MultiPlan (MPLN) - 2025 Q2 - Quarterly Results

Executive Summary Claritev's CEO highlighted a return to growth in Q2 2025, supported by strong financial results including increased revenues and significantly reduced net loss CEO Commentary Claritev's CEO highlighted the company's Q2 2025 return to growth, driven by value-added solutions, expanded markets, and strong execution, affirming positive full-year guidance - Claritev returned to growth mode in Q2 2025, focusing on driving results with value-added solutions across expanded vertical and growing market segments[3] - Key achievements include multi-year renewals, white space sales with existing clients, record-sized enterprise subscription deals, and new logos and partnerships in key areas[3] - The company's transformation is powered by a clear purpose to make healthcare more affordable and transparent, combined with a revitalized leadership team executing with discipline and urgency across expanded international markets[4] - Full-year financial guidance is moving in the right direction, indicating Claritev is 'fit for growth'[4] Q2 2025 Business and Financial Highlights Claritev reported strong Q2 2025 financial results, with 3.5% revenue growth, significantly reduced net loss, and improved Adjusted EBITDA and Free Cash Flow Q2 2025 Business and Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------------- | :-------------- | :-------------- | :----------- | | Revenues | $241.6 million | $233.5 million | +3.5% | | Net Loss | $(62.6) million | $(576.7) million | Reduced loss | | Adjusted EBITDA | $154.0 million | $146.7 million | +5.0% | | Adjusted EBITDA Margin | 63.8% | N/A | N/A | | Net cash provided by operating activities | $61.2 million | $18.5 million | +230.8% | | Free Cash Flow | $36.6 million | $(7.0) million | Improved to positive | - The Company ended Q2 2025 with $56.4 million of unrestricted cash and cash equivalents on the balance sheet[7] - Claritev processed approximately $43.8 billion in claim charges during Q2 2025, identifying potential medical cost savings of approximately $6.3 billion[7] Company Information & Outlook This section provides an overview of Claritev's mission, updated full-year 2025 financial guidance, and details for the Q2 earnings conference call About Claritev Claritev, formerly MultiPlan, is a healthcare technology company leveraging data and AI to enhance affordability, transparency, and quality in the U.S. healthcare system - Claritev (formerly MultiPlan) is a healthcare technology, data, and insights company focused on delivering affordability, transparency, and quality to the U.S. healthcare system[12] - The company leverages over 40 years of claims processing data, world-class technology, and AI to power a robust enterprise platform that provides meaningful insights, drives affordability and price transparency, and optimizes networks and benefits design[12] - Claritev serves more than 700 healthcare payors, over 100,000 employers, 60 million consumers, and 1.4 million contracted providers[13] Full-Year 2025 Financial Guidance Update Claritev updated its full-year 2025 financial guidance, upgrading revenue outlook to positive growth and significantly improving Free Cash Flow projections Full-Year 2025 Financial Guidance Update | Financial Metric | Previous FY 2025 Guidance | Updated FY 2025 Guidance | Change | | :------------------- | :-------------------------- | :----------------------- | :----- | | Revenues | (2)% to flat from FY 2024 | Flat to +2% from FY 2024 | Upgraded | | Adjusted EBITDA Margin | 62.5% to 63.5% | No Change | No Change | | Capital expenditures | $155 million to $165 million | $170 million to $180 million | Increased | | Effective tax rate | 25% to 28% | No Change | No Change | | Free Cash Flow | $(75) million to $(65) million | $(20) million to $20 million | Significantly improved | Conference Call Information Claritev held a conference call on August 6, 2025, to discuss Q2 financial results, providing details for access and replay - A conference call was hosted on Wednesday, August 6, 2025, at 8:00 a.m. U.S. Eastern Time (ET) to discuss financial results[9] - Participants could pre-register via a provided link or access a live webcast through the Investor Relations section of the Company's website[9][10] - A replay of the conference call is available approximately two hours after the live event through the archived webcast on the Investor Relations website[11] Condensed Consolidated Financial Statements This section presents Claritev's condensed consolidated balance sheets, statements of loss, and cash flows, detailing financial position and performance Condensed Consolidated Balance Sheets As of June 30, 2025, Claritev's total assets slightly decreased, with increased cash and receivables, while liabilities rose and shareholders' equity became negative Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $56,390 | $16,848 | +$39,542 | | Trade accounts receivable, net | $123,579 | $89,758 | +$33,821 | | Total current assets | $247,138 | $175,515 | +$71,623 | | Total assets | $5,071,980 | $5,150,827 | -$78,847 | | Total current liabilities | $253,142 | $213,790 | +$39,352 | | Long-term debt | $4,533,078 | $4,509,725 | +$23,353 | | Total liabilities | $5,111,888 | $5,066,805 | +$45,083 | | Total shareholders' equity | $(39,908) | $84,022 | -$123,930 | Condensed Consolidated Statements of Loss and Comprehensive Loss Claritev's Q2 2025 revenues increased to $241.6 million, with net loss significantly narrowing to $62.6 million, primarily due to the absence of prior-year impairment losses Condensed Consolidated Statements of Loss and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $241,570 | $233,476 | $472,900 | $467,984 | | Total expenses | $224,992 | $757,403 | $446,580 | $1,478,347 | | Operating income (loss) | $16,578 | $(523,927) | $26,320 | $(1,010,363) | | Net loss | $(62,640) | $(576,727) | $(133,959) | $(1,116,416) | | Net loss per share – Basic and Diluted | $(3.81) | $(35.78) | $(8.19) | $(69.18) | - The significant reduction in net loss is largely attributable to the absence of a loss on impairment of goodwill and intangible assets, which was $553,701 thousand in Q2 2024 and $1,072,751 thousand for the six months ended June 30, 2024, compared to $0 in the corresponding 2025 periods[32] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, operating cash flow decreased, investing activities remained an outflow, and financing activities generated significant cash inflow Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Item | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $31,181 | $68,187 | -$37,006 | | Net cash (used in) investing activities | $(63,489) | $(55,989) | -$7,500 | | Net cash provided by (used in) financing activities | $69,924 | $(34,523) | +$104,447 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $37,616 | $(22,325) | +$59,941 | - Financing activities included $130,000 thousand in borrowings and $(50,000) thousand in repayments on the 2025 revolving credit facility for the six months ended June 30, 2025[34] Non-GAAP Financial Measures & Reconciliations This section defines Claritev's non-GAAP financial measures, outlines their limitations, and provides detailed reconciliations for EBITDA and Free Cash Flow Definition and Limitations of Non-GAAP Measures Claritev uses non-GAAP measures like EBITDA and Free Cash Flow for supplemental insights, acknowledging their definitions, adjustments, and inherent limitations - Non-GAAP financial measures used include EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash Flow, and Adjusted cash conversion ratio, which are supplemental to GAAP measures[19][20] - EBITDA is defined as net (loss) income before interest expense, interest income, income tax provision (benefit), depreciation, amortization of intangible assets, and non-income taxes[21] - Free Cash Flow is net cash provided by operating activities less capital expenditures, while Unlevered Free Cash Flow further adds back cash interest paid[25] - Limitations of these non-GAAP measures include not reflecting changes in working capital, interest or principal payments on debt, tax expenses, or cash requirements for asset replacements[27] Calculation of EBITDA and Adjusted EBITDA Claritev reported Q2 2025 EBITDA of $128.29 million and Adjusted EBITDA of $154.03 million, with significant year-over-year improvement due to no impairment losses Calculation of EBITDA and Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | $(62,640) | $(576,727) | $(133,959) | $(1,116,416) | | EBITDA | $128,286 | $(415,306) | $240,636 | $(788,211) | | Adjusted EBITDA | $154,028 | $146,670 | $296,097 | $293,460 | - Adjustments to EBITDA for Q2 2025 included $6.69 million for other expenses, net, $1.81 million for loss on disposal of assets, $7.93 million for transformation costs, and $9.10 million for stock-based compensation[36] - The substantial increase in EBITDA compared to the prior year periods is largely due to the absence of a 'Loss on impairment of goodwill and intangible assets,' which was $553,701 thousand in Q2 2024 and $1,072,751 thousand for the six months ended June 30, 2024[36] Calculation of Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio Claritev's Q2 2025 Free Cash Flow significantly improved to $36.61 million, with Unlevered Free Cash Flow at $72.12 million and an Adjusted Cash Conversion Ratio of 47% Calculation of Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $61,237 | $18,471 | $31,181 | $68,187 | | Purchases of property and equipment | $(24,623) | $(25,445) | $(63,489) | $(55,989) | | Free Cash Flow | $36,614 | $(6,974) | $(32,308) | $12,198 | | Interest paid | $35,507 | $97,653 | $117,510 | $158,395 | | Unlevered Free Cash Flow | $72,121 | $90,679 | $85,202 | $170,593 | | Adjusted EBITDA | $154,028 | $146,670 | $296,097 | $293,460 | | Adjusted Cash Conversion Ratio | 47 % | 62 % | 29 % | 58 % | Legal & Investor Information This section provides contact information for investor and media relations, alongside important disclosures regarding forward-looking statements and associated risks Investor and Media Relations Contacts Claritev provides dedicated contact information for investor relations and media inquiries, with specific personnel assigned to each - Investor Relations contacts are Jason Wong (SVP, Treasury & Investor Relations) and Shawna Gasik (AVP, Investor Relations), reachable at 866-909-7427 or investor@claritev.com[15] - Media Relations contact is Pamela Walker (VP, Marketing & Communication), reachable at 781-895-3118 or press@claritev.com[15] Forward-Looking Statements This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, with no obligation to update - The press release contains forward-looking statements regarding future events or results, identifiable by terms such as 'believes,' 'estimates,' 'anticipates,' 'expects,' 'plans,' 'may,' 'will,' or 'should'[15] - These statements are based on current market information and management's expectations but involve risks and uncertainties that may cause actual results to be materially different[15][17] - Key risk factors include loss of clients, ability to achieve strategic goals, loss of key personnel, trends in the U.S. healthcare system, competition, pricing pressure, changes in industry standards, litigation, cybersecurity breaches, and regulatory changes[15][16] - The company does not undertake any obligation to update or revise forward-looking statements, except as required under applicable securities laws[18]