the Data Analytics and Care Coordination segment was well below this targeted range, we expect to see high single-digit to low double-digit year-over-year revenue growth in this segment for the balance of the year, and this is expected to drive adjusted EBITDA margin performance near the long-term range over this same period. To wrap up, we're very pleased with the execution and results across all facets of the business in the first quarter, and we remain optimistic about our outlook for 2021. With that, I'd like to open up the call for questions. Thank you. Our first question comes from the line of Charles Rhyee with Cowen. Please proceed with your question. Hi, this is James on for Charles. Obviously, virtual care is playing a greater role in care delivery. Can you talk about what Allscripts is doing to enable virtual care? Yeah. We've actually been talking about this for a few quarters now. We rolled out very quickly last year, telehealth capabilities to our clients. We've gotten pretty significant pickup with our clients on that, so that's contributed to our revenue, but also has been a big win for our clients, as they've been able to maintain their relationship with their patients. Paul went through a lot of other items that we're doing to try to assist our clients, I should say, during the pandemic, and help them work remotely with their clients. I think, telehealth, televisits is probably at the top of the pyramid. Can you talk about your capital deployment priorities given the strong cash position, following the divestitures of EPSi and CarePort? How much capacity is available under the current share repurchase program, and any plans for additional authorizations in the future? Yeah. Let me take those two part question there. Our priorities are, we want to continue to make smart investments in the business. We'll do that. We've been doing that. We continue to maintain our R&D at a pretty high level. We will look to continue to add to our capabilities as we see fit. We also, I think, have been pretty transparent about the fact that we think our shares have been dramatically undervalued, and so we have been focused on returning cash to shareholders. We've detailed that over several quarters now. We're coming to an end next week of a accelerated share repurchase program that we put in place in Q4. As we do that, we will have used up about 2/3 of the authorization that we just got in last November. We still have some remaining authorization, close to $100 million of authorization left. We will continue to monitor our stock price and do that, and make incremental decisions from here. Our plan is we're quite comfortable no net debt, as you heard me say. We, in fact, have net cash position right now. We have tremendous capacity to continue to return cash to shareholders. Okay, thank you. Our next question comes from the line of Michael Cherny with Bank of America. Please proceed with your question. Afternoon, really nice job across the board on the quarter. Congratulations. Thanks, Mike. I wanted to dig in a little bit. It's been, I believe, and please correct me on timing, but close to a year since you first engaged with the consulting firm to start working on your operational dynamics. It's showing up very nicely in the margins. Can you just give us a sense of what comes next from here, where you're focused on the next leg of opportunity, and how much of what we should expect on ongoing margin expansion will be further business improvement in some operational dynamics versus some of the mix components that come with the growth, in particular on the data and analytics side? Yeah. Thanks, Mike, for the comments and the question. I guess you have a few questions within that. Yeah, first off, yes, it was about a year ago that we brought in some assistance from the outside to help us very rapidly scale our cost structure back to where it belonged. I'm happy with the results of that. We published long-term margin targets early in that process, and we haven't forgotten about those. We haven't deviated from them other than the fact that, of course, with some of the portfolio changes, we needed to, of course, refresh the margin for that, and that's what I've done with this call. We're still holding ourselves to a high standard. I think in our Core Clinical and Financial Solution Segment, we will continue to really focus on efficiency on the cost side, but also look for opportunities to grow. We all know it's not a high-growth market, but there are pockets to grow into, and there is still a replacement market that we believe we'll be a net winner in. Some of the examples Paul went through on the inpatient side with our Sunrise platform, and as I'd said, we continue to log wins in our ambulatory side. Makes us feel good that we have the right solution, very competitive as that replacement market comes up. It'll be a focus on cost, but also picking off some replacement wins as well. Of course, there's use cases that continue to evolve with that client base, too. Revenue Cycle Services is a big area, in particular in the outpatient space. We're seeing a nice lift there from our client base, and that's providing some good growth for us. The first question today about telehealth and some of the remote patient tools that our clients are looking for gives us an opportunity to provide solutions there. It's a combination of all of that will help the core clinical group continue its march towards its long-term goals. As you started in your question, we've made significant improvement already and I think we'll