MultiPlan Corporation (NYSE:MPLN) Q1 2024 Earnings Call Transcript

MultiPlan Corporation (NYSE:MPLN) Q1 2024 Earnings Call Transcript May 8, 2024

MultiPlan Corporation beats earnings expectations. Reported EPS is $-0.03, expectations were $-0.05. MultiPlan Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, everyone and welcome to the MultiPlan Corporation First Quarter 2024 Earnings Call. My name is Angela, and I will be coordinating your call today. [Operator Instructions] I would now like to hand the conference over to Shawna Gasik, VP of Investor Relations. Thank you. Please go ahead.

Shawna Gasik: Thank you, Angela. Good morning and welcome to MultiPlan’s first quarter 2024 earnings call. Our speakers today are Travis Dalton, Chief Executive Officer; and Jim Head, Chief Financial Officer. The call is being webcast and can be accessed through the Investor Relations section of our website at multiplan.com. During our call, we will refer to the supplemental slide deck that is available on the Investor Relations portion of our website along with the first quarter 2024 earnings press release issued earlier this morning. Before we begin, a couple of reminders. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management’s beliefs and expectations only as of the date of this call.

Actual results may differ materially from those forward-looking statements due to number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description in our annual report on Form 10-K and other documents we file with the SEC. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of MultiPlan’s underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measure can be found in the earnings press release and in the supplemental slide deck. With that, I would now like to turn the call over to our Chief Executive Officer, Travis Dalton. Travis?

Travis Dalton: Thank you, Shawna. Good morning everyone and welcome. I’d like to begin my first earnings call by expressing how excited I am to be leading the MultiPlan team and how inspired I am by the opportunity to work with great clients, passionate associates and serve a mission that really matters, which is to bend the cost curve in health care. I would like to share with you some of my thoughts about my first two months, which have been quite eventful at the helm of MultiPlan. As you heard me say during our last earnings call, I chose to join MultiPlan, because I saw the critically important and valuable role we play in reducing the cost of health care. We combine data, analytics and technology with expertise to make health care more transparent and affordable for all.

I believe we have a unique opportunity to take this value proposition and serve constituents across the entire health care ecosystem, leveraging data and insights to better serve our core clients and create value across the broader ecosystem is fundamental to how we will complete our journey to becoming a world-class public company that delivers sustainable growth. In my first two months on the job, I’ve engaged with our associates, our clients, strategic industry partners and many provider health systems. These engagements have demonstrated the incredible integrity and professionalism of the MultiPlan team, reinforce my confidence in the potential of the company and validated my commitment to helping this company carry out its critical mission in the health care market, positioning MultiPlan for accelerated and sustainable growth begins with the devotion to business fundamentals that drive performance excellence.

Business success will come as we serve clients, understand the problems the market is trying to solve and create mechanisms to deliver value. I’ve taken two important initial steps that reinforce accountability and build upon our long-standing record of service excellence. First, I’ve established a core operational framework centered upon the principles of clarity, alignment and focus. Clarity of mission and purpose, alignment of accountability and leadership, focus on operational metrics that matter. To that end, we have established over 30 corporate key performance indicators to measure and manage the business proactively. You are what your record says you are and we will keep score and be accountable. Second, I am also focused on alignment of our talent.

MultiPlan has an exceptional leadership and management team with deep domain expense and dedication to our important mission. Combining that talent with new leadership and perspective will be an accelerant for us going forward. To ensure rigor discipline and operating cadence as we proceed have established a new Chief Operating Officer position that will report directly to me and I’ve already onboarded a new leader to fill this important role. Jerry Hogg joined MultiPlan on March 11th and has already begun a structured assessment of the organization and will lead the team that designs and defines the new MultiPlan operating model to enable and support our growth. Another key addition to my executive leadership team is my Chief of Staff, Jackie Kwan, who along with our Chief Operating Officer will drive our key performance indicators and deliver timely management reporting that will enable real-time course adjustments as we manage the business.

