CloudMD Provides Business Update on Customer Momentum
CloudMD Software & Services a healthcare technology and innovative health services company transforming the delivery of care, is pleased to provide a business update on its customer momentum and contract wins within its core Enterprise Health Solutions (“EHS”) division, and an update on the Ontario Health Therapist Assisted Internet-Based Cognitive Behavioral Therapy (“TAiCBT”) support service program.
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EHS Customer Momentum
CloudMD continues to drive customer momentum, and new contract wins within its EHS division. The Company’s organic growth strategy is focused on three key areas, including selling direct to new organizations, expanding channel partners and cross selling its established suite of products.
In the second quarter, CloudMD signed several multi-year contracts which will contribute new organic annual recurring revenue (“ARR”) of $4.2 million, coming from all channels of its growth strategy. Additionally, these contract wins reflect a diverse portfolio of Government, employers, and insurers, further expanding CloudMD’s B2B/B2G client base and payor network.
One specific example is a significant new contract with the Christian Labour Association of Canada (CLAC), a large National labour union representing over 60,000 workers. Through HumanaCare, its Employee and Family Assistance Program (“EFAP”) provider, CloudMD won a competitive process to provide EFAP services to CLAC members covered by one of their Health & Welfare Trusts beginning in September 2022.
Other recent notable client wins include:
- Leading national US insurance company
- Large transportation manufacturer
- Leading national telecommunications provider
- Multiple regional health networks
- Large financial services firms
- Distribution partnership with North American group benefit provider
New TAiCBT Ontario Government Contract
After a competitive process, CloudMD’s TAiCBT provider, MindBeacon, has been one of two companies chosen to provide TAiCBT services for Ontario citizens under the new Ontario Health Contract. The two-year contract has been awarded for the provision of TAiCBT support services to be integrated into the Ontario Structured Psychotherapy Program (the “Ontario Program”) starting this fall. Details of the contract have been made publicly available on the procurement website MERX.
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The program is expected to expand over time, based on the growing need for proactive mental health supports. Compared to the previous two-year COVID Response Program, which the Government is winding down as anticipated, this new contract represents a reduction of approximately 85% in the number of guided iCBT cases that will be funded.
To offset the revenue impact, CloudMD is in the process of eliminating the direct delivery costs associated with providing the services, as well as identifying further cost synergies to offset the gross contribution from the contract. CloudMD has already implemented several of these initiatives and will continue to take the necessary steps to right-size its cost structure related to the program accordingly. CloudMD continues to engage in discussions with the Ontario Government on how to continue to expand access to mental health services for all Ontarians.
Furthermore, CloudMD has integrated its TAiCBT support service into its Kii platform and is delivering it as part of its overall Mental Health Support Solutions (“MHSS”) to diversify its network of private and public clients. The Company remains confident in its TAiCBT program, which coupled with MHSS will drive further growth and margin expansion over time.
“The strong customer adoption of our offerings is attributed to the execution of our growth strategy and unique product offering. This growth is partially offset by the end of one-time contracts. CloudMD was one of only two companies chosen by the Ontario Government to provide mental health services under its new contract because of our industry leading TAiCBT’s ability to provide positive, evidence-based health outcomes. We are in continuous dialogue with the Government on how we can improve access, as we have a shared understanding of the importance of mental health support,” said President and CEO Karen Adams. “The Company remains focused on driving organic growth through direct sales to new clients, leveraging existing distribution partners and cross-selling to our current client portfolio. The client wins representing $4.2 million in ARR is a testament to the success of our strategy and our key differentiators of providing personalized care and valuable health data and outcomes. I look forward to providing more details on the progress we’ve made on our Q2 conference call later this month.”
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