continue to drive a drumbeat of change. We've made a lot of progress, and I think we're not going to see step function changes here. We're just going to see continuous improvement. On the data analytics side, as I said, we're expecting nice growth for the back half of the year, or the next three quarters of the year, I should say. That's going to do a lot for margins. We're going to be smart about our costs there, but it's an area that ultimately we'll be investing in to support growth, but we'll get some nice operating leverage off that growth. Let me pause there, Mike. I don't know if I got all your questions or if I still left something out. You did, Rick. I ranted probably for longer than needed. I'll ask one more separate question that's much more quick and direct. Given where Veradigm is in its growth profile, how do you see it shaping out in the various different competitive dynamics of the market, since this does seem to be an area where other companies, both traditional competitors and others, are trying to expand as well? Yeah. Well, look, imitation is the sincerest form of flattery, right? We see that from other folks. The good news is we're not just talking about it. We have a real platform, real client relationships over multiple years, and a real distribution network there. I feel good about our competitive positioning. I also think we have a unique set of data assets that are not only assets we own, but we also have some of our competitors have asked us to help them with their assets. It's a unique asset base that is extremely difficult, if not impossible, to replicate. We feel good about the position, and I think, as I said, as we look out for the balance of this year, we're expecting to see the growth engine start to yield some nice results there. Things feel good on that side of the business. Perfect. Thanks, Rick, and again, congratulations. Thanks, Mike. Our next question comes from the line of Sean Dodge with RBC Capital Markets. Please proceed with your question. Thanks. Good afternoon. Rick, your comments earlier on opportunities in the replacement market. I'd imagine the pandemic probably sidelined a lot of those decision processes. Are you seeing any change in activity level there now? I guess anything either just the fact it being hopefully post-pandemic now, or are there anything regulatory or otherwise that are percolating here and helping to maybe catalyze some activity? Yeah, let me start, then I'm going to ask Paul to feed on, because Paul spends a lot more time in front of the clients than I do. I'd remind you that we actually had some nice wins last year on our ambulatory side. Even though with the depth of the pandemic, we did see a lot of replacement market activity on the ambulatory side last year, and we were very happy with how we fared there. I think on the inpatient side, it was a pretty slow year in 2020. Almost by definition, 2021 will be a better year than 2020, we think, in terms of opportunities. I think that's especially true internationally. Those tend to be more public sector deals, and I think public sector all but shut down last year for obvious reasons. We're starting to see some momentum creep back into those discussions. Let me ask Paul to add to that. Yeah, our pipeline on the hospital side is as good as it's been for new business for the last three or four years. There's a lot of activity, interestingly, and that's because of the teams we have that's been going after it, but also us getting better at being in front of the opportunities that exist with consultants and just by, if you will, riding the payment very hard. As Rick said, we had a very good Q1, and we have other things that are teed up. They're all competitive, sometimes those results are more lumpy. As Rick said, at the outside of the United States, there's some pretty good-sized things that last year there was a big diversion at the Ministry of Health level to take care of the populations, much more so than it was to go replace electronic medical records. That did in fact slow down. I wouldn't say that the U.S. slowed down, as Rick also said. Accurately, the new business in the ambulatory side of the marketplace was very robust last year. We had a pretty good Q1. Existing clients are also expanding. There's a number of organizations that are raising their hand and asking to be acquired. That's how we're getting some of those that we talked about today, but also some of the other relationships we had last year expand into additional hospitals that they acquired and additional physician clinics that they bought. That always bodes well for us when that happens, when our clients buy more, and those are the other, if you will, highlights to that. The thing that is different today, I talked on it a bit, is that we have a breadth and depth and a suite of offerings that allows somebody to come in and do a bit more of a one-stop shop, not only on inpatient, outpatient revenue cycle, but also for revenue cycle outsourcing services, for total IT outsourcing services, and for some of the consulting fees that are usually reserved for perhaps a organization that may have a history in specifically only doing that. We're seeing clients come to us for value-added services and for many of the things that they have not had historically outsourced to somebody like us, and we're seeing that as well. Some of that, I think, does from the pandemic where those organizations actually sent those people home, and like a lot of us, the people that were working, if you will, in the back office, and they're