Vocera Communications, Inc.
Q3 2017 Earnings Call Transcript

Published: 27 Oct 2017

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Vocera Communications Conference Call. My name is Chris, and I'll be your coordinator for today. [Operator Instructions]. I would now like to turn the call -- to turn the presentation over to your host for today's call, Sue Dooley, Vocera's Director of Investor Relations. Please proceed.

[Sue Dooley:]

Thanks, Chris. Hello, everyone. Welcome to Vocera's Conference Call to discuss our third quarter earnings. This is Sue Dooley, Director of Investor Relations. Joining me today are Vocera's CEO, Brent Lang; and Justin Spencer, our CFO. We distributed a press release detailing our quarterly results earlier this afternoon. The release is posted on our website at investors.vocera.com and is also available from normal news sources. This conference call is being webcast live on the IR page of our website where a replay will be archived. Before we begin our prepared remarks, I'd like to take this opportunity to remind you that during the course of this call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to risks and uncertainties described in Vocera's filings with the SEC, and actual results or events may differ materially. Except as required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we will refer to both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measure is provided in our posted earnings release. And with that, I'd like to turn the call over to Brent.

[Brent Lang:]

Thanks, Sue. Good afternoon, everyone, and thank you for joining us. On today's call, I will start by summarizing the highlights from the quarter, then I'll provide more details on some key customer wins. I will conclude my prepared remarks with some commentary about the market and hospital spending priorities before turning the call over to Justin for some detail on the quarter. We had a great Q3. Third quarter revenue was $42.3 million, up 25% over the same period last year and software revenue growth was robust. Year-over-year bookings growth was also really impressive. We added a large number of new customers while also expanding our presence with several key customers. We had a particularly strong bookings quarter selling our unified solution into VA hospitals. And our success in the overall federal space was even better than last Q3 when we booked the first half of the large MEDCOM deal. Our software platform continues to have significant impact in the market and our results clearly reflect this. The completeness of our solution, including the workflow capabilities Engage brought for our platform has become a meaningful differentiator for our solution and the market is validating this. Finally, sales to our installed base continue to be really strong in this quarter with sizable expansions and a growing supply of business. Our success illustrates the value our customers see in our platform and highlights the growth opportunity we have with the existing customers. Our third quarter results highlight the fact that hospitals are striving to become more efficient and patient-focused as both new and existing customers seek unified solutions to address their communication and clinical workflow challenges, they are increasingly turning to Vocera because we have solutions and expertise to address their individualized challenges. Now, let me dig a little deeper into some of the highlights from the third quarter which showcased our broad market appeal, strong sales execution and integrated secure and highly differentiated offerings. The highlight of Q3 was our execution in the federal hospital market, which drove an impressive quarter of new wins and customer expansions, fueled by our Engage software and successful cross-selling of our communications platform. Year-to-date results represent the largest total annual federal bookings performance in our history, and we still have a quarter left to go. Here are a few details from Q3. We added 20 new VA facilities this quarter as part of the total of 33 federal procurements, including the VA hospitals in Los Angeles, Cleveland, New York, and St. Louis, to name a few. Of the 33 procurements, 5 were in excess of $1 million each with the largest being a $2.1 million booking with the Denver VA. We are successfully selling our unified solutions and engaged with a meaningful driver of our results. A majority of the 20 new facilities mentioned above include the Engage software and those facilities will be adopting multiple workflows to improve patient safety and efficiency. In addition to the new facility wins, we were also effective in cross-selling our communication platform into existing Engage VA customers. Looking ahead, we feel optimistic about the large opportunity to pursue new customer wins and expand with an existing hospitals in the federal space. We believe that improved clinical communication along with effective alarm management are initiatives with rising importance in the DoD and the VA. We also have large bookings at Anglicare, an Australian aged care facility as well as at MedSpring's Mental Health in Grand Junction, Colorado. We're delighted by these endorsements of our platform, both of which further validate the potential of our solutions beyond the acute care hospital market. Existing customers are a major driver of our overall business and this quarter was no exception. Let me give you a couple of examples of success from our commercial installed