Rusty Frantz - President & CEO Jamie Arnold - CFO

Sean Wieland - Piper Jaffray Sean Dodge - Jefferies Jeff Garro - William Blair & Company David Larsen - Leerink Mohan Naidu - Oppenheimer Jamie Stockton - Wells Fargo George Hill - RBC Capital Markets

Welcome to the Quality Systems Incorporated Fiscal Fourth Quarter and Full Year 2018 Conference Call. Hosting the call today from Quality Systems NextGen are Rusty Frantz, President and Chief Executive Officer; Jamie Arnold, Chief Financial Officer. Today's call is being recorded. All lines have been placed on listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] Before we start, I'd like to remind everyone that the comments made on this call may include statements that are forward-looking within the meaning of the Federal Securities Laws, including and without limitation, statements relating to anticipated industry trends, the Company's plans, future performance, products, perspectives and strategies. Risks and uncertainties exist that may cause actual results to differ materially from those expressed in these forward-looking statements, including among others, those risks set forth in the Company's policy filings with the U.S. Securities and Exchange Commission, including the discussion under the heading Risk Factors in the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Any forward-looking statements speak only as of today. The Company expressly disclaims any intent or obligation to update these forward-looking statements. Our remarks on today's call include both our earnings results and guidance, which contains certain non-GAAP financial measures. For our earnings results, the GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure, and the comparable GAAP financial measure can be found within our fourth quarter 2018 earnings press release that was filed with the SEC and is posted to the Investors section of our website. This release also provides qualitative descriptions of how we have calculated non-GAAP financial measures contained in our guidance. At this time, I would like to turn the call over to Mr. Rusty Frantz, President and CEO of QSI NextGen. Rusty?

