Ontrak, Inc. (OTRK) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. ...

A downtrend has been apparent in Ontrak, Inc. (OTRK) lately. While the stock has lost 12.4% over the past week, it could witness a trend reversal as a hammer chart pattern was formed in its last trading session. This could mean that the bulls have been able to counteract the bears to help the stock find support.The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that makes a bullish case for the ...

Financial Data and Key Metrics Changes - In Q1 2025, the company's revenue was $2 million, reflecting a 25% decrease compared to the same period last year due to the loss of a customer [15] - The average revenue per enrolled member per month was approximately $254, down from $500 in Q4 2024 and $504 in Q1 2024 [17] - Gross margin for Q1 was 37%, a decrease from 61% in Q4 2024 and 63.6% in Q1 2024, primarily driven by the loss of a customer and a shift in member mix [20] Business Line Data and Key Metrics Changes - The total enrolled members reached 3,165 at the end of Q1, nearly doubling year over year, with over 1,150 members in the Engage program [6][16] - The company added 2,039 new members during the quarter, the highest since Q3 2021, contrasting with 1,641 in Q4 2024 and 925 in Q1 2024 [18] - The average monthly disenrollment rate was 10%, down from 19% in Q4 2024 and 22% in Q1 2024 [19] Market Data and Key Metrics Changes - The company has achieved state Medicaid provider approval in two states and is working to expand its footprint [8] - The outreach pool averaged 27,204 for the quarter, leading to a 30% enrollment rate, down from 50% in Q4 2024 [18] Company Strategy and Development Direction - The company aims to double its run rate revenue in 2025 compared to 2024, driven by successful conversions of prospective customers [6] - The Engage solution is expanding market reach by serving members who may not require the full Whole Health Plus program [7] - The company is focused on converting its strong pipeline into signed contracts while nurturing relationships with existing customers [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about converting prospective customers, particularly a large Midwestern Medicaid plan [5][10] - The overall reaction from prospects to the enhanced solution suite has been extremely positive, with health plans acknowledging the need for more intensive behavioral health support [12] - The company anticipates revenues for Q2 2025 in the range of $2.2 million to $2.6 million, representing an 8% to 22% sequential increase [22] Other Important Information - The company reported cash flow from operations for Q1 was negative $2.7 million, an improvement from negative $3.3 million in the same period last year [21] - Cash reserves stood at $4.1 million at the end of the quarter, down from $5.7 million at the end of 2024 [21] - The company has secured up to $10 million of additional financing available as needed in the short term [22] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the call may have concluded without a formal Q&A session.

Revenue Performance - Revenue for Q1 2025 was $2.0 million, a decrease of 25% from $2.7 million in Q1 2024, primarily due to a decrease in total average enrolled members[157] - Total revenue decreased by $0.7 million, or 25%, to $2.017 million for the three months ended March 31, 2025, compared to $2.680 million in the same period of 2024[169] Operating Expenses and Loss - Total operating expenses for Q1 2025 were $6.6 million, up from $6.0 million in Q1 2024, with increases in research and development and general administrative expenses[168] - Total operating expenses increased by $0.6 million, or 10%, to $6.596 million for the three months ended March 31, 2025, driven by increases in research and development and general and administrative costs[172] - Operating loss for Q1 2025 was $(5.9) million, compared to $(4.3) million in Q1 2024, indicating a worsening financial performance[168] - Operating loss increased by $1.577 million, or 37%, to $5.850 million for the three months ended March 31, 2025[172] Cash Flow and Liquidity - Cash flow from operations improved to $(2.7) million in Q1 2025 from $(3.3) million in Q1 2024, attributed to increased collections on accounts receivable and efficient cash flow management[158] - Net cash used in operating activities improved to $2.723 million for the three months ended March 31, 2025, compared to $3.259 million in the same period of 2024[181] - Total cash as of March 31, 2025, was $4.1 million, with negative working capital of approximately $3.1 