CareCloud, Inc. (CCLD) Q2 2023 Earnings Call Transcript

CareCloud, Inc. (NASDAQ:CCLD) Q2 2023 Earnings Conference Call August 3, 2023 8:30 AM ET

Company Participants

Kimberly Blanche - General Counsel and Vice President of Compliance

Hadi Chaudhry - President and Chief Executive Officer

Larry Steenvoorden - Chief Financial Officer

Mahmud Haq - Founder and Executive Chairman

Dwight Garvin - Executive Vice President and Chief Operating Officer for medSR

Conference Call Participants

Jeffery Cohen - Ladenburg Thalmann & Co

Derek Greenberg - Maxim Group LLC

Operator

Welcome to the CareCloud, Inc. Second Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

I will now turn the call over to your host, Kim Blanche, CareCloud's General Counsel. Ms. Blanche, you may begin.

Kimberly Blanche

Good morning, everyone. Welcome to the CareCloud's second quarter 2023 conference call. On today's call are Mahmud Haq, our Founder and Executive Chairman; Hadi Chaudhry, our Chief Executive Officer, President and Director; and Larry Steenvoorden, our Chief Financial Officer. In addition, Bill Korn, our Chief Strategy Officer, will be available for the Q&A portion of the call.

Before we begin, I would like to remind you 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. All statements other than statements of historical facts made during this conference call are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook and potential organic growth and acquisitions.

Forward-looking statements may sometimes 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 statements reflect our opinions only as to the date of this presentation, and we undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our press release and reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward-looking statements.

For anyone who dialed into the call by telephone, you may want to download our second quarter 2023 earnings presentation. Please visit our Investor Relations site, ir.carecloud.com, click on News & Events, then click IR calendar, click on Second Quarter 2023 Results Conference Call and download the earnings presentation.

Finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our second quarter 2023 results for a reconciliation of these non-GAAP performance measures to our GAAP financial results.

And with that said, I'll now turn the call over to our CEO, Hadi Chaudhry. Hadi?

Hadi Chaudhry

Thank you, Kim, and thanks to all of you for joining our second quarter 2023 earnings call. Before I jump in, I would like to take a minute to introduce Larry Steenvoorden, who joined us in July as our new Chief Financial Officer. Larry brings with him extensive experience he has spent time as a CFO in several different areas of the health care space. Our team is looking forward to working with him as Bill transitions into his new role as Chief Strategy Officer. He will be working closely with Larry to get him quickly up to the speed.

We have several meaningful developments that will contribute to our long-term success to discuss today. But first, I will start by providing a quick overview of our quarterly results.

The second quarter revenue came in at $29.4 million and adjusted EBITDA came in at $3.8 million. This compares to revenues of $37.2 million and adjusted EBITDA of $7 million in second quarter last year. Taking a step back and looking at the quarter as a whole, there were a few main areas that contributed to these numbers coming in lower than the prior year period, which includes softness in medSR professional services, a slower conversion ramp for wellness revenue and the loss of revenue from two large customers due to health system mergers, as previously announced. Larry will go into further details on these developments and provide insight to the results.

Despite these short-term challenges, our core tech-enabled RCM offering is performing well and meeting the evolving needs of our providers. We believe that we have taken the necessary actions to address the near-term issues we are facing, and over the long-term, focus on several emerging avenues of growth that include our generative AI offering powered by our relationship with Google, our Wellness solution, which is gaining more attention in the market and what could be a meaningful opportunity in the Middle East.

Turning now to the launch of our new generative AI product. I want to provide more detail on our recently announced partnership with Google Cloud with the goal of making it easier for doctors and clinicians to access essential information. We are actively working on integrating Google Cloud's advanced generative AI and enterprise search technology into CareCloud solutions.

Once launched, our AI model will assist the physicians with data-informed personalized treatment decisions. One of the major advantages of this collaboration in the nearly 20 years of CareCloud's de-identified clinical data and financial information, which will be used in a HIPAA compliant fashion to train Google's generative AI models within CareCloud solutions. This valuable data includes insights from small and medium-sized medical practices that haven't previously been used for generative AI. Current health care AI models have been trained primarily with health system data. Our partnership allows us to fill an important gap in the industry and create more comprehensive AI-generated information for our target market.

