athenahealth (ATHN) Jonathan S. Bush on Q2 2016 Results - Earnings Call Transcript

| About: athenahealth, Inc. (ATHN)

athenahealth, Inc. (NASDAQ:ATHN)

Q2 2016 Earnings Call

July 22, 2016 8:00 am ET

Executives

Dana Quattrochi - Executive Director-Investor Relations

Karl Stubelis - Chief Financial Officer & Senior Vice President

Jonathan S. Bush - Chairman, President & Chief Executive Officer

Edward Y. Park - Chief Operating Officer & Executive Vice President

Kyle Armbrester - Chief Product Officer

Analysts

Greg Bolan - Avondale Partners LLC

Robert Patrick Jones - Goldman Sachs & Co.

Ross Muken - Evercore Group LLC

David M. Larsen - Leerink Partners LLC

Jamie J. Stockton - Wells Fargo Securities LLC

Sean W. Wieland - Piper Jaffray & Co. (Broker)

Eric Percher - Barclays Capital, Inc.

George R. Hill - Deutsche Bank Securities, Inc.

Mohan Naidu - Oppenheimer & Co., Inc. (Broker)

Nicholas M. Jansen - Raymond James & Associates, Inc.

Donald H. Hooker - KeyBanc Capital Markets, Inc.

Jeff R. Garro - William Blair & Co. LLC

Richard Close - Canaccord Genuity Group, Inc.

Ricky R. Goldwasser - Morgan Stanley & Co. LLC

Garen Sarafian - Citigroup Global Markets, Inc. (Broker)

Sandy Y. Draper - SunTrust Robinson Humphrey, Inc.

Matthew D. Gillmor - Robert W. Baird & Co., Inc. (Broker)

Stephanie J. Davis - JPMorgan Securities LLC

Operator

Good day, ladies and gentlemen, and welcome to the athenahealth Second Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to turn the conference call over to Dana Quattrochi, Executive Director of Investor Relations. Please go ahead.

Dana Quattrochi - Executive Director-Investor Relations

Good morning, and thank you for joining us. With me on the call today is Jonathan Bush, our Chairman and CEO; and Karl Stubelis, our Chief Financial Officer. On today's call, Karl Stubelis will share brief highlights from the prepared remarks we published yesterday, and then Jonathan Bush and Karl Stubelis will take questions.

We would like to remind everyone that certain statements made during this conference call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding management's expectations for future financial and operational performance and operating expenditures, expected growth, and business outlook, including fiscal 2016 guidance; statements regarding the benefits of and demand of our service offerings; statements regarding the potential expansion and value of our network in progress towards building the healthcare Internet; statements regarding our ability to improve client satisfaction and our net promoter score; and statements regarding our goal of transitioning all customers to Streamlined at the end of 2016, and the impact on client satisfaction.

Forward-looking statements may be identified with words such as will, may, expect, plan, anticipate, upcoming, believe, estimate or similar terminology, and the negative of these terms. Forward-looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements.

These risks and uncertainties include those under the heading risks factors in our most recent annual report on Form 10-K, and other periodic reports filed with the Securities and Exchange Commission, which are available on the Investors section of our website at www.athenahealth.com, and on the SEC's website at www.sec.gov.

Forward-looking statements speak only as of the date hereof, and except as required by law, we undertake no obligation to update or revise these forward-looking statements.

Finally, please note that on today's call, we refer to certain non-GAAP financial measures in which we exclude certain non-cash or non-recurring items such as stock-based compensation from our GAAP financial results. We believe that, in order to properly understand our short-term and long-term financial trend, investors may wish to consider the impact of these items as a supplement to financial performance measures determined in accordance with GAAP.

Please refer to yesterday's press release announcing our second quarter fiscal year 2016 results available on our website, www.athenahealth.com for a reconciliation of these non-GAAP performance measures to our GAAP financial results.

With that, I'll now turn the call over to Karl Stubelis.

Karl Stubelis - Chief Financial Officer & Senior Vice President

Thank you, Dana. Good morning, everyone, and welcome to our second quarter fiscal year 2016 earnings call. First, I want to say how much I appreciate connecting with many of you since I transitioned into the CFO role. Thank you for helping me make it a seamless move.

Now, let's talk about momentum towards our strategic and financial objectives. We made market progress this quarter across several key initiatives. We're driving market awareness, and fuelling growth from our Athena-owned channels through the Let Doctors Be Doctors and Unbreak Healthcare branding campaigns.

With the ongoing rollout of Streamlined across our athenaClinicals' client base, we're radically improving the patient encounter. We're demonstrating success of our network-enabled services at our showcase hospital and health systems clients. Finally, we're using data to drive clinical and financial performance, and broadcasting it from our new web publication, athenaInsight.com.

As we have said before, Athenistas want to fix what is broken in healthcare, and we are building the healthcare Internet, what we believe to be one of the most important public resources being developed in our era.

Let's start with network growth. We ended the second quarter with over 80,000 providers, over 81 million patient records, and over 131,000 endpoints that exchange information. Demand for our differentiated network-enabled services remains strong across all services and segments. Midway through the year, we are tracking well against our annual growth target, highlighted by continued strong performance from our enterprise, hospital and population health teams. We remain focused on growing our network and working towards our 2016 growth targets.

As our network grows, so does the opportunity to fuel demand and generate growth. We are pleased to report that leads and meetings from our athena-owned channels continue to grow, and represent 32% and 44% respectively, of our total lead and meeting volumes in the first half of 2016. While we are in still early in our athena-owned channels' growth strategy, we are generating our own growth.

To further this strategy, we recently launched our new brand promise, Unbreak Healthcare. We believe it is time to Unbreak Healthcare, and expose the key points of failure, so we can start fixing them. Unbreak Healthcare aligns with our corporate mission to make healthcare work as it should, and it reflects why, Athenistas come to work each day as we differentiate ourselves from onpremise software vendors and lead industry change.

In typical athena fashion, we express this commitment to a series of satirical films pointing out critical breakdowns, and by starting conversations on social media that inspire what unbroken healthcare moments will look like.

