Rusty Frantz - President and Chief Executive Officer Jamie Arnold - Chief Financial Officer

Sean Wieland - Piper Jaffray Jeffrey Garro - William Blair Jamie Stockton - Wells Fargo David Larsen - Leerink Partners LLC Michael Cherny - UBS Mohan Naidu - Oppenheimer Sean Dodge - Jefferies Ricky Goldwasser - Morgan Stanley Garen Sarafian - Citigroup Matthew Gillmor - Robert Baird Stephanie Davis - JPMorgan Gene Mannheimer - Dougherty and Company

Welcome to the Quality Systems Inc. First Quarter 2018 Earnings Conference Call. Hosting the call today from Quality Systems' NextGen are Rusty Frantz, President and Chief Executive Officer and Jamie Arnold, Chief Financial Officer. Today's call is being recorded. All lines have been placed on a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions]. Before we start, I would 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. Risk and uncertainties exist that may cause results to differ materially from those expressed in these forward-looking statements, including, among others, those risks set forth in the Company's public filings with the U.S. Securities and Exchange Commission, including the discussion under the heading Risk Factors in the I would Company's most recent annual report on Form 10-K and 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 Company 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 measures 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 second quarter 2017 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 Rusty Frantz, President and CEO of Quality Systems NextGen. Rusty.

Thank you and thank you everyone on the call for joining us this morning to discuss NextGen's Fiscal first quarter 2018. This was another consistent and solid quarter for NextGen. On the today, I want to start by sharing some details about an exciting acquisitions we just announced that we feel will truly add value for our clients and continues to extend the breadth and capabilities of our solution platforms. I will then review some of the highlights in the quarter and provide an update on our platform-as-a-service strategy. Finally, I will discuss the launch of our new commercial programs, which we're now introducing to our existing and perspective clients. I believe this new framework will dramatically alter the conversations we have with our clients and will frame NextGen as more trusted advisor they can partner with to enhance the efficiencies of their practice. As many of you saw this morning, we announced that we entered into a definitive agreement to acquire EagleDream Health. The acquisition of this EHR Agnostic Cloud based analytics platform represents yet another example of our focus on achieving the quadruple aim. Improving the provider experience, improving patient outcomes, lowering the cost of care, and enabling a great patient experience. By bringing this continuous improving capability of our clients we can enable them to guide and evolve their practices directly in-line with these great tenants. Strategically EagleDream's analytic suite aligns incredibly well with our goal becoming a complete value-based care solution platform. This transaction is key in repositioning NextGen as we evolve our platform-as-a-service strategy to ensure our client's success in this trend forming healthcare industry. Not only will this position us as a leader in the emerging risk based reimbursement world, but will also leverage our recent Entrada acquisition by allowing us overtime to push our analytics driven insights real-time to mobile devices directly into the workflow of the provider. This is a very exciting acquisition for us and we intend to lien in and make further investments into the EagleDream platform to ensure scalability. EagleDream continues to strengthen our suite of solutions and while we believe this acquisition will allow us to reach critical mass, we will continue to broaden the offerings we provide to our clients as we respond to the growing needs into the future. In terms of EagleDream’s client footprint, this represents a significant cross-selling opportunity for us as none other dozen or so clients are current NextGen clients and our expansive base of customers is eager for an analytics solution that can help to guide their evolution and performance. As stated in the press release, we are paying about $26 million in cash for EagleDream, which generated approximately $1 million in revenue last year and a net loss of approximately $4 million. We expect to close during this financial quarter. As we see great opportunity to integrate this quickly into our platform and significantly build on capabilities of this great analytics offering, we expect to further invest in R&D and implementation capabilities this year to maximize the impact of this addition to our portfolio. Turning to business and financial highlights in the first quarter of fiscal 2018, we continue to perform well in a highly competitive environment. Our first quarter revenue of a $130.9 million compared to $122.2 million a year-ago and our non-GAAP EPS was $0.17 compared to $0.15 in the first quarter a year-ago. There were a number of favorable trends in the quarter that put our results slightly ahead of where you expected and Jamie will get into those in more detail when he reviews the financial results later on in this call. As I mentioned earlier, this was another consistent quarter for NextGen as we continue to progress along the strategic plan we have laid out over the last year and the year before. We are now launching the integrated solution selling programs we have been developing over the past several quarters. Our acquisition of EagleDream is another step in the right direction and our lasers focus on client satisfaction over the last few years has positively impacted our maintenance attrition, which now has come down to just over 6% on a trailing 12 months basis. In our pursuit towards establishing our platform-as-a-service strategy, we have now built a strong framework of solution sales programs combining both software and services to deliver comprehensive value to our clients. Furthermore, in developing these programs, we have identified additional areas where we will be able to add increasing value in the future. The Entrada acquisition has opened up an entirely new avenue for discussions with our clients and by combining that with our new analytics platform we see great opportunities for cross platform synergies that enable a great provider and care experience. Concurrent with adding these new solutions to our platform, we have also taken necessary steps to refine our business model to better align with our platform-as-a-service strategy. As we said in past calls, the work of building out our enhanced solutions did push back the launch of our new streamline and simplified business model. This delay resulted in bookings in the first quarter of $23.5 million down $1.4 million or 6% compared to a year-ago. As we noted on previous earnings calls, we expect to see bookings growth acceleration in the back half of 2018 ultimately leading to accelerating revenue growth in fiscal 2019. I can confidently say today that we have greatly enhanced our value proposition and significantly broadened our solution offering. NextGen Healthcare can provide to our existing clients a very compelling reason to reengage as well as offering potential new clients a more holistic suite of solutions. We continue to anticipate bookings ramp in the second half of this fiscal year and I look forward to updating you on our progress. We also wanted to bring your attention that as noted in the 10-Q we filed today, we have received a Civil Investigative Demands letter from the Department of Justice. Media reports and public filings indicate that other companies in our states have received similar requests. In a highly regulative business in which we operate, we receive these type of inquiries from time-to-time and this one is specifically related to the matters that we have seen the DOJ looking at another companies. We are fully cooperating with the request and we will provide updates as soon as we are able. What NextGen offers our clients today compared to two years ago is worlds apart. Through focus, positive and productive change and aggressive investment, we feel like we have gotten to a point where we have a very solid platform to build on going forward. Our intense focus on the user experience has resulted in increased client satisfaction and led it to attrition rates continuing to trend down. Those accomplishments will allow us to shift our attention towards augmenting the capabilities of our strengthen platform. While the Entrada acquisition was a great first step in that direction adding an analytics element rounds out our offering and allows us to move towards meaningfully expanding the breadth of our solution and its coverage of the needs of our stakeholders. We have built a much more complete framework and in doing so, we feel like we shifted the conversation towards NextGen being a trusted advisor to our clients. Our conversations had a historically been weighted down by a complex business model that read more like a Chinese menu. We have now simplified our solution pricing framework in a way that will allow us to introduce new capabilities to the market and fold them into a straightforward and transparent pricing model that aligns with our clients' success. Having launched the new programs, our commercial teams are now taking the offering out to the client base. While the first steps on the path towards growing revenue we're ensuring client satisfaction and ease of doing business with us, the next step is to make sure our clients understand the breadth of our enhanced solutions and how these solutions can truly enhance their businesses. With that in mind, we're about to kick off a 20 city Road Show to both existing and potential new clients so that our leadership team can meet with senior executives including myself and walk them through the new strategic direction of our Company. With our new suite offerings, we have made a major step towards being able to act as a trusted advisor to our clients and prepare them for success in a value-based world. With that, I will turn the call over to Jamie for an in-depth review of the numbers and I will be back with you at the end. Jamie.

