PFMT - Earnings call transcript Q2 2021 | Performant Healthcare, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the Performant Financial Corporation Second Quarter 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Zubek, Investor Relations. Thank you, sir.

begin. may You

Richard Zubek

and have operator, for everyone. now, By second Thank a good copy should received XXXX release of you quarter you, results. afternoon, the our earnings

not, President On today's Rohit of will the have If Simeon available Executive Im, Healthcare; of Ramchandani, call Strategy. copy President Kohl, of website. portion and Senior be on Vice you Finance our and Investor a Chief Relations Vice Officer; Lisa Senior is Manager and

that begin, some the statements. described the statements and I'd on like materially call we are filings risks SEC. you today's remind Before may call. differ made of from to to with in results our those comments described are those These the Actual uncertainties, forward-looking including subject during

are and circumstances measures new measures non-GAAP forward-looking this Lisa? of call to table discussed as undertake call reconciled not any most all our the does to revised any addition, forward-looking to based attached turn the today, during update financial comparable are release. expectations. Im. would Also, In statements Lisa to statements now in company or over to on the like the press I GAAP made directly

Lisa Im

year-over-year basis. business of we of end with quarter and afternoon, entirely over wind-down results care on our revenues The in Rich. care to our everyone, second you year. the health you, a recovery by us the by company the thank remains for integrity payment Good Thank that nearly Performant into joining was business and earnings growing our exiting anticipate by reinforced for decision The health call. and streamline complete, is a on schedule XX%

thaw, care back slowly world to grow. this emerge levels continue to quarterly revenues health the our from anticipate pre-pandemic see we we and will revert As COVID

drive over past our technology impact has while care X to services. progressed business largely through combination contracts the and with business our are the our products health the from of new efforts COVID, innovative in expanding line existing our new focusing We Despite years expectations.

XXXX, in systems, of upfront required cetera, X. investment significant As latter a we people, towards integrating before amount beginning large profitable contracts most of year our et stages back to indicated of to turn the you for

since in are systems win new point, a health care already changed the are believe strategy their our until is long of continue X to have unseating However, new brands today, a land whether We a ours. period. opportunity where the and And us payment and contracts new recent that existing to year with show scope be a services X we in every implement we client, going maturity wasn't this through applicable are But landscape multiple to there clarify, we expand months grow If which to are business integrated competitor of and ramp-up really within reach avenues operations, that just for competitive has that can to expanding our an that not X, would more health these in and past. dramatically steady-state margins. care or client. it to to begin integrity with

was XXXX. Our equity purchased private integrity purchased biggest competitor eligibility another competitor large in that by payment in firm previously a

outlook. what will payment have General scrutiny Vice Sim? President prospects growth. Kohl, and right our is the about of see of Manager among of at like business time, to And care excited additional so some pending wait we're a and transaction take would you some Healthcare, the Senior of our through I to there this results X the but transpires. and Simeon health significant his currently, addition, separate that In under Overall, merger other companies, is now, integrity we

Simeon Kohl

innovative focused We growth cost care delivering health execution our and strategy clients. our remain of to on the Lisa. management Thanks, solutions

higher XX% continues initial the sight of combined last over sources were to programs sequential operational in demonstrate new programs implemented second a the implementation meaningful to within and sales we quarter line the performance new a growth XX% Noting our the revenues when existing care and mature from they XX from months implemented basis. year our opportunities. new revenue XXXX, these of programs. higher we already This health of compared on expansion clients XX fully phase provide robust the both past additional with as clients, pipeline, value of nearly to Our over into

data In Performant you to As XX the care with eligibility, performant into is the liability uniquely our analytic Within With a sometimes expertise divided to well sources segment in and to benefits. to payments. is Commercial X landscape. we both. contract to national third-party Secondary the many serve in operate base platform is national recovery only and to claims or data is audit expertise, states. nation. product which improper of and claims auditing, eligibility efficiently Performant as coordination health contractors onboard of as in client recovery honored solutions its invaluable is proprietary diverse Payer only commercial know, our leader services business and of referred every broad positioned commercial Performant the Medicare X Center, payers also provide a and is CMS with in CMS and eligibility, state provides In national and audit this care audit, Repayment seamlessly to provide segments: health we National one is claim insights leverage identify our industry of auditing one Performant apply jurisdiction. of positioned

