- Q3 2022 Financial and Operational Highlights:
- Total net revenue was $16.6 million
- Gross profit was $9.7 million, or 58% of total revenue
- The company’s Eviti Connect platform earned full URAC
accreditation for Health Utilization Management, through 2025
- Maryland Physicians Care signed a two-year renewal agreement
for Eviti Connect for Autoimmune Diseases
- Post quarter end:
- Secured 3-year contract extension with large national
commercial insurer that provides coverage to more than two million
Medicaid members across multiple states. Expanded contract now
includes formulary redirection
NantHealth, Inc. (NASDAQ-GS: NH), a leading provider of
enterprise solutions that help businesses transform complex data
into actionable insights, today reported financial results for its
third quarter ended September 30, 2022.
“Net revenue was $16.6 million for the third quarter of 2022,
representing the fourth consecutive quarter of top-line growth,”
said Ron Louks, Chief Operating Officer, NantHealth. “Moreover, our
gross profit of $9.7 million and gross margin of 58 percent for the
quarter were the highest since the fourth quarter of 2020.
“We expect to continue the positive momentum generated over the
last several quarters. Recently, we signed a new customer, a
leading provider of technology-enabled payment integrity,
eligibility and related analytics services, to a four-year
agreement for our NantHealth solutions. Importantly, we are also
benefiting from a broadened product portfolio, with existing
customers appreciating the value of our multiple solutions and
services.”
Software and Services Q3 Highlights:
- Clinical Decision Support and Pre-Authorization (Eviti®):
- In October, secured a three-year contract extension with a
large national commercial insurer providing coverage to over two
million of their Medicaid members across multiple states. This
client has opted to continue bringing unparalleled value to their
operations by using Eviti Connect®, and has used this renewal
period to increase their solution set to include formulary
redirection, further enabling value-based care
- Announced Eviti Connect platform once again earned full URAC
accreditation for Health Utilization Management through 2025. This
designation demonstrates the highest level of commitment to quality
healthcare
- Maryland Physicians Care signed a two-year renewal agreement,
ensuring it continues to receive a unique and tailored solution for
its members with autoimmune diseases
- Added new capability to Eviti Connect, which allows payer
clients to comply seamlessly with state-mandated preferred drug
lists, eliminating the need for manual reviews and secondary
processing when those preferred drugs are prescribed
- Payer Engagement (NaviNet®):
- Secured an agreement with an existing customer, one of
America’s leading health insurance organizations, which added
750,000 new members to NaviNet
- Went live with NaviNet Open Prior Authorization for a key
customer. This capability is expected to streamline workflows and
data collection to enable automated decisions and reduced manual
processes. The initial deployment has been completed with further
roll outs planned in Q4
- Added new platform functionality to speed up the prior
authorization process, enabling more timely patient care. Updates
include the ability for health plans to add direct-to-provider
information within the request
- Network Monitoring and Management (The OpenNMS Group, Inc.):
- Completed shipment of small form factor OpenNMS mini appliances
for user testing. Highly optimized for secure, scalable, and
reliable distributed monitoring via the OpenNMS Minion component,
these hardware appliances provide visibility into remote or private
areas of enterprise networks
- Made significant progress toward the development of a
capability that will let customers monitor infrastructures built
using VMware SD-WAN. This initiative marks a significant milestone
in the OpenNMS Managed Service Provider (MSP) support program
- Delivered several service engagements positioning OpenNMS as
strategically significant within the clients’ IT organizations.
Clients included a large national retail chain, an entertainment
streaming service, and a top wireless communication provider
Third quarter Financial Results: 2022 vs 2021
For the 2022 third quarter:
- Total net revenue was $16.6 million compared with $14.4
million.
- Gross profit was $9.7 million, or 58% of total net revenue,
compared with $7.5 million, or 52% of total net revenue.
- Selling, general and administrative (SG&A) expenses
increased to $16.6 million from $13.0 million.
- Research and development (R&D) expenses increased to $6.3
million from $4.6 million.
- Net loss attributable to NantHealth was $13.7 million, or $0.12
per share, compared with $10.8 million, or $0.09 per share.
- On a non-GAAP basis, net loss from continuing operations was
$14.0 million, or $0.12 per share, compared with $11.5 million, or
$0.10 per share.
- At September 30, 2022, cash and cash equivalents totaled $0.6
million.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference call at 1:30
p.m. PT (4:30 p.m. ET) to review its results of operations for the
third quarter ended September 30, 2022. The conference call will be
available to interested parties by dialing 800-942-2493 from the
U.S. or Canada, or 212-231-2931 from international locations. The
call will be broadcast via the Internet at www.nanthealth.com.