million[175] - The company was not in compliance with consolidated liquidity or consolidated recurring revenue covenants as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern[178] Member Enrollment and Outreach - Callable outreach pool for WholeHealth+ increased by 45% to 7,319 members as of March 31, 2025, compared to 5,057 members a year earlier[159] - Callable outreach pool for Ontrak Engage reached 22,152 members as of March 31, 2025, reflecting the program's launch on an à la carte basis in early 2024[160] - The company aims to increase eligible members by signing new contracts and identifying more eligible members within existing contracts[161] Debt and Financing - The company entered into an agreement with Acuitas to purchase up to $5.0 million in Demand Notes and $5.0 million in senior secured non-convertible promissory notes[153] - Interest expense, net increased by $858,000, or 469%, to $183,000 for the three months ended March 31, 2025, due to a higher average total outstanding loan balance[174] - The company had $13.5 million of secured debt outstanding as of March 31, 2025, with additional borrowing of $0.5 million under the Keep Well Agreement on May 9, 2025[176] Customer Relations - A health plan customer notified the company of its intent to discontinue services after December 2024, leading to disenrollment of related members[152] - The company has a minimum guarantee of $5.8 million over a two-year period with a customer, extended to June 30, 2025, with $4.6 million invoiced as of March 31, 2025[163] Cost of Revenue and Profitability - Cost of revenue increased by $0.3 million, or 30%, to $1.271 million for the three months ended March 31, 2025, primarily due to higher employee compensation and benefit costs[170] - Gross profit decreased by $1.0 million to $746,000, with gross profit margin declining by 27% to 37% for the three months ended March 31, 2025[171]

Financial Performance - Q4 2024 revenue was $3.1 million, an 11% decrease year over year; full year revenue was $10.8 million, down 15% year over year[5]. - Q4 2024 operating loss was $(4.4) million, a 16% improvement from $(5.2) million in Q4 2023; full year operating loss was $(17.8) million, a decrease of 16% year over year[6]. - Q4 2024 Adjusted EBITDA improved to $(2.8) million, a 20% improvement year over year; full year Adjusted EBITDA was $(12.8) million, a 13% improvement year over year[5]. - The company experienced a net loss of $(5.2) million in Q4 2024, compared to a net loss of $(6.4) million in Q4 2023[6]. - Non-GAAP net loss for the full year 2024 was $(15.4) million, compared to $(24.9) million for the prior year[10]. - Revenue for Q4 2024 was $3,146 million, a decrease of 11.1% from $3,539 million in Q4 2023[27]. - Gross profit for the year ended December 31, 2024, was $6,824 million, down 22.4% from $8,800 million in 2023[27]. - Operating loss for Q4 2024 was $4,363 million, compared to a loss of $5,213 million in Q4 2023, showing an improvement of 16.3%[27]. - Net loss attributable to common stockholders for the year ended December 31, 2024, was $79,015 million, significantly higher than $36,874 million in 2023[27]. - Adjusted EBITDA for the year ended December 31, 2024, was $(12,825) million, an improvement from $(14,730) million in 2023[35]. Cash and Liabilities - Cash and restricted cash at the end of Q4 2024 was $5,710 million, down from $9,701 million at the end of Q4 2023[32]. - Total current liabilities increased to $8,780 million in 2024 from $3,942 million in 2023, reflecting a rise of 123.4%[30]. - Stock-based compensation expense for the year ended December 31, 2024, was $3,920 million, an increase of 32.8% from $2,948 million in 2023[32]. - Total assets increased to $21,075 million in 2024 from $19,846 million in 2023, representing a growth of 6.2%[30]. - Weighted-average common shares outstanding increased to 4,643 million in 2024 from 744 million in 2023, a significant rise of 524.3%[39]. Membership and Contracts - Total enrolled members in the WholeHealth+ program decreased to 1,409 at the end of Q4 2024 from 1,758 at the end of Q4 2023[10]. - The callable outreach pool for WholeHealth+ was 4,908 at December 31, 2024, down from 6,689 at September 30, 2024[10]. - The company signed a new agreement with Intermountain Health to deliver WholeHealth+ to approximately 2,300 Medicare Advantage members[10]. - A three-year contract extension was announced with Sentara Health Plans following several expansions in 2024[5]. Future Outlook - For Q1 2025, the company estimates revenue in the range of $2.0 million to $2.3 million[13].

