Thank you for joining us for the Omnicell Inc. Fourth Quarter Fiscal 2021 Earnings Call. All lines are muted to reduce background noise. There will be a question-and-answer session after the speakers' remarks. Now, Kathleen Nemeth, Head of Investor Relations, will start the conference.

Good afternoon, and welcome to the Omnicell Fourth Quarter and Full Year 2021 Financial Results Conference Call. On the call with me today are Randall Lipps, Omnicell Chairman, President, CEO and Founder; Scott Seidelmann, Executive Vice President and Chief Commercial Officer; and Peter Kuipers, Executive Vice President and Chief Financial Officer. This call will contain forward-looking statements, including statements related to financial projections or other statements regarding Omnicell's plans, objectives, expectations, targets or outlook that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. For a more detailed description of the risks that impact these forward-looking statements, please refer to the information in our press release issued today in the Omnicell Annual Report on Form 10-K filed with the SEC on February 24, 2021, and in other more recent reports filed with the SEC. Please be aware that you should not place undue reliance on any forward-looking statements made today. Our results were released this afternoon and are posted in the Investor Relations section of our website at Omnicell.com. Additionally, we'd like to remind you that during this call we will discuss some non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are included in our financial results press release. With respect to forward-looking non-GAAP measures, such as guidance and targets, we do not provide a reconciliation for forward-looking non-GAAP measures to the comparable GAAP measures on a forward-looking basis, as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort. I will now turn the call over to Randall.

Good afternoon, and thank you for joining us today. 2021 was another outstanding year for Omnicell as strong customer demand for our differentiated technology-enabled and cloud-based medication management products and enhanced solutions exceeded our expectations across all metrics. We believe our business is resilient and our innovation growth strategy is delivering results. We delivered a record $1.22 billion in bookings for the full year compared to $1.0 billion for 2020. This was a year-over-year increase of 21%, exceeding the top end of our guidance by $47 million. Demand for our advanced services portfolio was exceptionally strong and exceeded our plan for the year. As a reminder, advanced services includes our SaaS, subscription software and tech-enabled services. Our 2021 non-GAAP revenues of $1.13 billion were also a record for the company, increasing $241 million or 27% from 2020. Now we are entering 2022 with a record backlog of $1.25 billion. We increased our total number of long-term Sole-Source partnerships to 151 of the top 300 U.S. Health Systems, an increase of six from 2020. Many of these were competitive conversions. In addition to increasing the number of Sole-Source partnerships, we're seeing an increase in average booking size. In fact, we booked three of the largest deals in our history in 2021. As a trusted partner, we develop solutions that we believe will continue to elevate our critical role in the pharmacy health system. To that end, we're excited to announce that Omnicell is partnering with Long Island University to launch pharmacy simulation centers that prepare the next generation of pharmacy leaders. This immersive experience goes live later this year, and will provide the opportunity for more than 200 pharmacy residents and technicians to become certified in the innovative technologies, systems and workflows that will help them navigate the challenges of medication management and shift their focus to clinical care. These centers will also be used to train and certify Omnicell Pharmacy Technicians, as well as pharmacy students who will go on to support our customers and their technology on site. We're excited to launch this initiative and look forward to providing updates on our progress on future earnings calls. The critical role automation and digitization play in addressing the healthcare labor shortage, ensuring access to care and improving patient outcomes is becoming recognized by our healthcare system partners and retail customers even more strongly today. The pandemic led to increased demand for care, causing heavier workloads for healthcare and pharmacy workers, which in turn resulted in worker burnout and resignations. According to the U.S. Bureau of Labor Statistics, from February 2020 to September 2021, the healthcare sector lost 524,000 workers from an already aging workforce, and with the continued high demand for administering COVID-19 vaccines, tests and treatments, the nationwide acute shortage of pharmacy technicians has adversely impacted both hospitals and retail pharmacies. Moreover, patient volume is projected to rebound and exceed pre-pandemic levels. McKinsey & Company survey of 100 large private sector hospitals, which was conducted several months prior to the emergence of the Omicron variant concluded that on average hospitals' in-patient admissions have returned to 2019 levels and predicted that in-patient admissions would increase by 4% in 2022 relative to 2019. Thus, not surprisingly, a recent American College of Healthcare Executives Survey of 310 community hospital CEOs found that personnel shortages were their top concern in 2021, marking the first time since 2004 that financial challenges were not executives’ primary concern. We believe we are uniquely positioned to assist our customers in addressing these labor challenges by implementing an automated and cloud-based comprehensive medication management and enhanced platform, reducing the manual processes within pharmacy workflows and enabling pharmacists to practice at the top of their license. In 2019, at our investor day at the ASHP Midyear Clinical Meeting, we outlined our plan to fundamentally transform our business toward building the IoT of Medication Management, to support the industry vision of the fully autonomous pharmacy. We believe the results we achieved in 2021 demonstrate that our strategy is working, and while we still are in the early innings of the strategy, we were very pleased with the level of customer interest, which is ahead of our initial expectations as well as the value we find we are already creating for healthcare system partners and retail customers. In our opinion, the broad adoption of these new services and cloud-enabled SaaS solutions validates our decision to take the path toward transforming the pharmacy care delivery model. Now, turning to how we expanded our advanced services portfolio over the past year with three strategic accretive acquisitions: FDS Amplicare, MarkeTouch and Reset. We are pleased with the early momentum and progress we are making in strengthening our market position through value-enhancing M&A. In December we announced our agreement to acquire Reset, which is a leading provider of Specialty Pharmacy Management Services for health systems, clinics and physicians' groups. This acquisition is expected to open a new market for Omnicell and will expand Omnicell’s portfolio of capabilities and advanced services that are designed to address the significant need to improve access to and management of complex medications. In January we announced our acquisition of pharmacy software solutions provider MarkeTouch, which will expand and deepen EnlivenHealth’s footprint across key pharmacy segments. Each of these acquisitions are strong additions to our EnlivenHealth and 340B solution sets. Scott will speak more about how these companies have strengthened our competitive offering in just a moment. Looking ahead, we also intend to continue strengthening our market position through our robust innovation pipeline. From next-generation products to new SaaS and connected device capabilities, we are very proud of the advancements we have made. We expect to launch new next-generation IV Robotics in the coming months and are very excited about the years ahead. As I noted earlier, 2021 was an outstanding year and yet despite the records we have set across a number of financial metrics, we are not immune to the inflationary headwinds and supply chain constraints that others are also seeing. As we indicated last quarter, we have been taking and will continue to take steps in an effort to address and offset these challenges. Despite current headwinds, we are entering 2022 with significant momentum and expect to deliver profitable growth and value creation in the year ahead. 2022 marks the 30th Anniversary since our founding. It is a milestone we will be celebrating throughout the year. Over the last 30 years we have successfully navigated through many difficult economic cycles and believe we will do the same in this current cycle. Our focus on creating long-term, enduring value for all of our stakeholders and transforming the pharmacy care delivery model continues to inspire and guide us. We are confident in the opportunities ahead of us and look forward to updating you on our progress. Now, before I turn the call over to Scott, I would like to say how pleased we are that Omnicell’s environmental, social and governance efforts have been recognized by Sustainalytics, one of the largest providers of ESG Research Ratings and Analytics. In their most recent report, Omnicell ranked higher than 89% of other companies in the healthcare industry for ESG Risk Management, which acknowledges our company’s tremendous efforts and improvements in this area. Sustainalytics also rated Omnicell number one, for lowest risk among our peers. We remain focused on innovating to drive sustainability across our business, ethically and responsibly sourcing materials by adhering to internationally recognized OECD guidance and elevating our diversity and inclusion initiatives. Now with that, I'd like to turn the call over to Scott to discuss the industry landscape and key customer engagements.

