WELL Health Achieves $1 Billion Annualized Revenue Run-Rate Ahead of Plan with Best Ever Quarterly EBITDA and Free Cashflow Results for Q3-2024 and Raises Annual Revenue Guidance
- WELL surpassed
$1 billion annualized revenue run-rate with record revenue of$251.7 million in Q3-2024, marking a 27%(1) increase compared to Q3-2023, mainly driven by organic growth of 23%. - WELL achieved record Adjusted EBITDA(2) of
$32.7 million in Q3-2024, an increase of 16% as compared to Q3-2023. - WELL achieved a record total of 1.5 million total patient visits in Q3-2024 an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis.
- WELL increases its 2024 annual guidance range for revenue of
$985 million to$995 million , while maintaining Adjusted EBITDA guidance to be in the upper half of$125 million to$130 million .
Third Quarter 2024 Financial Highlights:
- WELL achieved record quarterly revenue of
$251.7 million in Q3-2024, an increase of 23% as compared to revenue of$204.5 million generated in Q3-2023 (or 27%(1) with reference to continuing operations). This growth was primarily driven by organic growth of 23%. Growth from acquisitions of 4% was offset by the impact from divestitures. - Canadian
Patient Services revenue was$78.0 million in Q3-2024, an increase of 35% as compared to$57.8 million in Q3-2023. -
U.S. Patient Services revenue was$158.2 million in Q3-2024, an increase of 21% as compared to$130.7 million in Q3-2023. - SaaS and Technology Services revenue from continuing businesses was
$15.6 million in Q3-2024, an increase of 19% as compared to$13.1 million in Q3-2023. - Adjusted Gross Profit(2) was
$112.3 million in Q3-2024, an increase of 19% as compared to Adjusted Gross Profit(2) of$94.2 million in Q3-2023. - Adjusted Gross Margin(2) percentage was 44.6% during Q3-2024 compared to Adjusted Gross Margin(2) percentage of 46.1% in Q3-2023. The decrease in Adjusted Gross Margin(2) percentage was primarily driven by the addition of recruiting revenue from the acquisition of CarePlus, which has lower margins compared to other Patient Services and SaaS and Technology Services revenue.
- Adjusted EBITDA(2) was
$32.7 million in Q3-2024, an increase of 16% as compared to Adjusted EBITDA(2) of$28.2 million in Q3-2023. - Adjusted EBITDA to WELL shareholders(2) was
$25.1 million in Q3-2024, an increase of 10% as compared to Adjusted EBITDA to WELL shareholders(2) of$22.9 million in Q3-2023. - Adjusted Net Income(2) was
$13.0 million, or$0.05 per share in Q3-2024, as compared to Adjusted Net Income(2) of$12.9 million, or$0.05 per share in Q3-2023.
Third Quarter 2024 Patient Visit Metrics:
WELL achieved a record 1.5 million total patient visits in Q3-2024, an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis. Total patient visits were comprised of 798,000 patient visits in
Total Care Interactions were 2.2 million in Q3-2024, a year-over-year increase of 41% compared to Q3-2023 and representing 9.0 million Total Care Interactions on an annualized run-rate basis.
|
Q3-24 |
Q2-24 |
Q3-23 |
Q/Q |
Y/Y |
Y/Y Organic |
Canada Patient Visits |
798,000 |
766,000 |
548,000 |
4 % |
46 % |
26 % |
US Patient Visits |
682,000 |
640,000 |
505,000 |
7 % |
35 % |
35 % |
Total Visits |
1,480,000 |
1,406,000 |
1,053,000 |
5 % |
41 % |
31 % |
|
|
|
|
|
|
|
Technology Interactions |
675,000 |
622,000 |
458,000 |
9 % |
47 % |
47 % |
Billed Provider Hours |
88,000 |
84,000 |
81,000 |
5 % |
10 % |
10 % |
Total Care Interactions(3) |
2,243,000 |
2,112,000 |
1,591,000 |
6 % |
41 % |
35 % |
Third Quarter 2024 Business Highlights:
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Outlook:
WELL anticipates maintaining its strong performance through the remainder of 2024, with a strategic focus on enhancing operations for organic growth and profitability. The company continues to pursue capital-efficient growth opportunities while effectively managing costs to deliver robust growth and sustained cash flow to shareholders. Management is pleased to update its guidance, which includes only announced acquisitions:
- Annual revenue for 2024 is projected to be in the range of
$985 million to$995 million . - Adjusted EBITDA(2) for 2024 is projected to be in the upper half of
$125 million to$130 million . - Adjusted Free Cashflow(2) available to shareholders is expected to be approximately
$55 million , before the potential impact of increases in capital expenditures in Q4 and timing of tax payments. Management believes these capital expenditures to be a prudent use of cash given WELL's strong cash flow generation.
