Ontrak(US:OTRK)2024-08-09 16:51Financial 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]