Ladies and gentlemen, thank you for standing by and welcome to the NantHealth 2020 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your first speaker for today, Mr. Robert Jaffe, Investor Relations for NantHealth. Thank you. Please go ahead, sir.

Welcome, everyone, and thank you for joining us today to discuss NantHealth's 2020 third quarter financial results. On the call today are Ron Louks, Chief Operating Officer; Bob Petrou, our Chief Financial Officer. This call is being broadcast live at www.nanthealth.com. A playback will be available for three months on NantHealth's website. I'd like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the Safe Harbor provisions of the Litigation Reform Act. The company's discussion today will include forward-looking information reflecting management's current forecast of certain aspects of the company's future, and actual results could differ materially from those stated or implied. In addition, during the course of this call, we may refer to non-GAAP financial measures that are not prepared in accordance with U.S. Generally Accepted Accounting Principles and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review NantHealth's press release announcing its full 2020 second quarter financial results for the company's reasons for including those non-GAAP financial measures in its financial results announcement. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the company's press release issued earlier today. In a moment, Ron will provide a brief overview of the quarter and discuss the business, followed by Bob, who will discuss the financial results in more detail. We will then open the call for questions. With that said, I will now turn the call over to Ron Louks. Ron?

Thanks, Robert. Good afternoon, everyone, and welcome to NantHealth's 2020 third quarter financial results conference call. We hope all of you and your families continue to be safe and well. As we previous announced, during the 2020 third quarter, we successfully completed the acquisition of OpenNMS, a leader in enterprise grade network management. The integration of the open NMS business in our operations is proceeding smoothly, and we expect to see benefits and synergies as a strategic data acquisition. We view OpenNMS as strategic acquisition on multiple products. It provides a number of cross marketing opportunities by leveraging NantHealth data science and AI competencies and OpenNMS’ network monitoring solutions for critical data flows. Additionally, we believe the acquisition will enable OpenNMS to substantially grow revenue by leveraging NantHealth operations expertise and experience. Lastly, we believe the acquisition will allow NantHealth expand an industry beyond healthcare. Now, let's quickly turn to our financial results. Total revenue for the 2020 third quarter was $18.8 million. Total operating revenue which included a contribution from our recently completed acquisition of OpenNMS was $18.7 million. For both 2020 and 2019 third quarter gross margin was 60% of net revenue. Total operating expenses for both period to compare it with approximately $18 million, with SG&A decreasing, investments and R&D increasing, and our bottom line improving considerably. Bob will discuss the financials in more detail shortly. Now, let's discuss our Software and Services business. In our clinical decision support product, we are expanding our client base with new clients through NantHealth’s Eviti channel partner, a leading clinical solutions provider. We expanded Eviti Connect across the Medicaid population of a leading U.S. health insurance company. Of the 13 states originally announced, we’ve gone line on six states with five more states to be added to Q4 and into early 2021. We released enhancements to the early platform, including enhanced their preferred drug program efficiencies to facilitate automatic activation to payers [patient] configuration on an agreed upon date. The loss of the drug management framework, which allows for multiple third party feed integrations enables client request for customization for both branded generic drugs, and the introduction of new features that support medical office operations to track and record on adhere to find specify treatment plan review timelines. We expanded API capabilities with the new service offering for provider and revenue cycle organizations to connect the payer [indiscernible] an open platform. Expanded API capabilities include an update that enables faster information retrieval and easier payer access to a secure HIPAA combined gateway to payers and workflows, including Eligibility & Benefits, Claim Status Inquiry, Authorizations, and Referral transactions. We launched user-centric enhancements that will provide a richer user experience on NaviNet Open. These enhancements include [indiscernible] and self-service capability. For sequencing and molecular analysis business, we continue to explore monetization opportunities. For an update on our newly acquired network monitoring business OpenNMS, we released Meridian 2020 with new features, including time series database integration, with numerous time series databases, including cortex in [OCD], Elasticsearch and others. Local [indiscernible] alarms with pager duty platform enables users to notify on-call responder, customize alarms, and synchronize incidents and acknowledgments in support for [BGP modern protocol DNP] for monitoring Border Gateway Protocol routing information. A fortune 500 healthcare IT company went into production with the OpenNMS Architecture for Learning Enabled Correlation, ALEC, AI engine providing greater insights to the timely alarm resolution. To sum up, our recently completed strategic acquisition of OpenNMS contributed revenue during the third quarter. We reported a solid overall financial performance with total revenue increasing, lower SG&A, and an improved bottom line. We had a new clients [indiscernible] or any business, launch of [indiscernible] engaging solution. And with that overview of our business, I'll turn the call over to Bob to discuss the financial results in more detail. Bob?

