SHCR (2021 - Q3)

Good morning and welcome to Sharecare's Third Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listening-mode. After today's presentation, there will be an opportunity to ask questions. Leading today's call are Mr. Jeff Arnold, Chairman and CEO; and Mr. Justin Ferrero, President and Chief Financial Officer. Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subjects to various risk and uncertainties and reflect our current expectations based on our beliefs, assumptions and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of some of the factors that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC including the Risk Factors section of the prospectus for our business combination filed with the SEC on June 3, 2021. In addition, please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press that is posted on the company's website. I would now like to hand the conference over to Mr. Jeff Arnold. Please go ahead. Jeff Arn

Good morning everyone and thank you for joining Sharecare's third quarter fiscal 2021 conference call. I'm very proud that we delivered another strong quarter of financial performance and further expanded the reach of our digital health platform to enable millions of members, employees and consumers to consolidate and manage all their health in one place, regardless of where they are on their health journey. By partnering with leading payers, providers, life science companies and employers, we make it easy for them to buy, implement and engage with their populations to measurably improve their overall wellbeing. Now, let me provide a brief overview of our financial results for the quarter. The third quarter results reflect the momentum we are seeing in the market, exceeding our expectations. We beat our revenue and adjusted EBITDA guidance, delivering revenue growth of 32% to $105.6 million compared to the prior year period and adjusted EBITDA of $7.9 million. The results demonstrate the continued execution of our land and expand strategy, the advancement of our business development initiatives and the initial successful integration of our recent CareLinx acquisition. We also continue to bolster our team with key executive hires, including Jaffry Mohammed, who led UST's healthcare business and he was previously with Anthem; Kevin O'Laughlin, who ran Salesforce's healthcare sector working closely with health plans including Anthem; and our new Head of Investor Relations, Evan Smith, joining us from Change Healthcare. Additionally, I'd like to congratulate our Chief Medical Officer, Dr. Nirav Shah on his recent appointment to the Advisory Committee of the CDC Director. We are continuing to build momentum, which gives us great confidence for growth and profitability for the remainder of fiscal 2021 and in fiscal 2022. Let me provide some color on our performance by channel, starting with enterprise. In the second quarter, we expanded our relationships with key enterprise clients as well as on several new clients, including Lennar and AFLAC, which will begin to ramp in the fourth quarter and early next year. We also launched several government sponsored and commercial health plans during the quarter. I would also note that we are executing well on the implementation of previously disclosed program wins, including both Centene and Humana's CarePlus as well as with corporate clients like Nordstrom and Lockheed Martin, among many others. As a result, we continue to expand our base of lives and are on track to end the year with nearly 10 million lives on the platform. In addition, we're also seeing increased engagement in our deployed digital therapeutics, which will be a significant growth driver over the next few years as we increase penetration with current customers and expand our total market opportunity. To further support growth in this area, we launched Unwinding by Sharecare, a broad-based mental well-being app designed to help people better understand how their minds work, reduce their stress, and build healthier habits. It's based on more than a decade of research by renowned neuroscientist and addiction psychiatrist, Dr. Jud Brewer, who became Sharecare's Executive Medical Director of Behavioral Health when we acquired MindSciences in July of 2020. Unwinding complements our suite of award winning digital therapeutics that are clinically proven to help people overcome behavioral health issues, including anxiety, smoking and vaping and emotional eating, introducing new growth opportunities in both consumer and enterprise. These proven digital therapeutics address employers' increasing demands for science-based behavioral health solutions and seamlessly integrates into a comprehensive virtual care platform by empowering people to improve and manage the interconnected aspects of their physical and mental wellbeing. Lastly, I'm very proud of the team given the integration of CareLinx, which is performing well against plan. With the increasing activity in home health right now, I'd like to take a minute to reinforce the competitive advantages Sharecare has realized through this acquisition. To recap on our last call, CareLinx is a leading in-home care technology platform with a nationwide network of more than 450,000 tech-enabled care professionals that deliver on demand personal care services endorsed by AARP since 2018 with more than 1.5 million Medicare advantage members having access to their services today. CareLinx tech-enabled care providers support the functional needs of seniors and patients living with chronic conditions while helping address isolation and