Accolade - Q1 2024

Transcript

Operator (participant)

Good day, thank you for standing by, and welcome to Accolade First Quarter 2024 Earnings Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Todd Friedman, Senior Vice President of Investor Relations. You may begin.

Todd Friedman (SVP of Investor Relations)

Thanks, operator. Welcome everyone to our fiscal first quarter earnings call. With me on the call today are our Chief Executive Officer, Rajeev Singh, and our Chief Financial Officer, Steve Barnes. Shantanu Nundy, our Chief Health Officer, will join for the question and answer portion of the call later. Before turning the call over to Rajeev, please note that we will be discussing certain non-GAAP financial measures that we believe are important when evaluating Accolade's performance.

Details in the relationship between these non-GAAP measures, the most comparable GAAP measures, and the reconciliations thereof can be found in the press release that is posted on our website. Please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Accolade to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. With that, I'd like to turn the call over to our CEO, Rajeev Singh.

Rajeev Singh (CEO)

Thank you, Todd, thank you everyone for joining us today. We enter fiscal Q2 with optimism regarding our company, our category, and our opportunity to build a nationwide customer-obsessed healthcare delivery system off the foundation of advocacy-led primary care. Let's get into the reasons for our excitement. First, revenue and adjusted EBITDA were both ahead of our guidance for fiscal Q1.

Revenue in the quarter was $93.2 million, with an adjusted EBITDA loss of $12.6 million, both ahead of our previous guidance and leaving an Accolade in solid financial position to start the year. Revenue highlights in the quarter were marked by continued strength in our virtual primary care and mental health offerings, both consumer and enterprise, strong growth in our expert medical opinion segment, and some early recognition of performance-based revenues. We're increasing guidance for both revenue and adjusted EBITDA this quarter.

Both our growth engine and our path to profitability are firing on all cylinders. Steve will give you all the details in his prepared remarks shortly. Second, the selling season is off to a strong start. Fiscal Q1 is really the first quarter our buyers put pen to paper on contracts, and we saw large companies in food services and retail choose Accolade. Fiscal Q2 is also a major quarter for signing new business, and the pipeline continues to look strong. Notably, more of the deals in the pipeline include multiple offerings and one or more trusted partner solutions. We view this as powerful validation of our overall vision, as well as the importance of embracing the ecosystem. This is reflective of continued interest in our category and our ability to win more than our fair share of the market with our differentiated personalized healthcare suite.

From our foundation of advocacy, we are making advocacy-led primary care a critical factor for companies evaluating in our category. Third, calling out two other drivers of growth for our business. As I mentioned earlier, both our expert medical opinion business, Accolade Expert MD, and our virtual primary care and mental health business, Accolade Care and PlushCare, are demonstrating strength.

Today, we'll focus on the virtual primary care business. On the enterprise side of the business, we fully deployed all of our new business sales from last fiscal year on January 1st, 2023. Those customers are ramping up adoption of primary care and mental health services according to our expectations. Given that it's our first year of deployments, achieving our usage expectations in the first quarter is notable.

On the consumer side of the business, we continue to see strong demand for the high-quality, longitudinal care delivered by our physicians and therapists, and growth rates remain strong and steady. Since I'm sure we'll get a question about the impact of GLP-1 drugs, let me make a few comments here. Accolade's approach is different than many other companies in this space. That said, we did see a benefit from interest in these treatment options, and our primary care business is benefiting from the demand associated with GLP-1 weight loss drugs. I call this out for two reasons: to bring your attention to how Accolade differs from other companies who have a role or a part to play in this healthcare journey.

While it is a fact that GLP-1 drugs are driving interest in virtual primary care, this is in many ways no different than when COVID drove demand for virtual primary care or during flu seasons. What is important is how we apply the same clinical focus and rigor, balance customer acquisition and physician resources, and maintain our obsession with the customer experience that has resulted in NPS scores over 90 for our virtual primary care services. Our care delivery teams, led by Dr. Shantanu Nundy and Dr. James Wantuck, are ensuring that we apply the proper clinical rigor in prescribing these drugs only to patients who meet the defined criterion for prescription. We don't earn money for prescribing medications, so there are no incentives driving behavior to the contrary.