Thank you, Randall. As Randall stated, our results demonstrate that our strategy is working. Our shift in 2018 toward tech-enabled services and cloud-based services, which we shared with you in 2019, is gaining traction and delivering initial results. We made this shift back in 2018 because we recognized the significant need and large opportunity to transform the Pharmacy Care Delivery model and we recognize the unique position that Omnicell had because of its high-quality brand, significant customer base, and the large channel to successfully execute a land and expand strategy. In 2018, the primary reason that the pharmacy care delivery model struggled with quality and cost problems was that its labor force was overwhelmed, overworked, and under-supported. COVID significantly exacerbated this people problem and in 2022, we feel better about our market opportunity than we did three years ago. We find the need to automate and digitize manual processes within pharmacy workflows is now even more pronounced. We offer our customers an intelligent medication management infrastructure that equips and empowers pharmacists and caregivers to focus on clinical care rather than administrative tasks. This infrastructure is a comprehensive cloud-based platform that combines automation, analytics, and expert services. Our intelligent infrastructure provides the foundations for realizing the industry's vision of the autonomous pharmacy, a vision defined by pharmacy leaders as providing operational efficiencies and ultimately targeting zero-error medication management. Ultimately our intelligent infrastructure will enable pharmacists and caregivers to improve patient outcomes, reduce costs, and reduce provider burnout. Now, I would like to comment on some of the recent customer wins. Our Intelligent Infrastructure Platform clearly resonates with customers. For example, we are excited to announce today that we signed a long-term Sole-Source contract with UMC Health System in Lubbock, Texas. Omnicell was selected to support key pharmacy initiatives across acute care, outpatient, and retail care settings. This is a competitive conversion and the partnership includes Central Pharmacy Services, Point of Care Solutions, our Omnicell 340B service, and EnlivenHealth patient engagement solutions. We think this is an excellent example of several key elements of our strategy and demonstrates where we are winning in the market. One, our comprehensive platform approach and long-term vision significantly differentiate Omnicell. Two, our EnlivenHealth solution will appeal to health systems as they focus on ambulatory and retail opportunities, thereby adding further differentiation; and three, our channel can successfully deliver acquired solutions such as Omnicell 340B. Similar to UMC, I am also pleased to announce that University Health in San Antonio, Texas has selected Omnicell One along with Omnicell Central Pharmacy and Point of Care solutions to support their pharmacy care model. Our platform is aligned with University Health's goals and long-term vision for growth. Additionally, EnlivenHealth in Anderson, South Carolina selected Omnicell's Central Pharmacy Dispensing Service and IV Compounding Service as a comprehensive platform that can support their goals of supply chain control, improved efficiency, and enhanced patient safety. Lastly, an Ohio-based health system partnered with Omnicell to help them address staffing constraints while enhancing visibility and communication across the system. Again, this health system chose Omnicell One, Central Pharmacy Dispensing Service, and IV Compounding Service to help them achieve their goals of managing near-term staffing challenges and supporting future growth. Based on the strength of advanced services bookings and robust customer demand in 2022, we are continuing to invest in our innovation pipeline, cloud platform, and customer experience. Now, I will comment a bit more on the acquisitions we made in 2021. FDS Amplicare, Reset, and MarkeTouch are great examples of where we think retail pharmacies and health systems are going and why we're so energized by the opportunity ahead. In 2020, specialty drugs totaled $269 billion and accounted for 51% of all drug sales. Furthermore, health systems with specialty pharmacies are generating significant patient outcomes and profits for the health systems and are thus a strategic priority for the C-suite. However, managing a specialty pharmacy requires a different skillset, and increasingly, hospitals are outsourcing their specialty pharmacy operations to managed service organizations like Reset. Specialty pharmacy is a key part of the medication management process, and Omnicell can significantly scale the Reset solution through our channel and ultimately create new value for customers through integration with other parts of our intelligent infrastructure. It is another way we are expanding our footprint within our existing customer base. As Randall mentioned, we also strengthened our EnlivenHealth solution with the acquisitions of FDS Amplicare and MarkeTouch. The addition of FDS Amplicare’s differentiated financial management analytics and population health solution, along with its nationwide network of more than 15,000 independent retail pharmacies, expands EnlivenHealth's product functionality and its market footprint. The addition of MarkeTouch Media not only expands EnlivenHealth's customer base but also adds critical mobile capabilities to the solution. With these acquisitions, Enliven adds critical functionality to its platform and expands its customer base. We believe COVID and the current labor market have accelerated the need for a new intelligent medication management infrastructure. Omnicell is uniquely positioned to deliver this intelligent infrastructure and ultimately enable our customers to transform a significant part of the healthcare system. We are early in this journey and we are excited by our progress to date. With that, I'll turn the call over to Peter.