Thank you Rusty and thank you all for joining us on the call this morning. As Rusty said, this was another solid steady quarter for NextGen Healthcare. Rusty reviewed some of the exciting changes in development in the business so I would like to use my time on the call today to provide some color around our financial results for the quarter. Total revenue for the first quarter of $130.9 million represents the 7% increase year-over-year. Revenue from software license and hardware of $12.8 million a 13% decrease compared to a year-ago. The softness in this revenue line was largely in-line with our expectations and we expect software license and hardware revenue will remain under pressure for the remainder of the fiscal year. Subscription revenue of $23.9 million increased 20% and was driven by Entrada as well as growth across [indiscernible]. Without Entrada, revenue or on a an organic basis, subscription revenue increased approximately 15% organically. Support and maintenance revenue of $41.1 million increased 8% year-over-year. Similar to last quarter this revenue line benefitted from the effect of CPI increases as well as cleanup of past due accounts. As Rusty mentioned, our emphasis on client satisfaction weighed positively on maintenance attrition which is just over 6% on a trailing 12 month basis. For the quarter, attrition was approximately 3%. Revenue cycle management generated $21.4 million in the quarter, up 2% year-over-year. This was slight better than we had expected as attrition from the client that we discussed last quarter has not started as expected. Note, we still expect RCM revenues to slow in the back half of the fiscal year. Revenue from electronic data interchange and data services of $23 million increased 5% year-over-year. The increase was essentially across all products. Lastly, professional service revenue of $8.4 million increased 32% from $6.4 million a year-ago. The increase is primarily due to revenue from the Entrada acquisition. Before turning away from revenue, I want to highlight that recurring revenue reached a record level at 84% of our total revenue. This compares to 83% a year-ago. Recurring revenue was a $109.7 million up $8.7 million or 9% from last year. As a reminder, recurring revenues comprise of our subscription revenues, support and maintenance, RCM and EDI. Rusty touched on our bookings results earlier on the call, but to reiterate, we ended the quarter with $23.4 million. As noted above, we saw softness in our software and hardware segments as customers transition away from the perpetual license model. I want to highlight that we experienced solid performance across recurring revenue solutions. Before I review bookings, I want to reiterate the point that Rusty made. In conversations with our clients it has become clear what they need to succeed in the evolving healthcare world. That clearly has led us to make some dynamic changes to the Company over the past year. I feel confident that combining the Entrada mobile platform with EagleDream analytics capability along with a simplified business model will generate the uptick we anticipate seeing in bookings in the back half of this fiscal year. Gross profit of $71.8 million compared favorably to $65.4 million in the first quarter of 2017 due to higher revenues and lower amortization of capitalized software development costs while gross margin stood at 54.8% compared to 53.5% a year-ago. Turning to our operating expenses, SG&A of $43 million is an increase from the $40.6 million year-over-year. The increase was driven by incremental personnel costs consultants related to the 606 Revenue project and bad debt expense. As a percentage of total revenue, SG&A decreased to $32.8 million from $33.2 million a year-ago. R&D in the quarter of $20 million was an increase from $18.2 million a year-ago. The increase in R&D resulted from increased [staffing] (Ph) partially from the Entrada acquisition as well as greater utilization of contractors as we accelerate to the release of our latest NGA product. The increased costs were partially offset by higher capitalization at $5.2 million compared to $2.9 million last year primarily associated with the [5984] (Ph) release. Our GAAP tax rate for fiscal 2018 is 35.6% and our non-GAAP tax rate was 30.5%. Finally our GAAP EPS for the first quarter of fiscal 2018 of $0.06 compared to a loss of $0.01 last year. Our non-GAAP EPS was $0.17 which compares to $0.15 a year-ago. Turning to the balance sheet, we ended with $23.3 million in cash and cash equivalents down $14.3 million from last year. Additionally, we drew $30 million on our revolver in the quarter related to the Entrada acquisition and payment of the health use and earn out. This leaves us with $45 million outstanding against the revolving credit and total liquidity measured by cash and unused line of $228 million. DSOs of 57 days are stable from last quarter, remaining in our desired range and the decrease from 61 days a year-ago. Overall, I feel increase in confidence based on our performance this quarter as we continue to manage our revenue and expense to meet or modestly exceeded our expectations while investing and making great strides in core strategy we lead out last year. Before I turn the call back over to Rusty, I want to update you on our outlook for fiscal 2018. Historically, fiscal first quarter of the year is typically the lowest and for fiscal 2018, we expect to see headwinds in the second half of the year particularly in RCM due to rolling off of customers we have discussed with you last quarter. As Rusty mentioned earlier, EagleDream is a great capability, but we do anticipate investing to further build out this offering. With that in mind, we're maintaining our previously stated revenue guidance, and adjusting our non-GAAP EPS expectations for the full fiscal year. We expect revenue to be between $512 million to $530 million and we now expect non-GAAP EPS to be between $0.62 and $0.70 per share. That concludes my discussion on the financials for the quarter and remainder of the year. So with that, I will turn the call back over to Rusty for his closing comments. Rusty.