XX,XXX the support of volume next currently to that month line double workbench least medical year. records audit and auditing at sight per with of workflow Our

have our mining, that last. medical yielded require financial audits do not a savings Our in also recent than more the record clients more over double year investments data this for

anticipate growth last Repayment As challenging the a as revenues clients pre-COVID X-plus such eligibility, programs. quarter Medicaid Due accuracy, offering, strong were our of nature, result, solid We claims-based and in suppressing Region new year expansive in believe visibility CMS-based us the and suite expand a the years, growth positions we presently X. our relative Center COVID, results. future. through our despite foundation have second Medicare million environment just with multiyear the our client expanding savings and represents continues Of plans premium develop as implementations claims for complex meaningful X year. set as a to doubled industry-wide recently continued reawarded and a TPL to to in believe XXX% their health initial business term MSP yet more long program CMS our of executing navigating health in our secondary into our RAC medium types we MSP multiple MSP Having revenue we last excess Advantage continue decline coverage, provider to of typically to service audit trend We we identification program levels from states has for to nearly our will particular opportunity excitement, claim eligibility contract on we near-term each $XX revenue more of an recovery. care we third-party and programs the return Commercial contract caused and continue solutions, their grown new we for a which Within first the X from continue announced new we our leverages revenue recently with spending, of result anticipate in reclamation operations. Medicare market. the cover year pandemic their records to upward optimize payer the we The in experience With in to operating medical comprehensive than recoveries. Advantage, Advantage margins the recoveries to carrier partner Plans of and into

of the dedicated platform team our members. proprietary Our efforts enabled growth our has unmatched been by data and

sight our year. commitment and our Strategy, a Finance efforts investments we that, ensure service -- a with we is continuing into acquisition health President in management expand growth year-to-date customer rising make cost result position of in I'd about in expanded of always half and our will results the to growth, our advanced sales through believe helping their line we from will client-centric our additional to will in analytics. of With strong like account accomplishments and and also are of of and the and development manage excited our services of Building introduce and our investments of we walk clients investing to care of Rohit? revenues, talent, As teams. the company Senior the that the Vice to second you to quarter. To marketing are our further expansion our key Performant core, at remain Rohit Ramchandani, historical the our

Rohit Ramchandani

anticipation the whereas our the within $XX.X in last evidences non-health on the will our was growing the recovery business this the recorded impact care will the QX the any revenue to and related million, care ramp. quarter comparatively a planned second that million of health our and recovery the such million down COVID-XX growing $X.X quarter million, for than our we wind-down reported million, we to to quarter them new of Revenue second prior more revenues in reported Thanks, we year rapidly a our benefited reported remainder of compared care in quarter, now XXXX and in was in was to Sim. currently second million the also well of eligibility and year. than the decision through the the due growth revenues. results higher $X.X health diversified do from backlog from continue the quarter quarter lower business We million the of prior new we second second $XX.X an of of recoveries reporting as period million as wind continue of in operations. base. was our Of million markets. expect year mid-single-digit XXXX to revenue maintain with of more not this millions of our and from based, period as known that from to the XXXX care eligibility to year Similar In than million XXXX markets $XX.X were which in quarter breakeven to both was sequentially remainder the continue line at represent start quarter of the operations in year-over-year, the quarter total $XX.X XXXX be of this $XX.X $XX.X as the XXXX note, the million programs XX% in first revenue Adjusted the last Despite $XX.X XXXX $X.X we million first revenues during recovery approximately the $X.X our reported health decline auditing, of million, attention that to total We year down throughout double recorded result $XX.X in second higher prior. recovery a second XXXX, was the to QX health in we or implementation XXXX, sequentially million anticipate XXXX outsized the as of the $XX.X EBITDA roughly XXXX. of quarter quarter than half first of care year non-health services higher care low our and portion a our the services from dollars and the existing from Total pandemic and X of XXXX demonstrate than quarter, strong anticipate claims focus revenue the due second and of of this XXXX. of we of Claims the million the revenues of revenue revenue of to half large continue this of the our program, in contribution $X.X year. the $X second over which the KPIs XXXX. XXXX in a