Thank you, Scott. I’m pleased with the strong results for the fourth quarter and full year 2021. Our Healthcare System and Retail Pharmacy customers continue to partner with Omnicell to realize the industry vision of the fully Autonomous Pharmacy, and the overall demand metrics for Omnicell remained strong. I'm especially proud of the solid execution that our over 3,000 Omnicell team members continue to consistently deliver. During the quarter, we welcomed 429 employees to the Omnicell family, 93 of whom were with the Reset and MarkeTouch acquisitions. Throughout the pandemic, Omnicell employees have demonstrated their unwavering commitment to ensuring our frontline healthcare heroes received the critical medication automation management systems and expertise they need to deliver the best patient care possible. Before I dive into the specifics of our financial results, I would like to highlight that despite the challenges from the pandemic, 2021 was a record year for bookings, backlog, revenue, non-GAAP EBITDA, non-GAAP EPS, and free cash flow generation. Record product bookings for the full year 2021 were $1.270 billion compared to $1.002 billion for the full year 2020, and were $67 million above the mid-point of our full-year guidance range, an increase of 21% over the prior year. Total product backlog at the end of 2021 was $1.254 billion, compared to $924 million at the end of 2020, a significant increase of 36% year-over-year. Of the $1.264 billion in ending product backlog, $439 million or 35% is considered long-term. This percentage is up from 33% at the end of 2020. The year-over-year percentage increase primarily reflects the growth in Advanced Services. We believe the strong 2021 product bookings are an indication that our healthcare system and retail pharmacy customers continue to turn to Omnicell to realize the industry vision of the Autonomous Pharmacy. We saw specific strength in Advanced Services, as well as the strength in our key partnerships, including long-term Sole-Source agreements with 151 of the top 300 U.S. Health Systems. Out of these 151, 50% has now booked at least one contract. We have partnered with the majority of the 151 Sole-Source partners to create multi-year investment plans for medication management automation. These plans provide significant visibility into future bookings. We are continuing to see strong momentum with Advanced Services and engaging with our Health System and Retail Pharmacy Customers. For the larger deals, we find that Advanced Services are a clear differentiator and one of the main reasons these partners do business with Omnicell. Turning to our financials; our fourth quarter of 2021 revenues in accordance with GAAP were $311 million, an increase of $50 million over the prior quarter. Our fourth quarter 2021 non-GAAP revenues were $312 million, up 25% over the fourth quarter 2020 and approaching the south end of our guidance range. The strong year-over-year non-GAAP revenue increase reflects continued strong demand for Omnicell medication management, adherence automation solutions, as well as the contribution of revenues from the FDS Amplicare acquisition in the third quarter 2021. A full reconciliation of our GAAP to Non-GAAP results is included in the fourth quarter earnings press release and is posted on our website. We delivered record GAAP and non-GAAP revenues for 2021, reflecting strong customer demand and strong commercial execution. Our full year 2021 GAAP revenues were $1.132 billion. Our non-GAAP 2021 revenues were $1.133 billion, an increase of $241 million or 27% from 2020. As a reminder, the year-over-year growth was partially as we returned to the low end of fiscal GAAP and non-GAAP revenue levels of 2020 due to the COVID-19 pandemic. Non-GAAP gross margin for the fourth quarter of 2021 was 49.8%, a decrease of 130 basis points from the previous quarter, primarily due to the mix of customers in the quarter as well as modestly higher inflationary costs. Included in the fourth quarter gross margin is the impact of approximately $5 million of inflationary costs compared to a cost base of semiconductors, other materials, and freight for 2020. Excluding approximately $5 million in inflation costs, the gross margin percentage was the same 160 basis points higher. Our fourth quarter 2021 earnings per share in accordance with GAAP was $0.28 per share compared to $0.61 per share in the previous quarter and $0.37 per share in the fourth quarter of 2020. Fourth quarter 2021 non-GAAP