Good afternoon. My name is David and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Amwell Q2 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I would now like to hand the call over to Sue Dooley, Head of Investor Relations at Amwell, you may begin.

Hello, everyone, welcome to Amwell’s conference call to discuss our second quarter of 2023. This is Sue Dooley of Amwell Investor Relations. Joining me today are Amwell’s Chairman and CEO, Ido Schoenberg, and Bob Shepardson, our CFO. Earlier today we distributed a press release detailing our announcement. This release is posted on our investors.amwell.com and is also available from normal news sources. This conference call is being webcast live on the IR page of our website where a replay will be archived. Before we begin our prepared remarks, I would like to take this opportunity to remind you that, during the course of this call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to the risks and uncertainties described in our filings with the SEC and actual results or events may differ materially. Except as required by law, we undertake no obligation to update or revise these statements. On this call, we will refer to both GAAP and non-GAAP financial measures. A reconciliation of our GAAP to non-GAAP financial measures is provided in our posted earnings release. With that, I would like to turn the call over to Ido.

Thank you, Sue. Hello, everyone. The second quarter of 2023 was strong for our company. With most of Converge development completed, we progressed in migrating health systems, and payer migrations are in progress. I am happy to announce that we have expanded our list of strategic clients for Converge, further validating our market approach. We are also putting important strategies in place to reaccelerate our bookings momentum. Before discussing market trends, I’d like to highlight some key points from Q2 and then go over our financial results. During Q2, we maintained a steady pace of client migrations, with visits on Converge increasing to 43% of total visits, up from 36% last quarter. We successfully migrated Intermountain Health, which significantly contributed to this metric during Q2. Other successful migrations included Northern Arizona Health and a California health provider. I'm proud of our teams for their effective migrations, and I'm pleased to report that Converge continues to offer excellent availability and value to our clients. A key highlight of Q2 was the successful launch of a significant strategic payer client on Converge. We are proud to support their approach to hybrid care, and this client aims to achieve best-in-class technical success rates for their provider visits. After going live, the client quickly scaled, and their technical success indicators improved significantly. This case is especially valuable as it showcases the advantages of our connective infrastructure platform, separate from traditional urgent care products. Converge has already improved efficiencies by reducing demand on the client's support call center. Additionally, we expect substantial savings with our connected platform, leading to more accurate cost-sharing algorithms, enhanced member experience, and better backend processes for this strategic client. We are honored that this leading payer has selected us as a partner to adopt a range of our capabilities and address important operational needs in the evolution towards effective hybrid care delivery, setting new industry benchmarks. As for go-live events, we had an exciting expansion of our solution aimed at addressing the nursing shortage at Saint Bernard. Virtual nursing is an emerging capability enabled by our solution, representing a significant opportunity for us. With virtual nursing, care teams can monitor multiple rooms, handle alerts, prevent falls, and enhance the overall experience for both patients and care teams. Saint Bernard is currently using virtual nursing rooms throughout the organization and plans to expand to additional facilities, incorporating various features such as virtual rounding and pharmacy consults. Now, I'd like to discuss our bookings activity as we pursue hybrid care opportunities. Q2 was a busy quarter as we ramped up our enterprise solution selling approach, engaging with various payers and providers while expanding our existing client relationships. Our sales team is diligently working to cultivate opportunities with our new platform. For instance, we had a successful collaboration with Wood County Hospital in Ohio, where they plan to post QR codes throughout their facility and the nearby Bowling Green University campus to connect staff, patients, and students to automated behavioral health programs. Additionally, we are extending our behavioral health services partnership with a major hospital system in Oklahoma, which operates 16 hospitals and several healthcare facilities statewide. Finally, we are making strides in growing our footprint in automated virtual care programs, with Penn State and Carilion Health expanding the use of our programs throughout their organizations. In Q2, Penn State included six additional instances of our valuable care programs, showing the positive impact of our relationships with these innovative organizations as we evolve from telehealth providers to vital hybrid care partners. I also want to highlight some successes from our international efforts. Our proven results are fostering partnerships that broaden our reach. We're leveraging our track record across the NHS in the UK to help Ireland's HSE, the National Health Service of Ireland, launch access to our digital behavioral health programs nationwide. We've also formed a new partnership with Discovery Health in South Africa and renewed our commitment with Honeysuckle