Q4 2023 Augmedix Inc Earnings Call
Participants
Matt Chesler; IR; Augmedix, Inc.
Manny Krakaris; CEO; Augmedix, Inc.
Paul Ginocchio; CFO; Augmedix, Inc.
Ryan Daniels; Analyst; William Blair & Company
Elizabeth Anderson; Analyst; Evercore ISI
Aaron Watts; Analyst; Lake Street Capital Markets
Allen Klee; Analyst; Maxim Group LLC
Bill Sutherland; Analyst; The Benchmark Company LLC
Presentation
Operator
Yes, greetings, and welcome to all Augmedix's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Matt Chesler, Investor Relations. Thank you. You may begin.
Matt Chesler
Thank you, operator. Joining me today are Manny Krakaris, Chief Executive Officer of Augmedix; and Paul Ginocchio, Chief Financial Officer. This afternoon, we released financial results for the quarter ended December 31, 2023. We've posted a copy of the press release and an investor presentation on our website at Augmenix.com. We'll begin our call with prepared remarks to be followed by a Q&A session. This call is also being simulcast and will be archived on our website.
Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events or results for performance are forward-looking statements. They are based upon our current estimates and various assumptions and involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied. Accordingly, you should not place undue reliance on these statements.
For a list and description of the risks and uncertainties associated with our business, please refer to risk factors and management's discussion and analysis in our most recent Form 10 K and Form 10 Q filed with the Securities and Exchange Commission and similar disclosures in subsequent reports filed with the SEC.
Also during our call today, we'll discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items. You'll find additional information regarding these financial measures and a reconciliation to GAAP measures in today's press release. This call contains time-sensitive information and is accurate only as of the live broadcast today, March 18th, 2024. We disclaim any intention or obligation, except as required by law to update or revise financial projections or forward-looking statements, whether because of new information, future events or otherwise. And with that, I'll turn the call over to Manny.
Manny Krakaris
Thanks, Matt. This was a solid ending to a strong and strategically important year for our NetIQ's. We met or exceeded all of our financial targets while assembling the broadest portfolio of ambient class solutions in the industry, including a fully automated AI documentation solution, but we serve more care settings than any other player in our business. We are leveraging the structured data we produce and our bidirectional communication channel to the point of care to become even more valuable to our health care enterprise customers. And of course, we have onboarded an enviable set of customers and partners that are supporting us along the way and to provide high visibility to incremental growth.
We are well positioned to win the key to success, we believe is to be able to meet customers where they are today, in other words, solve their current problems today and where they want to be in two to three years is for this reason that we are offering varying levels of service embedded within our product suite. Customers can choose products ranging from a fully autonomous software product, which we call Augmenix go with no human assistance on our part two, a full service solution, which we call Augmenix live. We assign a highly trained medical documentation specialist to observe patient encounters remotely and deliver a very high quality note and ancillary services to the clinician. Importantly, we also deliver clinical decision support to the point of care and structured data that positively impacts customers' downstream activities.
Finally, we are one of only two documentation vendors to be certified by the high trust alliance for information security. This prestigious certification validates our commitment to safeguard sensitive patient information, which we know is currently at the top of many customers' minds. This broad product approach drove our growth in 2023, and it is resonating with the market today. As evidence of this last week, we were selected to participate and a large pilot with a Fortune 100 healthcare company that is looking to adopt AI and digital health tools across oncology networks. In December, we made the ambulatory version of Augmenix go generally available to customers, nine.
Very pleased with how it is performing. Augmenix go is our new ambient AI product that addresses a very large price segment of the market, sub $600 per month and represents the vehicle by which we expect to realize significant penetration within health systems recent data from survey responses I've met Exco customers revealed that 94% of clinicians surveyed reported that I've met. Exco, helps them better focus on their patients and clinicians save up to one hour or more per day using that product. This aligns with our philosophy of enabling clinicians to see the patients and trust the technology to do its work in the background. So very early in its deployment. Initial orders have met our expectations, and we expect adoption will continue to build throughout the year and beyond.
