TBRG - NASDAQ

Greetings and welcome to the CPSI Q1 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dru Anderson. Please go ahead, ma'am.

Thank you. Good afternoon and welcome to the CPSI first quarter 2022 earnings conference call. During this conference call, we may make statements regarding future operating plans, expectations and performance that constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties and other factors, including those described in our public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, our most recent annual report on Form 10-K. We also caution investors that the forward-looking information provided in this call represents our outlook only as of this date and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call. At this time, I will turn the call over to Mr. Boyd Douglas, President and Chief Executive Officer. Please go ahead sir.

Thank you, Dru. Good afternoon, everyone. And thank you for joining us today. After my brief comments, I will hand the call over to Matt Chambless, our Chief Financial Officer, who will provide the detail regarding our first quarter results. Then Chris Fowler will share his opening thoughts before the three of us, along with David Dye, our Chief Growth Officer, will take your questions. I'll begin by noting how exceptionally pleased we are with the strong start to the year. Matt will go into the details, but I would like to highlight a few key takeaways from the past quarter. Total revenues of $77.9 million were impressive, but particularly encouraging is the quality of those revenues as the revenue mix increasingly leans towards recurring revenue, which now makes up roughly 92% of total revenues. Adjusted EBITDA of $16.2 million is very close to a company record. Third, a particularly strong start from our recently acquired RCM solutions business, HRG, and our RCM teams are off and running in terms of the HRG integration. Lastly, we have an all-time high sales pipeline across all business lines. Central to the notable first quarter results is the performance from TruBridge in terms of both financial performance and bookings. A key factor that led to the impressive first quarter revenue performance of $77.9 million included better-than-expected patient volumes for TruBridge hospital customers. In addition, the momentum and ease surrounding the integration of the HRG business enabled the combined talented sales teams to execute on the opportunities for growth in both cross sales into our EHR base and the net new market. While there's a lot of work remaining this year, we are very encouraged by the first quarter results and remain steadfast in our determination to deliver on our three-year plan to provide outsized shareholder returns and $80 million in adjusted EBITDA in 2024. We will continue building a solid foundation to support core growth, margin optimization and tangible upside growth through digital innovation. And now, before I hand the call over to Matt, I would like to make a few personal comments regarding the announcement yesterday of my retirement as CEO and President of CPSI. As you can imagine, I've given the decision to retire a great deal of thought and consideration over the past 18 months or so. It was very important to me that the timing be right for both me personally and for the company. As all of you know, CPSI is near and dear to me as I have thoroughly enjoyed every bit of my 34-year career here at the company. It has been both an honor and a privilege to be fortunate enough to be the CEO for the past 16 years. We've had a tremendous amount of success over the years, but I would be remiss to not give full credit where it belongs, to our fantastic and thoughtful senior leadership team and the 2,500 employees that make CPSI great. Our employee base undoubtably makes CPSI the great company that it is today. And to all of them, I'm truly grateful for all they have done for me and for our company. CPSI's positive impact on health care has been a true team effort. And I'm particularly proud of all that we have accomplished together. Additionally, David, Chris and Matt deserve a special shoutout as all three of them have been great partners, friends and leaders over the years. With that being said, the timing is right. The company is on a solid foundation and has a very exciting future ahead. I am thrilled that my good friend and longtime business partner Chris Fowler has been named the new president and CEO of CPSI. The board conducted a comprehensive evaluation of internal and external candidates, and unanimously chose Chris to be my successor. There is no doubt that the company is in great hands with Chris as CEO as we continue with the transformation that we started 18 months ago. In closing, I would like to thank all of our clients for the unwavering drive and determination to deliver the highest quality of care to the patients in their respective communities. The challenges they have faced over the past two years are unprecedented. But time and again, they have risen to the occasion and delivered high quality, compassionate care to the patients they serve. CPSI would not be in the position we are in today without the feedback, advice, partnerships and relationships that we have formed with our clients over the past 40 years. And for that I'm truly grateful. With that being said, I'll turn the call over to Matt for comments on the financials.

