Performant Financial (PFMT) - 2025 Q1 - Quarterly Results

Financial Highlights Performant Healthcare reported strong Q1 2025 financial results, with total revenue increasing 22% year-over-year to $33.3 million, driven by a 29% rise in healthcare revenue, significantly improving profitability to a net loss of $0.1 million from $4.0 million and achieving a positive Adjusted EBITDA of $3.3 million from a $1.2 million loss Q1 2025 Key Financial Metrics (in millions) (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $33.3M | $27.3M | +22.0% | | Healthcare Revenue | $33.2M | $25.8M | +28.7% | | Net Loss | $(0.1)M | $(4.0)M | +97.5% | | Net Loss per Share | $0.00 | $(0.05) | +100% | | Adjusted EBITDA | $3.3M | $(1.2)M | N/A | | Adjusted Net Income | $1.2M | $(3.0)M | N/A | Q1 2025 Healthcare Revenue Breakdown (in millions) (vs. Q1 2024) | Service Line | Q1 2025 Revenue | YoY Growth | | :--- | :--- | :--- | | Claims-based | $17.1M | +38% | | Eligibility-based | $16.1M | +20% | Management Commentary Management expressed strong satisfaction with the first quarter's performance, highlighting that both revenue and profitability surpassed expectations, with growth broad-based across government and commercial clients and significant momentum from the commercial sector, reinforced by 13 new commercial programs expected to generate substantial annualized revenue - CEO Simeon Kohl stated that Q1 revenue and profitability exceeded expectations, driven by strong demand for the company's services and solid growth across both government and commercial clients[3] - The company implemented 13 new commercial programs during the quarter, which are estimated to contribute between $4.5 million and $5.0 million in annualized revenue once they reach a steady state[3] - CFO Rohit Ramchandani noted that the strong start to the year is a testament to the execution of the strategy set in 2021 to become a pure-play healthcare company, with commercial clients being the largest growth area[4] 2025 Full-Year Guidance Buoyed by the strong first-quarter results and a positive outlook for the remainder of the year, the company has raised its full-year 2025 financial guidance, projecting higher healthcare revenues and increased adjusted EBITDA Updated Full-Year 2025 Guidance (in millions) | Metric | Guidance Range | | :--- | :--- | | Healthcare Revenues | $133M - $135M | | Adjusted EBITDA | $9M - $10M | Consolidated Financial Statements The consolidated financial statements detail the company's financial position as of March 31, 2025, and its performance for the first quarter, showing growth in total assets to $105.4 million, a significant improvement from a $3.9 million operating loss to a $0.15 million operating income, and positive cash flow from operations at $2.9 million Consolidated Balance Sheets As of March 31, 2025, total assets increased to $105.4 million from $101.8 million at year-end 2024, driven by increases in cash, trade accounts receivable, and contract assets, while total liabilities grew to $27.2 million and total stockholders' equity rose to $78.1 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $41,970 | $38,358 | | Total assets | $105,365 | $101,774 | | Total current liabilities | $16,401 | $13,971 | | Total liabilities | $27,233 | $25,275 | | Total stockholders' equity | $78,132 | $76,499 | Consolidated Statements of Operations For the three months ended March 31, 2025, the company generated $33.3 million in revenue, up from $27.3 million, with operating income of $0.15 million, a significant improvement from a $3.9 million operating loss, and a net loss narrowed dramatically to $81 thousand from $4.0 million year-over-year Statement of Operations Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $33,269 | $27,334 | | Total operating expenses | $33,119 | $31,255 | | Income (loss) from operations | $150 | $(3,921) | | Net loss | $(81) | $(4,017) | | Net loss per share (Basic & Diluted) | $0.00 | $(0.05) | Consolidated Statements of Cash Flows In Q1 2025, net cash provided by operating activities was $2.9 million, a strong reversal from $0.1 million, with net cash used in investing activities decreasing to $1.5 million, and the company ending the quarter with $10.0 million in cash and cash equivalents, up from $3.8 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,904 | $121 | | Net cash used in investing activities | $(1,450) | $(3,652) | | Net cash used in financing activities | $(765) | $(14) | | Net increase (decrease) in cash | $689 | $(3,545) | | Cash and cash equivalents at end of period | $9,981 | $3,788 | Reconciliation of Non-GAAP Measures The company provides reconciliations for its non-GAAP financial measures, Adjusted EBITDA and Adjusted Net Income, to the most comparable GAAP measure, Net Loss, with Q1 2025 net loss of $0.1 million adjusted for items like stock-based compensation ($1.7 million) and depreciation & amortization ($1.5 million) to arrive at an Adjusted EBITDA of $3.3 million and Adjusted Net Income of $1.2 million - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to evaluate core operating performance, excluding items such as interest, taxes, depreciation, amortization, and stock-based compensation[6] Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(81) | $(4,017) | | Adjustments (Taxes, Interest, D&A, etc.) | $3,403 | $2,787 | | Adjusted EBITDA | $3,322 | $(1,230) | Reconciliation of Net Loss to Adjusted Net Income (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(81) | $(4,017) | | Adjustments (Stock comp, tax adj., etc.) | $1,293 | $979 | | Adjusted net income (loss) | $1,212 | $(3,038) | Historical Revenue Breakdown Historical data shows a clear strategic shift towards healthcare services, with total healthcare revenue consistently growing to $33.2 million in Q1 2025, while revenue from 'Customer Care / Outsourced Services' has been systematically reduced, reflecting the company's focus on its core healthcare payment integrity business Q1 2025 Revenue Breakdown (in thousands) | Service Line | Revenue | | :--- | :--- | | Eligibility-based | $16,082 | | Claims-based | $17,104 | | Healthcare Total | $33,186 | | Customer Care / Outsourced Services | $83 | | Total Revenue | $33,269 | - Historical data from 2022 to 2024 shows a consistent increase in total healthcare revenue year-over-year, from $94.7 million in 2022 to $118.3 million in 2024[22] - Revenue from non-healthcare services like 'Customer Care / Outsourced Services' has steadily declined from $14.3 million in 2022 to $4.7 million in 2024, and only $83 thousand in Q1 2025, indicating a successful transition to a pure-play healthcare company[22]