Additionally, because of the nature of our service, we have the ability to help the patient with other needs, such as behavioral health and ultimately lifestyle change, that might be required when no longer taking the drug. Thus, much like patients who engaged with us during the COVID lockdown, we expect to retain many of these customers on our platform long term. Final point on this topic: the robust nature of our suite of offerings here make us unique in the market. For example, while not everyone qualifies for these medications, partners like Virta may be a strong alternative for our customers and members seeking to address their needs. Moving on. Fourth, our government business continues to grow on the strength of our Autism CARES demonstration and other opportunities we are pursuing.

As we have said previously, the T5 award remains in a protest phase, with a decision on Health Net's protest now due in September. That still remains subject to the protest timing. We continue to work with our T5 partners and look forward to planning our rollout and updating you on timing once that protest is complete. Fifth, our trusted partner ecosystem, a vital element of the value proposition for our customers, continues to grow. Our customers, benefits buyers, are overwhelmed by the number of solutions available to them in the market. Our trusted partner ecosystem solves that problem by vetting critical partners in core categories. Last quarter, we added Equip, a leader in delivering eating disorder treatments.

We'll continue to add new partners in a highly curated way and leverage our technology and data platforms to ensure strong adoption and efficacy for those programs. Finally, in terms of quarterly highlights, we made tremendous progress on our One Accolade initiative. This is already having the effect of streamlining decision-making at Accolade and improving our operating structure as we scale to serve hundreds more customers and millions more members. Wrapping up, before I turn the call over to Steve, let's briefly take a giant step backward and look at our opportunity. Our mission is rooted in the idea that every person should have the opportunity to live their healthiest life, and that this opportunity should not be hindered by an overly complex and costly healthcare system that intimidates people instead of welcoming them.

We are demonstrating through outcomes, engagement, and measurable ROI that an advocacy-led population health strategy, one we call personalized healthcare, is the key to transforming the U.S. healthcare system for our customers. To address that challenge, we're aspiring to build the first customer-obsessed nationwide delivery system in the United States. That is no small task. The opportunity for the company that succeeds there is enormous. The heart of that business is an advocacy-led primary care practice that once again puts primary care in the center of delivering high-quality care. Over the last 50 years, for a variety of reasons, primary care spend as a percentage of total healthcare spend and utilization has gone down, while specialty care and pharmacy costs have continued to skyrocket.

Accolade's strategy of virtual primary care and mental health, built off of a foundation of simplicity, service, and data delivered by our advocacy service, is a scalable means of reversing that trend. Our clients and prospects are agreeing and voting with their dollars. The market opportunity for doing this successfully is enormous. Our ability to influence many different parts of the healthcare journey has many significant factors. Advocacy by itself is a $25 billion market. Expert medical opinion is similarly sized. Primary care is a $200 billion-plus market. Our immediately addressable piece is north of $100 billion. Mental health is a large and growing market. The federal government represents a huge opportunity. The capacity to enable dozens of ecosystem partners is also extraordinary. Today, fewer than 1,000 companies have adopted true advocacy-led benefits programs.

There are over 35,000 companies with more than 500 employees who we consider our target market. Put it all together, and we see runway for years to come, with the real beneficiary being the healthcare consumer. We encourage all of you to review our proxy statement filed this week, which goes into more detail on our strategy and our vision. Now, I'm going to turn the call over to Steve to review our financials. Steve?