loneliness. Through these home visits, CareLinx's digital platform facilitates rich social determinants of the health, data capture, population health analytics and real-time care coordination with remote clinical teams to administer in-home monitoring and digital care plans to close identified gaps in care, ultimately delivering over 3.3 million hours of home-based care. Today, CareLinx has been recognized at a White House event with the Elizabeth Dole Foundation for the respite relief program that supported over 1,600 military and veteran families amid the pandemic. In addition to CareLinx's strong performance in the quarter, we see a significant opportunities as we cross-sell their capabilities to our existing customer base as well as leverage their capabilities to drive new integrated solutions, including becoming a unique component differentiating the payer agnostic advocacy solution we're developing in partnership with Anthem Sharecare Plus. By building on the scale and strength of the Sharecare platform, our advocacy solution, Sharecare Plus, will harness the power of Sharecare's industry-leading capabilities in data and artificial intelligence to drive more informed precision health decisions and improve outcomes by leveraging our existing digital capabilities from benefits navigation and risk assessment to digital therapeutics and decision support. Sharecare Plus will have all the components to deliver a comprehensive best-in-class flexible solution to address the needs of employers, health plans and providers. And we bring this to market working closely in partnership with Anthem, providing their customers, seeking a payer agnostic solution, where we are uniquely positioned to engage with people at every step of their health journey, and more importantly, engage with them how and where they prefer to engage, whether via digital assistant or talking to a live person on the go or in the home. Now, let me move on to our provider channel with services approximately 6,000 physician practices, hospital systems, and health plans. We continue to see positive trends with strength and volumes and demand for our medical record retrieval, payment integrity, and value based care solutions. Showing the strength and diversity of our opportunity across this channel, during the quarter, we signed contracts with leading payers and regional hospital systems for our record retrieval business, which received the highest overall performance rating in the 2021 Class ROI Vendors Report. We signed a new contract for our payment integrity offering with a division of one of the largest health and life re-insurance companies in the world. We launched our unified patient and provider solution suite with a regional medical center and multi-specialty physician group to Sharecare enable their clinicians and signed contracts for value-based care offerings, which will begin in the first quarter of 2022. Moving to our consumer solutions channel, which focuses on leveraging our platform to implement targeted audience specific messaging campaigns on behalf of pharma and life science companies we had a very strong performance in Q3, which reflect Sharecare’s ability to deliver strong results against brand goals and the power of our 108 million first-person database. The consumer solutions channel continues to build momentum adding approximately 25 significant new brands since this time compared to prior year with positive trends in average revenue per new brand supported by a significant increase in the number of million dollar plus campaigns. The team has already built momentum for next year selling its suite of 2022 clients solutions feature an immersive content experiences and new advanced targeting capabilities, which leverage insights from Sharecare’s community wellbeing index. We have integrated new capabilities from our doc.ai acquisition to further efforts to decentralize clinical research and are actively marketing Smart Omix to pharmaceutical and life sciences companies to advance relevance, equity and data integrity and research through artificial intelligence powered smartphone-based studies. In fact, a recent observational study conducted on behalf of global biopharmaceutical company, UCB exemplified this futurist approach to research by building objective measures of symptoms of a rare disease, achieving diverse representation among the effected population and automating a collection of rich patient generated data streams. Through Smart Omix, we are realizing the future of medical research today by conducting these virtual studies, which yield highly relevant real world findings at speed and scale. With partners like UCB, we are able to maximize not only our understanding of specific conditions, but also build a complete digital journey from research to care for people everywhere. We are excited about the potential in these areas, which will further support our growth in fiscal 2022. As I’ve demonstrated by our results across all our channels, we have multiple avenues to drive growth and signing new clients, cross selling additional solutions to our current customers, expanding our digital therapeutics and value-based care offerings and launching new products. Based on the strength of our platform and momentum to date, we remain confident we can deliver strong recurring organic revenue growth with additional growth opportunities as we further enhance Sharecare’s capabilities through strategic acquisitions. And now I’ll turn the call over to Justin for a more detailed review of our third quarter financial performance. Justin?

