athenahealth — Investor Day (February 2018)

128 slides from athenahealth's investor day presentation, Feb 15, 2018

Slide 1: 2018 Investor Summit
2018 Investor Summit February 15, 2018
Slide 2: Welcome to our Investor Summit
Welcome to our Investor Summit Dana Quattrochi Investor Relations
Slide 3: Agenda
agenda Opening and Closing Remarks Jonathan Bush • Chief Executive Officer Financial Expectations Marc Levine • Chief Financial Officer Technology and Platform Strategy Prakash Khot • Chief Technology Officer Core Services Strategy Kyle Armbrester • Chief Product Officer Network Services Strategy Jo
Slide 4: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements reflecting athenahealth, Inc. (“athenahealth” or “we”) man
Slide 5: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In our press releases, conference calls, slide presentations, or webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed herein
Slide 6: Opening Remarks
Opening Remarks Jonathan Bush Chief Executive Officer
Slide 7: We are building the platform for healthcare
We are now – and have always been– building the platform for healthcare. © athenahealth 7
Slide 9: Our purpose
Our purpose We are the enabler It’s not just about us – it’s about everyone unleashing our collective potential to transform healthcare We’re changing the industry © athenahealth
Slide 10: Open up the network, multiply intelligence, free people
Our purpose Open up …multiply …and free people the network… its intelligence… to do what matters © athenahealth
Slide 11: Our purpose, commitments, fundamentals, results
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Our Fundamentals People Culture Tech Our Results Revenue growth Operating results Managed risk © athenahealth 11
Slide 12: Our purpose: client value
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters $$$ CLIENT VALUE $$ $ Free Our Fundamentals People Culture Tech Our Results Revenue growth Operating results Managed risk © athenahealth 12
Slide 13: Our purpose: big data sets and outcomes
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters X1 X2 Business & experience outcomes X3 Big data sets X4 Our Fundamentals People Culture Tech Our Results Revenue growth Operating results Man
Slide 14: Our purpose: automation cycle
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Automation Cycle Direct Analyze Automate Outsource Our Fundamentals People Culture Tech Our Results Revenue growth Operating results Managed r
Slide 15: Our purpose: fundamentals
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Our Fundamentals People Culture Tech Teach healthcare and “agile” Simple Microservices Candid Real-time intelligence Our Results Relevant Debt
Slide 16: Our purpose: results targets
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Our Fundamentals People Culture Tech 7-13% 16-17% Diversify revenue through new services Our Results operating income and markets Revenue grow
Slide 17: Our purpose
Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Our Fundamentals People Culture Tech Our Results Revenue growth Operating results Managed risk © athenahealth 17
Slide 18: Market Opportunity: Horizon 1
In order to achieve our vision, we will invest in three growth markets over the next five years. MARKET OPPORTUNITY Horizon 1: The Doctor in Practice 1999 TIME TODAY PLATFORM FOUNDATION Microservices • Scale • Performance © athenahealth 18
Slide 19: Market Opportunity: Three Horizons
In order to achieve our vision, we will invest in three growth markets over the next five years. MARKET OPPORTUNITY Horizon 3: Employers & Payers Horizon 1: The Doctor in Practice Horizon 2: Hospitals & Ancillaries TIME ONE-TO-TWO YEARS TWO-TO-FOUR YEARS FOUR-TO-FIVE YEARS PLATFORM FOUNDATION Micros
Slide 21: Financial Expectations
Financial Expectations Marc Levine Chief Financial Officer
Slide 22: 2017 financial and operational highlights
2017 financial and operational highlights Total Revenue GAAP/Non-GAAP OP Inc1 Operating Cash Flow $1.220B $71M/$175M $241M 13% YoY Growth 5.8%/14.3% of Revenue 32% YoY Growth Collector Providers Discharge Bed Days Covered Lives 111K 73K 3.3M 15% YoY Growth >500% YoY Growth 48% YoY Growth 1 See non-G
Slide 23: Revenue and operating income expansion
While we remain focused on growth, we see opportunity for operating income expansion $1,550 $290 $1,310 to $1,380 $1,350 Operating Income $Millions $240 $210 to $235 $1,150 Revenue $Millions $950 $190 $108 to $750 $152 $140 $550 $90 $350 $40 $150 ($50) $(10) 2007 (IPO) 2008 2009 2010 2011 2012 2013
Slide 24: Installed base of recurring revenue
