Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Performant Financial Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Richard Zubek, Vice President, Investor Relations. Richard. you, Thank

Richard, begin. may on be You your mute. may line

Richard Zubek

company's Good Thank the now, our full afternoon, you operator. XXXX earnings quarter results. year should for of By copy everyone. you, and a have release fourth received

copy have the Investor available you of If is website. portion our on a not, Relations

Ramchandani, Lisa of President Finance Strategy. On be Executive Simeon Vice Im, today's call Kohl, Senior Officer; Chief will President; and Rohit and

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

those Our during the actual call. may results materially from described differ

Company on in undertake statements to to does any release. forward-looking all are non-GAAP this comparable all update GAAP not measures table as addition, In statements the are to based forward-looking measures most directly reconciled made call attached discussed financial the during press and of our today,

June Lastly, approaches. as event. follow event our XXth inaugural we as More details please Day our hosting on Investor mark be will will calendars your

like now Im. over to turn would I the Lisa? to call Lisa

Lisa Im

and that call. and proud you, our that Thank pursue to Good Healthcare for work. in for of our us business hard earnings dedication and team entire you Thank ways joining many as Rich. the us you thank we continue gives everyone, afternoon, for efforts each this day I'm every and your grow

integrity as for to us, successes to and our our we is With reflect operating of opportunity opportunity the share as in grow areas company first year us continue of payment take and this Healthcare base. primarily a prime a behind on

you Sim? have results things Simeon and through year. the as XXXX quarter for me over fourth let him turn that, well as our With the of to walk

Simeon Kohl

good milestones. numerous Thanks, year afternoon, Performant a remarkable is everyone. strategic as and XXXX Lisa, achieved

and Inspector of Human space, a Department government General, Within for highly we and Office awardee in a Health contract sole services engagement. full and was audit national the Services consultant provide open the of the via the Performant procurement awarded this claim were coveted and

proprietary and that clinical expertise Our OIG, expected pleased forge and extensive have to I the this policies our allowed program to partnership am to payment multiyear is with operational XXXX share of technology, targets. us to this contribute revenue and vast knowledge

In addition relationship builds relationship Region for the the region existing X Region we long-standing award expanded X with national the Region to HHS recovery as the expansive RAC OIG award, with and contractor our CMS existing with our This of contractor audit contract. for the CMS further XX-state upon X.

a during that X/X important plans. note point It's our approximately to of with to be key administers be health commenced. X It and the was our favor. CMS client the should years, twice with a was six the Payer was Medicare included process term number from to Staying incumbent there incumbent a have via highly are contract protest I'm vendor, multiple our competitive transition are has announce Region noted re-awarded bidders. contract that business, protest contract for that recent were though and RFQ a that confirmed This ultimately also we activities up ruled contractor within Secondary activities commercial that addressed the following to relationship CMS Commercial anchor contract and important focus government a the in withdrawn X.X eligibility we RAC pleased federal most with the in the and national CMS. Center award discussions of proof

commercial similar a in market is leader audits experience contractor CMS' for Performant the example, payer health home equipment, durable For was national significant in audit medical and reviews for space. our hospice becoming

and comfort entrusting sensitive in unique perspectives Performant audits. payers with commercial these independently attested national Our quality provide

offers X Region Our RAC tenure in payers commercial confidence. similar

success with audit Region resulted others. active demonstrated the discussions Our with have and in states commercial X, those contracted provider in are X/X relationships engagements many payers we in and of within nearly strong

the alignment XX-state awarded as and some As contractor the newly are payers seek we same with trusted payers the audit seen the region, knowledgeable within unique we XX have for X, early partner. and hopeful for RAC interest a Region

health engagement a not work Priority deliver effective solution we was year Health, first also bespoke may XXXX more commitment share our end-to-end and make our providing priorities to its most breakthrough affordable, the one-size-fits-all commercial strategy. market. a kind payment engagement where that mission the multi-vendor tailored our of for We are Health integrity for reflects solutions payer payers be in this a where announced Priority care strategic the is needs. We approach innovative to for with

quicker a by we wallet our similar of with and Priority operationalized model evidenced will is other initial to path provide to thesis Our this believe share payers. value Health,

such be data Finding plans. sensitive expertly is and multiple and with a vendor who entrusted can small to for vendors of gaining interest, not for distraction quite be thesis provider mid-market this traction. sourcing can our and be a managing market managed easy and health seems Judging key relations element