Revenue and Financial Performance - Revenue for 2024 was $10.8 million, a decrease of 15% from $12.7 million in 2023, primarily due to a reduction in average enrolled members[222]. - Total revenue decreased by $1.9 million, or 15%, in 2024 compared to 2023, primarily due to a decrease in average enrolled members[235]. - Gross profit decreased by $2.0 million, or 22%, with a gross profit margin of 63% in 2024, down from 69% in 2023[236][237]. - The company incurred a net loss of $25.5 million in 2024, compared to a net loss of $27.9 million in 2023[234]. - Cash flow from operations improved to $(13.4) million in 2024 from $(15.5) million in 2023, attributed to a decrease in net loss and improved operating expenses from strategic headcount reductions[223]. Operating Expenses and Cost Management - Total operating expenses decreased by $5.3 million, or 18%, in 2024, with significant reductions in research and development, sales and marketing, and general and administrative costs[238]. - Interest expense, net decreased by $5.4 million, or 75%, in 2024, attributed to lower average outstanding loan balances[242]. - The company implemented multiple restructuring plans over the last two years, resulting in a reduction of annual compensation costs by approximately $2.0 million in February 2024 and $2.7 million in March 2023[218]. Cash and Liquidity - As of December 31, 2024, total cash was $5.7 million, with a working capital of approximately $0.8 million and an average monthly cash burn rate of $1.1 million[244]. - The company has raised concerns about its ability to continue as a going concern due to insufficient cash on hand to meet obligations for the next 12 months[248]. - The company anticipates requiring additional capital to fund operations through and beyond the second quarter of 2025, raising substantial doubt about its ability to continue as a going concern[246][247]. - The company has approximately $13.6 million of secured debt outstanding under the Keep Well Agreement[248]. Customer and Program Developments - A health plan customer accounted for approximately 59% of revenue in 2024, billing $6.5 million, while another customer represented 33.8% of revenue in 2023, billing $4.3 million[215]. - The callable outreach pool for the WholeHealth+ program increased to 4,908 at December 31, 2024, up 127% from 2,161 at the end of 2023, due to program expansion with a major health plan customer[224]. - The callable outreach pool for the Ontrak Engage program was 20,648 at December 31, 2024, reflecting the launch of this program on an à la carte basis in the first half of 2024[225]. - Management is actively pursuing growth strategies and engaging with prospects and existing customers to expand business relationships[245]. Stock and Debt Transactions - The company executed a 1-for-15 reverse stock split effective September 23, 2024, to enhance its stock price and marketability[209]. - Acuitas agreed to purchase $5.0 million of Keep Well Notes, with the purchase completed as of the filing date, and the payment due after August 30, 2025[210]. - Acuitas may purchase up to an additional $5.5 million of Keep Well Notes, with ongoing discussions regarding this potential purchase[248]. - Debt issuance costs for 2024 included $3.3 million related to promissory notes and $2.7 million of warrants expensed[240]. Legal and Compliance Matters - Legal defense costs related to various securities class actions and investigations totaled approximately $5.2 million, with $4.9 million paid by the insurer as of December 31, 2024[217]. - The company was not in compliance with the consolidated recurring revenue covenant of $11.0 million as of December 31, 2024, but was in compliance with the consolidated liquidity covenant[245]. Other Financial Information - The company reported a net cash used in operating activities of $13.4 million for the year ended December 31, 2024, an improvement from $15.5 million in 2023[249]. - Net cash provided by financing activities was $9.6 million in 2024, primarily from $8.0 million in borrowings under the Keep Well Agreement and $3.5 million from warrant exercises[251]. - The company utilized $0.2 million in investing activities in 2024, compared to $0.3 million in 2023, related to capitalized software development costs[250]. - The company conducted its annual goodwill impairment test on October 1, 2024, and determined no impairment existed[263]. - Research and development costs are expensed as incurred, primarily including personnel and related expenses for software development[262]. - Deferred revenue represents billed but unrecognized revenue, recognized as performance obligations are satisfied[261].