Our large installed base of recurring revenue provides a foundation for future growth and margin expansion % Share of 2018 Revenue Budget 3% 2% 5% Key Assumptions Existing Client Base Client Retention 90% Utilization Client Ramp Backlog & Bookings 1H 2018 Bookings Implementation Timelines To be sold
Slide 25: Balance between growth, margin and free cash flow
Based on the investment opportunity horizon, we’ll seek an optimal balance between revenue growth, operating margin, and free cash flow Continuously identify and generate operating 1 efficiencies across the business Carefully select investments with: high return and high growth contributions 3 Focus
Slide 26: Increased investment in Research & Development
We plan to increase investment in Research & Development to support our near term product and technology initiatives Cash Research & Development 250 200 Other $Millions 150 Network Services 100 Platform and Artificial Intelligence 50 Core Services Expansion and Depth - 2017 2018 Budget Cash R&D as %
Slide 27: Profitability expected to improve in 2018
Despite increased investment in Research & Development, we expect profitability to improve significantly in fiscal year 2018 250 200 150 $Millions 100 50 0 2015 2016 2017 2018 Guidance1 (midpoint) -50 GAAP OperatingNon-GAAP Income Operating Non-GAAP Operating Income Income GAAP Operating Margin (0.4
Slide 28: Expanding operating leverage
We will expand operating leverage through a combination of revenue scale and net expense savings Non-GAAP Operating Margin +170-270 bps 16% - 17% +210 bps 14.3% 12.2% + Revenue scale +210 bps + Workforce reductions + Revenue scale + Direct & Indirect Spend Initiatives + Workforce reductions + Real E
Slide 29: Fiscal year 2018 expectations
Our fiscal year 2018 growth and profitability expectations… Fiscal Year 2018 Expectations Financial Measures GAAP Revenue $1,310 million - $1,380 million GAAP Operating Income $108 million - $152 million GAAP Operating Margin 8% - 11% Non-GAAP Operating Income1 $210 million - $235 million Non-GAAP O
Slide 30: Expected Impact of ASC 606 adoption
Expected Impact of the Adoption of ASC 606 on our results Revenue • Seasonality may change as revenue will be dependent on claims to be submitted vs. collections • Upon adoption, elimination of deferred revenue will not have a significant impact • No new “upfront” revenue that certain software and h
Slide 31: Expected Impact of Tax Reform
Expected Impact of Tax Reform on our results Non-GAAP Tax Rate • 2017: 40% • Expected for 2018: 25% As primarily a domestic company, many of the major impacts of the tax reform will not significantly impact us Our Tax Provision & Cash Taxes Paid • We have historically paid a nominal amount of taxes
Slide 32: Key Takeaways
Key Takeaways Plan to strike an optimal balance between revenue growth, operating income, and free cash flow Committed to executing with greater discipline, clarity, and consistency Well positioned to drive long-term profitable growth and enhance shareholder value © athenahealth 32
Slide 34: Technology & Platform Strategy
Technology & Platform Strategy Prakash Khot Chief Technology Officer
Slide 35: The promise of the platform
The promise of the platform Opening up the Multiplying its Freeing people to do network intelligence what matters Fast, scalable, cost efficient, resilient, collaborative, and infinite in possibilities.
Slide 43: Document classifications with machine learning in 2017
Document classifications performed with machine learning in 2017 © athenahealth 43
Slide 44: Increase in ready for release features
Increase in “ready for release” features since March 2017 © athenahealth 44
Slide 45: 2017 was athenaNet's best year ever
2017 was – by the numbers – athenaNet’s best year ever but from a technology and platform perspective, that’s not the whole story. ©©athenahealth athenahealth 45
Slide 46: The healthcare internet vision
The healthcare internet vision demands the availability of intelligent and networked enabled services PRE-VISIT VISIT POST-VISIT ON-GOING Provider and Acquisition OUR Registration Intake and Ordering and Claims and Care Automation Practice and PROJECT and Check-in Exam Referring Payments Coordinatio
Slide 47: Applications still only semi-automatic
Despite athenaNet’s success, our applications are still only semi-automatic Our outstanding year required the support of: 4,238+ Engineers, product managers, customer 4,438+ Business Process Office workers endless Efforts for transparency success and operations athenistas © athenahealth 47
Slide 48: Distributed data models for network effects
Modern systems demand distributed data models that can support growing network effects athenaNet Table Table Table Table Space Space Space Space … 1 2 3 © athenahealth 48