Thank you, operator and thank you to everyone for joining us this afternoon to review NextGen Healthcare's fiscal fourth quarter and full year 2018 results. We ended fiscal 2018 on a high note with solid and consistent execution across the Board, once again delivering on our guidance as we have consistently for the last seven quarters. Our fourth quarter revenue came in at $136 million compared to $132 million a year ago, and our non-GAAP EPS of 16% compared to 21% in the fourth quarter of fiscal 2017. Our full year revenue of $531 million compares to $510 million in fiscal 2017; and our non-GAAP EPS of $0.70 compares to $0.82 last year. But beyond the numbers, we also accomplished quite a lot in last year and today on the call, I'd like to touch on a few of those accomplishments. At the start of fiscal '18 we committed to driving bookings growth in the back half of the year. Consistent with our expectations, I'm very pleased to report we've delivered on our promise of bookings growth in the back half of FY18. Our bookings were up 20% on a sequential basis in the quarter. Year-over-year bookings increased 9% on an absolute dollar basis and about 5% on a pro forma basis; this marks the first year-over-year bookings growth we've delivered since Q4 '15 and gives us confidence that we have the right solution, the right commercial team and an increasing number of satisfied clients who view us as the right solution provider to take them forward. As we've previously stated, the primary financial growth opportunity for NextGen is to deliver the full breadth of our solution to our existing clients. The bookings and pipeline growth are great reflections of our progress and delivering on that opportunity. Notably, the RCM pipeline has grown significantly as clients recognize the value of our more fully integrated platforms and appreciate the ease of working with us under our new simplified approach on both NextGen Enterprise and NextGen Office, formerly MediTouch. I want to emphasize that we currently have the strongest RCM pipeline in terms of quantity and quality that I've seen since joining the Company and I'm incredibly proud of all the hardwork it's taken us to get to this point. As we move to FY19, we expect to see conversion of that momentum and pipeline in the contracts and happy clients. At the end of Q4 we had 37 clients under contract for the NextGen population health analytics suite, formerly known as Eagle Dream compared to just 15 when we acquired them late in the third quarter. We've also seen significant growth in energy in this pipeline in addition to increasing contract flow. A couple of notable Q4 successes include signing a large existing NextGen plant as well as four hospital system in the Mid-Atlantic showing the applicability both within our sizeable NextGen client base but also how our population health suite can provide great value on top of other EHR and practice management platforms. Our NextGen mobile platform, formerly Entrada, also saw the best quarter so far in terms of bookings in Q4 including some large client wins. This success is reflection of the increasing inclusion of our mobile platform and the associated services in more deals. The ability to drive both, provider efficiency and satisfaction continues to round out our solution and align with our client's needs. Also in the back half of FY18, we saw the return of both larger deals in client base, as well as with net new clients. As well as two years ago we were rarely considered for these larger types of deals. It is a reflection of how far we have come that we are once -- again becoming a great first option based on the broadening of our integrated solution, as well as the increasing robustness, quality and usability of our core EHR and practice management platforms. Finally, NextGen Office continues to grow nicely as well. As we move forward, we expect to see that growth continue into the future augmented by the emerging cross-sell opportunity around RCM. Midst the positive trends in the quarter, we did see a slight tickup in legacy maintenance dollar attrition to about 9% to 10% trailing 12 months. The government delaying the implementation of MIPS and Macra has enabled some of the health systems across the country to focus on rationalizing and standardizing their ambulatory footprint. As we've updated our modeling based on this dynamic, we think we're going to continue to see slightly higher legacy maintenance attrition for a period of time, and as always, we've modeled it into our forward-looking guidance. While we've come a long way, we are by no means resting on our past successes. Looking into fiscal 2019, we anticipate continued acceleration of our commitment to provider usability and efficiency, patient satisfaction and engagement, as well as national interoperability. We're very excited about the now available Spring 2018 release for NextGen Enterprise, formerly known as NextGen Ambulatory. And as with our last few releases, this one was delivered on-time, on-budget and on-quality. Validating this, our own internal survey of our beta clients yield at high 8s and low 9s out of 10 compared with high 5s and low 6s as little as three years ago. Later in the year, our NextGen Enterprise Fall 2018 release will not only continue our journey on provider usability and efficiency, but also introduced deep integration of our population health analytics and mobile capabilities with our foundational EHR platform, all as we seek to create a truly integrated population health management solution. This enabled our clients to get the best patient and financial outcomes from their clinical workforce regardless of where they are on the continuum of fee for service to fee for value. We continue to add capabilities to NextGen office; in FY19 we will broaden the capabilities of the EHR practiced management platform as well as expand the specialty supported broadening the market opportunity at the small practice end for the market. In addition, we'll continue to enhance our service capabilities to capitalize on the emerging cross-sell opportunity around revenue cycle management. On the national interoperability front, we continue to expand our footprint within the care quality framework. In Q4 we expanded our capabilities announcing full bidirectional integration with care quality. We've already enabled the exchange of millions of messages on the framework and our clients coming up on the last few NG Enterprise releases have been very excited to be able to plug-in seamlessly. We are absolutely committed to enabling our clients to see a great breadth of their patient's data all in the name of more effective patient care. As we move into FY19, I would expect to see us continue to drive increasing client satisfaction, deliver great organic capabilities that enable our clients to grow and thrive, execute effectively commercially and continue to use our significant liquidity and cash generation capabilities to acquire assets that enhance the breadth and value of our solution. We remain confident and fully committed to our multi-year guidance of low single-digit growth with some leverage in this year FY19 high single-digit growth with increasing leverage in FY20, all leading to 20% operating margin in FY22. With that, I'll turn the call over to Jamie to review the financial results in greater detail. Jamie?