Financial Data and Key Metrics Changes - In Q3 2024, the company's revenue reached $2.6 million, reflecting a 31% decrease compared to the same period last year due to the loss of a customer at the beginning of the year [24] - The average revenue per health plan enrolled member per month was approximately $449, down from $462 in Q2 2024 and $552 in Q3 2023, primarily due to a mix shift from newer customers with different pricing structures [25] - The gross margin for Q3 was 62%, a decrease from 65.6% in Q2 2024 and 72% in Q3 2023, with expectations of maintaining current levels but potential slight decreases during new customer expansions [29] - Operating cash flow for Q3 showed a negative $1.4 million, an improvement from negative $1.8 million in the same quarter last year [30] Business Line Data and Key Metrics Changes - The company added 1,166 new members during Q3, compared to 881 in Q2 2024 and 1,272 in Q3 2023, indicating a growing membership base [26] - The enrollment rate for Q3 was 64%, up from 61% in Q2 2024 and 50% in Q3 2023, attributed to higher enrollment rates from new customers [27] - The average monthly disenrollment rate stood at 11%, consistent with prior periods [28] Market Data and Key Metrics Changes - The company secured two new regional health plan customers and four health plan expansions since January, showcasing the versatility of its offerings across various plan types [10] - The current customer base under contract accounts for approximately $11 million to $13 million of annual revenue, with potential additional revenue of $9 million to $12 million from opportunities at the bottom of the sales funnel [31][32] Company Strategy and Development Direction - The company is focused on strategic growth and innovation, with recent announcements regarding mental health digital twin and comprehensive healthcare integration framework [18] - The Engage solution is being offered to members across multiple lines of businesses, including Medicaid HARP, Medicare Advantage, and Commercial, indicating a broadening of service offerings [9] Management's Comments on Operating Environment and Future Outlook - Management highlighted macro trends driving demand for services, including elevated medical cost trends in Medicaid plans and the need for improved risk scoring [13] - The company anticipates Q4 2024 revenues in the range of $2.9 million to $3.2 million, representing a 12% to 23% sequential increase [33] Other Important Information - The company has four active prospects in the late stages of the sales cycle, representing significant potential for future growth [19] - The company experienced a cash reserve decrease to $8 million from $9.7 million at the end of the previous year [30] Q&A Session Summary - The Q&A session concluded without specific questions being documented in the provided content, indicating a focus on the management's remarks and financial results rather than audience inquiries.

Financial Performance - Q3 2024 revenue was $2.6 million, a 31% decrease year over year[1] - Q3 2024 operating loss was $(5.1) million, a 26% increase year over year[1] - Q3 2024 adjusted EBITDA was $(3.3) million, a 24% decline year over year[1] - The company reported a net loss of $(5.6) million for Q3 2024, compared to a net loss of $(6.4) million for the same period in 2023[5] - Revenue for the three months ended September 30, 2024, was $2,569,000, a decrease of 30.8% compared to $3,715,000 for the same period in 2023[23] - Operating loss for the three months ended September 30, 2024, was $(5,107,000), compared to $(4,064,000) for the same period in 2023, reflecting a 25.7% increase in losses[23] - Net loss attributable to common stockholders for the nine months ended September 30, 2024, was $(27,043,000), a decrease of 4.2% from $(28,240,000) in the same period of 2023[23] - For the three months ended September 2024, the net loss was $5,580, compared to a net loss of $6,418 for the same period in 2023, representing a decrease of 13%[28] - The adjusted EBITDA for the nine months ended September 2024 was $(9,989), an improvement from $(11,172) for the same period in 2023, indicating a reduction in losses of approximately 10.6%[27] - The operating loss for the three months ended September 2024 was $(5,107), compared to $(4,064) for the same period in 2023, indicating a decline of 25.7%[27] - The EBITDA for the three months ended September 2024 was $(4,997), compared to $(3,446) for the same period in 2023, reflecting an increase in losses of 45%[27] Membership and Partnerships - Total enrolled members in the WholeHealth+ program were 2,007 at the end of Q3 2024, compared to 2,297 at the end of Q3 2023[8] - The company signed a 2-year strategic partnership with a large regional health plan in August 2024 to deliver behavioral health solutions[8] Cash and Assets - Cash and restricted cash at the end of the period was $7,966,000, down from $9,701,000 at the beginning of the period[26] - Total current liabilities increased to $8,657,000 as of September 30, 2024, compared to $3,942,000 at December 31, 2023[25] - Long-term debt increased to $2,169,000 from $1,467,000, indicating a rise in financial leverage[25] - Total assets as of September 30, 2024, were $22,398,000, an increase from $19,846,000 at December 31, 2023[25] Expenses and Costs - Research and development expenses for the three months ended September 30, 2024, were $1,224,000, a