Health in Australia. The success of our digital behavioral health programs is a significant aspect of these achievements. While our sales focus is primarily in the U.S., we are also laying the groundwork for international expansion with key partners in English-speaking countries while utilizing our established presence in Europe and Israel. These wins enhance our total addressable market and reaffirm the larger opportunity we are addressing. Moving on, I would like to comment on the current environment in relation to our growth. My discussions with healthcare leaders emphasize their priorities. The pressure on budgets is substantial, and improving margins, addressing staffing shortages, finding new revenue sources, and enhancing patient experience and outcomes consistently top their agendas. To navigate these challenges, healthcare leaders are increasingly prioritizing technology and adopting a digital-first approach to hybrid care. This trend is beneficial for us, as demonstrated outcomes support our long-term growth. Conversations surrounding Converge are evolving into more strategic discussions about how we can enhance patient and provider experiences and improve operational efficiencies. We have found that while this deeper engagement can prolong sales cycles and affect the timing of bookings, it ultimately aligns with our platform approach and is positive for our business long-term. As we gain more experience selling Converge and collect proof points and use cases, we expect our sales cycles to shorten and streamline. Transitioning to the Converge platform requires shifting from selling proven solutions to a methodology focused on ROI, which we believe will lead to long-lasting partnerships and high customer value. As we enter the second half of the year, our go-to-market teams are rapidly gaining experience and are committed to mastering this transformation. The shift to ROI-based selling involves training and quickly ramping our marketing initiatives to effectively position our solution and expand our pipeline. These efforts are already in progress. We are also boosting sales initiatives for our high-ROI automated programs in virtual nursing, which are in demand and assist our clients in scaling efficiently amid labor constraints. I'm pleased to welcome Kathy Weiler as the new leader of our growth organization. Her experience in driving significant organizational transformations will help us align around an ROI-based selling approach. Kathy brings valuable insights from her time at United Health Group, Optim, Blue Cross Blue Shield of Massachusetts, and Fidelity. To conclude this discussion, we are taking necessary steps to ensure we have a place at the table. Our transformation in selling is aimed at establishing our solution as a critical asset in any environment. We are successfully engaging with strategic players in healthcare and maintain confidence in our long-term business, supported by our customers' successful migrations and case studies. The industry is increasingly recognizing our solution, and I want to highlight a few noteworthy examples in the digital behavioral health space. In May, Amwell was ranked as a top digital behavioral health company by AVIA. The report highlights our automated programs' ability to alleviate pressure on health teams and to foster accessible care for underserved populations. In June, our automated programs were acknowledged in a study published by the Journal of Diabetes Science and Technology, which showcased our diabetes education chatbot's positive impact on patient self-care confidence and A1c reduction. Our webinar series is also thriving, featuring success stories like that of El Camino Health, which chose Amwell for its on-demand virtual care platform and quickly became our first client migrated to Converge. El Camino has ambitious plans for digital care and exemplifies our land and expand model. During their recent webinar, they reported that 92% of patients felt more confident managing their health after using our respiratory automated chats. Before wrapping up, I want to briefly address the ongoing dialogue surrounding artificial intelligence in healthcare and its implications for Amwell. We believe this conversation is raising awareness and acceptance of hybrid care, serving as a growth driver. AI technologies are advancing rapidly, and Converge is designed to integrate AI seamlessly with both in-person and virtual care. We provide a future-ready platform that connects and empowers healthcare organizations. As the industry adapts to AI, we are well-positioned to accelerate its adoption and value creation through both native and third-party AI applications connected to Converge. An example is a patient engaging with their doctor through our platform who will benefit from AI-driven follow-ups between live visits. At Amwell, we believe AI will enhance our hybrid care platform, augmenting care teams and improving patient and staff experiences and operational efficiency. However, as we move towards hybrid care and integrate automated programs, we must ensure patients and providers trust these tools. Today, we’ve shared examples that demonstrate our commitment to that goal. In summary, hybrid care is quickly establishing itself as the primary pathway forward, yet the journey is complex. Clients hoping to overcome technological fragmentation and abandon a DIY approach are recognizing the value we offer. We are rapidly adapting our selling methodology. With our unique blend of technologies, services, and client experiences, we believe Amwell is ideally suited to be a comprehensive solution provider in the digital care transformation arena. With that, I will turn the call over to Bob to go over our Q2 financial results, key metrics, and our guidance. Bob?

