WELL Health Reports Record Results for Q2-2024 Driven by an Acceleration in Organic Growth and Raises Annual Guidance
- WELL achieved record quarterly revenues of
$243.1 million in Q2-2024, an increase of 42% as compared to Q2-2023 driven by acquisitions and overall organic growth(3) of 21%. - WELL achieved record Adjusted EBITDA(1) of
$30.9 million in Q2-2024, an increase of 11% as compared to Q2-2023. - WELL achieved a record total of 1.4 million patient visits in Q2-2024 an increase of 38% compared to Q2-2023 and representing 5.6 million patient visits on an annualized run-rate basis.
- WELL's US digital revenues attributable to Circle Medical and Wisp grew organically by 40% to
$56.3M in Q2 and achieved$3.5 million in Adjusted EBITDA an improvement of$5.3 million realizing investments made in the previous year. - WELL is raising its guidance range for 2024 annual revenue to be between
$970 million to$990 million and maintaining Adjusted EBITDA guidance to be in the upper range of$125 million to$130 million , despite higher costs due to our projection of significantly lower share issuances and stock-based incentives. WELL also maintains guidance for Free cashflow available to shareholders to be approximately$55 million .
Second Quarter 2024 Financial Highlights:
- WELL achieved record quarterly revenue of
$243.1 million in Q2-2024, an increase of 42% as compared to revenue of$170.9 million generated in Q2-2023. This growth was mainly driven by organic growth of 21% including clinic absorptions and 16% without absorptions. - Adjusted Gross Profit(1) was
$107.4 million in Q2-2024, an increase of 18% as compared to Adjusted Gross Profit(1) of$90.8 million in Q2-2023. - Adjusted Gross Margin(1) percentage was 44.2% during Q2-2024 compared to Adjusted Gross Margin(1) percentage of 53.1% in Q2-2023. The decline in Adjusted Gross Margin percentage is mainly attributed to the acquisition of businesses in the past year that had lower gross margin percentage.
- Adjusted EBITDA(1) was
$30.9 million in Q2-2024, an increase of 11% as compared to Adjusted EBITDA(1) of$27.8 million in Q2-2023. - Adjusted EBITDA to WELL shareholders was
$23.0 million in Q2-2024, an increase of 3% as compared to Adjusted EBITDA to WELL shareholders of$22.3 million in Q2-2023. - Adjusted Net Income(1) was
$12.3 million , or$0.05 per share in Q2-2024, as compared to Adjusted Net Income(1) of$14.4 million , or$0.06 per share in Q2-2023. - Net Income was
$117.0 million or$0.45 per share in Q2-2024, driven by material unrealized gains of WELL's investment in HEALWELL AI. - Free cashflow attributable to WELL shareholders(1) was
$8.7 million during Q2-2024, compared to$9.4 million during Q2-2023.
Second Quarter 2024 Segmented Results
- Canadian
Patient Services revenue was$76.7 million in Q2-2024, an increase of 42% as compared to$54.2 million in Q2-2023. - SaaS and Technology Services revenue was
$16.9 million in Q2-2024, an increase of 27% as compared to$13.3 million in Q2-2023. -
U.S. Patient and Provider Services revenue was$149.5 million in Q2-2024, an increase of 45% as compared to$103.5 million in Q2-2023. - Canadian Patient Services Adjusted EBITDA was
$9.0 million in Q2-2024, an increase of 2% as compared to$8.9 million in Q2-2023 mainly due to lapping of a number of one-time positive impacts to profitability in Q2-2023. - SaaS and Technology Services Adjusted EBITDA was
$4.0 million in Q2-2024, an increase of 94% as compared to$2.1 million in Q2-2023. -
U.S. Patient and Provider Services Adjusted EBITDA was$23.2 million in Q2-2024, an increase of 9% as compared to$21.3 million in Q2-2023.