This will enable us to drive top-line growth while proactively managing bottom-line performance with predictability. Jerry and Jackie both have extensive experience in publicly run, product-focused growth companies. This will be invaluable to us as we proceed. In addition, given the revenue growth potential of our existing product portfolio, we added three new senior sales leaders to our team, each of whom have deep experience and relationships in key adjacent markets. The expansion of our sales team demonstrates our commitment to investing in growth and our intent to compete more aggressively in all of our market segments. Furthermore, we are also focused on what we call Fit for Growth, which includes initiatives like product lifecycle management, data science, data platform development, and process automation.

These initiatives will support accelerated growth that we will achieve with strategic enhancements to existing products for our core business and by introducing new, innovative products to expand the value we provide to adjacent and new vertical markets. This framework of clarity and alignment focus, talent, and fit for growth will enable us to sharpen our focus on our horizons for growth, which include the following. Horizon 1, or what I call the now, delivering on our 2023 and 2024 product roadmap, attacking competition and target markets and driving value into our core client base. As you see on Page 9, we are progressing on schedule with our product development roadmap, and I’m encouraged with our focus on achieving our milestones. Horizon 2, or what I call near, is accelerating the evolution of organic product development while bringing to market new data and decision science products with insights to serve clients across the healthcare continuum.

We are doing market and partner research now. I’m excited to continue to update you on that as we progress with more to come. Horizon 3, or what I call next, a world-class product company strategically positioned to take advantage of licensed software, platform products, and data assets across multiple market segments as healthcare evolves. We will do all of this while continuing to manage our financial position, repay our debt, and prudently allocate our capital. This will be a multi-year journey, but I believe we are well-positioned for the future and will complete our transformation to a company that has diverse product set, strong organic revenue growth and fortified business and financial models. Turning to the quarter, we had several notable successes.

First, we received a positive 73 net promoter score across all of our clients, which is 25% higher than the prior year and in the top quartile of the global benchmark, demonstrating our value proposition to our clients and our dedication to service and operational excellence. We will continue to earn that reputation and our clients’ trust every day. Second, we increased our sales pipeline and closed 73 opportunities, representing a 36% year-over-year increase in new sales. Third, we signed four new logos with HST’s value-driven health plans, and we’ve made progress going to market through our HST platform to sell our new balance bill protection product. Fourth, we closed our first plan optics sale in the first quarter, and our pipeline of plan optics business is gaining momentum.

Platform transparency products and predictive analytics will be an important part of our future, and we are beginning to see our efforts converting in the market. Fifth, we closed our sale for auto pay and our supplemental carrier products. And finally, with regard to strategic partnerships, we are expanding and deepening our conversations with potential partners about how we can work together on promising new growth opportunities, which I plan to tell you more about in the coming quarters. From a financial point of view, our quarter was impacted by a cybersecurity incident at a major medical claims clearinghouse, which disrupted claims flow across healthcare and ultimately downstream to our platform. Despite this disruption, first quarter revenues were $234.5 million, and first quarter adjusted EBITDA was $146.8 million, both slightly below the low end of our guidance range.

Excluding the disruption in claims flow, which we estimate to be $5 to $6 million of revenue in the quarter, our first quarter results would have been in line with our guidance. During the quarter, we generated free cash flow and reduced the face value of our debt by over $24 million. Despite dealing with several exogenous events, it was a solid quarter, and we made material progress on key priorities. Looking forward, we expect our second quarter results to show improvement over our first quarter. And based on what we know today, we are affirming our FY 2024 guidance at this time, as Jim will discuss in a moment. Before I turn it over to Jim to review the financial results for the quarter in more detail, I want to make a few additional comments.

I am pleased with the performance of the team as we navigated several notable external events in the healthcare market. Every challenge presents an opportunity and we were able to pull together quickly as a management team and respond as a unit. The team and company remain focused on delivering value and service to our clients. We will not be distracted by extraneous noise or uncontrollable events from the supported mission in health care. It’s been an exciting rewarding two months on the job. I want to reiterate that 1 of the most important reasons I came to MultiPlan was my belief in the mission of the company and the integrity and dedication of our associates to that mission. MultiPlan has been bringing affordability, efficiency and fairness to US healthcare for over 40 years.