and the programs coordination benefit nearly an payment working X,XXX with integrity solve alliance care million X Additionally, strategic improved health of industry partnership we plans, for of to providers health and stakeholders plans. announced unique CAQH. and is health care other CAQH challenges

better drive and benefit support strategic otherwise of to with be help coordination savings CAQH, partnership would with an comprehensive lost. operations team provide as health own will serve of able initiatives, extension their data plans our to that Through be we services

excited are the partnership results that this fruitful we Performant produce alliance. and and about both We it believe will CAQH for

has first positive which have we results. Smart, our plan health fact, ROI delivered already COB into In implemented

and to investments commercial growth is completed no our direction. XXXX. on and existing past pipeline trade we well leaving continue to our XX implementations. attention focus into are Solutions, of care our we decision believe June, implementations, our full ongoing new revenue Healthcare sales Overall, we name, forecast anticipate We This have and our believe doubt XXXX, introduced our toward new that goals and Performant we supported revenue during health strong, by long-term amending cadence growth place and

positioned we that MCOs MSP the revenue and a transition These, along share market new our million we multi-hundred on with a government the and public decision growing believe are our amongst revenue XX, direct caused programs. and in delays XXXX, the has impact our in to could implementing targets, into market contracted commercial revenue considering to until and on emergency business. Today, better a than long-term dollar particularly alongside conservatism, growth. accomplishments have May have We notes both ever to space, CMS contract achieve extend some do XXXX the expanded expanding health

driving to represents XX% offers $X decade. is economy complexity, forecasting in U.S. to are internal that range we the and remain the million invest has bolster companies to $XXX a expected be grow our spending nearly the to within revenues objectives. complex We growth care the $XXX trillion embrace million, tremendous willing efficiencies we XXXX expansion our the opportunities of to current for industry laser-focused and and dynamic in ever-increasing are and initiatives Accordingly, will edge. and that margin to operate continue of Health market. in nearly Coupled on with a system competitive to

COVID, rewon and continued implemented to to past revenue our business, Performant challenges we legacy has strategic disruptive growth year-over-year related or strategic pursued government weathered show commercial recovery every the year, navigated several that divestiture successfully won of myriad initiatives. the contract of this

market toward on we our share achieving are further track remain and EBITDA scale strong business. We goals margins to long-term committed the as

the Rohit? I'll Strategy that, our Rohit financials. for Senior discussion a With to of Finance hand of over and it Ramchandani, Vice President

Rohit Ramchandani

Thanks, Sim.

market in were record operations, results both our and Our $XX efforts the to of company revenues increases quarter included excited we and health sequential and year-over-year remain pleased quarter on on. continuing Total fourth million, trajectory with which a we health of the our million, basis. $XX.X the reflect quarterly in care that successful revenues grow care are

were revenues last Our decline expectations customer quarter, line for but for business. the a quarter, care from $X.X our million outsourced with in this services

be the expectations of care student of will expected process customer programs. by restart Our the federal the future loan guided for market this

we And overall, $XXX,XXX such for reported XXXX, care During fourth $XX,XXX non-health in quarter, we of recovery the also had revenue. revenues.

anticipated, RAC contract to EBITDA spend in adjusted $X.X million, had fourth X the lower-than-expected was award. part CMS to related stronger originally in we Our the Region than quarter due

For the XXXX to we health revenues of overall had $XXX.X revenues. revenues million, a XX% of care of as year care-specific including company, compared first increase health health care-driven $XX.X our million, an

We $XXX,XXX continued results also strategies of The engagements proving health achieved adjusted EBITDA and with plans. growth work of well. implementation out is commercial commercial and our

revenues care government-related care payer quite we million guidance and with for million and line these in to year-over-year with year in in million for pleased commercial to health $XX $X revenues ranges represent $XX The our results, annual had for commercial care health are the which Overall, growth. revenue. XX% $XX million payer million health also were prescribed $XX revenues negative EBITDA. of $X We squarely million

from as claims we've the care, the well of of statements the growth fourth based, from growth strong of auditing compared fourth existing quarter million an in health as nearly work. to XXXX in roughly quarter This implementations $X.X increase was as million, $XX.X Within of which continued were XXXX. known represents both also been revenues XX% claims sharing

the were eligibility a liability in of year, $XX.X we as fourth work those relation had late large of to $XX. increase million revenues services year-over-year our recruitments had an of or our XXXX. the full XX% million, volumes a under decrease Revenue for year-end XXXX to or For of over based XXXX. government from just in We claims compared decline $XX.X of totaled some quarter

