MultiPlan Corporation (NYSE:MPLN) Q4 2024 Earnings Call Transcript

MultiPlan Corporation (NYSE:MPLN) Q4 2024 Earnings Call Transcript February 25, 2025

MultiPlan Corporation beats earnings expectations. Reported EPS is $-8.54, expectations were $-13.5.

Operator: Hello all, and welcome to today’s Claritev Corporation Fourth Quarter 2024 Earnings Call. My name is Drew, and I will be the operator on today’s call. After today’s prepared remarks, we will have a Q&A session. [Operator Instructions] I would now like to hand the call over to Shawna Gasik, Assistant Vice President, Investor Relations. Thank you. Please go ahead.

Shawna Gasik: Thank you, Drew. Good morning, and welcome to Claritev’s fourth quarter 2024 earnings call. Joining me today is Travis Dalton, Chief Executive Officer; and Doug Garis, Chief Financial Officer. The call is being webcast and can be accessed through the Investor Relations section of our website at Claritev.com. During the call, we will refer to the supplemental slide deck that is available on the Investor Relations portion of our website, along with the fourth 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 these forward-looking statements due to a 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 on 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 Claritev’s underlying operating results. An explanation of these non-GAAP measures and reconciliations to their most comparable GAAP measures 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 Travis. Travis?

Travis Dalton: Thank you, Shawna. Good morning to all of you on the call. Welcome to our first call as Claritev. I’ve told the team repeatedly that we would not chase a rebrand as a shiny lure. We needed to earn the right to brand as a health technology company. I believe we’ve done just that, and we will explain why today. I’m nearing my first year anniversary with the company, and it’s been exciting and eventful. I came here believing we had great clients, products that serve healthcare, incredible associates and deep core values of character and integrity. I was right. I also believe we could transform the company, building on those core assets to better serve our long-term clients and create new innovative products that serve a broader set of constituents across the healthcare continuum.

I’ve never been more excited or committed in my career. We have an incredible opportunity here to serve the mutual interest of affordability, transparency for all and quality care across a broad set of the continuum. I’m gratified and humbled by the talented and experienced leadership team that we have assembled here in the way the company has rallied around Claritev and our collective 2030 vision. I’m also very pleased by our progress, which is marked by real milestones. I’m even more excited and optimistic for what’s to come. To set the context for my optimism about Claritev’s future, I will begin by sharing our view of the state of healthcare and how Claritev’s vision and mission address what we believe are some of the most important issues confronting healthcare.

I will then talk about specific actions we have taken and successes we have achieved. We have been busy. We are operating with urgency, and we are getting things done. I will then summarize our financial outlook before turning it over to Doug for a detailed discussion on our transformation program, 2024 financial results and 2025 guidance. Healthcare remains a highly competitive environment with escalating cost and demand for critically needed services. Never has there been more data at our disposal, yet challenges related to affordability, cost and quality persist. The last decade was focused on interoperability, and I think the next will be focused on transparency, technology and insights, essential to addressing healthcare affordability, cost and quality.

Data is abundant and problem admiration is rampant. Clear and actionable insights are needed to make a real impact. That is what we bring at Claritev, and our vision will allow us to create even more value for our clients in the future. I’ve said this many times and seen it in action. I think a mutual interest between providers, payers, employers and patients exist in healthcare. Providers want to provide access to care, serve patients, generate quality outcomes and receive fair payment. Payers want to manage risk, provide access to networks, serve employers and achieve fair pricing. Employers want to manage and lower costs while increasing benefits for their employees. At the intersection of that mutual interest are insights from data and full transparency.

Our rebrand and investments now and in the future will position us at this center. Better information will yield better decisions, reduce costs and more efficient markets. We will continue to provide solutions that focus on that access to care, fair affordability, platform-based transparency, service quality and health plan cost optimization. As we continue this transformational journey, you’ll hear me talk about the foundation, the vision, the turn, the proof and the way up and forward. 2024 was largely about laying the foundation for the company so we can better serve our clients, position for what is to come in 2025 and achieve our Vision 2030. We have been laser-focused on creating clarity of purpose, alignment of talent and focus on clear measures of success.