Thanks, Boyd. And good afternoon, everyone. On today's call, I'll provide a high level overview of the quarter, including some additional detail on bookings performance and a brief walk through our first quarter financial results. But before we dive in, I'd like to take this opportunity to say what a pleasure it's been working alongside Boyd these past several years. His clarity of focus, strategic vision, and dedication to serving the needs of all stakeholders is chief among many reasons CPSI is well positioned for success in the years ahead. Between yesterday's announcement around Boyd's retirement, our acquisition of HRG in early March, and today's announcement of the refinancing of our credit facilities, we've had a lot of headline grabbing events over the past several weeks. Not to be outdone, this quarter's stellar financial results shouldn't be crowded out from that headline. Coupled with one month of HRG activity, the resiliency of our customer base during the pandemic's last gasp continues to provide organic momentum that has TruBridge soaring to new heights, driving near record metrics across the board and furthering our excitement for the organic growth potential of TruBridge and our ability to accelerate that growth with responsible M&A execution. Speaking of M&A, this quarter's results included one month of activity for HRG with revenues of $3.8 million and adjusted EBITDA of $600,000. Full quarter pro forma results for HRG were $10.1 million of revenues and $1.1 million of adjusted EBITDA, putting HRG on track for the expected $40 million of revenues and $5.2 million of adjusted EBITDA that we stated in the press release announcing the acquisition. Our other recent acquisition, TruCode, contributed $3.4 million of revenues absent purchase accounting adjustments and adjusted EBITDA of $1.8 million, both down slightly from the first quarter of 2021's pre-acquisition amounts as customer conversions from term licenses to SaaS arrangements injected some timing noise into revenue recognition. Before we dive into the details, we'd like to call your attention to some enhanced disclosures in the earnings released. A couple of quarters ago, we began disclosing the recurring versus non-recurring revenue mix within our EHR businesses to provide more clarity around the shifting revenue mix. Beginning with today's earnings release, we've added a table breaking out the adjusted EBITDA contributions from each of our three reporting segments – TruBridge, acute care EHT and post-acute care HER. We think you'll find these disclosures valuable and informative, giving investors a better grasp of where we are and what the future may hold. Moving on to bookings. The addition of HRG added considerable talent to our TruBridge Salesforce, and is expected to accelerate our ability to generate meaningful revenue growth from outside of our EHR base, a target cohort we label as TruBridge's net new market. HRG contributed $2.9 million to the quarter's bookings since the date of acquisition, adding to successful execution from our existing sales teams and driving overall bookings to a 31% sequential increase and a 132% improvement over the first quarter of 2021's levels. You may recall that the first quarter of 2021's bookings were anemic and made for a particularly easy comparative as the pandemic attacked bookings and created a stingy decision environment, the likes of which we hadn't seen before. TruBridge bookings increased 38% sequentially and nearly threefold over the first quarter of 2021's amounts as HRG drove net new TruBridge bookings to $4.4 million, compared to well below $1 million during the first and fourth quarters of 2021. Sustained performance in this net new TruBridge market has a real potential to accelerate growth above and beyond the expectations we laid out when we announced our multi-year growth strategy in February of 2021. The organic growth plan we've been executing against has a heavy reliance on cross sales success, with an initial target of $60 million in incremental annual cross sell revenues by the end of 2024 compared to a target of only $25 million from the net new TruBridge market. With nearly 4000 hospitals across the US with 200 beds or less, the total net new market size for TruBridge is nearly four times the size of our cross sell base. So the potential upside from this initiative is enormous. System sales and support bookings increased 24% sequentially and 68% compared to the first quarter of 2021. The year-over-year improvement can be mostly attributed to a vastly improved sales climate, with more normalized decision timeframes, while the improvement over the fourth quarter of 2021 has been mostly the product of improved add-on sales to existing EHR customers. The net new EHR environment continues to be dominated by SaaS licensed models, with the first quarter of 2022 marking the fifth consecutive quarter with a 100% SaaS mix for new hospital EHR contract signings. Including add-on bookings, SaaS bookings made up 59% of total system sales and support bookings during the past quarter compared to 54% in the fourth quarter of 2021 and 31% in the first quarter of last year. Turning to the financials. HRG's $3.8 million revenue contribution drove total revenues to their second highest level in company history, surpassed only by the fourth quarter of 2017 when more than $12 million in non-recurring MU3 revenue created a momentary revenue spike. The past quarter showed a 5% sequential increase in revenues, while the combined $7.2 million in revenues from HRG and TruCode drove top line growth over the first quarter of last year to 14.5%. And while total revenues didn't quite eclipse our prior record, the quality of our revenues continues to improve as the revenue mix tilts more heavily towards recurring revenue sources. Recurring revenues made up 92% of total revenues during the past quarter, increasing 4% sequentially and 16% over the first quarter of 2021. Organic recurring revenue growth was 5.6% over the same period from a year ago. Similar to the top line performance, our profitability metrics of adjusted EBITDA and non-GAAP net income were at near record levels as well. Adjusted EBITDA improved 13% sequentially and 37% over the first quarter of 2021, with adjusted EBITDA margins expanding to 20.7%. Adjusting for the HRG and TruCode acquisitions, organic EBITDA growth was 9% sequentially and 16% over the first quarter of 2021. Similar to adjusted EBITDA, non-GAAP net income increased 15% sequentially and 28% over the first quarter of 2021. Looking deeper at our segments, TruBridge