We've also been developing a version of Augmenix scope, specifically designed for the challenging conditions of the emergency department. There are very few competing products commercially deployed in this important sector of the market. We are pleased with initial results thus far and expect to make Augmenix go for the ED generally available by the end of this month. At the same time, our strategic partner, HCA Healthcare has been testing the virtually department version of Augmenix go in its own hospitals. Hca preparing to evaluate this version of Augmenix go in advance of a broad rollout across its network of hospitals. We are confident we will realize the full potential of this significant opportunity, and we'll update you as soon as we reach the next meaningful milestone at the Hims conference last week, I was on a panel with HCA and Google during which HCA delivered encouraging commentary on both the Go E, our pilot and our portfolio of products.
Hca also stated its intention to deploy our solutions into are there departments within their system. Met Exco is being offered to service levels. The base level is a self-service version wearing of masks provides no human assistance in creating the Medical Note, notice automatically generated and available for review and sign off with the clinician within a minute or two following the patient encounter based version Biomedics scope is the least expensive for the customer and most scalable product among our portfolio. Premium version is called go assist at the discretion of the clinician. The draft note is simultaneously delivered to and I've NetIQ's medical documentation specialists.
We've used for quality assurance and make any necessary edits before clinician sign-off. Gotoassist comes at a slightly higher price than the base version of growth. Our medics go sits alongside our live product, highest level of service where a remote medical documentation specialist is matched with a clinician throughout clinicians shift. And this leads to what is truly unique about our medical approach. Our recognition that doctors' needs are diverse and ever-changing, and we have developed the broadest portfolio of solutions to address those needs. Moreover, we offer customers fungibility across our products whereby clinicians can switch between different products and service levels to address their varying needs.
This flexibility provides doctors with a higher touch level of service when they're short handed or dealing with more complex cases, while also allowing them to save on documentation costs for more routine patient encounters as Augmenix offer solutions from self-service ambient AI, two remote human support in one suite. Our systems can cover all of their documentation needs under one agreement and seamless integration process. The AI solutions in the market do not have this breadth offerings. We see a lot of AI hype and claims made by several a I own a new commerce trying to break into the market generative. Ai tools are clearly capable of doing much of the heavy lifting when it comes to medical, no documentation. However, it takes a great deal more than off-the-shelf generative AI tools to produce accurate and comprehensive medical notes consistently across a wide variety of specialties and patient encounters when harnessed properly generative.
Ai has the potential to substantially ease and lower the cost of medical documentation as the pioneer in ambient virtual medical documentation. Over the past 11 years, we have built a vast repository of domain knowledge pertaining to clinician workflows and medical datasets. This knowledge has enabled us to address multiple care settings should more than 50 specialties, provide clinical decision support to the point of care at the right moment and deliver structured data that positively impacts customers' downstream activities such as billing. These key points of differentiation in conjunction with our two-way communication channel to the point of care provided a significant moat around our business.
Now I'd like to discuss some of the financial highlights of our strong fourth quarter, we delivered a 45% increase in revenue to $12.7 million ahead of our most recent guidance driven by a 44% increase in conditions and service and net revenue retention of 152%. Our largest customers are increasingly adopting our high ROI products additionally, we demonstrated the scalability of our business model by increasing gross profit by 54% to $6.2 million, a 300 basis point improvement in gross margin year over year to 49.3% and driving meaningful improvement in our adjusted EBITDA and GAAP operating losses.
We also bolstered our capital resources through our November equity offering, which generated over $26 million in net proceeds to further solidify our leadership position in our industry by expanding our commercial and engineering teams to enable us to accelerate our growth relative to our previous plan. We have already begun to grow our team with some very strong hires. Now as we complete the expansion over the coming months, we expect to realize a payback on this spending later this year and more meaningfully in 2025, which is what we communicated during the capital raise.
Our most recent capital raise has enabled us to take a more aggressive approach towards a large underpenetrated market where customers are adopting generative AI technology at an increasing rate. Our established market presence compared to a I. only newcomers will continue to serve us well, we've expanded our sales organization to bolster our efforts to land new enterprises and to further expand within our existing enterprise accounts. We believe now is the optimal time to lean into our advantages and accelerate our growth initiatives to capture market share and exploit our leadership position.