Thanks, Jeff. And thanks to everyone on the call for your interest in Sharecare. As Jeff indicated, we delivered another strong quarter with both revenue and adjusted EBITDA exceeding our guidance. As evidenced by the results, we continue to gain momentum in the business, delivering strong sequential and year-over-year revenue growth and positive adjusted EBITDA, while continuing to invest heavily to support our future growth. During the quarter, we hired several key executives as well as attracted great talent across the organization to support our growth. Digging into the quarter, our total revenue grew 32% from $80.2 million a year ago to $105.6 million, which also represents more than 7% sequential quarterly growth. This was primarily driven by increased client penetration, executing on our land and expand strategy and new client implementations and wins across the entire platform. On an organic basis, we grew total revenue in excess of 20% compared to the third quarter of the prior year. I would also note that recently acquired CareLinx is performing in line with if not ahead of our initial expectations. Adjusted EBITDA for the quarter was $7.9 million, which was also ahead of previous guidance of $6 million to $7 million, and which reflects increased investments in the current period for both technology and Salesforce expansion. We expect the investments to support our long-term growth and drive additional operating leverage as we gain greater traction where the Sharecare digital platform with existing and new customers. I’ll now turn to our guidance for the fourth quarter and full year. Our Q4 guidance for revenue is $120.3 million to $121.3 million and adjusted EBITDA is expected to be $8 million to $9 million. The fourth quarter guidance reflects strong sequential growth as various initiatives ramp as well as seasonality in our consumer solutions channel, which generates more than 30% of its revenue in the fourth quarter as life science companies typically increase their spend for the end of the year. In addition, adjusted EBITDA includes the previously disclosed negative impact from CareLinx and additional investments in sales and technology, as well as the seasonal impact of certain marketing related expenses, which occur in the fourth quarter. For the full year 2021, we are reiterating our revenue guidance of $414 million to $415 million, while increasing the midpoint of our adjusted EBITDA guidance, which is now expected to be in a range of $29 million to $30 million, increasing the low end of the range from $28 million to $29 million. This reflects the strength of the third quarter and that we are essentially fully booked for the remainder of the year. Now I’ll hand it back to Jeff for some closing remarks.

Thanks, Justin. As you can tell, we continue to build momentum as we move through the first nine months of the year, delivering on our financial, operational and growth objectives. As a result of new business wins, new solution introductions, strategic acquisitions and a strong balance sheet, we have established an extremely strong foundation and runway to support future growth and profitability. Again, I want to thank everyone on the call today for your continued interest in Sharecare. We have a significant opportunity ahead of us, and I look forward to continuing to update you on our progress. And with that, we'll open the call for any questions. Operator?

Thank you. [Operator Instructions] Our first question comes from Eric Percher with Nephron Research. Your line is open.

Good morning and thank you. Question on the number of lives on the platform and it's good to hear you're nearing the goal of 10 million. When we look at go-lives in 2021, what's the trend been January versus April, July and October relative to what you've seen historically and maybe what you saw in a disrupted 2020?

Hi, Eric. It's Justin. Thank you for the question. Based on our conversations, we're really tracking exactly to what we expected this year. I think you remember we provided at the end of last year, we ended at 8.8 million lives and provided guidance to 9.7 million. And we're growing sequentially quarter-over-quarter and expect to, as Jeff alluded to in the opening, to hit our target of 9.7 million by the end of the year.

Right. So it sounds like there is not a -- any real difference relative to how lives ramped in prior years. And maybe I'd ask then, what is your perspective on additions from expansion of accessible lives versus penetration of the accessible lives you currently have?

Well, we don't break that out, but it's again where we focus is to make sure we hit the target and the KPI that we provided, which we are going to do. But we have a lot of ways to drive growth as, which is from bringing on new wins to expanding with our existing customer base, which is significant to cross-selling and we expect all of those to contribute to our growth as we look into 2022.