Second Quarter 2024 Patient Visit Metrics:
WELL achieved a record 1.4 million patient visits in Q2-2024, an increase of 38% compared to Q2-2023 and representing 5.6 million patient visits on an annualized run-rate basis. Patient visits were comprised of 759,000 patient visits in
Total care interactions were 2.1 million in Q2-2024, a year-over-year increase of 48% compared to Q2-2023 and representing 8.4 million total care interactions on an annualized run-rate basis.
|
Q2-24 |
Q1-24 |
Q2-23 |
Q/Q |
Y/Y |
Y/Y Organic |
Canada Patient Visits |
759,000 |
733,000 |
537,000 |
4 % |
41 % |
21 % |
US Patient Visits |
640,000 |
577,000 |
478,000 |
11 % |
34 % |
31 % |
Total Visits |
1,399,000 |
1,310,000 |
1,015,000 |
7 % |
38 % |
26 % |
|
|
|
|
|
|
|
Technology Interactions |
622,000 |
599,000 |
411,000 |
4 % |
51 % |
51 % |
Billed Provider Hours |
83,000 |
89,000 |
0 |
-7 % |
N/A |
N/A |
Total Care Interactions(2) |
2,104,000 |
1,998,000 |
1,426,000 |
5 % |
48 % |
48 % |
Second Quarter 2024 Business Highlights:
On
On
On
Events Subsequent to
On
On
Outlook:
WELL anticipates maintaining its strong performance through the remainder of 2024, with a strategic focus on enhancing operations for organic growth and profitability. The Company aims to pursue capital-efficient growth opportunities while effectively managing costs to deliver robust growth and sustained cash flow to shareholders. The Company's strong organic growth and healthy cash flow position it well to continue executing its growth strategies while progressively reducing debt.
Management is pleased to improve its guidance, which includes only announced acquisitions, as follows:
- Annual revenue for 2024 is projected to be in the range of
$970 million to$990 million . - Adjusted EBITDA for 2024 is projected to be in the upper range of
$125 million to$130 million , despite increased cash costs due to lower share issuance and share based incentives. - Free cashflow attributable to WELL shareholders is expected to be approximately
$55 million .
WELL plans to advance its
Leveraging its deep technological expertise, WELL is prioritizing investments in AI technologies, with plans to continue to develop and launch innovative products and enhancements across its provider and clinic network.
Conference Call:
WELL will hold a conference call to discuss its 2024 Second Quarter financial results on
The conference call will also be simultaneously webcast and can be accessed at the following audience URL: https://well.company/events.
Selected Unaudited Financial Highlights:
Please see SEDAR for complete copies of the Company's condensed interim consolidated financial statements and interim MD&A for the quarter ended
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Quarter ended |
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Six months ended |
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|
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$'000 |
$'000 |
$'000 |
|
$'000 |
$'000 |
|
|
Revenue |
243,147 |
231,562 |
170,922 |
|
474,709 |
340,347 |
|
|
Cost of sales (excluding depreciation and amortization) |
(135,766) |
(129,342) |
(80,099) |
|
(265,108) |
(163,355) |
|
|
Adjusted Gross Profit(1) |
107,381 |
102,220 |
90,823 |
|
209,601 |
176,992 |
|
|
Adjusted Gross Margin(1) |
44.2 % |
44.1 % |
53.1 % |
|
44.2 % |
52.0 % |
|
|
Adjusted EBITDA(1) |
30,880 |
28,314 |
27,789 |
|
59,194 |
54,472 |
|
|
Net income (loss) |
116,976 |
19,600 |
(2,016) |
|
136,576 |
(12,643) |
|
|
Adjusted Net Income (1) |
12,284 |
20,239 |
14,361 |
|
32,523 |
28,486 |
|
|
Earnings (loss) per share, basic (in $) |
0.45 |
0.06 |
(0.03) |
|
0.52 |
(0.09) |
|
|
Earnings (loss) per share, diluted (in $) |
0.43 |
0.06 |
(0.03) |
|
0.48 |
(0.09) |
|
|