As a network-enabled services company, our development efforts are oriented around delivering results, improving the user experience and leveraging our network to expand our services across the continuum of care. We continue to make leaps forward against our highest profile initiatives rolling-out athenaClinicals Streamlined, and executing against our continuum strategy.

Let's start with Streamlined. We've transitioned nearly 40% of our existing client accounts as of Q2 2016, and we remain on track to transition the entire existing athenaClinicals' client base by the end of the year. As you might expect, we are tracking client performance across several key performance indicators, including same-day encounter close rate and post-visit documentation rate.

Same-day encounter close rate measures how efficiently providers document the patient visit, while post-visit documentation rate measures the amount of time providers spend documenting after hours. We are pleased to report that client performance on Streamlined continues to trend positively as evidenced by an average 10% increase in same-day encounter close rate, and an average 22% decline in post-visit documentation rate compared to historical controls.

Also of note, new client performance on Streamlined is even better than existing clients still using the older platforms, demonstrated by an average 13% increase in same-day encounter close rate, and an average 24% decline in post-visit documentation rate compared to historical controls. This means, that all providers on Streamlined, both new and existing are not only more efficient at documenting the patient visit, but are spending less time documenting the patient visit when they should be at home eating dinner.

Despite this, and positive feedback from both new and existing clients, there's a minority of existing clients who prefer our old workflow. We are working with them closely, understanding their pain points, and determining how to course-correct. We kicked off several initiatives to help these clients make the leap to Streamlined, including provider coaching, the rollout of new specialty-specific functionality, and targeted adjustments to our release process.

We believe that the clients that are still adjusting to Streamlined will recognize that the changes we have made will ultimately lead to better results and less work for physicians and their staff. While the outcomes of these initiatives will not be reflected in our net promoter score in the near-term, we remain keenly focused on eliminating friction and delivering the best experience for our entire client base. We are also focused on using our network, knowledge and work to bring disruptive business model transformation to the hospital and health system market.

We continue to gain momentum in the under 50-bed market, and are ahead of our growth goals mid-way through the year. In less than a year since launching our athenaOne for hospital and health system service, we've grown our contracted hospital base by nearly 200%, from approximately 25 hospitals in the acquired base to approximately 80 hospitals as of Q2 2016. We are building out our in-patient client network, and are very excited about the operational and financial support we are delivering to these clients.

Here are some early success stories. Mount Grant General Hospital, a critical access hospital in rural health clinic located in Hawthorne, Nevada, was one of our first clients to go live on our athenaCollector for hospitals and health systems service. Within a few months, Mount Grant set a new revenue record and improved staff efficiency.

In the past 30 years, there was only one month that Mount Grant collected $1 million of revenue. Since joining athena's network, Mount Grant has enjoyed two $1 million months, and has generated total cash flow of nearly 106% of its baseline after Q1 2016.

We've also helped improved financial health and operational performance at Faith Community Hospital, a 41-bed Level IV Trauma Center in rural health clinic in Jacksboro, Texas. Soon after its athenaCollector for Hospital and Health Systems go live, Faith enjoyed improved cash flow, faster payments and increased staff efficiency. More specifically, total cash flow at Faith was nearly 120% of its baseline after Q1 2016.

Now that Faith Community Hospital is fully live on athenaOne for Hospitals and Health Systems, Faith has become a hospital showcase client opening its doors to prospects to exhibit the efficacy of our differentiated services. We are the only Internet-based company of any size or scale in healthcare today.

As a result of our business model and system architecture, we have a massive dataset. We connect over 80,000 providers in all 50 states, maintain over 81 million patient records, and manage over 5 billion annual data transactions. In the last 18 months alone, athenaNet managed 47.1 million active patient records, representing nearly five times the size of Kaiser Permanente's 9.6 million healthcare plan members.

We recently launched athenaInsight.com, a new editorial platform that shares network insight and reporting from the heart of the healthcare Internet. We believe that, part of what is broken in healthcare is the lack of credible, objective insights into what constitutes best practice. It's also hard to get a detailed picture of what is really going on in healthcare.

By delivering industry data insight, performance insight, and leadership insight, we are delivering a hub of knowledge that furthers recognition of athenahealth, the healthcare Internet, and our high-value services. For example, last quarter, we shared a story about how we identified and addressed a significant pregnancy risk within our network data.

Here's another example; no one should be surprised that healthcare providers are not immune to decision-fatigue, a sociological phenomenon that had been studied across all aspects of daily life. Hannah Neprash, a PhD candidate in health policy at Harvard University, studied our network data to explore how decision fatigue might affect the clinical judgment of providers through analysis of antibiotic-prescribing patterns.

She found that the rate of antibiotic prescriptions rose throughout the day. Doctors were 13% more likely to prescribe an antibiotic in the 13th appointment of the day, and 19% more likely by the 24th appointment. What is most alarming is, not that patients at the end of the day have a statistically more significant chance of being prescribed an antibiotic for the same kind of condition than those in the morning, but these patients should never have been prescribed an antibiotic for their condition in the first place. There's no other company that can provide this level of insight into what is happening in healthcare today; no one.

We have a socially-valuable vision, to build a healthcare Internet, and we believe our company culture of teachers and learners rewarded for team success is key to maintaining growth and achieving that vision. This is why culture is top of mind for our founder and CEO, Jonathan Bush. Athenistas are highly-engaged and based on our analysis, much higher than employees at many other companies. But internal feedback shows that in our expansion, we need to reboot.

To put this in perspective, our Q2 2016 engagement score was 4.19, putting us in the top quartile of top engagement employers. But we missed our goal of 4.29 and are concerned that employee engagement has slipped from 4.29 and 4.27 in Q2 and Q4 last year, respectively.

As a result, we've began several initiatives to ensure that the values we expect and encourage in each other are still nurtured as we grow. Culture will be a key focus of our new Chief Human Resources Officer. We continue our search for a new Chief Human Resources Officer, and we will keep you updated on this critical leadership role.

With that, I'll now begin the financial portion of today's call. Starting with the top line, our second quarter revenue of $261.9 million grew 17% over the same period last year. This brings year-to-date revenue of $518.1 million or 20% growth over the same six-month period last year, and in line with our fiscal year 2016 guidance.

