Performant Financial (PFMT)2019-03-26 23:05Financial Data and Key Metrics Changes - In Q4 2018, the company reported revenue of $39.8 million, reflecting a 19.5% increase compared to Q4 2017 [10] - For the full year 2018, total revenues were $155.7 million, up from $132 million in 2017, with adjusted EBITDA showing a loss of $5.2 million compared to a profit of $9.2 million in 2017 [10][20] - Q4 expenses were $43.2 million, an increase of $8.7 million from $34.5 million in Q4 2017, driven by growth in healthcare and the acquisition of Premiere [16] Business Line Data and Key Metrics Changes - Commercial healthcare revenues in Q4 were $6 million, a 90% increase year-over-year, and $14.1 million for the full year, up 64.8% from 2017 [11][10] - Total healthcare revenue for 2018 was $55.9 million, compared to $10 million in 2017 [13] - Student lending revenue in Q4 was $18 million, down 20% from $22.5 million in the prior year, with full-year revenue at $66.5 million, a decrease of 29.5% [13][14] Market Data and Key Metrics Changes - The IRS Private Debt Collection program has collected $130.6 million in overdue tax revenue, contributing to the company's growth in the tax and customer care revenue category, which saw a 48.6% increase year-over-year [15][14] - The company faced challenges with the Department of Education's decision to cancel a procurement contract, despite the increase in defaulted student loans managed by the department [8][9] Company Strategy and Development Direction - The company aims to build a diversified business leveraging its strengths in analytics, innovation, compliance, audit, and recovery, with a focus on healthcare growth and the integration of the Premiere Credit acquisition [6][19] - The long-term revenue target for 2021 is set at $200 million, primarily driven by healthcare growth and existing contracts, with expectations for strong double-digit EBITDA margins [20][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business strategy despite guiding for a net EBITDA loss in 2019, emphasizing the importance of investments in contracts for future growth [20][19] - The company plans to accelerate audit cycles on CMS contracts in 2019, which is expected to yield benefits in 2020 [12][26] Other Important Information - The acquisition of Premiere Credit of North America is expected to add $28 million to $32 million in revenue in 2019, enhancing the company's recovery services capabilities [7][8] - The company has secured over $20 million in growth capital to support its investments and operations [20] Q&A Session Summary Question: What are the bigger drivers for the 2021 target of $200 million? - The target is largely driven by healthcare growth, with expectations for recovery growth as well, particularly from the Premiere Credit acquisition [23] Question: Can you discuss the pipeline of new business in commercial healthcare? - The company anticipates strong sequential growth in commercial healthcare, with existing contracts expected to contribute significantly [25] Question: How much revenue was generated from the CMS RAC contract in the quarter? - The company is working with CMS to increase document limits for audits, which will take time to fully benefit from, with expectations for improvement in 2020 [26]