noticing that freed up space inside the hospital, and they're actually interested in perhaps looking at somebody else to take that function over for them, given that they've already, if you will, moved it out of the four walls of the hospital or four walls of the clinic. That's another interesting dynamic, I think, that's come out of the pandemic that we will certainly try to work on aggressively with our clients. Okay. That's very helpful. Thank you. Maybe on the rollout of the new Sunrise platform, how long you expect it'll take to get the majority of your client base upgraded, transitioned over? The choice they have to migrate to the Microsoft hosting, can you walk through maybe how that changes the cost or economics for them, and is that a decision you expect most that migrate will make? I think that as you bifurcate the market into new business versus those that are already clients of ours that are already hosted in one of our data centers versus the third option of people that are on-premise, I think the on-premise folks are going to be very interested in this, especially when they think about the things I talked about earlier around cyber, around continuous operations, and around some of the capabilities that come native in the cloud around texting, voice recognition, the ambient technologies that you read about Microsoft doing, not only with their acquisition of Nuance, but even before that. The capabilities that come native inside the cloud are pretty interesting to people, especially as folks are trying to get to more of a keyboard-less experience for the physicians when you think about the broader topic of physician fatigue. Those are all things that help drive us towards that. When we do new business, our new business is almost exclusively cloud-based. That's number one. The people that are on-prem are going to move over a period of time, I'd say the next 18-24 months. Some people are already moving. Other folks that are already hosted, depending upon what their contract looks like with us, will host over the course of the next, I would say, three to five years. Okay, great. Thanks again. You bet. Thanks for the question, Sean. Our next question comes from the line of Jeff Garro with Piper Sandler. Please proceed with your question. Yeah, good afternoon, and thanks for taking the questions and congrats on the quarter. I wanted to ask about bookings, and Sean's question was a nice segue here. I was hoping that you could comment on the mix of bookings between recurring revenue and non-recurring in the quarter, and particularly in the light of what sounded like a very good Sunrise quarter, and then knowing how that product is evolving with the Microsoft relationship that you just referenced. Well, let me start by, we don't typically report, as you know, bookings on a recurring versus non-recurring basis. We don't really categorize it that way. I guess what I can say is this: There's nothing about the quarter that I think fundamentally changes the mix we have today. We're 80-ish% recurring, 20% non-recurring. Non-recurring, again, is primarily made up of project-based services, software licenses to the extent some people still buy them on a perpetual license upfront basis as opposed to through a subscription. Sometimes we have some hardware sales. Those tend to be the things that are the non-recurring aspects, and there's nothing about the composition of first quarter that, in my view, fundamentally changes that. Okay. That's on that part. I think the contribution to get all the way to the full $194 million that we reported of bookings, yes, Sunrise had a good quarter. The new deal with Mercy was a nice deal, as was both the Blessing and the Northwell hospital extensions. We have the other big areas of the company. The ambulatory franchise and also Veradigm were also significant contributors to the overall bookings mix. There was nothing unusually skewed, in my view, about the bookings performance for first quarter on any area of the company. Thank you. That's helpful. That may not answer your question, Jeff, but let's start with that backdrop and then see what else you want to ask us. Very helpful color. Wasn't expecting specific percentages. Maybe a little bit more commentary on what a Sunrise deal looks like today in terms of recurring versus non-recurring and if the Microsoft relationship changes how something like a Mercy deal hits bookings and then translates to the P&L. A new logo relationship, Mercy, is typically structured as either a seven to 10-year deal. Most of the structure of the deal, everything is bundled in a kind of a single subscription price. There's a little bit of initial implementation services, so there is some non-recurring revenue that goes with it, but they actually probably look a lot like what our long-term average is now, is 80/20, when you break it all down. Nothing unusual about that deal and nothing that really changes what we look like today because of that deal. It's structured all as recurring revenue once you get past the initial implementation fees. The deals where it's an additional hospital with a client that's already in place, that could be different based on how our relationship is with the client. Some clients are long-term clients who started on perpetual licenses, and when they need a few more licenses for a new facility, they'll follow the same structure of the deal that they already have. Others started as a subscription model, and they'll just look to add on top of that subscription. It tends to follow what the client was like, Jeff. Beyond