And maybe Justin, I might add to that. Hi, Eric. This is Jeff. I think what's unique about Sharecare is we have these really large health plan clients. So there is tons of opportunity to grow with those clients. I mean, we're just scratching the surface on the number of covered lives that Anthem has or Centene has. And so, we're constantly trying to bring on members onto the platform throughout the year. But at the same time, we're having success in the large self-insured employer space. And in the past, we've talked about wins like Delta and State Farm. And I mentioned in my opening comments, recent wins like with AFLAC employees or Lennar Homes employees. And we had mentioned that we're bringing on 90 sales people and we announced, or I mentioned in my comments, Jaffry and Kevin, who have joined us with Pam to lead that effort. But we've also brought on 24 sales people since we had our last call and that's starting to ramp as well. So it's just really nice kind of one, two punch of growth from within these large health plans prove that our services work for them and add more members and at the same time add new logos to the roster, which on the combined basis increases our total eligible lives.

And Jeff, you make a great point there. It felt like for some time, most of the wins we saw were coming in the Georgian neighborhood. How far in are we on those 90 additions to actually be out there and productive? And how do you think about productivity ramping?

They're coming up to speed fast. As you know, this is -- isn't -- it's a little bit of a sales cycle, but we expect those sales people to be contributing new logos in 2022. And we're already seeing their participation in some of the logos that I mentioned like AFLAC and like Lennar. Our pipeline is way more robust this year than even it was last year. And so, we're getting a lot more about. So, I think, our brand is more known than it was a year ago, but just the volume of RFPs that we're getting is -- I probably say 5x what it was last year.

Yes. And one thing Eric that might have not been clear from your research report is that we laid out that – that 90 sales people, we were going to hire over a period of three years. And I don't know if that came across to you when we spoke earlier. So we're right on track through three quarters of the year to hire north of 30 this year and right in line with the guidance of 90 over the next three years.

That's helpful. And then maybe last financial question, transaction costs with the full $16.8 million in G&A and Justin any guidance you can give us relative to stock-based comp across the expense line items.

Yes. Stock-based comp was significant as well. Really there were three areas. The $16 million is on the transaction expenses. There was $11 million on the stock-based comp, which was all transaction related due to vesting of shares. So, that was $11 million. And then I just think it's important to point out we paid off all of our debt. We have a very clean balance sheet. And so, you saw $12 million come out of our accrued deferred financing fees.

Okay. That's helpful. Last one, after two quarters as a public company, the CareLinx acquisition, how should we think about headwinds and tailwinds relative to 2022 and the numbers you provided back in the S-4?

Well, Justin, do you want to – I'll let you take that, but as far as maybe explain CareLinx after the S-4. Do you want to do that?

Yes. We feel very – we reiterate our guidance there, as you know we provided guidance around $7 million for the year. We're very confident in 2021 numbers. We grew that to $35 million for 2022. And again, we're very confident in achieving that 70% growth year-over-year. So the integration has been fantastic with CareLinx and we see that as a fantastic transaction for our shareholders, very accretive and it's going to pay dividends for years to come.

Yes. We now have 250 health plans on CareLinx, which makes up 1.5 million Medicare advantage members.

Perfect. Thanks so much.

Sure.

Thank you.

The next question comes from [indiscernible] with BTIG. Your line is open.

Hi. Congratulations on a very good quarter. Can you talk a little bit about your relationship with Anthem and some of these other large health plans? Everybody is talking about digital first plan designs. United talked about it. Anthem talked about it. CVS, Aetna talked about it. Can you maybe just give some color around what Sharecare's contribution is there to your clients? Thank you.

Sure. Hi, David. This is Jeff. I think we play an important strategic role with our clients and particularly you asked about Anthem. So with Anthem's Sydney we play a significant role with our artificial intelligence services. It powers much of that platform as well as we have other Sharecare solutions that we're driving through Sydney. And in addition to that as you know when Anthem made their $50 million investment in April into Sharecare, it was -- so that we could co-develop our Sharecare Plus solution, which is for multi-payer advocacy. So Anthem where they have large employers in which we're not a 100% on Anthem, they're leading with the Sharecare Plus solution as well as we're selling that solution to our other clients as well. So it's helping our clients leverage all the capabilities that Sharecare has assembled over the last decade and then becoming our own digital front door went appropriate especially for their multi-payer clients. And we see lots of growth opportunities within all of those relationships.