Slide 54: Transformation launched last year
We launched a transformation last year that we’ve already made great progress against 1 2 3 4 5 Migrate to Adopt mobile and Adopt a Complement Adoption of open microservices social, purpose- progressive Agile private cloud with source architecture built apps culture and public cloud technologies to
Slide 55: Transformation launched last year
We launched a transformation last year that we’ve already made great progress against 1 2 3 4 5 Migrate to Adopt mobile and Adopt a Complement Adoption of open microservices social, purpose- progressive Agile private cloud with source architecture built apps culture and public cloud technologies to
Slide 56: Continuously re-platforming athenaNet
Continuously re-platforming athenaNet remains a paramount initiative The first 10 Bootstrapped and microservices will “Serengeti” Established and built several see daylight and platform division Established a well executed on a foundational and significant is functional and understood transformation
Slide 57: Current State
CURRENT STATE IDEAS (ALPHA) BUILD NET-NEW (BETA/GA) ENHANCE/NURTURE (GU) TO DEPRECATE (SST) DEPRECATED (RTD) ©©athenahealth athenahealth 57
Slide 58: Future State
FUTURE STATE We are prioritizing and categorizing services based on: • Risk • Resiliency • Performance • Expansion • Innovation IDEAS (ALPHA) BUILD NET-NEW (BETA/GA) ENHANCE/NURTURE (GU) TO DEPRECATE (SST) DEPRECATED (RTD) ©©athenahealth athenahealth 58
Slide 59: Portfolio of microservices planned for 2018 and beyond
We already have a diverse portfolio of microservices planned for 2018 and beyond Care Mgmt as Data Exchange Task Mgmt a Service Data Fabric Workflow as a Service Ordering Authorization Quality Mgmt Identity and Management as a Service Access Mgmt Network Directory AI as a Service Coding Doc Processi
Slide 60: Boosting R&D efficiency across the platform
We are dramatically boosting R&D efficiency as we develop across the platform QUALITY MANAGEMENT AS A SERVICE 7x 60+% greater efficiency reduction in in R&D people cost "One Patient, One Measure, One Status" © athenahealth 60
Slide 61: Network effect in services: scheduling service
We are generating true network effect in our services built on top of our provider and patient networks SCHEDULING SERVICE APIs, widgets, and other interfaces RESILIENCY athenaNet Scheduling External hospital Enterprise Booking Availability Prediction system Connector Service Service Service COST Fr
Slide 62: Machine learning to take on work at scale
We are using machine learning to take on work at scale, while delivering the most cost-effective and efficient services AUTOMATED SERVICES DOCUMENT INBOX DISCHARGE CLAIM POSTING SERVICES SUMMARIES PROCESSING Data Clinical Data Split Categorize Select QA Reconcile Capture Entry Data Science Client AP
Slide 64: Enabling the creation of the healthcare internet
…which will enable the creation of the healthcare internet PRE-VISIT VISIT POST-VISIT ON-GOING Provider and Acquisition OUR Registration Intake and Ordering and Claims and Care Automation Practice and PROJECT and Check-in Exam Referring Payments Coordination and Insight Enrollment Scheduling The int
Slide 65: The age of the platform
The age of the platform Opening up the Multiplying its Freeing people to do network intelligence what matters Fast, scalable, cost efficient, resilient, collaborative, and infinite in possibilities. © athenahealth
Slide 66: Core Services Strategy
Core Services Strategy Kyle Armbrester Chief Product Officer
Slide 67: Core Services commitments and results
Core Services is focused on executing against our commitments and delivering results Our purpose unleashing our collective potential to transform healthcare Our Commitments Open the network Multiply intelligence Free people to do what matters Our Fundamentals People Culture Tech Our Results Revenue
Slide 68: Open up the network, multiply intelligence, free people
Open Up We are breaking down data silos and driving enhanced 1 connectivity across health systems, while also doubling The Network our hospital services footprint Multiply 2 We are increasing client market share using network insights Intelligence Free People To We are doubling Value Per Visit by ta
Slide 69: Open Up The Network
Open Up We are breaking down data silos and driving enhanced 1 connectivity across health systems, while also doubling The Network our hospital services footprint Network Depth Network Expansion Extend native customers Make it easier to connect to on the network the network © athenahealth 69
Slide 70: Expanding across the continuum of hospitals
