15-04-2025
Ontrak Inc (OTRK) Q4 2024 Earnings Call Highlights: Navigating Challenges and Seizing Opportunities
Revenue: $3.1 million in Q4, an 11% decrease year-over-year.
Gross Margin: 61% in Q4, down from 62% in Q3 2024 and 64.6% in Q4 2023.
Operating Cash Flow: Negative $4.3 million in Q4.
Cash Reserves: $5.7 million at year-end, down from $9.7 million the previous year.
Revenue per Member: Approximately $500 per month, down from $546 in Q4 2023.
Membership Enrollment: 1,641 new members in Q4, highest since Q3 2021.
Disenrollment Rate: 19% in Q4, compared to 11% in Q3 2024 and 16% in Q4 2023.
Q1 2025 Revenue Guidance: Expected to be between $2 million and $2.3 million.
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Release Date: April 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Ontrak Inc (NASDAQ:OTRK) secured three new regional health plan customers and four health plan expansions in the last 14 months, showcasing the versatility of their offerings.
The launch of the WholeHealth+ solution with Intermountain Health is progressing well, with over 325 members enrolled in just over a month.
Ontrak Inc (NASDAQ:OTRK) is in late-stage strategic discussions with a large Midwest plan, which could potentially double the company's run rate revenue.
The company has been designated as a value-based provider, allowing for greater access to reimbursable fees and reshaping their economic model.
Ontrak Inc (NASDAQ:OTRK) has a strong sales pipeline with six active prospects requesting financial and clinical proposals, representing significant potential revenue opportunities.
Q4 2024 revenue decreased by 11% compared to the same period last year, primarily due to the loss of a customer.
The company anticipates a sequential revenue decrease of 27% to 36% in Q1 2025 due to the lost customer and new customers still in the ramp-up phase.
Gross margins decreased slightly to 61% in Q4 2024, with expectations to decrease further into the mid-50s due to current pricing and revenue mix.
Operating cash flow for Q4 was negative $4.3 million, a deterioration from the previous quarters.
Ontrak Inc (NASDAQ:OTRK) is actively seeking financing options to access capital needed for executing their sales pipeline and business plan.
Q: Can you provide an update on the progress with new customer acquisitions and expansions? A: Brandon LaVerne, CEO, stated that Ontrak has secured three new regional health plan customers and four health plan expansions over the past 14 months. This includes a recent launch with Intermountain Health, enrolling over 325 members, and a three-year contract extension with Sentara Health plans. Additionally, strategic discussions are ongoing for further expansions, including potential new offerings for adolescents and chronic pain conditions.
Q: What is the status of Ontrak's sales pipeline and potential revenue growth? A: Mary Osborne, President and Chief Commercial Officer, highlighted that Ontrak is in late-stage discussions with a large Midwestern plan, which could double the company's run rate revenue. The company is also in active discussions with six additional health plan prospects and has 20 more in the pipeline, representing over 15 million lives. The company anticipates doubling its revenue in 2025 and again in the following year.
Q: How has Ontrak's financial performance been impacted by recent customer changes? A: James Park, CFO, reported a Q4 2024 revenue of $3.1 million, an 11% decrease from the previous year, primarily due to the loss of a customer. However, new customer acquisitions have slightly offset this decline. The company expects overall revenues to increase despite a decrease in per member per month revenue due to newer customers with different pricing structures.
Q: What are the expectations for Ontrak's revenue and member enrollment in the near term? A: James Park, CFO, projected Q1 2025 revenue to be between $2 million and $2.3 million, a sequential decrease due to the loss of a customer and ramp-up phases for new customers. However, the company expects to achieve its revenue run rate by Q2 2025, driven by recent launches and member engagement expansions.
Q: How is Ontrak positioning itself in the market as a value-based provider? A: Brandon LaVerne, CEO, explained that Ontrak is engaging with payer partners as a value-based provider, aligning quality outcomes with medical cost savings and financial incentives. This shift allows greater access to reimbursable fees and enhances pipeline opportunities, providing payers with more flexibility in working with Ontrak.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