On a consolidated basis, on non-GAAP adjusted gross margin for the second quarter was 62.8% as compared to 63.3% in the second quarter last year. As planned, we continue to invest in our Go-Live support, client support center, and emerging services team to support the growth of our core and emerging services.

Notably, our non-GAAP adjusted gross margin for the first six months of 2016 of 62.4% was in line with our internal goal, and we remain on track to deliver another 50 basis points improvement in 2016.

Looking forward, we see considerable opportunities to drive efficiencies, increase automation, and deliver even better services and results for our clients. The opportunity to grow, scale and strengthen our connected network is huge; and as we do so, we believe we will improve our non-GAAP adjusted gross margin every year. As planned in the second quarter, we continue to invest in both growth and innovation. Our GAAP selling and marketing investment of $65.9 million increased by $11.5 million or 21% over second quarter last year.

However, our GAAP research and development expense of $23.6 million was relatively flat compared to the second quarter last year. While our overall cash investment in research and development is in line with our plan, we have allocated more resources to support the development of new service lines and improved user experience, which has resulted in a slightly higher capitalization rate. We expect to continue to invest in growth and innovation as we look to fully Unbreak Healthcare as we expand our services across the full continuum of care.

Our GAAP general and administrative expenses of $41.3 million increased by $5.2 million or 14% over second quarter last year. While we expect to scale our general and administrative costs over time, the second quarter was impacted by higher than expected legal expenses, facility-related costs, as well as recruiting an executive search fees.

As a result of higher general and administrative expenses incurred to-date, an incremental recruiting and facility expansion-related investments in the second half of 2016, we expect our general and administrative costs as a percentage of revenue for full-year 2016 to be relatively flat to last year. However, we are a financially-disciplined company, and remain focused on scaling our general and administrative costs in the future.

Our non-GAAP adjusted operating income of $24.1 million for the second quarter grew 9% from the $22.2 million in the second quarter last year. While year-to-date, non-GAAP adjusted operating income of $48.3 million grew 26% over the same six-month period last year.

Notably, we have improved our non-GAAP adjusted operating margin by over 40 basis points from 8.9% in the first six months of 2015 to 9.3% in the first six months this year; and we remain on track to deliver approximately 100 basis points improvement for the full year.

Our non-GAAP adjusted net income was $13.5 million for the second quarter or $0.34 per diluted share, up from $12.4 million or $0.32 per diluted share in the same period in 2015. Year-to-date, our non-GAAP adjusted net income was $26.9 million or $0.69 per diluted share, up 25% from $21.5 million or $0.55 per diluted share in the same six-month period in 2015.

We set guidance once a year at our Annual Investor Summit. Throughout the year, we provide additional insights into our annual guidance given our visibility into our performance. We are pleased to report that we are in line with our internal financial goals for the first half of 2016. Therefore, based on our year-to-date performance; and our current expectations for the second half of 2016, we expect to be at or above the midpoint of our guidance ranges for each of our key performance measures.

Let me remind you that our fiscal year 2016 guidance is as follows: GAAP revenue of $1.085 billion to $1.115 billion. Non-GAAP adjusted gross margin of 63.5% to 64.5%. Non-GAAP adjusted operating income of $120 million to $135 million, and finally non-GAAP adjusted net income per diluted share of $1.65 to $1.85.

In summary, we are pleased with our financial performance to-date, and remain focus on delivering against our full-year financial and operational goals that we first communicated in December at our Investor Summit. We continue to operate within our well-defined plan and are making progress towards building the healthcare Internet, a portion of the Internet that is safe, reliable and connected.

We believe what we are building each day will become the default from managing one's health information. Stay tuned for more updates on our progress throughout the year. We appreciate you listening. And now look forward to your questions.

Question-and-Answer Session

Operator

Our first question comes from Greg Bolan with Avondale Partners. Your line is open.

Greg Bolan - Avondale Partners LLC

Hey, thanks guys. So Karl, if I look at the weighting that's implied for guidance here in the back half versus the first half, to get to slightly above the midpoint, it's almost identical both on a revenue basis, and on an EPS basis, and maybe if you could kind of walk us through why typically the back half is more highly-loaded, if you will, from a revenue, and more so from an EPS standpoint? And kind of just maybe if you could, give us some insight as to how the stronger bookings and in-patient might play through in the back-half, if at all? And that'd be helpful. Thanks.

Karl Stubelis - Chief Financial Officer & Senior Vice President

Yeah. Sure, Greg. Thanks. Thanks for your question. So, yes, you're absolutely right. Well, if you look back through history, you'd see that we do experience some seasonality. So, it's seasonality as it relates to the flu season. It's seasonality as it relates to when we put on doctor and providers in the beginning half of the year; as they get ramped up, we experience more of a tailwind. So, typically the first half of the year is less than 50%, and the back half of the year is over 50% for us.

As you might expect, we set guidance yearly. We did that in past December, and what we also do is, we do a bottoms-up forecast every quarter. So, we've gone through and looked at, and feel quite confident in the way that – the way that the year is playing out. It played out this way for the last four years or five years. We're thrilled with the performance right now. We are very close to our internal goals, both doc providers as well as revenue and bookings. So, there's no reason to believe that, what we're seeing right now from a bottoms-up level; as well as a historical perspective that it should be any different for us.

Operator

Thank you. Our next question comes from Robert Jones with Goldman Sachs. Your line is open.

Robert Patrick Jones - Goldman Sachs & Co.

Thanks for the question. I just wanted to look at the revenue performance in the quarter. It seem like growth in collections per provider was essentially flat year-over-year versus typically increasing low-single-digits. Is that more a function of too few doc adds being a little bit more heavily-weighted towards the end of the quarter or was there some moderation in utilization and mix amongst your physician base?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

It's seasonality, it's portfolio mix around how our document providers were dropping claims. I wouldn't read too much into it. I don't think it's directly attributable to the document provider adds being lighter than the Street was expecting.

If you look at us year-over-year, we're only about 200 document providers down from where we were at this time last year, in 2015. And last year, we had large Ascension waves (20:48) going live all the time. So, I wouldn't necessarily read too much into it.

Operator

Thank you. Our next question comes from Ross Muken with Evercore. Your line is open.