Thank you, Ido, and hello, everyone. Overall, we are encouraged by progress in our business with important customer validation of our new platform, many successful migrations, and strong customer feedback. I do want to take a moment to comment that many of our metrics and results are being impacted to a degree by the churn of customers on our legacy platform that we previously anticipated. With that as context, I'll start with a review of our operating metrics, then turn to financial results for the second quarter, and our revised guidance for the year. We ended the second quarter with 106,000 active providers representing growth of 5% compared to a year ago. This represents a 2% decline from last quarter, as during replatforming efforts, temporary declines can occur. We continue to view active providers as an important indicator of the sustained value our clients see in our platform. And we anticipate that our number of active providers will continue to increase as we migrate existing and implement new clients onto our Converge platform. Total visits were approximately 1.5 million in the second quarter, down 4% over last year. Scheduled visits represented 69% of total visits in line with our experience over the last few years. We believe total visits declined year-over-year due to a combination of factors. First, we saw some impact of declines on the legacy platform. And second, we believe we are returning to a more typical seasonality and visit volume, which was less prominent during the pandemic. We continue to make steady progress successfully migrating our clients to the new platform, and two successful migrations drove visits on Converge for the quarter to 43%, up from 36% in the first quarter of 23. As we look toward the remainder of this year, we intend to complete migrations for the majority of our provider customers, and this should drive visits on Converge to over 50% by year-end. And as Ido said, payer migrations have begun. Given payer visits are tied to the enrollment cycle at year-end, we expect to see payer-related visits transitioned to Converge next year. And now on to our financial results. Total revenue was $62 million for the quarter, down slightly from a year ago and also from last quarter. Subscription revenue was $28 million in the second quarter, slightly down from the first quarter, reflecting churn associated with our legacy platforms. Customer experience on Converge is excellent and we expect this revenue headwind to lessen as we successfully migrate the balance of our customers onto Converge in the quarters to come. Moving to visits, in the second quarter, AMG visit revenue trended 6% lower than last year and was $28 million. AMG visits declined 3% versus the second quarter of ‘22, with average revenue per visit $3 lower at $77, due primarily to a higher urgent care visit mix. Based on our experience so far this year, we believe 2023 visits are looking more in line with historical seasonal patterns than the period between 2020 and 2022. Our services and care points revenue was $6.3 million for the quarter, which represents an increase of $3.6 million from last quarter, driven primarily by professional services revenue we earned as we implemented strategic clients onto Converge. These revenues are lumpy from quarter-to-quarter due to customer buying patterns for care points, as well as the timing of professional services that precede deployments. As we have discussed on prior calls, professional services revenue highlight the strategic long-term nature of our client relationships, and the ROI they see in deploying our platform. They are also a leading indicator of the long-term increase in activity we expect to see on Converge. Turning to profitability, our second quarter gross profit margin declined to 38.8% from 39.5% last quarter, and 43.4% last year. Gross margin was negatively impacted this quarter by lower subscription revenue versus prior periods and higher clinician onboarding costs in advance of new clients reaching run-rate volumes in our Amwell Psychiatric Care business. Turning to operating expenses, R&D expense was flat versus last quarter at $25.8 million and was $32.9 million after adjusting for $7.1 million of capitalized software costs. As we have discussed, we believe that the fourth quarter of 2022 represented our peak R&D spend. Given our progress in delivering Converge, we expect that R&D spend will decline in the second half of this year, ending the year down mid-20s percent compared to Q4’s peak. We also expect the capitalization of software costs to be minimal in the second half of this year. Sales and marketing spend declined 5%, and G&A expense was flat this quarter compared to last quarter. We expect SG&A to decline approximately 10% in the second half versus the first half of 2023, primarily due to lower stock-based compensation expense. Adjusted EBITDA for the quarter was negative $45.3 million, flat to last quarter. Also, we recorded a non-cash goodwill impairment as a result of the decline in our market capitalization. As compared to the carrying value of our equity as of June 30th, 2023, we estimated the fair value of our equity based on our market cap and a related control premium. As a result of this interim quantitative impairment assessment, we recorded a $27 million non-cash goodwill impairment charge. Transitioning to the balance sheet, we ended the quarter with $459 million of cash and marketable securities. We have a substantial cash position which provides the resources to fund this temporary period of investing, as well as flexibility to pursue strategic opportunities that are aligned with our financial and strategic goals. Turning now to our outlook, we are updating our 2023 financial guidance based on some near-term dynamics we are facing relating to our ongoing replatforming. In subscriptions, we are transitioning the structure of our growth organization and expanding our dialogue with partners and clients to fit our new and different opportunity set with Converge. The ramp-up and optimization of this process has had some temporary impact on the timing of new sales and existing client expansion in the first half. And visits: we had some churn and implementation delays in the second quarter that will impact our Amwell Psychiatric Care business in the second half. As we build our APC business beyond our traditional geographies, we find implementation durations that are slightly extended as we hire and work with our clients to acquire the necessary licensing and credentialing for APC clinicians to deliver services in these states. Given these changes, we are revising our guidance for annual revenues to a range of $257 to $263 million. To provide additional color for the second half, we expect subscription revenue will be mid-single digits percent higher than in the first half. For visit revenue, we are tightening our paid visits estimate for the year to a range of 1.575 million to 1.575 million visits, and expect revenue per visit will be approximately the same as it was in 2022. We further expect our adjusted EBITDA for the year to be in the range of negative $165 to negative $160 million. Although we are facing some near-term headwinds associated with replatforming, we remain confident in the elements of our long-term model and our path to cash flow breakeven, bolstered by the following elements: we have clear visibility to steadily normalizing our R&D spend with much of Converge development behind us. Our solution is providing best-in-class reliability and performance and is resonating in the market with our clients. We are applying our learnings in the market rapidly. We believe we are taking the steps to accelerate our deal velocity and drive our overall efficiency, win bookings with existing and new customers and grow our high-margin subscription software revenue. With Converge commercial in the market, our sales transformation well underway, and a more informed view of our longer-term cost structure, we estimate we can reach profitability at a level of circa $400 million, significantly lower than our early 2022 estimate of $500 million. Thank you for listening. With that, I'd like to turn the call back to Ido for some closing remarks. Ido?