The first CareCloud solution using generative AI will focus on clinical applications and is set to launch in the coming months. We will start by training Google's generative AI models with our clinical data. This will enable our solutions to use a patient's current and past clinical data to create personalized care plans for that specific patient, enabling the physician to make more informed decisions for that patient.

These plans will be tailored to each patient's medical history and current symptoms, including medication recommendations, lab orders, diagnosis and procedures. Eventually, the offering will also enable the system to give patients personalized estimates of their insurance coverage and out-of-pocket expenses, helping them make informed decisions about their health care.

We plan to charge a reasonable license fee for this smart assistant addition and are exploring different licensing models or user fees, similar to Microsoft recent launch of Copilot. The overarching goal of this partnership with Google Cloud is to transform health care delivery through generative AI technology for the broader market beyond just CareCloud's ecosystem.

I now want to provide you an update on our UAE opportunity. As we discussed last quarter, we are continuing to explore opportunities for expansion in the Middle East. We previously mentioned that we were close to completing the establishment of an entity in the UAE to capitalize on the opportunities in this market. I am pleased to report that we have successfully established a branch office in Dubai and received our license to conduct business in UAE.

In May, we attended the Precision Med Conference at Dubai World Trade Center and then the MENA Hospital Project Conference in June to start building relationships with our partners. We are now in the process of recruiting the best local talent for our business development team with the primary goal of developing new business relationships within the Gulf Cooperation Council, which is comprised of six countries. CareCloud is uniquely aligned to take advantage of the opportunities in this market.

I also want to highlight that on the marketing front, we recently revamped our entire corporate website. We updated the site to not only include all of our brands, solutions and services, but also optimize it by end market and category to make it easier for our customers and partners to navigate. We believe this will make for a more enhanced user experience.

Next, I would like to provide an update on the progress we have made on bookings conversions and new customer go-lives. For our core tech-enabled RCM, we have gone live with 95% of the potential revenue we booked last year compared to 88% last quarter. On an annualized run rate, we have recognized 94% of those potential revenue from the live clients.

In our Wellness solution, we have gone live with 93% of the potential revenue, also in line with last quarter, while the percentage of annualized run rate revenue increased from 7% to 23%. We still believe this is a meaningful opportunity for us, but the ramp is taking significantly longer than we initially anticipated. Our Wellness offering represented a paradigm shift of how people treat chronic illnesses, getting them into a monthly virtual checkup routine in order to proactively manage their illness.

Lastly, in Force, which is our staffing augmentation solution, we have gone live with 96% of the potential revenue, same as last quarter, but the percentage of annualized run rate revenue has increased from 4% to 65% at the end of the second quarter. The increase was driven by one of the contracts we noted last quarter going live, a new client starting to ramp.

Overall, out of the total recurring bookings we signed in 2022, 95% of the potential revenue has gone live with us in some form or fashion, up from 92% last quarter. In the second quarter, on an annualized basis, we recognized 62% of the potential revenue opportunity from those clients that have gone live compared to 44% last quarter.

Turning to 2023 bookings. We are experiencing further bookings growth with a meaningful increase in first half 2023 bookings compared to the first half of last year. Notably, we are signing that new business more efficiently as we have seen a year-over-year decline in our customer acquisition cost.

In summary, during the quarter, our core tech-enabled RCM business is performing well, but we did experience some softness in two of our newer innovative business lines, Wellness and medSR professional services. As we look to the second half of the year, we face some continued headwinds in those businesses and have adjusted our 2023 guidance accordingly. We believe that we are past the low point and I believe that we have taken the right steps to stabilize those business lines in the second half.

Now I will turn the call over to Larry for a deeper look into our second quarter results and annual guidance. Larry?

Larry Steenvoorden

Thank you, Hadi, and hello, everyone. I appreciate the kind words from those of you that have already reached out, and I'm excited about getting started in the new seat. CareCloud's strategy is focused on being the front runners in the market and it's an exciting time to join the company and a very motivated and passionate team.

