- Revenue grew 3.5x YoY, to $1.11 billion, exceeding
guidance
- Cost of Care Delivery (COCD) Margin in the U.K. already
profitable1, with U.S. Clinical services also expecting COCD
profitability in early 2023
- Key U.S. VBC contracts delivered profitable Medical Margins2 in
their first year
- Monthly Adjusted EBITDA of $(16.3) million for Q4 2022 beating
guidance of $(18) million
- Adjusted EBITDA profitability expected in mid-2024,
significantly earlier than previous guidance
- Commercial VBC revenue substantially increased with recent
launch of Ambetter digital-first service across 6 states
Babylon Holdings Limited (NYSE: BBLN) (“Babylon” or the
“Company”) today announced its financial and operating results for
the fourth quarter and fiscal year ended December 31, 2022.
In 2022, Babylon’s revenue grew 3.5x to $1.11 billion, exceeding
guidance. The Company’s most mature business, UK clinical services,
achieved COCD profitability in 2022, and its U.S. clinical services
business is expecting the same early this year. Babylon’s U.S.
value-based care (“VBC”) business delivered profitable Medical
Margins in its key contracts, even though they are predominantly
still in their first year. Babylon’s rate of engagement of VBC
members continues to accelerate, with the latest cohort of members
showing 8x faster engagement than the earliest cohorts. This is
important as for instance in the Iowa cohort which went live in
January 2022, the Company saw a 5% reduction in cost of care for
engaged members compared to a 7% general increase in cost of care
for non-engaged members. The Company grew its U.S. VBC members by
1.6x YoY, with an emphasis on shifting the membership mix. To this
end, it has added just over 34,000 new commercial VBC members since
January 2023, and expects that number to grow substantially this
year.
Net loss Margin in 2022 improved YoY to 20.0% from 26.0%.
Babylon has successfully implemented nearly $125 million in
annualized cost reductions, with most of the planned actions to
achieve Net loss and Adjusted EBITDA improvements for 2023 already
executed. Adjusted EBITDA as a percentage of revenue has fallen by
52ppt to (16.9)% QoQ. The Company expects Adjusted EBITDA to fall
from $(274.5) million in 2022 to the range of $(120) million and
$(100) million in 2023. Babylon now expects to achieve Adjusted
EBITDA profitability in mid-2024, significantly ahead of previous
guidance.
“While most solutions are siloed, clinic centric and therefore
unscalable, Babylon is purpose-building a digital-first platform to
deliver integrated healthcare at scale. Although these are early
days for us, our results are beginning to speak for themselves,”
said Ali Parsa, CEO and Founder of Babylon. “In 2022, we grew our
revenue by 3.5 fold and achieved COCD or Medical Margin
profitability improvements across our business lines. Our U.K.
business already delivers profitable COCD margins and we expect the
same in early 2023 for our U.S. Clinical Services business. Our key
value-based care (VBC) cohorts showed profitable Medical Margins
even in their first year, while for most companies profitability of
each cohort normally takes a few years. Further, with each new
contract, we have demonstrated our ability to accelerate the
engagement of high-risk members and therefore expect to see
continuous improvement of our performance. The cumulative result of
all of this is that we now expect Adjusted EBITDA profitability in
mid-2024, significantly ahead of previous guidance.”
David Humphreys, Chief Financial Officer, added, “Babylon once
again delivered high revenue growth and strong financial
performance to beat revenue expectations and previously guided
Adjusted EBITDA estimates. We continue to shift revenue mix away
from Medicaid members with a focus on expanding Commercial
populations and have demonstrated great capital discipline,
successfully executing nearly $125 million in annualized cost
reductions. The result is a significantly improved profitability
outlook and Adjusted EBITDA guidance of $(120) million to $(100)
million for 2023.”
_________________________
1Management considers Cost of Care
Delivery (“COCD”) Margin the measure of profitability for the
Clinical services business. COCD Margin is defined within the
Non-GAAP Financial Measures section of this earnings release and is
equal to one minus the absolute value of claims expense and
clinical care delivery expense divided by total revenue. This
metric can be further disaggregated by geographical region, as
necessary.
2Management considers Medical Margin the
measure of profitability for the Value-based care (“VBC”) business.