Thanks, Rusty, and thank you to everyone for joining the call today to discuss our fiscal fourth quarter and full year 2018 results. Before diving into the fourth quarter results I will review some of our accomplishment from fiscal 2018. Total revenue on an as reported basis increased 4% compared to a year ago. We experienced year-over-year increase in five of our six revenue lines; the exception being the traditional software license and hardware line as customers continue to shift towards subscription models and away from the upfront perpetual model. We successfully completed three acquisitions which support our customer shift into value-based arrangements and address position satisfaction and experience. We amended and enhanced our revolving line of credit thereby strengthening our financial position. Finally, subsequent to the year-end on May 10 we reached an agreement in principal to resolve the Federal Securities class action litigation. Accordingly we recorded the charge in the FY18 financial statements based on this agreement in principal. This agreement would finalize removing of distraction it is being shadowing the Company since 2013. Turning now to our fourth quarter results. Total revenue in the fourth quarter of $135.8 million, increased approximately 3% both sequential and year-over-year. Taking a closer look at our individual revenue lines for the quarter, software license and hardware revenue of $15.4 million decreased 7% year-over-year. Customers new and existing are increasingly engaging with us under a subscription-based model and we continue to see declines and add-on sales from existing customers. Subscription revenue of $26 million increased 12% compared to a year ago. The growth was primarily driven by our NextGen office solution, formerly known as MediTouch, and contribution from analytics and mobile solution, the Entrada and Eagle Dream acquisitions we completed in April and August of 2017 respectively. Support and maintenance revenue of $40.6 million decreased 3% year-over-year due to the uptick in legacy maintenance attrition we noted in the previous quarter plus last year we benefited from a one-time sales return reversal. Revenue cycle management and related service revenue decreased 4% compared to a year ago. RCM revenue declined year-over-year primarily due to declines and in process of leaving. To clarify a point we made on previous calls, we have been notified that the client we previously referenced will be completely off our solution by the end of fiscal year '19. EDI revenue of $23.3 million was flat year-over-year and in-line with our expectations. Professional services revenue increased 58% due to transcription revenue from the acquisition of Entrada, increased services to legacy clients and high level of closure of longstanding engagements that resulted in what I consider a onetime revenue of $1 million. Finally, 81% of our total revenue was recurring in nature compared to 82% a year ago. This segment of our revenue represented $110 million, and increased 1% compared to a year ago. Next, I'll discuss bookings which came in at $36.8 million in the quarter, up 20% sequentially. On a year-over-year basis, bookings increased 9% on an as reported basis and 5% on pro forma basis or after accounting for the two acquisitions. I'm very pleased with the progress we've made in driving bookings growth in the back half of 2018. And based on the level of interest for our new solutions, I'm even more confident that bookings growth will continue. Gross profit and gross margin decrease shift away from the high margin license revenue and towards lower margin subscription revenue. Taking a look at our operating expense, SG&A of $65.7 million increased 54% from $42.7 million a year ago. The primary reason for the increase was the $19 million onetime charge associated with the agreement and principal to settle the Federal Class Action lawsuit. Excluding that onetime charge, SG&A would have been $46.7 million in the quarter representing a year-over-year increase of 9%. And 9% increase is largely due to increased employee cost, marketing expenses associated with the rebranding, and consulting and legal cost associated with the [indiscernible] implementation and legal matters. Please note, that we will record a counter-expense in the period we receive insurance proceeds, if any, which we expect will occur in Q2 and we expect a value of approximately $6 million. Both the charge and the counter-expense are excluded in our non-GAAP EPS. R&D of $21.1 million decreased about 5% to a year ago due to increased investment in people cost offset by either higher capitalized software development costs. Gross revenue was up $2.3 million -- sorry, gross R&D was up $2.3 million, offset by $3.3 million of increased capitalized software development costs. Our GAAP effective tax rate in the quarter was almost 700%. This unusual tax rate is largely due to the onetime $19 million settlement charge but for the onetime charge a GAAP rate would have been approximately 10% due to increased benefit related to the R&D tax credits and reduction of tax reserves. For FY19 we expect to use non-GAAP tax rate of 22%. To conclude my comments on the income statement; our GAAP EPS of a loss of $0.17 compared to a positive $0.07 a year ago. Our non-GAAP EPS of $0.16 declined by a nickel year-over-year. Turning to the balance sheet; we ended the year with $31.2 million in cash and equivalents and $37 million outstanding against our revolving credit agreement. DSOs in the quarter which were 57 days which is flat year-over-year. Our capital expenditures for the quarter were $2.2 million and capitalized R&D was $5.2 million. To close the call today I will provide our initial outlook for fiscal 2019. We're implementing the new revenue recognition standard 606 using the modified retrospective approach. Because there is not historical financial data under 606, we're providing guidance based on 605. In each quarter of FY19 we report, revenue and non-GAAP EPS under both standard 605 and 606, and this is so that we can build a track record for the future. For the full year 2019 we expect revenue to be between $532 million and $548 million, and non-GAAP EPS to be between $0.70 and $0.78 per share. Note, that our guidance incorporates several items of note. We plan to invest our FY19 tax reduction into our business for incremental R&D and commercial operations to support the long-term growth. These incremental investments will be for R&D to continue accelerated efforts to enhance our offerings and at sales and marketing to support the bookings growth. In addition, we have factored in slightly higher assumption around attrition based on the recent results. As we look further out, we standby at prior statements regarding revenue growth and operating leverage. In closing, I'm pleased with our performance in Q4 and fiscal 2018, and look forward to continued progress in fiscal '19. That concludes my review of the fourth quarter and fiscal year results. I'll turn the call back over to Rusty for his closing remarks. Rusty?