With that, let me turn to the financials. Revenue in the quarter was $29.4 million compared to $37.2 million in Q2 2022. The year-over-year decline is primarily a result of the factors that Hadi mentioned, softness in medSR and a slower conversion ramp for Wellness revenue, as well as the loss of revenue from two large customers due to health system mergers.

Regarding medSR, after the acquisition, a large EHR vendor stopped allowing their clients to contract with us for professional services because they viewed CareCloud as a direct competitor in the EHR space. We saw the impact of this play out in the last quarter. In light of this, our team started to establish stronger Meditech relationships and leverage more RCM cross-selling opportunities. The expectation was that through these relationships and with the organic sales, the gap could be bridged to deliver growth as originally projected. However, this did not materialize.

We still believe this is the right approach to get us back on track. And in light, we anticipate medSR's MediTech-related revenue and RCM revenue will increase for the full year, but it will not be enough to offset the decline in professional services this year.

The second area identified was in Wellness. The real live ramp did not pan out as steep as initial forecast predicted. Now that we have a year of experience and more data is available, it is becoming clear that it will take longer to migrate into revenue. Going forward, we are now able to use this real live data in our forecasting and are confident about this patient population opportunity, but the ramp will take longer.

Adjusted EBITDA of $3.8 million reflects a 13% margin for the quarter. This compares to $7 million and 19% in Q2 2022. The decline in quarterly EBITDA was a combination of lower revenue and related margins as we continue to invest in sales and marketing and R&D to drive future growth.

We ended the quarter with $7.7 million in cash and net working capital of $8.2 million. Cash provided by operations was $6.4 million, offset by cash used in investing and financing activities of $7.1 million. In addition, we ended the second quarter the same as the first quarter, with $10 million drawn on our $25 million line of credit.

Now turning to guidance. As mentioned earlier, there are a few areas in which results differed from expectations. For medSR, we expect the impact will be approximately $12 million deviation from our projected plans on an annualized basis. As I discussed earlier in more detail, for Wellness, we anticipate it will be approximately $4 million short of our original forecast. We now have real live data to help us project its contributions in a more conservative and accurate way. And lastly, it was planned to backfill approximately $8 million of revenue from the previously mentioned customer health system mergers organically, but this is not materializing at the expected rate.

Additionally, I'd like to provide an update on Force, our staffing augmentation service, which was discussed last quarter. The large contract that we signed late last year with a well-known publicly traded health care technology company was delayed in the preproduction phase due to the customer focusing on other priorities. While this led to a slower-than-expected time line, we are pleased to say that we went live on August 1.

Taking into account all of these variables, we will be adjusting our annual guidance accordingly. We now expect full-year revenue of $120 million to $122 million and adjusted EBITDA of $15 million to $17 million. While the fundamentals of the business are solid, we have undertaken a deep dive into expenses and capital spend to scale the business accordingly and improve profitability for the second half and into 2024.

We still see plenty of opportunity for our solutions moving forward, and we'll use our steady core RCM business as well as developing projects such as physical therapy, our AI solution, the opportunity in the Middle East and the Wellness ramp as a strong foundation from which to grow. That concludes my prepared remarks. In closing, I want to reiterate that like the entire team, I'm very motivated to be in this role and see the vision the company has in sight.

I'll now turn the call over to Mahmud for his closing remarks. Mahmud?

Mahmud Haq

Thank you, Larry. As Hadi expressed earlier, we feel that our solutions are well positioned in the market. We are executing on the plan to overcome our short-term challenges, and there are several opportunities that will benefit us over the long-term.

I would like to thank our employees, customers and shareholders for all they do to support the CareCloud mission. Thank you. Operator?

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session for analysts. [Operator Instructions] Our first question comes from Jeffrey Cohen of Ladenburg Thalmann. Please go ahead.

Jeffery Cohen

Hey. Good morning. Hi. Hadi, Larry and Bill. How are you?

