Ontrak (OTRK) Tops Q4 EPS by 3c; Offers FY21 Revenues Guidance Above Consensus

Ontrak (NASDAQ: OTRK) reported Q4 EPS of ($0.27), $0.03 better than the analyst estimate of ($0.30). Revenue for the quarter came in at $29.3 million versus the consensus estimate of $29.2 million.

Fourth Quarter 2020 Financial Results Highlights

• Revenue for the fourth quarter of 2020 was $29.3 million, representing a 149% increase compared to the same period in 2019 and a 22% increase from the prior quarter.
• Operating loss for the fourth quarter of 2020 was $(1.8) million, yielding an operating loss margin of (6)% compared to an operating loss of $(7.0) million for the same period in 2019, yielding an operating loss margin of (60)%. Operating loss improved 39% from an operating loss of $(3.0) million in the third quarter of 2020.
• Adjusted EBITDA for the fourth quarter of 2020 was $2.2 million compared to adjusted EBITDA of $(4.6) million for the same period in 2019. Adjusted EBITDA improved sequentially by an average of $1.7 million in each of the quarters in 2020.
• Net loss for the fourth quarter of 2020 was $(3.2) million, or a $(0.27) diluted net loss per common share (after deduction for declared and undeclared preferred stock dividends), compared to net loss of $(8.7) million, or a $(0.52) diluted net loss per share for the same period in 2019. Net loss and diluted net loss per common share improved 43% and 25% from net loss of $(5.7) million and $(0.36) diluted net loss per share in the third quarter of 2020, respectively.
• Non-GAAP net income for the fourth quarter of 2020 was $0.3 million, or a $(0.07) non-GAAP diluted net loss per common share (after deduction for declared and undeclared preferred stock dividends), compared to non-GAAP net loss of $(6.4) million, or a $(0.39) non-GAAP diluted net loss per share for the same period in 2019. Non-GAAP net loss and non-GAAP diluted net loss per common share improved 109% and 65% from $(2.9) million non-GAAP net loss and $(0.20) non-GAAP diluted net loss per common share in the third quarter of 2020, respectively.

GUIDANCE:

Ontrak sees FY2021 revenue of $100 million, versus the consensus of $97.07 million.

The following outlook is based on information available as of the date of this press release and is subject to change in the future. This outlook solely represents existing and planned enrollment launches, and program expansions with current health plan partners.

For the year ending December 31, 2021, the Company provides the following outlook:

• Revenue of $100 million. Initially, we were going to guide to 100% growth with revenues of $165 million. In light of Ontrak-A, we believe we are being conservative with our $100 million revenue guidance. Of that number, over $88 million is from customers with existing contracts or in the signature phase and those health plan partners remaining with us are already contemplating further expansions. Moreover, we see tremendous upside with large plans in our pipeline. Furthermore, we are continuing to develop our strategy to regain the Ontrak-A business emphasizing our validated medical cost savings and ROI, our NPS of 80, and our clinical outcomes.

“While we are extremely disappointed by the upcoming loss of our Ontrak-A contract in June 2021, we are focused on the growth opportunities ahead of us with existing and new customers," said Terren Peizer, Ontrak Chairman and CEO. “During the fourth quarter, expanded programs with existing health plans and signed contract renewals with current customers resulted in strong enrollment rates which we expect to see continue through 2021. The tailwinds to our financial performance as we enter 2021 are:

• Very rapid enrollment of members under our Ontrak-CI contract, which expanded in October 2020 and already tops 5,100 members.
• A severe shortage of quality behavioral health providers which has heightened the value of our contractual relationships with over 11,600 high quality behavioral health providers whom we train and from whom we receive valuable member progress reports. We anticipate this number to grow to approximately 15,000 in Q2, resulting in the largest qualified behavioral health provider network in the industry.
• Continued momentum in our pipeline and expansions driven by health plan customer confidence in our member engagement, evidence-based care programs and proven savings and associated ROI. Our other existing customers besides Ontrak-A have either already signed extensions or expansions with us, or are expected to in the next month.
• Record high member satisfaction levels demonstrated by an industry leading Q4 2020 Net Promoter Score of 80 for our Ontrak program versus an NPS of 74 in Q3 2020.
• The anticipated 2021 launch of Ontrak tiered care programs for the full spectrum of behavioral health needs from high to low acuity, designed to meet 100% of the behavioral health needs of those with undiagnosed and untreated behavioral health conditions.
• The anticipated 2021 launch of an expanded suite of digital programs including mobile-first depression and anxiety modules that build upon the LifeDojo platform and scale our ability to serve more members in the rapidly growing behavioral health marketplace.
• Recently signed contract expansions for LifeDojo solutions with a subsidiary of Berkshire Hathaway and Dolby.”

Mr. Peizer continued, “As a market leader in telemental health with a high-quality network of over 11,600 behavioral health provider contractual relationships in 40 states plus Washington DC, Ontrak is uniquely positioned to deliver positive and durable outcomes for not only care avoidant but also care neutral and care seeking members of our health plan partners. We have a total addressable market opportunity of over $30 billion.”

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

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