Release Date: September 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pro forma SaaS revenue grew 21% during the first six months of fiscal 2024.
- Successful closure of contracts with an aggregate SaaS ACV of $800,000 in the second quarter.
- Significant cost savings achieved through strategic restructuring, reducing operating expenses.
- Development of impactful solutions focused on identifying financial opportunities and providing automated workflows.
- Positive client feedback on the service model, with clients appreciating the hands-on education, optimization, and insights provided.
Negative Points
- Notifications of non-renewals and renewals at lower rates for contracts with an aggregate value of $2.8 million of SaaS ACV.
- Total revenue for the second quarter of fiscal 2024 was $4.5 million, down from $5.8 million in the same period of fiscal 2023.
- Net loss for the second quarter of fiscal 2024 was $2.8 million, compared to a loss of $2.5 million in the second quarter of fiscal 2023.
- Unexpected churn during the fiscal quarter, impacting the adjusted EBITDA breakeven timing expectation.
- Anticipation of a sequential decline in total revenue by approximately $300,000 in the third quarter of fiscal 2024.
Q & A Highlights
Q: What are you hearing from customers regarding the market and procedure volumes?
A: Customers are making material investments to expand their physical footprints and new service lines to accommodate patient volumes. However, they are still struggling with revenue cycle issues and payer dynamics, particularly managed care.
Q: What gives you confidence in achieving sequential growth in 2025?
A: Our products are superior to the competition, and our service model adds significant value. We have opportunities to add additional modules to our existing software, and current clients are very enthusiastic about these opportunities.
Q: Can you provide more detail on the current pipeline and expected conversions?
A: We expect a significant uptick in bookings in the second half of the year. We have a good line of sight on deals that will close before the end of the fiscal year, potentially more than doubling the first half bookings.
Q: What feedback are you receiving from the existing customer base regarding the value proposition?
A: Our best clients are very resource positive and can fully utilize our solutions. Prospective clients who outsourced during COVID are now realizing the drawbacks and are interested in bringing revenue cycle management back in-house.
Q: How is the Cerner Oracle relationship progressing, and how does it differ from the eValuator go-to-market strategy?
A: The relationship is progressing well with several successful implementations. Oracle is actively making introductions and working with us. RevID is viewed as more impactful at an enterprise level, requiring more departmental involvement compared to eValuator.
Q: What are the financial highlights for the second quarter of fiscal 2024?
A: Total revenue was $4.5 million, down from $5.8 million in the same quarter last year. SaaS revenue was $3 million, representing 67% of total revenue. Adjusted EBITDA was a loss of $300,000, an improvement from a loss of $900,000 in the same quarter last year.
Q: What are the expectations for revenue and EBITDA in the coming quarters?
A: We anticipate a sequential revenue decline of approximately $300,000 in the third quarter but expect to return to $4.5 million in the fourth quarter. We aim to achieve persistent positive adjusted EBITDA above a $15.5 million SaaS ARR run rate in the second half of fiscal 2025.
Q: How are you addressing the challenges faced by resource-drained health systems?
A: We are improving our ability to maintain long-term relationships by creating stronger ties with client management, leveraging results, and providing actionable high-level insights. We are also developing best practice manuals and audit programs to ensure client success.
Q: What are the key areas of product innovation and development?
A: We are focused on identifying financial opportunities and providing automated workflows. Our AI model continues to enhance rules for eValuator clients, and we are developing a risk scoring engine. We are also working on material upgrades to address payer denials.
Q: What are the strategic priorities for growth?
A: Our priorities include a displacement campaign for eValuator, emphasizing our Oracle partnership, developing new channel partners, and expanding upsells and cross-sells within our existing client base. We are also investing in targeted high-value marketing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
