NextGen Healthcare (NYSE:NXGN) Q1 2020 Earnings Conference Call Transcript

Jul 24, 2019 • 05:00 pm ET

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NextGen Healthcare (NYSE:NXGN) Q1 2020 Earnings Conference Call Transcript

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Q & A
Analyst
Gene Mannheimer

line. Maybe you could quantify that for us, Jamie, because, certainly you're reducing the EPS guidance I understand why, but how much of a benefit would this R&D restructuring deliver?

Executive
Rusty Frantz

Gene, I'm actually going to answer that qualitatively. R&D restructuring was not driven by cost reductions. The R&D restructuring was driven by increased regulatory intensity from the government, as well as continuing increasing needs from the client base. When it came down to it, our capacity model was not enough with the ramping up of government regulation to be able to both deliver the capabilities our clients need to win and also deliver the capabilities that the government requires them to. And so based on that, we actually needed to expand our capabilities and expand our headcount. And so we are -- this enabled us to do that cost neutrally, but does not create EPS favorability. It creates future optionality from an innovation standpoint.

Analyst
Gene Mannheimer

All right. Very good. Thank you.

Executive
Rusty Frantz

Thank you.

Operator
Operator

And we have no further questions at this time.

Executive
Rusty Frantz

All right. Well, I'm going to thank Cerner for taking all the rest of the questions away since their earnings call just started. But thanks, everybody for hanging in there. We will look forward speaking to everybody on the next call. Thank you.

Operator
Operator

[Operator Closing Remarks]