Thanks, Jamie. Before I open the call to questions, I wanted to take a moment to comment on a few changes. First off, I was very excited to announce that Dr. Betty Rabinowitz has assumed the role of Chief Medical Officer becoming a member of our executive leadership team. Dr. Rabinowitz experienced in perspective regarding physician needs and practical applications of day-to-day everyday clinical practices will undoubtedly prove to be invaluable as we strive to provide our clients with highest quality and most complete solutions. Previously of course, Dr. Rabinowitz was the Founder and CEO of Eagle Dream Health. In addition, I would like to congratulate Dona Green on her well-deserved promotion to EVP of Human Resources. Double-digit improvements in employee engagement year after year reflects -- are a reflection of Dona's leadership in creating an increasingly great place to grow and thrive for all of our associates. We're excited to welcome both, Betty and Dona to the Exec Leadership Team and see both as great wins for the shareholders. Next, I want to thank every member of the NextGen team, their efforts are undeniably paying off as we receive the most improved award from Class again this year serving as proof of our dedication to client satisfaction. It's important to note that a company has demonstrated 10% improvement in their class score year-over-year to receive this award and only three companies in all of healthcare achieved that level of improvement this year. More -- impressively NextGen is the only company that achieved this for a second year in a row and I couldn't be more proud of our team. Finally, I wanted to reiterate that coming out of fiscal 2018, a vast majority of the transformation is behind us and we move into execution mode. At this point, the story is working. Our sales force is fully staffed, engaged and capable; our pipeline is growing across all components of our solution. We're seeing demand for both of our acquisitions from last summer, Eagle Dream and Entrada from our existing client base. Our RCM pipeline has grown significantly, further demonstrating cross selling success and as we look forward, we expect to continue to deliver strong year-over-year bookings growth again in this first quarter of FY19. We are grateful to be at this point and we are excited to accelerate into the future. And with that, let's open the call to questions. Operator?

[Operator Instructions] Your first question comes from Sean Wieland with Piper Jaffray.

Just some quantification questions if I could; starting on the bookings. Can you give us a sense of maybe -- what percentage of the bookings were coming from existing customers versus new footprints? And what we should think about in terms of bookings growth put this back with into your guidance for next year?

I think as we look at -- if we look at our bookings in Q4, naturally we don't break them down but I'd say 1820 is a good way to look at it from existing client base versus new. And frankly, I think we expect that to continue throughout the year. And I'm sorry, I may have missed the second part of your question, so if you can reframe, that will help.

