Performant Financial (PFMT) - 2025 Q2 - Quarterly Report

Revenue Performance - Total revenues for the three months ended June 30, 2025, were $37,803,000, a 28.8% increase from $29,362,000 for the same period in 2024[89] - Healthcare total revenues for the six months ended June 30, 2025, reached $70,989,000, up 32.2% from $53,725,000 in 2024[89] - Total revenues for the three months ended June 30, 2025, were $37.8 million, an increase of approximately $8.4 million, or 29%, compared to $29.4 million for the same period in 2024[116] - Healthcare revenues for the three months ended June 30, 2025, were $37.8 million, representing an increase of $9.9 million, or 35%, compared to the same period in 2024[117] - Revenues from claims-based services during the three months ended June 30, 2025, were $19.7 million, an increase of $6.0 million, or 44%, compared to the same period in 2024[117] - Total revenues for the six months ended June 30, 2025, were $71.1 million, an increase of approximately $14.4 million, or 25%, compared to $56.7 million for the same period in 2024[126] - Healthcare revenues for the six months ended June 30, 2025, were $71.0 million, representing an increase of $17.3 million, or 32%, compared to the same period in 2024[127] Net Income and Expenses - Net income for the three months ended June 30, 2025, was $2.1 million, an increase of approximately $5.1 million, or 169%, compared to a net loss of $3.0 million for the same period in 2024[124] - Net income for the six months ended June 30, 2025, was $2.0 million, an increase of approximately $9.0 million, or 128%, compared to a net loss of $7.0 million for the same period in 2024[134] - Salaries and benefits expense for the three months ended June 30, 2025, was $26.8 million, an increase of $2.3 million, or 9%, compared to $24.5 million for the same period in 2024[119] - Other operating expenses for the three months ended June 30, 2025, were $8.3 million, compared to $7.6 million for the same period in 2024, primarily due to higher outside services[120] - Interest expense for the three months ended June 30, 2025, was $0.3 million, unchanged from the same period in 2024[122] EBITDA and Cash Flow - For the three months ended June 30, 2025, adjusted EBITDA was $6,173,000, a significant increase from $548,000 in the same period of 2024[139] - The company reported a net income of $2,078,000 for the three months ended June 30, 2025, compared to a net loss of $2,996,000 in the prior year[139] - Adjusted net income for the same period was $4,777,000, up from a loss of $1,962,000 in 2024[139] - Cash provided by operating activities was $3,300,000 for the six months ended June 30, 2025, compared to $4,700,000 for the same period in 2024[146] - As of June 30, 2025, cash and cash equivalents totaled $9,100,000, a slight decrease from $9,300,000 as of December 31, 2024[142] Merger and Agreements - The company entered into a Merger Agreement on July 31, 2025, with Machinify, with stockholders entitled to receive $7.75 in cash per share[85] - The Merger is expected to close by the end of calendar year 2025, pending regulatory approvals and stockholder consent[85] - A termination fee of $19,980,000 is required if the merger agreement is terminated under specified circumstances[141] Business Operations and Risks - The company ceased providing outsourced call center services in Q1 2025, resulting in a significant reduction in revenue from that segment[99] - The company derives a majority of its revenues from healthcare payment integrity services, with a focus on claims-based and eligibility-based services[88] - The company has been awarded multiple Medicare Recovery Audit Contractor contracts, including a recent contract for Region 2 with a term of eight-and-a-half years[93] - The company’s revenue model is success-based, earning fees based on the amount of funds recovered for clients[84] - The company anticipates continued growth in its healthcare services as it expands its technology-enabled services platform[98] - The company faces risks related to the implementation of new contracts, which can delay revenue recognition and impact profitability[102] Financial Agreements - The company entered into a new credit agreement with a $25 million revolving loan commitment, with $8 million outstanding as of June 30, 2025[143] - The annual interest rate under the credit agreement was 7.1% as of June 30, 2025[152] - The company expects to maintain sufficient cash flows from operating activities to fund ongoing and planned business operations[144] - The company was in compliance with all financial covenants under the credit agreement as of June 30, 2025[157]