Ross Muken - Evercore Group LLC

Hi. Good morning, guys. Can you talk about just sort of the – some of the leadership transitions. Obviously, you highlighted one of the new additions, but obviously you had, Ed, stepping away to the board. And maybe give us a little bit of color on that. And then, just in terms of how the organizations have responded also, to the CFO transition, and how seamlessly it seems like that sort of has moved over?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

It's been really smooth. Eddie is right here; and he can talk to you about his own journey. But from my perspective, Eddie has always been and remains a fiduciary of the company when he's awake, and when he's asleep; he's as much of a blood brother as he is a colleague, and so, we're doing this incredibly well. I'm very confident in the people we're developing, in the ways we're parsing out his responsibility to people with great succession potential in their own right, and I don't feel any clench or panic, and I'm expecting to see just as much of Eddie in the next 10 years, as I've had in the last 10 years. He is in West Newton, and I'm in Cambridge, et cetera. Eddie?

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah. And I'll add, this is Ed Park. We have a very deep bench, and a terrific succession plan. I'm going to be here for at least through the end of the year to ensure that, that goes off as smoothly as it's planned, and at that point, I hope and expect the transition to a role as an extremely active board member. The company is taking, I think, it very well. We have always cultivated strong leaders with a very strong bench, and I have no reason at all to believe that there's going to be any blip.

Operator

Thank you. Our next question comes from David Larsen with Leerink. Your line is open.

David M. Larsen - Leerink Partners LLC

Hi. Can you talk about how bookings is tracking year-to-date, please? Thanks.

Karl Stubelis - Chief Financial Officer & Senior Vice President

We are 92.65%, I don't know, honestly. We have a lot going on right now in the realm of growth, all that exciting, but needless to say, none of it perfectly timed. So, we have an explosion of demand on the in-patient side; and our challenge there is to not take it onboard faster than we can serve it with strong cash-producing results. We do not want to be part of the 30-year run of healthcare IT that has had negative returns to investment. We want to be a source of cash to every customer, and we will do that to the hospitals as we've done to the medical groups.

The other major growth, sort of inflection is the movement away from federal government mandates to buy, noun form EMRs; and therefore our need to go-to-market, to go to Google and show up as a noun form EMR. You want an EMR, yeah, oh we have an EMR. We don't have an EMR. We have lots medical record functionality, but we have a national medical record network with a set of services that produce cash for you.

That first wave of; I need an EMR, or I'll be shot is ending. And we are going back to our original source of growth pre-HITECH Act, which as we produce cash and reduce frustration; Let Doctors Be Doctors. That turn of phrase in our marketing team has come up with is, it really resonates at Athena, because it gets back to our original intention of creating perfect moments of care where the crap, the bureaucracy, the coding, the defensiveness around malpractice has been handled, and so doctor and patient can be focused on one another.

We are amazing at that. We're a little rusty at it compared to where we could have been, because of all of the cycles of R&D that went into getting our client so disproportionately paid and compliant with these federal government mandates. But that inflection point is going to create a lengthening of the sales cycle on the ambulatory side.

I think we're going to get them all just the same, but the rise of the growth of in in-patient being throttled by our ability to take on new business as we scale that business line, and the change in demand type from government mandate to sort of organic discovery of the opportunity to be a doctor again is making it a struggle.

We got a lot of demand. So, we can still make it to the finish line. We could blow through with one – it's always the case with one big enterprise deal, we could blow through it. With one or two fewer than we have in mind, we can miss it by 5% or 10%. But net-net, despite these inflections, it looks pretty good. It's just that it's a lot of change in the middle.

I'll throw in one more pleasant surprise. Our population health product, population health service, has been a really neat source of decently profitable, very efficient, fast-implementation growth. It also has allowed us, because it sits outside of the electronic medical record of record, it has allowed us to unscratch-off, to re-include the entire Epic and Cerner installed base, recently-acquired EMR market back on our prospect list.

As we mentioned recently, the addition of Dignity and Providence to this, they're not on our core medical record, but they have added our population health services around the outside to build and manage their market share and their network.

This idea of being able to do that has been a lovely little tailwind in our growth, both the bookings and the conversion of those bookings to revenue, and that will also help us get to the goal.

Operator

Thank you. Our next question comes from Jamie Stockton with Wells Fargo. Your line is open.

Jamie J. Stockton - Wells Fargo Securities LLC

Yeah. Good morning. If you could just touch on whether the pricing for some of these hospital deals is where you want it to be in the long run? And then maybe if a hospital signs up today, what is the implementation timeline they're looking at, that would be great.

Karl Stubelis - Chief Financial Officer & Senior Vice President

Well, in the first few deals, we gave a great discount for our alpha clients. We also have four 250-bed alpha clients for the midsize hospital market that also have been given very special deals. I guess, we have three and we're negotiating final terms with another.

The rest of them have gone back to our regular price. We will learn more about whether our regular price is the right one as we see and study their costs and cash flows live on athena services. We want this to be a positive source of cash for both client and athena. We think we've got it right, but we're going to study that as these things go live, and we watch their financials.

In terms of implementation time, it's only a couple of months, but we're booked. So, we are now slotting folks into the middle of 2017 for implementation as we take care not to over promise and ruin such a strong initial brand in this segment.

Operator

Thank you. Our next question comes from Sean Wieland with Piper Jaffray. Your line is open.

Sean W. Wieland - Piper Jaffray & Co. (Broker)

Hi. Thanks. So, how is the introduction of Streamlined, and the feedback you're getting, that the market is giving you there, and the movements in the sales force impacting bookings performance? Say, year-to-date, I know, you said you're on track. And are you more or less confident in your 30% bookings target for the remainder of the year versus say, 90 days ago?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

Well, I describe the two big inflections, right? Not enough speed to digest and process on the in-patient side where there is significantly more than 30% growth room. And then the change in demand dynamics on the ambulatory side led – particularly non-enterprise ambulatory side, lengthening the sales cycle there.

It certainly doesn't change the underlying opportunity to grow 30% for many years to come, but those are the two big challenges that we have to hitting our goals for the year. Like I said, we'll repeat the tailwinds. We've always got these wonderful enterprises that think more longly and broadly than that; that use us for strategic purposes.