Medical Margin is defined within the Non-GAAP Financial Measures
section of this earnings release and is equal to one minus the
Medical Loss Ratio. Medical Loss Ratio is defined within the
Non-GAAP Financial Measures section as one minus the absolute value
claims expense divided by Value-based care revenue.
Recent Highlights
- U.S. VBC membership grew 1.6x year-on-year to a total of over
261,000 U.S. VBC members as of December 31, 2022.
- In January 2023, Babylon launched a new digital-first
Commercial Exchange product with Ambetter, covering approximately
34,000 commercial members across six states, furthering the
diversification of our VBC portfolio and mix shift.
- Babylon is a purpose-built, digital-first platform for
delivering value-based care at scale.
- 50%+ member interactions completed entirely digitally
- 85% primary care consultations entirely virtual
- Increasing U.S. provider utilization to 80% and maintaining
90+% clinician utilization in the U.K.
- 1500+ global multi-specialty provider network
- 99% of VBC members enrolled into our 24/7 primary care after
their first encounter
- 50% improvement in anxiety (GAD-7) and depression (PHQ-9)
scores
- 55% of members with eligible chronic conditions that we
reached, enrolled in a digital chronic care management program
- 90% of specialty consults contained within our digital
ecosystem within chronic care management
Fourth Quarter Financial
Results
Comparison of the following financial results for the three
months ended December 31, 2022, compared to the three months ended
December 31, 2021:
- Total revenue was $289.0 million compared to $117.6 million, a
2.5x year-over-year increase of $171.4 million. This was primarily
due to the growth in VBC revenue, which increased by 177%
year-over-year to $267.9 million in Q4 2022.
- Net loss totaled $100.1 million, a 34.6% Net loss margin
compared to Net income of $67.4 million, a 57.3% Net income margin
in Q4 2021. Net income in Q4 2021 included a $239.2 million gain
primarily relating to the Company going public.
- Adjusted EBITDA totaled $(48.9) million, a (16.9)% Adjusted
EBITDA Margin, compared to $(80.6) million Adjusted EBITDA, or
(68.5)% Adjusted EBITDA Margin, in Q4 2021. This was driven by
successful execution of cost reduction actions expected to deliver
approximately $125 million in annualized cost reductions.
Financial Highlights for the Full Year
2022
Comparison of the following financial results for the year ended
December 31, 2022, compared to the year ended December 31,
2021:
- Total revenue was $1.11 billion, compared to $320.8 million in
2021, reflecting an increase of 245.9%. This growth was driven by
organic U.S. VBC membership increases.
- Net loss totaled $221.4 million or 20.0% Net loss margin,
compared to Net loss of $83.4 million, or 26.0% Net loss margin in
2021.
- Adjusted EBITDA totaled $(274.5) million in 2022, or (24.7)% of
Total revenue, compared to Adjusted EBITDA of $(212.2) million, or
(66.1)% of Total revenue, in 2021.
Financial Guidance and Other Important
Information
Assuming the sale of its IPA Business, Babylon is providing
revenue guidance of more than $1.1 billion and Adjusted EBITDA
guidance of $(120) million to $(100) million for FY23.
Babylon targets reaching profitability on an Adjusted EBITDA
basis by mid-2024.
In October 2022, Babylon announced plans to sell Meritage
Medical Network (the “IPA Business”) in California to fund the
Company through to profitability. During the sale process, Babylon
has been approached by potential investors who have suggested other
strategic alternatives, some of which would include retaining the
IPA Business. As a result, Babylon has extended its existing
lending arrangement with AlbaCore through a working capital
facility of up to $30 million. The purpose of the working capital
facility is to provide Babylon with funding for a period of time
that allows execution of binding bids relating to a successful sale
of the IPA Business or other strategic alternatives to fund
Babylon. Cash and cash equivalents as of December 31, 2022 was
$104.5 million, including $61.0 million classified as held for
sale. There is no assurance that the facility will provide
sufficient funding for a time period that allows us to complete a
successful sale of our IPA Business or other strategic
alternatives. Therefore, additional funding may be required.