Thanks, Jamie. We continue to make great progress into the future with our evolving organization and solutions. Over the last few months, Jocelyn Leavitt our General Counsel over the last four years and I have been discussing her desire over the next chapter in her career. Jocelyn has been the great asset to this organization and a great team member. To that end, Jocelyn has decided to move out of the GC role and seek that next chapter. She will continue to work with us to ensure an effective hand off to her successor and I want to personally thank her for the great contribution she has made and will continue to make to NextGen. She will always be part of the NextGen family and will always have a home here. Thank you Jocelyn. In closing, we continue to deliver on our strategic plan. We have come a long way [in two] (Ph) years on so many fronts, client satisfaction, technology execution, financial performance, employee culture and so much more. Our teams are racing towards growth and we look forward to continuing to update you on our progress both at our Analyst Day in New York and at next quarter's call. Until then, you can find us on the road making things happen for our clients. Thanks, and we will see you next time. With that we will now open it up for questions. Operator.

[Operator Instructions]. Our first question comes from the line of Sean Wireland of Piper Jaffray.

Thank you. good morning. So you are looking at bookings growth in the second half of the year, could you just comment on maybe some of the leading indicators of that bookings growth that you have got today that you are hearing from your channel, from your sales people that gives you confidence that that bookings growth is going to happen towards the back half of the year?