Hadi Chaudhry

Good morning, Jeff. Yes, we are very well. Thank you. How are you?

Jeffery Cohen

It's fine. So I know that Larry went through a few of the shortfalls in some of the contracts on time and congrats on buying up the Force contract. But Larry, I guess the question is any macro themes that you're seeing over the past quarter as far as position or organization spending patterns that you can talk about?

Hadi Chaudhry

Can you able to little elaborate it further, Jeff, please?

Jeffery Cohen

Just from a macro standpoint, are you seeing any themes out there as far as your space with utilization or orders that are out there in North America the past quarter?

Hadi Chaudhry

Not exactly, but we do see from the medSRd perspective, like any other consultancy businesses, some impact. But I think for us, it's not primarily driven by the overall – the advisory and the consultancy business impact. For us, at least it's that large vendor driven. Because you all as you understand, there are a couple of vendors, just three, which covers about 80% of the market share in that space. So if the largest one thinks that they should not be working with us, there will be a significant impact. But other than that, no, we have not.

Jeffery Cohen

Okay. And anything to speak of as far as utilization recently or any geographical strength or weakness to call out as far as specific specialties or specific geographies that you can talk about?

Hadi Chaudhry

No. Again Jeff, we have not seen any such occurrence. But I think we do see a lot of at least these discussions more towards this, the next – the upcoming technologies, I would say, between the confusion of the people and waiting for the next and the right technology to be used and more referring to these AI-based upcoming technological tools and the movement towards the value based, how the two pieces are going to get together for – and from the preventative medicine as well. But not anything specific that we have seen at least yet.

Jeffery Cohen

Okay. Great. Then lastly for us, any commentary on the regenerative partnership with Google Cloud as far as rollout and talk about which specific offerings of yours that is being embedded in and how you would expect that to play out over the coming months or quarters? Thank you.

Hadi Chaudhry

Sure. Thanks, Jeff. And if we just zoom out just to give you, first of all, the perspective of how this partnership has come together. So this was – I was able to meet earlier this year in a meeting with the CEO of the Google Cloud. The idea was that or the thought was – and if you think about CareCloud or previously known as MTBC when started in 1999, our focus was or how we started was how to focus the small to medium practices primarily and bring innovation and technology and converting them from the conventional medical billing conventional RCM into more tech-enabled RCM and providing them with the tools such as EHR and all of those.

Fast forward for these last 20 years now, we have the data, the clinical and financial because of our proprietary software and the technology, we started investing, let's say, from the last over five years by establishing our own AI or the data science department to see how we can – what we can achieve with the of our own skilled people and the skill set. It never have been enough to get to the level of where the AI technology exists today.

So when Google launched their product or whether the ChatGPT launched their product on the AI, on the generative AI, the one – if you just step back from that perspective and think about it – and let's talk about Google. They launched their Vertex AI, which is their AI, a trained AI model and the engine. And then they started focusing on the health sector, and they're calling it the Med-PaLM model, which is an AI trained model for the health care industry.

But when we talk about it, that model is trained only on the health system side space, the larger practices. Because for the smaller ones, whether it's Google or someone else, one, it's a very highly regulated industry. So in order to have an outreach or reach out to so many or thousands and thousands of those small practices and take their data and then train their AI model, it's just not – simply not possible. So this partnership is basically Google coming with their technological, their people, their expertise and technology on the generative AI. We are coming in with the last 20 years of data and our people and the experts. And together, we are trying to produce the product. So that's a bigger picture.

What we are trying to accomplish for us in the short-term, as I mentioned, as part of the script, the – we will be providing a sort of a smart assistant in our EHR in the practice management product, which will work as – if we use the analogy of the Microsoft recent launch of their Copilot. First of all, the copilot is a copilot, its not a pilot, it won't be flying the plane, but it will be assisting. So our product is also going to assist and suggest the doctor, leaving the responsibility with the doctor. The decision maker would still be with the doctor and making sure HIPAA compliant and the regulatory requirements and patients' safety in mind.