revenues increased 11% sequentially as HRG added $3.8 million to the top line. Organically, the sequential revenue growth from TruBridge of only 1% includes a $700,000 decrease in GRH revenues as the timing of patient engagement licenses injects some volatility into the TruBridge revenue line. We call this out because the timing related decline in GRH revenues clouds up a nice organic growth story for TruBridge during the first quarter, as outside of HRG and GRH, revenues increased 3.5% from the fourth quarter of 2021. On the margin side, relatively lower margin HRG brought gross margins down by 130 basis points to 50.4%. Compared to the first quarter of 2021, TruBridge revenues increased 36% on the backs of the TruCode and HRG acquisitions. Organically, TruBridge revenues grew by 14% over the first quarter of 2021. Gross margins improved 30 basis points from the first quarter of 2021 as margin improvements earned through the TruCode acquisition and our margin optimization initiatives were mostly offset by the relatively lower margin HRG revenues. Next, system sales and support revenues were down 1% sequentially due to the timing of software subscription renewals, while gross margins expanded 440 basis points due mostly to the timing of certain third-party licenses. Compared to the first quarter of 2021, revenues decreased 4% as a result of the continued trend in declining non-recurring revenues as we advance recurring revenue licensing models in new EHR arrangements. Despite the top line pressure from the continued transition to SaaS, gross margins remained relatively flat versus the first quarter of 2021. We currently anticipate eight new client facilities going live with our drive solution in the second quarter of 2022 and all are expected to go live in the cloud or SaaS environment. Moving on to operating expenses. Product development costs were down $700,000 or 9% sequentially and $1.3 million or 16% from the first quarter of 2021 due to increased labor capitalization. Sales and marketing costs increased $900,000 or 14% sequentially and $1.7 million or 33% from the first quarter of 2021 as improved bookings and revenues drove commissions cost higher, while recent acquisitions brought incremental spend. General and administrative costs increased $1.3 million sequentially due mostly to the seasonal dynamics related to our 401(k) match expense and the timing of our annual audit. Costs were flat from the first quarter of 2021. Closing out the income statement, our effective tax rate for the quarter decreased to 14% compared to 23% in the fourth quarter and 19% in the first quarter of 2021. We're expecting a full year effective tax rate of around 18%. From a cash flow standpoint, operating cash flows of $11.8 million were down $1.5 million sequentially and $1.9 million from the first quarter of 2021, mostly due to the timing and scale of annual bonus payouts. Like most companies, CPSI pays annual performance bonuses during the first quarter of each year. The pandemic's impact on our 2020 financial performance kept the related payout in early 2021 to a minimal level, whereas successful execution during 2021 led to above target bonus payouts. Cash outflows related to bonus payments increased to $4.7 million from $200,000 in the first quarter of 2021. On a trailing 12-month basis, operating cash flow totaled nearly $46 million or 80% of adjusted EBITDA over that timeframe. We're also pleased this afternoon to announce the refinancing of our credit facilities, with the major changes being a $50 million increase in revolver capacity, a step up in maximum leverage following an acquisition, a transition to as the benchmark rate and tweaks to the credit agreement's EBITDA measure to better align with how we report adjusted EBITDA to the investing community. These adjustments were in furtherance of our capital allocation strategy, which prioritizes flexibility to have CPSI optimally positioned to opportunistically deploy capital through a combination of M&A, internal investment, and value-based share repurchases. Our recent acquisitions of TruCode and HRG bring pro forma average to roughly two times, well below our target of 2.5 times ensuring that we remain well positioned to respond quickly to other opportunities that may arise. We continue to groom our pipeline of potential M&A opportunities that fit our programmatic M&A strategies, and feel there is tremendous opportunity to enhance and supplement TruBridge service offerings with reasonably valued roll ups and tuck ins. Capital allocation decisions generally involve some trade-offs. And as a result, share repurchases were limited to $1.7 million for the quarter and were all related to tax withholdings on employee stock awards. However, we'd like to remind investors that the cadence and volume of our repurchases have been and will continue to be influenced by a number of factors, certainly considering value, but also considering capital needs and availability, potential M&A, cost of replacement capital and other capital allocation alternatives. These alternatives and priorities in capital allocation are ever evolving. So a lack of repurchase activity in a given quarter may not reflect our views on the intrinsic value of our stock. Before I turn things over to Chris for a few remarks, I'd like to briefly touch on our guidance and near-term expectations. While the first quarter surpassed our internal expectations, we cautiously believe we'll be giving some of that back in the second quarter. The second quarter will see some seasonal costs as we host our first in-person client conference since 2019. On the top line, it's no sure bet that the record volumes for TruBridge will extend through the second quarter and we expect license timing for GRH and TruCode to cause a slight pullback in those high margin businesses. In short, we're a bit ahead of plan as of March 31, but expect to be back on target for our year-to-date plan numbers by the end of the second quarter, and don't see a need to update or change our 2022 annual guidance at this point. In closing my remarks, I'd like to congratulate Chris Fowler on yesterday's announcement that he'll be taking the reins as CEO in a couple of months. I look forward to continuing to work with Chris in his revised role as we strive to help our customers with products and services that make their jobs easier, continue to build a corporate culture that our team members can take pride in and provide our valued investors with quality returns. And with that, I'll turn things over to Chris for a few remarks.

