Jailendra Singh: Very helpful.
Operator: Thank you for your question. Our next question is from Jack Wallace of Guggenheim Securities. Your line is live.
Jack Wallace: I got a follow-up on the MHS award. And just thinking about some of the upfront then, particularly on the customization, it sounds like, Bob, you mentioned that there’s an element of that, that was going to be cash flow accretive. And then I just wanted to confirm that whether that was from an upfront spend standpoint or if there’s a margin on the professional services component? And then second to that would be how much of the upfront build here would be transferable in the instance per se, the VA would also have a similar type of award and this would make for an easier plug-and-play opportunity there? Thank you.
Ido Schoenberg: Hi, Jack, I’ll take the second part of your question and let Bob do the first part. So in the initial phase, we will do a lot of work to integrate into the GovCloud, the government cloud, the EHR GENESIS and comply with many rules and regulations for this unique environment, including cybersecurity and other elements. Nothing in this work is risk in our opinion. The work is very clear. We know what to do. And we are very comforted by the enormous experience of other partners like Leidos and Oracle that Oracle Cerner that are very familiar with the environment and are going to do the work together with us. This work is directly relevant for clients who are — potential clients who are not included in this past quarter, first and foremost, the VA as I’m sure you know, the MHS Video Connect, the one that we are replacing and modernizing for the DHA is really derivative of the VA Video Connect.
And the EHR, the Vista is very similar to the one we are integrating with. Very much like the DHA, the is also very, very large. It’s actually larger then the DHA 172 medical centers, over 1,000 clinics and about 9 million enrollees and there is another really important point, which is the system is built for continuous to fair. I mean, essentially, there is movement between those two population that is important. And that’s why in many ways, these organizations typically choose similar solutions. So we believe that, that initial effort will position us very well to compete for the business of the VA in other public entities. Bob, maybe you’ll take the first question.
Bob Shepardson: Yes. So thanks. So Jack, thank you for the question. The initial — this is — think about it in two phases. There’s an initial deployment phase and then a full enterprise rollout. If we just think about the initial deployment phase, that in and of itself is cash flow accretive to Amwell. So that’s a positive cash generator for us over the 22-month period of performance. And to go from the initial deployment to the full enterprise deployment, and that’s to the full $9.6 million people that the DHA provides care to and across the 47 or so hospitals and medical centers and the 525 clinics there’s no incremental investment required to go from that initial deployment to the full enterprise rollout So you’ll see all of that come on without any incremental spending to bring that on. It’s basically to bring the first medical center on we’re going to spend just about everything we need to spend. So that’s how you should think about it.
Jack Wallace: That’s helpful. Thank you.
Operator: Thank you for your question. Our next question is from the line of Ryan MacDonald of Needham & Company. Your line is live.
Matt Shea : Hey, thanks for the question and congrats on the DHA win. This is Matt Shea on for Ryan. I wanted to touch on the active providers. So I was surprised to see client providers tick down again in the quarter. Just curious, was there any churn within that to call out or just replatforming and with 50% of visits now on Converge, should we expect to see that number start to increase sequentially now? And then on the AMG side also, I was just curious what drove that decline and if there’s any gross margin benefit from less AMG providers?
Ido Schoenberg : Hi, Matt, I’ll take the first part and let Bob continue with the second. So we talked a lot in previous calls about what we platforming means, you have some of your clients in legacy. Some of them are migrating. There is an element of churn, but we talked about it, and it’s very much growingly in the rare viewer where we stand right now with more than half of our volume already on Converge. Per design, when you move from one environment to another, you lose people quite quickly, but to gain them a little more slower. So the answer to your question is that we certainly plan and expect to see continued growth in our active providers. And I think Bob actually said that in his prepared remarks. As you may remember, there are big deployments also this year, but certainly early next year that are all going to increasingly contribute to raise this number. Bob want you take the second part.
Bob Shepardson : Yes. And on the AMG side, I wouldn’t read too much into the number of active providers. They’re 1099. And there is some impact from a gross margin perspective as we think about ramping up panels for our APC business, we need to have — we have SLAs there. We need to have availability for subject to those SLAs. So that can actually have having too many — too much capacity there can be negative from a gross margin perspective. But away from that, on the urgent care side, I don’t — I wouldn’t read too much into it. And we can be adding some of our customers, we’re building platform — platforms to activate their doctors. And so we can be growing on that side of the business, and you wouldn’t see that on the AMG side. So — the — I think that addresses your question, but if it didn’t, let me know.
Operator: Matt, thank you for your question. Our next question is from the line of Charles Rhyee with TD Cowen. Your line is live.
Charles Rhyee : Yes. Thanks for taking the questions. Maybe I know you touched on it kind of tangentially, but just wanted to get an update sort of how bookings for next year are trending here through the third quarter. But particularly as you’ve kind of change sort of your go-to-market strategy? Maybe any update on the progress of sort of this implementation of the new sales force focus on ROI?
Ido Schoenberg : Charles, this is Ido. Thank you for your questions. So where we stand today, we have very good staff on converge and very happy customers. So that’s a really good starting point. We have a healthy pipeline. But very importantly, in the same way that we transformed our platform, we’ve really transformed our growth organization to grow it methodically and meaningfully over the next two years. So to give you more details, as you requested, the first thing we did is upskilling of the team and the people. And we are now focused on — we did some research and thinking and our focus on market segments and subsegments where we have very strong right to win and to maximize really the value and impact on profitability.