So that assistant will be able to – because we have that specific patients and the industries from the geographic same-specialty, gender insurance mix. So we will be able to suggest a treatment plan, a full comprehensive care plan with the help of the generative AI to the doctor, which can help in the rare disease cases, which can help in preventive medicine, there could be certain tests that should be conducted at that point, which otherwise a doctor may have skipped or may not have thought about at that time.

So on one side, from the revenue generation perspective, that one license or one user will be charging from the license fee perspective. And then in the bigger picture, there will be an improvement of the overall profitability and the patient outcomes for that practice. So this is going to be the one, the revenue generation line for us or this is how the revenue will be generated.

In addition to that, the bigger picture is, once this proof of concept gets done, our model gets trained for the small to medium-sized practices data, with the help of the Google, we plan to though, and we will communicate if anything gets finalized with Google, we plan to go make and how we can provide this with the help of working with Google access to this trained AI model to other vendors in this space. So there will be another in the future that at least our goal is what we are opportunistic about. That's what we think is a path to go.

But anyway, I hope I answered the question in terms of the revenue for us. This year, we are going through and making sure just because of dealing with the patient health information that it should provide a reasonable accurate projections, so we are in the process of refining the results.

And by the end of the third quarter, early fourth quarter, we plan to launch this product. Let's see how what is the attention and attraction we get from our existing client base for us as everyone is going through their adaptability and understanding the generative AI and then we believe this is going to help us in the bigger picture into the 2024.

Jeffery Cohen

Okay. Perfect. Thanks for taking our questions.

Hadi Chaudhry

Thank you. Thanks, Jeff.

Operator

Thank you. The next question comes from Neil Chatterji of B. Riley. Please go ahead.

Unidentified Analyst

Hi. Thank you. This is Anderson on for Neil. You called out the weaknesses in Wellness and Professional Services in Q2. How do you see those recovering going forward in the second half and in 2024?

Hadi Chaudhry

I can talk about from the business perspective. And Larry, if you want to add any other color to it. Just let's talk with the Professional Services first. So for Professional Services, if you think about it and just to – the largest vendor that I've been talking about and just to put the things in perspective, if you talk about activation services, one activation project for that largest health system could potentially have, let's say, $1 million at an average project in revenue.

The other alternative that we are working on, which is Meditech as an example, their average activation could only be, let's say, a $200,000 a project. So for us to bridge that gap, it's taking this time to get there. The other – the second major line of business, probably where we anticipate we should be able to recover or should be able to do a good job with this Professional Services is leveraging those relationships in the health system space to sell our RCM services.

As you may recall, last year, when we presented the numbers for Professional Services division, we were able to increase the revenue of RCM by roughly 300% compared to prior to acquisition. So both of these two – and we see a – may not be the similar 300%, but there is a decent increase on the RCM revenue compared to the last year as well.

So our RCM business line under MedSR is growing. Our Meditech business line is also growing, and that's opening even further door for us into a more partnered possible relationship on the RCM with Meditech and also our Middle East opportunity. So we believe between the two, we will keep on growing.

Our goal would be. And again, we will share the numbers at the end of this year when we close the year. Our goal would be that at least with these two possible lines and the opportunities that exist for us in Middle East, we should be able to get back to where we should be by the end of next year. Again, that's one goal. We yet to see how the things plays out until the end of this year. But we do see a lot of these opportunities and the path for us to get back to where we should be.

Unidentified Analyst

Great. Thank you. And then on your Middle East expansion, congrats on the UAE trade license. When do you anticipate recognizing revenues there?

Hadi Chaudhry

Great. And I'll answer it. And just to mention that Dwight who is heading over MedSR as well as the Middle East division, he also joined us for the Q&A session. And Karl from the Force division, the head of the Force, he also had joined us during the Q&A session.

So let me answer that, and then I'll hand it over to Dwight to give you a little more color. We – in the current phase, we are going through the process of finding the right boots on the ground resources we have the knowledge you can go and help us sell into that space and there are a number of other activities that we are projecting. Our internal goal is to at least have been able to sign R&D a few deals before the end of this year, which should have a revenue recognition for us into the next year. Because there's no matter what you do by the time we signed the deal, get the resources aligned, get the projects initiated, the revenue recognition will take at least six months from the point of signing the deal. So this is a bigger picture. But Dwight would you like to give just a little more color like how you're doing on the Middle East side for Neil and the other people listening.