Okay. And then is United Health Group a client of CareLinx? Or is their in-sell potential there?

Yes. So, CareLinx does have a significant relationship with United as well as some other new payers that we didn't have on our roster in the past. And we're hopeful that relationship will continue to grow for CareLinx it has from 2021 to 2022 as well as it will give us an opportunity to cross-sell some other Sharecare capabilities.

Okay. And then I think that doc.ai serves a very large number of Anthem members like through Sydney. Isn't that in like the multi-million dollar range in like maybe the 3 to 10 million members? So I would think that there's – like what is the rate or the price that you're charging for those lives and I'm just thinking about the PMPM upsell potential.

Yes, David. Hi. It's Justin. Thanks for the question. We don't charge that on a PMPM basis. We charge it more as a license fee and it's a long-term relationship with Anthem. And so – and it's in the double-digit millions.

Okay. Great. And then just my last question here is on the provider side. It sounds like you've got very good selling momentum there. Any thoughts on what impact the surge from the Delta variant had? It doesn't sound like it's slowed down the medical record retrieval business. Just any thoughts or color there and are you still like 95% booked? And you had talked about the 4,000 sites that you could in-sell into longer-term. Just any update or color there would be helpful.

We are. That division is performing very well. And as you saw, there's sequential growth in that business from Q1 to Q2 to Q3. We expect more in Q4. We're going to do a record number of record retrievals this year. Our KPI there is 5 million and we're tracking to hit that. So, very pleased with the performance of the provider division.

Okay.

Yes, I would say, David, what's nice about the division two is we're starting to see the cross selling that we had hoped for. So I think we had mentioned in the past Emory Healthcare, for example, which is 20,000 plus employees will come onto the platform in January as enterprise client, Wellstar 20 plus thousand hospital employees will come onto the platform as an enterprise client. And so, we have got these 6,000 clients out there in which we're retrieving 5 million medical records. And our new sales force is staying that as like a really rich opportunity as often these health systems are the largest employers in their city to come onto the Sharecare platform as enterprise clients, in addition to ROI services.

That's great. And then what sort of traction have you seen around health security and vaccine related winds? I know you've developed or are developing a vaccine passport that could be used in stadiums, restaurants, hotels. What sort of lift are you seeing there, if any?

Well, I think, we've positioned ourselves really well. We reacted quickly to the pandemic and built a tech-enabled solution to help the world reopen. That product has been adopted in over 80 countries in the hotel business with 2,000 clients. I saw last night we just surpassed 2,000 restaurants that are Sharecare verified. We've got amazing relationships in the arena space and continue to bring on new arenas. We have a really great health path that's easy to implement, and you've seen the Biden mandate around employers with 100 plus employees. And we think we're really well positioned to be able to use our system as that mandate rolls out. We just made our first sell under that value proposition last week. And we're in conversations with big tech companies, global companies, government. And so we think that this is here to stay. It's like I've said in the past health security is like cybersecurity. And we're really well positioned to be able to deliver that to our clients and build our brand.

Great. Thanks all. Congrats on a good quarter. I'll hop back in the queue.

Okay. Thanks David.

Thank you. [Operator Instructions] Our next question comes from Richard Close with Canaccord Genuity. Your line is open.

Great. A lot of my questions have been asked and answered here. But just maybe going a little bit deeper on Sydney and Anthem. So when Anthem gives an update, like in their most recent call that they have more than 50 national accounts signed up for Sydney preferred. It represents like 900,000 commercial members. Just to be clear, as they grow that, it doesn't necessarily positively impact Sharecare because you have that guaranteed minimum contract with Anthem with respect to from legacy doc.ai.