That, along with our process and Fit for Growth initiatives have helped us make real and meaningful progress towards this transformation. During 2024, we have clarified our purpose and launched Vision 2030. We are a technology, data and insights company focused on affordability, transparency and quality. We are making major investments in our technology to support our vision, which we will discuss. We have reenergized and invigorated our associates and management team. We also welcomed just this week our very first Chief AI Officer, noting our commitment to talent and technology. The team is operating at a high level with more urgency and impact. We’ve improved our forecasting, operating and finance processes with clear KPIs to ensure we are on target and course correct where appropriate.

All of this will yield better insights to the business and allow us to provide more predictable results and reliable communications going forward. We have added a world-class corporate affairs team, welcomed a Chief Growth Officer and completely reset and refocused our market segment leaders to aggressively grow in existing market segments and launch the full breadth of our solutions in new market segments, which will significantly expand our total addressable market. This foundation has — this transformation has created a foundation that is now fit for sustainable growth. In line with all of this, 2024 was also about deep reflection and recasting the brand vision of Claritev going forward. We are proud of the 40-plus year history of the company, but now is the time to expand our impact in healthcare market and build upon that success.

Having now earned the right to rebrand the company, we are better able to reflect the value that Claritev provides the healthcare ecosystem. To enable this, we have committed to modernizing our technology platform as evidenced by our Oracle partnership to ensure we have a robust and scalable technology infrastructure, cloud enablement and the best development tools. We are working on our data architecture to ensure we can efficiently serve our existing clients with more value-adding product enhancements and use the most cutting-edge capabilities like AI to launch innovative products aimed at transparency and quality. We will also API enable our platform to serve healthcare more holistically and rapidly bring new applications to market to serve the evolving needs of healthcare.

We have improved our affordability offerings, launched our CompleteVue platform for the provider segment and have made great traction with health plan optimization capabilities via BenInsights in the employer broker segment. All of this will allow us to bring more value to more segments like payers, providers, employers, government, brokers, consultants and strategic partners. I point 2025 as the term for Claritev. We will start to see demonstrable improvement in value created from the foundation as we proceed. We have underlying business process for success, and we are operating with rigor and discipline, which drives consistency of results and predictability in how we call and deliver a number. We have increased our number of addressable markets and aligned internal governance structures to support growth within these new market segments.

To fill these markets, we will have a product pipeline with thoughtful go-to-market plans. We have the necessary corporate affairs and government relations team to make sure we educate stakeholders and our roles in the ecosystem are well understood. In addition to Claritev’s long successful history of combating waste, fraud and abuse, our transformation will help us accelerate our mission to improve affordability, transparency and quality. We have laid the foundation, reset the vision and started the turn. Let’s talk about the proof on the way up and forward. We successfully addressed our capital structure. In December 2024, we announced the exchange offers to refinance our entire debt structure and extend maturities by approximately three years to align with Vision 2030.

This transaction closed in January 2025 with a 99.75% participation outcome. We were able to do this at an attractive cost of capital. More importantly, it was a demonstration of our commitment to our long-time investors and a testament to our credit investors’ belief in our vision and its probability of success. With this important initiative complete, my leadership team and I can now devote 100% of our time to running the business. We continue to add value to our payer clients and core product set. We successfully renewed one of our largest clients for an additional three years at current value. And we are working more closely with our other top-tier clients to reframe relationships and better explain the value we bring. We also continue to make great progress with wins for our value-driven health plan and our HST products, ending the year with an 8% increase in covered lives, resulting in $16 million of annual contract value.

