Vocera Communications, Inc. (NYSE:VCRA) Q2 2020 Earnings Conference Call - Final Transcript

Jul 27, 2020 • 05:00 pm ET


Vocera Communications, Inc. (NYSE:VCRA) Q2 2020 Earnings Conference Call - Final Transcript


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Brent D. Lang

importantly, our Smartbadge is building meaningful momentum as customers recognize the value in choosing the right device for the right role.

Despite the difficult environments and budgetary challenges facing our hospital customers, our engagement with them continues. Our teams took quick action to transition as many meanings as possible to virtual discussions. And as a result, our pipeline is strong and engagement with prospects is high. Our teams have risen to the challenge and are excelling in this new normal.

Now let me go into a little bit more detail on some of the highlights from the quarter. Our Q2 bookings performance was great. We won several very large strategic deals, and we saw continued strength in urgent COVID-related orders as hospitals worked quickly to try to prepare for and respond to this crisis.

Our strong bookings performance underscores our relevance and importance, both today and over the longer-term as we streamline clinical workflows and communications, drive efficiencies and cost savings and improve patient and care teams' safety. Our sales team really delivered this quarter.

In the VA alone, we booked over $6 million in large and strategic new facility wins. We also won an important $2 million expansion at UT Southwest, where they will be using our Smartbadge, and we received a follow-on expansion order from Kaiser that was equal in magnitude to last quarter's big win. Interest in our hands-free device remains high and badge orders grew substantially over last year as customers leveraged our software platform during these challenging times.

In a dynamic supply chain environment, we met the demand for our badges by ramping our assembly capacity in Mexico and Taiwan, and we are proactively building higher inventory to prepare for future demand. We have positioned our hands-free solution as an essential part of clinician's personal protective equipment and based on our strong first-half performance, it is clear to me that our badge is now viewed by many of our customers as PPE.

One of the highlights of the quarter was growing momentum around the uptake of Smartbadges as new features like the wake word and panic button are driving interest from customers. For example, Norton, a large new customer for us in Q4, shifted their plans in Q2 to include Smartbadges rather than smartphones for certain roles. They told us they are now able to include almost 50% more of their care teams in the deployment of our solution because of the cost savings of using the Smartbadge rather than smartphone. This means we can have greater impact on patient safety and staff experience across the health system.

Other new Smartbadge customers include the University of Arkansas Medical Center and South Coast Health. We believe the Smartbadge is elevating its importance in an environment where customers are picking the right device for the right role. The federal market was especially robust for us in Q2, and we are delighted that strong demand from the Fed is no longer just a Q3 event. This quarter's Fed