Tabula Rasa HealthCare (TRHC) Misses Q1 EPS by 1c, Revenues Beat; Offers 2Q Revenue Guidance Below Consensus, Maintains FY20 Revenues Mid-Point Guidance Above Consensus

Tabula Rasa HealthCare (NASDAQ: TRHC) reported Q1 EPS of ($0.01), $0.01 worse than the analyst estimate of $0.00. Revenue for the quarter came in at $72.8 million versus the consensus estimate of $71.64 million.

First Quarter 2020 Highlights

• Total revenue of $72.8 million, near the high end of our guidance range of $68.5 million to $73.5 million for the first quarter of 2020, increased 19%, on a reported basis, and 9%, on an organic basis, compared to a year ago.
• Non-GAAP Adjusted EBITDA of $4.8 million, near the high end of our guidance range of $4.0 million to $5.0 million for the first quarter of 2020, decreased 16% compared to a year ago due to increased investments to drive future growth. The company also incurred modest expenses in response to the COVID-19 pandemic.
• Non-GAAP Adjusted diluted EPS decreased to $0.01 from $0.10 a year ago.
• As part of our previously communicated reorganization, as of January 1, 2020, we operate through two business segments, CareVention (i.e. PACE) HealthCare and MedWise HealthCare, the latter encompassing our payer, pharmacy and provider-focused businesses.
• CareVention HealthCare revenue increased 15% to $48.7 million driven by organic growth.
• MedWise HealthCare revenue increased 29% to $24.2 million, driven by the acquisition of PrescribeWellness.
• Bookings, based on Annualized Recurring Revenue, or ARR, increased more than 102% compared to any quarter during 2019 due to key new business relationships with Health Mart, MODA Health Plan, WellCare, and two of the top ten health plans.
• Our overall sales pipeline as of May 1, 2020, is 49% higher vs. January 1, 2020 with the number of aggregate sales opportunities up 68%.
• Full year 2020 guidance remains unchanged.

“I am proud of the actions we have taken as a company to keep our team members safe, well informed, and engaged during these challenging times, all while continuing to deliver for our clients and execute on our long-term vision. We are particularly excited about the proactive role we are taking with the current pandemic through our scientific research efforts and support of COVID-19 testing at our nationwide network of community pharmacies, as well as the growing recognition of the important role pharmacists are playing under new federal and state legislative actions,” said TRHC Chief Executive Officer, Chairman and Founder Calvin H. Knowlton, PhD.

Dr. Knowlton continued, “During 2019, we made significant investments in our sales and marketing organization and I am pleased to report we have begun to benefit from these investments with a record number of bookings in the first quarter. Our performance was driven by our MedWise HealthCare business segment and specifically, important pharmacy wins at Health Mart and with a large pharmacy chain, as well as a number of exciting new relationships including WellCare, MODA Health Plan and two of the top ten largest plans in the United States. We signed a multi-year enterprise license agreement with Health Mart, the nation’s largest independent pharmacy franchise with more than 5,000 members. We plan to share more about this expanded relationship in the coming months.”

GUIDANCE:

Tabula Rasa HealthCare sees Q2 2020 revenue of $76-81 million, versus the consensus of $84.66 million.

Tabula Rasa HealthCare sees FY2020 revenue of $332-352 million, versus the consensus of $340.37 million.

Our guidance is based on current market conditions and our expectations as of today. Given the uncertainty associated with the duration and magnitude of the COVID-19 pandemic, as well as its broader impact, the factors underlying our outlook may change in the coming months.

For the second quarter ending June 30, 2020 we expect:

• Total revenue in the range of $76 million to $81 million, driven by sequential growth compared to the first quarter of 2020 in both the CareVention HealthCare and MedWise HealthCare segments.
• GAAP net loss in the range of $12.3 million to $10.8 million.
• Non-GAAP adjusted EBITDA in the range of $7 million to $9 million.

For the full year ending December 31, 2020 we continue to expect:

• Revenue in the range of $332 million to $352 million with stronger organic growth rates in the third and fourth quarters as: 1) year-to-date bookings come online and are fully reflected in revenue and 2) the total number of clinical interventions increases significantly compared to the first half of 2020 and the second half of 2019.
• GAAP net loss in the range of $35.5 million to $30.5 million.
• Non-GAAP adjusted EBITDA in the range of $46 million to $52 million.
• Free cash flow, excluding capitalized software and capital expenditures, in the range of $15 million to $20 million.

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

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