We are revitalizing focus on the network business, enhancing payment integrity to tackle waste, fraud and abuse, with NSA continuing to be a key focal area going forward as well. Finally, our PlanOptix payer product recorded four new client wins in 2024 and one already in 2025 with a total ACV of $1.1 million. We are building momentum and now have 37 opportunities in the sales pipeline with an additional $14 million ACV potential. I noted earlier that we completed a multiyear contract with Oracle for our digital transformation. Not only will that improve our technology infrastructure while providing better operating efficiency, but it will also allow us to more easily participate in the Oracle Cloud marketplace with innovative products like BenInsights.

This means our products can be sold through the Oracle sales channel. This opens the potential for thousands of relationships, clients and opportunities for not only our standalone products, but also native integration of our strategic products within multiple Oracle product sets over time. In Q4, we closed one of our largest-ever single contract bookings of $34 million total contract value, encompassing the full scope of what we offer through new client acquisition. We did so with a new innovative business and revenue model that will allow us — will allow for predictable revenue stream with built-in price escalation features while providing scale value to our clients. We now have over 12 similar enterprise sale opportunities in the pipeline.

I believe we can add value with business model transformation and change how the market buys. We also penetrated new market frontiers with important early wins and a new product launch. In evaluating our provider go-to-market offering fit, we have identified upwards of $250 million in serviceable obtainable market over a multiyear period, and we are just getting started. Earlier in 2024, we announced our first provider client win with the sale of our predictive risk modeling solution to TailorCare to improve their member engagement and cost efficiency. In December, we announced our new CompleteVue transparency analytics product and obtained our first four pilot clients with 10 additional in our growing pipeline. We are also making real progress with our BenInsights suite of products.

We closed our first direct-to-employer opportunity and have 39 opportunities across all segments in our pipeline for 2025. Furthermore, we are pursuing multiple federal government payment and revenue integrity opportunities and two specialty network solution opportunities. Partners continue to recognize what we do and want to work with us. We had some innovative successes with the announced J2 partnership this January. We also expect to announce a revenue collaboration in the pet wellness space in early Q2. We increased our competitiveness with 24 new or reactivated logos in ’24, including taking back four clients from competitors. We are being more aggressive in the market and competing to win. Finally, we continue to serve and deliver on our promises as demonstrated by a plus 73 on our Net Promoter Score and continued acknowledgment and feature success in Forbes list of Best Places to Work in healthcare.

We have been busy. We are operating at real pace with real urgency, and we are getting things done. As we proceed on the way up and forward, we are realistic and optimistic. We still have challenges to overcome. We continue working through a single-client impact that we believe will stabilize in 2025. We operate in a highly competitive marketplace. We have the overhang from exogenous events that don’t reflect who we are or the value we bring. Finally, we have continued work to do on driving sales execution on our new and existing products. I am pleased with how we are managing the challenges of the now, but also executing in the moment and planning for the next. We aren’t afraid to do the hard work, take the long road and take this on. As I said, we are realistic and optimistic and emboldened by the rapid progress we have made in certain key areas against our vision.

We will find our footing with a return to long-term sustainable growth. As you have heard from our earlier proof points, we will be product-led with new and enhanced solutions that address client interest. We will be partner-enabled, developing long-term relationships that are focused, targeted and meaningful. And we will be technology-driven with thoughtful long-term investments to develop new innovative products. Nobody in our space is taking on this kind of technology advancement to include best-in-class infrastructure and AI. We will take advantage of our unique market position to serve the entire ecosystem, which leads us to the way up in 2026. I am excited to share the good things to come at Claritev. We are moving fast, and I continue to be relentless with my teams and our associates about the need to go faster.

There is more to come, and we will be much more active in the marketplace and ecosystem. We have several key milestones to be announced soon. For example, to celebrate the rebranding, we will also be changing our stock ticker to CTEV on February 28 and ringing the closing bell at the New York Stock Exchange on that day. Other announcements forthcoming include additional key strategic partnerships, launching a health-focused foundation, a PGA player sponsorship and showing up big at key industry events with more proactive media outreach. What we do is good for healthcare, and we can and will do more. Before I turn the call over to Doug, I would like to make sure we set expectations for our financial outlook this year. We are providing guidance with a down the middle plan that I strongly believe our team can deliver.