We're a balance sheet free way to grow and control of our fund network, and there are more and more institutions that are ready to grow far flung, primary care managed – controlled primary care type networks or single specialty type networks and the traditional hospital based networks that want to grow in multiple states to scale in an environment of tight costs; pricing for them.

So in the enterprise side, we just got to get them across the finish line. No real change in demand dynamics. Group practice longer sales cycle, but the underlying opportunity to grow is still there and in-patient, which is governed by our own desire for operational excellence.

Operator

Thank you. Our next question comes from Eric Percher with Barclays. Your line is open.

Eric Percher - Barclays Capital, Inc.

Thank you. And maybe continuing on that vein, so the most impressive piece here obviously is the 80 (30:59) that you've now got online or assigned on. Most concerning to us was the weakness in the quarter despite having Ascension contributions, and also seeing, Adventist contribute. So if we look at that 600 addition this quarter, does it suggest that we'll see Adventist through this year as you look at the second half?

Clearly, you've commented now on – enterprise wins can help you more than achieve what you're targeting; but is there a dependency on enterprise? And is that dependency equal in the acute? Can we see acute move more quickly? I know, you mentioned that enterprise can be a source of growth because it feels like, if we pull Adventist forward, there can be a real gap as we exit the year, and then we're – got more dependency on acute than we've seen in traditional dependency in the past.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

Well, we certainly are growing our dependency on acute. We have an enormous screening demand for acute care hospital services. These guys are in deep trouble. They can't afford buying or using the traditional enterprise software products at the low-end of the market. So, there's no question, the complexion of our growth will include more and more and more acute.

Enterprise, you need new logos, but then you need your existing logos to (32:28) incremental waves. And they've got strategies that are bigger than just the implementation of athenaNet. And sometimes, there are puts and takes that make the waves come in lumps. The waves have come in lumps every year that I've been here since we've had an enterprise business. So, really since Steve Kahane joined the company, we call him lumpy, Steve. No, we don't. I'm just – that just occurred to me that, that would be funny.

So, that's all as it has always been. And this is where – how are you going to do the deal? Well, if a lot of our existing enterprises give us their waves as fast as we can handle them, and if a couple new logos comes in, we're going to crush it. If they for their own perfectly legitimate reasons hold back on us, we're going to be a little behind. We'll get them next year.

Operator

Thank you. Our next question comes from George Hill with Deutsche Bank. Your line is open.

George R. Hill - Deutsche Bank Securities, Inc.

Hey. Good morning, guys, and thanks for taking the question. I guess, kind of two parts. First, Eddie, can you tell us where you're going? And second, Jonathan, one of the things that jumped out of me in the quarter was the growth in the number of reps. It's basically double the number of reps added in the quarter that you guys have ever added.

I guess, have any employees been reclassified as reps? You've always talked about how hard it is to attract and recruit people, and that you guys only take the best. Just trying to think about how do you guys get 30 new reps in the door, in a quarter, when you've kind of never been able to do it before? And how should we think about how they're deployed? And just kind of talk about that dynamic, please?

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah. So briefly, I'll start – so I don't have any plans. I'd cautiously try to create white space, I've been here for two decades. And I think that, from my perspective, I just want to create a little white space to be open to the next chapter, whatever that might end up being. I look – very much look forward to being an active board member though, and we'll continue to talk with Jonathan, and with clients and prospects from the sidelines (34:15).

George R. Hill - Deutsche Bank Securities, Inc.

Thank you. Good luck.

Operator

Thank you. Our next question...

Jonathan S. Bush - Chairman, President & Chief Executive Officer

In terms of the rep addition, you're on to us. In the beginning of the year, we got caught flatfooted with not enough, and not senior enough small group reps in Q1. And the result was, we had to hurry up and catch up in Q2. And that was because of these new areas. We had a lot of reps do very well last year, and get promoted, either into the group practice division or into the acute care division, which is terrific for them and for us, and we love to see great career path.

But when it goes and comes, it creates lumps in the pipe. And you're absolutely right to be seeing a lump in the hiring pipe that we've now caught up on, and we expect them now to ramp up. Luckily, most of these new hires are in the small group segment where they only have a very short time before they're on some kind of quota.

And so, yeah, all those things happened, and we should have been little more proactive in hiring reps in the first quarter, and the end of last year in the low end.

Operator

Thank you. Our next question comes from Mohan Naidu with Oppenheimer. Your line is open.

Mohan Naidu - Oppenheimer & Co., Inc. (Broker)

Thanks for taking my question. Jonathan, maybe on small hospital segment again, are the new customers coming in with the revenue cycle included, and also on the capacity question that you talked about, is it just a matter of increasing the implementation capacity or you need to make operational improvements so that you are hitting your targets before you can add more customers there?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

It's both. It's implementation capacity and it's service delivery capacity. When we use our Emerging Service Division, they have a little microcosm of everything. They have a little micro, one-person CSC, Client Support Center. They have a little micro claim team, a little micro implementation account management, and they figure out the prototype for the second half of the year. Kyle and Ed will be merging those into our larger and more high-scale operations, so that by the end of this year, hopefully, we can handle much, much more volume in the acute care side.

In terms of whether they buy athenaCollector. Yeah, people most always buy athenaCollector. There is an opportunity we see coming up here with these emerging networks to sell population health plus optionally athenaClinicals on a per-member, per-month basis that we're very excited about, but we haven't really gotten it in the market in a big way yet.

All of our services can be sold standalone or paired with any of other of their sisters. But most of the time, when a sales guy gets in there and shows the value of a cloud-based service, they buy them all, 80%-some (37:03) of the time.

Operator

Thank you. Our next question comes from with Nicholas Jansen with Raymond James. Your line is open.

Nicholas M. Jansen - Raymond James & Associates, Inc.

Hey, just wanted to focus little bit on the gross margin, year-to-date down about 50 basis points to 60 basis points, and fully understand the reasons behind that, but the expectation for a pretty sizeable improvement in the back-half of the year. I would have thought with the implementations of some of these in-patient clients that we would still pressure on that point. So, a level of confidence on the gross margin target in the back half of the year? Thanks.