Thank you, Bob. With Q2 behind us, we are focused on execution in Q3 and beyond. As we think about the next few quarters, while our growth may be temporarily moderated in the near term, we're taking the right steps to secure long-term success. Looking ahead, we will continue to work to build our market momentum, execute well in our sales transformation, and drive expansions and new customer wins while continuing with successful client migrations. It's still early days for our industry as we evolve towards hybrid care delivery. We are driven every day to enable our clients to evolve their approach to hybrid care as we pursue our mission and achieve the potential of our long-term model. With that, we're ready to conclude our formal remarks. Thank you for listening today. Operator, we're ready to open the line for questions. Thank you.

Thank you. We'll now take our first question from Craig Hettenbach with Morgan Stanley. Your line is open.

Yes, thank you. First question for Bob, on your last comments there about bringing the breakeven revenue down to $400 million, in addition to things that you're going to do on the R&D side that will roll off. Can you just maybe talk about some of the levers that you have to reach that breakeven mark?

Thanks, Craig, happy to. About approaching 50% of visits on Converge at this point. We've got real-world experience versus our early ‘22 assumptions behind the path to profitability framework that we put out at that time. We know more, we have better data and the product is highly successful. The buckets of savings relative to them are really around R&D, as you highlighted, but also product delivery and sales efficiency. We've got a lot of conviction around lower levels of around run rate R&D, and do see potential for absolute declines in SG&A from today's levels. And those efficiencies are really driven by better sales efficiency.

Got it. And then just a follow-up when we think about the replatforming and some of the push out and bookings this year, you talked about kind of a shift in the sales market focus, the new sale here. Any thoughts there in terms of proof points into the back half of this year or early next year what you'll be looking to kind of underpin an acceleration that you eventually expect in bookings?

Sure. There are a couple of key points to mention, Craig. First, we will discuss the importance of migrations a lot today, both in the Q&A and in some prepared remarks. As we successfully transition our existing clients to the Converge platform, several positive outcomes emerge. For one, the challenges from client churn significantly decrease because churn primarily relates to older platforms and clients' historical dissatisfaction with their performance. Clients are eager to avoid delays in their migration. We've made commendable progress with health systems, and as Ido mentioned, health plans are now in the process of migrating as well. By early next year, we should be able to demonstrate some impressive metrics around this, which will not only reduce churn but also expand our market for upselling opportunities. Additionally, it’s crucial for us to continue making strong efforts to migrate the rest of our health system clients and our largest health plan customers. This is arguably the most critical action we can take. Ido can likely contribute more about our go-to-market transformation, which is progressing well. We anticipate that these efforts will positively influence our results in the second half of the year compared to the first half, particularly in generating quicker bookings. Ido, would you like to add anything?