Yes. Let me talk first of all about the accomplishments that we have made, right. When we talked to you all back in January, two calls ago, one of the things that we said was we're about six months behind where we wanted to be in launching the programs that we really feel will enable this bookings close to show up. As we sit here today, we have released those programs and so we have basically wrapped our solution into a model that really aligns with the way our customers want to buy and makes it very simplified to do business with us. So that step one is, is that we now have a much more simplified offering to take out to our clients which really casts us in a new light. The second is, is as we have talked about we have continued to build client satisfaction. When you think about the fact that we have gone from over 10% in attrition down to 7% and just in this quarter took another drop to 6.3%, you can see that the leading quarters, most recent quarters are really pulling that number down. We see that as a reflection of client satisfaction, which is also borne out in the feedback from agencies like Class as well as our internal Voice of Client score. So we have a more receptive client base and we have a simplified offering. We are now also starting to really take this out to the clients. We have already seen the pipeline for Entrada begin to grow and we certainly are now excited to be able to bring an analytics offering to the table as well. So as we look at all of those underlying factors, that continues to give us great confidence, because we continue to make progress there. Now we are taking that next step which is because I need more frequent thought flyer miles, we are going to be flying around the country where we have time set up to groups of clients in cities all across the country so that we can walk them through all these things, create that executive intimacy that has been so powerful for us and truly give the sales team a great head start into the back half of the year. And so when you think about all those things combined the sales discipline, sales process, great messaging, that gives us a tremendous amount of confidence Sean.

Is the issues at eCW created any changes in the competitive landscape?

I mean I guess from our standpoint, we haven’t seen a massive flight out of eCW. Now naturally Classes come out with a report that says a significant number of the clients are looking to change, but if you read further down in that only about 4% according to them were actually looking to change, because of the concerns with how they operated. And so once again, we continue to sell why NextGen, we don’t why not our competitors, because frankly we feel like we have got a great differentiated offering that allows our clients to bring in a solution that allows them to operate that the way they want to operate.

Okay. Thank you very much.

Thanks Sean.

Our next question comes from the line of Jeff Garro of William Blair.

Yes, good morning guys and thanks for taking the question. Maybe to follow-up a little bit more about bookings. Wanted to ask if you could try to parse out what was Company specific in the quarter versus industry-wide? And maybe as we look forward, can you maybe see that the timing of certain regulatory pressures like macro and the indecision in Washington on Healthcare Reform might be working in your favor as you build up towards this great amount of activity into second half of your fiscal year? Thanks.

Yes, I’m sorry Jeff can you just kind of maybe clarify a little bit more what you are looking at from a parsing out booking standpoint?

Yes, absolutely, so when we see the quarterly bookings result here in terms of the level of client activities, in terms of your own win rate, what can you identify that was Company specific and what was more just industry-wide, were there just overall less demand or were you winning more or less?

I mean honestly I feel like this quarter was another extension of prior quarters. Now what we have seen is as we have certainly seen as we continue to move more towards recurring business models, we have seen kind of more of a shift within those bookings, some more and more recurring revenue. And I think we will continue to see that trend as we move forward. From a overall landscape issue, I don't know if I'm going to tag it to industry factors. I think we're right now kind of operating in two worlds, we're operating the way we have always operated and now we are getting ready to really pivot and operate in a different way. But that hasn't really sound up yet. And so what you are seeing is kind of a continued extension of good solid execution the way things were, but I would expect that to change now that we're coming in with something differentiated from the past. As I look towards the regulatory pressures at the back end of the year, I think well first of all, number one for us is making sure that our clients especially our APM clients our Alternative Payment Model clients are absolutely ready for the full-year reporting period. And that's really job one. But as we start bring things like our new acquisition on the analytics space to the table, which enables our clients to not just report, but to actually get early warning systems on how they can affect the outcomes of the reporting, I think that really positions us well not just to help our clients comply with the regulations, but actually thrive within the regulations. Makes sense?

Yes absolutely and maybe a quick follow-up on EagleDream, you just spoke to why there might be a demand for this solution from your client base. But maybe curious on what specifically about EagleDream makes it the right fit for NextGen as outside of being a physician sounded business versus some of the other value-based analytics solutions that maybe are catering more to health plans or integrated health systems?

Well yes. I mean certainly the cloud based nature of it, the fact that we can deliver at a price point that absolutely generates value for both our clients and our investors, but also this is a solution that was really developed by somebody who truly understands the how to deliver, not just a broad analytics suite that allows a data expert to find needles in the haystack, but rather delivers in a very simplified way the actions that our clients need to execute to truly improve their performance. On top of that, when we looked across the spectrum of offerings out there, EagleDream really has a phenomenal solution, in fact such a phenomenal solution that in the recent Class ratings they came out well into the 90 points. And so when we looked at client satisfaction, when we looked at our channel checks, when we looked at how people were actually using the application, none in a theoretical way, but in a way that drives both value and fee-for-service world by closing up gaps in care that increase reimbursement, but also drive value in the fee-for-value world by closing gaps and care that drive better wellness for the patient and overall profitability. They have really got both of those things and they have really done a nice job with it. So we have spend a lot of time looking at solutions out there and look I'm not going to characterize other solutions as much to say that we think that we have got great one here and we're very excited about it.

Great. Thanks for taking the questions guys.

Thank you.

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

Hey good morning thanks for taking the questions. I guess maybe first on the bookings, did you guys recast the way that you are measuring bookings or is it consistent with the way you have been doing it the last few quarters? That would be my first question. And maybe we will follow-up on to that, any color on like - is that 23 I think Jamie said 0.4 million, is that number inclusive of Entrada or exclusive of it? I know you guys have adjusted acquisitions previously, and I will start there.