CMS MSP vehicles contract and new over we As years were XXXX. contract the to early re-awarded Sim for should six up mentioned, the take CRC in

fairly as As that we which delay also implementation expected we a delayed, reminder, our out revenue would anticipated a quarter, ramp eligibility called was last well. sizable

implementation our we growth we continue. commercial this efforts, eligibility progress strong diversification delay, Despite still in and anticipate which seeing to are

XXXX. full of of reported million XX% the compared $XX.X an or we than as revenues to more eligibility For year, increase

higher Operating were for from every for ongoing million, of XXXX and fourth $XX million, headcount million year. quarter expenses which recovery salaries the were increased by million. inclusive operating is activities compared investment to This $X.X QX market to of $X $XXX.X year Full driven expense into ongoing year last our growth. related was in expenses of

grow Looking implementation alongside strong for And revenues to continue the on XXXX, continue based space our our based over seeing eligibility XX-plus mature execution commercial claims and ahead are past pipeline contract. growth as to trends the of trajectory. to expect These a similar on months. CMS continue expectations sales to eligibility revenues revenue we

we mentioned, also amend certain and have light to As like of cadence of I agreement, X been current filed Form into to macro with the process be initiatives, protest will continuing Sim in Region existing our RAC later XXXX. have would our response this to credit across have environment terms lengthy which also excited for we are a in activities of week. implementation that commenced in we after our contract included that be current mention visibility growth lenders details working to our the our XX-K our and

anticipate million. will be Separately, in of XXXX, we our Sim to tied And revenues the expectations For loans. restart health quarter-over-quarter. we anticipate process on will I customer as to precise $XXX payments for of $XXX revenues the these mentioned decline mentioned, range to as our earlier, revenues be million student care that market

year largely to specifically $X and overall which drive In an our million implementations and $X our inclusive operational reflects be will EBITDA, into efficiencies. This million, full initiatives of $XX anticipate range and spend of efficiencies. in XXXX terms $XX million of scale operational investment million. revenue XXXX That beyond, of is to adjusted investment the ongoing of improvement we program and EBITDA to support expected growth

have eye excited are growing our also of the achieving in XXs. to goal the EBITDA We business, continue on margins but the

seeing markets expansion various as of it improvements supported by operational in XXs with margins from management's we margins. anticipate to Aside estimated expansion. a This as the scale, of these stands we today gross continue is natural for room our

XXXX Performant. frame as lessening operationalize We continue contracts all And be time to to of new positive goals, long-term prospects and at which notably the year are we should the initiatives on it takes results key for some excited long-term implementations, on for impact Ultimately, execution our the the constituents. remain the the wins our we another encouraged on time to revenues. believe a of of strong work path Sim mentioned, we deliver toward

questions. With that, for operator, line the up you would open please

Operator

you. Thank

Craig-Hallum. We Please session. question-and-answer [Operator from your question question. Instructions] with George first Our will now be with a Sutton conducting is proceed

George Sutton

First, Region congratulations on the X. finalization of RAC

you suggests date are just And out contract 'XX? rolled I March that how work just start there's over Our for a to wanted confirm XX, that out can lay of you that.

Simeon Kohl

yes. George,

commenced, activities start did we I remarks. -- starting as prepared said are we So, in my

shared will operationalizing the activities quite I've these And on previously regards so, engaging of CMS all programs. that be we now with with to regularly

decent And data terms of concepts. to we that amount remapping so, the systems, in the various place getting the of a setting there's have work of in some over up us, inputs

I think lift most outreach. big what provider is we specifically refer the to as

theme our And win with providers. scores -- has historically so, our Performant been quality

And communicate CMS time make lot so, ramp that the of is we expecting, spend of sure sure et they're appropriately making that a providers, those cetera. with we aware

we're start going time, for the audits position think down initiatives next I towards I'd QX, we I early few the program. starting some to So, be minimally. think in late a And with say, for might to our months QX, heads those actually be we'll then, moving see

and and just of place. various aligned contracts a right sure good coordination of with get in time get to that make all So, amount we systems these everything our the our providers types of on

George Sutton

were, I you you unique about that Could mean there in heard might terms see? that correctly, RAC XX the in further Region if mentioned opportunities you what You by X. you talk payers of