We are expanding across the continuum through both enhanced connectivity to legacy incumbents and full system displacement at the lower end of the market 2016 Standalone Acute Community Hospital Decisions n=74 standalone acute care hospital wins, 1-200 beds athenahealth 21% (208 accounts) Over half
Slide 71: Expanding interoperability coverage
We are expanding our interoperability coverage across the continuum % sites accessible by Patient Record Sharing out of known sites eligible to be accessible by Patient Record Sharing 96% 2017 68% 2016 Via CommonWell “ Our physician technology satisfaction 22% scores have significantly increased 201
Slide 72: Clinicals and Epocrates interoperability expansion
Interoperability expansion will enrich the network intelligence feeding into our clinical workflows both on desktop and mobile Clinicals Intelligent navigation Epocrates Intelligent, virtual of patient information medical assistant Timeline branded Reduces charting time by 30% Powered by machine lea
Slide 73: Progress in the hospital segment
In 2017, we continued significant strides in our hospital segment and were recognized by KLAS as a category leader for 2018 47.8 62 14 Hospital Hospitals Showcase NPS Live Accounts “ Within just a few short months of going live on athena’s cloud platform, we “ When we first partnered with athena, ou
Slide 74: Cash flow and revenue cycle metrics
Our cash flow success is resonating in market - while our other key revenue cycle metrics show continued improvement and stability 2016 2017 Change Cash flow as a % baseline trend 103% 106% 3% increase Discharged Not Final Billed (DNFB) Median 14.7 days 11.5 days 22% decline Days Accounts Receivable
Slide 75: Multiply Intelligence
Multiply 2 We are increasing client market share using network insights Intelligence © athenahealth 75
Slide 76: Patient experience as a top priority
49% of provider executives said revamping the patient experience is one of their organization’s top three priorities over the next five years. Many already have or are building the role of chief patient experience officer. PwC Health Research Institute Top health industry issues of 2018: A year for
Slide 77: Outreach click-thru and scheduling rates
click thru rate on care gap scheduling rate for Medicare outreach messages Annual Wellness Visit athenahealth athenahealth INDUSTRY AVERAGE 26% INDUSTRY AVERAGE <10% 13% $46M Flu vaccine outreach led to 13% care In incremental client revenue driven gap closure in just one month through Medicare Annu
Slide 78: Intelligence-driven outreach campaigns
Through intelligence-driven outreach campaigns, we are taking on the work for providers to target and engage patients who should schedule a visit Q1 Q2 Q3 Q4 Campaign Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ReminderCall SEGMENTATION Communicator Self-Pay CONTENT/DESIGN SEGMENTATION Triggers
Slide 79: Free People To Do What Matters
Free People To We are doubling Value Per Visit by taking on significant 3 Do What Matters additional work from clients’ plates © athenahealth 79
Slide 80: EHR adoption and provider burnout
While EHR adoption is at an all time high, so is provider burnout from increasing administrative burden and general system fatigue EHR Adoption Growth of Physicians and Administrators 100% 1970-2009 3500% 90% 80% 3000% 70% 2500% >50% physician time spent 60% on EHR and administrative work 50% 2000%
Slide 81: Reducing work from providers
In response, we’re focused on reducing work from providers, and completed foundational work in 2017 to measure and project the impact we can drive Time Motion Study Workflow Heuristics Path to Dramatic Value Expansion 23.5k 609 data points collected from initial experience design opportunities value
Slide 82: Doubling value per visit over two years
We have good line of sight on the investments we need to make to double value per visit over the next 2 years athenaOne Value Per Visit $$$$$ $25.00 Collector Clinicals Communicator $$$$ $20.00 +67% $$$ $15.00 +50% $$ $10.00 $ $5.00 $- - Current 2018 2019 © ©athenahealth athenahealth 82
Slide 83: Work reduction through service depth and expansion
We are driving work reduction through service depth and expansion, yielding an uptick to value per visit ▪ Causes ~40% of Posting cases each year ▪ ~70M authorizations per year, 7 mins per Overpayments Authorization phone authorization Live across the base ▪ Reduces an average of 5 hours per Mgmt pr
Slide 84: Doubling document services processing
In 2018, we are doubling the document services processing for our providers and staff at no additional cost to them, and at less cost to us Our providers receive 120M+ We’ve applied machine As a result, we’ve driven down paper documents that come learning to document unit costs, creating scaling thr