What kind of bookings growth is assumed to factor into your guidance for FY19? Do you need to continue on a high single-digits, double-digits bookings growth for next year?

What I'd say is, I'd say that -- first of all, if you look at getting to high single-digit for next year that actually can imply a certain bookings growth rate. What we are targeting is we are targeting continued year-over-year beat as we move through the year. That being said, there are sometimes we may see some timing issues that pull things into one quarter and out of another, but all in all, we expect to significantly exceed our bookings rate from FY18 and FY19.

And then on the attrition; the -- this large revenue cycle client, it's unwinding, it seems to be probably a big driver of that attrition rate. Could you may be put some quantification around how much of the attrition is from this single client that you've been talking about for quite some time now?

We don't really breakdown attrition, what I would say is, I'd standby that the primary driver we're seeing of attrition is health system consolidation of foreign EMRs that are within their patch and that we feel has been -- and we feel that was really truly enabled by the delay in MIPS and Macra which not only gave a break on reporting but also opened up IT bandwidth for some of those health systems.

Your next question comes from the line of Sean Dodge with Jefferies.

Going back to guidance; the bookings for the fourth quarter were good but your full year looks like they were still down. Next, you're assuming higher client attrition, yet the midpoint of your revenue guidance looks like it implies flat or maybe accelerating organic revenue growth. I guess, can you help us tie that together bookings down, attrition up but flattish organic revenue growth for the year? Is there a notable shift in the mix of what's being booked or Rusty, maybe you're capturing more of what you expect to book in '19 in the form of revenue in the year or is there something else I'm missing?

I'd say, first of all, the first half of this year as report of last year FY18 as reported was not where we wanted to be from a bookings standpoint. In Q2 we had the sales attrition problem, since then we've recovered nicely and if I look at that trajectory -- I expect that trajectory to continue throughout this year, not necessarily sequentially from Q4 to Q1 certainly but as we move forward through the year we expect to continue to year-over-year beat as we go through. And so when we look at last year versus this year, when you think -- number one, that in the back half of FY18 we drove a lot of subscription bookings, that will flow through the year. And then as we move forward through this year, we'll continue to drive those bookings and as we -- as I stated in the call, we expect Q1 to be another strong year-over-year beat. All of those things are really starting to put energy behind revenue growth. Jamie, any thoughts?

The other thought is that on a pro forma basis there was modest growth this year based on the total bookings level, and so you got to have -- but therefore, if we're going to have bookings growth next year with slightly higher attrition our bookings have to be higher than they are this year.

And then you mentioned the agreement to settle the securities class action; does the $19 million charge you recorded as part of that this quarter also include or put to an end the shareholder derivative complaint too or is that being treated or addressed separately?

The shareholder derivative of complaint will be addressed separately and most likely sometime during the summer.

Your next question comes from the line of Jeff Garro with William Blair & Company.

I was hoping maybe in light of the bookings momentum and pipeline growth, if we get an update on penetration of key cross-selling initiatives like RCM hosting path [ph] health in mobile which I believe are still likely quite low.

Yes, I mean -- frankly, we had a great quarter, we're starting to penetrate but there is so much wide space that I would say it has not been meaningfully impaired and so we still see a very large opportunity which is frankly, what gives us confidence not in Q1 but in FY19, FY20 and beyond because we're really seeing significant enhancements, especially kind of in our core client base who are truly independent. We're seeing just significant enhancements in client satisfaction and a willingness to look at us as their primary solution provider which is very different than it was four [ph] years ago. And so as we look at that, we say that we actually see -- frankly, we see less friction ahead of us than behind us in penetrating that wide space but there is so much there that we feel like the opportunity is just as big as it was before last quarter.

One more for me; I wanted to ask about the recurring revenue percentage going forward. I know the mobile product and some of the professional services relating to that -- you're defining them as non-recurring based on the prior segment line. But really those are -- I think they are more recurring in nature; so maybe some perspective on where the recurring revenue mix may explain for the year, up versus last year and how we should think of that into next year?