We implemented and executed very thoughtful and professional processes to plan and run our business in ’25 and beyond. I expect our team to execute on this plan. This year, we’ll be critically focused on preserving the strength in our core business while we relentlessly pursue developing and winning in our growth markets. We expect revenue to be slightly down to flat, and we are internally planning for roughly flat EBITDA as we complete the turn. We are organized, focused, we’ll deliver our plan, and I am very optimistic based on the proof to date for our future. With that, let me turn it over to Doug to cover 2024 and our 2025 guide.

Doug Garis: Thank you, Travis, and good morning, everybody. It has been a rather quick onboarding process for me here at Claritev. I’m excited to see our new vision take shape, and I’m happy to share the pace of progress has picked up notably since we last reported. I wanted to start off my remarks with commentary on the pivotal transformation program we announced yesterday. It is a culmination of the foundation year that Travis spoke to and defines our multiyear initiative to modernize operations, deliver meaningful cost efficiencies and position the company for future growth as part of our Vision 2030 plan. We briefly hinted at this plan on our last earnings call, and I’m happy to outline the three key components of the transformation program.

First, digital transformation and technology enablement. We plan to leverage Oracle Cloud Infrastructure, or OCI, to modernize our technology platform and applications with modern and advanced tooling, which will allow us to take full advantage of AI and will enable us to deliver our products to market much faster and with significant operating leverage and cost efficiencies. Second, business realignment. We are refreshing our go-to-market strategy and updating our commercial agreements to optimize market positioning. We are also improving pricing and packaging and enhancing deal management. This realignment will also bring a general manager leadership focus across our lines of business. This focus will help our agility in decision-making and provide better discipline with respect to capital allocation priorities as we seek to profitably grow.

Third, business process optimization. We are streamlining internal processes across the enterprise using advanced technologies. We are deploying scaled shared services by leveraging modern enterprise resource planning application and global best practices for automation where appropriate. We will improve operational speed, ensuring disciplined fixed cost leverage to support our long-term growth objectives. Our transformation program has been designed to modernize our operations to deliver a 10% to 15% net reduction in our operating cost base and to accelerate our growth agenda under our Vision 2030 plan. In parallel, growth is a primary focus for us. Our Chief Growth Officer has realigned our sales organization into dedicated growth-focused market segments with the aim to more efficiently and strategically expand current markets and white space within those markets and aggressively pursue new addressable markets with our growth products.

In recent weeks, we’ve achieved several key milestones in support of the transformation program, including a new product launch, a comprehensive debt refinancing, the selection of Oracle to modernize our technology footprint and the rebranding of our company that we recently announced at ViVE in Nashville last week. In summary, our transformation program is not solely about cost reduction. It is a complete effort to position Claritev for sustainable long-term growth. By integrating advanced technologies into our way of work, realigning our business and improving our internal processes, coupled with a renewed focus on strategic pricing, packaging and growth, we are well positioned to drive Vision 2030 forward. As mentioned, we announced the closing of our debt refinancing exchange offerings in January with a 99.75% aggregate participation.

In total, $4.56 billion of the funded indebtedness was exchanged, leaving approximately $11.5 million of old debt outstanding. As we disclosed, this process began in the fall of last year and required a deeper level of communication with the credit holder groups throughout the fourth quarter to negotiate and accomplish. These discussions were a helpful iterative process that allowed us to get direct feedback on the tenants of our Vision 2030 strategy. As the saying goes, it takes a village, and there is no shortage of diligent advisers and internal resources to complete this transaction. We are enthused by the receptiveness of the existing credit holders to our Vision 2030 concept and their faith in our team being able to deliver. This gives us great runway and ample time to realize our vision for Claritev.