earnings per share was $0.92 per share, compared to $1.08 per share in the previous quarter and $0.91 per share in the same period last year. Fourth quarter non-GAAP earnings per share were near the mid-point of fourth quarter guidance, inclusive of our favorable tax benefit and stock compensation of $0.10 per share, offset by the impact of incremental expenses related to compensation from significantly stronger product bookings and enabled expenses and certain key investments. Our full year 2021 earnings per share in accordance with GAAP were $1.62 per share. Our full year 2021 non-GAAP earnings per share were $3.81 per share, an increase of $1.27 per share or 50% from 2020. The year-over-year increase was mostly driven by higher revenue volume and gross margin expansion, partially offset by the impact of inflationary costs in 2021, as well as the impact of higher share counts. We delivered non-GAAP EBITDA of $52 million in the fourth quarter of 2021, resulting in a record full year non-GAAP EBITDA of $230 million. In comparison with the guidance, fourth quarter and full year non-GAAP EBITDA includes the impact of additional drive in the compensation from significantly stronger product bookings, M&A related expenses, and certain key investments. Full year fiscal '21 non-GAAP EBITDA margin was 20.3%, an increase of 240 basis points from the previous year. Moving to cash flow. Full year 2021 free cash flow of $173 million was a record and reflects the overall increased demand in the business, strong cash collections, and working capital management. At the end of the fourth quarter of 2021, our cash balance was $349 million, down from $482 million as of September 30, 2021; a $133 million decrease in cash is the result of financing activities related to our recently completed acquisitions of Reset and MarkeTouch partially offset by operating cash flow in the quarter. Free cash flow during the fourth quarter of 2021 was $42 million compared to $27 million from the previous quarter and $65 million in the fourth quarter of 2020. In terms of accounts receivables, day sales outstanding for the fourth quarter '21 was 70 days, excluding the impact of Reset and MarkeTouch acquisitions which were completed in the last few days of '21 and therefore do not contribute significant revenue in the quarter. The day sales outstanding in the fourth quarter of 2021 reflects a decrease of three days over the last quarter and a decrease of one day for the fourth quarter in 2020. Inventories as of December 31, 2021, were $120 million, an increase of $60 million from the prior quarter and an increase of $22 million for the fourth quarter of 2020. It's important to note that the inventories as of December 31, 2021, include approximately $10 million of advanced purchases and receipt of semiconductors that we believe will help reasonably secure supply for future customer implementation timelines. We continue to execute very well on our global supply chain process improvements and inventory management. Now moving on to our full year 2022 guidance. All guidance includes our recently announced acquisitions, including FDS Amplicare, Reset, and MarkeTouch. As we look to the rest of the year, we continue to expect strong revenue growth in customer demand and a record backlog. Our record 2021 product bookings reflect strong market demand, including momentum in Advance Services. We continue to have high confidence that we have secured supply for semiconductors and critical components through 2021 in order to deliver our mission-critical systems and connected devices to help our customers. Our global supply chain and procurement teams have done a great job addressing these challenges and minimizing the disruptions to our customers. We expect 2022 product bookings to be between $1.370 billion and $1.430 billion. We expect total GAAP and non-GAAP revenues to be between $1.385 billion and $1.410 billion. We expect GAAP and non-GAAP product revenue to range between $950 million and $965 million. We expect GAAP and non-GAAP service revenues to be between $435 million and $445 million. At the mid-point, this reflects an increase in total non-GAAP revenue of $265 million or 23% over the prior year. We expected service revenue as a percentage of total revenues to increase from 10% for 2021 to approximately 15% in 2022. We expect total year 2022 non-GAAP EBITDA to be between $243 million and $265 million. This non-GAAP EBITDA guidance reflects; one, the expected impact of inflation and