Simeon Kohl

course. of Yes,

And of these of various level about when so their call it we the Medicaid offers CMS all think and CMS They control terms state trillion amount Advantage the plans, said to XX% our so pillar plans, -- in the Medicare guidance spend of as programs. we've much an pillar really MCO. fee-for-service you look, them contribution, strategy. is enormous that $X along,

with eligibility think which offerings, our with terms aligns CMS CMS. our about so, offering, of various to our And as have program alignment we MSP we our in

our have to our audit pursuits. commercial We audit, which aligns RAC

And commercial terms investments talk national plans, these programs us, the support as and that in as when determinant, use our share teams with differentiator, we've go to of so we that sales for with our key a CMS. made key plans out all a the to we

with resonates really clearly Advantage are It a resonates. they in really or where Medicare that running plan. And MCO they're partnership CMS, an

think contractor a really in of with suppliers And of lot lockstep you super benefit the it and a with providers that's CMS from various a about is standpoint, a regions. within important. having So integrity around that dynamics from regional if is particular the something jurisdiction there's then

in opportunity conversations start And XX-plus super folks that our so, number and we've as showcased evidenced are the good in same that's Region sales jurisdiction X region, we're commercial excited that and Region for of in for same X a to demonstrated, plans plans the for translated those jurisdiction. how to aligned that with

George Sutton

Finally, in about referring believe Is you if for pipeline release, cadence you're us more 'XX give a in you call, you said the I implementations. a XXXX. to? picture just Could I were there? 'XX; versus understand the little referring talked on your a that just the you XXXX press said what -- release, you similar that supports to

Simeon Kohl

Sure. Yes.

I So in I think, 'XX. my prepared 'XX, remarks, the discussed in release,

the to implementations. 'XX commercial commercial, so is 'XX referring including the probably 'XX So the HHS, is

we I think continue before, we And of terms CMS. largely so just strategy and our consistent in pillar we've with shared discussed as with what

a strong We're those pipeline opportunities. very converting have translate very, implementations. which opportunities, into to continue additional of We

really line we sight the so we point into George, is And in see have here, similar XXXX experienced in for that that strong XXXX cadence of the a plans. commercial we

Operator

you. Thank

with question. next question Jacob Please proceed Stephan Lake Our from your Markets. Street with is Capital

Jacob Stephan

could know out had alliance, maybe RAC talk a that I CAQH you how you congrats kind implementations? breakdown the program, on of implemented us Region just the Maybe to give wanted over the to X. echo the of the... first program I you lays of kind but said

Simeon Kohl

Yes.

CAQH, various data CAQH look, from the of a amount plans. a shared, as reminder, so yes, aggregates So coverage I as tremendous

take CAQH with with the we is that out communicating They're engaging data. their plans, there And have we with plans. partnership ultimately, so

similar they here their services, opportunity it We with data. supplement make our CAQH was And available. we have we to for their but data what felt data, in the come with

supplement But benefits. matter subject our of we expertise services, most importantly, it coordination with around our

these does investment on plans that more product. what much, their to it CAQH a allows of the ROI get material is so And much really

work And the together. terms what proposition the I thesis the has in first end together, client organizations is of as value plan, we've how our so mentioned, come implemented our for

you And of can the and of together, I a timing I do we working can't next is having and I teams as CAQH that in will be year various opportunities tell in assure are specifics opportunity number progresses. we terms ones, share what you that while the have more Performant, the the and pipeline, on expect to an

Jacob Stephan

commercial right, hear revenue it. Did I year? growth Okay. of Got XX% that payers this

Rohit Ramchandani

Yes, you hear did that right.

Jacob Stephan

Okay. you into kind we kind us see what -- we Could a rate growth on great. XXXX? could of That's of sense what give

Rohit Ramchandani

Yes.

So, consideration more something but sharing growth, think we've growth guidance, all be you'll line as almost probably also rate we commercial of more where government our streams, commercially mature in as been I are And see our stronger. strategies. revenue much in for and those see you'll to the XXXX muted programs similar going in entirely have consideration look with our focused the been at of is implementations

Operator

Thank you. the I time. to There over Simeon to at any are no back hand would this further like closing Kohl comments. floor for questions

Simeon Kohl

you, Thank operator.

thank our in we you to that further expedite scale can shareholders our our strong XXXX laser have continued both support, a implementations. I accomplishments want efforts our focused our for the to in continued is terms driving this see year alongside business additional chance and a for growth. We at of We person to you and growth As hope and strategic remain Performant, see, year. their

today. And again, thanks for spending some us time with

Operator

This concludes today's conference.

lines your time. you for Thank this your disconnect at participation. may You

Performant Healthcare (PHLT) 14 Mar 232022 Q4 Earnings call transcript