The financial guidance and other statements above are
forward-looking and actual results may differ materially. Please
refer to the Forward-Looking Statements safe harbor below for
information on the factors that could cause our actual results to
differ materially from these forward-looking statements. Babylon is
unable to reconcile projected Adjusted EBITDA loss for 2023 to the
most directly comparable GAAP measure, as we are not able to
forecast Net loss on a forward-looking basis without unreasonable
efforts due to the high variability and difficulty in predicting
certain items that affect Net loss, including, but not limited to,
impairment expense, stock-based compensation, foreign exchange
gains or losses, restructuring and other termination benefits,
gains or losses from settlement of warrants, gains or losses on
fair value remeasurement, income or expense from premium deficiency
reserves and gains or losses on sale of subsidiaries. Adjusted
EBITDA should not be used to predict Net loss, as the difference
between the two measures is variable and may be significant.
Fourth Quarter 2022 Earnings Conference
Call
Babylon will host a conference call to discuss fourth quarter
2022 results on March 9, 2023, at 8:00 a.m. Eastern Time. To
participate in the Company’s live conference call and webcast,
please dial (877) 407-7994 for U.S. participants, 0800 756 3429 for
U.K. participants, or +1 215-268-9868 for international
participants. Alternatively, you can visit the “News & Events”
section of https://ir.babylonhealth.com/ to access the live
webcast. On this page, you can also find a “Call me” link for
instant telephone access to the event, which will be made active 15
minutes prior to the scheduled start time. A replay of the call
will be available via webcast for on-demand listening shortly after
the completion of the call, at the same web link, and will remain
available for approximately 90 days.
Additional Notes
On January 1, 2023, the Company ceased filing reports with the
U.S. Securities and Exchange Commission (the “SEC”) as a foreign
private issuer, and began complying with the SEC reporting
requirements for a domestic issuer. Therefore, Babylon’s Q4 and
2022 year-end results are reported under U.S. GAAP. The Company’s
full-year 2022 audited financial statements, prepared under U.S.
GAAP, will be filed in an Annual Report on Form 10-K.
Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Ratio,
Medical Margin and Cost of Care Delivery Margin are non-GAAP
measures. An explanation of non-GAAP measures, a reconciliation of
Adjusted EBITDA to the most comparable GAAP measure, Net loss, and
the calculations of Net loss Margin, Adjusted EBITDA Margin,
Medical Loss Ratio, Medical Margin and Cost of Care Delivery
Margins have been provided at the end of this press release.
Accompanying supplemental information will be posted to the
Investor Relations section of Babylon’s website at https://www.babylonhealth.com.
About Babylon
At Babylon, our mission is to make quality healthcare accessible
and affordable for every person on Earth. 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, ability to generate profits in the future, and timeline to
profitability for Babylon as a whole and in our lines of business;
risks associated with our debt financing agreements with AlbaCore;
that we may require additional financing and our ability to obtain
additional financing on favorable terms; our ability to sell the
Meritage Medical Network/IPA business, including the timing of the
sale and the sale price; our strategic alternatives; 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 NYSE’s continued listing standards and rules, 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
Reports on Form 20-F filed with the SEC on March 30, 2022 and Form
10-K for the year ended December 31, 2022 to be filed with the SEC,
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 readers 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.
Babylon Holdings
Limited
Consolidated Balance
Sheets
(Unaudited)
As of December 31,
2022
2021
$’000
$’000
ASSETS
Current assets
Cash and cash equivalents
43,475
262,581
Trade receivables, net
15,524
8,278
Other receivables
17,502
15,758
Prepayments and contract assets
18,349
26,060
Assets held for sale
125,275
—
Total current assets
220,125
312,677
Property, plant and equipment net
12,658
26,825
Operating lease right-of-use assets
13,327
10,943
Other intangible assets, net
—
28,774
Goodwill
—
67,361
Total assets
246,110
446,580
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES
Current liabilities
Trade payables
9,600
17,179
Other payables
4,839
5,507
Accruals and other liabilities
30,029
36,729
Due to related parties
4,791
—
Claims payable
8,475
24,628
Contract liabilities
18,710