Slide 85: Removing patient-related work
We are removing the work to find, engage, and collect from patients Patient Patient Patient Outreach and Scheduling HPI/ROS (History of Present Illness/Review of Systems) Pay Improvements Current Value Per Visit: $0.49 Current Value Per Visit: $0.50 Current Value Per Visit: $0.89 Expanded Value Per
Slide 86: Workflow simplifications reducing time on task
We’ve pushed workflow simplifications that materially reduce staff time on task Claim Action Workflow – live Clinical Timeline with Patient Record 4 pages & 9 steps 1 page & 4 steps Sharing - live ~50% “Saves me up to reduction 30 mins / day” in time on task Quickly scan patient history Click into f
Slide 87: Open up the network, multiply intelligence, free people
Open Up We are breaking down data silos and driving enhanced 1 connectivity across health systems, while also doubling The Network our hospital services footprint Multiply 2 We are increasing client market share using network insights Intelligence Free People To We are doubling Value Per Visit by ta
Slide 88: Network Services Strategy
Network Services Strategy Jonathan Porter SVP, Network Services
Slide 89: Healthcare cost problem: $3.3 trillion expenditures
Solving the healthcare cost problem requires us to support both sides of the healthcare payment transaction 2016 U.S. Healthcare Expenditures: $3.3 trillion 72 cents on every dollar goes to clinical care 10 cents on every dollar goes to non-clinical care costs 18 cents on every dollar goes to billin
Slide 90: Leveraging network capabilities to open new horizons
Our strategy is to leverage current network capabilities to open new horizons MARKET OPPORTUNITY Horizon 3: Employers & Payers Horizon 1: The Doctor in Practice Horizon 2: Hospitals & Ancillaries TIME ONE-TO-TWO YEARS TWO-TO-FOUR YEARS FOUR-TO-FIVE YEARS PLATFORM FOUNDATION Microservices • Scale • P
Slide 91: Capabilities required to enter payer/employer horizon
If we were going to start from scratch, here’s what we would need to do: Capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT ● Claim processing and ● Claims ● Prov
Slide 92: Capabilities built over 20 years
However, over 20 years we have built capabilities that we can leverage Capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT C U R R E N T AT H E N A H E A LT H C A
Slide 93: Experience administering claims nationally
We have deep experience in administering claims on a national scale Sets of capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT Remittance (associated cost) Remitt
Slide 94: Core Services investments align with Horizon functions
Our Core Services investments align with key Horizon 3 functions Sets of capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT Eligibility (associated cost) Authoriz
Slide 95: Investments in our network will differentiate us
…and investments in our network will differentiate us Sets of capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT 111K 18% 106M providers of all U.S. patients last
Slide 96: Strengthening network effect in three areas
In 2018, we will strengthen our network effect by focusing on three areas: 1 Coordination 2 Access 3 Quality © athenahealth 96
Slide 97: Strengthening network effect in three areas
In 2018, we will strengthen our network effect by focusing on three areas: 1 Coordination 2 Access 3 Quality © athenahealth 97
Slide 98: Missing or incomplete patient medical history
of patients report that their medical history is missing or incomplete when they visit their doctor of physicians have experienced difficulty delivering medical care because patients’ records were not easily accessible © athenahealth
Slide 99: Epocrates and athenaWell coordinated care network
Epocrates and athenaWell provide easy access to our coordinated care network for any individual provider or patient Epocrates athenaWell Intelligent, virtual medical assistant Intelligent navigation of patient information Powered by Pre-loaded care Real-time Single pane of 30% machine learning glass
Slide 100: Strengthening network effect in three areas
In 2018, we will strengthen our network effect by focusing on three areas: 1 Coordination 2 Access 3 Quality © athenahealth 100
Slide 101: Appointment wait times and unused appointments
Most specialties see a 2 to 3 week appointment wait time …and yet, nearly 30 percent of all appointments go unused © athenahealth
Slide 102: Booking time to appointment time impact on yield
Booking time to appointment time has a high impact on yield Time to Appointment Appointment Yield <1 Week Completed 90% 90% Cancelled / No Show Cancelled / 1 Week Completed 85% 85% No Show 2 Weeks Completed 70% 70% Cancelled / No Show 4 Weeks Completed 63% 63% Cancelled / No Show 8 Weeks Completed 5
