Steven Valiquette

Steven Valiquette asked about any learnings for Veeva from the 'customer-specific factors' driving some Vault CRM top 20 decisions, particularly regarding product design, pricing, or go-to-market strategy.

Answer

Peter Gassner (CEO) stated that while some customers chose to 'try something new,' there were no specific learnings that would change product design or pricing. He noted that the distraction of reselling top 20 customers is largely over, and the team is now excited about the future of Vault CRM with AI, which will be significantly different from past versions.

Steven Valiquette asked about any learnings for Veeva from the unique customer-specific factors influencing fewer Vault CRM wins, and whether this would lead to changes in product design, pricing, or go-to-market strategy.

Answer

Peter Gassner (CEO) stated there were no particular learnings for product, pricing, or strategy, as Veeva acted with customer success in mind, but some customers simply wanted to 'try something new.' He noted that the period of reselling top 20 customers against non-existent products was distracting, but now Veeva is largely through it and focused on customer success, with excitement building around AI and probabilistic computing to transform Vault CRM in the coming years.

Steven Valiquette of Mizuho Securities followed up on Crossix, asking for an update on the potential lumpiness of its usage-based component in the second half of the year and whether its growth rate was still above 30% in Q2.

Answer

CFO Brian Van Wagener confirmed that both the subscription-like measurement business and the usage-based Audiences business contributed to growth in Q2. He noted Audiences remains the smaller but higher-growth segment. He declined to provide a specific growth rate for the quarter but reiterated it is the primary growth driver for the Crossix business.

Steven Valiquette of Mizuho Securities asked a financial question about the strong Q1 margins, inquiring why the full-year guidance implies margins will moderate from the high levels seen in the first quarter.

Answer

CFO Brian Van Wagener explained that the Q1 margin outperformance was about 75% driven by revenue, specifically from the usage-based elements of Crossix and faster services delivery, which are not expected to be recurring benefits. The remainder was due to the timing of expenses. He described Q1 as a 'high watermark' for margins, expecting them to return to the guided 44% level for the rest of the year.

Steven Valiquette asked how much of the guided FX revenue headwind impacts the bottom line versus being offset by natural cost hedges.

Answer

CFO Brian Van Wagener explained that while there is a revenue headwind from FX, there is a natural hedge on the expense side because some costs are denominated in other currencies. As a result, the impact on operating income is not as significant as the impact on revenue.

Steven Valiquette asked if Veeva relies on external data like clinical trial starts for market assessment or focuses on its own customer discussions. He also requested the current percentage of revenue from CRO customers.

Answer

EVP of Strategy Paul Shawah explained that while they monitor external metrics like trial starts, they don't over-index on them as Veeva's business is tied to enterprise capabilities, not study volume. CFO Brian Van Wagener confirmed that revenue from CROs has not materially changed from the previously disclosed figure of approximately 5%.

Steven Valiquette asked about the uptake of branded GLP-1s relative to expectations, specifically if Novo Nordisk's partnerships with other virtual care providers have diluted LifeMD's expected uptake, and LifeMD's ability to capture its fair share of customers seeking lower-cost branded drugs in the weight management category.

Answer

CEO Justin Schreiber acknowledged that Novo Nordisk and Eli Lilly were expected to form multiple partnerships, but he believes these deals do not impact demand or conversion rates on LifeMD's platform. He attributed challenges to the intense competition from low-cost compounded GLP-1 makers, which has significantly increased since these drugs came off the shortage list. Schreiber expressed optimism that branded therapies will continue to perform well, especially with further price reductions and the anticipated launch of the oral Wegovy pill in January, which he expects to be a massive catalyst for the business.

Steven Valiquette asked for details on the assumptions embedded within the 2025 revenue guidance, particularly concerning the telehealth segment. He sought clarity on the projected retention and conversion rates for the large number of weight management patients currently using compounded semaglutide.