wind-down. year amendment. from our impacts expenses prior expenses recovery of compared last useful services certain this the the expenses as charge $X.X year, increase related of related year goodwill in million, the million Act an by spike increase to Operating customer recovery quarter total $X.X the amortization restructuring resulted forbearances. in was a primarily down second costs alongside is care recent amortization. in to which, lives for million as the higher. The had increase assets was second well our new impairment in CARES related driven the and was the $XX.X loan to and Our $X.X the The period, slightly million of to outsourced when debt revenue credit in QX quarter issuance primarily We after excluding in of compared were in quarter up quarter, which our shortening

of from levels from that expect in growth overall care Looking the health expenses forward, we QX in expansion. spite expenses continued will operating operating related decline

we back over we with done by open of current mentioned, Lisa activities recovery year. to questions. like to of the expect I'd end our call that, the As With be to the your Lisa? wind-down up Lisa before turn market

Lisa Im

Thanks, Rohit.

have as client-centric payment the past a we partner. value-added a Over integrity X strong years, health care brand developed

care our health million in grown $X billion almost have over XXXX $XX care We health from million by just $X client almost XXXX in revenues savings. to in driving

us results forward. our continue we We market there believe that anticipate gain to to continue opportunity deliver a we to XXXX continue to and will clients, and we in also share tremendous is grow. for As to grow

in creates the uncertainty activities pauses COVID-XX of variant potential Delta or the in surge recent slowdowns quarters. some in for coming the However,

results. seen not $XX we maintain care to a positive are have impact, in our guidance to taking approach confidence refine and a to $XX health cautious range to we of we to the long-term yet With our achieving will questions. like up opting call coming take we'd the revenue While million in million EBITDA of continue sound, open business and that believe and our and years. Performant grow scale in The your we prospects that, remained

Operator

Instructions]. [Operator

question Colliers with first Securities. Bauser Kyle Our from comes

Kyle Bauser

here. we've of it. Maybe heard contracts start Thank all with that updates you some appreciate I the about. the for I'll new

in I X in So think QX and XX QX.

contract can size And I these maybe, you some average contracts and this, maybe length average, of term clients the new if in new are on of missed what in Sorry what is? the about talk any particular, QX.

Simeon Kohl

from Kyle, I think so it's quick Simeon. a just Yes, a -- level-set.

XX QX. We programs programs And X in announced additional QX as we in reflected implemented remarks, X an another in implemented prepared QX. XXXX. implemented new we So that we my in then

about a They're client little And ramp. of programs standpoint, we So these expansion. component, the as X blend logos this, of were good claims-based previously primarily existing new we've kind think a take programs timing shared of revenue programs. and think I a to bit just and time from do the

So will XX implemented XXXX more perspective. contribute with from later year QX we And those we material a the we start programs that year. contribution contribute we QX in revenue just in a next this anticipate revenue in to primarily then recently announced announced, and to that start

good programs to So -- cadence announced we early a we what into line those good that sight have of continue we've or as pretty here new of are implementing, show.

And we're also, so as I -- both think and it's land good a in here new executing Lisa as we're contribution logos points with seeing expand, both. out, for

Kyle Bauser

a millions Got end to the it. is in years a length. for and X for terms of new Is safe that are maybe these in lot the it know of the on digit X.X of I contracts single And years of term long for few Region the dollars? assume -- are

Simeon Kohl

MSP you are also and longer RAC those contracts a time them, extensive The though, contracts, out and programs if commercial Yes. mean, look -- CMS are have think contracts at the contracts, term. or as I very call sticky you I our pretty they there, period. contracts

it contribution, on revenue of size the covered cetera. the terms number depends of et look, opportunity, the of In lives, really

So it's to call these to a out from hard exactly standpoint. revenue opportunities quantify

Kyle Bauser

appreciate the that. EBITDA, we I were higher in modeling. of much than very it. strong And what quarter, terms Got in

And of contracts. would provide to continues year-end. fully sold Are business as be assets color looks be recovery to recovery of able the wind we divested the sort costs of should million you remaining helpful. amount? more the about recovery As see of that around to it And you sort percentage down, of here Any these $X.X any the diminish. we mentioned, expect or color you off like by worth should

Rohit Ramchandani

Yes, Kyle.