Well, we think that we're a good strategic partner with Anthem. And as they continue to deploy more and more digital solutions and make digital a more and more of a priority, which they're obviously doing that Sharecare is going to have a major role in that whether it's their artificial intelligence services that we'll be providing throughout their platforms through the doc.ai or other solutions that Sharecare has that can be sold through Sharecare – I mean sold through Sydney or sold through Sharecare Plus. But we're very engaged with them and what their needs are and have a lot of capabilities across both Sydney and Sharecare Plus that we think will be valuable to their members as well as help them win new business as well.

Yes. No, I understand that. I'm just trying to gauge like should we be looking at like Anthem as a read through of potential upside to you guys on a quarterly basis. If we track the number accounts that they're reporting or the number of members – because you have that minimum [Audio Dip] and advocacy and all that. How are you guys thinking about the competitive landscape? Obviously, you have a great partner in Anthem and the door there with that partnership, but how – overall, how are you thinking about the competitive environment call it navigation advocacy?

So, I think, we think of it holistically and that we're really well positioned because we were a platform before platforms were cool. And we think about these four pillars that we've assembled at Sharecare that are valuable to Anthem, but they're also valuable to our other blues clients to our Medicaid partners, our Medicare advantage partners, our self-insured employers. And it's how do you do digital navigation? So think of that like RealAge, plus doc.ai, to predict cost of care and outcomes. And then how do we have a really strong offering against across three other pillars of intervention? And so the second pillar and the first of intervention is digital therapeutics. So because we have such high engagement, we get higher utilization of the right digital therapeutic at the right time and solve a big pain point for our clients who are trying to aggregate all these point solutions. The third is this advocacy, where we're building out this Sharecare Plus. And so we'll kind of be this one stop shop across multi-payer opportunities. And then lastly, this last mile of healthcare, being able to have 450,000 caregivers that we can deploy across the country, and we're starting to really think of those 450,000 tech enabled caregivers, that's advocates themselves. And so when you take that, we've had 50 million people take our HRA and engage in our content. We've got the most robust digital therapeutic marketplace. We've got a spot on advocacy solution that we're developing hand-in-hand with one of the largest payers. So we're getting it right the first time. And then when we've got this last mile covered all on one platform where the data is interoperable. It's what we believe to be user friendly. And we're seeing that. We're getting wins across the board. It's not just Anthem. And so we're super excited and then you take into account that we also have a $100 million provider business and a big consumer business. And those three all work together in one ecosystem on one platform. We believe that where this category of one company that we talked about in our roadshow.

Great. Helpful there. And then on the consumer side, maybe to dive in there a little bit. Obviously, we're coming up on 2022. Justin, you mentioned fourth quarter is usually the strongest quarter there. I think you said 30% of the year comes – in the fourth quarter. Based on your discussions with clients, how are they thinking about the shift from legacy, marketing and channels versus the digital and any thoughts regarding I know it's early for 2022 guidance and all that. But any thoughts in terms of just like how those budgets – your customers’ budgets are looking towards mix shift towards digital?

Yes. Hi. This is Jeff. Maybe Justin I'll start that is our consumer division is really strong. We have a tremendous leader, a great team. We have a lot of experience in this space, going all the way back to WebMD in late 1990s. We've been working in digital health with pharma for a long time. This was a big year for pharma, kind of a bounce back from COVID. But I think what pharma and life science companies appreciate about Sharecare is our first party database. We have 108 million people on our first party database. I think we have like 70 million emails as an example. And they really appreciate our high quality content, our ability to produce high quality content. I think we have a library of over 40,000 videos for example, and be able to perform from them because of that quality content and the quality of our database. So they keep coming back to us new campaigns. So we expect this division is going to continue to grow for us. And it underwrites all the content that we produce for enterprise, which really differentiates us from our peers that just the volume of content that we can use to personalize the experience for our users. I'd also like to note that we're real excited about the capability that we picked up with doc.ai called Smart Omix, which is their decentralized clinical trial product. We put out a press release last week about our first client on their UCB. But if you take all the relationships that we have in pharma and life sciences that we've earned over the last two decades performing against their campaigns and now we bring them this decentralized clinical trial product, that's state-of-the-art and introduce them to doc.ai. We think that this has massive potential for us long term. And it's been really well received by our clients and we think it's going to be a big contributor. You'll start to see it next year, but in 2023, we think it's going to really take off.