Steve Barnes (CFO)

Thanks, Raj. I'll recap the results for the first fiscal quarter and then provide details on the rest of fiscal 2024. We generated $93.2 million in revenue in the first quarter of fiscal 2024, representing 9% growth year-over-year, or 19% pro forma growth, excluding the impact of a large customer termination in fiscal 2023. Revenue highlights in the first quarter included strong growth in our primary care and Expert Medical Opinion offerings, each of which grew in the range of 30% on a year-over-year basis. In Q1, we also recognized approximately $1 million in performance guarantee-related revenue earlier than expected, as we had initially forecasted this PG to be earned in fiscal Q4.

As we've noted previously, highlighted in our Capital Markets Day presentation on May 8th, at the start of a fiscal year, we generally forecast that savings-related PGs will be recognized in our fiscal Q4. When we earn those PGs earlier, we call them out to the extent they are notable. Fiscal Q1 adjusted gross margin was 43.5%, compared to 45.6% in the prior year period. The primary factor impacting the year-over-year comparison was high gross margin performance guarantee revenue recognized in Q1 of last year. Net of that PG timing impact, technology-driven efficiencies, as well as prudent spend management, contributed to gross margin performance. Adjusted EBITDA in the 1st quarter of fiscal 2024 was a loss of $12.6 million.

The positive performance versus guidance reflects the revenue overperformance, as well as a keen focus on spend management as we continue on our path to profitability. Note that fiscal Q1 reflects some duplicative costs as we transition and consolidate roles in certain of our office locations. This dynamic will continue into fiscal second quarter, with savings from the cost actions we announced on February 28th being fully realized in the second half of the fiscal year.

Turning to the balance sheet, cash and cash equivalents totaled $303 million at the end of the first fiscal quarter. As a reminder, our convertible notes are not due for about three years. With $303 million cash on hand, we have more than adequate liquidity to achieve our financial plans without going back to the capital markets, placing us in a strong position to execute against our objectives. Finally, we currently have approximately 75.6 million shares of common stock outstanding. Turning to guidance. We're updating our guidance today for fiscal year 2024.

Given the strong performance in fiscal Q1 and our optimistic outlook on growth, as well as our continued drive towards profitability, we are raising fiscal 2024 revenue guidance to a range of $410 million-$414 million, representing year-over-year growth of approximately 21% at the midpoint, excluding the customer termination noted earlier. We are also raising our full-year outlook on our bottom line, updating our adjusted EBITDA loss for fiscal 2024 to a range of $6 million-$12 million. With respect to the fiscal second quarter, we are now guiding to revenue in the range of $93 million-$95 million and adjusted EBITDA loss in the range of $11 million-$14 million.

This adjusted EBITDA guide puts you at roughly -$25 million for the first half of the year, which, when combined with our annual guidance, shows that we expect to be significantly positive on an adjusted EBITDA basis for the second half of the year as our cost initiatives become fully realized and we turn the corner towards full year profitability on an adjusted EBITDA basis in fiscal 2025. With that, we'll open the call to questions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by. We compiled a Q&A roster, and we ask that you have one question and no follow-up. Again, that's one question and no follow-up. Bear with me one moment while we get the first question. One moment, please. Our first question comes from Ryan Daniels from William Blair. Your line is now open.

Ryan Daniels (Analyst and Group Head of Healthcare)

Yeah, good evening. Thanks for taking the question. Maybe a big picture one for you. We're seeing a lot of recent data that indicates that 2024 could be one of the larger healthcare cost trend increases for employers in about a decade. Maybe a two-part here. Number one, do your early channel conversations lead you to believe, you know, this is being widely recognized in the market? Number two, if so, is that really helping your advocacy-led PCP initiative as kind of a means to battle that trend at scale? Thanks.

Rajeev Singh (CEO)

Hey, Ryan, thanks for the question, and thanks for being here. I'll address the question and see if you got anything you want to jump in on this, too. The first part of the question, are we looking at a year ahead where our medical trend line is going to be significantly higher or materially higher than it has been in years past? I think that's very consistent with the feedback we're hearing, both from our customers, from the consulting community, and from the indexes, or the early view on the indexes for the year. I think the corollary to that, Ryan, is very true.