This market is still in its infancy. I am confident that our portfolio approach addresses the major price points within this market will resonate with health care systems and clinicians. With that, I'll now turn the call over to Paul Ginocchio, our Chief Financial Officer, then will return with closing comments.
Paul Ginocchio
Paul, you may Let's review the quarter's financial highlights. Revenue for the three months ended December 31st, 2023 was $12.7 million, slightly better than our preliminary expectations announced in January. Growth was driven by growing adoption of live and notes by existing customers. Gross margin for the fourth quarter of 2023 was 49.3% as compared to 46.3% in the fourth quarter of 2022. In comparison to 49.5% in the third quarter of 2023. This 300 basis point improvement year on year in gross margin percentage was mainly driven by our growing scale and efficiency and also by our strategic initiative to shift US clinicians service service in the US to outside the US, gross profit growth was 54% year on year.
Total operating expenses for the fourth quarter of 2023 were $10.6 million, up 12% compared to the fourth quarter of 2022 points of our gross profit growth outpacing OpEx growth resulted in a reduction of our operating losses by over $1.1 million year on year. Adjusted EBITDA was a loss of $3.3 million in the fourth quarter of 2023 compared to a loss of $4.5 million in the fourth quarter of 2022. Along with this improvement in adjusted EBITDA was a year-on-year improvement in our adjusted EBITDA margin from negative 51% in the year ago quarter to negative 26% in this quarter.
Note beginning this quarter, we have modified the calculation of adjusted EBITDA to remove the interest income benefit that we are now earning due to the larger cash balance after the equity financing in November 2023 as well as foreign exchange gains and losses, both of which we deem to be nonoperational in nature. All prior amounts have been recast to conform with this current presentation under the prior definition, adjusted EBITDA in the fourth quarter of 2023 would have been slightly better at a loss of $2.8 million. Cash flow from operating activities was an outflow of $0.9 million in the fourth quarter of 2023 compared to an outflow and outflow of $4.4 million in the fourth quarter of last year.
Now turning to the full year results, total revenue was $44.9 million, an increase of 45% compared to $30.9 million. Dollar-based net revenue retention was 148% for our health enterprise customers compared to 128% in 2022. Our gross profit increased 54% to $21.5 million. We're a 48.0% gross profit margin, up from $14 million or a 45.1% gross profit margin. Operating expenses were $40.3 million compared to $36.3 million. Adjusted operating expenses, which excludes stock-based compensation in both periods, grew 11% to $37.8 million compared to $34.2 million. Gaap net loss was $19.2 million compared to $24.4 million adjusted EBITDA loss declined to $15.2 million from $19.4 million at December 31st, 2023.
We had $46.2 million in cash and cash equivalents as compared to $21.3 million as of December 31st, 2022. This reflects the $26.3 million in net proceeds from the equity offering in November 2023 and the $11.8 million of net proceeds from the equity offering in April. Our weighted average share count for EPS for the fourth quarter was $49.0 million shares common shares outstanding, and that reflects a partial quarter of the additional $7.2 million shares we issued in November and includes the $4.375 million prefunded warrants. As of year end, our common shares outstanding plus pre-funded warrants totaled $53.0 million, assuming all of the warrants outstanding are net exercised in all of our employee options.
And so ours, they're both fully vested in the money. Our net expense net exercise, we would have approximately $57.1 million shares outstanding. Overall, 2023 was a significant year for Augmenix with robust revenue growth, gross margin expansion, disciplined expense management and narrowing losses. Additionally, we meaningfully strengthened our balance sheet during the year, providing the necessary capital for us to execute our updated and accelerated strategic plans and capture a significant share of this growing opportunity.
Now moving onto guidance due to the solid finish to 2023 and the trends we are seeing in 2024, we are providing revenue guidance of 60 to $62 million for the full year of 2024. Turning to the outlook for the first quarter of 2024, we expect revenue in the first quarter to be approximately $13.4 million. We expect GAAP gross margins to be lower quarter on quarter by about 300 basis points due to temporary costs from both our move to the new building in Bangladesh and a one-time up and optimization initiative in India, we expect gross margins to resume their upward trajectory in May. As we have previously stated, we anticipate go revenue to be modest during the first half of 2024.