Okay. A final question on consumer, a lot of noise on the marketing and advertising side with changes in securities, cookies, whatnot Apple’s changes and does anything like that impact your guy, Sharecare with respect to that situation?

It's a great question. And it's a great opportunity for Sharecare because of that first party database that I referenced. And so cookies would go away tomorrow. It's irrelevant to how we deliver our campaigns.

Okay, great. And if I could slip a couple in on the provider side, just can you talk a little bit more about what you're seeing on payment integrity and value based care efforts on those two fronts would be helpful?

Sure. Yes. So, obviously we're highly focused on enterprise, but we see our provider unit as a great growth opportunity as well. So how do we take this $100 million unit and grow it? One is we have 6,000 clients, and so we can cross-sell enterprise and other things to them, but we've remain focused on this idea of a Sharecare enabled clinicians. And so the thinking there is, as value-based care takes off that the providers and health systems are going to need the same types of platforms that the payers are buying from us to take on risk. And so we have this obviously, and we've repackaged it for health systems, and then we made two acquisitions to complement that strategy. One was WhiteHat which is on the payment integrity side. And we're starting to see some real traction there as well. Basically being able to identify abnormalities and then be able to confirm it within the Sharecare platform. And I'll let Justin, talk to the revenue there and then I'll come back to the value base.

Yes. And Richard…

Hey, Justin.

As we talked about, we expected value-based care payment integrity to be a contributor in the second half of 2021, and that's happened which Jeff outlayed in his opening remarks is we're executing on this large value based contract and also a payment integrity contract. And so we're set up now, not only to have nice contribution from them in Q4, but also a good momentum as we go into 2022.

Yes. Then on the value base care, I mentioned we will be launching that with customers in Q1 of 2022. So that is resonating with our clients of like, bring me the same platform that the payers have as we go into value base care.

Great. Thank you very much. Congratulations.

Thank you.

Our next comes from Ben Sherlund with Cantor Fitzgerald. Your line is open.

Hey guys. Thanks for taking my question. I just wanted to follow up on the consumer segment. It seems like you guys have a very unique signal for advertisers relative to some of the other media platforms. Can you help me frame the opportunity? You disclosed 108 million first party users, is there any way you could provide a bit of color on how many of these users are actively engaged with the platform? At 108 million users, I would suggest ARPU of roughly $0.65 in 2021, which to me says you're in the very early stages of monetization here. So moving forward is the major driver of monetization expansion increasing the engagement from these users or maybe growing the advertiser base, any color that would be helpful? Thanks.

Yes, I think, it's renewing brands which we have a high renewal rate. It's adding new brands to the roster often from existing clients that are launching new brands. But from a – I think we can fulfill, we have enough capacity to fulfill these campaigns and it's coming up with new products, which we've done a really good job of continuing to kind of innovate in that space. Like we have a product called Sharecare Reality Labs where we build these really immersive kind of the Google maps of the human body that has been really well adopted. And I mentioned the Smart Omix product, but I think we've got the database, the database continues to grow. We've got excellent leadership, a great team, lots of history in the space. We win – I think, we won 17 awards recently for the quality of our content and our ability to innovate and deliver for our clients. And so it's just a matter of keeping what we’ve got, bringing on new logos, adding more brands and continuing to introduce new products.

Okay, great. Thanks for the color guys.

Sure. Thank you.

Next question is a follow-up from David Larsen with BTIG. Your line is open.

Hi. Can you talk a little bit more about the virtual clinical trial activity that you have going on? Maybe describe in detail what you're doing please, are you actually helping to conduct the clinical trial and recruit patients into those trials based on the data that you have on those members? Thanks.