23,786
Lease liabilities
5,102
4,186
Liabilities held for sale
74,717
—
Loans and borrowings
—
185
Premium deficiency reserve
6,124
51,282
Total current liabilities
162,387
163,482
Loans and borrowings, net of current
position
278,028
168,601
Contract liabilities, net of current
position
46,160
70,396
Lease liabilities, net of current
position
14,056
8,436
Warrant liability
711
20,128
Deferred tax liability
—
1,065
Earnout liability
667
174,949
Premium deficiency reserve
—
890
Total liabilities
502,009
607,947
SHAREHOLDERS' EQUITY
Class A ordinary shares, $0.001056433113
par value; 360,000,000 shares authorized at December 31, 2022 and
2021; 24,858,717 and 13,356,991 shares issued and outstanding as of
December 31, 2022 and 2021, respectively
16
13
Class B ordinary shares, $0.001056433113
par value; 124,000,000 shares authorized at December 31, 2022 and
2021; zero and 3,185,503 shares issued and outstanding as of
December 31, 2022 and 2021, respectively
—
3
Additional paid-in-capital
576,585
456,748
Accumulated deficit
(836,772)
(615,323)
Accumulated other comprehensive income/
(loss)
4,272
(2,808)
Total stockholders' equity attributable
to Babylon Holdings Limited stockholders
(255,899)
(161,367)
Non-controlling interests
—
—
Total shareholders' equity
(255,899)
(161,367)
Total liabilities and shareholders'
equity
246,110
446,580
Babylon Holdings
Limited
Consolidated Statement of
Operations and Other Comprehensive Loss
(Unaudited)
For the Three Months Ended
December 31,
For the Year Ended December
31,
2022
2021
2022
2021
$’000
$’000
$’000
$’000
Revenue:
Value-based care
267,892
96,651
1,026,251
218,758
Clinical services
14,432
13,119
54,480
42,017
Software licensing
6,639
7,824
28,938
60,052
Total revenue
288,963
117,594
1,109,669
320,827
Claims expense
(266,404
)
(104,026
)
(1,017,003
)
(219,625
)
Clinical care delivery expense
(16,543
)
(24,957
)
(80,624
)
(69,831
)
Platform & application expenses
(4,508
)
(10,681
)
(29,897
)
(32,723
)
Research & development expenses
(11,256
)
(14,365
)
(79,155
)
(68,473
)
Sales, general & administrative
expenses
(53,311
)
(73,176
)
(227,937
)
(187,172
)
Premium deficiency reserve income /
(expense)
7,538
(48,199
)
31,311
(46,533
)
Impairment expense
(38,599
)
—
(64,066
)
—
Depreciation and amortization expenses
(2,610
)
(4,503
)
(12,050
)
(9,185
)
Loss from operations
(96,730
)
(162,313
)
(369,752
)
(312,715
)
Interest expense
(9,307
)
(8,971
)
(32,736
)
(13,047
)
Interest income
374
295
1,041
325
Gain on fair value remeasurement1
2,770
239,195
192,749
239,195
Loss on settlement of warrants
—
—
(2,397
)
—
Exchange gain / (loss)
2,225
1,270
(10,420
)
783
Gain on sale of subsidiary
—
—
—
3,917
Share of net loss on equity method
investments
—
(1,046
)
—
(3,339
)
Net (loss) income from operations
before income taxes
(100,668
)
68,430
(221,515
)
(84,881
)
Tax benefit / (provision)
554
(1,043
)
66
1,443
Net (loss) income
(100,114
)
67,387
(221,449
)
(83,438
)
Other comprehensive loss
Currency translation differences
9,439
(1,438
)
7,080
(564
)
Other comprehensive income (loss), net
of income tax
9,439
(1,438
)
7,080
(564
)
Total comprehensive (loss)
income
(90,675
)
65,949
(214,369
)
(84,002
)
Net (loss) income attributable
to:
Equity holders of the parent
(100,114
)
71,873
(221,449
)
(77,409
)
Non-controlling interest
—
(4,486
)
—
(6,029
)
(100,114
)
67,387
(221,449
)
(83,438
)
Total comprehensive (loss) income
attributable to:
Equity holders of the parent
(90,675
)
70,435
(214,369
)
(77,973
)
Non-controlling interest
—
(4,486
)
—
(6,029
)
(90,675
)
65,949
(214,369
)
(84,002
)
Net income (loss) per share2
Adjustments to Net income (loss),
Basic3
—
(1,549
)
—
6,029
Adjustments to Net income (loss),
Diluted4
—
(31,821
)
—
6,029
Net income (loss) per share, Basic
(4.50
)
4.32
(12.01
)
(6.93
)
Weighted average shares outstanding,
Basic
22,228,682
15,252,912
18,439,104
11,169,203
Net income (loss) per share, Diluted
(4.50
)
2.13
(12.01
)
(6.93
)
Weighted average shares outstanding,
Diluted
22,228,682
16,712,408
18,439,104
11,169,203
_________________________
1Gain / (loss) on fair value remeasurement
for the year ended December 31, 2022, includes Gain / (loss) on
warrant liabilities of $18.2 million (2021: $27.8 million) and Gain
/ (loss) on Earnout liabilities of $174.3 million (2021: $206.7
million). Gain / (loss) on fair value remeasurement for the three
months ended December 31, 2022, includes Gain / (loss) on warrant
liabilities of $1.0 million (2021: $27.8 million) and Gain / (loss)
on Earnout liabilities of $1,812 (2021: $206,744). Within Gain /
(loss) on fair value measurement for the three months and year
ended December 31, 2021 includes a gain of $4.6 million for the
fair value for the fair value remeasurement of existing equity
interest in Higi upon acquisition.