We do expect go to have a positive contribution later in the year and then do contribute more materially in 2025 in terms of modeling operating expenses to reflect the point that the deployment of the equity proceeds as we articulated during the November equity raise, our plan is to invest an incremental $9 million in 2024 versus our previous previous plan, largely in sales and marketing, but also in engineering with a modest amount in G&A combined with an increase in underlying operating expenses associated with the strong current growth of our business, it would be appropriate to expect GAAP operating expenses to be in the mid the upper $50 million range in 2024. At this point, I'd like to turn the call back to Manny for closing comments.
Manny Krakaris
Thank you, Paul. We remain committed to playing an essential role in unburden clinicians and improving the operating efficiency of health care organizations. We have built a broad portfolio of products and are positioning magnetics as an effective information data delivery platform at the point of care. This unique positioning will help ensure we continue our rapid growth well into the future. I've never been more excited about the opportunities in front of us metrics and want to thank our team and our customers for helping us deliver another quarter and full year of strong financial results. Thank you very much. With that, we'll now open it up to questions. Operator?
Question and Answer Session
Operator
(Operator Instructions) Ryan Daniels, William Blair.
Ryan Daniels
Yes, guys, thanks for all the color thus far. Congrats on the strong performance. If we look to the HCA rollout, can you give us a little bit more detail on that regarding if that's just going to be in the emergency department at first or when they go system-wide did anticipate kind of broadening that out into other specialties as well.
Manny Krakaris
Hey, Ryan, good question. So there are multiple thrusts within HCA in terms of rollout. The one that obviously we've been talking about the most is in the emergency department and as you know, we're currently deployed in four hospitals at HCA and is that deployment the plan for broadening broadening that deployment. It's going according to schedule. So we anticipate that occurring throughout the year. But beyond that, we are already seeing deployment of our products in other areas, other departments within HCRACA. and there are plans to accelerate that deployment come very soon.
Ryan Daniels
Okay. And given the operating environment in an emergency department, both kind of the KSSC. multiple doctors and noncontiguous conversations, I assume that once it's built there, you don't really have to do a lot of work to take it into other specialties or clinical areas. Is that fair?
Manny Krakaris
Well, sort of there's some things that do overlap with other other departments. But there's there's certain things in the emerging department that are unique to the emergency department from being able to slip in and out of different patient EHRs. As you follow the path of the doctor, would it may be the same for hospitalists, for example and for nurses. But on the clinical side, it's not that's not the case, it's not necessary. They follow a schedule patient schedule of fixed predetermined before the day starts. And so it's quite it's a very linear workflow. So it's a lot easier to develop the product, which we've done already for the clinical side of the house.
Ryan Daniels
Helpful. And then two more quick ones. And then just in regards to the premium go version, I think you referred to it as go assist. It was that a novel launch based on feedback you're getting from clinicians that they want to still involve a medical document specialist to make it even simpler for them to just review and sign off? Or is that something you're proactively putting in the market just to have kind of the broadest product offering of any vendor in this space?
Manny Krakaris
Well, everything that we build is based on feedback we get from the market from our customers and prospective customers. So we had heard that ideally, everything that comes out of the backend is perfect or that doctors have an infinite amount of time to devote to medical documentation. That's not reality, hence. So there needs to be a solution to address is there no time constraints on the part of the doctor or limitations of the technology when it comes to more complex types of encounters and that led us to develop this particular product. It's a hybrid product where the flip of the switch, the clinician can choose to get some support to the extent they feel it's necessary Okay.
Ryan Daniels
Perfect. And then, Paul, maybe one for you and I'll hop off in regards to the gross margins. Appreciate the color on Q. one and some of the one-time items related to India for the full year. However, do you still think year over year gross margins will be able to expand? Or will this kind of transitory pushing q. one, keep them down year over year for the full year? Thanks.
Paul Ginocchio
I think on a year-on-year basis, they'll be up. Obviously, we'll exit the year and better than we will have it for in the first quarter. But overall I would expect some gross margin expansion.
Ryan Daniels
Okay, perfect. Thank you so much, guys. Congrats again.
Manny Krakaris
Thank you, Ryan.
Operator
Elizabeth Anderson, Evercore.