WELL plans to advance its
Leveraging its deep technological expertise and strategic relationship with HEALWELL AI, WELL is prioritizing investments in AI technologies, with plans to continue to develop and launch innovative products and enhancements across its provider and clinic network.
To boost operational efficiency and profitability, earlier this year WELL has implemented a cost optimization program, including staff restructuring and other cost-saving measures. The company's strong organic growth and healthy cash flow position it well to continue executing its growth strategies while progressively reducing debt.
Conference Call:
WELL will hold a conference call to discuss its 2024 Third Quarter financial results on
The conference call will also be simultaneously webcast and can be accessed at the following audience URL: https://well.company/events.
Selected Unaudited Financial Highlights:
Please see SEDAR for complete copies of the Company's condensed interim consolidated financial statements and interim MD&A for the quarter ended
|
Quarter ended |
|
Nine months ended |
|||
|
|
|
September |
|
September |
September |
|
$'000 |
$'000 |
$'000 |
|
$'000 |
$'000 |
Revenue |
251,739 |
243,147 |
204,461 |
|
726,448 |
544,808 |
Cost of sales (excluding depreciation and amortization) |
(139,487) |
(135,766) |
(110,225) |
|
(404,595) |
(273,580) |
Adjusted Gross Profit(2) |
112,252 |
107,381 |
94,236 |
|
321,853 |
271,228 |
Adjusted Gross Margin(2) |
44.6 % |
44.2 % |
46.1 % |
|
44.3 % |
49.8 % |
Adjusted EBITDA(2) |
32,738 |
30,880 |
28,172 |
|
91,932 |
82,644 |
Net income (loss) |
(75,752) |
116,976 |
(4,482) |
|
60,824 |
(17,125) |
Adjusted Net Income (2) |
12,996 |
12,107 |
12,862 |
|
46,406 |
41,536 |
Earnings (loss) per share, basic (in $) |
(0.33) |
0.45 |
(0.03) |
|
0.19 |
(0.12) |
Earnings (loss) per share, diluted (in $) |
(0.33) |
0.43 |
(0.03) |
|
0.19 |
(0.12) |
Adjusted Net Income per share, basic (in $) (2) |
0.05 |
0.05 |
0.05 |
|
0.19 |
0.18 |
Adjusted Net income per share, diluted (in $)(2) |
0.05 |
0.05 |
0.05 |
|
0.18 |
0.18 |
|
|
|
|
|
|
|
Reconciliation of net income (loss) to Adjusted EBITDA(2): |
|
|
|
|
|
|
Net income (loss) for the period |
(75,752) |
116,976 |
(4,482) |
|
60,824 |
(17,125) |
Depreciation and amortization |
17,476 |
17,307 |
15,449 |
|
51,343 |
44,012 |
Income tax expense (recovery) |
1,087 |
(1,959) |
(25) |
|
(1,050) |
2,056 |
Interest income |
(255) |
(279) |
(114) |
|
(772) |
(429) |
Interest expense |
9,103 |
9,689 |
8,966 |
|
28,333 |
24,568 |
Rent expense on finance leases |
(4,675) |
(4,129) |
(2,672) |
|
(12,918) |
(7,743) |
Stock-based compensation |
2,141 |
4,765 |
7,043 |
|
12,383 |
19,776 |
Foreign exchange gain |
62 |
(72) |
(539) |
|
(42) |
(888) |
Time-based earnout expense |
1,829 |
15 |
1,589 |
|
3,956 |