This includes over 1.4 million providers that we contract with directly through our network today and we work with those providers and many others daily to ensure that they are compensated for their critical services with accurate and swift reimbursements using our solutions to minimize friction. I had the pleasure of serving providers for 22 years, and I still do. I wouldn’t have come to MultiPlan if I didn’t believe we provide an important service for all the constituents of healthcare. We will continue to serve our mission by bringing data, analytics and innovation in an objective manner to the healthcare industry to reduce cost and administrative burden for all eliminate balance bills and lower out-of-pocket expenses for millions of healthcare patients.

It is my firm belief that there is enormous potential value yet to be realized as we expand our clients, our product offerings and bend the cost curve in healthcare. I will now turn it over to Jim.

Jim Head: Thanks, Travis, and good morning, everyone. I would like to begin by echoing Travis’ comments. We’re excited about carrying our strategy forward with the new members of our management team. The executive transition has been smooth. We’ve made several pragmatic changes to our operating model that will accelerate our progress. We successfully navigated a difficult industry-wide challenge and the company is energized. Today, I will walk through the financial results for the first quarter of 2024. I’ll then turn to our outlook for Q2, and I’ll close with a review of our balance sheet and update on our capital allocation activities. As shown on page 4 of the supplemental deck, first quarter revenue was $234.5 million, a decrease of 0.9% from Q1 2023 and a decrease of 3.9% sequentially.

Our revenues fell just shy of the low end of our guidance range for the quarter despite the disruption to our claims volumes caused by the clearinghouse cyber outage that Travis mentioned previously. While it’s difficult to quantify precisely, we estimate this disruption impacted our first quarter revenues by roughly $5 million to $6 million. And excluding this impact, our revenues would have been within our guidance range for the quarter. Turning to revenues by service line, as shown on page 5 of the supplemental deck. Relative to Q4 2023, network-based revenues declined 11.6% sequentially or $6 million driven largely by the impact of the aforementioned claims volume disruption to our complementary network, fee-for-service and property casualty businesses.

Also impacting the service line were a non-recurring customer credit and some client attrition. Our analytics-based revenues fell 2.1% sequentially, largely due to the claims volume disruption. Our Payment and Revenue Integrity revenues declined 0.6% sequentially also reflecting the impact of the clearinghouse outage on claims volumes for our prepaid solutions, offset by strength in our Discovery Health postpay solutions. Versus the prior year quarter, network-based revenues declined 19.3%; analytics-based revenues grew 5.0%; and Payment and Revenue Integrity revenues grew 4.8%. Excluding a $3.8 million contribution to revenues from BST, which is reported in our analytics-based revenues, first quarter consolidated revenues were $230.7 million, down 3.9% sequentially and down 2.4% from the prior year quarter.

Our first quarter results reflected volatility in claims volumes with the clearinghouse cyber outage impacting our claims flows, particularly in March, given our typical claim lag relative to dates of medical service. As shown on page 7 of the supplemental deck, total first quarter bill charges decreased 4% sequentially to $41.5 billion and identified potential savings decreased 3% sequentially to $5.7 billion. In our core commercial health plan segment, bill charges decreased 6% sequentially to $18.3 billion and identified potential savings decreased 3% sequentially to $5.4 billion. The sequential decreases were more acute in physicians claims compared to facilities-based claims. We believe the larger hospital systems were able to quickly switch to alternative clearinghouses or find other workarounds to route claims to payers.

Although the clearinghouse outage continued to affect our April volumes and we haven’t digested the full impact given our claims lag, we continue to believe this is largely a timing issue, as our cost containment solutions are still required for claims coming through the payers. In terms of the utilization environment, we note the relatively strong first quarter facility volume data reported by the public [Technical Difficulty] operators who were able to work around the clearinghouse disruption by the end of the first quarter. The largely exogenous weakness in our volumes was exacerbated by a decline in revenues as a percentage of identified savings, on what we call revenue yield. As shown on page 8 of the supplemental deck, our revenue yield declined about four basis points sequentially for the overall business, which includes PSAV and PEPM.