When companies are looking at increased costs, when companies are looking at significant changes in the landscape with things like GLP-1 or other material waves that are hitting the healthcare ecosystem in 2023 and 2024, they're looking for broad-based solutions that solve the problem at scale across the entirety of their population. That's where we think we really differentiate ourselves. Primary care is a part of the story, but primary care builds off of an advocacy platform, where you can surround primary care with data, service, and simplicity, we think is really differentiated. That, no doubt, is playing a role in the growth of our pipeline on a quarter-over-quarter basis.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Craig Hettenbach from Morgan Stanley. Your line is now open.

Craig Hettenbach (Executive Director)

Yes, thank you. Raj, you spoke to some of the strength in expert medical opinion, and it does look like maybe there's some pent-up demand out there. Can you maybe just give a little bit more color in terms of some of the patterns that you're seeing and what that means for your outlook here?

Rajeev Singh (CEO)

Yeah, Craig, first of all, thanks for the question. I'm glad you're here. you know, two things are that drives expert medical opinions, revenues, and growth. The first is new logo acquisition. Are we growing by acquiring new customers? We do that, both with our direct sales channel and with our health plan partner channel. The answer to that question is yes. We're continuing to see strong growth there. The demand for a service like that one, that's so rationally aligned with the customer need, continues to be strong. The second part of that story is utilization, and we're continuing to see utilization at levels that we've previously seen. Both of those things are driving the growth rate of the expert medical opinion business.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Jeff Garro from Stephens Inc. Your line is now open.

Jeff Garro (Managing Director and Healthcare IT Equity Research Analyst)

Yeah, good afternoon, guys, and thanks for taking the question. It sounds like I'm hearing an increased emphasis on virtual primary care as a differentiator. Was hoping you could comment a little bit more on that, and also the mention of an increase in interest in more than one product at a time. You know, relatedly there, curious to hear on any particular themes of combinations of products that prospects are interested in?

Rajeev Singh (CEO)

Yeah, thanks for the question, Jeff. Let me start with the back end of your question. Last year, when you look at at the deals we closed last year, and we had a strong bookings year last year, 30% growth off the year before, that year, we saw the majority of new customer acquisition came in with more than one product. Whether that was advocacy plus primary care, advocacy plus EMO, advocacy plus a trusted partner, we saw the majority of our deals come in with multiple products as part of the first sale. We think that's reflective of customers understanding the strategy, believing that a personalized healthcare suite is aligned with their needs, and also wanting to see a platform to weave all of those capabilities together. That trend continues into this year.

I think I would guess over time, that just becomes the norm, and that what we're looking at are customers who are looking for a suite of solutions to solve the litany of challenges they're facing when they're trying to reduce healthcare costs and improve patient experience or member experience. First part of your question, you know, Jeff, we would say that the way we've been thinking about our service from the beginning is that primary care on a platform of advocacy is fundamentally differentiated, particularly when you're talking about an advocacy platform that today is, you know, between 2.5 million and 3 million members. We have an extraordinary experience of delivering advocacy. We're now layering primary care on top of it.

What that really means is every primary care physician that works at Accolade has a 360-degree view history of the patients that we're serving, has an understanding of the medications they're on and the conditions that they're facing, and also has an understanding of the benefits ecosystem that the employer has aligned for that for that patient. That gives our primary care physicians a superpower that other primary care physicians don't have. You know, a year ago, we really just got started in bringing primary care to market, the Accolade Care offering.

I think we were learning about how customers wanted to would understand and embrace the solution. What we saw was a strong embrace of the solution last year. We deployed those customers on January 1. We're seeing great uptick in terms of their utilization. I think it's fair to say, Jeff, that it's a more significant and pronounced part of our value proposition as we go to market today because we saw such traction in it last year.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Jessica Tassan from Piper Sandler. Your line is now open.

