MONTREAL, September 20, 2022 /CNW Telbec/ – Dialogue Health Technologies Inc. (TSX: CARE) (“Dialogue”), from Canada leading virtual healthcare and wellness platform, today provided a business update and offered guidance for its third quarter 2022.
Update on Customer Migrations at Optima
Since acquiring Optima Global Health (“Optima”) in 2020, Dialogue has successfully migrated a large percentage of Optima customers to Dialogue’s Virtual Employee Assistance Program (“EAP”), many of whom have subscribed to additional services on the integrated health platformMT. The net impact to date was accretive to gross profit and more than offset anticipated customer churn, which remained within plan.
As we continue to successfully deliver our goals, Optima recently received notice from one of its customers, who was hesitant to upgrade their offering, confirming that they would not be renewing their agreement with Optima. Thus, the service relationship will end on December 31, 2022. This agreement represented revenue of approximately $40.6 million in the twelve months ended July 31, 2022, with a gross margin less than half that generated in our virtual business, well below our target margin profile.
“Every day we hear from customers and members who appreciate the responsiveness, convenience and efficiency of our modern approach,” said Cherif Habib, Managing Director of Dialogue. “Our ability to see patients within 24 hours, compared to several weeks for legacy EAPs, along with our commitment to providing strong continuity of care, has reduced employee time off significantly and delivered a clear return on investment. for the customers. . Demand for our modern EAP is robust and our pipeline for this service continues to grow. »
Mansuri Navigation AidChief Financial Officer, continued: “While disappointed to lose a customer, we maintain our strategy of focusing on higher margin technology services that deliver superior results. Churn at Optima represents lower margin revenue that varies by usage and that we plan to replace with more stable services. recurring revenue on our Integrated Health PlatformMT. Combined with operating expense savings, we expect the impact on Adjusted EBITDA to be limited. The net result will be a higher gross margin profile for our business. We remain committed to achieving EBITDA breakeven by the end of 2023 and are well capitalized to achieve our growth and profitability targets.”
It is important to note that this announcement does not affect key performance indicators reported by Dialogue, such as members, attach rate, member service units and net retention rate, as these measures do not have ever included Optima.
Canada Life expands relationship with Dialogue
Effective on September 1, 2022Dialogue’s mental health service and EAP were made available through Canada Life’s Consult+ app in Canada for plan sponsors who choose to add them. This development is strong testimony to one of the from Canada leading insurers for our modern approach to driving positive health and wellness outcomes. Importantly, it also supports our integrated platform as a key factor in driving growth and adoption.
“This extension of our relationship with Canada Life will increase access to mental health resources for Canadians in need,” said Jean-Nicolas GuillemetteDeputy Managing Director of Dialogue. “We are proud to work with Canada Life to help Canadians access modern, convenient and quality care.”
Recent successes underscore the dynamic with corporate clients and student associations
Our momentum in the third quarter to date has been solid. We added more $50.2 million new ARR and expect to register more gains before the end of the period. Importantly, ARR for our virtual business in Canada, which accounts for approximately 75% of our revenue, grew nearly 60% year-over-year. We continue to have good traction in the enterprise segment and are seeing positive contribution from all of our services.
From a partnership perspective, we are seeing many Sun Life customers extend their benefits on the Lumino Health platform by adding our virtual EAP to their existing primary care service. From the perspective of direct customers, the winners include a large retail chain, a domestic food producer and a global technology leader.
Additionally, our relationship with a leading provider of student health plans in Canada continues to grow, as many colleges and universities take significant steps to support the health and well-being of their students. Our performance in this segment has been strong, and students who enjoy our services become ambassadors for dialogue with employers as they enter the job market.
Outlook for the third quarter of 2022
Dialogue provides perspective based on current market conditions and expectations. For the third quarter of 2022, we expect:
- Total revenue must be in the order of $23.2 million at $23.5 million.
- The gross profit margin must be between 49.0% and 50.0%.
- Adjusted EBITDA should be around ($4.7) million at ($4.5) million.
Incorporated in 2016, Dialogue is from Canada leading virtual healthcare and wellness platform, providing affordable, on-demand access to quality care. Through our team of healthcare professionals, we serve employers and organizations that have an interest in the health and well-being of their employees, members and families. Our Integrated Health Platform™ is a one-stop-shop healthcare hub that centralizes all of our programs in one easy-to-use app, providing access to services 24 hours a day, 365 days a year from the convenience of a smartphone, a computer or tablet. .
This release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking information may relate to our financial outlook (including revenues and Adjusted EBITDA) and anticipated events or results and may include information regarding our financial condition, business strategy, growth strategies, potential markets, budgets , our operations, our financial results, our taxes, policy, plans and dividend targets.
In some, but not necessarily all, instances, forward-looking statements can be identified by the use of forward-looking terms such as “plans”, “targets”, “expects” or “does not expect”, ” is expected”, “opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “could”, “could”, “would”, “could”, “will” or “will be taken”, “will occur” or “will be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts or guarantees or assurances of future performance, but rather represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance.
Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates which, although considered reasonable by Dialogue as of the date of this press release, are subject to uncertainties, risks and changes in circumstances. which may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, perhaps materially, from those indicated by the forward-looking statements include, but are not limited to, the risk factors identified under “Risk Factors” in the latest notice. Annual Report of Dialogue, and in other filings that Dialogue has made and may make in the future with securities commissions or similar regulatory authorities in Canadaall of which are available under Dialogue’s SEDAR profile at www.sedar.com. These factors are not intended to represent a complete list of factors that could affect Dialogue. However, these risk factors should be carefully considered. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. Dialogue undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.
Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other risk factors that are not currently known to us or that that we currently believe are not material and that could also cause future results or events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, you should not place undue reliance on forward-looking information. Forward-looking information represents our expectations as of the date of this press release (or as of the date it is otherwise stated to be made) and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by Canadian securities laws. . All forward-looking information contained in this press release is expressly qualified by the foregoing caveats.
SOURCE Dialogue Health Technologies Inc.
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