In our core percentage of savings revenue model which is approximately 90% of our revenues, our revenue yield fell about 10 basis points in the quarter which had an impact of about $4.4 million to our revenues. That included about five basis points of decline from idiosyncratic yield shifts most of which are temporary and likely to abate and about five basis points of decline from a customer credit that we expect to run off in Q2. Importantly, none of the decline in our PSAV revenue yield was related to any contract changes with our customers. Turning to expenses. First quarter adjusted EBITDA expenses were $87.7 million, increasing $7.4 million from the prior year quarter, but up only $0.4 million sequentially. The increase of $7.4 million over Q1 2023 was driven by the combination of the acquisition of BST, structural cost increases and investments in the business year-over-year.

For the sequential comparison, the modest increase in adjusted EBITDA expenses reflected tight expense controls as we held the line on expenses amid the external pressures on our revenue. Adjusted EBITDA was $146.8 million in Q1 2024 down 6.1% from $156.3 million in the prior year quarter and down 6.4% from $156.8 million in Q4 2023. Our Q1 adjusted EBITDA was 2% below the lower end of our guidance due to the external pressures on our revenue. Adjusted EBITDA margin declined to 62.6% in Q1 2024 down 180 basis points from 64.2% in the prior quarter and down from 66% from the prior year quarter. Our first quarter margin was driven largely by the combination of lower revenues against our largely fixed expense base. As the volume environment normalizes, we expect our margins to track back to a 63% to 64% range in line with our prior commentary.

Turning to our second quarter guidance as outlined on page 11 of the supplemental deck. We anticipate revenues of $235 million to $250 million and adjusted EBITDA of $145 million to $160 million. Our second quarter projections reflect slightly lower visibility related to the ongoing and uncertain impact of the clearinghouse outage on our claims volumes. Our view is that the claims volume disruption is largely a timing issue and we began to see signs of that our volumes were normalizing in the back half of April. So despite the shortfall in our Q1 results and our lower visibility for Q2, our expectation is that revenue growth will accelerate in the second half and we are maintaining our guidance for fiscal year 2024. As you’re aware from our press release based on the recent performance of our stock price, we conducted an impairment test in the first quarter of 2024 which incorporates current financial market conditions including our share price, market discount rates and other factors.

Based on this test the estimated fair values of our goodwill and indefinite-lived assets were less than their carrying values. As a result, we recorded non-cash impairment charges of $516.4 million for our goodwill and $2.7 million for our intangibles and recognized the charge in our GAAP earnings results. To clarify, the impairment charge was not driven by changes in our outlook for the business or our cash flow projections, but instead by our stock price and implied cost of capital. Turning to the balance sheet and capital allocation. Our operating cash flow was $49.7 million in the first quarter and levered free cash flow was $19.2 million. As a reminder, the first and third quarters are typically our higher quarters for cash flow given the timing of our interest and tax payments.

As shown on Page 14 of the supplemental deck, we ended the quarter with $59 million of unrestricted cash. Net of cash, our total and operating leverage ratios were 7.4x and 5.4x respectively. We continue to be disciplined in allocating our capital with a near-term focus on debt reduction. As shown on Page 12 of the supplemental deck, during the first quarter, we used $18.2 million of our cash to repurchase or repay $24.4 million face value of our debt, including $21.1 million face value of our 6% senior convertible PIK notes. We also allocated $10.5 million of our cash towards the repurchase of 11 million shares in the quarter. Our long-term capital priorities remain the same. Our highest priority remains investing in the business to drive growth and long-term value.

