Accolade, Inc. (NASDAQ:ACCD) Q1 2024 Earnings Call Transcript

Stephanie Davis: Hi, guys. Thanks for taking my question, and congrats on a good quarter. I wanted to also touch on that trusted partner ecosystem. Is this something where there’s exclusivity with these partners? So there’s some sort of head-to-head competition as you try to go and get them in your network versus that of another peers? Or is this something where it’s more of a question of breadth and having kind of the widest possible bench for folks that might want some variance in who they’re partnering with?

Rajeev Singh: Thanks for the question, Stephanie. I think it’s actually neither of those. And so, let me start with the question of exclusivity. In fact, our partners, we partner with multiple companies in certain categories and we would expect to continue to partner with multiple companies in certain categories. The rationale for that is fundamentally around ensuring that our customers have the right choice. It also breeds competition and innovation in each of those categories, which we think is good for the universe, good for our members, good for our customers. And your opportunity to build differentiation with those partners, which could be exclusive if your differentiation and your investment in building integration with those partners is real, is where we think we have the opportunity to differentiate ourselves from potential competitors in the category who also have partnership, but also give our customers incremental value.

So, hopefully that addresses the exclusivity point. On the second point, as it relates to breadth of the service, we’re going to be very focused on categories that our customers care about, categories where they’re spending money, categories where clinical outcomes can be improved and that we think can tangibly have hard impacts on trend lines. And in those categories, we’re going to go deep. But I think what’s important in terms of our strategy is, we’re going to vet those partners. We won’t choose a multitude of partners. We’ll choose a couple, two, maybe top end three, that we believe are at the high end of that category in terms of value delivery, at the high end of that category in terms of accountability, and also around what our customers are most interested in.

So we won’t go wide necessarily that we have to. We’ll be focused on the categories that matter and being really smart about the companies that we vet.

Operator: And thank you. And one moment for our next question. And our next question comes from Ryan MacDonald from Needham and Company. Your line is now open.

Ryan MacDonald: Hi, congrats on the quarter and thanks for taking my questions. Raj, you talked about, in the prepared remarks, the government business continues to grow nicely there with areas like the initiatives in Autism Care, but obviously, you’ve got some delays on the T5 contract. As we think about the growth opportunity in government over the next couple of years here, what do you expect the primary drivers to be? And are you dependent on success with T5 to be able to continue to grow that government vertical?

Rajeev Singh: Thanks for the question Ryan, I will hit in a couple of different ways. First Autism Care continued to be a – an exciting part of the business. It grew modestly on a year-over-year basis. We expect it to continue to grow and we have an opportunity to continue to grow that and it will be an important part of our government business moving forward. In terms of opportunities to grow beyond that, there are multiple incremental evaluations happening inside the government that will continue to pursue, they will range from the TRICARE universe to other parts of the government universe that – because we’re still in the depths of those conversations, we haven’t really talked about publicly, and we will, but then of course is the T5 relationship.