base quarter. In a $1.2 million expansion, Intermountain Healthcare in Utah is expanding their use of our badge to new facilities and launching several clinical integration that they plan to leverage for more use cases over time. We're pleased to be deepening our relationship with this prominent system. We also had a $1 million expansion at Barnes-Jewish/Christian Hospital as they move forward with their campus renewal project. You will remember this was a $1 million booking from just last quarter and the scope was expanded in the third quarter. The deployment includes our communication solution running on Zebra smartphones and will feature several clinical integrations. In another substantial expansion this quarter, Sidra Medical and Research Center in Qatar is expanding their use of our solutions and we will become their enterprise communication standard for clinical and nonclinical staff, including integration to Cerner and Philips monitors. Another large expansion was UNC where the customer is seeing rapid adoption of the Vocera platform, creating need for additional hardware. Our professional services team are executing well and deployments continue at a rapid pace. Their expertise is a meaningful differentiator in helping our customers achieve real improvements in their communication and workflow challenges. We had several notable go-lives in Q3, including University of Colorado, Longs Peak and St. Elizabeth in Edgewood, Kentucky. Both engagements are exemplary because they include our voice, messaging and Engage software with multiple integrations. In addition, feedback on the MEDCOM go-live has been very positive, as our teams proceed at a rapid pace delivering on the Army's goals. Now, I'd like to talk for a moment from a market perspective. In my interactions with hospital executives, there's a few key themes that consistently rise at the top of the list. One of these is the rising importance of consumers in health care with an increasing emphasis on patient experience. Several health systems have hired cheap consumer officers who are focused on improving the experience in their hospitals in order to deliver the types of interaction that we've all grow accustomed to in other aspects of our daily life and ultimately, to bring more patients in the door. Another focus is on improving margins by lowering costs and improving quality, shrinking reimbursements and a move towards value-based care as well as open competition between hospitals is leading to the need to reduce costs and eliminate wastes by doing a better job of delivering the right care in the right environment, eliminating friction and bottlenecks and streamlining operations. A third area of focus is on enabling physicians and nurses to do their jobs with less stress, spend more time with patients and give them better access to the resources they need. In our conversations with hospital leadership, they are increasingly striving to help their clinicians maintain a level of resiliency that will keep them from leaving the profession. Our mission of helping hospitals and health systems achieve the quadruple aim of improving cost, quality, patient experience and staff resiliency is completely aligned with these top-of-mind priorities for the C-suite decision makers. In August and September press releases, you saw us highlight examples of 3 children's hospitals, which are leveraging integrations with Vocera to directly connect patients in their care team members in order to better compete in their markets. Hospital and health systems are prioritizing budget dollars to focus on clinical communication and workflow solutions because they recognize that the return on investment from these decisions will be reflected in patient experience, clinician resiliency as well as in their bottom line. Another area that's becoming a hot topic among hospital decision makers is analytics. Vocera accelerates the role that artificial intelligence and predictive analytics can play in solving some of the challenges in health care. For example, we highlighted one compelling application of our solution earlier this month in a press release. Wolters Kluwer provides a life-saving intelligence platform, which rapidly analyzes more than 300 data points within a patient's medical record to identify early signs of sepsis. Traditionally, a sepsis alert needs to be proactively retrieved by a clinician. The intelligent routing capability of our software platform expedites delivery of this life-saving sepsis alert to the right person at the right time. In the future, there is great potential to integrate with other systems similar to Wolters Kluwer to provide the last mile delivery of patient contempt. Reducing EHR fatigue and extending the power of their EHR are top priorities for hospitals and they're looking for the best partner to integrate with these systems. Hospitals are seeking prescriptive partners to help them achieve their quadruple aim goals. Our clinical expertise, our depth and breadth of customer experience and our well-established leadership in voice-based user interfaces, positions us greatly to improve the efficiency and experience a clinical workflow. Our enhanced position in this market environment is demonstrated by a continued strong momentum in the business with strategic customer -- with strategic new customer bookings, successful large-scale deployments and high customer loyalty. Now, I'd like to give Justin a chance to cover the financial details of Q3. Justin?