You should expect us to continue making a series of small, but critical organic investments to support our platform, including our new core products and our Data & Decision Science service line. With our remaining cash flow, we will primarily focus on debt reduction. While our long-term priorities have not changed, following the acquisition of BST, in the near term we will emphasize organic investments and debt reduction and deemphasize M&A. Finally, as I mentioned we spent $10.5 million on share repurchases in the first quarter. Additional share repurchases will not be a priority for the remainder of the year as we will focus on debt retirement. Before I end, I want to reinforce Travis’ comments regarding the value of MultiPlan provides to the entire health care ecosystem.

We serve a critical role as a long-standing data-enabled intermediary between providers, payers, employers and consumers. We provide widely accepted services that reduce health care costs including for patients and make health care transactions more efficient, transparent and fair for all parties involved including 1.4 million providers over 700 payers over 100,000 employer plan sponsors and tens of millions of consumers. In 2023, we identified $23 billion in potential medical cost savings across all of our products and we reduced out-of-pocket costs and reduced or eliminated millions of balanced bills. Consider a few facts. In 2023, we priced $15.4 million out-of-network claims through our platform, $15.4 million. This service solves a significant problem for all parties involved, because there is no contracted price between providers and payers for out-of-network services.

And there is often a wide gap between the provider’s list price and what employers are willing to pay for out-of-network services under their benefit plan designs. Our platform sits between these parties and serves a valuable role in helping to determine a fair price which in the case of MultiPlan and our services is accepted without appeal by providers 98% of the time. That’s 98%. Further, it is widely known and transparent throughout the industry that out-of-network reimbursements are consistently priced at a premium to contracted in-network rates for the same service even after cost containment tools like ours are applied. By the way our average revenue per claim across our out-of-network pricing services in 2023 $44 per claim. That’s $44.

Further, our services insulate millions of health care patients from balanced bills annually. In 2023, MultiPlan priced over 15 million out-of-network claims that were accepted without appeal or dispute including over 10.5 million claims for which we contractually eliminated balance bills for patients through our provider, network negotiation and surprise bill services. Nearly everyone agrees that the No Surprises Act was good for consumers. And in 2023, the number of balance bills we eliminated was approximately equivalent to the number eliminated by the No Surprises Act according to a recent survey conducted by AHIP and the Blues Association. And importantly, we didn’t just start eliminating balance bills on behalf of consumers in 2022. When the No Surprises Act went into effect, we have been solving this problem for decades.

That brings me to the end of my comments. I’ll turn the call back over to Travis.

Travis Dalton: Thank you, Jim. Let me say a few closing words before I open up the call to questions. As I said earlier, it’s been an exciting and interesting first two months on the job. As I mentioned, the experience has strengthened my conviction about the value and potential of this company. I will also note that it has not been without challenges. I’d like to think of myself as realistic but optimistic and every challenge creates opportunity, as I’ve noted. The reality is that it has been a difficult moment as we contended with a number of external pressures including macro uncertainty in healthcare as well as some company-specific adversity that was largely out of our control. I believe we should take the challenges head on and stay focused on our clients and the markets that we serve.

Optimistically, these challenges have posed an extraordinary opportunity for our management team and associates to band together, sharpen our point of view and develop as a team. I also see tremendous opportunity for the company to execute better and evolve overtime across the healthcare continuum. I’m confident that as we continue to enhance our foundation and quicken our execution velocity, we will realize our transformation to a world-class company. Would you kindly open the call for questions? Thank you.

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Q&A Session

Operator: Thank you, Travis. [Operator Instructions] The first question is from Joshua Raskin with Nephron Research LLC. Your line is open.

Joshua Raskin: Hi. Thanks. Good morning. I just want to talk about the change outage. And you gave guidance the last day of February, which was a couple of weeks into that outage. So relative results relative to guidance that was given at that time, did the outage just last longer than expected or were more claims impacted than you expected? And then, how did you size that $5 million to $6 million impact? And I’m sort of a little surprised that 2Q guidance would reflect a little bit more of that pent-up claims processing. I would have thought you would have seen a larger cohort in April.

