Castlight Health, Inc (NYSE:CSLT)
Q2 2014 Earnings Conference Call
July 29, 2014 17:00 ET
Nita Sommers - VP, Business Development
Giovanni Colella - CEO & Co-Founder
John Doyle - CFO
Robert Jones - Goldman Sachs
Jennifer Lowe - Morgan Stanley
Richard Davis - Canaccord
Terry Tillman - Raymond James
Welcome to the Castlight Health’s second quarter 2014 earnings conference call. (Operator Instructions). I would now like to turn the conference over to your host Nita Sommers, Castlight’s Vice President, Corporate and Business Development. Thank you Ms. Sommers, you may begin.
Good afternoon and welcome to Castlight’s second quarter 2014 conference call for the period ended June 30, 2014. With me on today’s call are Giovanni Colella, our Co-Founder and CEO and John Doyle, our CFO. Following the prepared remarks we will take questions. Our press release was issued after close of market today and is posted on our website where this call is being simultaneously webcast.
During the course of this call we will make forward-looking statements regarding our trends, strategies and anticipated performance of our business including our guidance for the third quarter and full year 2014. These statements reflect management’s current views and expectations and are subject to risk various risks, uncertainties and assumptions.
Please refer to the press release and the risk factors included in the company’s filings with the Securities and Exchange Commission for discussion of important factors that may cause actual events or results to differ materially from those contained in our forward-looking statements. Forward-looking statements made during the call are being made as of today.
If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. We disclaim any obligation to update or revise any forward-looking statements.
We will provide guidance on today’s call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. On the call we will also discuss certain non-GAAP metrics that we believe aid in understanding of our financial results.
A reconciliation to comparable GAAP metrics on a historical basis can be found in today’s earnings release which is available on our website and as an exhibit to the Form 8K filed with the SEC just before the call.
With that let me turn this call over Gio.
Thank you Nita. I like to thank you all for joining us this afternoon to hear our quarterly results. We’re a great second quarter Castlight, overall results exceeded our expectations across many dimensions. We saw strong execution in sales and customer implementations against the backdrop of continued strong demand as we ended the quarter with a 130 customers including 35 Fortune 500 businesses.
Our focus today on four key areas that we track very closely. Growth eco-system relationships, customer success and innovation. We believe that progress in each of these areas is key to enabling our customers to gain control over the healthcare spending through Castlight Enterprise healthcare cloud offering. Let’s start with growth. Market enthusiasm to have our enterprise, healthcare cloud offering continues to build and our team continues to execute. We ended the second quarter with a total of a 130 signed customers compared with a 114 at the end of first quarter. We expanded our share of the top end of the market by adding six Fortune 500 employers including Google, Sprint, Texas Instruments and the Kellogg Company increasing in a single quarter of Fortune 500 customer account of more than 20%.
Additionally we continue to see a healthy mix of industries and geographies in our Q2 sales. For example in the second quarter our sales ranged from large technology companies like those already mentioned to public sector clients including a large state university system and local governmental entities.
Importantly our go forward pipeline is both strong and highly diverse as we head into the second half of the year. In addition to greater progress acquiring new customers during the second quarter we were also very pleased this quarter with our execution on implementation. We launched 30 new customers including the California public employees retirement system also known as CalPERS.
We also implemented Castlight Pharmacy and Castlight Rewards for 12 existing customers. You will recall that our first quarter was a record quarter for Castlight with 29 new customer implementations completed. These successes enabled us to grow revenue in the second quarter to $10.5 million which represents a 353% growth over the same quarter last year.
Our execution on customer implementations in the first half of this year is one of the factors driving the solid increase in our four year revenue guidance that John will share in a momentum. Top line growth and expansion of our customer base is critical priority for us given the size of our market opportunity and our clear early leadership position.
The second key area of our business that I wanted to review is one of our biggest advantages in the market which is Castlight’s unique position in the healthcare eco-system [ph]. Our mission is to dramatically improve U.S. healthcare by unleashing the power of market forces and to do it we need to work in concert with the entire eco-system of employers, employees, health plans, pharmacy benefit managers or PBMs, consultants, providers and other service providers. As a result we’re very focused on building a broad set of relationships across these major constituents.