Karl Stubelis - Chief Financial Officer & Senior Vice President

Yeah. So as top line increases, we're zealous around automation and making sure that we're – we take the biggest hairiest (37:43) things that we can find and compress them and automate them, and put them in the best cost environment for us.

So, we're continuously marching towards margin expansion through the contraction of costs as the top line increases for us over the back half of the year. We will maintain that focus upon it, you're right that we're putting investments into the CSC and Go-Live support and emerging services, but we're doing it in a thoughtful way, so that we're rolling it out, and we're not just sort of throwing bodies at the problem. We're making sure that we're building these scalable platform to take us into the next millennium here. So good confidence level, and we're going to see this margin expansion in the back half of the year.

Operator

Thank you. Our next question comes from Donald Hooker with KeyBanc. Your line is open.

Donald H. Hooker - KeyBanc Capital Markets, Inc.

Great. Good morning. So I am interested in the hospital market and your success there. Can you describe sort of the competitive environment, and maybe specifically kind of what your win rate is when you have sort of bake-off against other vendors and kind of, if you're willing to say, what types of other vendors you're seeing and your win rates there? Thank you very much.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

KLAS did a study of this so we could quote them, and therefore not share more than we should on our own. I believe, I'm looking at, Dana, to make I got this right. Our win rate according to KLAS on all the hospital deals so far is 32% of all hospital deals in the nation. Is that right?

Dana Quattrochi - Executive Director-Investor Relations

I think that's right.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

I think it's about 30%; I think, I just saw the slide from, Kyle, that we're using the board meeting. So an astonishingly high rate amongst all the deals done for a company that has been in this sector for a very short period of time; it's really a function of getting the engine running that we need to get out of the way, our win rate and our – the happiness of our existing clients, it's moving and exciting.

We had a really great, Kyle, had a – did kind of a roadshow, visiting clients and people were in tears. They weren't really sure how they were going to pencil through the next couple of years. And the fact that we've take on their billing and their coding and their inventory management and their payroll systems and all these things in a single network for a percentage of their collections, and that we implement it for, virtually, for free in a couple of months. It's just oxygen for them, that we expect – we expect to do very well in this segment. We just don't want to wreck it by jumping the shark as Fonzie did it.

Kyle Armbrester - Chief Product Officer

Yeah. So Jon, that number was 32%, right on there. So if you look at the – KLAS did a study as you were talking about, and you just look at the – all the competitive set in there; what you'd find is that, we were number three in terms of expansion in the hospital space right there, so really great study.

Operator

Thank you. Our next question comes from Jeff Garro with William Blair. Your line is open.

Jeff R. Garro - William Blair & Co. LLC

Yeah. Good morning, guys, and thanks for taking the question. I want to ask. It seems that easy for us to look at that net promoter score trend, and maybe point the finger at the Streamlined conversion. But curious internally, how much of the focus is on that versus other initiatives to improve customers' satisfaction? And maybe if you could, could also translate that a little bit into doc adds in the quarter and just kind of reassuring us that there wasn't anything different on the gross versus net doc add number versus what you've seen historically?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

No historic change in the dynamics there. In fact, our charge-back rate, which is a percentage of doctors who buy or groups that buy, and then before going live, bail out is creeping downward, and has been for three years.

The other major driver of disaffection amongst clients has been client support. We made a terrible operational miscalculation when we ramped up. We had enjoyed years of very, very reliable CSC performance, Client Support Center performance, and we saw it as a career path move that we would create this concept of a Go-Live support rep, who is part-time CSC, part-time flying out to health clients in their first days on a athenaNet; and we just bungled the logistics of making sure that there were enough people on the phones.

It would have been fine, but we had a spike on the rollout of Streamlined, and a spike in the demand for people to be on the ground amongst enterprise clients. And so, a second driver of disaffection amongst our client, which we have pretty much solved. I believe, this month will be the first month that we close where we look good or at least look respectable as client support.

Eddie, do you want to – I realize you're on the call. I should have asked you – he's been – Eddie has been leading the teams that are fixing this.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah, the (42:55) answer hasn't been where we want it to be. We've been looking into it, and we have been taking a bunch of action to ensure that we end up answering the calls and many of our clients find to be satisfactory. It hasn't been exactly where we want it to be the first half of the year, but we have clear plans in place to get it there in second half.

Operator

Thank you. Our next question comes from Richard Close of Canaccord Genuity. Your line is open.

Richard Close - Canaccord Genuity Group, Inc.

Thank you. I want to focus on the Enterprise Sales team a little bit. Have you guys seen any turnover there? Maybe what the average tenure is, and has that changed? And then maybe talk about their sales goals, have those changed over the last years? Clearly you have to add a lot more physicians to keep growth up here. I'm just curious on the Enterprise Sales team.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

We have the best people, they never leave. Their goals are huge and they're going to win big. Sorry. What happened? I just woke up. Yeah. No. I think it's a segment with very, very of the company; with very, very high employee engagement, very, very high enthusiasm. These are extroverts in general who are always happy to be on teams, and we're not seeing any grumblings at all in that segment of the employee base.

Operator

Thank you. Our next question comes from Ricky Goldwasser with Morgan Stanley. Your line is open.

Ricky R. Goldwasser - Morgan Stanley & Co. LLC

Yeah. Hi. Good morning. So, when we think about kind of like the HHH initiative to have 30% of Medicare payment tied to alternative model at the end of this year, and then 50% by 2018. Is this coming up in conversations that you have with clients, and in the RFP process?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

Sadly, not much. We are doing all the work to win at MIPS, and at PQRS and of course, we've won at every meaningful use way. We've got a majority of our ACO clients generating profit checks, while only 20% of ACOs, of the remaining ones that haven't quit have gotten those checks.

So, we do and it's been very distracting, and it had consequence on other aspects of our value prop to doctors like doing the camp forms and the short forms and the work accident forms that we should be doing that we're not doing, yet, coding that we could be doing that we're not doing yet.

But, yes, we do a good job with MIPS, and we don't expect our clients to miss out on any money there. I think in the MIPS, the upper right quadrant, the non-penalty category, 60% of doctors nationally are in the non-penalty category and we have 90% what, Eddie, 95%.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah, in the number.