[Justin Spencer:]

Thanks, Brent. Hello, everyone. Vocera's third quarter results reflect an important achievement for our business as we delivered robust revenue growth with higher profitability demonstrating the operating leverage in our business that we have discussed with you in the past. Total revenue in Q3 grew 25% to $42.3 million, with double-digit growth in both our product and services segment. Product revenue in the quarter increased 20% to over $23 million. Our device revenue grew 14% compared to last year and was driven broadly by both expansions and supplies within our installed base as well as devices we shipped to new facilities. Software revenue was $7.2 million in Q3, up 38% compared to last year, driven by several new customer deployments and the ramp of Engage-related revenue that we had anticipated. Year-to-date, our software revenue was up 32% versus last year. Several new customer bookings included our Engage software, and we are also encouraged by the early cross-selling result into our installed base. An effort that we believe will contribute to our growth in 2018. Services revenue in the quarter was over $19 million, up 32% from last year. Our professional services revenue grew 55% to $5.3 million as a result of a high volume of new customer deployments and achieving key implementation milestones. We expect to finish a very strong year of growth for professional services in 2017, which are largely driven by software deployments and clinical integrations. The other large portion of our services portfolio is software maintenance and support. With a renewal rate about 95% and several new deployments over the last year, our software maintenance and support revenue grew 25%. This revenue is all recurring and was approximately 32% of our total revenue in Q3. Turning now to profitability. Our adjusted EBITDA increased to $4.2 million or 10% of revenue, demonstrating our operating leverage as we grow revenue on a scalable cost structure, and we believe we are well positioned to expand this profitability even more as revenue increases. Now here are some more detail on our profitability. Non-GAAP gross margin in Q3 increased to 65%, something we are really pleased with. Non-GAAP product margin was 73%, reflecting the higher mix of software revenue. Services margin increased as expected to 55%, continuing an upward trend of contribution over the last few quarters from this part of our business as we are achieving higher utilization of our fixed resources. Our global services team of roughly 170 professionals is exceptional and have created a strong competitive advantage for Vocera with highly trusted relationships among our 1,400-plus customers. Their knowledge and expertise, along with that of our sales and clinical specialist, allows us to bring tangible improvement to our customers through enhanced clinical communication workflow. Non-GAAP operating expenses were $23.9 million, flat compared to last quarter, and decreased to 57% of total revenue. After the acquisition late last year, we had kept our headcount relatively flat in 2017 and focused on maximizing the utility of our combined workforce. As we look forward, we expect to continue to invest in our business to drive growth and balance that with our commitment to expand profitability. Now, a couple of brief comments on our balance sheet. Our balance sheet continues to be very strong with over $67 million in cash and short-term investments and no debt. You may have noted that our accounts receivable increased substantially in the quarter representing a use of cash. This was purely timing and is tied to the slightly longer payment terms we have with the U.S. government. June sales have been strong over the last several quarters. As we expected, we've already received several large payments in October, so we expect to have a strong cash flow quarter in Q4. Now, let me turn to guidance. As we look to finish 2017 strong, we are raising the lower end and reiterating the top end of our annual revenue guidance. We now expect revenue to be $158 million to $162 million for the year. Our adjusted EBITDA for the full year is expected to be $7 million to $10.5 million. The implied revenue guidance for Q4 is $41 million to $45 million. We have expanded our guidance range, our revenue range for Q4 to reflect our now larger base of revenue. Additionally, Engage has become a larger portion of our software revenue where recognition is influenced by the timing of completing key customer implementation milestones. The rest of the guidance details and a full reconciliation of GAAP to non-GAAP guidance can be found in the guidance table of our press release. In summary, we're very pleased with the financial results in Q3 and the business momentum we are experiencing. We have said for some time now that our goal is to build a business that is capable of achieving mid-teens organic growth, which we are on track to accomplish in 2017. Looking forward with strong bookings and backlog to-date, and the opportunities we see with our varied growth drivers, we believe we can continue to achieve this level of organic growth. We're now focused on strong execution in Q4, which we anticipate will set us up for a solid 2018. I'll now turn it back to Brent.

[Brent Lang:]

Thanks, Justin. In summary, I am very pleased with the strong momentum we've built in 2017. We believe we're still in the early stages of market adoption for clinical communications and collaboration. Our solution and ROI-based approach are resonating with an underserved market that is primed for growth. I want to take a moment to recognize the Vocera team that is making this happen. We are positioned to drive revenue growth in the business and deliver increasing profitability. I'm pleased that thanks to our comprehensive platform, great execution in a receptive market, we are one step closer to delivering on our 2017's financial and strategic initiatives. Thank you for listening today. Operator, we are ready to open up the call for questions. Thank you very much.

[Operator:]

[Operator Instructions]. Your first question comes from the line of Rob Munnings with William Blair.