Yes we did Jamie, if you recall about a year-ago at this time, it was my first quarter here and what I discovered after the first quarterly announcement was that the bookings number that we have reported included situation where we were in a competitive bid for a renewal and it was put together by the sales team. Subsequent to that quarter, we changed our methodology to exclude those competitive renewals and that’s why the number is different this quarter than we reported a year-ago. I believe the number we reported a year-ago was somewhere in the 28 or 29 range if I remember correctly. So I think Rusty has giving you the updated number I think it’s 24.2 million is the corrected number. And I think Rusty used the number 24.9 which included Entrada’s booking number last year and the 23.4 that I quoted includes Entrada in it.

Okay, that’s great. And then maybe just a couple of other quick ones, the comment about the DOJ, is this basically you think just doing a little fact finding around there, broader penalty that they levied on eCW in making sure that everybody else in the space is good actor?

Yes, I mean I can’t comment on the mind of the DOJ. But what I would say is, we received request for information, we are cooperating with it. As this moves forward, we will keep everybody updated. I mean it really comes back. Look we are focused on transparency with the investment community. And so as these things come in, we want to make sure that we are keeping you updated and then just given the fact that we have seen this in a couple of other companies as well, we do feel like it’s broader than just us.

Okay. And my last question is just one kind of timeline of the various pieces of your platform all converging into what you feel like it’s really tight solution, you’ve gone out and bought this population health solution with EagleDream incrementally you know I assume that there is going to be six, 12, 18 months before it’s completely integrated with the NextGen platform. So could you just give us some quick color on how you think about timeline with being able to go out with the robust sales efforts which sounds like maybe it’s almost now and then when the technology is completely rewritten on to the one platform that you want?

Yes, so part of what we have done especially as we have built out a SMART on FHIR compatible restful API around our solutions. That’s part of the platform-as-a-service strategy. And what is that there for is to enable rapid information of new solutions with the core platform, whether those are organically developed, whether they are partner solutions or whether we acquired them as we did in this case. I would say right out of the gate about 80% of EagleDream’s interaction with the underlying platform will come through the API. And so it's great that we have done all the foundational work over the last year to truly make this seamless. Now naturally there will still be some work to really integrate that in. If it's 18 months I would be shocked, I'm thinking more around six, and my CTO will probably reach out to me and give me an even better number after this, but we're moving very quickly with tit and we feel very good about that. Now as we move forward, the question is not how does an individual asset integrate into the platform, but how does an individual asset - how do you get workflows to span not just that asset but other assets that fit on the platform. And so I briefly reference, you know the reality is if I'm analytic suite that's identifying gaps and cadre on which patients I need to focus on most and that's fitting in a back office in the front of the data analysts. That's probably not going to acquire close a lot of gaps and care. However, if that analytics suite can then pop that directly on to the mobile device in the palm of a provider when they are about to see that patient and let them know the activities that they need to do to either maximize reimbursement or maximize outcomes. That's actually a pretty powerful solutions. So if you think about it, one it's just analytics on the core data, but the other is analytics truly informing practice. And I think that’s what you will see as we move over the next six, 12, 18 months is the really coming together of use cases that span the entire solution platform.

Okay, that's great. Thank you.

Thank you.

Our next question comes from the line of David Larsen of Leerink.

Hey, Rusty. Can you talk about the sales force? How many reps roughly do you have now? Where are you in the hiring process? And then do you have any comments around the leadership for the sales force and any adjustments in strategy like hunter or gather model? Any thoughts around regions, geography and things like that will be helpful thanks.

Yes, I can actually. So a couple of things, first of all, let me talk a little bit about the leadership of sales force first. So we have made some adjustments in the leadership, we have made some adjustments in the structure as well. So from a leadership standpoint we did bring a new Senior Vice President of Sales a gentlemen named Mitch Waters, he is doing a great job for us. He comes with a long experience from McKesson. We have also brought in a number of new regional Vice Presidents. In fact what we have done is we have expanded our regions, because as we see moving into a much more aggressive posture having that player coach with maybe a smaller fan-out form a sales team really enables that kind a client intimacy. But it also during the time of transition when we're taking our great sales team and really training them how to do things differently and bringing new solutions to them and asking them to call wide and high in the organization having somebody who can really help them in the development and really help them get there is very powerful. From a total number of sales reps about 70, it's relatively stable at this point in time. But, as we have moved through the past year we have had some turnover that was kind of expected as we really transitioned from selling products to solutions and some folks prefer to go in a different direction and we feel good about the progress we're making and certainly as we get out there and as I spent time with the sales team, sales team is increasingly excited especially because they have really gone from gathering negative client feedback to having happy clients that are really starting to believe that we are their partner.

Okay. And what do you expect that 70 figure to be a year from now?