Thanks, Matt. And I'd like to start by saying thanks to both you and Boyd for the very kind comments. And also, beyond that, just a special thanks to both you, Boyd, and also David, for the relationship that we have had over the last five years, specifically as we run the company. It's been a great opportunity. And I think that it's really come through with how we continued to execute and iterate on what the company looks like today. Obviously, what we do could not have been done without the valued work and the strong work of the 2,500 strong team members that we have at CPSI here and look forward to continuing to work with each and every one of them as we grow the company going forward. While I'm giving thank yous, I'd also like to give one to Glenn Tobin, our Chairman of the Board, and also the Board of Directors for their confidence in selecting me to be at the head of the organization and continue to carry us through this transformation. Before I get started in my comments, the one last thing I like to say is, again, I know that Matt did this as well, but just an additional special thank you to Boyd and his leadership over the last 16 years. Obviously, his passion for the success of our companies, for our customers, for our employees and for our shareholders has been truly the basis of the success of our company. And we thank him for his leadership and his guidance over the last 34 years and 16 years as the CEO. I'd also like to personally thank him for his mentorship, his confidence in me and ability to see us through as we make this successful transition over the next 60 days. I guess you'd say, coincidentally, my 22nd anniversary at CPSI was Sunday, May 1. And as I reflected on that over the last couple of days, it's hard to sit here and believe that 22 years – first of all that 22 years has gone by as fast as it has, but more importantly that I think about this as what a wonderful honor and a humbling opportunity to have the opportunity to take over the reins of CPSI and continue the great work that's been done up to this point. So, very much look forward to the opportunity in front of us. As Boyd said, the company is on very solid footing. We're very excited about the execution that we have had over the last several years, and specifically as we think about Next 36 and where we are on that transformative journey. We're about halfway through and we're on target, but we've got to remain focused on the execution. We've got to stay on top of the work that's set out and what needs to be done. And to remind all of you have of what the key tenants are of Next 36, there's three principles that, again, I'll go over real quick. One is to grow the core. And while TruBridge is obviously at the focus of that, as we think about it from growing that in our in our installed customer base and also into the net new market, we also need to make sure that we have a satisfied and happy EHR customer base for us to be able to truly unlock that $400 million of market opportunity in the installed customer base for TruBridge. So we have to remain laser focused on delivering quality products and services to continue to see that that fulfilled. Second is operational efficiency. You've heard us all for the last several calls about how we're continuing to unlock value through automation and offshoring. Our efforts there continue to spur on additional momentum and we're excited to see how we continue to leverage that to deliver more scale and provide more value to our customers going forward. And then, lastly, making a few bets on some key adjacencies of how we can grow exponentially beyond just the core business that we have. Some examples of that would be Get Real Health and our migration to the public cloud for our EHR business. Obviously, with Get Real Health, we've made some announcements over the last several calls that shows the true momentum behind the transformation of care to the digital age, and allowing us to be positioned with the technology that we have there to capitalize on what that opportunity could be. And from a cloud perspective and us moving the EHR business into the public cloud, it's our ability to have our data positioned to where we can take advantage of new technologies that are becoming rapidly available in the healthcare space more easily and just faster as we go forward. Beyond the execution that we have to convert on as it relates to Next 36, we'll also be looking for additional growth and how we can accelerate that. And I think Matt touched on it really nicely as we think about our measured and thoughtful capital allocation strategy, whether that's us focused on additional product investment to capitalize on opportunities that we think we can deliver through our product and adoption of our product, or whether that's additional M&A that we can execute on that looks a lot like the recent transactions of TruCode and HRG. And lastly, when prudent, potentially share repurchases. So, we will be laser focused over the next short term and continue to evaluate opportunities for us to take advantage of the capital opportunities for us to accelerate the growth beyond Next 36. Lastly, I would say we're beyond excited to get started on this next chapter. We look forward to working with all of you on the call as well as the team here at CPSI and our customers at large to help clear the way for care. And with that, Denna, please open the lines for questions.