You are correct that there is an element of our service line. It is recurring in nature and having more appropriately it should be included in the recurring line. And on previous calls, I've identified that if there is a component of the software license and hardware line it is their annual licenses and that too is recurring in nature. So we are looking at it to see if we can better educate you on what's going on. I don't have an answer today but we will talk about this on the next call to try to break it out because when you take those elements it takes the recurring number from the 81%, 82% that we've been reporting, it takes it up into the high 80%, probably closer to 88%. So we're working on modifying our reporting as we go forward and we'll talk about that more on the call in July.

Yes. I mean, our intent -- first of all, our intent is not to evolve the P&L so quickly that frankly, it becomes too difficult to track apples-to-apples. But we do see some opportunities to continue to increase the clarity and representation of the P&L within the construct of course of what the SEC and FASB and everybody else is comfortable with.

Your next question comes from the line of David Larsen with Leerink.

Hi Jamie, did I hear you correctly for fiscal 2018 on an adjusted or pro forma basis bookings grew for the year -- year-over-year?

No, you heard that for the fourth quarter.

So it's just for the fourth quarter, okay. Any sense for what that bookings growth number was for the year or…

I don't have that at the top of my head.

Alright. And then you mentioned that there was a four hospital system win I think for Eagle Dream; can you maybe give a little bit more detail around like what that competitive process was like, who you were competing with and what led to the win?

I'm not comfortable getting too deep into it frankly because I would have to talk to the client first. But what I would say is, they did an extensive -- they actually hired an external group to do an extensive analysis of all the different opportunities that were out there. This process had already started prior to acquisition, and then we carried it on from there and eventually closed it into Q4. But yes, it was competitive process, a lot of demoing, a lot of looking in, I can't comment on who the competitors were but it was a broad process. And for us, what gives us great comfort is, we believe the standalone value of our NextGen population health analytics platform combined with our NextGen care outreach platform had great applicability, not just in our client base and frankly, not just in the ambulatory client base. Now, before we put a flag on the top of the mountain and say that we're going to go out and take on all the hospitals in the country; I think we need a little more runway into the keel [ph], but we certainly see these agnostic capabilities having applicability well outside of our base.

And just to confirm, it wasn't limited to the docs in those hospital systems, it was the hospitals themselves that were deploying Eagle Dream, right?

Yes, they are deploying Eagle Dream in totality across multiple EHR platforms to enable them to have a single solution for maximizing clinical efficiency to best treat the population.

Your next question comes from the line of Mohan Naidu with Oppenheimer.

Rusty, a few questions on the RCM side, great to hear about the strengthen here. Can you comment on what is resonating with your clients now? And, is there a change in message or approach to sell -- upselling this RCM solution. And also, we want to check do you see an opportunity to improve these RCM margins via automation or investments in that segment that could drive those margins?

Yes and yes. So a couple of things have evolved; number one is, we have evolved the breadth of our RCM solution. So in the past we were very focused on processing pair centric transactions and ensuring our customers didn't have to manage denials. As we move forward, we are looking to also -- we are also starting to bring capabilities on the patient pay side, on the preclearance service side; we are bringing analytics to the table to help them constantly manage the effectiveness of to view our effectiveness in providing services to them. We've put in filters that reduce denial rates and as we move over the next two years, we are now taking that broader solution and starting to automate more and more of that which should result in margin improvement as we move through the next couple of years. And so all of that combined with a seasoned group of specialist and a much better educated sales team that understands not just how to talk to the CIO but understands how to talk directly to the CFO, and to illustrate the value, the change, and the performance that we can deliver to them. And so it's really -- it is -- I would say it's a breadth of solution, first; revenue acceleration, second -- through great commercial teams; and then, third, really starting to then look at margin expansion.

Jamie, one quick follow-up on the bookings. You did not give the actual bookings number in the quarter so far, have you?