Answer

CFO Marc Benathen explained that the 2025 guidance was built on conservative assumptions, including a significant write-down of compounded medication revenue, assuming nearly half is lost. The model assumes some conversion to branded therapies but a slightly lower new patient acquisition rate than the previous year. The goal is to have 40-50% of weight loss patients on branded therapy by year-end. Benathen also noted that growth is expected from the RexMD business, particularly in HRT, as well as incremental benefits from the new Behavioral Health and revamped LifeMD+ offerings.

Steven Valiquette asked for clarification on how much of the upward revision to the 2025 guidance was attributable to the recent partnership announcements with LillyDirect and NovoCare for Wegovy and Zepbound, aiming to understand the immediate financial impact of these deals.

Answer

CFO Marc Benathen stated that none of the guidance increase was related to the Lilly and Novo collaborations; the revision was based entirely on the company's strong performance in Q1. CEO Justin Schreiber added that while it's too early to factor into guidance, they view these partnerships as long-term 'game-changers' that will create significant value over time.

Steven Valiquette asked about the Doximity litigation with OpenEvidence, specifically if it impacted the purchase price of Pathway, and whether OpenEvidence's exclusive content from the New England Journal of Medicine and JAMA poses a competitive disadvantage for Doximity's offering.

Answer

Anna Bryson, CFO, declined to comment on ongoing litigation but stated Doximity was pleased with Pathway's valuation, acquiring a six-person team with a strong medical knowledge corpus. Jeff Tangney, CEO, added that doctors desire access to 'all journals,' not just a few, highlighting the Research Solutions partnership for over 2,000 journals.

Steven Valiquette asked about the Doximity litigation with OpenEvidence, specifically if it impacted the Pathway acquisition price and if OpenEvidence's "lock" on historical medical information from New England Journal of Medicine and JAMA poses a competitive disadvantage for Doximity's offering.

Answer

CFO Anna Bryson declined to comment on ongoing litigation but stated Doximity conducted extensive benchmarking for the Pathway acquisition, finding it a reasonable valuation for a six-person team with a "second to none" medical knowledge corpus. She praised the speed of Pathway's integration into DoxGPT. CEO Jeff Tangney added that doctors want access to all journals, not just two or three, and expressed excitement about the Research Solutions partnership providing full PDF access to over 2,000 journals.

Steven Valiquette of Mizuho Securities noted his firm's survey showed evenly spread usage across Doximity's features and asked if this matched internal data and if a new feature might become dominant.

Answer

CEO Jeff Tangney confirmed that the survey findings align with Doximity's internal data, stating that their product teams for news, network, and workflow are all relatively balanced. He expressed that having a diversified platform with even usage across its features is a key competitive strength against single-point solution competitors.

Steven Valiquette noted that the implied Q1 growth rates are in line with the full-year guidance and asked if any macro risk is specifically baked into the Q1 forecast, and how the impact of that risk might be phased throughout the year.

Answer

CFO Anna Bryson confirmed that the Q1 guidance is cautious and incorporates potential macro impact by moderating upsell assumptions, as the upsell season typically begins in the quarter. She also noted that the Q1 year-over-year comparison is affected by different launch timing versus the prior year, but the new integrated programs should lead to a more stable revenue cadence throughout fiscal 2026.

Steven Valiquette asked if Solventum's dental portfolio experienced similar geographic trends as other publicly traded dental companies, specifically a strong recovery in Europe but a choppy U.S. market, or if their dynamics were different.

Answer

CEO Bryan Hanson stated that Solventum did not observe dramatically different regional trends. He attributed the company's momentum in dental to new products launched globally, which are gaining traction in both the U.S. and international markets. He commended the dental team for their innovation and the effectiveness of their specialized sales organization.

Steven Valiquette asked if Solventum's dental portfolio experienced similar geographic trends to other publicly traded dental companies, which reported strong recovery in Europe but choppy U.S. markets in Q3.

Answer

CEO Bryan Hanson stated that Solventum did not observe dramatically different regional trends within its dental portfolio. He attributed the segment's momentum to new products launched globally, which are gaining traction in both U.S. and international markets, commending the dental team's innovation and specialized sales organization.

Steven Valiquette asked for details on the Health Information Systems (HIS) partnership with Ensemble, seeking to quantify the revenue opportunity and understand the implementation timing and competitive process.

