Babylon Holdings Limited (NYSE: BBLN) (“Babylon” or the
“Company”) today confirmed that its revenue for the year ended
December 31, 2022 is expected to exceed $1.05 billion on both a
U.S. GAAP and International Financial Reporting Standards (IFRS)
basis, including revenue from the IPA business in California.
Babylon also expects to beat its previous IFRS Adjusted EBITDA
guidance of $(270) million or less for 2022. These financial
results are preliminary, unaudited and subject to change in
connection with the completion of Babylon’s financial closing
process and the preparation of its audited financial statements for
2022.
In July 2022, Babylon announced cost reductions expected to
deliver up to $100 million in yearly savings. As a result of
additional cost saving measures, Babylon expects to deliver an
additional 25% in cost reductions on an annualized basis. Babylon
continues to expect the proceeds from the planned sale of its IPA
business in California to fund the Company to profitability.
Babylon’s previously announced revenue guidance was provided
under IFRS, and was between $1.05 to $1.1 billion. Babylon has
transitioned to U.S. domestic reporting company status as of
January 1, 2023. Accordingly, Babylon will report its full Q4 and
2022 year-end results and provide future guidance under U.S.
GAAP.
In addition, Babylon announced that Ali Parsa, Founder and Chief
Executive Officer, and David Humphreys, Chief Financial Officer,
will participate in the 41st Annual J.P. Morgan Healthcare
Conference, including a company presentation at 10:30 a.m. Pacific
Time on Thursday, January 12, 2023. The live audio webcast of the
presentation will be available on the “Events” page of the
Investors section of Babylon’s website. The replay will remain
available for 30 days following the event. For more information,
please visit https://ir.babylonhealth.com/.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure under U.S. GAAP and IFRS.
IFRS Adjusted EBITDA, which Babylon has reported in prior periods,
is defined as profit (loss) for the period, adjusted for finance
costs and income, depreciation and amortization, tax provision or
benefit, impairment expenses, change in fair value of warrant
liabilities, loss on settlement of warrants, share-based
compensation, foreign exchange gain or loss, restructuring and
other one-time benefit arrangements and gain or loss on sale of
subsidiaries.
Babylon is unable to reconcile projected Adjusted EBITDA loss
for 2022 to the most directly comparable GAAP measure, as we have
not yet completed our financial closing process and are not able to
forecast Loss for the period on a forward-looking basis without
unreasonable efforts due to the high variability and difficulty in
predicting certain items that affect Loss for the period,
including, but not limited to, changes in fair value of warrant
liabilities, impairment expense, share-based compensation, foreign
exchange gains or losses and gains and losses on sale of
subsidiaries. Adjusted EBITDA should not be used to predict Loss
for the period as the difference between the two measures is
variable and may be significant.
We believe that Adjusted EBITDA is a useful metric for investors
to understand and evaluate our operating results and ongoing
profitability because it permits investors to evaluate our
recurring profitability from our ongoing operating activities.
Adjusted EBITDA has certain limitations, and you should not
consider it in isolation or as a substitute for analysis of our
results of operations as reported under GAAP. We caution investors
that amounts presented in accordance with our definition of
Adjusted EBITDA may not be comparable to similar measures disclosed
by other issuers, because some issuers calculate Adjusted EBITDA
differently or not at all, limiting its usefulness as direct
comparative measure.
About Babylon
At Babylon, our mission is to make quality healthcare accessible
and affordable for every person on Earth. We believe that this is
possible by combining cutting edge technology with the best medical
expertise. To this end we are building an integrated digital first
primary care service that can manage population health at
scale.
Founded in 2013, we are reengineering how people engage with
their care at every step of the healthcare continuum. By flipping
the model from reactive sick care to proactive healthcare through
the devices people already own, we offer millions of people
globally, ongoing, always-on care. And, we have already shown that
in environments as diverse as the developed UK or developing
Rwanda, urban New York or rural Missouri, for people of all ages,
it is possible to achieve our mission by leveraging our highly
scalable, digital-first platform combined with high quality,
virtual clinical operations to provide integrated, personalized
healthcare.