I don’t really know. It’s always going to vary on opportunity. It’s a function of what our revenue growth plan is. It might come up another 10 people, but honestly I don’t have a great answer there, because it’s something that we deal with on a quarter-by-quarter basis depending on the opportunity and depending on what we see out there.

Okay. And then just one more. Can you comment on the technology solutions itself? Any thoughts around like the number of fixes that have been implemented over the past year and a half since you’ve been there Rusty, any thoughts on new upgrade cycles? And then I don’t know if I missed this or not but what was the net promoter score and how has that trended over the past say two years? Thanks.

Yes. So let me start first with on the technology side. We just had a large client user group in June. Coming in, my first large client user group is frankly it was a little tough. We had some really unhappy clients out there. As we came into this large client user group, there’re still a couple of areas we are skidding our knees, but it was interesting. We are taking 50% of the time out of the upgrade process. And then in the next release we are going to drop another 50% of that time. In fact, we have gone in some places in many cases we are able to actually do upgrade overnight instead of over a weekend. And so, we are really seeing a significant, a much more frictionless upgrade. That was one of my commitments early on to the client base. The next is, we have fixed thousands of defects in the software and truly made the software much more robust and the feedback from the clients is they are feeling it. We had a couple of areas where we are skidding our knees but out of over 300 upgrades I would say we had about four or five that went a little sideways and then each of those we got in there and the feedback from the client even in areas where maybe they hurt a little bit was you guys are there, you are countable and boy it’s a whole different world. So from that standpoint, we feel very good and we feel like we will continue that. We have really changed our processes where we are testing against large client databases. We are doing performance testing. We are doing all the things necessary to deliver a great result for our clients on top of our technology. And so, we feel very good about that. And it’s starting to show up and it’s really showing up in our net promoter score. When I showed up, net promoter score was somewhere between minus 50 and minus 60. As we sit here today, we are at minus five and continuing to trend upwards. So the client base is noticing. The numbers are showing it. It’s showing up in our Class scores. It’s really showing up across the board. And even then on the Class score, in the recent Class article they did call out the fact that we had a cap in analytics and well here we are. So I really feel like we are listening to our clients. We are responding incredibly well. And we are creating confidence in our clients and our employees and hopefully in you are investors.

Interesting.

Our next question comes from Michael Cherny of UBS.

Good morning guys. Thanks for the color so far. So Rusty just thinking about some of the investments you are making particularly following today’s deal, as you think about the pathway forward, I know you have targeted some longer term goals where you want the Company get to. How do you think about the mileposts that you are measuring itself against in terms of making sure that the investments you are making are driving the revenue growth that you want, the acquisitions are hitting the return hurdles, just take through the process as you evaluate that those targets are aspiration or official target, how you think about them over the next few years of returning towards that double-digit revenue growth rate that you are hoping to get to?

Yes for sure. Well first of all its interesting deals models. Deal models aren't that things that gets a deal closed. Deal models are the things in which you measure yourself for year by year-after-year. So when we look back first of all and what gives me confidence number one, when we look back at the HealthFusion acquisition early on in my tenure, HealthFusion continues to perform well and grow nicely. We actually had a great bookings last quarter just this last quarter. And so that continues to grow and thrive. Entrada already integrated into the solution we're already starting to see bookings growth. In fact they beat the plans and bookings in our deal model. And so as we look at those things they continue to give us more confidence that we can acquire and integrate and integrate very effectively. On top of that, as we look, these aren't just acquisitions we're going out and finding. We sat down and did the complete strategic work up of the marketplace we brought in a consultant to help us to really understand from a data standpoint what was out there and we have identified key areas that are absolutely relevant to our clients as we move forward. And so as we sit here today, we have we are just checking down that list and getting to the point where we feel like where we have now a complete solution, because our clients are not a many of our clients are looking for one-stop shop. They don't want to have to bring the solution in from over here solution in from there and then assemble them together. By providing that consolidated solution and by finding some great capabilities that were developed outside, we feel like we can take those capacities and because we have built a much stronger organization we can be a better owner of them and truly drive revenue growth within our clients. Now as we have done channel checking and frankly, we have done some I guess I would call it relatively oblique questioning of some of our large clients specifically around our analytics solutions much like we did within Entrada and I got to tell you the appetite is high within our client base for these types of solutions. And they are looking at us as the natural provider of them. So all these things together really give me confidence. Now, how we grading ourselves. I guess when I sat down with you for the first time, I said I’m going to focus on client fast and I'm going to focus on being a transparent organization. I think we are achieving that very well. A Little later we said look, we are going to start to really look at both organic and inorganic means. We have checked that off and done it effectively. We then said we're going to restructure the organization and become a consolidated solution provider both in structure and approach and in strategy. As we sit here today, we have got a single consolidated organization, we have got an increasingly connected solution bundle. And we are now taking that to market. And so when I think about how we have messaged the investor community, the milepost we set for ourselves and the make accomplishments that we have made I feel very good about it. I always want to be further along than I am. So we're working pretty damn hard and making some real progress.

