Tabula Rasa HealthCare (TRHC) Misses Q1 EPS by 2c, Beat on Revenue; Reaffirms FY17 Revenue Guidance

Tabula Rasa HealthCare (NASDAQ: TRHC) reported Q1 EPS of $0.04, $0.02 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $27.7 million versus the consensus estimate of $26 million.

GUIDANCE:

Tabula Rasa HealthCare sees FY2017 revenue of $116-118 million, versus the consensus of $117.16 million.

Financial Performance for the Three Months Ended March 31, 2017

All comparisons, unless otherwise noted, are to the three months ended March 31, 2016.

• Total revenue was $27.7 million, an increase of 37%. Total revenue included product revenue of $22.7 million, an increase of 28%, and service revenue of $5.0 million, an increase of 110%. Product revenue increased as a result of existing client expansion as well as the addition of a number of new clients during the quarter. The majority of the increase in service revenue was the result of the commencement of the Enhance Medication Therapy Management program on January 1, 2017.
• Gross margin was 29%, compared to 31%. The year over year decrease is primarily related to a reduction in our product gross margin which was impacted by investments related to significant new contracts implemented in the first quarter of 2017. Onboarding new clients can result in temporary reductions in gross margin as the new clients transition onto TRHC services.
• Non-GAAP Adjusted EBITDA was $3.0 million, compared to $2.8 million, an increase of 7% compared to a year ago. The increase in Adjusted EBITDA was primarily driven by growth in the business, both in the PACE market and payor and at-risk provider market. Adjusted EBITDA margin was 11% in the first quarter of 2017 compared to 14% during the same period in 2016. Adjusted EBITDA margin was impacted by transition costs related new PACE clients, costs related to operating as a public company following TRHC’s initial public offering in the third quarter of 2016, as well as the investments that will enhance our growth and were discussed in the prior quarter.
• $3.1 million of incremental stock-based compensation expense related to restricted stock grants issued in connection with TRHC’s initial public offering was a significant contributing factor to TRHC’s reported net loss of $2.9 million in the quarter compared to net income of $0.2 million.
• Net loss per diluted share was $0.18, compared to net income per diluted share of $0.01. The net income per share calculations were based on a diluted share count of 16.2 million for the first quarter of 2017, compared to 12.4 million shares for the same period in 2016.
• Non-GAAP Adjusted net income per diluted share was $0.04, compared to adjusted net income per diluted share of $0.01.
• Cash at the end of the first quarter was $2.8 million compared to $4.3 million at December 31, 2016. The reduction in cash was due to a $1.5 million payment for contingent consideration made in the first quarter of 2017. No amounts were drawn on TRHC’s $25 million line of credit at the end of the first quarter or at December 31, 2016.

For earnings history and earnings-related data on Tabula Rasa HealthCare (TRHC) click here.

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