Slide 103: National calendar service matching supply and demand
Our national calendar service will be a platform for matching supply and demand in healthcare 1% increase in scheduling yield would generate $300M in client revenue Antonia Marith, MD August 3 311 Arsenal St. Watertown, MA Pt complaining of chest pain © athenahealth 103
Slide 104: Strengthening network effect in three areas
In 2018, we will strengthen our network effect by focusing on three areas: 1 Coordination 2 Access 3 Quality © athenahealth 104
Slide 105: Time spent documenting quality measures
are spent per week per physician documenting measures for quality reporting © athenahealth
Slide 106: Untethered quality engine and clinical decision support
Our untethered quality engine and clinical decision support tools will allow clients to define quality and apply network rules at the point of care 2017+ Quality Management as a Service and Clinical Decision Support 2014-2016 athenahealth had success with quality programs • Providers avoided $265M i
Slide 107: Untethered quality engine and clinical decision support
Our untethered quality engine and clinical decision support tools will allow clients to define quality and apply network rules at the point of care 2017+ Quality Management as a Service and Clinical Decision Support Our own data insights Epocratized clinical guidelines Partners © athenahealth 107
Slide 108: Most coordinated provider and consumer networks
Once we have tackled our three main areas of… s Coordination s Access s Quality …we will have created the most coordinated and engaged provider and consumer networks in healthcare Provider network Consumer network  Efficient  Transparent  Accessible  Convenient  Effective  Valued © athenahe
Slide 109: Positioning for entry into Horizon 3
…positioning us for entry into Horizon 3 Sets of capabilities required to enter the third horizon: payer/employer 1 2 3 4 5 6 CLAIMS EMPLOYER PROVIDER MEMBER 3RD PARTY NETWORK ADMINISTRATION SERVICES SERVICES SERVICES SERVICES MANAGEMENT MARKET OPPORTUNITY Horizon 3: Employers & Payers TIME ONE-TO-T
Slide 111: Fireside Chat
Fireside Chat Stephen Kahane, M.D., M.S. Strategic Solutions
Slide 112: Panelists
Panelists Tim O’Brien Paul Merrild Bret Connor Chief Marketing SVP Sales SVP Customer Officer Success
Slide 114: Closing Remarks
Closing Remarks Jonathan Bush Chief Executive Officer
Slide 115: We are unleashing our collective potential
We are unleashing our collective potential Freeing 1 Opening the network 2 Multiplying intelligence 3 people to do what matters © athenahealth 115
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Slide 119: Thank You
“vathenahealth Thank You
Slide 121: Additional points of interest for fiscal year 2018
Additional points of interest for fiscal year 2018 It is best to assess our business on a year-over-year basis as there is typically an increase in expense levels during Q1 versus Q4 • FICA payroll tax reset, benefit rate changes, trade shows, etc. The number of working days varies each quarter; imp
Slide 122: Implementation cycle times
Implementation cycle times for ambulatory, small hospital, and population health deals Q1 Q2 Q3 Q4 Q1 Q2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Ambulatory Kickoff (6 months) Ramp (6 months) Hospital Kickoff (12 months) Ramp (6 months) Population Kickoff (7 months) Ra
Slide 123: Key metric definitions
Key metric definitions Providers The number of providers, including physicians, that have rendered a service which generated a medical claim that was billed during the last 91 days on the athenaCollector platform. Examples of physicians include Medical Doctors and Doctors of Osteopathic Medicine. Ex
Slide 124: Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures © athenahealth 124
Slide 125: Non-GAAP reconciliation
Non-GAAP reconciliation GAAP Operating Income and Non-GAAP Operating Income $Millions Fiscal Year Ending December 31, 2017 2016 2015 Total revenue $1,220.3 $1,082.9 $924.7 GAAP operating income (loss) $70.6 $26.6 $(4.1) GAAP operating margin (loss) 5.8% 2.5% (0.4)% Add: Stock-based compensation expe
Slide 127: Non-GAAP reconciliation for fiscal year 2018 expectations
Non-GAAP reconciliation for fiscal year 2018 expectations GAAP Operating Income and Non-GAAP Operating Income $Millions Low High Fiscal Year Ending December 31, 2018 Total revenue $1,310 $1,380 GAAP operating income $108 $152 GAAP operating margin 8.2% 11.0% Add: Stock-based compensation expense 61
Slide 128: Investor Summit
2018 Investor Summit February 15, 2018