Adjusted Net Income per share, basic and diluted (in $) (1) |
0.05 |
0.08 |
0.06 |
|
0.13 |
0.12 |
|
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|
|
|
|
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Reconciliation of net income (loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Net income (loss) for the period |
116,976 |
19,600 |
(2,016) |
|
136,576 |
(12,643) |
|
|
Depreciation and amortization |
17,307 |
16,560 |
14,041 |
|
33,867 |
28,563 |
|
|
Income tax expense (recovery) |
(1,959) |
(178) |
1,889 |
|
(2,137) |
2,081 |
|
|
Interest income |
(279) |
(238) |
(127) |
|
(517) |
(315) |
|
|
Interest expense |
9,689 |
9,541 |
7,828 |
|
19,230 |
15,602 |
|
|
Rent expense on finance leases |
(4,129) |
(4,114) |
(2,581) |
|
(8,243) |
(5,071) |
|
|
Stock-based compensation |
4,765 |
5,477 |
6,134 |
|
10,242 |
12,733 |
|
|
Foreign exchange gain |
(72) |
(32) |
(65) |
|
(104) |
(349) |
|
|
Time-based earnout expense |
15 |
2,112 |
1,476 |
|
2,127 |
12,330 |
|
|
Change in fair value of investments |
(116,327) |
(13,957) |
- |
|
(130,284) |
- |
|
|
Gain on disposal of assets and investments |
- |
(11,284) |
(1,517) |
|
(11,284) |
(1,517) |
|
|
Share of net (income) loss of associates |
(177) |
1,064 |
91 |
|
887 |
188 |
|
|
Other items |
753 |
- |
1,798 |
|
753 |
1,798 |
|
|
Transaction, restructuring and integration costs expensed |
4,318 |
3,763 |
838 |
|
8,081 |
1,072 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
30,880 |
28,314 |
27,789 |
|
59,194 |
54,472 |
|
|
|
|
|
|
|
|
|
|
|
Attributable to WELL shareholders |
23,019 |
21,371 |
22,287 |
|
44,390 |
42,919 |
|
|
Attributable to Non-controlling interests |
7,861 |
6,943 |
5,502 |
|
14,804 |
11,553 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1) |
|
|
|
|
|
|
|
|
WELL Corporate |
(5,320) |
(4,767) |
(4,456) |
|
(10,087) |
(8,981) |
|
|
Canada and others |
13,032 |
14,474 |
10,942 |
|
27,506 |
22,747 |
|
|
US operations |
23,168 |
18,607 |
21,303 |
|
41,775 |
40,706 |
|
|
Adjusted EBITDA(1) attributable to WELL shareholders |
|
|
|
|
|
|
|
|
WELL Corporate |
(5,320) |
(4,767) |
(4,456) |
|
(10,087) |
(8,981) |
|
|
Canada and others |
12,645 |
14,247 |
10,798 |
|
26,892 |
22,308 |
|
|
US operations |
15,694 |
11,891 |
15,945 |
|
27,585 |
29,592 |
|
|
Adjusted EBITDA(1) attributable to Non-controlling interests |
|
|
|
|
|
|
|
|
Canada and others |
387 |
227 |
144 |
|
614 |
439 |
|
|
US operations |
7,474 |
6,716 |
5,358 |
|
14,190 |
11,114 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income (loss) to Adjusted Net income: |
|
|
|
|
|
|
|
|
Net income (loss) for the period |
116,976 |
19,600 |
(2,016) |
|
136,576 |
(12,643) |
|
|
Amortization of acquired intangible assets |
11,361 |
11,520 |
10,720 |
|
22,881 |
21,750 |
|
|
Time-based earnout expense |
15 |
2,112 |
1,476 |
|
2,127 |
12,330 |
|
|
Stock-based compensation |
4,765 |
5,477 |
6,134 |
|
10,242 |
12,733 |
|
|
Change in fair value of investments |
(116,327) |
(13,957) |
- |
|
(130,284) |
- |
|
|
Other items |
753 |
- |
1,798 |
|
753 |
1,798 |
|
|
Non-controlling interest included in net income (loss) |
(5,259) |
(4,513) |
(3,751) |
|
(9,772) |
(7,482) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (1) |
12,284 |
20,239 |
14,361 |
|
32,523 |
28,486 |
|
|
Footnotes:
-
Non-GAAP financial measures and ratios.
In addition to results reported in accordance with IFRS, the Company uses certain non-GAAP financial measures as supplemental indicators of its financial and operating performance. These non-GAAP financial measures include Adjusted Net Income, Adjusted Net Income Per Share, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted Free Cash Flow. The Company believes these supplementary financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.