As we turn the page to 2025, I wanted to briefly summarize FY ’24 results. As shown on Page 5 of the supplemental deck, FY ’24 revenue was $930.6 million, down 3.2% from FY ’23. Our revenues came in at the low end of our latest guide range for the year. However, excluding the impact of one large client, our revenues would have increased 3.6% as compared to the prior year. Additionally, the Q4 2024 revenue of $232.1 million was in-line with what we communicated on the third quarter earnings call that the fourth quarter would be running similar to third quarter results. Turning to FY ’24 revenues by service line. As shown on Page 6 of the supplemental deck, network-based revenues declined 17.1% from prior year. Analytics-based revenues increased 1.4% from the prior year.

Our payment and revenue integrity revenues decreased 1.6% from the prior year. During 2024, we experienced sequential quarterly growth of identified potential savings. As shown on Page 7 of the supplemental deck, total FY ’24 bill charges increased 5.3% to $177.6 billion for the year, while identified potential savings increased 7.5% to $24.7 billion. In our core commercial health plan segment, bill charges increased 6.9% from 2023 to 2024, while identified potential savings increased 7.3% to $23.2 billion for FY ’24. While our volume results were strong, the conversion of revenue was hampered by volume and mix pressures related to the decline experienced with one of our larger clients in our NSA product. Additionally, the impact of the Change Healthcare outage earlier in the year and the subsequent CMS announcement of a 120-day exception period for independent dispute resolution submissions in mid-June created a headwind for our NSA product in particular.

Historically, the company has relied on these metrics to guide the outlook on top-line performance. I believe that the transformation of our business into a data analytics and technology business, along with the broadening of our products and pipeline, clients and segments and innovative revenue models with which we are going to market and winning warrant a new set of metrics that more clearly models Claritev’s performance. We expect to present these new metrics on our first quarter 2025 earnings call and develop more informative communications that more clearly align to the successes of the company. For example, we believe that a Rule of 70, which would be a combination of adjusted EBITDA margin plus revenue growth percent is an appropriate medium- to long-term target for Claritev given its strong historical and ongoing operating leverage, currently yielding adjusted EBITDA in the low- to mid-60%s.

There will be more to come on these new metrics. Turning to expenses. FY ’24 adjusted EBITDA expenses were $354 million, increasing $10.5 million from the prior year. The increase from FY ’23 was primarily due to the increased personnel costs driven by management and leadership changes between FY ’23 and FY ’24, along with the increase in legal fees and IDR fees, partially offset by lower year-over-year expenses in areas, including facilities and insurance. Adjusted EBITDA was $576.7 million for FY ’24, down 6.7% from $618 million in the prior year. Our Q4 2024 adjusted EBITDA of $141.6 million was below the low end of our implied guidance range by roughly $3.3 million, but equal to Q3 ’24. Adjusted EBITDA margin was 62% in FY ’24, down roughly 230 basis points from 64.3% in the prior year due to volume deleveraging from the noted decline at one of our larger clients, plus the additional costs in FY ’24 mentioned earlier.

Moving on to our outlook. As shown on Page 9 of the supplemental deck, we are initiating our full year 2025 revenue guidance range to be down 2% to flat to 2024. We are forecasting a net revenue retention rate within our core product segments, analytics, network and payment and revenue integrity of roughly 97%. This includes the impact of one large client decrease, which will normalize by Q3, offset by contributions from the record TCV deal Travis mentioned in his opening comments and modest but positive market growth assumptions we have baked into our model. Additionally, we expect to show strong double-digit growth in our growth segments, which include HST and our Data and Decision Science business. This is based on the bookings and related ACV that we are seeing come through, tempered by the partial year effect of such realizations from bookings to revenue in FY ’25.