Well, I think you covered it, Bob. I would just suggest that the growth organization transformation is very, very significant. In the past couple of years, we really focused on imagining the best private care enablement platform we could imagine. And then went ahead and focused on disruptive innovation. As we look into now in the next couple of years, it's all about a profitable delivery. And as Bob mentioned, while we have data that allows us to be very confident about reducing and concluding a very large R&D expense, we are now focused on touching other parts of the organization. The growth organization transformation includes a touch of really every part of the org, including new positioning, packaging, pricing and messaging. We did a very big effort in the past few months of upskilling our client-facing teams, we did some great hires, starting from the top, new training for everyone to move from point service solution to an ROI-driven solution sales. The dialogue with our channel partners, the clients has changed dramatically. It's not much broader, more proprietary. And we look to a new level of rigor as we build reproducible, efficient engines to send and extend Converge with a goal to improve service efficiency, deal velocity, and besides we are focusing on profitability, mostly by improving the mix and contribution of all the subscriptions. So, continuing the migration and concluding the growth organization transformation, coupled with the accumulation of very powerful validations and proof points are all going to be the hallmark of what you can expect between now and the end of the year. And we fully see ourselves starting the New Year from a completely different standpoint.

Got it. Thank you.

Hey, thanks for taking the question. This is Matt Shea on for Ryan. Wanted to start off with some of the churn commentary and trying to unpack that a little bit. Are you guys still seeing this churn contained to kind of the lower end of the market with some of your small business clients and or has that bubbled up to any of your larger clients and relative to kind of expectations is churn in line with what you had been expecting? Or has there been any changes that resulted in maybe some lower subscription expectations in the back half of the year?

So, a few data points. Matt, one, all our strategics are with us and we added a couple as you know from our recent announcement. In addition to that, the low-end churn that we saw was exclusive to a legacy. And we may have seen also some mid-level churn, as we approach the last innings of the migration. It's important to know that there is zero churn in Converge, in fact, there is renewed commitment by so many of our customers, existing and new, to Converge. With our announcement this evening, we are looking to cover most of the covered lives; I mean, a big part of the go-live in the United States is committed to Converge. Bob, if you have anything to add.

Yeah, Matt, I would say the churn is coming in and around the levels that we expected in our guidance; there really isn't a meaningful change there. So, it's not a churn-driven re-guide here, as much as just delays around some quicker twitch revenues that we anticipated coming in. And those are pushed out a bit. So, while churn is a word that probably comes through a lot in our prepared remarks, the level of revenue impact from that is in and around the levels that we had anticipated.

Okay, that's helpful. Appreciate that. And then maybe digging in on some of the go-to-market changes, picking up on Craig's question, I was interested to hear you guys mention pricing as something that's part of the changes in the growth organization. So, understanding that existing clients are getting the new Converge platform for free. Curious with your newer clients and some of this new pricing initiative that you have, if you're able to raise the price relative to what the legacy platform was, and whether you're seeing pricing power at that offering, and that clients are understanding that higher price relative to the greater value that Converge is driving? Thanks.

It's a good question, Matt. And so, in essence, Converge is very, very different from our legacy solutions. It's different in its impact and its value, and therefore it deserves a different look as it relates to pricing. In addition to that, Converge is modular. So, when you can do pretty much everything you've done with a legacy platform made with Converge, there are many, many new things you can do with Converge that were not possible before. In the market today, people are very value-focused and oriented. Our new architecture allows us to allow people to buy what they need today but still be future-proof as it relates to enabling growth as their needs evolve over time. The fact that we have some stats or observations that relate to the new platform in terms of customer feedback and other things, which I'm happy to elaborate on, we actually believe that our pricing power has grown significantly. Just to give you a few observations that could be interesting: the system availability is really the highest possible we can ever aspire to; very unusual technical difficulty. The consumer ratings and even more importantly, the provider ratings are at record levels. They're super high also in absolute numbers. The support issues we get are extremely low, much, much lower than our legacy platform; that really reflects the robustness and simplicity of the new platform. And the NPS is skyrocketing; it's much, much higher; it's actually our highest ever. In our opinion, based on what we know, it's much higher than where the competition is. There are lots of green shoots, there are lots of proof points coming from all directions. Converge is a platform that can impact organizations in so many ways. And all that is adding to our perception to existing and new clients, it also relates to your question about pricing power. I will just end by saying that when you see the size of the ecosystem that is already committed to Converge, that too is a very important buying factor and strength source for us. The largest, most sophisticated organizations are choosing Converge. That means that if you are, for example, the provider or innovator, and you want to interact through them or with them, you need to do that in some way using Converge. And that, of course, is strengthening our position.