that generalization, it's hard to say. It's very client-specific what the structure of the deal would look like. Got it. Very helpful. One last one from me. I wanted to ask about the ambulatory market and the comments around consolidating vendors. Just curious what types of organizations are pursuing consolidation of vendors now, and how your portfolio that segments for different parts of the markets might help you address those consolidation efforts. I think some of the consolidation that I was referring to are things that we brought to them, specifically during the pandemic. They were seeing that their clinic visits were going down. They were seeing, and perhaps they were unable to see patients a full year ago. They actually had some financial pressures, and so they were talking to us about some of their woes. We talked to them about the number of different relationships that they had, and it might be more cost-effective, and it turned out to be more cost-effective to put more of those relationships into one supplier's bucket, if you will, and that was us. As we have a broad breadth and depth of offerings, we would look at their accounts payable and work with them to try to figure out if we could consolidate many more pieces of business that we didn't currently have, a larger, if you will, percent of their spend coming to us versus, in some cases, 20 or 30 other players. That was a way for them to become more efficient and achieve their goal, which is to overall reduce their IT spend a bit. That benefited us because that percent that they continued to spend actually increased our share. Perfect. Thanks again. You bet. Thanks for the question. Our next question comes from the line of Eric Percher with Nephron Research. Please proceed with your question. Thank you. Rick, appreciate what you termed a clean quarter. Two quick clarifying questions and then one for Paul. On the clarifications, cap software at $18.1 million, is that about right-sized relative to percent of revenue or absolute level? I want to make sure I understood the debt comment, which I think was that there's $60 million of net cash without stating what the cash or debt level was. Just wanted to clarify those two. Thanks, Eric. On the second question, yes. In an effort to make sure everybody understood the cash position, it's a net of $60 million if you pro forma the tax settlement that we did in early April. Then you just compare that. As you know, the convertible bonds that we have outstanding don't show up on a balance sheet of face value. They accrued upward over time. To cut through all that noise for just anybody who is a little less familiar with it, I want to make sure everybody understood, if you just compare net cash to face value of the bonds, we're in a net $60 million cash position. Make sense? Yeah. CapEx software? Okay. You were a little hard to hear, let me just make sure I understand what your question was. 18.1 was the amount of spend this quarter that we capitalized, right? We spent a gross of $67 million. Right? That's where I think I lost you a little bit on what your question was. You may have to repeat it, but the capitalization rate- Yes. That's where I was going. Okay. The cap rate, I've been talking about that for a few quarters. We've been trying to drive the capitalization rate down and not continue to just build up costs on the balance sheet. For three quarters now, we've been amortizing more to income than we've been capitalizing. I feel good that the quality of the earnings continues to get better and better. That trend should continue. The rate, we were at 30% in Q3, dropped to 23% in Q4, went to 27% this quarter. Around the edges, you're going to see a little bit of movement on the percent just because of the accounting rules intersecting with what our gross spend is during the quarter. You'll get a little bit of bubbling up, but I definitely expect that number to sit in the 20s and not go back up to where we had gotten to, which was almost like the mid-30s. Okay. That's where I was going on room for improvement. Paul, on the topic of Microsoft, it feels like they are everywhere of late and I think beyond Nuance and Axo this last week, seeing alignments with health systems and even biopharma manufacturers. When you see that expansion, does it appear to you like to us that they're expanding faster or broader than maybe was expected a year or two ago? Do you think there are opportunities that extend beyond some of the core that we've talked about? As we think about Veradigm, are there opportunities that you get excited about relative to the moves that they seem to be making? The appearance and the reality of what's going on with Microsoft, in my opinion, are that they are absolutely getting into healthcare in a very big way. They will continue to be an enterprise software player. They'll continue to have, if you will, an operating system that resides inside of their cloud, which I think is an interesting distinction between them and perhaps some of the other people that are out there in the marketplace. Specifically, when you go to the cloud, you're going to also pick up all the work that they have with the operating systems they have had over time, but also layer in capabilities that people are going to be extraordinarily interested as they go to the cloud. Things around AI, things around voice, things around ambient, things around the FHIR obviously comes with that. Those things are pretty interesting to people because of the rate at which you can put them into production. That is a big