HMS Holdings Corp. (HMSY) Reports In-Line Q2 EPS, Revenues Miss; Offers FY20 Revenue Guidance Below Consensus

HMS Holdings Corp. (NASDAQ: HMSY) reported Q2 EPS of $0.19, in-line with the analyst estimate of $0.19. Revenue for the quarter came in at $142.7 million versus the consensus estimate of $154.3 million.

• 2Q'20 Total Revenue of $142.7 Million, (-15.2%) vs. 2Q'19; YTD'20 Total Revenue -0.7% vs. YTD'19
• 2Q'20 Net income of $6.6 Million vs. $29.1 Million in 2Q'19; YTD'20 Net Income -60.4% vs. YTD'19
• 2Q'20 GAAP EPS of $0.07 Per Diluted Share vs. $0.33 per Diluted Share in 2Q'19
• 2Q'20 Adjusted EPS of $0.19 Per Diluted Share vs. $0.34 per Diluted Share in 2Q'19 (excluding 2Q 2019 Reserve Release Benefit)
• 2Q'20 Adjusted EBITDA of $27.8 Million, (-41.6%) vs. 2Q'19; YTD'20 Adjusted EBITDA -15.5% vs. YTD'19 (excluding 2Q 2019

“HMS is showing its organizational agility and financial strength, and the fundamentals of our business remain strong as our nation and the world continue to address the circumstances surrounding COVID-19,” said Bill Lucia, Chairman and CEO. “With lower utilization rates, client work pauses, and shifts in industry focus, COVID-19 had a negative impact on our Company's second quarter financial performance, with revenue, net income and adjusted EBITDA declining on both a sequential and year-over-year basis. Despite these challenges, we maintained robust cash flows, with cash and cash equivalents up 38.6% since the end of 2019 to reach $193 million at the end of the second quarter.

“Our organization moved swiftly to remain fully operational in support of our clients while protecting our employees' health and safety. We continue to invest in our business to bolster future growth as well as deliver strong client value to meet the industry's evolving needs. We believe strong cost containment and clinical outcome capabilities are going to grow in importance both during and after this health crisis, particularly as State budgets are pressured due to lower revenue and higher Medicaid costs.

“Regardless of the recent headwinds we have encountered, we remain well positioned to deliver value to our clients and our business outlook for the second half of 2020 and full year 2021 remains positive. We are seeing signs of improving healthcare utilization and other trends that should be beneficial for the HMS business. For example, elective procedures are beginning to increase; Medicaid enrollment is rising due primarily to higher unemployment; and, our Payment Integrity business line is expected to improve during the third quarter as CMS and other clients are lifting pauses on certain medical record requests and audits enacted during a COVID-19 emergency period to reduce administrative burden on hospitals,” Lucia concluded.

GUIDANCE:

HMS Holdings Corp. sees FY2020 revenue of $616 million, versus the consensus of $694.11 million.

For earnings history and earnings-related data on HMS Holdings Corp. (HMSY) click here.

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