Jim Head: Okay. Thanks, Josh. It’s Jim here. Why don’t, we kind of, march through this. So when we did put out guidance, we were clear that the outage, the clearinghouse outage was days old, maybe a week old. And so we really didn’t have a sense for how this was going to play out. And I think at the — at a conference in March, we kind of updated that a little bit. But we started to see the effects of this — we actually saw a little bit at the tail end of February, and then it kind of hit us much more squarely in March. So when we sized it up, it was both kind of our average plane volume from a static perspective, we looked at client activity. And what I would say, Josh, it was pervasive. Every kind of every payer client, we were seeing things slow down a little bit.

It was less so at some of the larger customers. But as you get into the smaller customers and in some of our primary business, et cetera, it really started hitting. As we march through April, it was persisting in the beginning, and it’s starting to abate in the second half of April. So here we are in May, we think this is going to persist. It’s going to take a little while to work through the system. And so where you’re seeing us be a little bit cautious is it doesn’t feel like it’s a complete snapback in six to eight weeks’ time period, particularly on the physician claims, which were more, I think, hit more deeply by this outage, and so we’re just trying to make sure that we give ourselves a little room for this to work through the system.

But importantly, those claims need to be repriced. And our payer clients and the employers they serve need those cost containment services for all the reasons that we’ve talked about. So that’s kind of how it’s playing out right now. We’re trying to be as accurate in real time as possible, but it is — the upstream flows are somewhat out of our control. And we’re working through it.

Joshua Raskin: Got you. All right. That’s perfect. And then just switching topics to the NSA, I’m curious about demand for some of the NSA related products, especially the rules-based processing. Are clients reticent at all to sort of lock something in now with the uncertainty that still sort of exists? Or are the plans just moving ahead because they need a solution for the current situation?

Travis Dalton: Yes, this is Travis. Yes. Actually, I think it represents a real opportunity for us over tone. I think, it’s here to stay. I think that’s becoming more well understood. I think the rules will continue to be defined. And for us, we think we offer an incredible service in that space, and there’ll be continued demand for it. I also think we have the ability to automate some of our process out of that. So my view is, as we continue to look at the company, figure out how to grow top line, but also create operating leverage that’s actually an area where we can create some automation and operating leverage over time. So we view NSA as a real opportunity for us on the business side, but also an opportunity to serve an important function in the market. So, I’d say, we remain positive on that and positive on the demand.

Joshua Raskin: Okay. Thank you.

Operator: Thank you. The next question is from Daniel Grosslight with Citi. Your line is open.

Unidentified Analyst: Hey, this is Louis [ph] on for Daniel. I wanted to ask if you change your go-to-market strategy at all given another recent lawsuit has been filed?

Jim Head : Yes. We’re having trouble hearing the question. So could you repeat it? Are we changing our go-to-market strategy? And I didn’t hear the second part of it.

Unidentified Analyst: Yes. Given the recent lawsuit that was filed just wondering if that had any implications in the go-to-market strategy?

Jim Head : No, no, none at all. None at all. We’re going to continue to Yes, we’re going to continue to aggressively attack the market. We’re going to not only focus on core. But as I mentioned, we’re going to look at our adjacent markets, TPAs, consultants, brokers. We’re confident in the services we provide. I said this, but we offer an array of solutions across providers, members, employers and health systems. We’re aligned with the goals of NSA and otherwise. And I’m just going to make this comment of my view, I believe that there’s a mutual interest out there that providers want fair payments, and they also want to reduce friction. And I think payers want to manage risk and do the same thing. And we play an important function inside of that.

But we’re going to continue to do what we’ve done for 44 years, which is deliver quality and capability and products and services to the market. So if anything, we’re going to continue to sell aggressively in those markets because we have real value to bring.

Unidentified Analyst: Got you. And if I can sneak another one. I want to ask if there’s any change in the management that self-insured employer side for like for ESRD [ph] versus PEPM given the controversies raised in a recent article?