Thanks for taking my questions. Just want to drill in a little bit more on the new business environment and maybe ask the questions from a different angle. It was about 50% of volumes getting beyond the Converge platform by the end of the year. Migrations were taking place earlier in the year of being completed early in the year for the early adopters. Are you seeing any changes in the lag time between migration to then considering incremental use cases, modules, expansions, et cetera? In that timeline that wouldn't necessarily be related to market dynamics or budget pressures, but more related to their experience with the platform and understanding of its incremental capabilities. Thank you.

Sure. So, it's important to note that the rollout of Converge was unequal and asymmetrical, right? We started with the low end, then we went to providers in the lower end of providers, and so on and so forth. And now we are reaching the point where we are basically covering everyone, including the payers, and that is influencing the same story growth and experience. Having said that, I gave today in my prepared remarks quite a few examples of expansions; we see a lot of those with. We think that things that increase efficiency in this climate are very, very popular things that change the ratio between providers and the number of patients that they can address. So, less humans and more automation, longitudinal program, virtual nursing is very popular in way of examples. Behavioral health seems to be very much in high demand. So, all those things topped the list in terms of expansion opportunities. And we also begin to see changes in sphere size. So, volumes are growing very nicely with the Converge, and will be related to the experience and the fact that it's more easily and deeply integrated with existing workflows. We think all these trends are going to increase quite significantly over the next few quarters as more and larger clients are migrating in much higher scale.

So that's really helpful. Thank you. And then, Ido, is there any pushback on some of the price increases? And what I mean by that is, during the elevated dialogue process, the demonstration of value, is there a pushback on price? Or is it really, there's, as customers are looking at the incremental capabilities and considering them? Is price a secondary factor? And it's really, what kind of value can you demonstrate, and you're sure we'll consider paying a little bit more for it. But we're really curious about the full extent of the platform.

So, we are certainly in a price-conscious environment; people are very careful as it relates to expenditures, and they really want to make sure that they invest in things that have a clear ROI that is not so distant and it’s very, very likely. The modularity of Converge allows us to allow our clients to take measured risk as they choose the components that they believe are most needed, moving away from them, get confident, prove the ROI, and then expand; we couldn't really do that before. We try to price every component of Converge realistically, in a way that is fair and in line with general market reality. Unlike others, we have lots of components to choose from. So, while we are competitive and realistic as it relates to every standalone solution, we are unique in our ability to offer an end-to-end one-stop shop experience for customers that are all integrated into one code base. A lot of our buyers are now CIOs and those who are charged with integration. The fact that you have a singular reproducible experience designed to integrate with a lot of moving pieces is a hallmark and strength that we bring to the table that is saving and creating a lot of efficiency for our customers. And we think that's not really a loss for them. So, on the one hand, we have a very robust, very comprehensive offering for very large strategic customers. On the other hand, we have very focused, dedicated, fairly priced options for people that want to dip their toe into the water and are very risk-averse. And we are getting them to adopt our technology quite quickly and grow from there in a reliable fashion.

Hi, this is Jenny on for Jailendra. Can you speak about more specifically the customer, the new trends you have been seeing from both the health systems side and the healthcare side? As these contracts are coming up for renewal, how are those conversations evolving? Are you seeing some of your customers willing to restructure the contract in some ways, or is it still more or less status quo on the approach?

Thank you, Jenny. We've had several renewals lately, with the most notable one being announced during our last earnings call, which represents a significant vote of confidence. We're proud that they have committed to Converge. There are many other examples, several of which I've mentioned in this call and in previous ones. As I noted earlier, when you upgrade or migrate to Converge during your term, there’s no additional charge. However, if you want more flexibility, there is a cost. When we renew contracts, we're transitioning customers to the new structure, and the pricing is quite comparable when looking at it directly. Nonetheless, there is a substantial opportunity for expansion and the selection of additional components. We now offer significantly more flexibility and options for customers, which was also discussed in the previous call. We believe we are positioned in the market similarly to before, but we can provide increased flexibility and choices for customers, depending on their appetite for risk and their needs.

Hi, thanks for taking my questions. I guess I'd like to ask if I recall correctly. I think historically, non-AMG visit volumes were a component within subscription revenue. Is that still the case post migration onto Converge? And to the extent that it is, with visit volumes moderating, has that been a headwind to subscription revenue growth? Thanks.

