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

Operator: And thank you. And one moment for our next question. And our next question comes from Sandy Draper from Guggenheim. Your line is now open.

Sandy Draper: Thanks very much and I appreciate you taking the question. I am trying to see if I can frame this right, probably for you, Steve. With the EBITDA outperformance this quarter, improving guidance in EBITDA, lower EBITDA losses, are you seeing – as you go through the year looking beyond that, do you change the way you think about, okay, maybe we step back up some reinvestments in sales and marketing, R&D or maybe we go back into the M&A market? Or is it really, you know what, we just want to scale margins and prove to ourselves and prove to the market, we can get closer and closer to those EBITDA targets you set as investors. I’m just trying to think with a strong start to the year, you’re not going to make a snap decision, but if this type of performance continues by the end of the year, do you start to think about changing either M&A or internal investments?

Or is it really just – let’s just ramp faster in terms of margins, hopefully that makes sense. Thanks.

Steve Barnes: Yes. Makes great sense. Thanks Sandy. This is Steve. So a couple of things. First of all, you’re right, we had a strong quarter in Q1, we bottom lined by about $4 million and you’ll see us raising our guidance for the full year for most of that, call it three and the other $1 billion you could consider that to be timing of investments in things like marketing programs, et cetera. But, look, we’re very focused on getting the company to profitability as we laid out Capital Markets Day and by the second half of this year, we will be better and on a full-year basis in fiscal 2025. So that’s a very important operational and strategic initiative for us. We also believe Sandy for other reasons Raj has laid out, given the strength we’re seeing in the business and the strength of the platform and being diversified across advocacy, primary care, expert medical opinion, the partner ecosystem, there’s a lot of ways for us to grow and we believe we’re investing amply to achieve the growth targets we’ve laid out while also driving the company to profitability as we laid out in a lot of detail on Investor Day.

So that’s a little bit more color around the EBITDA guidance and how it ties into our balance of growth and profitability.

Operator: And thank you. And one moment for our next question. And our next question comes from Richard Close from Canaccord Genuity. Your line is now open.

Unidentified Analyst: Hi, this is [John Penney] on for Richard Close. Congrats on the quarter. I was just hoping you give some commentary on the virtual blue plan and how that’s progressing or any commentary you can provide there would be great. Thanks.

Rajeev Singh: Yes. I appreciate the question. The partnership continues to progress as expected, we’ve got the first round of going to market in that space. We’ve seen the first green shoots customer acquisition and utilization and so I’d say, the good news is we have the relationship in hand, the good news is we actually deployed and delivered and it’s a little bit too early for us to give you any color commentary on the kind of utilization that we’re seeing. But I can tell you that we continue to be really excited about the relationship and the opportunity in that space.

Operator: And thank you. And one moment for our next question. And our next question comes from Stan Berenshteyn of Wells Fargo. Your line is now open.

Stan Berenshteyn: Hi, thanks for taking my questions. Maybe on PlushCare. What percentage of the incremental growth expected to come this year, will be coming from the Enterprise channel? And can you also maybe comment on customer acquisition costs on the consumer side? Thanks.

Rajeev Singh: Sure. Sure. Steve, you want to get this one?