Finally, given the declining nature and the wind down of one large customer impact and the activation rate of the new gross sales, we would expect to see sequential growth of overall revenues and EBITDA by quarter throughout FY ’25 with an implied exit rate showing low-single-digit growth by the end of the year. Because we believe we have better visibility and control over our spend with the deep dive taken by our FP&A team and the analytical work performed in developing the transformation program, we are providing our adjusted EBITDA guidance as a margin range between 62.5% to 63.5%. We believe that we can manage to this range in lockstep with our revenue outcome during the year. We are confident that continued prudent cost management and the recent launch of the transformation program will help us maintain earnings and margin power throughout the year and going forward.

A final point on capital allocation priority. We continue to believe that the best use of capital is investments back into our core business as we execute against our strategy. As depicted on Slide 10 of the supplemental deck, we give our highest capital priority to organic investments that are aligned with Vision 2030 and our transformation program, followed by leverage reduction with any excess cash generation. That brings me to the end of my prepared comments. I’ll turn the call back over to Travis.

Travis Dalton: Thanks, Doug. As we move into the future as Claritev, we are proud of the heritage of character and integrity built over the last 45 years as MultiPlan, and we will carry that forward. We have operated with clarity, alignment and focus as a company, and our new name starts to embody that. Like the aperture featured in our new logo, our new branding symbolizes our way forward, opening the aperture on affordability, transparency and quality, and facilitating the mutual interest in improving healthcare across payers, providers, employers and patients to deliver optimal health plan performance across the industry. We will build on our deep industry expertise to more thoroughly serve the healthcare ecosystem, and we will invest even more in our clients and their needs. We exist to serve them. Operator, would you kindly open the call for questions for Doug and me? Thanks.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question today comes from Joshua Raskin from Nephron Research. Your line is now open. Please go ahead.

Joshua Raskin: Hi, thanks. Good morning. I wanted to follow up on a couple of comments that you made. I think, Travis, I heard you say you renewed one of your largest clients at the current value or sort of the same value for the next three years. Is that the same economics you’re earning on that specific contract? And then, that 97% core retention, is that a net number that includes some core growth, or is that just sort of a count of clients that you renewed?

Travis Dalton: Yeah. As I said on the call, we’re very happy with that. We were able to get a large renewal done with one of our largest clients inside the quarter — inside the year. We’re also, I would say, much more actively engaged with all of our clients, including the one that’s been declining over time. We actually think that we can add more value for them. And so, we continue to work closely with them. I’ll let Doug comment on the 97% as we go forward.

Doug Garis: Yeah. Hi, Josh, and good morning. Thanks for the question. So, the 97% is a net number. And when you think about our total contract base, we have — with the recent renewal, our top several customers are about half of our revenue. And I would say the weighted average renewal for our top customer base with the renewal is approximately two years. And that’s why — one of the reasons why we feel like a revenue retention metric is much more helpful, but that 97% number is a net number.

Joshua Raskin: Okay. That’s helpful. And then, can you speak to the underlying volume you’re seeing with the commercial health plans, maybe even into 2025? Maybe remind us which areas of claims are most valuable to you or ones where you can create the most savings opportunity? And I’m assuming a strong flu season doesn’t really present a lot of savings opportunities.

Doug Garis: Yeah. So, in our model for 2025, we did model no material mix changes versus 2024, but modest growth assumptions across all areas. And so, the approach we took this year in our commercial health plan was to look at kind of the entire environment and model modest growth against our claims volume. But I don’t think we’ve materially addressed or changed our mix assumptions year-over-year from ’25 to ’24.

Joshua Raskin: Okay. All right. We can follow-up. Thank you.

Operator: Our next question today comes from Daniel Grosslight from Citigroup. Your line is now open. Please proceed.

Daniel Grosslight: Hi. Thanks for taking the question. I was curious if you could provide revenue growth and net revenue retention stats in 2025, excluding the large client attrition? And then, as we think about this turn and going into ’26, do you think you’ll be able to accelerate overall revenue growth back up to kind of a mid-single-digit, even getting up to high-single-digit in ’26, or is it going to take longer to see that growth really come through? Thank you.