13,919 |
Change in fair value of investments |
77,092 |
(116,327) |
- |
|
(53,192) |
- |
Gain on disposal of assets and investments |
(33) |
- |
(7) |
|
(11,317) |
(1,524) |
Share of net (income) loss of associates |
1,832 |
(177) |
102 |
|
2,719 |
290 |
Other items |
- |
753 |
- |
|
753 |
1,798 |
Transaction, restructuring and integration costs expensed |
2,831 |
4,318 |
2,862 |
|
10,912 |
3,934 |
|
|
|
|
|
|
|
Adjusted EBITDA(2) |
32,738 |
30,880 |
28,172 |
|
91,932 |
82,644 |
|
|
|
|
|
|
|
Attributable to WELL shareholders |
25,104 |
23,019 |
22,912 |
|
69,494 |
65,831 |
Attributable to Non-controlling interests |
7,634 |
7,861 |
5,260 |
|
22,438 |
16,813 |
Adjusted EBITDA(2) |
|
|
|
|
|
|
WELL Corporate |
(5,368) |
(5,320) |
(4,933) |
|
(15,455) |
(13,914) |
|
14,036 |
13,032 |
12,110 |
|
41,542 |
34,857 |
US operations |
24,070 |
23,168 |
20,995 |
|
65,845 |
61,701 |
Adjusted EBITDA(2) attributable to WELL shareholders |
|
|
|
|
|
|
WELL Corporate |
(5,368) |
(5,320) |
(4,933) |
|
(15,455) |
(13,914) |
|
13,743 |
12,645 |
12,044 |
|
40,635 |
34,352 |
US operations |
16,729 |
15,694 |
15,801 |
|
44,314 |
45,393 |
Adjusted EBITDA(2) attributable to Non-controlling interests |
|
|
|
|
|
|
Canada and others |
293 |
387 |
66 |
|
907 |
505 |
US operations |
7,341 |
7,474 |
5,194 |
|
21,531 |
16,308 |
Reconciliation of net income (loss) to Adjusted Net income(2): |
|
|
|
|
|
|
Net income (loss) for the period |
(75,752) |
116,976 |
(4,482) |
|
60,824 |
(17,125) |
Amortization of acquired intangible assets |
11,294 |
11,361 |
11,734 |
|
34,175 |
33,484 |
Time-based earnout expense |
1,829 |
15 |
1,589 |
|
3,956 |
13,919 |
Stock-based compensation |
2,141 |
4,765 |
7,043 |
|
12,383 |
19,776 |
Change in fair value of investments |
77,092 |
(116,327) |
- |
|
(53,192) |
- |
Share of net (income) loss of associates |
1,832 |
(177) |
102 |
|
2,719 |
290 |
Other items |
- |
753 |
- |
|
753 |
1,798 |
Non-controlling interest included in net income (loss) |
(5,440) |
(5,259) |
(3,124) |
|
(15,212) |
(10,606) |
|
|
|
|
|
|
|
Adjusted Net Income (2) |
12,996 |
12,107 |
12,862 |
|
46,406 |
41,536 |
Footnotes:
- Relates to revenue from continuing operations excluding the revenue impact from businesses divested in the prior periods.
- Non-GAAP Financial Measures
In addition to results reported in accordance with IFRS, the Company uses certain non-GAAP financial measures as supplemental indicators of its financial and operating performance. These non-GAAP financial measures include Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted EBITDA attributable to WELL Shareholders/Non-controlling interests, Adjusted Net Income, and Adjusted Net Income Per Share (basic and diluted). The Company believes these supplementary financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.