Yes. So this is one of doc.ai’s kind of premise when we bought them was this idea of how to go from research to care believing that the smartphone could be an amazing data collection platform within itself. And so, how could you build a platform that could collect data from the smartphone that had the artificial intelligence built in. That could start to make predictions faster that could help researchers. And so this was, I mean, this is kind of one of the core foundations of doc.ai was research to care using AI research for researchers. And so we've taken that product that they've continued to nurture. And we've introduced that to our consumer group and said, hey, you guys have all these relationships with all these pharma brands. And we have all these users and we've got this great technology and how could we create our version of operation work speed. So the same way the vaccine came to life in a year. How can we use our technology and our users and our relationships so that we can accelerate discovery. And I think, what we're really well positioned to be able to do that. And we announced it last week, we were on stage in Boston this week with UCB talking about the results that we've seen. And we're seeing a lot of demand for conversations and business development opportunities that we think give us a great outlook for the future of decentralized clinical trials and the role that Sharecare comply in it.

Great. Thanks very much.

Thanks, David.

Our next follow-up comes from Eric Percher with Nephron Research. Your line is open.

Thank you. Wanted to follow up a bit on your digital therapeutic commentary. It's good to hear about the new program. What tools are getting the most interest and particularly for unwinding, where do you think there's pent-up demand?

Well, I think for unwinding, I think just the whole behavioral health space is on fire within our clients. And we've taken kind of an interesting angle on this. So one is when we acquired MindSciences during the pandemic, what we liked about MindSciences is it was evidence based. They had done $13 million in research with NIH and Yale-Brown [ph] and others. And it was all based on mindfulness. So, what relationships do you have with food? So that you could help you lose weight. Or what relationship do you have with smoking and other things? And what we found in our research is that financial stress is a really big issue. And I've said in the past, like financial stress is the next diabetes that people are worried about losing their jobs and retirement and all these different things. And so we went back to the team at MindSciences, and we said, look, you've got this amazing evidence based mindfulness approach. All the surveys and resources that we're seeing is that people are under tremendous financial stress. How can we build a solution that we could bring to enterprise clients and consumers that could help with that? And so internally, we developed unwinding off of that research and our sales people are actively selling that for 2022. So we're going back to all our clients right now and trying to get upsell that so that they can make it available to their members in 2022. And it's really resonating the approach of mindfulness as well as the recognizing the issue of financial stress. And then the opportunity is to sell it into our current base, because it's like turning on WiFi it's integrated already into the platform. We just hit a switch and it's active for our clients. And it's just getting on contract with them, then getting those members enrolled into the platform. But so we see that as a huge opportunity. Diabetes prevention is always huge, there's 88 million people that are pre-diabetic. And so, we have a solution for that and that continues to grow. And then all your staples, people are always interested in is trying to lose weight and stop smoking, et cetera.

Yes. And so it's per our conversations, Eric, it's we don't break them out individually, but it is in line with what you would've expected. Based on your research is, diabetes is significant. Pre-diabetes is a big one for us, and now we're expanding into new areas like we talked about when it comes to 2022 in areas like sleep, hypertension and others. So it's really the major conditions that you would expect.

Thanks for that. It sounds like something will be following up in the next quarter or two. And Justin, when you roll out a new program and we think about Sharecare’s approach to go to market, should we think of these as incremental PMPM, or would you ever have a digital therapeutic that would be covered under medical or pharmacy benefit?

In ours, I would look at it incremental PMPM, but it could expand to the models that you're – we're looking at that as well. But in the short term, think of incremental PMPM.

Got you. And then last, you mentioned earlier the opportunity outside of enterprise, if this is utilized by a physician who pays for it in that situation would it – are you thinking mostly it would be an at risk provider who'd be willing to take that on themselves or a consumer or where does it come from?

Yes, I think we're pursuing kind of all forms of reimbursement. So at risk, direct to consumer, we're looking at all kinds of different models for the therapeutic.

Thanks so much.

Sure.

Thanks so much.

Absolutely.

Thank you. And I'm currently showing no questions. I turn the call back over to Jeff Arnold for closing remarks.

Great. Thank you. Well, we appreciate everybody calling in today and learning about our Q3 numbers. We couldn't be more excited about hitting our revenue target, our adjusted EBITDA. We feel like we're going to end the year really strong and going into next year at nearly $500 million run rate. And look forward to continuing to update you on our progress and take care. Thank you.

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