And we believe Converge solves for it in a really comprehensive fashion. We also believe that the combination of our own network together with a long list of partners that is getting longer by the day, like Cleveland Clinic and many others, allows us to offer the full gamut, not only urgent care but also diabetes and hypertension and nutrition and GLP-1, and stroke, and psychiatry, psychology and therapy, and so on and so forth, in a really efficient way. So you have trusted services from nonbrand across the full care continuum through an interface that you certainly need, that connects you to people that you trust. Having said all that, as it relates to the market demand, what I just said appeals to subsegments that we have defined, and we just don’t have the time to go through, within the payer and provider community where this is the most compelling, where what we created has the best right to win.
So together with our friends at McKinsey and others, we really net those out and package our products in the right way to address those needs. The teams that we built are no longer separated by product line or by new logos and existing customers. Basically, the idea is that each support of consultants is able to basically establish new relationships but then continue this relationship and manage it to expand it or focus on existing relationships and just expand it. And the metric here is more related to capacity rather than the type of people that do that. And that may sound like a small change, but it’s actually a very profound change. Anyone that is facing our clients in Amwell today knows that, from the first interaction, that they are going to own this relationship for many years.
And that changed the dynamics, both on our end, but very importantly, for our customers.
Operator: Your next question comes from Hanna Lee with Bank of America. Please go ahead.
Hanna Lee: This is Hanna Lee on for Allen Lutz. Thanks for taking my questions. So just over the past few months, have there been any changes with what you’ve been seeing in the spend environment just overall macro pressures on health systems? I would just love to hear your thoughts on recent customer trends? How much do you expect growth in 2025 and 2026 coming from either new customers versus expansion with existing customers?
Ido Schoenberg: Hi, Hanna Lee. Well, I think that the biggest change we’re seeing is maybe from two or three years ago to today. And we think that many of those changes are permanent. What we’ve seen, first and foremost, is dramatic rise in sophistication of health systems. If telehealth was somewhat exciting and, in some cases, naive, today, hybrid care is a very effective tool that is known to do important things for health systems, to retain staff, to improve efficiency, to save time, to engage patients in a very meaningful way, to manage risk in a meaningful way, to name a few. So the RSPs that we see and the dialogue with health systems, both existing customers and new ones, is a very different dialogue than the one that we held only a couple of years ago.
The ROI is really front and center to those dialogues. And it’s no longer enough to talk about a broad platform. It’s very important to dig deeper into specific solutions. And I gave a few examples earlier on the call today. The benefit of having Converge today is it’s already coming out of the door with a very broad set of solutions but it’s very often to get nuance, not only from Amwell but also from new partners, and to also invest solutions that our clients bring to the table. And that’s a really important attribute. So I would say that there is willingness to pay for clear ROI. The model that is preferred is a model of risk sharing, whenever possible. But there is a growing conviction that we see in making those payments. So in summary, we believe that if telehealth two or three years ago was part of the innovation, differentiation, vision part of the health system, it’s really much closer today to the operational mundane part of the infrastructure that has very clear goals and very clear ROI to be proven by the partner.
Operator: Your next question comes from David Larsen with BTIG. Please go ahead.
Jenny Shen: Hi. This is Jenny Shen on for Dave Larsen. Thanks for taking my question. I just want to ask, you’ve mentioned in the past that 90% plus of the revenue increase that you need from 2024 to 2025 is associated with contracted go-lives or backlog. Can you give us some more color there, any update, just to have a better idea on concentration? How much of that is related to the DHA contract? And any additional comments you can give us in terms of visibility, how you’re feeling with the longer-term outlook for profitability by 2026? And any comments on your good bookings, which you made some positive comments on earlier. Thanks.
Robert Shepardson: Yes. Jenny, I think we gave really specific guidance back in February. Nothing’s really changed there in terms of those statistics. The percentage of growth that’s underpinned by contracted go-lives still in that same ZIP code. And if anything, we have higher conviction around all that. So I don’t really have anything incremental to share on that. And as far as the path beyond that to profitability, again, I would say, higher conviction as we’ve really dug in on our cost structure. We’re going to show, just independent of all of the goodness that we’re going to see top line and gross profit, if you just look at where we were in 2023 from an operating expense perspective, we’re going to be down high single digit this year.
And then we’ll be down, call it, circa 25% from that level in 2025. So costs are coming out of the business very quickly. And again, on the revenue side and the mix side and the gross profit margin side, we continue to feel really good about the guidance we gave in February.
Operator: Our last question comes from Jack Wallace with Guggenheim Securities. Please go ahead.
Jack Wallace: Hi. Thanks and congrats on what looks to be an increasingly positive outlook here. Just a question on the provider business. For the providers that have migrated, have we seen any churn there? And I say that because my hunch is, if most of the providers have been migrated at this point, there shouldn’t be much of a churn element in the subscription line going forward. Do I have that correct?
Ido Schoenberg: We have many clients, but I think you’re right, but I need to check all of them. Some of them are very small. So I don’t want to assume anyone over on the call. But as a general rule, I don’t recall any migrated customer that terminated or departed that I’m aware of. Notwithstanding, people had some non-market events that we cannot talk about and are not connected necessarily to us at all. But as a rule in wherever market, people that migrated are very happy and are not going anywhere anytime soon as far as our vantage point is concerned. Bob, any color on that?
Robert Shepardson: No. I think that’s right.
Jack Wallace: Great. Thanks you so much.
Ido Schoenberg: You’re welcome Jack.
Operator: There are no further questions at this time. I will now turn the call back to Mr. Ido Schoenberg, for any closing remarks.
Ido Schoenberg: Well, thank you, everyone. We really appreciate your support of Amwell in going through this enormous period of transformation. It was a long road, but we are excited that it’s nearing the hard part, and we are excited about what’s to come. So thank you for joining us on this journey, and thank you for joining us this evening.
Operator: This concludes today’s conference call. You may now disconnect.