That's a very interesting question. Stan, thank you for bringing it up. So, essentially, the general structure where you have a component of fixed non-AMG visit included in your provider subscription is maintained. Also into Converge when you pierce it obviously, you pay more. The innovation pattern, however, has changed dramatically. You are absolutely right to note that post-COVID, obviously, the market has seen a decline in telehealth in general. However, Converge is much broader than telehealth; there is a healthy dose of automation and many other types of interactions. But even more importantly, the pattern of utilization that we saw during COVID and even before was related to telehealth as an alternative to the main pathway of care. So, when you look at the patterns of best times of where the weekends and holidays, the pattern with Converge is entirely under negative degrees reversed. Our best times are weekdays; we see plunges on weekends and holidays, which demonstrates the fact that Converge has become part of the day job, part of the main pathway of care for our provider organization. In fact, when you count interaction, we'd see an overall bigger patch of patients, although it's not always done through traditional video visits. There are many other modalities, asynchronous communication, automated care, and many other examples that can be used with a full hybrid care enablement platform, including physical care enablement as a component of what we offer today. I would suggest in summary, that our role as an enabling of a digital-first experience has become much more meaningful; if it was somewhat of a sideshow before, a convenient alternative to care, it's becoming very quickly the main pathway—the main way that people interact with their healthcare. And of course, it covers the full spectrum, not only urgent care but also anything from prevention all the way to catastrophic care, including chronic illness management, not only video visits, but also asynchronous care, automated care and physical care that are all enabled by our platform, and the overall traffic magnitude is increasing, and we fully expect it to continue to increase over the next few years.

Yes, thanks. And good evening. Hey, I just wanted to ask about the transition timeline. I think in the past, you said that you hope to have all the health systems transitioned over by the end of ’23 and that the payers would mostly convert in ‘24. Is that timeline still the right way to think about it? And should we assume that you won't be able to sunset the legacy platform and realize those gross margin savings until the last person is transitioned? Or last customer rather?

Yes, and no. So to the first part, yes to the first part, and no to the last part. The first part is pretty accurate. I mean, we fully expect the lion's share of our provider customers to be on converge by the end of the year. Of course, there could be some outliers. But as a trend, you're right. We also have a few payers like the one that we announced tonight, with no name. And, of course, there is CVS that has a payer component to it, and they are already live in production. We have some payers already live, but we will have a serious optical payers in the first half, even over the next year. So we fully expect to have the lion's share of our customers, as planned, on converge by the end of ‘24. If we have some laggers, that could happen. But we try to minimize that. The more customers are on converge, it's not binary; we have enormous savings and efficiency gains as we deploy more of our customers. Of course, a day when the last customer stops using converge would be a very happy day and a very efficient day for us. But we are definitely incurring efficiency, velocity, and upside with every client that we convert. Robert, I don't know if you have anything to add.

Yes, Glen, you're correct. Until we either migrate everyone or decide to phase out those platforms, we won't see the cost benefits associated with their removal. However, we can proactively choose to make that decision based on the revenue levels compared to the cost savings we anticipate. I believe the timeline you mentioned is quite accurate, as Ido noted.

Thanks for that. I want to revisit the topic of churn. While it's not unusual, it ties into the idea of retraining the salesforce to view our offerings as an ROI platform rather than just point solutions. Is some of the churn happening because they may not fully understand the value of transitioning to converge? How long do you think it will take to retrain the salesforce before we start seeing improvements, and do you believe this might enhance the retention of our existing clients?

So, hi, Charles. A few comments. First, the churn in legacy happens in every replatforming. I've done three replatformings in my history, and they all do pretty similar. We announced a few years ago that we are going to platform some clients; don't care to wait that long; they are unsure what the result would be. And they don't necessarily like new platforms. These are some reasons; I'm sure there are others as well. So we saw some churn. There is no question that as we deploy converge and we have more proof points, that changes quite significantly. There is no question that as we transition our salesforce, which is very much underway, and we're getting much better at articulating the value, working with a client to realize their own business goals and ROI, and doing it with much shorter cycles and much more efficiently. So I want to be very clear; we are well on our way, we say process, but we are not done; we are getting better all the time. We definitely believe that within a quarter or two, this efficiency will plateau; there will be a diminishing return. So, we are certainly not expecting this to last much longer. But the fact that we have so many clients happy and deployed and in production is enormously valuable for the learning and for the communication that our client-facing team, not only sales, but also cost management and even deployment experts and solution experts are able to communicate.