Listeners are encouraged to visit the website at least 10 minutes
prior to the start of the scheduled presentation to register,
download and install any necessary audio software. A playback of
the call will be archived and accessible on the same website for at
least three months.
Discussion during the conference call may include
forward-looking statements regarding topics such as the company’s
financial status and performance, regulatory and operational
developments, and other comments the company may make about its
future plans or prospects in response to questions from
participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, a member of the NantWorks ecosystem of companies,
provides enterprise solutions that help businesses transform
complex data into actionable insights. By offering efficient ways
to move, interpret and visualize complex and highly sensitive
information, NantHealth enables customers in healthcare, life
sciences, logistics, telecommunications and other industries to
automate, understand and act on data while keeping it secure and
scalable. NantHealth’s product portfolio comprises the latest
technology in payer/provider collaboration platforms for real-time
coverage decision support (Eviti and NaviNet), and data solutions
that provide multi-data analysis, reporting and professional
services offerings (Quadris). The OpenNMS Group, Inc., a NantHealth
subsidiary, helps businesses monitor and manage network health and
performance. For more information, visit nanthealth.com, follow us
on Twitter, Facebook, LinkedIn and YouTube and subscribe to our
blog.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; our ability
to grow the market for our software and data solutions;
successfully enhancing our software and data solutions to achieve
market acceptance and keep pace with technological developments;
customer concentration; competition; security breaches; bandwidth
limitations; our use and distribution of open source software; our
ability to obtain necessary regulatory approvals, certifications
and licenses; dependence upon senior management; the need to comply
with and meet applicable laws and regulations; unexpected adverse
events; and anticipated cost savings. We undertake no obligation to
update any forward-looking statement in light of new information or
future events, except as otherwise required by law. Forward-looking
statements involve inherent risks and uncertainties, most of which
are difficult to predict and are generally beyond our control.
Actual results or outcomes may differ materially from those implied
by the forward-looking statements as a result of the impact of a
number of factors, many of which are discussed in more detail in
our reports filed with the Securities and Exchange Commission.
FINANCIAL TABLES FOLLOW
NantHealth, Inc. Consolidated
Balance Sheets (Dollars in thousands)
September 30,
2022
December 31,
2021
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
635
$
29,084
Accounts receivable, net
5,299
5,810
Related party receivables,
net
476
506
Prepaid expenses and other
current assets
5,738
4,010
Total current assets
12,148
39,410
Property, plant, and equipment, net
11,754
12,366
Goodwill
98,333
98,333
Intangible assets, net
32,342
39,039
Related party receivable, net of
current
937
1,012
Operating lease right-of-use assets
4,604
6,048
Other assets
794
1,620
Total assets
$
160,912
$
197,828
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
6,216
$
3,204
Accrued and other current
liabilities
18,771
16,358
Deferred revenue
2,663
2,440
Related party payables, net
4,825
5,161
Notes payable
1,112
782
Total current liabilities
33,587
27,945
Deferred revenue, net of current
1,397
2,024
Related party liabilities
43,922
38,278
Related party promissory note
112,666
112,666
Related party convertible note, net
62,318
62,268
Convertible notes, net
74,663
74,603
Deferred income taxes, net
1,561
1,775
Operating lease liabilities
4,554
6,248
Other liabilities
27,406
34,013
Total liabilities
362,074
359,820
Stockholders' deficit
Common stock, $0.0001 par value
per share, 750,000,000 shares authorized; 115,550,244 and
115,505,244 shares issued and outstanding at September 30, 2022 and
December 31, 2021, respectively
12
12
Additional paid-in capital
894,750
891,105
Accumulated deficit
(1,095,016
)
(1,052,897
)
Accumulated other comprehensive
loss
(908
)
(212
)
Total stockholders' deficit
$
(201,162
)
$
(161,992
)
Total liabilities and
stockholders' deficit
$
160,912
$
197,828
NantHealth, Inc. Consolidated
Statements of Operations (Dollars in thousands, except per
share amounts) (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue
Software-as-a-service
related
$
16,161
$
13,879
$
47,793
$
45,140
Maintenance
398
406
1,290
1,201
Professional services