And you mentioned the holistic approach towards the serving the customer giving them one-stop shop to your solutions. As you think about the path way forward, do you feel like you need to be back in the impatient market? do you feel like you can accomplish that holistic approach without having a impatient for your solutions ?

We absolutely do. You know clients our independent clients that are proud of their independence and that many of them are growing and rolling up and trying to own the covered life and then to work with critical multiple health systems for critical care services. Certainly part of the market has consolidated around health systems, but part of the market is consolidated at the ambulatory providers. And from where we sit today, we feel lot of, as we have always talked about, a lot of wide spaces in our client base. So we think there is some satisfaction with the capabilities of this organization. We are well setup to create a growth path in a very strong ambulatory client base.

Great. Thanks.

Thank you.

Our next question comes from the line of Mohan Naidu of Oppenheimer.

Thanks for taking my questions. Rusty, maybe one more on the booking side. How much of the acceleration that you are expecting in second half of this year is dependent on you ruling in Entrada the EagleDream into your platform and selling it or can you start selling the current offering directly from EagleDream?

So first of all we can’t start selling the current offering for EagleDream. How much of our bookings is dependent on those? I would say that we are not going to get in for that kind of sub detail within those bookings, but look Entrada, EagleDream, NextGen ambulatory capabilities our financial solutions which includes our RCM services EDI it’s all wrapped into one business model that scales with our client success. And so I would we feel like it’s really the combination. It’s the combination and it’s not really at a sub segment level on each product.

Okay, got it. Just one follow-up on EagleDream. Can you talk a little bit more about the revenue model and how many customers EagleDream has right now?

Yes, well as I said they have got about a dozen clients right now, none of which are actually in the NextGen base. So it’s a lot white space in our base. And from a pricing model standpoint, I mean for data pricing on per provider per month, but as roll into our model it will be rolled into the overall model.

Got it. Thank you very much.

Thank you.

Our next question comes from the line of Sean Dodge of Jefferies.

Hi, thanks. Jamie, just clarifying one of the last points you made in your prepared remarks. How much of the adjustments in the EPS guide relates to the investments in EagleDream versus the impact of the [indiscernible] cycle probably unwinding? And then with the EagleDream investments, will those be done this year, should we expect some of amount of it to carry into the next?

So the adjustment, the EPS guidance is due to the investment we are going to make in EagleDream.

Entirely.

Entirely.

And we have been talking about the RCM that there was a client that had notified us that they are rolling off. We have been talking about that for a couple of quarters actually. That was built into the guidance.

Got it. And then the incremental investments in EagleDream, that integration will be done this year or is there some amount of integration and development then that you expect to carry forward?

I would say integration and development will happen this year. As we move into next year it’s really more accelerating development. It’s interesting bringing in an analytics offering. In the past we have kind of been at open loop solution, we provide a great process enablement software. The missing pieces has been that continuous improvement feedback loop, by bringing this analytics solution we now can allow our clients instead of waiting till the end of the year when they report the figure out whether they are going to be successful we can now allow them to actually affect that success starting day one. As we start to get deeper in with our clients on this, I expect further opportunities to really deliver value to our clients. Not the least of which is actually starting give them a roadmap where as they want to expand, they profitably expand in markets around them. So when you start to think about the capabilities that we can layer in here, my guess is that this is going to be an exciting investment area for us next year based on the success we're going to see with the client base.

Okay. And then Rusty, you mentioned 80% of the work I think that’s done with the EagleDream platform can be done through your prior API. So if I think about from the standpoint of the physician, how quickly can the implementation of the EagleDream then be done?

Let me hold that question. And because we're just at the acquisition here, we have signed the deal we haven't closed the deal. And so I would like to get a little more mild agenda that kill before I provide an expectation on that.

Understood. Thanks, thanks again.

Thank you.

Our next question comes from the line of Ricky Goldwasser of Morgan Stanley.

Yes, hi good morning. And thanks for taking my questions. And so when you think about the portfolio that you have today with the two acquisitions that you completed in the last 12 months in your core offering. Do you think that you still need to augment the portfolio with some an additional acquisitions and what other areas do you think are needed to [indiscernible]?

I would say is I think we have got a very full solution right now. Now actually there are always areas that we may look at both from a partnership organic and inorganic standpoint. But it's not something I'm really comfortable talking about on the open mike, because that's really indicating future direction that we're not comfortable talking about frankly in front of the rest of our industry. But what I would say is, right now our focus is truly on execution in bookings growth. That being said, we are a Company that generates free cash flow, we're Company that's shown that we can put money into the market to acquire something and generate value after that. And so if something comes, it's truly a win for our clients, creates great value for them and in return creates great value for our investors. It's something we will look at. But right at the moment we're pretty focused on bookings growth.

Great. Thank you.

Our next question comes from the line of Garen Sarafian of Citigroup.