Dwight Garvin

Sure, absolutely. Good morning and thank you for taking some time. So yes, in UAE, we're excited about the opportunities there and not only UAE, but also the GCC. So we're seeing those six Gulf countries really bringing together quite a few and exciting opportunities for us.

My colleague said earlier, I attended a few conferences this year and so did Karl. We're seeing a lot of excitement in what we're bringing to the table, both from a professional services and a solution point of view.

Looking this quarter, really, we're hiring our business development team and getting them up and running. And then with our goal really, as we move through Q3 and Q4 of using the Arab Health Summit, which is in January of 2024 is really our time that we can come forward and show all of our solutions. It's a huge conference, almost 65,000 attendees. So that really becomes where we're porting towards as we move through Q3 and Q4 and building that excitement and those opportunities to come.

Unidentified Analyst

Great. Thank you so much for taking my question.

Hadi Chaudhry

Thank you.

Operator

Thank you. The next question comes from Derek Greenberg of Maxim Group. Please go ahead.

Derek Greenberg

Hi. Good morning. I wanted to touch on Wellness a little bit more and possibly just some things you're learning as that process continues to roll on and some actions you may be taking to improve onboarding for the product?

Hadi Chaudhry

Thank you, Derek. And thanks for your question. So I think if – I’ll just hit it in a way, first to fall even other than for our clients or the doctors or the providers and for us and the doctors are also trying to adapt to this new preventive care and accept and adopt to the preventive care technologies or the options and the opportunities. And then also for the patients, it's a paradigm shift from every time when you feel, say, going to the doctor's office and seeing them in person from that shift to the telehealth appointments.

Now this is another paradigm shift, where you were not sick, you're not feeling sick, but there are still certain things in the case of the chronic conditions that can proactively be managed. So that paradigm shift is taking us time to convince the patient that this is something good for you in the long-term. Those – let's say, onetime in a month, 20 minutes or 45 minutes and in case of the diabetes or blood pressure taking those meetings every day, how that's going to change your overall health in the long-term.

Yes, we are continuing to adapt other ways as an example, what are the right times to call the patients. If the patient is more available during the lunch hour versus in the evening hours, how can we leverage our automated text messages, how we can keep sending them a text message to remind them from the call before they have to get on the call because there are leakages in all of these places, number one, convincing the patient. The number second, they may not be available for the call even though the call was scheduled.

So all of these pieces, we do have the technology that we have developed over the last 20 years. For us, is it just a matter of keep plugging in those technologies at the right time in the right places and making sure how we can ramp up or improve the patient deductibility.

Long-term to long picture, the bigger picture, I think this industry is also going to drive that paradigm shift or the deductibility because as more and more insurances have started to cover their deductibles will be impacted. The doctor will have more incentive to get so there will be a better push even coming from the doctor when they are trying to convince the patient.

So for this year, for the last one year, based on their data, we had to readjust this guidance. We are trying to be more conservative now and then try to actually surpass those expectations as we keep on improving with the help of the different technology. So I think if you want to talk about and we can plan to by the end of this year, dive into a little more details in terms of the various KPIs in this space. But at the moment, I think we are not ready to dive into those specifics. But there's an overall and high level, I would say, the picture, unless Larry, if you would like to give any other color on the numbers specific, I think...

Larry Steenvoorden

No, I think I that just covers it from the overall business strategy, and then how we're thinking about this and moving into really a 2024 catalyst and not a significant revenue driver for the share.

Hadi Chaudhry

And Derek, the good thing for us is the business is signed. We have already the acknowledgment for the doctors. So we have a good number to focus on, and we continue to see the attraction from even our existing client base in addition to the new logos.

And now when we are selling our end-to-end solution, sometimes this becomes a hope for us. If they sign up for chronic care and remote patient monitoring, it comes for us as an entire end-to-end deal instead of just a remote patient monitoring and chronic care management.