73
57
419
257
Total software-related
revenue
16,632
14,342
49,502
46,598
Other
1
17
2
20
Total net revenue
16,633
14,359
49,504
46,618
Cost of Revenue
Software-as-a-service
related
5,172
5,244
16,356
16,223
Maintenance
509
298
1,347
775
Professional services
—
6
9
13
Amortization of developed
technologies
1,247
1,247
3,741
3,741
Total software-related cost of
revenue
6,928
6,795
21,453
20,752
Other
—
34
1
127
Total cost of revenue
6,928
6,829
21,454
20,879
Gross Profit
9,705
7,530
28,050
25,739
Operating Expenses
Selling, general and
administrative
16,580
12,969
45,577
37,309
Research and development
6,299
4,648
17,875
14,510
Amortization of
acquisition-related assets
985
985
2,956
2,956
Total operating expenses
23,864
18,602
66,408
54,775
Gain (loss) from operations
(14,159
)
(11,072
)
(38,358
)
(29,036
)
Interest income (expense),
net
(3,511
)
(3,572
)
(10,431
)
(10,943
)
Other income (expense), net
4,003
3,759
6,651
(1,862
)
Income (loss) from continuing
operations before income taxes
(13,667
)
(10,885
)
(42,138
)
(41,841
)
Provision for (benefit from) income
taxes
(10
)
23
(19
)
21
Net income (loss) from
continuing operations
(13,657
)
(10,908
)
(42,119
)
(41,862
)
Income (loss) from discontinued
operations, net of tax attributable to NantHealth
—
—
—
24
Net income (loss)
(13,657
)
(10,908
)
(42,119
)
(41,838
)
Net income (loss) attributable
to noncontrolling interests
—
(65
)
—
(284
)
Net income (loss) attributable
to NantHealth
$
(13,657
)
$
(10,843
)
$
(42,119
)
$
(41,554
)
Basic and diluted net loss per share
attributable to NantHealth:
Total net income (loss) per
share - common stock
$
(0.12
)
$
(0.09
)
$
(0.36
)
$
(0.37
)
Weighted average shares
outstanding
Basic and diluted - common
stock
115,550,244
115,243,671
115,540,681
113,706,124
NantHealth, Inc. Non-GAAP Net
Loss from Continuing Operations Attributable to NantHealth and
Non-GAAP Net Loss Per Share from Continuing Operations Attributable
to NantHealth (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net income (loss) from continuing
operations attributable to NantHealth
$
(13,657
)
$
(10,843
)
$
(42,119
)
$
(41,578
)
Adjustments to GAAP net income (loss) from
continuing operations attributable to NantHealth:
Loss on Exchange and Prepayment
of 2016 Notes
—
—
—
742
Stock-based compensation
expense from continuing operations
889
799
3,542
2,533
Change in fair value of
derivatives liability
—
—
—
(4
)
Change in fair value of
Bookings Commitment
(3,656
)
(3,670
)
(6,156
)
1,133
Impairment of ROU asset
—
—
208
—
Noncash interest expense
related to convertible notes
37
58
110
568
Intangible amortization from
continuing operations
2,232
2,222
6,697
6,646
Cyber incident estimated
liability
220
—
220
—
Tax provision (benefit)
resulting from certain noncash tax items
(29
)
(17
)
(73
)
(105
)
Total adjustments to GAAP net income
(loss) from continuing operations attributable to NantHealth
(307
)
(608
)
4,548
11,513
Net loss from continuing operations
attributable to NantHealth - Non-GAAP
$
(13,964
)
$
(11,451
)
$
(37,571
)
$
(30,065
)
Weighted average basis common shares
outstanding
115,550,244
115,243,671
115,540,681
113,706,124
Net income (loss) per common share from
continuing operations attributable to NantHealth - Non-GAAP
$
(0.12
)
$
(0.10
)
$
(0.33
)
$
(0.26
)
Reconciliation of Net Loss per
Common Share from Continuing Operations Attributable to NantHealth
to Net Loss per Common Share from Continuing Operations
Attributable to NantHealth - Non-GAAP (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net income (loss) per common share from
continuing operations attributable to NantHealth
$
(0.12
)
$
(0.09
)
$
(0.36
)
$
(0.37
)
Adjustments to GAAP net income (loss) per
common share from continuing operations attributable to
NantHealth:
Loss on Exchange and Prepayment
of 2016 Notes
—
—
—
0.01
Stock-based compensation
expense from continuing operations
0.01
0.01
0.03
0.03
Change in fair value of
derivatives liability
—
—
—
—
Change in fair value of
Bookings Commitment
(0.03
)
(0.04
)
(0.06
)
0.01
Impairment of ROU asset
—
—
—
—
Noncash interest expense
related to convertible notes
—
—
—
—
Intangible amortization from
continuing operations
0.02
0.02
0.06
0.06
Cyber incident estimated
liability
—
—
—
—
Tax provision (benefit)
resulting from certain noncash tax items
—
—
—
—
Total adjustments to GAAP net income
(loss) per common share from continuing operations attributable to
NantHealth
—
(0.01
)
0.03
0.11
Net income (loss) per common share from
continuing operations attributable to NantHealth - Non-GAAP
$
(0.12
)
$
(0.10
)
$
(0.33
)
$
(0.26
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221103006208/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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