[Robert Munnings:]

You mentioned Wolters Kluwer and the integration you guys have there. I'm just curious how unique is this type of solution? I guess, to phrase it differently. Once you deployed at a single customer, how easy is it to expand something like this quickly across the customer base?

[Brent Lang:]

Yes. Thanks, Rob, for the question. It's really pretty straightforward and could be replicated fairly easily once we develop the API and the capability to interface to it. It's something that can be replicated at other customers pretty easily. And in fact, not only are we interested in doing more of that same implementation, but as I mentioned in the prepared remarks, there is other integrations that we'd like to continue to pursue to build out even more of those delivery across the last mile.

[Robert Munnings:]

Okay. Great. And then this is something we've asked in the past. But has the device integration driven more inquiries from customers about another badge update? Or is it shifting customers more towards iPhones systems and the Zebra Systems versus the badge?

[Brent Lang:]

We're still seeing a really good mix of endpoint devices. The demand for the badge remains really strong. We are starting to see more and more customers have more of a mixed environment where they have badges for some users and use of smartphones for other users depending on their particular use cases and their particular workflow. Some of the alerts and alarms can be delivered to the screen of the badge or can be used using text-to-speech to verbalize them to a user who is using a badge. But if a user wants to dig down into more of a patient content and some more of the details they want, then the smartphone option is more appropriate for them. So it really ends up being a mixed depending on the specific use cases and the specific integration that they're looking at.

[Operator:]

And your next question comes from Matt Hewitt from Craig-Hallum Capital.

[Charles Haff:]

This is Charlie on for Matt. Can you hear me?

[Brent Lang:]

Yes.

[Charles Haff:]

First, it sounds like things went really well in the federal market front. How penetrated are you into that market? And I'm just trying to get a sense of how far we have to go in terms of as you guys pick up steam in that market.

[Brent Lang:]

Yes, great question. Something we're really excited about. So if you sort of tally up the numbers now, we're in just over 90 of the VA facilities at this point, with either one or both of the products that's out of the roughly 155-ish VA facilities. So we still got another 60-plus facilities that we're looking to get into there. On the DoD side, most of our penetration has been with the Army up until now. We're in about 35 facilities on the DoD side out of roughly 64 of their medical center and acute care hospitals. The -- as I mentioned, most of the penetration to-date has been with the Army, but we are starting to establish a beachhead with both the Navy and Air Force, which could represent additional opportunity here. I think the exciting thing from our perspective is that we really have been established as the de facto standard in both of those markets. And at this point, it's a matter -- budget dollars becoming available as they look to roll out into those other areas. The other thing that I'm excited about is that it really has demonstrated the power of the cross-selling capability, both the ability to cross-sell Engage into the customers that were formerly communications customers and vice versa our ability to take their communications platform and drive that into the existing Engage customers. And we really see that as a model that will play well as we expand out into the commercial market as well. It just happened a little bit faster in the Fed space.

[Charles Haff:]

Sure. No, that's helpful there. Are you seeing anything from hospitals as far as kind of their reaction to macro and how that's driving extra interest in the Vocera platform, specifically related to that law?

[Brent Lang:]

Not specifically to that law. I would say that in general what we're seeing is that hospital executives are taking more of an enterprise approach to clinical communication and collaboration rather than looking at this as a departmental solution. They're centralizing the decision-making and they're looking for more of a broad-based platform. And the macro trend, this is not to play on macro versus macro, but the macro trends of needing to increase efficiency and improve patient safety are really the drivers for the purchase decision and looking to have unified solutions across their health system is another key driver. But the specifics of various pieces of legislature or reimbursements are sort of lost in the noise at some level.

[Charles Haff:]

Okay. That's helpful there. I guess, one more for me. Are you seeing any changes on the competitive front? Any other devices popping up, for instance, or any changes in hospital spending that you can comment on?

[Brent Lang:]

Really nothing major change there in terms of the competitive landscape. Our competitive win rate has remain really high in Q3, we're really pleased with that. We continue to gain market share based on the deals that we're involved with. I think that the separation between us and the rest of the players in the marketplace is increasing as we continue to add more functionality to the platform. We take competition really seriously and we're monitoring it very closely, both with the start-ups that are trying to enter into this space as well as with some of the more established companies like Epic and Cerner that have made some noise about getting into the space. So we monitor that very closely and continue to push the team to expand on our functionality and the capabilities we're delivering to the marketplace making sure that we're delivering best-in-class user experience and functionality. And in terms of the spending environment, it's been kind of business as usual throughout most of this year. Obviously, there's been a backdrop of a lot of uncertainty in the marketplace, but as far as our sales force is concerned, they've been able to stay focused and really have driven us up into the higher level priorities for the C-suite decision-makers. This has been an initiative that we've been focused on for the last several years making sure that we're really a top priority for them and tying our solution directly to the ROI associated with increase efficiency and patient experience.