Today, we support a global patient network across 15 countries,
and operate in 16 languages. In 2021 alone, Babylon helped a
patient every 6 seconds, with approximately 5.2 million
consultations and AI interactions. Importantly, this was achieved
with a 93% user retention rate in our NHS GP at Hand service and 4
or 5-star ratings from more than 90% of our users across all of our
geographies. We are working to demonstrate how our model of digital
first integrated primary care can be applied to manage the health
of the population in different settings across Medicare, Medicaid,
and commercial value based care contracts in the US and our primary
care services in the UK.
Babylon is also working with governments, health providers,
employers and insurers across the globe to provide them with a new
digital-first platform that any partner can use to deliver
high-quality healthcare with lower costs and better outcomes. For
more information, please visit www.babylonhealth.com.
Forward-Looking Statements
This press release contains “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally relate to future events or our
future financial or operating performance. When used in this press
release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements
include, without limitation, information concerning Babylon’s
possible or assumed future results of operations, business
strategies, debt levels, competitive position, industry environment
and potential growth opportunities.
These forward-looking statements are not guarantees of future
performance, conditions, or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside of Babylon’s management’s
control, that could cause actual results to differ materially from
the results discussed in the forward-looking statements. These
risks, uncertainties, assumptions and other important factors
include, but are not limited to: our future financial and operating
results and ability to generate profits in the future and our
timetable to profitability; that we may require additional
financing and our ability to obtain additional financing on
favorable terms; our ability to sell the Meritage Medical
Network/Independent Physician Association business, including the
timing of the sale and the sale price; the impact of our recently
completed reverse share split on the price and trading market for
our Class A ordinary shares; if we fail to comply with the
continued listing standards and rules of the New York Stock
Exchange (the “NYSE”), the NYSE may delist our Class A ordinary
shares; uncertainties related to our ability to continue as a going
concern; our ability to successfully execute our planned cost
reduction actions and realize the expected cost savings; the growth
of our business and organization; risks associated with impairment
of goodwill and other intangible assets; our failure to compete
successfully; our ability to renew contracts with existing
customers, and risks of contract renewals at lower fee levels, or
significant reductions in members, pricing or premiums under our
contracts due to factors outside our control; our dependence on our
relationships with physician-owned entities; our ability to
maintain and expand a network of qualified providers; our ability
to increase engagement of individual members or realize the member
healthcare cost savings that we expect; a significant portion of
our revenue comes from a limited number of customers; the
uncertainty and potential inadequacy of our claims liability
estimates for medical costs and expenses; risks associated with
estimating the amount and timing of revenue recognized under our
licensing agreements and value-based care agreements with health
plans; risks associated with our physician partners’ failure to
accurately, timely and sufficiently document their services; risks
associated with inaccurate or unsupportable information regarding
risk adjustment scores of members in records and submissions to
health plans; risks associated with reduction of reimbursement
rates paid by third-party payers or federal or state healthcare
programs; risks associated with regulatory proposals directed at
containing or lowering the cost of healthcare, including the ACO
REACH model; immaturity and volatility of the market for
telemedicine and our unproven digital-first approach; our ability
to develop and release new solutions and services; difficulty in
hiring and retaining talent to operate our business; risks
associated with our international operations, economic uncertainty,
or downturns; the impact of COVID-19 or any other pandemic,
epidemic or outbreak of an infectious disease in the United States
or worldwide on our business; risks associated with foreign
currency exchange rate fluctuations and restrictions; and the other
risks and uncertainties identified in Babylon’s Annual Report on
Form 20-F filed with the SEC on March 30, 2022, and in other
documents filed or to be filed by Babylon with the SEC and
available at the SEC’s website at www.sec.gov.
Babylon cautions that the foregoing list of factors is not
exclusive and cautions you not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
Except as required by law, Babylon does not undertake any
obligation to update or revise its forward-looking statements to
reflect events or circumstances after the date of this press
release.
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