Answer

CEO Bryan Hanson described the partnership as a symbiotic relationship where Ensemble will integrate Solventum's autonomous coding technology to improve its own efficiency and margins. While declining to quantify the revenue opportunity, he confirmed it was significant. He clarified the partnership was established through a relationship built on mutual respect for quality, rather than a formal competitive RFP process.

Steven Valiquette of Mizuho asked for commentary on the Dental segment's 0.4% organic growth, questioning how its performance compared to the broader dental market, which reportedly slowed during the quarter.

Answer

CEO Bryan Hanson stated that the company performed "pretty well" relative to the market. He attributed the resilience to the company's focus on less-discretionary categories like restoratives and the positive impact of new product launches, which are providing a tailwind that is expected to continue throughout the year.

Steven Valiquette requested more detailed color on the individual performance of the Florida Cancer Specialists and PRISM acquisitions relative to their original EPS accretion guidance metrics, given the combined 30-34 percentage point contribution to operating profit growth.

Answer

Britt Vitalone, Chief Financial Officer, clarified that the 30%-34% figure represents the adjusted operating profit impact and reminded about debt and non-controlling interest considerations for Core Ventures. He stated that both acquisitions are performing well and are relatively in line with the provided guidance, with PRISM potentially slightly ahead. He reaffirmed the three-year accretion numbers, expecting continued expansion and synergies over time.

Steven Valiquette requested an update on the EPS accretion from the Florida Cancer Specialists ($0.40-$0.60) and Prism Vision Group ($0.20-$0.30) acquisitions relative to their original guidance, given the combined 30-34 percentage point contribution to operating profit growth.

Answer

Britt Vitalone, CFO, clarified that the 30-34% figure refers to adjusted operating profit impact, noting that debt and non-controlling interest for Core Ventures affect the EPS line. He stated that both acquisitions are performing well and are relatively in line with the original guidance, with Prism potentially slightly ahead, and reaffirmed the applicability of the three-year accretion numbers.

Steven Valiquette asked about the potential accretion or dilution related to the likely divestiture of businesses in the 'other' segment, how sale proceeds might be used (e.g., buybacks), and whether all businesses in the 'other' segment are currently profitable.

Answer

EVP and CFO Jim Cleary stated that while a sale could be dilutive in the short term, a more focused portfolio on higher-growth businesses is expected to drive better long-term returns and accretion. He confirmed that all businesses in the 'other' segment are profitable, noting that MWI and ProPharma are expected to show profit growth in fiscal 2026, while the balance of 'other' businesses are expected to decline.

Steven Valiquette inquired about the potential accretion or dilution related to asset sales from the 'other' segment, assuming divestment, and whether sale proceeds would be used for share buybacks. He also asked if any businesses within the 'other' segment are currently unprofitable.

Answer

CEO Bob Mauch stated that while no specific path has been determined, a sale could be dilutive in the short term, but a more focused portfolio would drive better long-term returns. He confirmed that all businesses in the 'other' segment are profitable, with MWI and ProPharma specifically expecting profit growth in fiscal year 2026.

Steven Valiquette of Mizuho Securities USA LLC asked if Cencora was observing the significant mid-year wave of AWP list price increases from brand drug manufacturers, noting that this activity appeared higher than in recent years.

Answer

EVP & CFO James Cleary responded that the branded price appreciation observed was generally in line with or perhaps slightly ahead of the company's expectations, but not significant enough to be called out as a major factor. He reiterated that as Cencora has rebalanced its contracts over time, brand inflation has less of an impact on the overall P&L than it did historically.

Steven Valiquette followed up on the subdued clinical trial activity, asking if the softness was widespread or concentrated and if a percentage decline could be quantified.

Answer

CEO Bob Mauch clarified the trend is market-based and consistent with declines seen by other industry players, not concentrated within a few customers. He noted activity is down from a peak during the COVID pandemic but did not quantify the decline, instead reiterating that Cencora is well-positioned for a market rebound.