[Operator:]

Your next question comes from Nicholas Jansen from Raymond James.

[Nicholas Jansen:]

Maybe just a little bit more on the Engage platform now that you've had it under your belt for about a year. Now you've digested how customers are kind of viewing it under your ownership and the integration with your existing platform. Have you done more thinking about kind of sizing the cross-selling opportunity? I know last time we chatted you were a little bit hesitant given just how early it was. But just want to kind of get your thoughts on the incremental opportunity as you've gone back to your existing Vocera customers with this kind of more unified platform?

[Brent Lang:]

Yes. Thanks, Nick. I would say we're really pleased with the momentum that we're seeing with Engage and we learned a lot about the platform and how it can be sold and what environment that makes sense to try to sell it into. I think it's having a couple of different effects. I think in one regard, it's getting us more deeply integrated into the clinical workflow and that actually creates greater level of stickiness and also escalate this as a higher priority within their decision-making. It's also, I think, increased the deal size. So we're seeing larger deals, the deals that include Engage are larger than the pure communications deal. There is still a wide variation in the dollar amount associated with that portion of it. I think at the function of how wide spreads are looking to use that, how many different use cases they're going to be using it in, how many beds that are going to be going across. So it's -- I think, is still too early to put a specific dollar amount on what that upsell opportunity is, but I would tell you that, as more and more customers look at the solution on the platform at the enterprise-level that level, that deep level clinical integration and the incorporation of Engage is helping us not just to sell the Engage software but sell the overall platform capability across more health systems.

[Nicholas Jansen:]

That's very helpful. And then secondly just kind of thinking about the momentum you've seen in the business. Just trying to better understand, I know it's too early to provide kind of 2018 expectations and certainly, you had to execute on 4Q. But -- that you guys have been a very strong kind of mid-teens organic grower. Is there anything that you're seeing in the marketplace that would shy away from that expectation? I know you have some tougher comps on the federal side, but just wanted to get your broader thoughts on how we should be thinking about the -- and kind of the organic growth profile heading into next year?

[Justin Spencer:]

Nick, yes. We're feeling really good about our ability to continue to deliver strong mid-teens organic growth. That's been our goal in terms of building the business that in terms of market opportunity and execution have the capacity to grow at that level. We're growing faster with the inorganic growth as well. So as we head into 2018, we're on a good trajectory. We have higher levels of backlog in deferred revenue disposition and if we close out Q4 strong as we expect, that will put us in a strong position to deliver on that mid-teens organic growth and then we've been able to demonstrate an ability to layer on top of that with some organic growth from time to time. But the base-level model that we have from an organic standpoint is really kind of oriented towards that mid-teens growth and that's the trajectory that we're on at this point.

[Operator:]

Your next question comes from Sean Wieland from Piper Jaffray.

[Sean Wieland:]

So your commentary on bookings in particular with VA DoD bookings sounded great, but there wasn't a transition into upside into Q4 revenue. And I wonder if you can kind of bridge the gap there on the timing of revenue recognition of some of these deals?

[Brent Lang:]

Sean, yes, so the -- we had a really strong quarter in the Fed business in Q3. It actually -- and we've had -- we even started earlier in the year. But for the bookings that we realized in Q3 that revenue will start in Q4, but it will be more material to our 2018 financials as we have now just begin to sit down with VA customers and started to kind of schedule out the deployments. So I would expect that the majority of the bookings, the fed bookings that we booked in Q3 will translate to revenue in 2018. And by the way, I would just add, that was a similar pattern that we saw with MEDCOM last year. You may recall that we booked MEDCOM in Q3 and Q4 and the majority of that revenue was realized in 2017.

[Sean Wieland:]

Sure. Okay. So I know you don't like talking about bookings until given us numbers until the end of the year. But could you maybe comment on year-to-date bookings growth year-over-year? Is it at least in line with the organic mid-teens revenue growth number that you like to talk about?

