MONTREAL, Sept. 20,
2022 /CNW Telbec/ - Dialogue Health Technologies Inc.
(TSX: CARE) ("Dialogue"), Canada's
premier virtual healthcare and wellness platform, provided today a
business update and offered an outlook for its third quarter of
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 which signed on to additional services on the
Integrated Health PlatformTM. The net impact to date has
been accretive to gross profit, and has more than compensated for
the anticipated customer churn, which remained within plan.
While we continued to deliver successfully on our objectives,
Optima recently received a notice from one of its customers, which
was reluctant to modernize its offer, confirming that it will not
renew its agreement with Optima. As such, the service relationship
will end on December 31, 2022. This
agreement represented revenue of approximately $4.6 million in the twelve months ended
July 31, 2022, with a gross margin less than half of that
generated in our virtual business, well below our targeted margin
profile.
"Every day, we hear from customers and members who appreciate
the responsiveness, convenience, and effectiveness of our modern
approach," said Cherif Habib, Chief Executive Officer of
Dialogue. "Our ability to consult with patients within 24 hours,
compared to several weeks for legacy EAPs, as well as our
commitment to provide strong continuity of care, have reduced
employee leaves of absence in a meaningful way and generated a
clear return on investment for customers. Demand for our modern EAP
is robust and our pipeline for that service continues to
grow."
Navaid Mansuri, Chief Financial
Officer, continued: "While disappointed to lose a customer, we
stand by our strategy to focus on higher margin, tech-enabled
services that deliver superior outcomes. The churn at Optima
represents lower margin revenue that varies based on utilization
and that we expect to replace with more stable recurring revenue on
our Integrated Health PlatformTM. When combined with
operating expense savings, we anticipate that the impact on
adjusted EBITDA will be limited. The net result will be a higher
gross margin profile for our business. We remain committed to
breakeven EBITDA by the end of 2023, and are well-capitalized to
achieve our growth and profitability objectives."
Of important note, this announcement does not affect Dialogue's
reported key performance indicators such as Members, Attach Rate,
Member-Service Units, and Net Retention Rate, as these metrics
never included Optima.
Canada Life expands its
relationship with Dialogue
Effective on September 1, 2022,
Dialogue's Mental Health service and EAP have been made available
through Canada Life's Consult+ app across Canada for plan sponsors that choose to add
them. This development is a strong testimonial from one of
Canada's most important insurers
in favour of our modern approach to generate positive health and
wellness outcomes. Importantly, it is also supportive of our
integrated platform as a key factor to drive 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
Guillemette, Chief Operating Officer of Dialogue. "We are
proud to work with Canada Life to help Canadians access modern,
convenient and quality care."
Recent wins highlight momentum
with enterprise customers and student associations
Our momentum in the third quarter to date has been strong. We
added more than $5.2 million in
new ARR and expect to record more gains before the end of the
period. Importantly, ARR for our virtual business in Canada, which represents approximately 75% of
our revenues, grew by nearly 60% year-over-year. We continue to
have good traction within the enterprise segment and are seeing a
positive contribution from all our services.
From a partnership standpoint, we are seeing many Sun Life
customers expanding their benefits on the Lumino Health platform by
adding our virtual EAP to their existing Primary Care service. From
a direct customer standpoint, wins include a large retail chain, a
national food producer, and a global technology leader.
Additionally, our relationship with a leading provider of
student health plans in Canada
continues to expand, as many colleges and universities take
important steps to support the health and well-being of their
students. Our performance in this segment has been strong and
students who love our services become ambassadors for Dialogue with
employers as they integrate the workforce.
Outlook for the third quarter of
2022
Dialogue is providing an outlook based on current market
conditions and expectations. For the third quarter of 2022, we
expect:
- Total revenue to be in the range of $23.2 million to $23.5
million.
- Gross profit margin to be in the range of 49.0% to 50.0%.
- Adjusted EBITDA to be in the range of ($4.7) million to ($4.5)
million.
About Dialogue
Incorporated in 2016, Dialogue is Canada's premier virtual healthcare and
wellness platform, providing affordable, on-demand access to
quality care. Through our team of health professionals, we serve
employers and organizations who have an interest in the health and
well-being of their employees, members and their families. Our
Integrated Health Platform™ is a one-stop healthcare hub that
centralizes all of our programs in a single, user-friendly
application, providing access to services 24 hours per day, 365
days per year from the convenience of a smartphone, computer or
tablet.
Forward-Looking
Information
This release includes "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
position, business strategy, growth strategies, addressable
markets, budgets, operations, financial results, taxes, dividend
policy, plans and objectives.
In some cases, but not necessarily in all cases, forward-looking
statements can be identified by the use of forward-looking
terminology such as "plans" "targets", "expects" or "does not
expect", "is expected", "an 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 "may", "could",
"would", "might", "will" or "will be taken", "occur" or "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, nor guarantees or assurances
of future performance but instead 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 that, while considered
reasonable by Dialogue as of the date of this release, are subject
to inherent uncertainties, risks and changes in circumstances that
may differ materially from those contemplated by the
forward-looking statements. Important factors that could cause
actual results to differ, possibly materially, from those indicated
by the forward-looking statements include, but are not limited to,
the risk factors identified under "Risk Factors" in Dialogue's
latest annual information form, and in other periodic filings that
Dialogue has made and may make in the future with the securities
commissions or similar regulatory authorities in Canada, all of which are available under
Dialogue's SEDAR profile at www.sedar.com. These factors are not
intended to represent a complete list of the factors that could
affect Dialogue. However, such risk factors should be considered
carefully. 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 forward-looking information, there may be other risk
factors not currently known to us or that we currently believe are
not material that could also cause actual results or future 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. The forward-looking information represents our
expectations as of the date of this earnings release (or as 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 under applicable Canadian securities laws. All
of the forward-looking information contained in this earnings
release is expressly qualified by the foregoing cautionary
statements.
SOURCE Dialogue Health Technologies Inc.