Jessica Tassan (Equity Research Analyst)

Hi, guys. Thank you so much for taking me, the question. Congrats on the quarter. We were just hoping you could remind us what the performance revenue in F1 Q23 was, whether there was any in this quarter, and then just, is that kind of what accounts for the year-over-year change in adjusted gross margin? Thanks.

Steve Barnes (CFO)

Hi, Jess, it's Steve. Thanks for the question. Yes, there are certainly some performance guarantee impact in Q1. Let me just walk you through. The guidance range for the quarter was $89 million-$91 million, we beat the midpoint of the range by a little more than $3 million, and the top end of the range, a little more than $2 million. There was about $1 million of performance guarantee pull forward, recognized in Q1 that we expected to be recognized later in the year. We called that out. The true beat was, call it $2 million, $2.2 million at the midpoint, $1 million at the top of the range.

If you look back to last year, you'd see that in this quarter last year, we had a fairly significant performance guarantee revenue item recognized in Q1 for a little more than $3 million. The year-over-year comp there is driving some of the change in, or actually most of the change in the growth margin. The full year outlook for growth margin, we remain consistent with, call it, high f40s expectation for the year.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Michael Cherny from Bank of America. Your line is now open.

Speaker 17

This is Alan in for Mike. Thanks for taking the questions. Raj, you mentioned, or I guess at Investor Day, you talked a lot about the partnership strategy, and I think one of your partners, Virta, talked about how it was already driving some volume into their business. I guess, is there any way, at this point in the year, to quantify the referral momentum that you're seeing, or maybe total partners, how that's changed? I guess, how important is the partnership strategy as you think about the 2025 selling season? Thanks.

Rajeev Singh (CEO)

Appreciate the question, Alan. I, you know, I think whether you're talking about the 2024 selling season, the 2025 selling season, the partnership strategy is an essential part of the way we position our value to customers. Remember, if you were to step back, customers are looking to solve three core problems. The first, they want a better experience for their employees. They believe fundamentally that the existing healthcare ecosystem makes it difficult for people to understand and get the healthcare that they need. Second, as Ryan spoke about in his first question today, they're looking at trend lines that is beginning to have a very negative impact on their business and off of big, big numbers. They want to be able to control that trend line.

The third thing they're wrestling with is an extraordinarily complicated healthcare ecosystem with a whole suite of carve-out solutions that offer extraordinary innovation to their members, but their members have a very difficult time finding, and the benefits buyers have a very difficult time managing. That third value proposition is fundamentally addressed by our trusted partner ecosystem and our capacity to go to market with a vetted set of partners where we've built real product integration, and we have an opportunity to help manage those partners on behalf of our customers. That's been essential to the value proposition forever. What we've seen now is that as the ecosystem has grown and the integrations have delivered more depth, we're driving the kinds of results that, as you mentioned, Sami Inkinen spoke about at Investor Day, right? 2x utilization of Accolade customers versus non-Accolade customers.

That value proposition is so clean and so crisp for customers that it impacts buying behaviors. In terms of quantification, I'd say there's a couple of ways to look at it today that we speak about. First is the breadth of the relationships. If you're to look across all the categories that our customers are looking at, I think you'll find that our ecosystem is broader and has more depth in the categories that matter to those customers than any other ecosystem in the space. The second part of that story is customer uptick.

We've been talking over the course of the last couple of years about the fact that we're seeing an increasing majority of customers who have taken at least one trusted partner ecosystem relationship. Those two things should give you some sense, Alan, that this is right at the heart of the value proposition we deliver to our customers.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Stephanie Davis from SVB Securities. Your line is now open.

Stephanie Davis (Senior Managing Director)

Hey, guys. Thanks for taking my question. Congrats on a good quarter. I wanted to also touch on that trusted partner ecosystem. Is this something where there's exclusivity with these partners, so there's some sort of head-to-head competition as you try to go and get them in your network versus that of another peer? Is this something where it's more of a question of breadth and having kind of the widest possible bench for folks that might want some variance in who they're partnering with?