I think that you categorized well.

to And so that of mid-single-digit for I half in revenue to low the from in think -- of wind-down. back total our recovery goes the perspective, second market millions we expect XXXX terms

be share divestiture in, that small potential of lion's you've of the come already. from there of think of it may seen but I transactions some our value, terms In structure pieces the

Kyle Bauser

it. And just here. more couple a Got

any business cost this a we'll quantify see of with to away, associated costs OpEx. savings going come out of trying to of way basis? sense a get or this much maybe on terms Just annual quarterly In how

Rohit Ramchandani

Yes.

they're grow to care probably dollars the basis operation. reset that discussed million think related will, of an if come continue the that recovery couple a still But annual will I out as to we we've on that will the floor, wind-down. as health before, you

Kyle Bauser

and deal. X then been have significant is one business, obviously big a And drivers it. securing Region Got for X region the just

asking can want is And -- of get for Region is you're capabilities. by that with if grabs. both third X thoughts having that clearly to opportunity sort validates region you your you focusing be any up don't would I an a greedy great. here on? think coming secure So But

Simeon Kohl

-- have relationship we CMS, performance. with we and I that X.X-year underscores had our Look, Yes. X Region think to certainly for your reaward point, a long-standing

clearly in restricted of they of makes our And regions we regions, cetera. on these sense. opportunities it the if bid at will out hasn't et number we CMS point, rebid look to opportunities. all other And at see this good the are to to any available firmly strategy and so here map

definitely these of other pursuing at rebids so open some up. the And as opportunities closely we'll look

Operator

Craig-Hallum. next comes Our Sutton question from George with

George Sutton

care share? talk Can do extending you X% out far calculations care market a we release, is press tremendous terms our run get I process health think mentioned you you your calculations, our By this In currently share for may at market. opportunity calculate within a us share little further? can and there a be different, thought How a your the health to rate of about of the space. you gain know in

Rohit Ramchandani

Certainly.

it ahead, I -- Sim. stands go as think

to a it plus I market we is I And company. to have that XX% the waste if out stands think a a I goal think As were in million as extrapolate mind today, share was $XXX We as that, of $XXX saying, you that opportunity million for us but -- restricting payment $XXX current X/X of going with us translate nothing certainly, in a that's could beyond to can market. integrity, the goal. plus revenue million from the

George Sutton

you're seat, Can with on you about you commercial when I that account? these Are as existing customers with you question coming as guess ask and winning seat customers through side levels? that the seat levels? -- the with well. And see talk can relative question higher that walk I'd contracts you frankly, new in a another impact And at you is up move just to can the

Simeon Kohl

Yes, have we our we're clients, do. opportunity in clearly some in I more of move we've that that opportunities, second a matured, qualifications first of And Look, and these capabilities as solutions coming what our existing had us for demonstrate we're clearly as we've position our puts to capabilities better position to demonstrate and or clients. quality new think up. because how able of providing again, in, to been seat in in

see lives operates playbook, the growth opportunity in about accounts, think I of national think and covered So moving we're the wins as larger we of if from does volume and the And opportunities there's how the some us accounts, that up we progressing. historical the ultimately early the an product know kind well, of stack, we there the terms informed the have. give will, and account know we claim we that then you because

good in it So give growth predictability of terms us does opportunities.

George Sutton

your many result universe is there. out advantage not you that pipeline work than about There's, call it and what more talk. as have? just small technology of the it, the that technology hear continually is seeing you're how has we that a let's opportunity appears they And Could now right it that talk is there are suggested accounts better much others. XX-plus, and our and a So you from context

Simeon Kohl

Yes.