Steven Valiquette of Mizuho Securities asked for an update on the active contract discussions with Walgreens and sought confirmation that the FY25 guidance incorporates any potential changes from those talks.

Answer

CEO Robert Mauch affirmed that Cencora is continuously engaged with Walgreens to create mutual value, underscoring the long-term strategic importance of the relationship. CFO James Cleary confirmed that the current guidance includes the company's assumptions for all aspects of its business, including the Walgreens partnership.

Steven Valiquette asked about the impact of a recent competitor divestment in the GMPD segment, specifically if it creates new opportunities for Cardinal Health or alters the competitive landscape.

Answer

CEO Jason Hollar stated that a competitor's divestment 'certainly doesn't hurt' Cardinal Health. He reiterated the company's consistent focus on service level and performance, continued appropriate investment in the GMPD business, and commitment to being the supplier and partner of choice for customers.

Steven Valiquette asked about the impact of a competitor divesting their GMPD business on Cardinal Health and any changes to the competitive landscape.

Answer

CEO Jason Hollar reiterated that the competitor's divestment 'certainly doesn't hurt' Cardinal Health, as the company remains focused on delivering high service levels and performance, continuing to invest in the GMPD business to be the partner of choice for customers.

Steven Valiquette of Mizuho Securities USA LLC asked for confirmation that due to the liability classification change, the total net earnings attributable to noncontrolling interests on the P&L for FY26 would be close to zero.

Answer

CFO Aaron Alt did not give a direct confirmation but reiterated that the company has raised its overall guidance, reflecting both the liability classification and business updates, and directed the analyst to the 10-K for detailed mechanics.

Steven Valiquette asked whether Cardinal Health plans to procure higher levels of inventory ahead of potential tariffs or if normal inventory levels should be expected.

Answer

CEO Jason Hollar advised to assume 'fairly normal' inventory levels. While acknowledging some targeted pre-stocking within GMPD, he said nothing extraordinary is planned for the enterprise, as a significant inventory build would place an 'incredible burden' on the balance sheet. CFO Aaron Alt reinforced this, highlighting the strong ongoing focus on optimizing cash flow.

Steven J. Valiquette from Barclays inquired about the impact of the cough, cold, and flu season across the entire company, noting peer commentary about a soft December quarter followed by a stronger January.

Answer

CEO Jason Hollar acknowledged the dynamic, hypothesizing that the weakness seen in the GMPD segment was related more to less testing (lab products) than to less treatment, as the Pharma business did not see similar weakness. He stated it was too early to confirm if a January resurgence in illness had materially impacted the business but acknowledged the anecdotal reports.

Steven Valiquette questioned AccessOne's market share and positioning relative to the $6 billion TAM, given its $35 million in revenue.

Answer

Balaji Gandhi (CFO) stated that Phreesia is limited in what it can share before the acquisition closes but confirmed intentions to continue investing in the AccessOne platform and product.

Steven Valiquette questioned AccessOne's market share and positioning, specifically the $35 million revenue appearing low relative to the $6 billion TAM.

Answer

CFO Balaji Gandhi reiterated the need for caution before closing the transaction but directed the analyst to use the provided TAM and revenue figures for their own calculations. CEO Chaim Indig added that they expect to continue investing in the AccessOne platform and product.

Steven Valiquette inquired about the gating factors for HealthEquity signing more forward contracts for hedging, specifically asking if it's due to finding willing third parties or heavy negotiation on rates.

Answer

James Lucania, CFO, clarified that the Treasury forward curve is a highly liquid market, so counterparty availability is not an issue. He described the process as 'legging into the hedge' and dollar-cost averaging the yield, indicating a continuous execution strategy.

Steven Valiquette of Mizuho Securities inquired about the proposed legislation to double maximum HSA contributions for certain income levels, asking if the company could quantify how many of its existing members would fall into those eligible income brackets.

Answer

Founder & Vice Chairman Dr. Stephen Neeleman noted that with a median account holder income of around $72,000, the vast majority of members would qualify. However, President and CEO Scott Cutler added that only about 4% of members currently contribute the maximum. Dr. Neeleman emphasized the real opportunity lies in leveraging this change to drive innovative employer plan designs that encourage higher contributions.