And let's say, we do not have any insight from the CMS in terms of the next year's reimbursement rates, but we hope and again, it's just a hope, it's based on all the moving parts of this industry that there could potentially be some improvement or some – to give more attraction to the Chronic Care management because in the bigger picture, this is going to improve the expenditures of the government at large.

Derek Greenberg

Okay. Great. Thanks for the color. And then my other question is just what the bookings in the quarter were and how that compared to last year? And then maybe if you could just touch on the therapy offering trial, how that's progressing?

Hadi Chaudhry

Sure. Derek, and I missed the last part, please of your question. Can you repeat that, please, the last piece of your question? The color on…

Derek Greenberg

My apologies. The question was bookings in the quarter. And then the second part was just the therapy offering trial you guys are working on how that's tracking.

Hadi Chaudhry

Got it. Okay. Sure. So for – in order from the booking standpoint, if you compare the first half of 2022 compared to the first half of 2023, we have done better compared to the last year. We shared the number of the last quarter booking to be, I think, around was $7 million what we booked for the second quarter of 2022. So the two quarters together first and the second of last year because this quarter, as on the reason we kept sharing the by quarter booking numbers just to make sure that how we are ramping up our sales engine and the marketing engine. And this year, we plan not to give the quarterly booking numbers.

But just to give you a color, we have done better compared to the last – the first half of last year, but the mix is a little different. We see more traction and attention towards the chronic care management and the remote patient monitoring, so that makes this change.

Last year, it was, let's say, 40 to 60. So this year, it's more probably between 70% and 30%, 70% on the digital health and 30% on our tech-enabled core RCM and the SaaS bookings. So – but that translates basically and the reason I'm giving that color, even though the bookings are higher, there's a different go-live time. The revenue recognition is going to be a little different. Tech-enabled average six months, we can start recognizing the revenue. And in the case of chronic care and remote patient, it looks like with the full ramp, gradual ramp. It's going to be somewhere over in a year.

And so now to the second part of your question, Derek, for the therapy. We had some early adapters as I mentioned last year – on the last quarter, we are continuing to work with those early adapters and keep on improve our product to make sure any of the concerns or optimize it is addressed and the product keeps on getting optimized.

As you know, we have our largest client or over among our top clients of our therapy practice. We are closely working with them as well. But as you know, the other large players who have been in this therapy business for the last multiple decades, as an example, Raintree or WebPT and some of these others. And most of the time, these contracts are a number of years contract. So even if someone likes the product today, they're going to have to wait for probably a year or two unless whenever their next renewal is due, and there is a huge transition plan that we have to work through.

So we are getting traction, and we have a pipeline to work on, and we will keep on up-to-date when we are able to sign the business there. For the new logos, we are extensively actively working on with the marketing campaigns. So we hope to get some results over the next two quarters from this therapy in terms of the new logos.

Our product is very – we received many good reviews and the feedback even from the very large multisite multi-clinician practices compared to what exists today in the industry. It's a multiple – it’s a significant step forward in terms of technological advancements. If I use this analogy if think about, as an example, in EPIC system. It's been there in the industry probably, let's say, from 60s or 70s. It's the easiest decision for a hospital today to choose EPIC if they can afford it versus – and everyone believes there are other products that exist in the market, which is far more superior and technologically advanced. But it takes them some time to take the decision that if any other product is justifiable for them. And that's the kind of where we are fighting and struggling right now. We are making good progress. We are still excited about it, and we hope that should – we believe and confident that will add value for us in the years to come.

Derek Greenberg

Okay. Great. Thanks for answering my questions.

Hadi Chaudhry

Thank you.

Operator

Thank you. There are no further questions. I will turn the call back to Kim Blanche for closing remarks.

Kimberly Blanche

On behalf of the company, I'd like to thank everyone who has joined us on today's call. We appreciate your participation and your interest in us as a company, and we look forward to speaking with you again next quarter. Thank you, everyone, and have a great day.

Hadi Chaudhry

Thank you.

Operator

Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.