Dana Quattrochi - Executive Director-Investor Relations

No. I'm sorry. I don't.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

I just told our clients on a PowerPoint slide. I'm trying to visualize the PowerPoint slide in my head. But it's in the 90%s and we expect to continue on with that. We've got a team that – on the clinical team that reads these programs, analyzes them and then bake them into the workflow so that they can't be missed. And that continues on apace. It does not help us yet or as much as some of these other easy-smoking-gun type federal programs to win sales. But our clients sure do appreciate, and we think it contributes to our value prop.

Operator

Thank you. Our next question comes from...

Jonathan S. Bush - Chairman, President & Chief Executive Officer

I think, the problem is most doctors don't even know this is happening to them. They don't know that their Medicare fees are being swung by these metrics that they don't know about. I mean, it's – there was a recent survey. I wish I could direct you to it. But it's the majority of doctors don't even know what's happening. And those who do, your penalty doesn't come for a couple of years. So, it's sort of like, the kids with the marshmallow test. They just eat the marshmallow today, and they're not really aware of two years from now for something as esoteric as these complex quality programs.

Operator

Thank you. Our next question comes from Garen Sarafian with Citigroup. Your line is open.

Garen Sarafian - Citigroup Global Markets, Inc. (Broker)

Good morning, Jonathan, Karl and Ed. First of all, best wishes, Ed. We hope to still see you around once in a while, but it's been great working with you. Best of luck.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Thank you. Thank you.

Garen Sarafian - Citigroup Global Markets, Inc. (Broker)

I had a multi-part question on Streamlined, athenaClinicals, and net promoter score. I'm sure you're done testing on Streamlined before rolling out, so have you done a postmortem in terms of what you underestimated? In earlier question, you mentioned client support. But I thought the prepared remarks cited more of just a product sort of an issue.

And have those that showed dissatisfaction, how long does it take to show them the results you cited to us, and get their scores back up? And lastly, any correlation you've been able to calculate or any sort of a percentage point increase in the net promoter scores lead to any sort of a wide percentage, more sales leads and net sales for the company? Thanks.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

Well, I can get you partway through that question. The Streamlined change is not related to the client support change, other than it drives a lot of – for a couple of weeks, it drives more calls per doctor, and then it dies down relatively, quickly. But that more calls per doctor, combined with the Go-Live support program did affect our answer rate in a way we did not plan for that we have to fix.

Streamlined's big mistake was, it was not an agile deployment. This was not, you get a skateboard, and then you put it back out with a handle on it, then you put it back out with a little motor on it, then you put it back out with sides, and eventually it's a car. This was, take a skateboard, hide it, and show back up two years later with something you think will be a car, and all of the feedback that all of the customers would have had along the way comes raining down on you at once.

So, we've had to do a lot of tuning of Streamlined once it came out of the garage. We will not be doing that kind of hide it away for years and then, do a great reveal of something radically different any more in the future.

We just felt as though we have been so taxed by the committee for the certification of health IT to the Washington thing within Health and Human Services that gave us a list of features we had to be able to show them in order to be considered a viable EMR for meaningful use and for subsidy.

And then, we wanted to go and undo it and do it in a way that would be organic and more about the doctor, and less about the government. So, we did this great huge one-time fixed project that created a huge amount of friction upon rollout. And the project worked, the application is better, the results are immediate. It's not like it takes you a few months to get to these improved numbers that, Karl described.

It's just that we're moving their cheese. They've gotten used to one thing, and all of a sudden, we're making them basically do medical record, use training again. It's easier training. It's shorter training. It's nicer stuff, but it's different and they've already gotten used to the other one, and it wasn't on the top of their list to learn a new EMR.

And so, as we get them through it, I'm assuming they'd forgive us. I don't know when the net promoter score pops up on the back-end yet, I'm looking at my colleague to see if that's a number we know yet. I know that we're only a couple of weeks for customer support calls to die down.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah. Jon, I think...

Jonathan S. Bush - Chairman, President & Chief Executive Officer

And as I said, the performance results are almost immediate.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah, Jon, what we're looking at is, anywhere from two months to four months before the person is coming back to, and actually is more productive is what we're seeing on the productivity scale. I think you're absolutely right. We changed fundamentally. So, there's been – we changed fundamentally how the clinician is actually doing their workflow and how they're providing care. So, we're centering the encounter now around the patient. That's fundamentally different than a government mandate to check the boxes and comply with some arbitrary regulation, because they thought it was a good idea.

So, I do think, as you said, we made some missteps, but – by surprising some folks coming out with it, but we've been responsive, I think, to it. We certainly rallied the organization behind it. We've listened, taken inputs. We are coming out with our next release in October, so the 16/10 release. We're going to put some more – some functionality in that we probably should have had in the first place. But by and large, we do a baseline when it happens beforehand. I mentioned some of the statics afterwards.

We've got – the beauty of this is that we now have this empirical data. We don't have a feeling that says, oh, we think some people are going to be better on this. We actually have empirical data that's going to be able to prove, and does prove that people, if they convert – once they convert and get through this conversion into Streamlined, and the people who never experienced classic in the first place around Streamlined are more productive. And that's part of the beauty and the promise of what athena is, that we've got this instrumentation not only to measure how people are performing specifically, measure against how everyone is performing in their subset, and we actually have the ability to go in and help people perform even better going forward.

Operator

Thank you. Our next question comes from Sandy Draper with SunTrust. Your line is open.

Sandy Y. Draper - SunTrust Robinson Humphrey, Inc.

Thanks very much; and I will echo my comment, Ed, it's been great working with you. Hopefully we'll see you around. You've been a great part of the company.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Thanks, Sandy.

Sandy Y. Draper - SunTrust Robinson Humphrey, Inc.

So my question, it get sort of – partly again, what we started the call with, Karl, looking at the sequential growth, well, I know, you got guide to the year and you're on track with internal budgets. It was a lower dollar amount sequential increase that was experienced the last couple of years; obviously part of that can be attributed to big ways of Ascension and things coming on. And I was also wondering was there any impact of higher customer attrition from larger clients? Is that anything that played out? Or is this all just normal trends; I'm wondering if there's any other thing that you can point to impacting? Thanks.