secondly, integration costs for recent acquisitions. As we noted for the last two quarters, we are experiencing the impact of inflationary headwinds. This continues to be primarily due to semiconductor and other component costs, and to a lesser extent freight and steel and other raw material costs. The total year non-GAAP EBITDA guidance includes the impact of approximately $30 million to $35 million of cost inflation in 2022 as compared to a cost base for semiconductors, other materials and freight in 2020. The 2022 non-GAAP EBITDA guidance also includes $8 million of integration costs with the FDS Amplicare, Reset, and MarkeTouch acquisitions. As we have noted, we have had a particularly active year in terms of M&A. As expected, there are integration expenses associated with this activity. Generally the majority of integration expenses are incurred in the first year after acquisition. We have a strong balance sheet which we believe positions us well for future growth and we look forward to continuing our plan to execute on our full year enhancing, disciplined M&A strategy. Well, I’ll provide some color on the gross margin outlook for 2022. We are working through product backlog and pipeline prior to pricing options. As a result, we expect that the pricing options we have put in place will begin to have a greater impact near the end of '22 and as we move into 2023. Included in our non-GAAP EBITDA guidance is the favorable impact of these pricing actions. We expect gross margins to modestly expand in the second half of 2022 compared to the first half of 2022. We expect 2022 non-GAAP earnings to be between $3.75 and $3.95 per share. This takes into account the higher expected blended tax rate in 2022 and the expected share count increase from employee stock plans. For full year '22, we are assuming the effective blended tax rate of approximately 6% in our non-GAAP EPS guidance compared to 4% in 2021 actuals. For the first quarter of 2022, we are providing the following guidance: We expect total first quarter 2022 GAAP and non-GAAP revenues to be between $312 million and $318 million. The GAAP and non-GAAP product revenues between $216 million and $219 million, and GAAP and non-GAAP service revenue between $96 million and $99 million. We expect first quarter 2022 non-GAAP EBITDA to be between $45 million and $49 million and we expect first quarter non-GAAP earnings per share to be between $0.65 per share and $0.72 per share. In 2021, we made the decision to secure what we believed is an adequate supply of semiconductors and other key components through direct buys and pre-buys from brokers and OEMs to support our customers. We are confident in our supply of our semiconductors and other key components through 2022 to support our health system customers that are critical to healthcare. We are anticipating supply challenges and inflationary cost impacts to continue throughout 2022. As I noted earlier, the majority of our current backlog and product line reflect pre-inflation pricing. As a result, we expect that the pricing actions we have implemented will begin to have a greater impact near the end of 2022 and as we move into 2023. We believe that we have built a company that can adapt and scale quite well and believe it’s well positioned to deliver on the 2025 total revenue growth targets driven by a number of factors, including growing Advanced Services revenue, benefits from long-term Sole-Source customer partnerships, including multi-year co-development plans and increased average deal size. We continue to have line of sight and are committed to our 2025 profitability targets; however, it's important to note that we issued these targets prior to the current inflationary environment. We continue to execute pricing actions, manufacturing savings, and cost efficiencies. As we continue to scale the business in the coming years, we expect to invest and redeploy some of these savings considerably toward creating growth and innovation initiatives. In summary, we are very pleased with our commercial, operational, and financial results for 2021 and of course visibility in earnings of the business. We continue to take steps to address inflationary headwinds and supply chain disruptions in the market and we remain confident in our long-term outlook. We look forward to updating you on our progress in the coming quarters. With that, we would like to open the call for your questions.

Your first question comes from Jessica Tassan with Piper Sandler. Your line is open.