Rajeev Singh (CEO)

Yeah, thanks for the question, Stephanie. I think it's actually neither of those. Let me start with the question of exclusivity. In fact, our partners, we partner with multiple companies in certain categories, and we would expect to continue to partner with multiple companies in certain categories. The rationale for that is fundamentally around ensuring that our customers have the right choice. It also breeds competition and innovation in each of those categories, which we think is good for the universe, good for our members, and good for our customers.

The, your opportunity to build differentiation with those partners, which could be exclusive if your differentiation and your investment in building integration with those partners is real, is where we think we have the opportunity to differentiate ourselves from potential competitors in the category who also have partnerships, but also give our customers incremental value. Hopefully, that addresses the exclusivity point.

On the second point, as it relates to breadth of the service, we're gonna be very focused on categories that our customers care about, categories where they're spending money, categories where clinical outcomes can be improved, and that we think can tangibly, have hard impacts on trend line. In those categories, we're gonna go deep. I think what's important in terms of our strategy is we're gonna vet those partners. We won't choose a multitude of partners.

We'll choose a couple, two, maybe top end, three, that we believe are at the high end of that category in terms of value delivery, at the high end of that category in terms of accountability, and also around what our customers are most interested in. We won't go wide necessarily than we have to. We'll be focused on the categories that matter and being really smart about the companies that we vet.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Ryan MacDonald from Needham & Company. Your line is now open.

Ryan MacDonald (Managing Director and Senior Equity Research Analyst)

Hi, congrats on the quarter, and thanks for taking my question. Raj, you talked about in the prepared remarks, like the government business continues to grow nicely there, with areas like the initiatives in autism care. Obviously, you've got some delays on the T5 contract. As we think about the growth opportunity in government over the next couple of years here, what do you expect the primary drivers to be? Are you dependent on success with T5 to be able to continue to grow that government vertical?

Rajeev Singh (CEO)

Thanks for the question, Ryan. I'll hit it in a couple of different ways. First, Autism CARES continues to be an exciting part of the business. It grew modestly on a year-over-year basis. We expect it to continue to grow, and we have an opportunity to continue to grow that. It will be an important part of our government business moving forward. In terms of opportunities to grow beyond that, there are multiple incremental evaluations happening inside the government that we'll continue to pursue. They'll range from the TRICARE universe to other parts of the government universe that because we're still in the depths of those conversations, we haven't really talked about publicly and well. Of course, is the T5 relationship.

We believe the T5 relationship presents significant opportunity, as we've talked about ad nauseam in the past. Unfortunately, the government appeals process tends to delay things, and so it's now, at least at this point, delayed until August of 2024. It could potentially delay beyond that, we don't know. What we can say is between autism care, between our other pursuits in the government, we can grow without the T5 arrangement. With the T5 arrangement, we think there's a very real opportunity to show strong growth across the category.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Jonathan Young from Credit Suisse. Your line is now open.

Jonathan Young (Analyst)

Thanks for taking the question, and congrats on a good quarter here. Just on the pipeline commentary, it sounds like things are tracking well, but I guess, can you provide any color on how it's developing against your internal expectations? Is the pipeline larger than last year? Alongside that, it sounds like, you're selling more or there's more interest in multi-product solutions. I guess, can you give any additional color on that? What, what are people looking for, which I think you talked about before, but just get a little more color there. Thanks.

Rajeev Singh (CEO)

Yeah. Hey, Jonathan. Pipeline is bigger than it was last year at this time. Pipeline continues to grow. I wouldn't say beyond our expectations, because our expectations are always aggressive, but the pipeline continues to grow in a way that's gonna support the objectives we have for the company for the year. As it relates to multiproduct deals, last year, the majority of our deals were multiproduct deals, and that same phenomenon is, we're quite confident. Q1 witnessed the same phenomenon. We're quite confident that same thing will happen in Q2 through Q4.