piece, Eric, as to why I think we're going to get a lot of traction as a result of that. Microsoft, as many other people have historically noted, healthcare is a very large marketplace. Some of the things that they're doing in this marketplace, my expectation is that they'll also leverage into some of the other industries that they serve and some of the other very large organizations they work with around the globe. They are targeting a lot of large healthcare enterprises. They're targeting a lot of large, if you will, ministries of health in different countries around the world. It's not short on them, the ability not only to have an Azure relationship with those organizations, but also then to drive additional applications and capabilities into those organizations in a rapid manner. My alignment or our alignment with them, we think is very strategic. They have been incredibly great to work with. The engineers there are supplying us and, if you will, the intellectual capital of those people of how we can get to where we need to get to in an accelerated point in time is helpful. Then also just working with and going hand in hand with Microsoft as we are calling on some of these large institutions. They are all interested in listening to what a joint relationship might look like as they think about additional capabilities that sit either on top of or in place of existing historic, if you will, electronic health only opportunities. That's interesting. Thank you. You bet. Our next question comes from the line. I didn't really get your answer. Oh, I'm sorry. I didn't really get to the final, Eric, on Veradigm. We've had a lot of discussions with them around, with Microsoft around that as well. They're very interested in the closed-loop nature that we offer of what we can do with pharma and payers, and they continue to be interested in that set of capabilities that we have. They also see it as unique in that we have the payer relationships, we have the pharma relationships, and we have provider relationships. Not everybody else has all three of those. Our next question comes from the line of Stephanie Davis with SVB Leerink. Please proceed with your question. Hey, guys. I echo my congrats and thanks for making time for the questions. It sounds like you have been very busy this quarter. Thanks, Stephanie. Thank you. I'd love to hear more about your longer-term Veradigm strategy around the pharma digital ad spend wallet. Do you see any pockets of opportunity that leverage your Veradigm life sciences relationships with your clinician-facing real estate in your core EHR? Is that something that you're only using for in the Practice Fusion side of the business? As you know, Stephanie, that's how Practice Fusion started, right? Yes. Was doing a lot of ads, pharma-like ads, and went through a learning curve on what was okay to do and helpful as part of clinical decision support and what was not okay to do in terms of things that might be viewed as fostering more prescription activity, right? They've learned that lesson along the way. I think we're really good at that. We can go ahead. Because of the pure cloud nature of Practice Fusion, it's much easier to deliver those opportunities to a wide client base than it is with some of the client server technology of some of our other EHR platforms. The longer-term answer to your question is absolutely. There's opportunities. That was a big part of the acquisition case when we bought Practice Fusion, is we knew that they were doing some things that we felt we had a larger base to leverage that across, and we will continue to pursue that. Are there any opportunities in some of the adjacencies around the EHR, such as the patient portal or maybe even having some sort of embedded telemedicine solution with an ad component there? Consumer and clinician facing. Yeah. Let me say it this way. To say it as an ad maybe is a little too narrow. Are there opportunities to create new revenue streams off of the users of our personal health records? Are there opportunities to bring information to providers and reduce some of the friction that they have with interacting with the payers? The answer is absolutely. That's really what Veradigm's doing for a living, and they spin up new product streams and new solution streams every quarter. It's a place where we innovate on new solutions. There's a pretty good web of rule books. You got to weave your way through when we do that. We intersect the commercial opportunities with a pretty strong view and review from our compliance group to make sure we're staying within the rules. Yes, the opportunity is very real. Thank you. Just one quick one from me. Microsoft has been known to sometimes do one-way exclusivity on these partnerships. Is there anything like that into the deal or fully clean? No. Very clean. Awesome to hear. Thank you, guys. Thanks, Stephanie. Our next question comes from the line of Donald Hooker with KeyBanc Capital Markets. Please proceed with your question. Hey, great. Good afternoon. I just want to make sure, a lot of questions have been asked here, of course, but just for my edification here, so I understand. You guys obviously are at the when I think about the progress you've made with operating margins or EBITDA margins in the core Clinical and Financial Solutions segment, just to be clear, you are at the top of your long-term range there, from what I understand from your comments. This was a seasonally weak quarter, and it sounds like things might be a little bit better next quarter. Is there a reason why margins