Sharecare, Inc. (NASDAQ:SHCR) Q4 2022 Earnings Call Transcript

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Justin mentioned one payer, there’s others and so we think that we are on a good path.

Richard Close: Okay. And then my final question, I will turn it over. I apologize for asking too many. But on CareLinx, I just want to better understand the 1.8 million new members that, I guess, you can target with CareLinx. How does that compare? I think when you bought it in 2021, August of 2021, you said you had about 1 million MA lives in the pool, I am not sure

Jeff Arnold: Yeah.

Richard Close: in terms of apples or oranges

Jeff Arnold: Yeah.

Richard Close: if you could just talk to us a little bit about and then did you generate the $35 million from CareLinx that you expected at the time of the acquisition for 2022?

Jeff Arnold: Yeah. We have seen explosive growth since we have owned this. I think, it was 80,000

Justin Ferrero: Yeah. It was

Jeff Arnold: 80,000 when we bought it.

Justin Ferrero: Just probably 300,000.

Jeff Arnold: Yeah. 300,000 MA lives when we bought it. It was 1.8 million ending last year. It will be more for this year.

Justin Ferrero: It will be around $2 million, $3 million.

Jeff Arnold: And yeah, we exceeded that $35 million number.

Richard Close: Okay. So essentially you went from 300,000 MA lives to 1.8 million at the end of 2022. That’s the number?

Jeff Arnold: Yeah. That’s kind of it and it will be over $2 million this year.

Richard Close: Okay. All right. I will jump back in the queue. Thanks.

Jeff Arnold: Thanks.

Operator: The next question is from Craig Hettenbach of Morgan Stanley. Please go ahead.

Craig Hettenbach: Yes. Thanks. Following up on the lower PMPM at Carillon, can you just talk about does this shape your view of the broader opportunity set? Do you think it’s specific to them or just how you are thinking

Jeff Arnold: Yeah.

Craig Hettenbach: bigger picture on the enterprise side and opportunity?

Jeff Arnold: Yeah. So what we believe is special about Sharecare+, it’s a digital-first offering. And what we mean by that is, it’s self-service. So anything that I could do with an advocate, I should be able to do directly within the platform myself and that’s not — doesn’t cost us much, obviously, to execute that type of experience. And so there’s certain clients that will gravitate to that for certain reasons, maybe they have got the right demographic of the population or maybe there’s cost constraints. We have an example within the Carillon partnership where there was some cost constraints and there was the desire to get to digital first. And so that particular client, we are moving down the path of the more digital offering with the less high-touch services, which is going to reduce that particular client’s PMPM, but it’s also going to make a higher margin.

We also have a big mix of clients that have the combination of both and so you get the advocate with the care console and you get the digital-first approach and we are taking both of those approaches to market. And so sometimes the digital-first works really well, as I said, for people that might not have substantial budgets for these types of things. We like it because it’s higher margin and it’s easy to turn on. I mean I think I have shown it to you in the past, clearly, it’s like turning WiFi on, the little blue button shows up and all the data there. And so I don’t see — I see it as an advantage in that we, as a go-to-market that we have got both offerings and depending on the client, we tailor the offering to fit the need.

Craig Hettenbach: Got it. And then as a follow-up, Justin, you mentioned just some infrastructure support for enterprise. Can you maybe touch on it, on like an intermediate to longer term basis where you think ultimately gross margin will shake out and what the implications are for that?

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