As part of this effort we held our inaugural Castlight enterprise health care cloud summit in June in New York City. This event was a momentous one more Castlight. At the summit we convened more than a 150 influential leaders from across the healthcare eco-system including more than 75 large employers around half of which were Fortune 500 firms such as American Express, Caterpillar, Citi, Dow, Land O'lakes, Macy's, Merck and Omnicom.
In addition to leading companies, the summit also included leaders of health plan such as Sigma, Wellpoint and Benefits Consultants such as (indiscernible) and Aon Hewitt as well as thought leaders like President Clinton and Steve Forbes among many others. The event was a huge success for Castlight and not only in terms of catalyzing sales but also more broadly in terms of a deep dialogue in connection that occurred there.
We’re grateful to everyone who participated in the Summit. While each of us participates in the healthcare system in different ways there were strong alignment among us and our commitments to changing the way healthcare has managed in the U.S.
The caliber of the participants and the ensuing uptick in the number of meaningful discussions we’re having with enterprises reinforce this Castlight leadership position as a catalyst for a positive change and as a partner for old players in the healthcare eco-system.
The Summit was also an ideal opportunity for us to announce key updates about our growing data and partner eco-system. Specifically our Castlight data interchange now has more than 30 connections with leading organizations including 4 of the 5 national health plans, more than 20 regional health plans and all of the leading pharmacy benefit managers or PBMs.
Castlight breadth and depth of connectivity with these payers allows us to deliver differentiated value to our employee or customers through Castlight Enterprise Healthcare Cloud. Another powerful way that we’re working with partners to deliver value to enterprises through our Castlight Connect Solution Center.
By linking fragmented healthcare technology solutions into a single healthcare management platform Castlight Connect enables our customers to improve employee engagement with other key employee benefits and programs that they offer.
For example, to-date we have integrated over 30 programs in Castlight Connect across areas such as dental health [ph], expert opinion services, HSA providers, onsite clinic providers and wellness offerings. We expect our Connect partner eco-system to continue to grow to include more partners and new technologies as our customers seek innovative ways to control cost and improve outcomes. The third area, I want to talk about today is customer success. Our customers have many different objectives when they adopt the Castlight platform including better health outcomes, cost savings and improved utilization of available benefits. As a result the derived value from working with Castlight in multiple ways including high engagement, high satisfaction, and measurable ROI.
One way we think about ROI is whether we’re demonstrating savings from real behavior change. During the second quarter our analysis showed that 87% of our customers that have been live on Castlight for at least nine months before March 31, 2014 have achieved statistically significant behavior change and savings on key services including lab test, advanced imaging and/or office visits.
We also recently completed our analysis demonstrating the Castlight usage are more than twice as likely to utilize telehealth services than members who do not use Castlight. These proved points communicated during our business reviews with our clients are important to show enterprises how we’re delivering ROI to them, their employees and employees’ families and they strengthen our customer retention and relationship growth opportunities.
This is where a lot of our product development effort is focused, which brings me to the fourth and final area I want to cover today which is innovation. This quarter we announced the newest expansion in our Castlight Care Solution Center. Castlight Dental which is expected to be available later this year.
Castlight Dental is a shopping experience to manage costs and find the best dental care. It integrates seamlessly with Castlight medical and Castlight pharmacy for unified employee experience regardless of plan administrator. Remember, many corporations use different providers for medical, pharmacy, and dental. This adds complexity for employees seeking care.
Castlight brings that experience together by providing a unified platform for the employee and employer to manage healthcare benefits. As I mentioned earlier in the second quarter we had great success delivering up sales into our current customer base with 12 launches of Castlight Pharmacy and Castlight Rewards. We remain committed to being the innovation partner of choice for our customers bringing to market new and valuable products at a rapid pace.
In addition to these business highlights I wanted to also share our management change. Today we announced that Randy Womack, Chief Operating Officer has informed the company of his intention to step down after serving in the position for nearly four years. Randy will remain with the company through September 30, 2014 to ensure seamless transition of his responsibility to other members of Castlight’s management team.
Randy has made enormous contribution to the success of our business across many dimensions, he recruited excellence leaders for these groups over the last 18 month which has positioned us well to building our success to-date. Randy has decided to leave the company with the success of his third IPO to pursue it's passion for start-ups. I’m deeply grateful to Randy for his exceptional effort and our close partnership during his time at Castlight.
To wrap up we continue to believe we’re in the middle of a momentous time in healthcare. We feel privileged that Castlight is playing a key part in this evolution and continues to deliver strong results for our customers, employees and shareholders.