Steven Valiquette of Mizuho Securities sought confirmation on the timing and amount of HSA cash contracts repricing in fiscal 2026 and asked if the strategy of pulling forward repricings was already factored into guidance.

Answer

An executive, likely CFO James Lucania, confirmed that while most repricing occurs late in the year, fiscal 2026 includes a mid-year event from legacy WageWorks assets. He clarified that all expected actions to pull forward maturities are already incorporated into the current guidance. CEO Jon Kessler added that the primary goal of this strategy is to enhance the stability and predictability of the custodial revenue line.

Steven Valiquette of Mizuho Securities asked for more color on the Rite Aid impact, specifically regarding the recapture rate assumptions in the guidance and the reasons why GoodRx was historically under-indexed to Rite Aid.

Answer

CFO Chris McGinnis confirmed the analyst's directional assumptions on recapture rates were reasonable but did not provide a specific number, noting the difficulty in tracking. He asserted there was nothing unique about Rite Aid customers that would impede recapture. CEO Wendy Barnes added that GoodRx is actively marketing to contactable consumers and using its digital platform to help all affected users find new pharmacies.

Steven Valiquette from Mizuho Securities asked about the Rite Aid impact, seeking color on the script recapture rate assumption in the guidance and whether being under-indexed to Rite Aid makes recapture more challenging.

Answer

CFO Chris McGinnis stated there was nothing unique about Rite Aid customers that would make recapture more difficult and confirmed the analyst's directional thinking on the recapture assumption was correct, without providing a specific figure. CEO Wendy Barnes added that GoodRx is actively marketing to displaced consumers through direct and digital channels to help them find new pharmacies and recapture volume.

Steven Valiquette asked for the specific factors driving the approximate 7% year-over-year increase in revenue per MAC, questioning if it was due to a mix shift to higher-priced drugs, more brand volume, or general inflation.

Answer

CFO Chris McGinnis confirmed that the increase in revenue per MAC was driven by 'all of the above,' citing a combination of mix shift, higher drug prices, and inflation as contributing factors without highlighting any single variable as the primary driver.

Steven Valiquette noted the 7% year-over-year increase in revenue per MAC and asked for the specific drivers, questioning if it was due to a mix shift to higher-priced drugs, more brand volume, or general inflation.

Answer

CFO Chris McGinnis confirmed that the increase in revenue per MAC was driven by 'all of the above.' He acknowledged that a mix shift, higher drug prices, and inflation were all contributing factors, without isolating one as the primary driver.

Steven Valiquette from Mizuho Securities asked for management's high-level thoughts on potential policy changes that could negatively impact pharmaceutical marketing to consumers and the implications for GoodRx.

Answer

CEO Wendy Barnes opined that potential regulations seem focused on traditional direct-to-consumer (DTC) advertising like TV, a channel GoodRx does not use. She suggested such a change could be a tailwind for GoodRx, as marketing funds might be redirected to their platform, where they can demonstrate a 5x to 10x higher engagement lift for pharma partners compared to brand websites.

Steven Valiquette of Mizuho Securities inquired about the priority level of managing relationships with major dental distributors and asked about the new CEO's general bias regarding direct versus distributor sales models.

Answer

CEO Dan Scavilla confirmed he has already initiated contact with the CEOs of major distributors. However, he stated that he would refrain from commenting on strategic direction until he has had more time to engage with partners and learn the business, emphasizing that his focus is on the long-term health of these relationships.

Steven Valiquette asked if Envista observed a trend of lower patient case conversions for clear aligners after initial scans, a phenomenon mentioned by a competitor, and whether this has historically impacted Envista's results.

Answer

CEO Paul Keel responded that Envista's Spark business has experienced consistent growth, outperforming the market for several consecutive quarters. He stated that while he hears many anecdotes from clinicians, a slowdown in patient conversions was not a meaningful factor in Envista's strong Q2 performance.

Steven Valiquette asked whether the Average Selling Price (ASP) for Spark clear aligners changed sequentially in Q1 and inquired about pricing trends among competitors.