Got it. That's really helpful. One other question: I want to touch on - I don't think you touched on this yet - was around behavioral health. And obviously, there is great demand for access to be able to help them particularly through virtual; it's not in the sense the way you guys are positioned in the market as a platform. But, it’s just a capability that you would think of as an added service to your health plan customers - sorry, health system customers - or both actually, given the scarcity in some regions of a qualified therapists. How would you think - how are you sort of approaching this opportunity that’s certainly right now in high demand?

That's a very good question, Charles. So essentially, we don't see the world anymore as segregated between providers and payers; essentially, providers and payers are partnering to improve the efficiency and quality of care. Behavioral health does not only influence behavioral health, but of course influences every other aspect of our health, including chronic illness management. For example, when you have very busy hours and you don’t have a psychiatrist, the ability to be in a psychiatrist and release a bed is very, very helpful for delivery systems; there are many other examples. So essentially, and strategically, the big focus of converge is the single codebase that is uniting all the players, most importantly, payers and providers, so they can partner to focus on solving really complicated problems, like longitudinal behavioral health management, in a way that is really allowing a much better distribution between very expensive humans and an envelope of automation. Well, absolutely; we don't talk about SilverCloud anymore; we really talk about converge as one platform. An important component of converges legacy SilverCloud, I guess quite a few examples, even today, as it relates to some really powerful and innovative ways that the legacy SilverCloud component, which is now part of the convergence offering, is behaving. Maybe just one nice one that people may have missed is Wood County. The fact that you have around the campus QR codes, and whenever you have a demand for anything, you just point your phone, and immediately you're connected to a slew of behavioral health solutions, makes access to behavioral health so much more streamlined is so much easier. There are reasons why large governmental organizations are choosing legacy SilverClouds; and the data is very compelling. I mean, the NHS came out with tests that are showing that they're able, with legacy SilverCloud, to change the ratio between behavioral health specialists and consumers six times over. And now we have this capability as part of the convergence offering. So, imagine the patient on a juvenile diabetes poll, but is in need of services; we can really look at the whole person and share those resources very easily in an integrated test.

Thanks for taking the questions. Ido, so to fully use converge and get the ROI, workflows need to change; you're talking about hybrid care; you mentioned single codebase and providing longitudinal behavioral health or longitudinal care. That's a lot different than just the basic telemedicine offerings that were being talked about 24, 36 months ago. Are there more people at these health systems; more stakeholders that you need to convince, as opposed to just putting in the base product that we were talking about three years ago? Is that what is taking a longer time period? Because you need more buy-in across the health system? And I guess, as we think about that, specifically, is there any way to frame what percent, if any, of your customers sort of have that full ROI-based view at this current point in time? Just trying to get a sense of where your customer base is versus where you are? Thanks.

So, Alan, this is almost not a question; this is a very important observation; and you're absolutely right; the market now is night and day different than it was only two or three years ago. The stakeholders are different, because this is a production platform. It's something that is used for everyday service to serve your customers and your ecosystem. So pretty much a lot of the leadership is involved. It is a technology solution, so the technology is very local; the CMIO, the CIO of the organization are always involved in this, but it's something that touches all the C-suite or the organization because it has savings element to it; it has differentiation; it has growth element to it; it has the staff retention element to it; it has a cost-saving and ways of claims and things of that nature connected to it. So we find that our customers are very educated today; we find that their RFP processes are very structured and that touch many people and that does influence the process. It's not necessarily a negative; we think we have a good net to the new ask. And we think that they are mentioning highly differentiated, versus other offers, especially as we deploy converge in very large scale. Having said all that, a lot of the effort I discussed in the transition over growth organization is our effort to greatly simplify this journey for ourselves and for our customers. And to really understand patterns of ROI in business tasks of our customers so we can check the books much more quickly and build a modular approach that fits a recurring cohort with typical segments that are happening again and again. So we can make it much simpler and shorter for customers to hit the ground running with our solution. It's not only technology; it's also best practices and other modalities that really create a white-glove experience for customers that really accelerate their time for ROI, which is the best way to create ambassadorship, endorsement, and deal velocity and momentum in the market for us with this new product.

That concludes today's question-and-answer session. Dr. Schoenberg, I'll turn the call back over to you for any additional or closing remarks.

Well, thank you, everyone, for joining. We have a lot to share. As you can tell, we're very excited about our future. We really appreciate your support and confidence in AMWL and Converge as we went through this enormous transformation, and we look to be very excited about the future ahead. Thank you so much.

This concludes today's conference call. You may now disconnect.