decrease of 21.2% from $1,552,000 in the prior year[23] - Stock-based compensation expense for the three months ended September 2024 was $1,712, up from $797 in the same period last year, reflecting a 114% increase[28] - The company incurred restructuring, severance, and related costs of $290 for the nine months ended September 2024, down from $457 in the same period last year[27] Certifications and Initiatives - The company achieved HITRUST Risk-based, 2-year (r2) certification for its Advanced Engagement System, ensuring high standards of data security[9] - The company announced the launch of Ontrak Quality, aimed at improving healthcare quality measures and closing care gaps[8] Stock and Dividends - The company executed a reverse stock split at a ratio of 1-for-15 effective September 23, 2024[1] - Dividends on preferred stock - undeclared for the three months ended September 2024 were $(2,239), consistent with the same amount in the prior year[28] - The weighted-average common shares outstanding for the three months ended September 2024 was 4,420, significantly higher than 327 for the same period in 2023[28] - The company reported a gain on the change in fair value of warrant liability of $(1) for the three months ended September 2024, compared to $(38) for the same period in 2023[28]

Revenue Performance - Revenue for Q2 2024 was $2.5 million, a decrease of 17% from $3.0 million in Q2 2023, and $5.1 million for the first half of 2024, down 7% from $5.5 million in the same period last year [146]. - Total revenue decreased by $0.5 million, or 17%, in the three months ended June 30, 2024 compared to the same period of 2023, and decreased by $0.4 million, or 7%, in the six months ended June 30, 2024 compared to the same period of 2023 [159]. - Government revenue decreased by $0.414 million, or 21%, in the three months ended June 30, 2024 compared to the same period in 2023 [158]. Cash Flow and Liquidity - Cash flow from operations for Q2 2024 was $(4.5) million, an improvement from $(5.1) million in Q2 2023, and $(7.7) million for the first half of 2024, up from $(10.1) million in the same period last year [147]. - As of June 30, 2024, total cash was $7.3 million, with a working capital of approximately $8.1 million [170]. - Net cash used in operating activities for the six months ended June 30, 2024 was $7.7 million, an improvement from $10.1 million in the same period in 2023 [178]. - Net cash provided by financing activities was $5.4 million for the six months ended June 30, 2024, compared to $10.6 million in 2023, primarily from borrowings under the Keep Well Agreement [180]. - The average monthly cash burn rate from operations for the six months ended June 30, 2024 was $1.3 million [170]. - The company plans to continue exploring other sources of capital and managing operating costs to increase liquidity [174]. - The company expects its cash on hand and the $5.0 million of Demand Notes from Acuitas will be sufficient to meet obligations for at least the next 12 months [177]. Operating Expenses and Profitability - Total operating expenses decreased by $1.1 million, or 17%, in the three months ended June 30, 2024 compared to the same period in 2023 [164]. - Total operating expenses decreased by $4.1 million, or 26%, in the six months ended June 30, 2024 compared to the same period in 2023 [165]. - Gross profit decreased by $0.5 million, or 25%, in the three months ended June 30, 2024 compared to the same period in 2023, and decreased by $0.5 million, or 14%, in the six months ended June 30, 2024 compared to the same period in 2023 [162]. - The gross profit margin decreased to 66% for the three months ended June 30, 2024 compared to 73% for the same period in 2023 [161]. - Operating loss improved by $0.581 million, or 13%, in the three months ended June 30, 2024 compared to the same period in 2023 [163]. Customer and Program Developments - The callable outreach pool for the WholeHealth+ program decreased by 31% to 7,511 at June 30, 2024, from 10,879 at June 30, 2023, primarily due to a health plan customer discontinuing services [148]. - A new customer agreement was announced in May 2024 with a regional Medicaid health plan for WholeHealth+ and Ontrak Engage solutions, pending state approval [148]. - The callable outreach pool for the Ontrak Engage program was 589 at June 30, 2024, reflecting the launch of this program on an à la carte basis in 2024 [149]. - The company aims to increase eligible members by signing new contracts and identifying more eligible members within existing contracts [150]. Debt and Interest Expenses - The company incurred $5.9 million in debt issuance costs for the three and six months ended June 30, 2024, related to Demand Notes [167]. - As of June 30, 2024, $6.9 million of secured debt was outstanding under the Keep Well Agreement, with $4.8 million payable after August 30, 2025 [171]. - Interest expense, net decreased from $2.223 million in the three months ended June 30, 2023 to $0.326 million in the three months ended June 30, 2024 [157]. - Interest expense, net decreased to $(326) for the three months ended June 30, 2024, an 85% reduction from $(2,223) in 2023, primarily due to a lower average outstanding loan balance [168]. Research and Development - Research and development costs decreased by $0.5 million, or 33%, in the three months ended June 30, 2024 compared to the same period in 2023 [163].

