NextGen Healthcare (NYSE:NXGN) Q1 2020 Earnings Conference Call - Final Transcript
Jul 24, 2019 • 05:00 pm ET
[Operator Instructions] And your first question comes from the line of Ricky Goldwasser with Morgan Stanley. Please go ahead.
Hi, this is actually Alexa in for Ricky, can you hear me okay?
Great. So I just -- I kind of wanted to unpack your comments on the larger client booking loss from last year. So you said they went into operational challenges. So can you maybe give a little bit more color on what they -- what was happening with them, when they notified you about these issues and...
My apologies, that is confidential and proprietary for the clients. What I would say is that, it was not a NextGen issue that caused this to go in this direction. And so we had a significant booking -- the booking was give or take about $4 million annually, and we had reason to expect that they were going to solve their financial problems as we came into this year and just in the last month or so, we've realized that that is -- we have come to the conclusion that that is not going to happen. Now, fortunately, because we are conservative, we did not actually book revenue on this. And so as they came to this point, we are simply removing it from our revenue forecast and moving on.
Got it. Okay. And I guess just to follow up on that, do you -- in terms of your other clients and that the bookings that you made last year, do you foresee this issue coming up with anybody else or are you fairly confident in the rest of the revenue forecasts for the year?
Yeah. The only reason we actually bring this forward is two-fold. Number one, it's material to the forecast this year, and number two, it's an extraordinary event for us to have something go this way. And therefore, we felt like in the interest of transparency that we needed to share with the investment community the fact that one of the two very large bookings for last year was not turning into revenue and therefore impairing this year's revenue forecast.
Got it. Okay, and then just a second one for me. On the retention, you said 89%, which is exactly the amount you guys are modeling for the full year, so that's great. Just in terms of how you're thinking about it for the rest of the year, you guys have previously mentioned, the key factor to watch is just hospitals and systems migrating towards single stack. And so do you guys foresee any of that happening later to the year or you -- is everything kind of just stable as of now?
Look, I mean, I think we've been pretty clear in the past that a lot of our exposure to hospital consolidation has already run off. And so attrition is just a difficult thing to forecast. We -- that's why we say the number is somewhat volatile, because frankly, you can only read so much