[Brent Lang:]

If you pick a number then and do I get enough of that or not? I'd tell you this, Sean, we're really happy with the bookings momentum in the business. I think it's been healthy throughout the year and the growth rate is similar to the overall growth rate of the business right now.

[Sean Wieland:]

You can't blame me for asking. How about this? The work that you're doing here with the VA and DoD. What's the overlap with the work that Cerner is doing? And is there any collaboration with Cerner and does that possibly open up additional areas of interoperability that you could leverage elsewhere in the Cerner base?

[Brent Lang:]

I think so. We mentioned on the call last quarter, that part of the expansion was that they were actually going to put Vocera badges on to the Cerner employees who are doing the deployment of the software. And so we're certainly getting good exposure there. The customer is likely going to expect further levels of integration and these are all published APIs, so to some extent we can do this work on our own. But the fact that the customers are going to likely drive that, not only within the federal space. When you take a customer like Intermountain, it's a very large Cerner customer and also a very large Vocera customer, I think there's a great opportunity for closer and closer interaction now.

[Operator:]

Your next question comes from Gene Mannheimer from the Dougherty.

[Eugene Mannheimer:]

So let me ask a related question to Sean's on the DoD maybe, what is the rest of the DoD use outside of the Army? Have they consolidated on any comparative platform or do you see that as a good opportunity for Vocera to expand into the areas of DoD outside of the Army?

[Brent Lang:]

Yes. Thanks, Gene. So the answer to your question is no, they're really have not consolidated on anything. They're using primary legacy technologies, traditional pagers and/or old in-building wireless telephones. And so we really see this as an opportunity to continue to drive growth and expansion within those marketplaces. They each move with a different pace based on the certifications and the security testing that they like to go through. Obviously, the budgeting processes are independent, but we're starting to feel better and better about both the Navy and the Air Force as being doing additional add-ons within the DoD side. And on the VA side, the budget tend to be organized by the divisions, which are the regions across the country, and we've been able to build momentum in certain business and then work to move on to new business. One of the interesting dynamics that's occurring with the combination of the Engage business and the legacy Vocera business is that we were strong in different business. And so some of the upside that occurred in Q3 was a function of the fact that we were able to leverage existing customer relationships from one side or the other side of that legacy business in order to drive sales of the complete solution and that helps accelerate that growth on the VA side.

[Operator:]

And the last question comes from David Larsen from Leerink.

[David Larsen:]

Can you talk about your product portfolio and potential M&A activity. Are there any assets or technologies that you feel could be beneficial to your overall product portfolio? Without getting too specific, obviously.

[Brent Lang:]

Yes. Thanks, Dave. You're obviously right. We're really feeling good about the success that we've had with the extension acquisition. We're coming, I think, tomorrow will be the 1 year anniversary of announcing that transaction. And we're pleased with the success we've had there and the integration and the work that we did to bring those teams together and to bring the products together, and I think it's reflected really nicely in the results that we're putting on the board. Not only in the sale of Engage software, but also just in terms of the market presence that we have. And so building upon that, we do feel like there is an opportunity to do some additional strategic M&A work where we try to leverage the strategic fit. And I would guess -- I would classify the broad category around what Gartner refers to as the real-time health system. This idea kind of eliminating the friction points inside of the health system, so that you can drive greater efficiency and better patient satisfaction. We see that as being catalyst for future growth. We see an opportunity to add in additional solutions that could potentially increase our TAM, broaden our product portfolio and grow our customer base similar to what we saw with the extension acquisition. As you know, because you've talked to us about this over the years, we are really selective and we look at -- we kiss a lot of frogs before we do a lot of transaction. We've got to have a clear path towards how the products would be integrated, a path towards how we ultimately would drive profitability and growth. And obviously, we're valuation sensitive as well. But I do think there is an opportunity to continue to extend our lead in this category and become the de facto standard across, not just the clinical communications and collaborations stage, but extending out across the real-time health system with some of the technologies that can help streamline that process.

[Operator:]

At this point, I will turn the call back over to presenters.

[Brent Lang:]

Okay. Thank you, everyone. Appreciate you taking the time, I know it's a your busy day for earnings announcement, and I appreciate you taking the time to listen to the call, and we look forward to following up with you. Have a great day.

[Operator:]

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