Last quarter was $36.8 million, he gave that in the opening remarks which represents 5% pro forma as if we'd owned Eagle Dream and Entrada for the entire year growth.

Your next question comes from the line of Jamie Stockton with Wells Fargo.

I guess maybe the first one, the sales rep turnover that you guys had -- I think you talked about on a September quarter call; we backfilled those seats, we've had a couple of quarters -- a little more maybe at this point. Can you talk about how much more kind of ramping there is or seasoning there is with those individuals, are we kind of at full productivity at this point?

Well, there is the full productivity that we're at right now and then there is the full productivity will be at two quarters from now. I feel like -- right now I feel like we've come from a situation where we were below where we needed to be; to come to a situation we're right where we need to be. But without a doubt and I'm rapidly transforming environment with a rapidly transforming solutions that we continue, in fact we just got off for sales meeting about two weeks ago where we spent time really focused on building enhanced capabilities in the team. But I got to tell you; universally across the team there is optimism, there is experience, there is capability and to go from where we were in Q2 to deliver two quarters of sequential growth to get to year-over-year growth and now to be able to commit to year-over-year growth in Q1 which I think clearly demonstrates the fact that we didn't perform ridiculous heroics in Q4, we simply executed the quarter like any other quarter and because of that now we come into Q1 seeing a solid quarter in front of us. It gives me great confidence that that is not only behind us but we've shown the capability to transform our entire commercial footprint and really only get hit for a quarter and then completely move on and accelerate again. And I'm very pleased and gratified to have such a great team with me.

And then, I guess just on RCM; so it's clear the step-down that we saw sequentially in that business -- from your comments it doesn't sound like you've lost kind of the big chunk of business yet. I guess, if that's accurate that it wasn't evident in the March quarter results? And then if you could just comment on whether there was a seasonal component to the sequential decline in the revenue there?

The decline was -- we saw modest contribution, if you will, from the client that was leading. And then there was a little bit of other invoice in there but we didn't see a big movement this quarter related to the client leaving. That will all show up in the next year.

And that of course is billed into our guidance.

And then Jamie, you may have already stated and I've missed it in your prepared remarks with the operating cash flow number if you got to bat [ph] that would be great. Thank you.

Operating cash flow for the quarter was $19.8 million.

Your next question comes from the line of George Hill with RBC.

I guess I would come to -- can you talk a little bit more about the mobile platform and what is the typically used case there for what you're seeing when customers are adopting their products, you talked about kind of population health and stuff like that or rest of it kind of just -- what are the specific used cases where providers are engaging with the mobile platform?

I'll give you a couple of used cases. The first one is, on the mobile platform I'm on my way into work, I just pull up my schedule directly on my phone. I can then click on a patient and I can see all the information about that patient and on top of that if I have our population of analytics platform, some of that information will be the gaps and care that I absolutely need to attack. As I walk into the room, right, I can talk to the patient because just as I walk into the room, I can refresh my view of that patient. Then, the platform during the case supports both automated transcription, it supports personal transcription and it supports remote scribes. And so during the case rather than focusing on the computer, I'm just simply talking to the patient and talking into my phone; and so that's a great piece of efficiency. But another is, say that -- say for example, that provider is out at a baseball game with their children; they can actually do much of the work they need to do and increasingly put in orders and as we move forward be able to engage all the way from CPOE [ph] to be able to do remote work when they know they have to do something rather than having to run home and log into their PC and get it done. And so it's really about provider patient efficiency, it's about making sure that the provider is not spending much of time on the computer, making sure the provider can move on to the next patient and get flow-through, and on top of that enable them to not have to work after work. Makes sense?

Well, you took my second question, it was going to be -- does it have free it only, does it also have order capabilities; so the answer is yes. You got me covered. Thank you.

Your next question comes from the line of Stephanie Dimco [ph] with Citi.

Could you walk us through what needs to fall into place to get to high single-digit growth in fiscal year '20 because it's dependent on future M&A, increased costs sales or can it be achievable solely with continued execution like the past quarter?