Travis Dalton: Yes. I think the — what you’re alluding to is 100,000 plan sponsors that oftentimes are services go-to-market through some of the big ASO platforms or TPAs. We haven’t seen a behavior switch because it takes time. I think there’s always been — and we even talk about it varying models that are fit for purpose here. So we have ongoing discussions where we talked — and this is before any of this — the press talking about creating more of a subscription or a PEPM type of model or a per claim model versus a percentage of safe. What you may see over time is a little bit of an evolution over that. But in the end, I think the employer plan sponsors want us to be motivated and some element of that will probably remain in our model.

But as we talked about at Investor Day, we are trying to shift the overall model of the overall portfolio of the business to more, call it, subscription type business, but that’s mostly through product introductions versus a shift in the core.

Unidentified Analyst: Thank you.

Operator: Thank you. [Operator Instructions] The next question is from Madison Aron [ph] with JPMorgan. Your line is open.

Unidentified Analyst: Hi. Thanks for taking my questions. First on you mentioned that, that retirement is could be your focus going forward. Post the quarter, have you repurchased any debt?

Jim Head : We don’t disclose that, Rishi, but we — I guess the right way to say it is we’re in a realm in which we are kind of pay-as-you-go. We — as I noted, our second quarter cash flow is typically lower because we’ve got tax payments and a lot of interest payments. And so we’re just being very flexible and opportunistic as we march through the year. I’d also note that pricing is changing a lot on our bonds. You saw that particularly post April 25th. And so all of it looks a little bit more enticing across the entire capital stack. So we’re just going to be flexible as we go along Rishi. And I think you’ll measure our progress quarter-to-quarter.

Unidentified Analyst: Yes. And so you’re reaffirming your guidance. And I realize that the revenue performance is usually split pretty evenly across the quarters. And this time around, it’s probably going to be heavily weighted towards the second half. Given all the performance indicators that we’re hearing out there all the increased utilization, I know in the past you guys have been somewhat conservative on the utilization views. But what are you not seeing? Or what are you seeing on the utilization front going into through the year? I would have thought that at least the revenue guide would have been higher. Is there something — are you seeing that utilization benefit? And if you are is there an offset that we’re just not thinking about? I just love to get your thoughts on why reaffirm the guidance if the performance indicators out there are pretty positive.

Jim Head: Yes, Rishi, I think there’s no doubt that it’s back-end loaded. We just — again we’re starting at but we start off with a little bit of a deficit here. And so we’re just — we’re going to see how this plays out, particularly in the second quarter and see how the clearinghouse outage works its way through the system. So, you’re right in the sense that the facilities-based claims have been stronger than physician claims. But our book is kind of half physician, half facilities if you will. So, we did see some strength year-over-year clearly on the facility side. Sequentially though is a little bit soft and we think that’s because of the outage. And on the physician side, it was relatively flat year-over-year. And so what you saw is you’re continuing to see the supply side on the facilities recover RECONNECT — and so we’re definitely going to be seeing the benefit of that over the year.

But we also have a mix of both physician and an upside, but it also creates a little bit more steadiness.

Unidentified Analyst: Okay. During — and Travis I appreciate your comments from the beginning of the call and I look forward to just hearing your thoughts on the long-term trends over time. But during the Investor Day, you guys highlighted a number of initiatives and growth plans that include your new acquisitions and you also some leverage targets as well. So, when you were talking about reassessing the business or just evaluating all these performance indicators has something changed in the long-term view on the business or just a view on these acquisitions? And then when you talk about these reassessments there’s a component of your business I get that you. But given this is all about top line when you talk about these 30 performance indicators, what does that mean to us?

Travis Dalton: Yes. There’s a couple of questions in the question. So, let me just start talking. Yes we are absolutely are committed to the 2023-2024 growth plan of road map. So, we’re tracking on that. We’re executing on it. If anything we’re working hard to try to drive more velocity with that and move more quickly on those products, which is why we’re implementing product life cycle management product processes and interlock inside the company, I won’t bore you with all that, that’s operational stuff that helps us produce more faster for the market. So, we’re absolutely committed to that. Beyond that, we’ll be moving — we’ll be looking aggressively at those adjacent markets and products we have. And we’ll build out from the core.