Elizabeth Anderson
Hi, guys. Thanks so much for the question and congrats on a nice quarter and outlook. I guess maybe just about of Ryan's question, just just the H2 rollout, maybe specific to the emergency department. Do you have any current indications from each year that sort of when they're expecting that to start rolling out or is that still sort of in flux at this point?
Manny Krakaris
We have a general idea that they wanted to make it happen as soon as possible. And they have a formal process that they go through in terms of evaluation of the initial users and the data from their their from their use of the product. And they have certain criteria that they'd like us to achieve. And I think we're well on the way to meeting those those goals. So yes, my best guess is that it's going to happen very soon within within less than a month.
Elizabeth Anderson
Great set of indicators. And then just on your hiring, obviously, you've made a number of hires since the equity raise in the fall. How do you feel about where you are in terms of your $9 million of incremental investment. Do you have all the people in place addition of any key areas that you're still waiting to hire? Any more color on that would be helpful.
Manny Krakaris
Yes, we're well underway, but we're not we haven't completed the hires yet. So we have a very specific plan of who we're going to hire what physicians, what department, et cetera. And I'd say and Paul can chime in on this, we're probably about two thirds of the way through that hiring process by our CFO, and he's a 4Q 23 provider. It include any GO users. It does not come in historically. We've just we've include live and notes. We will factor that in as this year progresses there, Argo users, and we're still working to make sure that we conform to how we've done historically done it.
Elizabeth Anderson
Got it. And then terms of just talking about the GO assist version. How do we think about the sort of gross margins and maturity for that? It's sort of become between the sort of premium version? Should we still think of them being about 60%. It feels like the right way to think about that gross margin profile of those combined go and go versus direct.
Paul Ginocchio
Yes, I would we've stated that goal being north of 60% gross margin product. And we've said historically that Augmedix nose was 55 to 60. So right in that area with where go assist and hopefully over time as we scale, it gets better.
Elizabeth Anderson
Okay, perfect. Super helpful, guys. Thanks so much and congrats again.
Manny Krakaris
Thank you, Elizabeth.
Operator
[Aaron Watts], Lake Street Capital Markets.
Aaron Watts
Hey, good afternoon, guys. This is analyzed for Brooks and congrats on the strong quarter. Bob, I guess, do you feel that the open platform partnerships of them materializing interior likeness and generating some impact to their customers? If you could just give us a sense as to what you've been seeing there that would be.
Manny Krakaris
So again, we haven't deployed anything yet. We're still developing the product. But if you recall, the impetus for doing this came from our customers in particular HCA. So we anticipate that HCA will be a source of demand for these particular products and they'll be on our platform. We will book the revenue, but we haven't completed the integration with it. For example, with the Sullivan group where it's underway, that work is underway, work is underway with Ellipsis at the behavioral health application. So those are underway. They will be deployed this year. But dumb FARES, there's no there's no response yet from the market because they haven't been deployed.
Aaron Watts
Okay, thanks. Thanks for that clarification. And then on I guess, as you start beginning the rollout go, do you expect any significant product mix shift? I guess just trends that you're expecting throughout the remainder of the year will be helpful as well, thank you.
Manny Krakaris
Well, you have to, I think, distinguish between users and revenue and from a user perspective, yes, I do expect there could be a shift in favor of GO as it grows faster than our other products, our legacy products from a revenue perspective because the RPU is so much lower for gold than it is for our legacy products. I don't think you'll see a similar, you know, realignment of the of the revenue mix in 24.
Got it. Okay.
Aaron Watts
That is helpful. Thanks, guys. Well, thank you, everyone.
Operator
Allen Klee, Maxim Group.
Allen Klee
I'm so sorry about that. About the competitive environment. Can you discuss a little some there's been some companies that have gotten funding down for some of your comments on the a bunch of, you know, people doing AI models with it. Two things about that one. Once that kind of imply that license is going to be pricing pressure, we're the main players in the industry coming up and down along with that, like it, if somebody had a hearing choose if they have a doctor that chooses to go, are they displaced displacing one of your services like my for more of us, when do you think that would be placing some like a competitor?
