Yahoo Finance NeueHealth Inc (NEUE) (Q1 2024) Earnings Call Transcript Highlights: Insights and Strategic ...
Consolidated Revenue: $245.1 million for Q1 2024, slightly below expectations.
Gross Margin: $48.2 million for Q1 2024.
Adjusted EBITDA: $2.5 million for Q1 2024, with full-year expectation between $15 million and $25 million.
New Care Segment Revenue: $73.6 million for Q1 2024.
New Solutions Segment Revenue: $173.9 million for Q1 2024.
Operating Income: $9.8 million for New Care segment in Q1 2024.
Operating Loss: $2.9 million for New Solutions segment in Q1 2024.
Total Cash and Investments: $256.4 million as of March 31, 2024.
2024 Revenue Outlook: Expected consolidated revenue of approximately $1 billion.
Consumer Base: Expect to serve between 475,000 and 500,000 consumers across both segments in 2024.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
NeueHealth Inc reported strong first quarter results, driven by continued momentum in both its new care and new solutions business segments.
The company expanded operations in Central Florida, serving approximately 41,000 additional ACA marketplace consumers, demonstrating the value driven for payer partners and the trusted relationships built.
NeueHealth Inc received high consumer satisfaction scores, including an NPS score of 84 and a 4.8 star Google rating in the Florida market.
The company has a strong pipeline for expansion and strategic opportunities to grow its value-based footprint across the country in 2024, 2025, and beyond.
NeueHealth Inc's ACO reach business is performing in line with expectations, with a carefully selected group of high-performing provider partners, enhancing the company's ability to deliver strong performance and improved margins.
Negative Points
First quarter revenue of $245.1 million was slightly below expectations due to the impact of prior year development in the ACO reach business and moderately lower volume in the new care segments.
The company reported a first quarter operating loss of $2.9 million in the new solutions segment, attributed to one-time impacts and prior period adjustments.
There were challenges in the ACA insurance business wind-down, including managing financial obligations and restructuring costs.
The adjusted operating cost ratio guidance increased by about 400 basis points, although it was clarified that this was due to a previous omission of corporate costs in the guidance.
Despite the increase in cash from the Molina transaction, total liabilities did not decrease significantly, raising concerns about the management of net debt and liquidity.
Q & A Highlights
Q: This is actually Marco on for Josh. Appreciate you taking the question. I'm looking at the balance sheet. It looks like cash was only up $25 million in the quarter despite the Molina proceeds and total liabilities don't seem to have come down that much either with that, can you can you just speak to changes in net debt in the first quarter and then also help us bridge liquidity against cash uses for the balance of 2024. Thank you. A: Yes, Mark, on Mako, I'm a little bit confused by your By Your Side cash reconciliation. But if you just go back to what we talked about in the last call, you know, after closing the Molina transaction, we continue to have, you know, about $300 million, $305 million of what we consider to be that cash or potential cash proceeds coming back from the escrow and what have you to offset future liabilities? You know, if you recall at the end of the first quarter, that that number was closer to that $380 million so we've seen a reduction in that estimate, and that is really based on that. We've had that we had to fund our financial guarantees for 2024, and we had other restructuring costs, severance and things like that, that offset that. And as you will note as well, we are we did increase our credit facility with NDA after the quarter, but earnings early April by about $30 million or so? Yes, that's the way we look at our capital position. Obviously, there's contingency to that, but we feel we're obviously in a much stronger capital position than we were a year ago.
Q: Great. That's helpful. And then if I could squeeze one other question in it looks like guidance for the adjusted operating cost ratio was up about 400 basis points versus the prior outlook, but you are reaffirming EBITDA guidance. I mean, is there any offset coming on the medical cost line for that? And if so what specific segment are you seeing that flow through? A: Yes. No, that what we just did and that was a miss on our part for good in the in the previous guidance from that, we were referring to 15% to 16%, excluding the corporate costs, but that was always in the model. So we just added that it was a when you include corporate costs of about $40 million and that that remains the bottom line. So just so nothing's changed in terms of the guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