If it needed additional M&A, then we wouldn't be providing the guidance, right. From our standpoint we've done all the table setting we need to get there, we absolutely have to execute but it's really based on reasonably productivity from an increasingly capable sales team into an increasingly satisfied client base and so it is -- it's by no means a gimmy but as I said at the beginning of the call, we're seven quarters in a row of telling you what we're going to deliver and delivering it. I feel like when we saw we are on path with our guidance, you can go to the bank on the fact that we've put in all the negative dynamics, all the positive dynamics, and then we have put together the center of our confidence. Now what I will say is, as I said in one of the questions; bookings growth has to continue to flourish during the year. If the bookings number came in where it came in last year, we would not get there. But when you look at the ramp going through last year, especially against some of the headwinds of sales attrition and then you hear the confidence that I have in Q1 this year, you can kind of understand why we feel like we've got a pretty good hand to play here and we have the things that we need. That doesn't mean we may now find additional capabilities and bring them into the organization, or we may find frankly, a chunk of revenue and earnings and bring it into the organization. But when we do that as we have always in the past, we will simply update our guidance based on the impact on top and bottom of any asset and make sure that you have traceability to get from guidance 1 to guidance 2. If you think about that was Eagle Dream last year, right, we brought in a dilutive solution set and we updated our guidance to reflect that. And frankly, then worked as hard as we can to make sure we overperformed on the EPS line to bring ourselves above where we expected to be; and so I would expect similar behavior from next year.

Did you do a quick walk-through of your conversion cycle and just timing from bookings to revenue and how we can see that contribute [ph]?

It's so variable that I hesitate to punch into that. If you think about it -- our revenue cycle management, you're outsourcing a key capability from the client and there is process change that takes longer, perpetual license shows us immediately the day the contract is signed and so it's really hard to push that through, and to some degree I guess we're going to have to ask you to trust us that we believe the bookings ramp that we are going to deliver in this year delivers what we need. Jamie, you want to comment on that?

No, I think you hit the bookings. The other thing I would say is, you're looking kind of -- you are assuming your other items that are taking on the recurring nature, like MediTouch and some of those -- the lag time is probably closer to 3 or 4 months before they turn to revenue, RCM is on the longer end at 6 to 9 months. And so if you're building it, if you're going line by line, you sort of back solving from what it might look like, I think that will help you build your model.

[Operator Instructions] Your next question comes from the line of [indiscernible].

I just wanted to just dive into that EDI line a little bit, only because it came up sort of flat year-on-year, which is the first time that I've seen that and as long as I can remember, so I'm just wondering if there is any secular trends in the business that are creating that dynamic or should I not read into it?

EDI does what EDI does to a degree. I wouldn’t read too much into that myself. Jamie, any thoughts there?

No, I don't really have much to add to it.

Is it tied to the software business to some degree or this is…

It depends on how deeply our clients are engaging, it depends on their provider count, depends on their case load, some clients are heavier users than others and so it can depend on -- attrition can have an effect on it. We'll take an action item to better understand the dynamics as we go forward but at this point in time, it's probably not the thing that we spend a lot of time analyzing versus some of the other lines. Fair statement, Jamie?

It is.

And then my other question would be around bookings from NextGen Mobile and Pop [ph], should we infer that it was about $1.5 million or so based on the actual versus the pro forma delta there?

I wouldn't infer that, I would probably infer more but we don't really comment on that.

And you do have a follow-up question from Sean Wieland with Piper Jaffray.

What was the impairment of assets in the quarter?

The trade names. So when we did the rebranding and we moved away from the names like Entrada and Eagle Dream [ph] and a lot of those names, in purchase accounting they have been put up as an intangible asset but we wrote those off because sooner or later we will stop referring them to as formerly known as.

And at this time, there are no further questions. This does conclude today's Quality Systems fourth quarter 2018 earnings call. You may now disconnect.