. Our first question is from Jeff Garro from Piper Sandler.

First off, Boyd, congratulations on a wonderful career and best wishes for your next steps. And, Chris, congrats on the new role. So, with that, Chris, I wanted to ask you a question. You've been involved in all facets of the business, but have maybe been more focused on TruBridge of late. So, I'm curious to get your updated thoughts on – and you touched on some of this, but maybe to bring it together, on really how you see CPSI as being more valuable than just the sum of the different parts that you touched on.

I did touch on a little bit, but to expand, obviously, the growth plan for TruBridge is twofold. One, it's into the external market where we're continuing to see success. Obviously, the addition of HRG and the talent that we're seeing come in from a sales perspective and also just the scale and additional notoriety due to that deal, we're continuing to see additional momentum for TruBridge by itself. Bur over the next two or three years, our growth account for – or actually, the models that we have expects more growth from our installed customer base. So, there is a very close dependency between the success and the retention of our EHR customer base and the conversion of success for TruBridge. So, again, I think the number I shared in the prepared comments was $400 million, which is what's left from an opportunity standpoint for TruBridge inside the installed customer base, both acute and post-acute. And then, lastly, if you're thinking about the diamond in the rough, the Get Real Health, while it has some momentum in both the international and domestic market standalone, we also think that that is an opportunity, not just to help continue to satisfy our EHR customers, but also a wedge opportunity for us as we're bringing in RCM opportunities, and how we're positioning ourselves as the greater entity of CPSI. So, that's an area, obviously, that's a hot topic and a demand for most all facilities right now. And so, hopefully, that's something that we'll continue to leverage as an opportunity to bring our additional offerings, whether it's TruBridge or TruCode in behind Get Real Health.

Maybe one more from me on the TruBridge side of things and the HRG acquisition. I'm just curious what the initial feedback has been from clients and prospects. It seems like they've really hit the ground running in terms of results and demand. But just curious what clients and prospects are saying whether it's anecdotally or how that's all maybe already translating to a pipeline impact so far.

So, what I would say, first and foremost, obviously, as an organization, our maturity from a M&A integration standpoint has obviously grown tremendously since 2016 when we did the Healthland deal. We have put a lot of thought in the integration process and making sure that, specifically like an opportunity with HRG, that the people integration comes first. And I think that that's maybe one of the most important parts of this, is we're not talking about a tech asset. It really is a people asset, and that's what the HRG customer base and also those new opportunities wanted to make sure that they saw. And so, the continuity that we've been able to keep in place as we manage through the pipeline and as we manage those customers and to see the team start to come together from both the HRG and the TruBridge side operationally, I think has been the real secret in the sauce for the success there.