Karl Stubelis - Chief Financial Officer & Senior Vice President

Yeah. No, so as Jonathan mentioned, we're actually seeing that number come down. So as you know we report a net number on document provider adds. There is nothing in that, that is different than prior quarters. It's just more or less slightly softer quarter as it's related to our mix, and the way that the days fell in the quarter for us, but there is nothing, nothing underlying that. There's no sort of negative thing that's being offset by a positive thing that would be masking our performance.

Operator

Thank you. Our next question comes from Matthew Gillmor with Robert Baird. Your line is open.

Matthew D. Gillmor - Robert W. Baird & Co., Inc. (Broker)

Hey. Thanks for taking the question. I wanted to ask you about the R&D organization and the new leadership under Prakash. I guess, Prakash has been there for six months now. But can you just update us on what he's brought to the organization, and where his focus has been, and then also, I noticed the head count for R&D declined sequentially. So can you give us an update on why that occurred? Thanks.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

I don't know why the head count declined sequentially. Although I do know we are holding off on junior hires at the pace of the past, while we go through this transformation, this Agile transformation. We've always had our versions of scrum teams, but we were doing these scrum teams for 20 years; and Agile has developed out in the world in ways that we didn't keep up, with bringing in some lateral thinking in the form of Prakash, who was just a great leader, has helped us, I mean, immensely.

We are refactoring the way we do R&D in a – I mean, it's not – if I explain the details of what we're doing, you would say that's not that big a change, but the impact is profound, and it's difficult, because people have grown used to the other way, and it's tempting to take these changes if you're not on an Agile team that you used to sort of casually help. It feels like you've been taken off the team in a meritocratic kind of way. But it's not, and we're just getting the company organized better, and it's exciting, it's really exciting in terms of our ability. We've had on our one-pager, strategies to invent.

For the last two years, athena moves faster, maybe even in three years, and this is in addition to Eddie reorganizing, so that each product has a kind of a mini-CEO under him. This has been a real breakthrough against that initiative. So, he's doing a terrific job. He's making sure every team has a good mix of senior people versus junior people, design people versus development people, architects versus application developers, customer advocates, the right ratios, and the right commitments, so no distraction, no multiple initiatives per team allowed, and that work is – it just gotten through the whole athenaClinicals team. We're now going through the whole athenaCollector team. We've already done the Epocrates team; and it's electric.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Yeah. I think, Jon, the head count's down about 20 people or so sequentially, it's up about 14% year-over-year. And I think the way that we talk about it is, we're just being thoughtful in how we invest in folks going forward as all this transformation of the R&D leadership, and ripples through the organization, we didn't want to go out and make any missteps. So, we've just paused a little bit on it. The market's really hot for folks right now.

We've got a great position in the marketplace. We thought it was prudent just to pause a little bit as we went through this thing. We're through it now. You should be anticipating us. We're back on the hiring bandwagon in the right – picking the right people and the right spots going forward.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

We do anticipate a smaller number of hires that are a little more senior just to get our mix right. I mean, I don't know that, but I'm guessing you might see less actual heads, but may be similar dollars.

Operator

Thank you. Our last question comes from the line of Stephanie Davis with JPMorgan. Your line is open. If your phone is muted, please unmute.

Stephanie J. Davis - JPMorgan Securities LLC

Okay. Thank you for taking my questions. You guys have seen a deceleration in net doctor adds for three quarters now. How much of that is being driven by specific factors such as the gap in sales reps you mentioned to the platform migration? Or could this persist as we go through the year?

Jonathan S. Bush - Chairman, President & Chief Executive Officer

We don't plan on it persisting. We typically do more at the end of the year. We don't see a change in our fundamental demand. We do see a change in our fundamental demand dynamics. Longer sale cycle in the group segment, need for a different pitch for the sales guys and the marketers. The marketers are done. Sales guys are getting together in May and in August to retune their pitch and get training. So, I think of this as a natural reshuffle. And I think of us as a resilient group. So, I'm not depressed. I'm enthused and paddling hard to get on the next wave.

Operator

Thank you. That does conclude today's question-and-answer session. I'd like to turn the call back to Jonathan Bush for closing remarks.

Jonathan S. Bush - Chairman, President & Chief Executive Officer

And I, in turn will turn the call over to the man who brought me here, who made every theoretical PowerPoint promise I made, either go away or turn into actual functioning reality at scale, Ed Park.

Edward Y. Park - Chief Operating Officer & Executive Vice President

Thanks for the opportunity to talk with you guys. So, I spent the first two decades of my life being born and then graduating from college, and then I spent the last two decades of my life building this company. I have three key messages. First, I'm incredibly proud of what we've accomplished today. We've built a significant part of the healthcare infrastructure of the country helping 80,000 providers deliver better care to 47 million patients.

Secondly, I remain as bullish as ever on the future of athena. Our original thesis that healthcare needs the Internet remains truer than ever, healthcare needs a connected network and you can see that in the response we're getting in the remarks that Jonathan and Kyle have been making. We haven't claimed an enormous role into transformation, in the ongoing transformation of healthcare, and I'm certain that data will continue.

And finally, I'm inspired by the team that we've built. We have a deep bench and a strong succession plan, we're going to take the opportunity that presents healthcare to continue to refactor into the General Manager model that you've been hearing about for a while. Kyle Armbrester has done a terrific job in building out the hospital segments. As Jonathan just said, Prakash is doing a terrific job with the R&D team refactoring into smaller, nimbler, leaner teams that will continue to do it fast.

And we have a deep collection of battle-scarred veterans right behind them. So, just to ask the question of why or why now? I think, you all get this, I'll just repeat it again, it's been two decades. The entirety of Kobe Bryant's career actually fits inside my career here at athena. I remember when he was playing Jordan, back in the late 1990s and then he just did his farewell tour. J.K. Rowling wrote seven books and then had seven movies made on those seven books, and then had a theme park built inside the time, I've been here.

And so, if I had two lives to lead, athena would absolutely be one. But I don't and from me, it's time to move on. I want to be open to doing something new, although I look forward to being an active board member. So, I'm enormously grateful to all of you for your continued guidance and support. Your relentlessly clear eye view of our business keeps us on it, and makes us better. So, thank you so much and I look forward to staying in touch.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.

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