Adjusted Gross Profit and Adjusted Gross Margin
The Company defines Adjusted Gross Profit as revenue less cost of sales (excluding depreciation and amortization) and Adjusted Gross Margin as adjusted gross profit as a percentage of revenue. Adjusted gross profit and adjusted gross margin should not be construed as an alternative for revenue or net income (loss) determined in accordance with IFRS. The Company does not present gross profit in its consolidated financial statements as it is a non-GAAP financial measure. The Company believes that adjusted gross profit and adjusted gross margin are meaningful metrics that are often used by readers to measure the Company's efficiency of selling its products and services.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization less (i) net rent expense on premise leases considered to be finance leases under IFRS and before (ii) transaction, restructuring, and integration costs, time-based earn-out expense, change in fair value of investments, share of income (loss) of associates, foreign exchange gain/loss, and stock-based compensation expense, and (iii) gains/losses that are not reflective of ongoing operating performance. The Company considers Adjusted EBITDA to be a financial metric that measures cash flow that the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Adjusted EBITDA should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance defined under IFRS.
Adjusted EBITDA Attributable to WELL Shareholders/Non-Controlling Interests
The Company defines Adjusted EBITDA attributable to WELL Shareholders (or Shareholder EBITDA) and Adjusted EBITDA attributable to Non-controlling interests as the sum of the Adjusted EBITDA for each relevant legal entity multiplied by WELL's or the non-controlling interests' equity ownership, respectively.
Adjusted Net Income and Adjusted Net Income Per Share, Basic and Diluted
The Company defines Adjusted Net Income as net income (loss), after excluding the effects of stock-based compensation expense, amortization of acquired intangible assets, time-based earnout expense, change in fair value of investments, share of income (loss) of associates, and non-controlling interests. The Company revised its definition of Adjusted Net Income for the three and nine months endedSeptember 30, 2024 to exclude share of income (loss) of associates. Comparative figures have been adjusted to conform to the current period definition. Adjusted Net Income Per Share is Adjusted Net Income divided by weighted average number of shares outstanding. The Company believes that these non-GAAP financial measures provide useful information to analyze our results, enhance a reader's understanding of past financial performance and allow for greater understanding with respect to key metrics used by management in decision making. More specifically, the Company believes Adjusted Net Income is a financial metric that tracks the earning power of the business that is available to WELL shareholders.
Adjusted Free Cashflow
The Company defines Adjusted Free Cashflow as Adjusted EBITDA Attributable to Shareholders, less cash interest, less cash taxes and less capital expenditures.
Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted EBITDA attributable to WELL Shareholders/Non-controlling interests, Adjusted Net Income, and Adjusted Net Income per Share (basic and diluted), and Adjusted Free Cashflow are not recognized measures for financial statement presentation under IFRS and do not have standardized meanings. As such, these measures may not be comparable to similar measures presented by other companies and should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with IFRS. - Total Care Interactions are defined as Total Patient Visits plus Technology Interactions plus Billed Provider Hours.
Per: "Hamed Shahbazi"
Chief Executive Officer, Chairman and Director
About
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL's solutions enable more than 38,000 healthcare providers between the US and
Forward-Looking Statements
This news release may contain "Forward-Looking Information" within the meaning of applicable Canadian securities laws, including, without limitation: information regarding the Company's goals, strategies and growth plans; expectations regarding continued revenue and EBITDA growth; the expected benefits and synergies of completed acquisitions; capital allocation plans in the form of more acquisitions or share repurchases; the expected financial performance as well as information in the "Outlook" section herein. Forward-Looking Information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-Looking Information generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-Looking Information involve known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the Forward-Looking Information and the Forward-Looking Information are not guarantees of future performance. WELL's comments expressed or implied by such Forward-Looking Information are subject to a number of risks, uncertainties, and conditions, many of which are outside of WELL 's control, and undue reliance should not be placed on such information. Forward-Looking Information are qualified in their entirety by inherent risks and uncertainties, including: direct and indirect material adverse effects from the COVID-19 pandemic; adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain any requisite future financing on suitable terms; any inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of WELL and other risk factors identified in documents filed by WELL under its profile at www.sedar.com, including its most recent Annual Information Form. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about estimated annual run-rate revenue and Adjusted EBIDTA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of WELL may vary from the amounts set out herein and such variation may be material. WELL and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, WELL undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about WELL's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither the TSX nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
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