2Net income (loss) per share, for both
basic and diluted purposes, is the same for both Class A ordinary
shares and Class B ordinary shares.
3Adjustments to Net income (loss) for
Basic net income (loss) per share calculations include i) the
allocation of undistributed earnings attributable to
non-controlling interest and ii) the allocation of undistributed
earnings to participating securities, if applicable.
4Adjustments to Net income (loss) for
Diluted net income (loss) per share calculations include i) the
allocation of undistributed earnings attributable to
non-controlling interest, ii) removal of any gain or loss resulting
from potential share-settled instruments that have potential Class
A ordinary or Class B ordinary shares included in diluted
calculation and iii) the allocation of undistributed earnings to
participating securities included in the diluted calculation, as
applicable.
Babylon Holdings Limited
Consolidated Statement of Cash
Flows
(Unaudited)
For the Year Ended December
31,
2022
2021
$’000
$’000
Cash flows from operating
activities
Net loss
(221,449
)
(83,438
)
Adjustments to reconcile Net loss to net
cash used in operating activities:
Non-cash interest expense, net
31,695
12,743
Non-cash restructuring and other
termination benefits
5,071
—
Share-based compensation
34,556
48,186
Depreciation and amortization
12,050
9,185
Exchange loss / (gain)
10,420
(783
)
Gain on fair value remeasurement
(192,749
)
(239,195
)
Premium deficiency reserve (income) /
expense
(31,311
)
46,533
Loss on settlement of warrants
2,397
—
Taxation
(66
)
(1,443
)
Impairment expense
64,066
—
Share of net loss of equity method
investments
—
3,339
Gain on sale of subsidiary
—
(3,917
)
Working capital adjustments
Increase in trade and other
receivables
(19,643
)
(4,868
)
Decrease / (Increase) in prepayments and
contract assets
6,186
(15,864
)
Increase in trade, other and claims
payables
27,036
27,364
Decrease in accruals and other liabilities
and due to related parties
(18,729
)
(3,447
)
(Decrease) / Increase in contract
liabilities
(21,937
)
17,404
Increase / (Decrease) in operating lease
liabilities
999
(1,245
)
Net cash used in operating
activities
(311,408
)
(189,446
)
Cash flows from investing
activities
Capital expenditure
(8,514
)
(8,103
)
Acquisitions, net of cash acquired
—
(22,843
)
Purchase of shares in associates and joint
ventures
—
(5,000
)
Proceeds from sale of investment in
subsidiary
—
2,213
Net cash used in investing
activities
(8,514
)
(33,733
)
Cash flows from financing
activities
Proceeds from issuance of notes and
warrants
100,000
270,563
Proceeds from the issuance of shares
80,000
229,311
Payment of debt issuance costs
(4,256
)
(1,446
)
Payment of equity issuance costs
(2,210
)
(31,239
)
Other financing activities, net
(359
)
(470
)
Repayment of cash loan
—
(82,000
)
Net cash provided by financing
activities
173,175
384,719
Less: Cash and cash equivalents classified
as held for sale
(61,000
)
—
Net increase / (decrease) in cash and cash
equivalents
(207,747
)
161,540
Cash and cash equivalents at January
1,
262,581
101,757
Effect of movements in exchange rate on
cash held
(11,359
)
(716
)
Cash and cash equivalents at December
31,
43,475
262,581
Babylon Holdings
Limited
Non-GAAP Financial
Measures
(Unaudited)
EBITDA is defined as Net (loss) income, adjusted for
depreciation, amortization, net interest income (expense), and
income taxes. We define Adjusted EBITDA as Net (loss) income,
adjusted for depreciation, amortization, net interest income
(expense), income taxes, impairment expenses, stock-based
compensation, foreign exchange gains (losses), restructuring and
other termination benefits, losses on settlement of warrants, gains
(losses) on fair value remeasurement, premium deficiency reserve
(income) expenses and gains (losses) on sale of subsidiaries. We
define Medical Loss Ratio as the absolute value of claims expense
divided by Value-based care revenue. We define Medical Margin as
one minus the Medical Loss Ratio. We define Medical Loss Ratio as
the absolute value of claims expense divided by Value-based care
revenue. We define Medical Margin as one minus the Medical loss
ratio. We define Cost of Care Delivery Margin as one minus the
absolute value of claims expense and clinical care delivery expense
divided by total revenue. Medical Loss Ratio, Medical Margins and
Cost of Care Delivery Margins are derived from amounts presented in
the Consolidated Statement of Operations and Comprehensive Loss and
the associated Notes to the Consolidated Financial Statements.
We believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin,
Medical Loss Ratio, Medical Margin and Cost of Care Delivery Margin
(collectively, the “Non-GAAP Measures”) are useful metrics for
investors to understand and evaluate our operating results and
ongoing profitability because they permit investors to evaluate our
recurring profitability from our ongoing operating activities.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss
Ratio, Medical Margin and Cost of Care Delivery Margin have certain
limitations, and you should not consider them 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 definitions of any of the Non-GAAP Measures may
not be comparable to similar measures disclosed by other issuers,
because some issuers calculate certain of the Non-GAAP Measures
differently or not at all, limiting their usefulness as direct
comparative measures.
The following table presents a reconciliation of specific GAAP
measures to the Non-GAAP Measures used by management. These include
EBITDA and Adjusted EBITDA from the most directly comparable GAAP
measure, Net (loss) income, and the calculations of Net (loss)
income Margin, Adjusted EBITDA Margin, Medical Loss Ratio, Medical
Margin and Cost of Care Delivery Margin for the three months and
year ended December 31, 2022 and 2021:
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
$’000
$’000
$’000
$’000
Net (loss) income
(100,114
)
67,387
(221,449
)
(83,438
)
Adjustments to calculate EBITDA:
Depreciation and amortization expenses
2,610
4,503
12,050
9,185
Interest expense and income, net
8,933
8,676
31,695
12,722
Tax provision (benefit)
(554
)
1,043
(66
)
(1,443
)
EBITDA
(89,125
)
81,609
(177,770
)
(62,974
)
Adjustments to calculate Adjusted
EBITDA:
Impairment expense
34,988
—
59,819
—
Stock-based compensation
6,635
27,510
34,556
48,186
Exchange loss / (gain)
(2,225
)
1,270
10,420
(783
)
Restructuring and other termination
benefits
11,156
—
20,139
—
Loss on settlement of warrants
—
—
2,397
—
Gain on fair value remeasurement
(2,770
)
(239,195
)
(192,749
)
(239,195
)
Premium deficiency reserve (income) /
expense
(7,538
)
48,199
(31,311
)
46,533
Gain on sale of subsidiary
—
—
—
(3,917
)
Adjusted EBITDA
(48,879
)
(80,607
)
(274,499
)
(212,150
)
Total revenue
288,963
117,594
1,109,669
320,827
Value-based care revenue
267,892
96,651
1,026,251
218,758
Claims expense
(266,404
)
(104,026
)
(1,017,003
)
(219,625
)
Clinical care delivery expense
(16,543
)
(24,957
)
(80,624
)
(69,831
)
Net (loss) income Margin
(34.6
)%
57.3
%
(20.0
)%
(26.0
)%
Adjusted EBITDA Margin
(16.9
)%
(68.5
)%
(24.7
)%
(66.1
)%
Medical Loss Ratio
99.4
%
107.6
%
99.1
%
100.4
%
Medical Margin
0.6
%
(7.6
)%
0.9
%
(0.4
)%
Cost of Care Delivery Margin
2.1
%
(9.7
)%
1.1
%
9.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230309005333/en/
Media press@babylonhealth.com
Investors investors@babylonhealth.com
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