With this let me turn things over to John to comment on our Q2 financial performance in more detail.
Thanks Gio. Good afternoon everyone. We had a strong second quarter that exceeded our expectations. Our sales team did a terrific job and the strong execution of our team overall has enabled us to increase our revenue guidance for the full year. As a remainder please note that all of the financial results I will talk about today with the exception of revenue or non-GAAP which exclude stock based compensation and warrant expenses. Total revenue was $10.5 million in the second quarter which was up 353% year-over-year.
As a reminder we began recognizing revenue from an individual customer agreement when Castlight has been launched for that customer. This means that the growth in total revenue during any quarter is typically a function of recognizing a full quarter of revenue from customers launched during the previous quarter and recognizing a partial quarter of revenue from new launches in the current quarter less any lost revenue due to churn.
Accordingly during the second quarter of 2014 our revenue growth was primarily driven by incremental revenue from the record 29 customers we launched in Q1 and 13 new customer launches in Q2. In addition to the strong revenue performance we were also very pleased with our momentum in acquiring new customers.
As Gio said, we ended Q2 with 130 customers and the sales pipeline that puts us in a great position to achieve our objectives for the year.
As a reminder we plan to update total backlog and net dollar retention metrics for investors annually after each year-end. On a quarterly basis we will keep you informed about our progress by updating you on our customer account, trends and deal sizes and pricing and our performance against our goal of annual net dollar retention of 100%. Of course our updated revenue guidance also incorporates our projections of new customer signings where applicable.
Now coming back to results in the second quarter of 2014, our average deal sizes were similar to our experience prior to Q1 and nominally higher than the year ago period with no material change in average pricing on a like customer basis versus the first quarter. What you should take away overall is that we had a very good quarter in terms of growth, pricing was static and the customer mix in the second quarter was more in-line with the trend prior to the first quarter of 2014.
This is also a good place to remind folks that our business is subject to seasonal buying patterns as a significantly higher proportion of our customers enter into new subscription agreements with us or renew previous agreements in the second half of each calendar year than in the first. This means that while we outperformed our expectations on customer acquisitions during the first half of the year. Our focus now is on insuring that we continue to execute well in the second half of the year when the majority of our new business for the year has plan to come in.
We feel confident because as Gio said the pipeline looks terrific as we head into the second half of the year. In addition to solid top line growth in Q2 we continue to achieve steady improvement in our gross margin which reached 33% this quarter compared to 23% last quarter and a negative gross margin of 64% in the year ago period. Castlight’s overall gross margin blends the effects of the gross margins that we derive from subscription revenues which reached almost 70% in Q2 and the gross losses that we generate from professional services which include implementation services and communication services.
For the foreseeable future we expect to see steady improvement in our overall gross margins as we launch customers each quarter and continue increasing the ratio of high margin subscription revenues to negative margin professional services revenues.
As a reminder our long term overall gross margin target for the business is 70% to 75%. Achieving this target will be a function of continued growth of our high margin subscription revenues and to a lesser extent improvements in the margin profile of our professional services offerings. We remain confident in our ability to achieve both overtime.
As we continue to drive improvement in our gross margins we’re equally focused on managing growth and operating expenses. At this point in our evolution new customer acquisition is a top priority for the business, so we’re investing aggressively to build on our leadership position in the market and this is likely to remain true for the foreseeable future.
We’re also mindful of our longer term margin targets for the business which for us represents sign posts that guide our decisions about the amount we’re willing to invest in a given period relative to our revenue growth and expansion in gross margins. With this context in mind our teams again performed well in Q2.
Totaling operating expenses were $22.2 million in the second quarter which was 5% above first quarter operating expenses and 81% higher than the year ago period. These growth rates reflect excellent operating leverage when compared to our revenue growth rates during the same periods which were 26% and 353% respectively.
On a line item basis sales and marketing expenses grew 6% sequentially and doubled versus the second quarter of 2013. The nominal sequential growth in sales and marketing was primarily result of cost associated with the successful summit even in June that Gio spoke about.
R&D expenses in Q2 decreased by 2% relative to the prior quarter but increased 40% compared with the same period in 2013. The sequential decrease in R&D expenses reflects our allocation of R&D resources to launch activity in Q2 for which the related costs were recorded as cost of revenue for professional services.