Thank you, Ron. For the third quarter of 2020 total net revenue was $18.8 million. This compares to 2019 third quarter revenues of $18.6 million. SaaS revenue, which includes only our Eviti in that net product lines increased approximately 1% year-on-year. However, QonQ SaaS revenue grew 5% driven by strong growth in our Eviti product and a full quarter of [result there]. Our Q3 acquisition of OpenNMS generated 361,000 of revenue, which was comprised of both maintenance and professional service revenue. Sequencing and molecular analysis revenue was $49,000, down from 276,000 in the third quarter of the prior year. We expect nominal revenue in the coming quarters as we continue to explore opportunities for this product. Q3 gross margin of 60% was comparable to the same quarter a year ago. Total operating expenses were flat at 18 million, compared with the third quarter the prior year. We lowered SG&A expenses by 1.3 million, compared with the prior period, while we ramped up our investment R&D expenses by 1.4 million. We continue to add new product offerings and grow our data science capabilities driving for future monetization of these efforts. For the third quarter, net loss from continuing operations attributable to NantHealth significantly improved to $11 million from 16.4 million in Q3 of 2019. On a non-GAAP basis, Q3 net loss from continuing operations attributable to NantHealth was 7.2 million or $0.07 per share, down from 7.5 million or $0.07 per share for the third quarter of last year. On a year-to-date basis, non-GAAP net loss from continuing operations attributable to NantHealth decreased to 20.8 million or $0.19 per share from 23.9 million or $0.22 per share for the same prior year period. Finally, cash and cash equivalents were 25.9 million at September 30, 2020, compared with 37.5 million at the end of our second quarter. Net cash burn was approximately $11.6 million in Q3, which included the usage of funds for the OpenNMS acquisition. With that, I will now turn the call back over to Robert.

Thanks Bob. Operator that completes our prepared remarks. We'd now like to open the call to questions.

Thank you, sir. [Operator Instructions] Our first question is from the line of Charles Rhyee of Cowen. Your line is now open sir.

Hi, this is Gwen Shi on for Charles. Congrats on the quarter. Quick question. It seems like you know, overall healthcare utilization is coming back to normal levels. And we're also hearing that oncology volumes are kind of getting back to where they were pre-pandemic. How does that look among your clients and was that a net benefit in the quarter? Have you seen a rebound there? And the other question is, you know, given followed growth in the quarter, how should we be thinking about 4Q revenue and what kind of expectations do you guys have for OpenNMS to contribute in 4Q? Thanks.

It's Bob here. I can touch on the latter question. And Ron can maybe touch on the first question. As it ties OpenNMS and where we see them going in the short-term is probably similar revenue as in Q3, $350,000, a quarter in the short-term where we're looking to expand that and drive those synergies that Ron referenced in the past. But for right now, it's probably in that 350,000 range on a quarterly basis in the short-term as we get those synergies and those engagements further aligned. As for Q4, again, obviously, we're not really providing guidance, there's still a lot going on in with the pandemic and such. So, I don't feel comfortable in giving an exact view, but I still think we're probably going to be in the 18 million range. As it ties to Q4, we've got upside opportunity, but there's also, as we get to the end of the year with our contracts and amortization of certain professional services, we could see an impact on that in Q4. So, again, I feel comfortable in that 18 million range. And we will work towards getting upside from there. But right now, it's probably in that 18-ish million range.

Okay, that's helpful. And I guess, you know, just a quick follow up, kind of in-line with that. I mean, would you be able to provide any thoughts about 2021 and kind of OpenNMS’ contributions in 2021, at this point, in terms of growth or margin that would also be helpful?

Yeah, at this time, I won't, but in the near future, we will be able to we are working on a future view in 2021 view. I think, again, as a basic view before we get into optimization and ongoing synergies, I think that run rate is relevant for the base view of where we expect OpenNMS, and then again, as we further come further along with synergies and ultimately drive further engagements, we could see upside to that, but probably to be conservative somewhere not same quarterly run rate for the next three, four quarters.

Got it. Thank you.

And there are no further questions at this time. I would now like to turn the call back to the NantHealth management for any final comments.

I want to thank everyone today for joining us. We look forward to sharing our progress on our next scheduled conference call. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. Enjoy the rest of your day. Keep safe and you may now disconnect.