Answer

CFO Eric Hammes reported no major change in Spark's ASP, attributing its consistent value capture to ongoing innovation and strong performance within the orthodontist-focused segment. He emphasized that Envista's strategy is to leverage its brand power and address the untapped potential in the orthodontic market, which supports stable pricing.

Steven Valiquette asked about the expected quarterly cadence for the EBITDA margin in 2025, given the full-year guidance of approximately 14%.

Answer

CFO Eric Hammes explained that the margin cadence will mirror the core growth trajectory. With core growth expected to be slower in the first half and stronger in the second half, primarily due to the China VBP impact, EBITDA margins are anticipated to be slightly below the 14% annual average in H1 and slightly above it in H2.

Steven Valiquette of Mizuho Securities inquired whether Align's softer case volume was consistent with the overall clear aligner market trend or if the company was potentially losing market share, particularly in the context of US tariffs.

Answer

President & CEO Joe Hogan stated that the competitive landscape did not materially change from Q1 to Q2 and attributed the softness to macroeconomic factors rather than competitive pressure. He noted that a competitor had actually raised prices during the quarter, reinforcing his view that the dynamic was not primarily competitive.

Steven Valiquette requested more color on the company's statement about mitigating China's retaliatory tariffs through supply chain adjustments, given that manufacturing for the Chinese market occurs within China.

Answer

CFO John Morici clarified that while finished aligners for the China market are made locally, some raw materials for that manufacturing process are sourced from the U.S. and other regions. He explained that the supply chain adjustments involve changing the sourcing of these specific raw materials to mitigate any potential tariff exposure.

Steven Valiquette asked whether the current political and tariff environment might make U.S. practitioners more hesitant to adopt competitor systems from outside the U.S., potentially benefiting Align.

Answer

CEO Joe Hogan stated that Align's strategy is to win through superior technology, service, and relationships, rather than relying on political factors. He noted that some competitors have entered with what he believes are unsustainable prices, a situation that tends to self-correct over time. He emphasized focusing on delivering the best value proposition.

Steven Valiquette asked whether Waystar's status as an independent entity, not owned by a managed care payer, is resonating more strongly with providers in the current market environment.

Answer

CEO Matt Hawkins affirmed that independence is a key differentiator that resonates strongly. He explained that providers and patients seek fairness and transparency, viewing Waystar as a 'referee' in the complex payments process. He believes this message has become even more powerful in 2025 as Waystar's profile has grown as a public company.

Steven Valiquette from Mizuho Securities noted that payer revenue per session was higher than modeled and asked if the high single-digit year-over-year growth was a sustainable run rate. He also asked for the key drivers behind the implied revenue reacceleration for the remainder of the year to meet guidance.

Answer

CFO Ian Harris confirmed that the Q1 implied payer price per session, which benefited from contractual rate increases, mix shift to higher-priced behavioral health sessions, and improved collection efforts, is a good proxy for the rest of the year. He attributed the expected revenue reacceleration to the ramp-up of new populations like Medicare and TRICARE, and the pull-through benefits from increased marketing investments made in the first half of the year, which take time to materialize due to the longer lifetime value of payer members.

Steven Valiquette asked for an update on the pricing environment within Talkspace's Payor book of business, specifically regarding contract renewals and new contracts.

Answer

CEO Dr. Jon Cohen responded that major contracts have been recently renewed and they are not seeing any pricing degradation in new contracts. He stated there is currently no change and no indication of any significant decrease in reimbursement rates.

Asked for an update on the distribution contract with a major dental manufacturer that had previously announced its intention not to renew. He also questioned if that same manufacturer's recent new product launch was significant enough to positively alter the cadence of Patterson's dental equipment sales outlook for the rest of the fiscal year.

Answer

Regarding the contract, the company is still working with the supplier, values the relationship, and believes a mutually successful, win-win outcome is achievable. The new product launch from that partner is definitely helping results and was successful at a recent event, but the business continues to battle the overall softness in the equipment market, making its full impact difficult to gauge.