Because of the breadth of our trusted partner ecosystem and because of the breadth of our solutions, advocacy, primary care and mental health, and expert medical opinion, that desire for customers to do, to one-stop shop across a number of categories, we think differentiates us against a number of our competition.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Jailendra Singh from Truist Securities.

Jailendra Singh (Managing Director)

Good try. This is Jailendra Singh from Truist Securities. Congrats on a good quarter. Thanks for taking my questions. One of your competitors recently announced a partnership with in-home care provider to add virtual to in-home care model to its offerings. I was just curious on your thoughts on extending your offerings to home. Have you seen any demand in this area among your employer clients?

Rajeev Singh (CEO)

Thanks, Jailendra. A couple of thoughts here. First, you'll see us continue to expand our partner ecosystem into new categories. We announced today a partnership that we're really excited about, a company called Equip, that's focused on really improving the service for people, families, challenged by eating disorders. If you look across the breadth of the categories that we're delivering, we're delivering the widest set of solutions to customers in categories that are directly relevant to, as I've mentioned before, improving clinical outcomes, improving convenience for their members, and lowering costs.

Do we believe over time that home health is an area that could potentially have an impact in those three categories? Absolutely, we do, and you should stay tuned in terms of whether we... You know, for us, it's always about finding the right partner, checking those three boxes, and ensuring that it's aligned with our customers' expectations.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Sandy Draper from Guggenheim. Your line is now open.

Sandy Draper (Senior Managing Director)

Thanks very much, and I appreciate you taking the question. I'll try to see if I can frame this right, probably for you, Steve. With the EBITDA outperformance this quarter, improving guidance in the EBITDA or lower EBITDA losses, how you think, as you go through the year, looking beyond that, do you change the way you think about, okay, maybe we step back up some reinvestments in sales and marketing R&D, or maybe we go back into the M&A market? Or is it really, you know what, we just want to scale margins, improve to ourselves, improve to the market, we can get closer and closer to those EBITDA targets you set on Investor Day?

I'm just trying to think with a strong start to the year, you're not going to make a snap decision, If this type of performance continues by the end of the year, do you start to think about changing either M&A or internal investments, or is it really just, Let's just ramp faster in terms of margins? Hopefully, that makes sense. Thanks.

Steve Barnes (CFO)

Yeah, it makes great sense. Thanks, Sandy. This is Steve. A couple of things. First of all, you're right, we had a strong quarter in Q1, beat bottom line by about $4 million. You see us raising our guidance for the full year for most of that, you know, call it $3 million, and the other $1 million, you could consider that to be timing of investments in things like marketing programs, et cetera. Look, we're very focused on getting the company to profitability as we laid out on Capital Markets Day, and by the second half of this year, we will be there, and on a full year basis in fiscal 2025. That's a very important operational and strategic initiative for us.

We also believe, Sandy, for other reasons Raj has laid out, given the strength we're seeing in the business and the strength of the platform in being diversified across advocacy, primary care, expert medical opinion, the partner ecosystem, there's a lot of ways for us to grow, and we believe we're investing amply to achieve the growth targets we've laid out, while also driving the company to profitability, as we laid out in a lot of detail on Investor Day. That's a little bit more color around the EBITDA guide and how it ties into our balance of growth and profitability.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Richard Close from Canaccord Genuity. Your line is now open.

John Penny (Managing Director and Senior Equity Analyst)

Hi, this is John Penny on for Richard Close. Congrats on the quarter. I was just hoping you can get some commentary on the Virtual Blue plan and how that's progressing, or any commentary you can provide there would be great. Thanks.

Rajeev Singh (CEO)

Yeah, I appreciate the question. The partnership continues to progress as expected. You know, we've got the first round of going to market in that space. We've seen the first green shoots of customer acquisition and utilization. Yeah, I'd say the good news is we have the relationship at hand. The good news is we've actually deployed and delivered. It's a little bit too early for us to give you any color commentary on the kind of utilization that we're seeing. I can tell you that we continue to be really excited about the relationship and the opportunity in that space.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Stan Berenshteyn from Wells Fargo. Your line is now open.