Elizabeth Anderson
Good question. So just broadly, in terms of the competitive landscape, yes, there have been several newcomers in this space, which is what we anticipated well over a year ago. All that does is basically reinforced the fact that our belief that this is a very large market, very attractive market and therefore, it's going to attract our competitors and venture capitalists who want to, you know, take advantage of that big opportunity. Having said that, the companies that you're describing that have announced large raises recently, one in particular, that's probably commanded.
Most of the the airwaves has 65 employees. And so they what they still need to do is build the infrastructure that is necessary to support wide-scale deployment of their product. We've made that investment already. So we've got the infrastructure in place to deploy widely at scale and so we anticipate that these smaller companies, these newer companies are going to have to do the same thing that you have to make those investments in infrastructure to be able to scale from now the second part of your question, I could start refresh my memory issue.
So disposition, yes. So in terms of cannibalization of products, we haven't seen that and we don't anticipate it primarily because it AC in particular, there's there's little live that's that's there to be displaced number one. And so it's mostly greenfield, a shale. I mean, vastly greenfield at HCA. So there's little opportunity for any kind of cannibalization, but more broadly across our all of our customers, we don't think so. We believe that go will cater to a distinct persona and price point in the market are quite different from the persona and price point of live customers. And we tested this this belief when we launched our newest product a couple of years ago and found that there was virtually no cannibalization of our live product. When we launched notes at a RPU that was less than half that of why does that answer your question, Alex?
Allen Klee
Yes, thank you. One last question on your guidance where you said that the first quarter will be lower by 300 basis points some temporary costs related in Bangladesh, the cost initiatives in India phone. Could you explain a little what what what do you think the impact of these extra cost spectrum taking on I mean, it's built for some people that if you're really a technology company, why and why not that profitable? Seems like a lot and maybe you're less embellished with what you're doing is exemplary on. I don't know if it's could you just help us understand that?
Paul Ginocchio
Sure. I'll use it as we stand today. Vast majority of our revenue still delivered by Augmenix live our legacy historical premium product. So that's still a human in the loop that we have a MDS that works with the clinician. So we we moved as we've grown we moved to a bigger office location in Dhaka in Bangladesh, and we are sunsetting the old building that we've been in since the 2018, maybe 2017. And so we've got a few months of duplicate costs there, rent transportation. So we'll come to the building up and running that for two buildings.
We've also in India, sorry, in India, optimizing our service delivery to make sure we have the highest quality service at the best price. And so we're doing that and there's going to be about three months of overlap that will end in early May around that initiative. Those two things combined are basically the entire decline in gross margins quarter on quarter.
Allen Klee
Okay. Thank you very much.
Operator
[Jan Z], B. Riley Securities.
Manny, congrats on the launch of GO, and it's great to hear that you can save up to ours for Dockers. So can you talk about some of the enhancements you recently added to go in the Anvil ambulatory setting and we have those it has then also added to the ER setting as well.
Manny Krakaris
Particularly cultures are facing a non-linear workflow in the emergency room setting, right? So we're always enhancing our products. We we've been releasing new features and enhancements to go almost on a weekly basis at this point. And so there are too many to recount now, but they're all designed to improve the user experience and to deliver greater utility to the health care enterprise. And you're right to point out that the products are designed differently between the clinical setting and the acute care setting for the emerging department you have a different section in the Medical Note that you had to create from scratch is called the NDSDM., which is essentially A.
It's the medical decision making that's occurring in the emergency room. And that is not part of the standard note format for clinical outcome for the clinical visits. And so we had that we had to design that we had to get input from EHR data that comes in the form of labs and so forth. We had to be able to input those into the application and as close to real-time as possible so that the clinician knows at any given moment, the updated status of a patient so that they know when to return back to that patient to resume their their encounter in a version for it. So these are some of the things that we've been doing. We keep adding to the to the feature set for each product as we iterate and get feedback from our customers.
Paul Ginocchio
Maybe one of the maybe the biggest sort of enhancements we've made since we launched go or over the last six months is continuing to add additional specialties. As you heard me say, we've now service 50 specialties will continue to go deeper in a few key specialties, but we go now supports of sees over 50 specials where that's been a big enhancement over the last four or five months.
Right? And that just data and we ready reduce that like a little over a week ago. Got it. Yes, that's very helpful.
