Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Achieved 22nd consecutive record-breaking revenue quarter with 42% year-over-year revenue growth.
- Significant reduction in debt and leverage ratios in Q2 2024.
- Improved annual revenue guidance to between $970 million and $990 million for the year.
- Record 1.4 million patient visits in Q2 2024, a 38% increase compared to Q2 2023.
- Strong performance in Canadian clinics with over 3,900 providers and clinicians delivering care.
Negative Points
- Higher costs due to lower share issuance and stock-based incentives impacting adjusted EBITDA.
- Temporary negative impact on P&L from the transformation and digitization of acquired Shoppers Drug Mart clinics.
- Delays in cash collections on anesthesia claims due to a cybersecurity incident at billing partner Change Healthcare.
- Increased accounts receivable and other liabilities due to advanced funding from Change Healthcare.
- Potential risks associated with the planned spinout of the SaaS and services provider solutions business.
Q & A Highlights
Q: Can you talk about the ramp-up in growth for Circle Medical, especially given the 65% year-over-year growth in July?
A: Hamed Shahbazi, CEO: Last year, we made significant investments in technology and our clinical network, which were costly and time-consuming but are now paying off. Circle Medical has seen a surge in profitability and margin expansion. We are optimistic about the future, especially as we consider strategic alternatives for Circle Medical.
Q: Regarding the SaaS and service provider solutions spinout, can you update us on potential timelines and progress?
A: Hamed Shahbazi, CEO: We are targeting H1 2025 for the spinout. We believe the provider solutions group will be a $50+ million revenue business by 2025. Operationally, nothing will change as we will maintain strong control and intercompany agreements.
Q: Can you provide details on the legal matter regarding Wisp and its impact on the strategic process?
A: Hamed Shahbazi, CEO: We have settled the Pixel matter, and most of the settlement will be covered by insurance. This legal matter did not factor into our strategic alternatives for Wisp, which remains a strong, growing, and profitable business.
Q: What will be the key use of proceeds from potential divestments or spinouts?
A: Hamed Shahbazi, CEO: Beyond debt repayment and potential special buybacks, we have a pipeline of acquisitions, particularly in the Canadian healthcare landscape. We aim to reallocate proceeds in an accretive manner, focusing on diagnostics and other high-value opportunities.
Q: What are your M&A priorities in the near term?
A: Hamed Shahbazi, CEO: Our focus is on the Canadian clinic program due to our confidence in clinic transformation. We are also looking at well-run businesses in the specialist and diagnostics center side. Additionally, we are ramping up our digital acquisitions pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