Doug Garis: Yeah. Thanks, Daniel. So, on the first point, if you strip out the impact of the one large client, we’re expecting our business to grow roughly mid-single-digits. And that pace of growth is accentuated by some of the ACV or new bookings like recurring revenue businesses we have within our growth areas. We actually expect bookings growth roughly around 20% in our HST and D&DS business and about half of that to convert to revenue. And our comments around the sequential improvement of revenues and EBITDA, we would expect that to roughly continue into 2026. We were very cautious and tempered about providing guidance beyond ’25 with the exception of being very optimistic about our pipeline, especially as some of our new products get to market and we learn more.

But part of the reason why we provided the Rule of 70 is we’re also going to focus on margin and profitable growth as we go forward and we modernize our tech. And so, I think it’s fair to say that the target for us is to get to mid- to high single-digit growth in our long-term outlook in Vision 2030, but the first objective is to get the cash flow of the business pumping to that Rule of 70, so we can use excess cash to pay down debt and to continue to invest in the business.

Daniel Grosslight: Yeah. And as we think about 2026, understanding you’re not providing guidance for ’26, but 2023 was a big year for contract renewals. You mentioned that most renewals are kind of two years, maybe going out to three years. So, that would put ’26 as potentially another big year for renewals. I was just hoping you can provide a little more detail on what we should expect in terms of renewals, pricing in 2026 as we potentially head for another big renewal year.

Doug Garis: Yeah. Maybe I’ll start off and Travis, if you have any comments. So, the recent renewal was a pretty big one for us and extends us three years, which is a big win at equal value. The next two that we have coming up are coming up within, call it, the next 12 to 24 months, where we’ve already started conversations on the early renewal front. We’re actually trying to demonstrate and prove out the value of increasing our relationship. And so, part of the — some of the things that we’re working on are pricing and packaging. And so, most of our large clients buy most of our stuff, and we think that there’s immense value in packaging our products to share more value with our customers for more volume growth. But the next two big contracts are coming due within, I would say, the next 12 to 24 months, but the weighted average renewal is roughly two years on our largest clients, which does give us some confidence and security around the core business and the cash flow generating abilities of our core business while we focus on our growth areas.

Travis Dalton: Yes. And I would just add, this is Travis, we’re engaging earlier, as Doug said, in those renewal conversations. I think in some cases, we’re seeking to look at or potentially change the business model where it makes sense. But even to the extent we don’t, we’re looking for multiyear renewals, which allow for predictability, both for us and for our clients. I’m also pretty excited about — we had a $34 million booking in the end of last year on a five-year term. And so, we now have 12 opportunities behind that, that are, I’d say, subscription-based type of revenue models that will give us a much more predictability in the business, a recurring revenue basis that we can count and plan against. And I think that we can really in that kind of mid-health plan market, use that model in a really valuable way.

And those are longer terms, you can rely on that. You have predictability of your revenue. It’s a basis you can work and plan from in capital allocation against. And so, I see some of the nature of the business changing over time, but we’re confident in our renewal activity.

Daniel Grosslight: Got it. Thank you.

Operator: [Operator Instructions] Our next question comes from Jessica Tassan from Piper Sandler. Your line is now open. Please go ahead.

Jessica Tassan: Hi, guys. Thanks for the question, and congratulations on the rebranding. I wanted to start with just on the top three customer renewal, can you maybe qualitatively describe like what was the value proposition and the key reasons this customer renewed? We know you’ve seen some business loss to internal operations at payers, but not every payer necessarily has the capacity to bring their MultiPlan contract in-house. Just kind of what sealed the deal on the three-year term and the stable economics, if you could help us there?