Stan Berenshteyn (Senior Equity Research Analyst of Healthcare Technology)

Hi, thanks for taking my questions. Maybe on PlushCare, what percentage of the incremental growth expected to come this year will be coming from the enterprise channel? Can you also maybe comment on customer acquisition costs on the consumer side? Thanks.

Rajeev Singh (CEO)

Sure. Steve, do you wanna grab this one?

Steve Barnes (CFO)

I'll start, then you want to jump in. First of all, Stan, thank you for the question. As you know, the growth coming today is, that you're seeing in revenue is largely driven by the consumer business. Importantly, we just launched several customers and more than half a million members on the enterprise side of the platform. That was on January 1st, where most of those launched. It's early days, but we're seeing strong utilization in line with our expectations here in that 1st quarter. Most of the near term growth has been on the consumer side, but our expectations are that that will also, we'll see significant contributions from the enterprise side.

With respect to customer acquisition costs, I would say, without getting specific about the dollar amount, we've seen it be consistently attractive and in range, in the same range that we've seen over the past, you know, period of time, past 12 months. There's been a lot of opportunities to capitalize on that.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from David Larsen from BTIG. Your line is now open.

David Larsen (Analyst and Managing Director)

Hi, congrats on the good quarter. You clearly have a very robust solution that's very comprehensive and impacts trend and improves the quality of care. One of the things that we've heard, though, is that when a customer decides to implement or potentially decides to implement Accolade, it can be a heavy lift. You got to switch call centers from the carrier. Sometimes they have to switch TPAs, and because of that, sometimes they may delay or not choose to implement Accolade. Just what are your thoughts around that? Do you ever get pushback from that or not? Thanks. Appreciate it.

Rajeev Singh (CEO)

Thanks for the question, David. Here's the way to think about it. If you're to look at the growth of the category, look at the growth of our customer base. Our company had 54 customers on, July 3rd, 2020, excuse me, when we went public, the last time we talked about our customer count. Here we are in 2023, we have more than 800 customers. When we think about bookings growth from fiscal 2022 to fiscal 2023, our bookings grew by 30%. We're looking at a strong year ahead, and we had a very strong Q1 as it relates to bookings.

When we look at customer adoption of a brand new category, when you talk about healthcare services, I don't know that there's a category in the enterprise segment where we're going directly to employers and to health plans, that's growing more aggressively at this scale, at this size. When you think about our revenue forecast for the year, we just took up top line guidance from $410 million-$414 million from a range perspective, each of those representing the strength of the business. The strength of the business is always and fundamentally driven by growth, as it relates to new customer acquisition. Hopefully that answers your question, David.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from Robert Simmons, from D.A. Davidson. Your line is now open.

Robert Simmons (Senior Research Analyst)

Hey, thanks for taking the question. I was wondering if you could put a finer point on your commentary around new sales or new bookings that were being strong. Like, how much did they actually grow, and what are your expectations for the year?

Rajeev Singh (CEO)

Hey, thanks for the question. We don't traditionally talk about bookings numbers at the outset of the year. We've talked about consistent growth on bookings on a year-over-year basis last year, even outperforming our expectations and growing at 30%. We expect bookings to grow, you know, in that 20%-25% range on a year-over-year basis. That's the way we're thinking about the year ahead. We'll give you a more color commentary on that at the end of the year. What we can tell you, as we mentioned in the prepared remarks and in several questions, we're tracking to our expectations with a stronger pipeline than we've seen in the past.

Operator (participant)

Thank you. I'm showing no further questions. I would now like to turn the call back over to Todd Friedman for closing remarks.

Rajeev Singh (CEO)

Thanks, everyone, for being here. This is Raj. We appreciate you spending the time with us, and we look forward to future conversations.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.