Release Date: November 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Newtopia Inc (NEWUF, Financial) has formed a strategic partnership with a new supplemental insurance provider, expanding its business channel and offering its habit change platform as a fully covered benefit starting in 2025.
- The company has secured key client renewals and expanded contracts with existing clients, including Fortune 500 and Fortune 10 companies, demonstrating high engagement rates and clinically significant outcomes.
- Newtopia Inc (NEWUF) is actively developing partnerships with clinical discovery and health AI leaders to leverage its habit change capabilities and data set for advancing clinical trials and novel drug development.
- The company has achieved significant milestones, such as the completion of a 12-month whole health coaching project, which has delivered best results to date for provider-referred participants.
- Operational enhancements and cost structure improvements are paving the way towards profitability in 2025, with a focus on delivering exceptional health outcomes and securing new business opportunities.
Negative Points
- Q3 2024 revenue for Newtopia Inc (NEWUF) declined to 1.0 million CAD from 2.4 million CAD in the prior year period, primarily due to the loss of a client and structural incentive changes at an existing client.
- The company reported an EBITDA loss of 987,000 CAD for Q3 2024, driven by topline headwinds, compared to a gain of 21,000 CAD in the prior year.
- Despite operational improvements, the company continues to face challenges in offsetting revenue declines and achieving cash flow positivity.
- There is uncertainty regarding potential policy changes in the US that could impact Newtopia Inc (NEWUF)'s business, as the new government administration focuses on tackling chronic lifestyle diseases.
- The company is carrying excess health coaching capacity, which may impact short-term financial performance, although it positions Newtopia Inc (NEWUF) for future opportunities.
Q & A Highlights
Q: Can you elaborate on the strategic partnership with the new supplemental insurance provider?
A: Jeff Ruby, CEO, explained that Newtopia has formed a strategic partnership with a new supplemental insurance provider, which will offer Newtopia's habit change platform as a fully covered benefit to thousands of U.S. workers starting in 2025. This partnership introduces Newtopia to a new business channel in supplemental insurance, aligning with their mission to promote whole health and well-being. The platform will serve some of the largest U.S. employers, providing personalized coaching and support to plan members at risk of metabolic disease, with no out-of-pocket costs. This partnership is expected to significantly accelerate participant acquisition and contribute to achieving profitability in 2025.
Q: What were the main reasons for the decline in Q3 2024 revenue compared to the previous year?
A: Colin Swenson, CFO, stated that the decline in Q3 2024 revenue, which totaled CAD 1.0 million compared to CAD 2.4 million in the prior year, was primarily due to the loss of a client and a structural incentive change at an existing client. These factors impacted the 2024 volumes, but Newtopia is actively working to offset these declines moving forward.
Q: How is Newtopia addressing the challenges posed by the current market environment?
A: Laura Dodo, Chief Growth and Operating Officer, highlighted that Newtopia is focusing on strategic commercial channels, staff reductions without impacting client experience, and innovative thought leadership. The company is leveraging partnerships and data to drive growth, including a new Payvider partnership and renewals with existing clients, which are expected to enhance engagement and clinical outcomes.
Q: What are the expected outcomes of the health coaching project with the Heartland Whole Health Institute?
A: Laura Dodo mentioned that the 12-month health coaching project aims to increase participant activation and engagement, improve health, and reduce care costs. Preliminary results indicate high engagement and significant weight loss among participants, with data expected to be published in the first half of 2025.
Q: How is Newtopia planning to leverage its capabilities in the health AI space?
A: Jeff Ruby, CEO, stated that Newtopia is pursuing partnerships with health AI and clinical discovery innovators to enhance their ability to deliver outcomes that prevent, reverse, and slow chronic diseases. The company is in exploratory discussions and analysis to enable this strategy, with tangible results anticipated in the next quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