Adjusted Net Income and Adjusted Net Income per Share The Company defines Adjusted Net Income as net income (loss), after excluding the effects of stock-based compensation expense, amortization of acquired intangible assets, time-based earnout expense, change in fair value of investments, non-controlling interests, and revenue precluded from recognition under IFRS 15 that relates to certain patient services revenue that the Company believes should be recognized as revenue based on its contractual relationships. Adjusted Net Income Per Share is Adjusted Net Income divided by weighted average number of shares outstanding. The Company believes that these non-GAAP financial measures provide useful information to analyze our results, enhance a reader's understanding of past financial performance and allow for greater understanding with respect to key metrics used by management in decision making. More specifically, the Company believes Adjusted Net Income is a financial metric that tracks the earning power of the business that is available to WELL shareholders.
EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA represents net income (loss) before interest, taxes, depreciation, and amortization. The Company defines Adjusted EBITDA as EBITDA (i) less net rent expense on premise leases considered to be finance leases under IFRS and (ii) before transaction, restructuring, and integration costs, time-based earn-out expense, change in fair value of investments, share of loss of associates, foreign exchange gain/loss, and stock-based compensation expense, (iii) revenue precluded from recognition under IFRS 15 that relates to certain patient services revenue that the Company believes should be recognized as revenue based on its contractual relationships, and (iv) gains/losses that are not reflective of ongoing operating performance. The Company considers Adjusted EBITDA a financial metric that measures cash that the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance in accordance with IFRS.
Adjusted Gross Profit and Adjusted Gross Margin The Company defines Adjusted Gross Profit as revenue less cost of sales (excluding depreciation and amortization) and Adjusted Gross Margin as adjusted gross profit as a percentage of revenue. Adjusted gross profit and adjusted gross margin should not be construed as an alternative for revenue or net income (loss) determined in accordance with IFRS. The Company does not present gross profit in its consolidated financial statements as it is a non-GAAP financial measure. The Company believes that adjusted gross profit and adjusted gross margin are meaningful metrics that are often used by readers to measure the Company's efficiency of selling its products and services.
Adjusted Free Cashflow The Company defines Adjusted Free Cashflow as Adjusted EBITDA Attributable to Shareholders, less cash interest, less cash taxes and less capital expenditures. Adjusted Net income, Adjusted Net Income per Share, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted Free Cashflow are not recognized measures for financial statement presentation under IFRS and do not have standardized meanings. As such, these measures may not be comparable to similar measures presented by other companies and should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with IFRS. - Total Care Interactions are defined as Total Visits plus Technology Interactions plus Billed Provider Hours.
- Organic growth includes growth attributable to "absorptions" which are characterized by clinics acquired for nominal consideration (ie. Less than 0.02x revenues). The overall organic growth inclusive of absorptions in Q2 was 21% but would have been 16.% without absorptions.
Per: "Hamed Shahbazi"
Chief Executive Officer, Chairman and Director
About
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL's solutions enable more than 37,000 healthcare providers between the US and
Forward-Looking Statements
This news release may contain "Forward-Looking Information" within the meaning of applicable Canadian securities laws, including, without limitation: information regarding the Company's goals, strategies and growth plans; annual revenue and patient-visit run rates; free cash-flow guidance; expectations regarding continued revenue and EBITDA growth; expectations surrounding the reduction in debt, share issuances and earn-out payments; expected annual savings from various cost cutting initiatives; the expected benefits and synergies of completed acquisitions ; and the expected financial performance as well as information in the "Outlook" section herein. Forward-Looking Information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-Looking Information generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-Looking Information involve known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the Forward-Looking Information and the Forward-Looking Information are not guarantees of future performance. WELL's comments expressed or implied by such Forward-Looking Information are subject to a number of risks, uncertainties, and conditions, many of which are outside of WELL 's control, and undue reliance should not be placed on such information. Forward-Looking Information are qualified in their entirety by inherent risks and uncertainties, including: direct and indirect material adverse effects from adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain any requisite future financing on suitable terms; the expected profitability of acquisition targets; the expected benefits from different commercial partnerships; any inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of WELL and other risk factors identified in documents filed by WELL under its profile at www.sedar.com, including its most recent Annual Information Form. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about estimated annual run-rate revenue and Adjusted EBIDTA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of WELL may vary from the amounts set out herein and such variation may be material. WELL and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, WELL undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about WELL's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither the TSX nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
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