Earnings call transcript Q1 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to Performant Financial First Quarter 2023 Earnings Conference Call. [Operator Instructions] This call is being recorded on Tuesday, May 9, 2023.

I would now like to turn the conference over to Richard Zubek, Vice President, Investor Relations. Thank you. Richard, you may begin.

Richard Zubek

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

If Rohit website. copy Relations you Chair; Simeon be a on Executive Board Financial have Investor Officer; Officer. Chief the and Lisa is Im, portion Chief today's On available our Kohl, call Ramchandani, will of not,

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

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

circumstances made does revised addition, forward-looking update expectations. statements to In today, new and forward-looking as not statements or undertake the company are any all on of based

during are to measures to in Also, reconciled most GAAP financial attached the directly table all non-GAAP this release. call comparable measures press disclosed our the

that inaugural York on will to additional Lastly, company be interest the information like contact or Please City. XX its hosting if June via have me formally you'd I'd attending. e-mail like event Day in announce in Investor New

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

Lisa Im

Rich. our thank us and Thank earnings afternoon, you joining call. for Good you, everyone, for

has your in Performant care changes you dedication us make health today, Thank it We many the are announcing to for several exciting. our the even future pursue that work. grow business I'm that entire allowed and which every thought team as and all day of this more and effort of proud ways impossible. hard gives each

But far given Healthcare that it company health I of a company becoming fully our clear to stepping in Kohl, the a payment integrity I very ahead that health thus as space. growth he to was anyone first joining our Simeon and achieved has to From surprise and in down with Performant me no that As care time as he reins growth of Sim's revenues health me transition March Simeon, is Performant drove of met promoted in time I to of care CEO Simeon team given dedication release, his a care to the for to bright Chair. our to continue to read become in am it health for served the execute health will since was president right focus who This business led company. complete, have year. and the over operations the hand Simeon should of you already Board intend visionary and the is Performant. notably the of care to his organic was our the press the him. pure-play as Solutions. future exciting vision continue head care significant the last growth and the to come our the as

to Performant we that, on away markets. care Simeon promotions. and want recovery over to actions both past pleased the into the Senior to new the Rohit from turn Finance our the X recently promotion navigated that announce Performant Ramchandani investing CEO, years. successfully Financial for X health legacy most I with also transform are Vice Officer. Rohit served We continue to and Strategy and With been Rohit Chief call the to has congratulate and business as its their role, of Sim. over President years In of for Rohit

Simeon Kohl

I achieve to organization to take to professionals. we our good confident afternoon, honored and delivering heights. Performant and Lisa, our am clarity of our to this relentless commitment that vision the With talented Thanks, dedicated for amazing truly can of lead am and new and I value everyone. clients, opportunity goals a

been have through XXXX time XXXX, I the our success. joined long-term Performant in in From I first fully our invested of quarter

As pipeline on key sales increased continues a And new pillar I ability our to our opportunities of previously mid-market services our payers. success. remains our result expand of focus of clients to existing grow within shared, as a

achieving key timely conversion into revenue-producing to the new our objectives these growth engagement. of opportunities is However,

During successfully XX first this all own implementations was year impressive completing new quarter for half And implementations quarter an as commercial the we many right. in its which as than during delivered of more new on context, XXXX, in XXXX, did objective by implementations. the XX new of of is we

our still for in was the implementation there quarter, improvement. cadence room first As as is impressive

demonstrated yield investments, We XXXX. are of these making during investments to with our year and the commitment expect we into this coupled dividends our into team workflows, platforms and and

regards the and month, ended this were officially emergency, health public last the national health end that public we we emergency later Biden week. encouraged will With to the emergency expect President

end administrative number of of expected the is it industry PHE, a Following challenges. health the care could the that face

however, clients, and challenges Our indicate be that these could temporary. minimal

our step normalcy and during final transition clients the We COVID-XX. period a the a of be to partner return toward will this hopefully, era continue to to from strong

flow beyond dip. potential returned the of a $X.X the the factors, is revenue million that a current in demand reporting. quarter revenues to worth our CMS XXXX over to roughly reporting the the levels, within can compared which of by that primarily lower inventory quarter there of Our due were our are this expected contract however, This is anticipate myriad to driven to business associated industry-wide beyond Demand we Section MSP is the It according of ebb under have XXXX and we to a noting, have first could control. volume remainder QX what many recoup with and volumes demand of first XXX anticipated. decline in of already year

growth, implemented implementation. new with current trend or Our expectation achieve year-over-year for programs anticipate as a of to our combined continued claims-based future business double-digit revenue and audit mature, previously the ramping we continuing contracts

that of results completed we drive revenue activities certain implementations We speaking are report the X. are new to And growth, during Region RAC early within future for and QX, our and business. implementation on also seeing we efficiency scale initiatives our increase to happy greater claims-based

the Our of speedy teams CMS' quarter. for have of amazing we a that demonstrating the implementation operations RAC region program, tandem CMS marked large and program. any this Performant to commencement audit anticipate capability some the facilitate effort, other knowledge in believe transition this made the has milestone progress with We and RAC dedicated or similarly

of business, of during Within the growth be our and the commercial implementations will last we mentioned, renewed in XXXX supporting progress norm. and In back remainder XXXX fully inventory contract demand the year QX growth is eligibility government work, we continue MSP eligibility is with particular, trending our available make expectations to the the CMS for of operational. now Within QX beyond. key completed to initiatives. as I the of our And

dip by down remain on the inventory, quarter XXXX. Though weighed in bullish available first we was MSP a