Financial Data and Key Metrics Changes - For Q2 2024, the company recorded revenue of $2.5 million, a 17% year-over-year decrease primarily due to a 7% decrease in total average enrolled members compared to Q2 2023 [14] - The average revenue per health plan enrolled member per month decreased to $463 in Q2 2024 from $504 in Q1 2024 and $528 in Q2 2023 [14] - The gross margin for Q2 2024 was 65.7%, slightly up from 63.6% in Q1 2024 but down from 72.8% in Q2 2023 [16] Business Line Data and Key Metrics Changes - The company enrolled a total of 881 members during Q2 2024, compared to 925 in Q1 2024 and 1,091 in Q2 2023 [15] - The average monthly disenrollment rate improved to 10% in Q2 2024 from 22% in Q1 2024 [16] - The company graduated 178 enrolled members during the quarter, equating to about 12% of the enrolled members at the beginning of the quarter [16] Market Data and Key Metrics Changes - The outreach pool averaged 5,764 for Q2 2024, with an annualized enrollment rate of 61%, down from 108% in Q1 2024 and up from 43% in Q2 2023 [15] - The outreach pool increased to 8,100 by the end of Q2 2024, indicating potential for increased member enrollments in the second half of the year [15] Company Strategy and Development Direction - The company signed a contract with a new regional health plan in the Northeast, which is expected to double the current outreach pool once launched [4] - The company is focused on integrating behavioral and physical health services and enhancing value-based care models through advanced technology and AI [7] - The company aims to expand its customer relationships and is in the final contracting phase with another prominent health system representing approximately 80,000 Medicare Advantage lives [12] Management's Comments on Operating Environment and Future Outlook - Management noted that many Medicaid plans are facing funding and utilization challenges, and the company's solutions are designed to address these issues [5] - The company expects revenue contributions to start in Q4 2024, but it will still be ramping up at that time [20] - Management expressed confidence in the pipeline, with approximately 26 active prospects representing about 15 million members across all lines of business [12] Other Important Information - The company ended Q2 2024 with cash of $7.3 million, down from $9.7 million at the end of the previous year [17] - The company drew down $4.5 million from the Keep Well Agreement, leaving $10.5 million available for future draws [17] - For Q3 2024, the company anticipates revenues in the range of $2.4 million to $2.8 million, excluding revenue from the new customer [18] Q&A Session Summary Question: Do you expect quarter-over-quarter revenue growth starting in the fourth quarter? - Management expects revenue contribution to start in Q4 but will still be ramping up at that time [20] Question: What is your pro forma debt? - Pro forma debt is approximately $6.5 million, including accrued interest [22] Question: How many future prospective clients do you have now? - The company has 26 active prospects representing about 15 million lives [23] Question: Have you started reaching out to CCP's eligible members in Florida? - Yes, the company has started reaching out and had a successful implementation [24] Question: How much cash did you raise since the end of the quarter? - The company has access to $10 million from the Keep Well Agreement and $15.9 million from warrants [27]