Increases in general and administrative expenses in Q2 of 11% and 94% relative to Q1, 2014 and Q2, 2013 respectively primarily reflect the addition of public company infrastructure and other resources needed to support the overall growth of our business. Collectively these favorable trends in Q2 resulted in a net loss of $18.8 million which was about 3% smaller than our net loss in the previous quarter.
Our net loss per share in the second quarter was $0.21 on 89.5 million weighted average shares outstanding compared to net losses per share of $0.72 on 27 million and a $1.43 on 9.6 million weighted average shares outstanding in the immediately previous and year ago quarter’s respectively.
Shifting now to the balance sheet, cash, cash equivalents and marketable securities were $217.9 million at the end of the second quarter. Free cash flow was negative $19.9 million during the second quarter and we saw an increase in receivables during the quarter that was in part driven by collections of a small number of relatively large customer balances that slipped into the third quarter.
Accordingly we expect collection of these balances to drive a significant sequential decrease in net cash outflows in the third quarter ending September 30, 2014.
I will wrap up our prepared remarks with updated financial guidance for 2014 and then Gio and I will take questions. For the full year 2014 we are forecasting total revenue of $42.6 million to $43.2 million representing growth of 228% to 232% compared to 2013 and an increase from our prior guidance of $40 million to $41 million. Our increased revenue guidance incorporates the strong start we had in the first half of this year on new customer implementations and sales activity.
At this point in the year we are projecting a full year non-GAAP operating loss in the range of $75 million to $76 million and a non-GAAP net loss per share in the range of $1 to a $1.01 based on 75 million weighted average basic and diluted shares outstanding. These updated ranges reflect the modest improvement from our full year guidance previously as we remain focused on investing in growth.
For the third quarter we’re forecasting total revenue of $11.3 million to $11.6 million representing growth of 214% to 222% on a year-over-year basis. We expect to generate a non-GAAP operating loss this quarter in the range of $18.7 million to $19 million and on -- in a non-GAAP net loss per share of approximately $0.21 based on 90 million weighted average basic and diluted shares.
In summary we’re pleased about our progress in the second quarter this year and we’re confident in our forecast for continued strong growth for the balance of 2014.
Thanks for your attention and now Gio and I will be happy to take some questions.
(Operator Instructions). Thank you. Our first question comes from the line of Robert Jones with Goldman Sachs. Please proceed with your question.
Robert Jones - Goldman Sachs
It looks like you guys have added about 24 customers year-to-date, I was just hoping any sense you could give us on how that compared to your expectations both from a sheer number of clients added and also from a size of individual client that you have been signing and then I guess just as it relates to that, you guys have shared going into even last quarter that the back half is typically a much bigger new customer signing period for the company. Just wondering if you can give us any general sense of balance between what’s to expect in 3Q and 4Q versus what we just saw on 1Q and 2Q.
First to your question on the number and sizes of our customers in the first half relative to our expectation. So we outperformed our expectations in the first half really had great sales executions. So we’re feeling really pleased about kind of where we’re sitting at this point in the year. We have in 2014 targeted typically a larger customer than we have in some prior periods and so in that way the mix of customers have shifted a little bit but again that’s something we have been talking about for some time and so very much tracks with our expectations and you heard, the remarks on the call a number of terrific Fortunate 500 names that we have added to the customer we’re thrilled about that. Additionally pipeline heading into the second half of the year, really looks strong so your right that we do look to the second half for a seasonal increase in our bookings.
Don’t want to get into kind of specifics around weighting of the two quarters but it's a meaningful majority of our bookings that come in the second half and as I said we feel very confident given the pipeline that we’re going to execute well against that.
Robert Jones - Goldman Sachs
And I guess just my follow-up would be around pricing, John, if I heard you correctly I thought you characterized pricing in the quarter as static. I was wondering maybe if you can just give a little bit more detail around the trends maybe within some of the different product lines thinking core medical specifically just wondering if pricing on a same store basis is continuing to trend up?
Bob, pricing is a critical priority for us overtime certainly looking to drive price and drive overall deal sizes and that dynamic is a function of a couple of things. One is what you talked about which is how we price individual products and I would say that the general commentary there that pricing has been stable applies broadly to the product. I wouldn’t really differentiae for you there. I think more importantly and we should be coming back to this topic on a regular basis. We do expect as our investment in the enterprise healthcare cloud differentiation begins to play out into our sales and remember our sales cycles can be 6 to 24 months. We expect to see some pricing leverage there and then as important if not more important the penetration of various products, we announced Castlight Dental last month which by definition is at the very earliest point in it's growth opportunity.