Both or, Our progressing times expected. sales robust our of of national claims-based frankly, exceeding as greater mid-market well eligibility existing expansion pipeline scale opportunities initiatives is rollout businesses improve and than our programs, of the strong promise. as at new quite are implementation showing the milestones are program at and cadence is our to new in and

Rohit over congratulate to chapter our hand I partner the of as partnership call I to trusted of we a wanted CFO. has moment Performant over our next him the Healthcare growth promotion of to to quarter, Before during care as Rohit continue a the transformation. to company go progress and results his take Solutions. health on I'm into to years served excited the

With Rohit, over the Chief that, Officer, to of Financial it a I'll financials. hand our discussion for Rohit?

Rohit Ramchandani

far Performant's to constituents the CFO. as have have serving view and really toward to the progress. our ongoing Thanks, company It's of all continue Sim. have here to and many and our excited contributing part journey strategic I'm inside thus been continue I'm we and financial to momentum an a made, the remarkable

quarter's With the that, results. let's dive into

excited Our first reflect with results we care in of quarter Total remain operations, efforts included million, $XX.X revenues care our company pleased our the continued which our quarter to $XX.X trajectory. market and million. revenues XXXX were grow health health and

during accounted anticipate as with student outsourced from programs. quarter to of this we care customer customer quarter, expectations a the line for business of for services $X.X revenues, decline shrinking short market process federal million last continue our restart but the care in Our loan business

revenues driven specifically key a our noted, by growth MSP eligibility programs, work. to see our clients, in care primarily our had we government first channel. CMS quarter As our downward a continue But strong commercial the within trend, health Sim performance

to As a of our quarter result revenues from million the declines, were quarter XXXX a compared the decrease government XXXX. of or the for over volume of $XX reported the first roughly when eligibility XX% first million of just $XX.X in services

our of of seen to growth programs I'd of we've and mentioned, volumes recoup consistent missed note historical the revenues the to portion implementations. the the year. Sim potential a efforts anticipate like the currently are also return the with across that the rest remainder of current displaying As eligibility

likely meet XXXX. annual first expect the revenues we Overall, and claims the business, claims-based exceed to revenues those eligibility XXXX of our Within known from auditing, as also in our services of were anticipate continue. the We $X.X to XX% of this million the in quarter quarter to million, trend compared roughly increase of was XXXX which $XX.X an XXXX. nearly first growth

million, in salaries hiring in operating of last to by will other increases equates pleased million the experiencing and continue first lower headcount in to anticipate we Operating experienced the as currently continue quarter not to by on upcoming are in drive that We and quarter that we expenses were $X implementations primarily partially $XX.X approximately year. last headwinds and expenses. we with was expenses. higher first which early to growth expenses year. salaries compared increases quarters, Moving in the headcount driven and are new This the offset the operating

and reflective improvements activities. margin well like efficiencies. full million the our Sim adjusted and the for our would range about in current of our $XXX $XXX to $X result to revenues excited for we're of and for in of be As in expansion guidance operational million EBITDA million, various our $X reaffirm the is XXXX as be ongoing investment the to million potential health as to growth of range care XXXX as investment a which cadence to initiatives our implementation I mentioned, year

to growing excited targets business are on and both We eye expansion revenue our the our continue the EBITDA of have margins. and

the by to of around operating blend various the of expansion seeing improvements margins operational scale, leverage. room [$XX estimated continue with from gross of a markets natural as it today we anticipate million] supported our for our stands Aside we margins This is management's expansion. as through

what encouraged XXXX. in by we are thus are seeing far We

we as are Our and please questions? strategy a future. you will toward larger for open stronger continue Operator, steady, line delivering results up long-term the excited remains to march and we

Operator

Sutton Your line from Instructions] question the from first of [Operator Craig-Hallum. George comes

James Rush

for promotions. Hey, the Simeon on Congratulations and Rohit. This is George. James on

the off, stood first commercial really XX So implementations out.

a X I were basically cadence as think similar for saw about last your year, means quarter. you expectations which

there? audit sort strength what about the and the expect And then throughout of sort eligibility? cadence you of remainder could So mix of drove year? about the between you Can the that the talk talk you

Rohit Ramchandani

Thank between you. because healthy Sim, Yes. the of see I pretty James, sort past latter a And across we've think we're as them, skewing and I more XX. of it's if year, this comment to is audit in actually pipeline of eligibility. claims adding can the think into little And auditing pleased then driving Rohit. to implementations you the our want we in towards But and had terms 'XX. shared split hit I the on question your

anticipate similar this see healthy you've should cadence, that do split So last a continue. of in think return happy better, that to we strong this year. year more or as seen, to And I to