Good morning, Rusty and Jamie. Could you elaborate a little bit on the streamline pricing structure maybe give us an example or two Rusty. And specifically you mentioned it's more aligned with your client success. So could you elaborate a little bit more there as well with any specifics if there are any sort of is it more incentive payments or is it just on a percent of their revenues or any changes that are behind that streamline pricing structure comment would be great?

Yes we try to stay right for the word streamline for obvious reasons. But no, it's a consolidated pricing structure that really is coming in and that is directly aligned with their financial success. And so it is a percentage of their financial success within this. And then based on how deeply they interact with the solution that scales.

Okay. Fair enough. And then just a clarification on earlier question on the indication opportunity. I wasn’t sure I understood the response was that you are happy with the outpatient in the white space that's available or were you truly…

I’m absolutely happy with the outpatient market, the ambulatory market and white space that’s available.

And will you interested and feel that you have the need for inpatient solution or entering into the inpatient market then?

I do not.

Okay, alight. Great thank you very much.

Our next question comes from the line of Matthew Gillmor of Robert Baird.

Hey thanks for the question. I just had a very brief follow-up. Jamie, I think you mentioned that the support line benefited from some similar clean up of passive accounts. Was that about the same amount as last quarter which I think was about $1 million?

Yes.

Okay. Thank you very much.

[Operator Instructions]. Our next question comes from the line of Stephanie Davis of JPMorgan.

Hey, Rusty. Hey, Jamie. Congrats on the quarter end. Thank you for taking my questions. Could you talk to the EagleDream how about that, just how it compares to your current popup offering, did have some analytics capabilities already? And maybe what functionality it’s got into your portfolio?

Yes absolutely. So we got current popup offerings, one of the things we have is the Mirth Care platform, which is a great platform for cohort identification and really managing gaps in care. However the analytics suite was not as strong as asset and therefore was not identifying the places to use some of our pop health assets. By bringing in EagleDream which has been developed by somebody who truly understands the population health market, truly understands value based care, but also truly understand how to find gaps in care, we now have something that we can identify the population that needs the most help. On top of that, as we move forward, we really see the ability to really bring those two things together along with Entrada into a really powerful combination that not only identifies problems but truly allows those problems to be addressed. So we looked across the market for a while and I’m an engineer type training. It’s interesting, engineers as a general rule tend to write a lot of reports by looking at the data and figuring out what reports they can write. A physician who is truly responsible for closing gaps in care instead looks at the client use case and then figures out how to bring just the right data necessary to support the insights to truly make changes. So it becomes much more of a client use case oriented solution. When we saw EagleDream, we looked at what they can bring out of the box, we talked to some of their clients and frankly they are doing a phenomenal job and we think a better job than almost anybody else in the industry. So we are very excited about that.

Good. Good to hear. And one quick follow-up on your guidance, could you talk to the drivers of the reiterated range given the 1Q and the acquisitions you made, is it just conservatism in driving this or is there anything to cause [indiscernible] maybe on attrition or kind of known losses?

Look the reason revenue guidance is where it is, is because while we haven’t seen the roll off that we were notified of a couple of quarters ago happened yet, we still fully expect it to happen within this year. And so, yes, you are right. If you take the number and multiply it by four and that will add a little bit of a Q4 up, you end up with a different number. But when we factor that in which is something like I said we have been notified and therefore we have built it into the forecast because it seems very real.

Okay. All right that makes sense. Well thank you for taking the questions.

Thanks Stephanie.

Thank you.

Our final question will come from the line of Gene Mannheimer of Dougherty & Company.

Thanks, good morning. Thanks for squeezing me in guys. I’m still trying to get a feel for the bookings growth that you have contemplated in the back half. How much of that is through your acquired businesses versus what I would characterize as legacy NextGen. And then my follow-up would be on EagleDream, is that something that you would offer your MediTouch clients as well as your larger practices? Thank you.

Yes. So like I said, we're not going to drill too deep into the components of it Gene. This isn’t as much of we have just added a new thing in the bag and people can go out and sale it as much as. We're now bringing a consolidated solution that has full breadth and depth in it. And so it’s neither the new things nor the legacy things, it's the combination of both combined with a great performing client focused organization that generates value. And so we really feel like it's not the individual components, it's the totality of this emerging, the one-stop shop for an entire solution that's emerging that is truly going to drive the bookings growth. And I'm sorry, I forgot the second part of your question? MediTouch, yes I would say our first focus is on the NGA client base, but certainly we see great opportunities within the MediTouch base as well, and expect thus to comment more on that as we move forward.

Very good think you.

And the great thing about EagleDream is, it is a very [portable] (Ph) cloud-based solution.

Thank you.

Thank you. Well with that, we're going to close it down. I appreciate all the questions from everybody. For those of you that will see at Analyst Day we will see you there and the rest of you we will talk to you on the next call. So thanks a lot.

Thank you ladies and gentlemen. This does conclude today's conference call. You may now disconnect.