David here. I'd like to add a little bit to that. From a timing standpoint, closing on the acquisition on March 1, I think we were fortunate, in that the timing of that closing with the labor shortage issues that our hospitals are seeing, particularly larger health systems, resulted in some significant bookings from the HRG side of the house in March. And is part of the reason why Boyd mentioned the record pipeline that we have on the TruBridge side of the business that that exists. HRG had in place some safety net agreements with some larger hospitals and health systems that allowed for when they ran into or have run into issues with regard to labor in their business offices that they immediately turn to HRG and we've already seen benefit from that.

Just a follow-up on that last part is. How should we think about the timing related to that? Does that create a new recurring opportunity or is it a temporary boost?

The initial bookings for those safety nets – and again, just to be clear, when we hear the term safety net, that's just us being the backstop for where they may have a shortfall of work being done, whether that's insurance follow-up, whether it's medical coding, whether it's early out collections of patient balances. It is booked as a one-time opportunity, but the conversion rate of those turning to reoccurring revenue is upwards of 75%.

The next question we have is from Joy

Congrats on the great quarter. I want to echo the congratulations for Chris on the new role and also want a wish Boyd a great retirement. I'll start with a question for Chris as well. I know you have not transitioned to the seat yet, but was wondering if you can give us a preview of what your top priorities are for your first 100 days in office?

I would say, for me, the biggest thing that we're thinking about is, again, going back to the key to our success is our employees, is making sure that we are supporting our staff, again, as labor is one of the main issues. Any article that you pick up right now, it's got a chance at being in the very top section of it. So, making sure that we're doing the things to support our customers or to support our employees in the way that they need to be supported to be successful for us. And secondly, I would say, making sure that we're engaged with our customers to understand exactly what we think it is that we should be delivering, and making sure that we're hitting on that. And then, obviously, like I said last, just from a M&A – I'm sorry, from a capital allocation standpoint, making sure that Matt and I are dialed in on what those opportunities are for us to best unlock potential for the company, whether, again, that's additional investment in product or if that's M&A opportunities going forward.

As a follow-up on your labor cost comments, we heard some of your healthcare peers this week talk about the high labor cost environment for hospitals that's likely to persist for the next one to three years. When you talk to your clients in the real market, are you getting the sense that they're also anticipating this to be a more permanent headwind? And does that cause them to spring into action when it comes to outsourcing the rev cycle?

Yeah. I think David said that earlier that that's obviously a driver right now and what we're seeing. And I think it goes beyond just the revenue cycle side. I think it's an opportunity for us to set ourselves apart with the software that's being developed. And it's being an efficiency opportunity and not something that inhibits their ability to do their job. But. definitely, as people continue to move away from healthcare, it definitely is a stimulus for TruBridge. And we're obviously seeing that come through loud and clear in the pipeline today. And based on what we can see, obviously, we can't read the history better than you can, but I don't think that that's something that's going to be going away anytime soon. So, I think our approach, whether it be through the automation work that we're doing or through our offshoring initiatives, I think we'll continue to be positioned well to capture that opportunity. And we have a sales summit going on right now, actually kind of had a similar question this morning. And we still see the biggest competition for RCM is the hospital itself. More than 85% of hospitals still manage their own business offices. So, this will be a driver in unlocking that value that's actually there.

The next question we have is from George Hill from Deutsche Bank.

This is Pragya speaking on behalf of George Hill. So, a trade group class noted some steep EMR market share and footprint losses for the company in 2021. Can you talk about how you expect that figure to look exiting 2022 and whether the company expects to be in net footprint gainer in 2022 and the strategies you're going to take together?

From a revenue retention standpoint, as we've remarked previously, we were over 98% in 2021. The losses in terms of customer count that are reflected in that class report are primarily those, as we have been working with our formerly Healthland-centric clients and efforts to move them over to Thrive in advance of 2023 is generally reflected in the attempts to convert those over to Thrive. And in those efforts, we're winning a little bit – around 60% of those deals. But that's the reason that you've seen the expanded numbers in the class report and we are confident that you'll see better numbers exiting the year.

Thank you. At this stage, we have no further questions. I would now like to turn the call back to Boyd Douglas for closing remarks.

Right, thank you. Thanks, everyone, for being on the call today. As you can tell from our remarks, we're certainly excited about the great start we've got to the year. We certainly realize we've got a lot of work left to do. But we're off to a good start and we're feeling really good about where we are as a company and where we're headed. So, appreciate everybody's interest and hope you have a good rest of the day. Thank you