Simeon Kohl

it's James, here. And Simeon Yes.

terms look, the also those and pipeline been converting sales we've what it's to of efforts deals. of the in talking So of healthy a think team reflection terms in a has sales I signed about

contracted, in to try then contracting once we've revenue. can what now it So you've them we to and push of them as contracted And a the how right remarks have really from the is to around to to they're focus pipeline opportunities, the as internal some discussed quickly we initiative move we to through on opportunities. heard at prepared really trying around look and get have an we

that, time of data frame have on depending to around the we getting the ramped in-house, And trying eligibility, service, expedite so a up. in doing just focus audits getting or

there And some is reflection so of process. we've of kind in that onboard a expediting made that number larger pure a ultimately, just progress seeing

James Rush

particularly of the and payers pre-authorizations. moves a CMS that audit assume sort side. be made of for if in on to reduce kind just And then positive would some curious would business, I your the of have that's up come Great. larger conversations. I'm

Simeon Kohl

we payers, depending it's a perspective, out, something might the Yes, I typically an policy pre-auth audit as So that various is of call imagine. think look you can't good anything from right? historically, that's on at

review. certainly, look claims again, removing that us and various opportunity payer-to-payer be to no would But designated it policies. more pre-authorization that otherwise And give as depends does so at a

James Rush

of back. Great. Last success far seen me. able any Are through you And CAQH? for so with you've will that hop relationship speak your one to sort I to

Simeon Kohl

appreciate we it. No, Yes.

We CAQH as their think opportunities, in of are leveraging and in we through both together organizations, on anticipated, asset, data of the terms community their -- is have. the capabilities skills and terms payer both value we bring asset, that recognizing Performant, the that I

we And So of the we bit still in expectations exceeding underway. few the operational in innings a are we're the meeting as seeing little or early opportunities of here, with components clients in though that some just increased a we have anticipated. pipeline but terms

Operator

Stephan from Street Capital comes question Jacob Lake from next of Markets. the line Your

Jacob Stephan

as extend the it revenue? first, commercial from payers? like quarter, update my congratulations I wondering you had last in just just talk I'd I about But payer XX%. you focusing broken on commercial if revenue out, guess, Could growing well. could us to you guys know here.

Rohit Ramchandani

and year. on thanks. we've an endeavor annual basis, so Jacob, this broken so yes, to we last do And again will quarter, that

the between basis, dig to is we'll particularly, guide up split we way meaningful on annual to something annual we to becoming ends an that cadencing number believe the view. an different think evaluate I and continue it a if more into quarters,

drive our stem a the are is rate, commercial shared to now, very growth the of last of For lot should digits, sort year share a continuing still think the we'd double I and current can of commercial what expectations growth strong I showing quarter side. programs from

Jacob Stephan

Have and those ending out become how Maybe kind heard bleed any That's over guess, guys here. years? -- may, emergency of way coming any just maybe may Okay. claims available helpful. quantify more the many focusing how health on public to the kind you I of

Simeon Kohl

Yes.

to no. the So answer answer is question specifically, the

there And been context, One I right? to able is X there look PHE system is expired, that. tailwinds because with right? we're into moved associated any quantify the not get back, haven't as those that have components, diagnosis. We COVID think a claims historical talking So a expires, of long some untouchable were of cetera? back et once as claims was the do in statute And limitations

finally those We're get good just with try CMS understand looking end appetite real upside. greater trying the of And and in might at the going payers clarity various around be. we like working expired. claims what terms so that any that once this are what you been PHE But have the forward we've the with the policies to to to to share of this to indication what week is for look don't are and to

kind also access that put sideline I of because "turned had can is claims COVID. that because just claims they also in in tell our there though otherwise been with correlation off" the were system that beyond you of the it's would historical COVID of terms that some our them. have be But to to

think that we look concepts could DME, have as So they what ultimately tied our diagnosis. to if durable and about are a medical oxygen and such at, things equipment, COVID you

our had also of inventory. we many particular And restrict concepts, which those of payers some impacted

So it's a two-prong.

of But an to possibility understanding component is that more we've having quicker or us saying, than see only access bullish I'm We fact of concepts inventory. helpful business. we'll those are we'll certainly look, this get start historical as on are our PHE going learning turn been a for on more. behind the what overall,

and they're think I to going work don't to that the business. to these have policies kind impact apply timing we're payer and what it's for going with and then how to communities important out is overnight, just understand the of point things through But to happen our

Operator

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

Simeon Kohl

all investors. the you you and today, the you. for Thank thank to I we on members, We of all we team look appreciate forward appreciate of us our support the conference quarter's joining call. next of hard Performant rejoining efforts and

Operator

call this Ladies disconnect your lovely lines. today. ask please presenters. gentlemen, you We a participating Thank and that conference your concludes Thank much, you day. thank you for you, sir. and so for Have

Performant Healthcare (PHLT) 9 May 232023 Q1 Earnings call transcript