And that insurers number there, XXX-plus ones tier, look look, accounts, we opportunity amount penetration of in total We accounts XXX,XXX in on. a national we we're are with million accounts payers covered there then gives segments. to of of for focus healthy the terms the of we number So of number terms great of If and as regional -- on that growing refer of there's the out to a across at the focus mid-tier X largely focus us covered X are of that lives. kind lives. The the kind the on in we right?

to we focusing of in space both from success capabilities end, because And properly to ends side. We've way -- will, I'm identification payers if the are -- opportunities to largely address paid some disproportionate that's the of sorry, the on. recovery kind claims that of the end also you so we all kind that an area missed of that see have had the

continues all quality we terms high real clients. to market some in That that results, to mindful differentiator a continue differentiator somewhat real hit had And so from continues point that a an of we of as pursue, material that share whole, a and our your in technology we've technology, also abrasion, And of that because capability in markets in and that expand incumbents on underserved to in having just look us findings. us high pretty support space. being a be then of the providing cost-effective for allowing at scale manner, take to kind success existing to as in the be provider rates, to that

George Sutton

if could more could, One question, answer this. Great. if ask she I and Lisa I'll

as looks grow, watching substantially higher. eligibility the can we what the both you infrastructure bill Medicare you? Medicare. sitting covered looks would fall spending as may have of could here about like Minneapolis. age talk could for it in be services We may impact And It mean which are closely that Can for

Lisa I'm

George. Sure,

clearly are these that think business. will wins our help overall I

share their as way opportunity grow accounts. growing clearly grows, taking ways, significant clearly CMS As we see one payer the X -- so with to care of in There's is opportunities grows. And our health them the and industry pretty you right? know, growing spending is a part and market within

growing our is part at. U.S., continue I health in growing to is the think, increase the the of spending dollars a in is at, of what care significantly GDP that which second be will and twice The spend amount

So we've with well we're making had long-standing try And we with that sure what the parties our I be seeing. excited Sim well pretty -- of as think CMS. entire universe a their we better about of particularly, said, interaction one CMS. with with And our think, providers, in we we're partners best to relationship we work work

So We excited we're And to take pretty that's continue we think are poised dynamic we advantage grow. about to well of. it's think that. a to that another opportunity

Operator

[Operator Instructions].

comes Our Harbor Chris from next with Capital. Krug Chatham question

Chris Krug

great trading share. Well, really quarter, or whatever, XX% by million market given guys. picture down. $X of know I I'm your think the the not sure I but is goal why don't this cares getting down was guide anyone and long-term

last $XX.X on your health being highest $XX.X there and revenue seasonality revenue seems was But the is -- QX Is the was best was it which it $XX.X quarter. million, this print, XXXX is QX health in So million this from second XX% in quarter, and the million, presentation, care QX of your be year. of care year-over-year. side? weakest to

is So QX? in seasonality a there

Rohit Ramchandani

Chris, good question. in And no, we generally see seasonality QX. don't

I this end see QX. the you market, their think of books lot in We clients try of to a clean QX at seasonality the know a from do year. to up our

an bit see potentially QX. typically inflated you into QX decline could that So a

deflating QX or anything So in don't there'll them. terms seasonality-wise be think of numbers, artificially inflating our I

Operator

remarks. questions this to over turn like There any are no the closing to time. floor for further I'd at management back

Lisa Im

that call. Thank our and earnings good on with had you being we for for us today the operator. you, Thank questions

want to to serve I time call, attendance We close their again, bringing feel thank clients very best this we call. earnings every much. colleagues them. thank As at We day. to our us again want your for for honored to Performant you And on partners. appreciate very our and us your be Thank we letting our

Operator

this gentlemen, and Ladies concludes today's webcast.

now great you may time. and disconnect your participation, Thank your a day. for have lines You this at

Performant Healthcare (PHLT) 11 Aug 212021 Q2 Earnings call transcript