MTBC (MTBC) Tops Q4 EPS by 27c, Revenues Miss; Offers FY20 Revenue Mid-Point Guidance Above Consensus

MTBC (NASDAQ: MTBC) reported Q4 EPS of $0.20, $0.27 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $15.8 million versus the consensus estimate of $16.13 million.

2019 Fourth Quarter Highlights

• Fourth quarter revenue 2019 of $15.8 million
• Record GAAP operating income of $864,000
• Record adjusted operating income of $2.5 million, or 16% of revenue
• Record GAAP net income of $332,000
• Record adjusted net income of $2.4 million, or $0.20 per share
• Record adjusted EBITDA of $2.8 million

“We are pleased to report record 2019 results, including 27% growth in revenue to $64.4 million, while growing our adjusted EBITDA by 69% to a record $8.1 million, as we delivered our eleventh consecutive quarter of positive adjusted EBITDA,” said Stephen Snyder, MTBC’s Chief Executive Officer.

“U.S. healthcare providers face unprecedented challenges and we’re thrilled that MTBC is increasingly becoming their vendor of choice,” said Snyder. “Today our solutions enable more than 15,000 providers to deliver better care to an estimated 10 million patients nationwide, and we expect to further extend our reach in the year to ahead. As we extend our reach, we incrementally address some of the challenges facing our industry and positon MTBC for additional growth.”

“In addition to reporting a record year of growth, we are very pleased to reaffirm our 2020 revenue guidance of $100 to 102 million and our adjusted EBITDA guidance of $12 to 13 million,” said Snyder. “Our revenue guidance represents a year-over-year increase of 55 to 58%, building on our trailing six-year CAGR of 35%. Our adjusted EBITDA guidance likewise represents significant year-over-year growth of 48 to 60%.”

“On January 8, 2020, we closed the acquisition of CareCloud Corporation, (“CareCloud”), our largest transaction to date,” said A. Hadi Chaudhry, MTBC’s President. “CareCloud provides its proprietary, award-winning, enterprise cloud platform and business solutions to more than 4,500 healthcare providers nationwide. They have built a stellar brand with advanced technology, award-winning design, and an innovative team. CareCloud and MTBC are highly synergistic and we believe that our combined businesses will accelerate growth, yield greater operating efficiencies and provide more opportunities for future expansion through our combined offering.”

“This is a transformative opportunity to accelerate the build-out of our strategic roadmap to provide world-class technology and services to more providers,” said Chaudhry. “CareCloud’s cutting-edge cloud-based software leverages Amazon and Google cloud platforms, and brings us exciting new technology integrations. The acquisition also gives us a strong Miami-based team of talented professionals with expertise in primary care and specialty physician practice operations.”

GUIDANCE:

MTBC sees FY2020 revenue of $100-102 million, versus the consensus of $100.4 million.

MTBC is affirming the following forward-looking guidance for the fiscal year ending December 31, 2020:

The Company anticipates full year 2020 revenue of approximately $100 to $102 million, which represents growth of 55% to 58% over 2019 revenue. “Most of this growth is due to revenue from CareCloud customers. But, unlike past acquisitions, CareCloud had developed a strong marketing and sales team. The combination of additional sales and marketing resources and the increase in cross-selling opportunities means that we anticipate stronger organic growth than in the past,” said Bill Korn. “During 2020, we anticipate the value of new recurring contracts signed will be significantly higher than our previous trend of single digit organic growth.”

Revenue guidance is based on management’s expectations regarding revenues from CareCloud, existing clients and new clients acquired through organic growth and/or tuck-ins, but excludes the effects of any additional, material acquisitions.

Adjusted EBITDA is expected to be $12 to $13 million for full year 2020, growth of 48% to 60% over 2019 adjusted EBITDA, as the Company integrates the CareCloud acquisition.

“Although CareCloud has operated at a significant loss during prior years, immediately after the acquisition closed, MTBC put in place a plan to significantly reduce operating expenses, consistent with previous acquisitions,” said Bill Korn. “CareCloud’s operations will reduce MTBC’s adjusted EBITDA during Q1 2020, but our expense reductions should allow CareCloud’s impact to be neutral by Q2. We anticipate that CareCloud will add to MTBC’s overall adjusted EBITDA during Q3 and Q4, at a level sufficient for the impact to full year 2020 operating results to be accretive. We plan to exit 2020 with CareCloud positioned to contribute significantly to our growth and profitability in future years.”

For earnings history and earnings-related data on MTBC (MTBC) click here.

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