Athenahealth — Investor Day (February 2018) on 6ix

athenahealth — Investor Day (February 2018)

Slide 1: 2018 Investor Summit

Slide 2: Welcome to our Investor Summit

Slide 3: Agenda

Slide 4: Safe Harbor Statement

Slide 5: Use of Non-GAAP Financial Measures

Slide 6: Opening Remarks

Slide 7: We are building the platform for healthcare

Slide 8: Our purpose

Slide 9: Our purpose

Slide 10: Open up the network, multiply intelligence, free people

Slide 11: Our purpose, commitments, fundamentals, results

Slide 12: Our purpose: client value

Slide 13: Our purpose: big data sets and outcomes

Slide 14: Our purpose: automation cycle

Slide 15: Our purpose: fundamentals

Slide 16: Our purpose: results targets

Slide 17: Our purpose

Slide 18: Market Opportunity: Horizon 1

Slide 19: Market Opportunity: Three Horizons

Slide 20: © athenahealth

Slide 21: Financial Expectations

Slide 22: 2017 financial and operational highlights

Slide 23: Revenue and operating income expansion

Slide 24: Installed base of recurring revenue

Slide 25: Balance between growth, margin and free cash flow

Slide 26: Increased investment in Research & Development

Slide 27: Profitability expected to improve in 2018

Slide 28: Expanding operating leverage

Slide 29: Fiscal year 2018 expectations

Slide 30: Expected Impact of ASC 606 adoption

Slide 31: Expected Impact of Tax Reform

Slide 32: Key Takeaways

Slide 33: Presentation Break

Slide 34: Technology & Platform Strategy

Slide 35: The promise of the platform

Slide 36: Patients since 2000

Slide 37: Patient visits in 2017

Slide 38: Interface transactions in 2017

Slide 39: Clinical orders processed in 2017

Slide 40: Prescription orders processed in 2017

Slide 41: Lab result orders processed in 2017

Slide 42: Epocrates unique users in 2017

Slide 43: Document classifications with machine learning in 2017

Slide 44: Increase in ready for release features

Slide 45: 2017 was athenaNet's best year ever

Slide 46: The healthcare internet vision

Slide 47: Applications still only semi-automatic

Slide 48: Distributed data models for network effects

Slide 49: athenaNet 2004

Slide 50: athenaNet 2005

Slide 51: athenaNet 2013

Slide 52: athenaNet 2015

Slide 53: athenaNet Today

Slide 54: Transformation launched last year

Slide 55: Transformation launched last year

Slide 56: Continuously re-platforming athenaNet

Slide 57: Current State

Slide 58: Future State

Slide 59: Portfolio of microservices planned for 2018 and beyond

Slide 60: Boosting R&D efficiency across the platform

Slide 61: Network effect in services: scheduling service

Slide 62: Machine learning to take on work at scale

Slide 63: Architecture of collaboration

Slide 64: Enabling the creation of the healthcare internet

Slide 65: The age of the platform

Slide 66: Core Services Strategy

Slide 67: Core Services commitments and results

Slide 68: Open up the network, multiply intelligence, free people

Slide 69: Open Up The Network

Slide 70: Expanding across the continuum of hospitals

Slide 71: Expanding interoperability coverage

Slide 72: Clinicals and Epocrates interoperability expansion

Slide 73: Progress in the hospital segment

Slide 74: Cash flow and revenue cycle metrics

Slide 75: Multiply Intelligence

Slide 76: Patient experience as a top priority

Slide 77: Outreach click-thru and scheduling rates

Slide 78: Intelligence-driven outreach campaigns

Slide 79: Free People To Do What Matters