Travis Dalton: Yeah. I’ll start, and then Doug can jump in if he wants to. Yeah, I think we — it’s a good relationship. It’s a close partnership. I think we continue to drive real savings yield for them and value. I think that we’ve also leaned in, particularly as it relates to NSA. So, we continue to focus on the NSA business, and we’re very supportive of NSA and transparency for the industry. And that’s been an important thing for us. We’ve automated some of our processes internally as well as it relates to that business. So, our backlog is coming down, and we’re operating with more efficiency. But really, that was a testament to the strength of the core business across our analytics network and NSA payment and integrity business. And it’s a continuation of what’s been a great relationship and I think mutually beneficial, and we plan to continue to do that.

Doug Garis: Yeah. Good morning, Jessica. Thanks for the question. I mean I would add, too, as we look at approaching some of our larger and more historic customers in a more strategic lens, we also have new stuff to sell them or stuff that they haven’t bought before. And I think part of the white space for us going forward is including some of our newer products in the discussion. So, we mentioned PlanOptix, risk analytics, payer advisory services that we provide through our data and decision science business. These, we think, are incredible products that will yield immense value for our existing customer base. Part of the emphasis on the rebranding, the relaunch and the investment in our go-to-market is to more deeply penetrate our existing and core markets because they’re pretty substantial in size, right?

Our core markets are an addressable market volume are roughly, call it, $13 billion to $15 billion. And so, there is a lot of white space there left. And so, the conversations we’re having with our large and strategic customers are here’s how we can continue to add value so that you guys can focus on your OpEx, your MedEx and affordability because you have large P&Ls to manage as well.

Jessica Tassan: That’s really helpful. Thank you. Just to clarify, does that mean that you guys are providing a more comprehensive product suite at the same economics? And then, just secondarily, can you remind us how does the core out-of-network claims repricing product interact with the No Surprises Act, both in your experience and over time? As payers converge on TPA schedules, kind of does the savings opportunity for Claritev change? Thanks, again.

Doug Garis: Thanks, Jessica. So maybe I’ll take the first one and then — so, the value economics of doing pricing and packaging are something we haven’t focused on specifically here at Claritev. We actually hired our first pricing leader, and we’re building out our pricing, packaging and deal management function, which we announced in the prepared remarks. But I think the benefit of the complete offering that we have in our core business as well as our growth areas is we service multiple areas of the healthcare continuum and specifically in the provider space as well. I mentioned most of our clients buy most of our stuff. And so, I think there is immense value in, call it, bundling our offering so that as we deepen our relationships with our clients, I’m not looking at the stand-alone selling price of one product by itself.

I’m looking at the complete value of packaging things together. And then, I think the second question was on out-of-network claims and NSA and how those interact.

Travis Dalton: Yeah. Just on NSA, the general comment that I would make is — we’re very focused on that business. We continue to invest in it. As I mentioned, we did quite a bit of internal automation around it this year. And what we’re seeing, generally speaking, I would say, is that we think there’s growth opportunity for us with our existing clients, some of whom we’re taking it on themselves, and we see some of that possibly starting to come our way as volume increases, but we also see state-level opportunities. And we just think that we’re — we’ve got some scale advantage potentially based on the product set that we have. And then, to Doug’s earlier comment, I absolutely see that for us, an advantage to some of that renewal activity or the ability to renew is we have got more dry powder to bring to the table.

As I mentioned earlier, when we start — when I started in March of last year, it feels like it’s been more than a year, we had — we didn’t have a CompleteVue product at that time and PlanOptix was nascent with no clients. We’ve now got eight clients and 47 opportunities in our pipeline amongst those solutions alone and 39 more in BenInsights. Those 39 opportunities are spread across new, but they’re also inside of our large accounts that we’ve served for a long time, and we’re starting to get, I’d say, more focus as it relates to those products and at least more interaction with some of those big clients. So, I expect that to be potential for us over time in addition to the core, which we’ve done for many, many years in the out-of-network and NSA space.

Jessica Tassan: Thank you.

Operator: We have no further questions in the queue at this time. So, that does conclude today’s Q&A session, therefore, concluding today’s call. Thank you all for your participation. You may now disconnect your lines.