Manny Krakaris
Additional color there. And maybe one last one from me. Can you clarify the difference between go assist the premium version versus the nodes such as the level of involvement from medical documents specialist or a high contribution in terms of the the workflow and the utility, there's very little difference. However, notes will be sunset and it will be replaced by GO assist. And the reason for that is we want to provide our customers with a seamless experience, allowing them to transition from one to the other on demand as they needed. If you have two independent applications, there's it's more laborious to go from one app to another. So we wanted to eliminate that duality and just have it appeared in one seamless range of service that you get from one application.
Got it. Yes, that's all from us. Thank you.
Manny Krakaris
You're welcome.
Paul Ginocchio
Thank you.
Operator
Allen Klee, Maxim Group.
Allen Klee
Yes, it's high for the for the $9 million of incremental loans pending from the capital raise them. So is it fair to assume that it's going to take longer to deploy it all in hiring and different things, so that should grow kind of incrementally as we go throughout the year rather than straight line?
Paul Ginocchio
Yes, yes, I found one. We have done a really good job. The team has done a great job of we as soon as we made the decision to raise capital, we started starting opening some hiring process. So we were able to get a little bit of adamant that obviously not start until we actually had raised the capital. The team's done a great job of hitting hitting the goals. Obviously, we're hiring quite a few people. So but I think we're, as Manny said, we're two thirds of that. Hiring is already complete with more people coming on. We had some approvals today. We have done some projects here in the first quarter. So I'd say we're fully it's going to be fully reflected here in the in the second quarter with a lot of it reflected in the first.
Allen Klee
Thank you.
Operator
Bill Sutherland, The Benchmark Company.
Bill Sutherland
It's usually Hey, guys been a very I just have I've a product question. I haven't heard about Augmenix perhaps in awhile. I did note that became a significant product for you guys.
Manny Krakaris
Yes. So a good question, Phil. We actually just signed an order for more prep at one of our biggest customers. So it seems to be getting some traction. It's still a fraction of our revenues relative to our other products, but it's there it does fill a need and we will continue to make it available to the market. And I suspect that the demand for it will expand as people become more aware of it. Okay. Well, timed question. I think.
Bill Sutherland
And then on your partnership with Google, maybe update us in terms of the components of that, you know, what, what's perhaps base on the original partnership, how that's what's what's the most important aspects of it as that's developed for you guys and what you kind of hold on your expectations going forward?
Manny Krakaris
Thanks for a good question, David and the partnership is really predicated on two principle thrusts. One is technology. So we utilize Google technology in our platform. And the second thrust is go-to-market. So Google Cloud is our biggest most important channel partner, if you will. And dumb, we've had some very obviously HBA's the biggest success, but we've had other successes with through Google Cloud, and we are actively pursuing some significant opportunities again through that relationship. It's a fantastic. It's been a fantastic partnership, and we don't we see more of that. It transpiring throughout the course of 24 and beyond.
Bill Sutherland
Have you seen of the health systems utilizing the Google Cloud Marketplace to them to purchase your services?
Manny Krakaris
Yes. In fact, we have some and there's a whole process. You have to go administrative process you have to go through to enable that. And we've already done that with Paul, correct me if I'm wrong, HCA. I think that's public and we're working on doing that with another health system as well. So and that's going to be a standard part of that of that go-to-market strategy.
Bill Sutherland
It's got it. Great workers. Thanks, appreciate it.
Manny Krakaris
Thanks, Bill.
Paul Ginocchio
Thanks, Bill.
Operator
There are no further questions in the queue. I'd like to hand it back to management for closing remarks.
Manny Krakaris
Well, it just wanted to conclude by reiterating that we had a really, really solid 2023, very pleased with the Company's performance. And looking forward, really we're putting in this all the necessary ingredients to ensure that we have a very, very competitive set of products that the market wants to buy and the market is growing very quickly for health care in particular is adopting new technology at a unprecedented rate, and we believe we are building the right infrastructure and products take full advantage of it. So I'm looking forward to a very exciting 2024 and beyond as for the company. Thank you.
Operator
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation and you may disconnect your lines at this time and have a wonderful day.