With referenced based benefits and rewards attach rates were relatively stable at around 10% and then pharmacies around 60%. So again from a deal size perspective in addition to pricing really driving uptake of those additional products is critical.
Robert Jones - Goldman Sachs
I guess and Gio just one last one if I could, some exciting announcements around Castlight Connect. I was wondering if you could just remind us how that offering fits into the portfolio and then maybe just what the economics are to the company relative to Connect?
Great question and very excited to talk about our platform. Connect is one of the four parts of our platform just to remind you Care, Control, Insights and Connect. In Connect we integrate all the third party solutions on the Castlight to drive value from programs that are currently underutilized at the enterprise level. So programs for example like Telemedicine it's a good example. Once they are integrated seamlessly into our platform get utilized much more, we have actually had clear evidence that Telemedicine is an example, once it is integrated into the Castlight platform increases utilization quite a bit. So that’s really what Connect is all about.
And Bob, in terms of economics really ties back to kind of where you started with some of your questions. Keep in mind we’re the premium priced solution the market, we achieved that premium price and win very consistently on the basis of a very broad value proposition of the enterprise and the value that the enterprise derives from our solutions is tied inextricably to engagement, and so driving engagement really does drive value of the overall platform and we view Castlight Connect as a critical part of our strategy for aggregating engagement on the Castlight platform and as that dynamic drives increasing value for the enterprise it does play in to the overall trends that we expect to be driving in price overtime. Great question.
Thank you. Our next question is from the line of Jennifer Lowe with Morgan Stanley. Please proceed with your question.
Jennifer Lowe - Morgan Stanley
I want to just ask you [ph] a little bit and focus on the scaling of the businesses you look out in this as strong pipeline into the back half and then presumably for years to come and specifically I wanted to drill in a little bit on some of the commentary on the expense side where I think you mentioned that a lot of the increase quarter-over-quarter in sales and marketing expense was the summit event. R&D ticked down because people needed to be reallocated to implementing customers. So do you think about your staffing levels currently? Obviously there is the push and pull between wanting to be prudent with capital and also wanting to invest for growth.
But where do you think you’re in terms of staffing needs for where the business is today and how do you -- if you look at the guidance it implies that expense growth is going to be slower over the next couple of quarters than it has been historically. How do you think about those investment levels and the hiring need relative to the big funnel of opportunity ahead of you?
You’re right in the prepared remarks, we have certainly -- we are pleased with the disciplined management of the business from an expense standpoint in the quarter. That should not be read to suggest that we’re investing aggressively in growth, in fact that is our top priority and sales capacity is a critical piece of that. We have very experienced leadership in the sales team who run very thoughtful process around our sales force recruitment that tracks the seasonality in demand in our business and we have talked about that a bit in the past. So we will see continued aggressive but disciplined investment going forward and it is from cadence perspective linked to booking dynamics.
Jennifer Lowe - Morgan Stanley
And maybe just to take that one step further and looking at Randy’s pending departure and obviously his role is a critical one in terms of scaling the organization both technologically and from a sales perspective to continue to grow and succeed with your customers. Can you just talk a little bit in a little greater detail how you’re going to filling that -- filling the void maybe a little strong but you know is there a need to hire another senior executive to take on some of those responsibilities. Where do you think you’re internally in being able to fill the technology and the sales leadership roles that Randy had filled historically?
Thank you Jennifer this is a very good question and it offers me the opportunity to first of all say how much we appreciate all the positive and great contributions that Randy has brought to the company in the past four years. We have a very strong, deep bench and leadership in place. So we have no current plans to replace Randy but each of our senior management has a proven track record across management and we believe that it's very well positioned to scale our business to the next level.
Our next question is from the line of Brad Reback with Stifel. Please proceed with your question.
This is Adam Borgen [ph] for Brad. Thanks for taking my question. You mentioned some nice upsell metrics around the pharmacy and rewards during the quarter and maybe you can just provide a quick update on the profile of the customers, how long have they been customers? Any particular vertical concentration or even how long were those sales cycles? Thanks a lot.
I think it really speaks to the broader trend we see in or business which is that the problems we’re addressing with the enterprise healthcare cloud problems that a very diverse set of large employers are dealing with and we found that to be true really across the full spectrum of our solutions and so you were not seeing significant differences in the uptick of individual products based on any particular customer profile. So I think it's good news in terms of the long term growth potential of those products.