might recede from here? Well, I think let's make sure we don't mix and match some of the comments, Don. Sure. The seasonal weakness was a comment I made with what is typically the bookings activity in the first quarter. It just tends to be a softer quarter. That's why we were very happy with where we came out for the quarter. Not only did we have a good sequential lift in bookings, it was the highest we've seen throughout all of last year. That was more a commentary on the selling environment's improving a little bit. I think as you talk about EBITDA margins, I purposely made it clear that we'll see quarter-to-quarter volatility. That is a big function of revenue mix during a quarter. Revenue mix was favorable in Q1, and we had a good boost in our EBITDA margins. We also had a nice flat curve to some of our SG&A in the segment. I'm going to have to see a little bit of a lift there over the next couple of quarters. I think, your observation is right. The quarter was a great quarter. It was at the high end of the range. I don't think we're going to see that for each of the next three quarters in this segment. We'll see a little bit of a tail off here, probably in that segment while the other segment grows. All my comments around segment margins were meant to just be clear that these are our annual goals, and we will see some quarter-to-quarter volatility. Okay, thank you for clarifying that. Maybe a mundane question here. You have the two segments, and you have an unallocated segment, I guess, which my understanding was the EPSi, which is now gone. I guess, is there some sort of runoff here? How do we sort of work that into our models? Yeah, it was all a little more than EPSi, Don. What you see this quarter is not going to vary much. The reason we need it is we have some transfer pricing we do between the two segments. Obviously, we have to eliminate that revenue when we do consolidation. We also have a couple of, what I call public company costs that we don't allocate out to the business segments. There's a little bit of pool of company costs, and then there's just the necessary elimination that has to happen for intercompany revenue. What you see in Q1 is a pretty steady level, I think. You could use that in any modeling that you want to do. Super. Thanks so much. Have a good day. Sure. Our next question comes from the line of George Hill with Deutsche Bank. Please proceed with your question. Yeah. Hi, it's Max on for George. Thanks for taking the questions. We've talked about the significant improvement in cost structure in the service segment this quarter. Going forward, to achieve the long-term margin goal, do you need to get more aggressive on the cost containment side, or is it mostly going to be driven by revenue expansion? Well, we've kind of covered a lot of that question in the last few questions. I think as just the previous question noted, this quarter's segment margin for our core clinical was the best it's ever been. It's at the high end of the guidance range we said. I'm tempering that by saying, the goals are annual goals, and I think we're going to see some quarter-to-quarter volatility. Largely, as we talked about earlier, this is one of, I think, continued cost focus. No step function changes, but cost focus, along with some modest replacement market wins, as well as some new pockets of demand opportunity. That's what's going to drive the core clinical and financial solutions on their continued journey upwards. The data analytics business, we're going to see a lot more of top-line lift, which will really be the catalyst for its margins to improve. Great. Thanks. Maybe a quick one. We've seen improvement in client attrition last quarter. Could you provide some color on the client attrition in the core business in Q1 and the churn trends you expect to see for the rest of the year? Thank you. Everything about our assumptions and beliefs around attrition are reflected in the guidance we've given. We pointed out client attrition last year because we had a particular bolus that we knew was going to hit us, and we shared that up front so that everybody could understand some of the year-over-year comparisons. If we ever got to a point where we had such a bolus again, we'll provide the same guidance, but that was not what we needed to do for 2021. Again, our outlooks reflect everything that we see happening on that front. This concludes our Q&A. I'd like to hand it back to Mr. Black for closing remarks. Thanks everybody for spending time with us today. 2020 was a big year for us where we did a lot of reset as we talked about at the JP Morgan conference, and we reset our cost structure, reset a bunch of different things inside the company, our portfolio as well as we got a lot of focus on unlocking some value of some assets in the company. I think about where we are today. Throughout the first quarter, we also are showing a lot of resiliency with regard to not only the people that work here, but also our clients having now experienced some 14 months of a pandemic. There's a lot of clients who've been on the front end of this that we respect everything that they've done. We're also starting to see a return to normalcy with regard to patient volumes and with regards to the U.S., to the revenues that our clients are seeing and expecting as a result of their day-to-day operations, which gives us the confidence to reaffirm the guidance that we gave you today. We appreciate your time and your interest in Allscripts. Thank you very much. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.