Allscripts Healthcare Solutions (MDRX)
Q2 2011 Earnings Call
August 02, 2011 4:30 pm ET
Clifford Meltzer - Executive Vice President of Solutions Development
William Davis - Chief Financial Officer and Principal Accounting Officer
Glen Tullman - Chief Executive Officer, Executive Vice President and Director
Seth Frank - Vice President of Investor Relations
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Thank you, Alicia. This is Seth Frank, Allscripts Vice President, Investor Relations. On the call today are Glen Tullman, our Chief Executive Officer; Bill Davis, our Chief Financial Officer; and Lee Shapiro, our President.
Before we begin, let me read the brief Safe Harbor statement. This presentation will contain forward-looking statements within the meaning of the Federal Securities laws. Statements regarding future events and developments or companies future performance as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties, including our ability to achieve the strategic benefits of the merger with Eclipsys and other factors outlined from time to time in our most recent transition report on Form 10-KT, our earnings announcements and other reports we file with the Securities and Exchange Commission. These are available at www.SEC.gov. The company undertakes no obligation to update publicly any forward-looking statements whether results of new information, future events or otherwise.
And with that, I'd like to turn the call over to Glen Tullman, CEO of Allscripts.
Thanks very much, Seth. I want to welcome all of you to the Allscripts 2011 Second Quarter Earnings Call. I'm pleased to welcome Cliff Meltzer, our new Executive Vice President of Solutions Development who I'll ask to say a few words later in the call.
Let's begin the call today with a high-level view of the market, and then we'll walk through the details of the quarter. I really see 2 stages playing out in this market. The first stage is Meaningful Use, which will continue to be a significant driver in accelerating adoption in this market. We are perfectly positioned with the largest footprint in the market, with clinical and financial solutions for all points of care and the largest sales force in the industry. We believe we have leading share in the market today and that it will continue to grow.
The second stage will be the emergence of new payment models, such as accountable or value-based care where providers will be paid for quality versus quantity. This market will be driven by companies that can connect care and provide insights that drive clinical and financial outcomes. Relative to the second stage, our open platform will connect patient information into a single view and help to coordinate care, both inside an organization and throughout the community. Our analytics capabilities, which include our partnership with and strategic investment in Humedica, signed in the second quarter, will provide insights that will drive both clinical and financial outcomes. That is what will be rewarded in the future model where Allscripts has already proven that we can deliver. As the advisory board cited in the their leasing report, Allscripts is the "market leader in improving clinical outcomes" through the delivery of actionable insights.
The key point here is that Meaningful Use, the Meaningful Use threshold of the Federal HITECH Act that we have all heard so much about, is increasingly being seen as minimum use. In other words, it's the first stage in building the infrastructure that will enable the delivery of insights leading to better outcomes. There will be significant growth in this market for years to come, and we believe that there is no company better positioned to capture the opportunity in the market today and in the future.
Having made these points, let's turn to the quarter. Allscripts' performance in the second quarter was strong across-the-board, reflecting the demand in the market and the strength of our solutions. We delivered bookings of $244.6 million, up 15% from the first quarter of 2011, reflecting strong sales across our entire portfolio. The overall volume of bookings for the transactions over $1 million was up by over 50%, which indicates a very solid mix of business across a large number of clients. To give you an example of how our market penetration is growing compared to another publicly-traded peer we're often compared to, in the June quarter, Quality Systems reported 97 new client agreements. By comparison, Allscripts signed a total of 359 net new clients during the quarter. It's clear that we're winning in the most important area of all: market share. Every quarter, more and more healthcare organizations are using Allscripts as their operating system.
Last quarter, I mentioned third-party validation of that fact from MGMA. In June, yet another major industry survey confirmed our leadership and mind share among physician practices planning to purchase an Electronic Health Record. The survey of 1,300 physician groups from CapSite, a respected research and advisory firm, reported that Allscripts leads all other Electronic Health Record providers in mind share, spanning the full spectrum of physician groups.
Returning to the numbers, in the second quarter, we also delivered non-GAAP revenue of $363.5 million, non-GAAP net income of $42.5 million and non-GAAP earnings per share of $0.22, which together reflects solid execution against our operational and financial plan during the quarter. Our financial results were driven not only by new clients, but by significant cost sales into our base as well. In fact, our current client base expanded their investments with Allscripts across all of the segments we served.