Thank you. Our next question is from the line of Richard Davis from Canaccord. Please proceed with your question.
Richard Davis - Canaccord
You talked about the change in behavior of employees that are using Castlight. Do you have enough data to see if there is change in the behavior of the provider? In other words if I’m a high cost provider am I now changing my pricing? Am I competing differently, you guys are really revolutionizing the healthcare world and you know that part of the equation is relevant too. So I was wondering kind of how that feels like it's pointing out. Thanks.
It's a great question and ultimately the kind of broad change that we’re trying to drive in the healthcare system has to manifest as some change in provider behavior. What I can share with you there is more anecdotal than the data we shared today on behavior across the portfolio and I’m not going to name names for reasons that will be obviously in my answer to the question. But a dynamic that we saw in a particular market where Castlight achieved very high concentration relatively quickly where some providers prior to Castlight haven't had their prices published in any form and when they became aware of the kinds of information that we were going to be making available through the platform and then the opportunities that employers would have to deploy solutions to control, spend across their employee populations.
We saw providers requesting an opportunity to adjust their pricing before we revealed that information before we went live. And so in that particular geography, again it's an anecdote but it's an important one. The arrival of market forces in a broad way that employers could leverage to control spend. It will result in a very discreet and obvious change in behavior that we think overall is very productive.
Our next question is from the line of Terry Tillman of Raymond James. Please proceed with your question.
Terry Tillman - Raymond James
I guess John first question just relates to last quarter you remarked one of the statistics was two deals over a $1 million in annual contract value, you didn’t say anything this quarter. Should we assume that there weren’t any or was that just a point in time data point you gave last quarter but you’re not necessarily updating at this quarter.
Yes Terry, we did see a couple of deals over that level but I think the thing we wanted to communicate on deal size in the second quarter is that deal size for the overall group of customers that we brought in was more aligned with deal sizes that we were seeing before the first quarter and I think that’s really a function of -- in the first quarter’s relatively low number of new customers. So there is particularly large Fortune 500 deals that we brought in did skew the deal size a bit of on the high side. I will also mention though that deal sizes in Q2 are up on a year-on-year basis. So we’re seeing the underlying trend that we’re looking for.
Terry Tillman - Raymond James
Okay and in terms of I think you had said some collection slipped out of the quarter, if I wasn’t mistaken I think that’s what you had said, was that just -- was there something execution oriented there or was it just simply maybe just a lower down the list of focus areas as opposed just trying to sign up the customers, what could you say -- what happened in the quarter? And should we then see that deferred kind of really pop up in the third quarter?
I think we can always have additional focus but really the dynamic here is simply -- working capital accounts are going to move around from quarter-over-quarter. We did see an elevated AR balance at the end of Q2. We do expect that to reverse around in Q3 and so sequentially we think that net cash burn will be meaningfully lower in the third quarter than we saw in the second and our overall expectations for the year are unchanged, so it's just working capital movements.
Terry Tillman - Raymond James
Okay. And my final question either for John or Gio, just relates to -- the summit was a big deal for you guys this year and you announced the number of packaging updates or just evolution of how you package your products. I would love to just get some color either from customers or prospects, what kind of feedback you’ve gotten and has this done anything? I know it's early days but has it anything in terms of maybe helping out with sales cycles or the timing of the sales cycles? Thank you.
It's not really that much early days. So obviously we don’t have really a granular numbers of how the summit has paid back. It was a great event, it had a very rich dialogue with multiple constituencies of the healthcare eco-system and we have noticed several things happening. First of all lots of increase on our website of people playing over and over and still going on now the summit replay. I personally received phone calls from many prospects and CEOs of either partners or bigger customers asking us about the platform and partnership opportunities and last but not least important -- hard to say how related this is but as we reiterated previously our pipeline is very, very strong for the next two quarters.
Thank you. At this time we have reached the end of our allotted Q&A session for today. I will turn the floor back to Gio Colella for closing comments.
Well thank you very much. I want to thank everybody for taking the phone call and we’re very proud of where we’re today mostly we’re proud of the fact that our growth shows that we’re having an impact of what is our mission which is to improve the delivery of care and bring market forces into the healthcare industry today. So thank you all and I’m looking forward to talking to you in time to come.
Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
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