Tech Companies Alithya and WELL Health Report Strong Q2 2024 Financial Results

Alithya reports strong cash flow generation and gross margin as a percentage of revenues

Q1-2025 Highlights Revenues decreased 8.1% to $120.9 million, compared to $131.6 million for the same quarter last year. On a sequential basis, revenues increased by $0.4 million, from $120.5 million for the fourth quarter of last year.83% of revenues were generated from clients which we had in the same quarter last year.Gross Margin as a Percentage of Revenues(1) increased to 31.9%, compared to 28.9% for the same quarter last year.Gross margin increased 1.1% to $38.5 million, compared to $38.1 million for the same quarter last year.Selling, general and administrative expenses decreased by $0.8 million, or 2.6%, to $31.7 million, compared to $32.5 million for the same quarter last year.Net loss was $2.8 million, or $0.03 per share, compared to a net loss of $7.2 million, or $0.08 per share, for the same quarter last year.Adjusted Net Earnings(2) amounted to $4.9 million, representing an increase of $1.9 million, or 65.1%, from $3.0 million for same quarter last year. This translated into Adjusted Net Earnings per Share(2) of $0.05, compared to $0.03 for the same quarter last year.Adjusted EBITDA(2) increased 11.1% to $10.1 million, for an Adjusted EBITDA Margin(2) of 8.3% of revenues, compared to $9.1 million, for an Adjusted EBITDA Margin of 6.9% of revenues, for the same quarter last year.Net cash from operating activities was $16.7 million, representing an increase of $9.1 million, from $7.6 million for the same quarter last year.Q1 Bookings(1) reached $98.2 million, which translated into a Book-to-Bill Ratio(1) of 0.81 for the quarter. The Book-to-Bill Ratio would be 0.92 if revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 were excluded.Backlog(1) represented approximately 16 months of trailing twelve-month revenues as at June 30, 2024.Signed 22 new clients. MONTREAL, Aug. 14, 2024 /PRNewswire/ - Alithya Group inc. ALYA ("Alithya" or the "Company" or "our") reported today its results for the first quarter of fiscal 2025 ended June 30, 2024. All amounts are in Canadian dollars unless otherwise stated. Summary of the financial results for the first quarter: Financial Highlights (in thousands of $, except for margin percentages) F2025-Q1 F2024-Q1 Revenues 120,875 131,595 Gross Margin 38,530 38,093 Gross Margin as a percentage of revenues (%)(1) 31.9 % 28.9 % Selling, general and administrative expenses 31,659 32,499 Selling, general and administrative expenses as a percentage of revenues (%)(1) 26.2 % 24.7 % Net Loss (2,762) (7,245) Basic and Diluted Loss per Share (0.03) (0.08) Adjusted Net Earnings(2) 4,944 2,992 Adjusted Net Earnings per Share(2) 0.05 0.03 Adjusted EBITDA(2) 10,058 9,055 Adjusted EBITDA Margin (%)(2) 8.3 % 6.9 % (1) These are other financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. See "Non-IFRS and Other Financial Measures" below. (2) These are non-IFRS financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. More information and quantitative reconciliations of Adjusted Net Earnings and Adjusted EBITDA to the most directly comparable IFRS measures are presented below under the caption "Non-IFRS and Other Financial Measures". "Adjusted EBITDA Margin" refers to the percentage of total revenue that Adjusted EBITDA represents for a given period. Quote by Paul Raymond, President and CEO, Alithya: "We are pleased to disclose financial results for the first quarter fiscal 2025. Despite global market conditions, our team delivered stable sequential revenues and continuing profitability improvements. Our adjusted EBITDA represented an increase of 11 percent over the first quarter of fiscal 2024. As clients increasingly turn to us for higher value services, our solid gross margin as a percentage of revenues reached 31.9 percent, representing incremental growth compared to the same quarter of last year. Additionally, in maintaining our cost management focus, our SG&A expenses for the first quarter of fiscal 2025 decreased by 2.6 percent year-over-year, while holding steady sequentially, despite company-wide annual salary increases on April 1st. Our team continued to deliver shareholder value in the quarter, with strong Adjusted Net Earnings and cash generation, including net cash from operating activities of $16.7 million, representing a 119.8 percent increase from the same period last year. Additionally, our total long-term debt decreased, due primarily to the repayment of secured loans. As we forge ahead in fiscal 2025, we remain focused on profitable revenue growth in alignment with the objectives of our new strategic plan, and we can clearly see the positive impacts of our operational efficiency initiatives implemented in fiscal 2024. We look forward to outlining this new plan during our Investor Day presentations on Tuesday, September 10th." First Quarter Results Revenues Revenues amounted to $120.9 million for the three months ended June 30, 2024, representing a decrease of $10.7 million, or 8.1%, from $131.6 million for the three months ended June 30, 2023. On a sequential basis, revenues increased by $0.4 million, from $120.5 million for the fourth quarter of last year. Revenues in Canada decreased by $11.9 million, or 15.4%, to $65.1 million for the three months ended June 30, 2024, from $77.0 million for the three months ended June 30, 2023. The decrease in revenues was due primarily to a reduction in information technology investments in the banking sector, and certain client projects reaching maturity compared to the same quarter last year. On a sequential basis, revenues in Canada increased by $0.5 million, from $64.6 million for the fourth quarter of last year. U.S. revenues increased by $1.5 million, or 3.0%, to $50.7 million for the three months ended June 30, 2024, from $49.2 million for the three months ended June 30, 2023, due primarily to organic growth in certain areas of the business, including a favorable US$ exchange rate impact of $0.9 million between the two periods. On a sequential basis, revenues in the U.S. increased by $0.3 million, including a favorable US$ exchange rate impact of $0.2 million, from $50.4 million for the fourth quarter of last year. International revenues decreased by $0.4 million, or 6.2%, to $5.0 million for the three months ended June 30, 2024, from $5.4 million for the three months ended June 30, 2023. Gross Margin Gross margin increased by $0.4 million, or 1.1%, to $38.5 million for the three months ended June 30, 2024, from $38.1 million for the three months ended June 30, 2023. Gross margin as a percentage of revenues increased to 31.9% for the three months ended June 30, 2024, from 28.9% for the three months ended June 30, 2023. On a sequential basis, gross margin as a percentage of revenues decreased only slightly, compared to 32.1% for the fourth quarter of last year, despite salary increases that came into effect at the beginning of this fiscal year. In Canada, gross margin as a percentage of revenues increased, compared to the same quarter last year, mainly due to a proportionally larger decrease in the use of subcontractors compared to permanent employees. On a sequential basis, gross margin as a percentage of revenues also increased, compared to the fourth quarter of last year. In the U.S., gross margin as a percentage of revenues remained stable compared to the same quarter last year. International gross margin as a percentage of revenues decreased compared to the same quarter last year. Selling, General and Administrative Expenses Selling, general and administrative expenses totaled $31.7 million for the three months ended June 30, 2024, representing a decrease of $0.8 million, or 2.6%, from $32.5 million for the three months ended June 30, 2023. Selling, general and administrative expenses as a percentage of revenues amounted to 26.2% for the three months ended June 30, 2024, compared to 24.7% for the same period last year. The decrease in selling, general and administrative expenses was driven mainly by decreases of $1.4 million in impairment of property and equipment and right-of-use assets, stemming from impairment charges last year as part of Alithya's ongoing review of its real estate strategy following the integration of acquisitions and changes in working conditions in order to reduce the Company's footprint and realize synergies, $0.5 million in occupancy costs, and $0.4 million in non-cash share-based compensation, partially offset by increases of $1.3 million in employee compensation costs, including $1.5 million of severance consisting of termination and benefit costs for key management personnel, and $0.3 million in professional fees. On a sequential basis, selling, general and administrative expenses increased by $2.1 million, from $29.6 million for the fourth quarter of last year, due primarily to increased employee compensation expenses, namely annual salary increases, variable compensation, and severance consisting of termination and benefit costs for key management personnel. Net Loss Net loss for the three months ended June 30, 2024 was $2.8 million, representing a decrease of $4.4 million, from $7.2 million for the three months ended June 30, 2023. The decreased loss was driven by increased gross margin, decreased selling, general and administrative expenses, decreased business acquisition, integration and reorganization costs, decreased amortization of intangibles and depreciation of property and equipment, and decreased net financial expenses, partially offset by increased income tax expense for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. On a per share basis, this translated into a basic and diluted net loss per share of $0.03 for the three months ended June 30, 2024, compared to a net loss of $0.08 per share for the three months ended June 30, 2023. Adjusted Net Earnings Adjusted Net Earnings amounted to $4.9 million for the three months ended June 30, 2024, representing an increase of $1.9 million, or 65.1%, from $3.0 million for the three months ended June 30, 2023, due primarily to increased gross margin, decreased selling, general and administrative expenses, decreased depreciation of property and equipment and right-of-use assets, and decreased net financial expenses, partially offset by increased income tax expense. This translated into Adjusted Net Earnings per Share of $0.05 for the three months ended June 30, 2024, compared to $0.03 for the three months ended June 30, 2023. Adjusted EBITDA Adjusted EBITDA amounted to $10.1 million for the three months ended June 30, 2024, representing an increase of $1.0 million, or 11.1%, from $9.1 million for the three months ended June 30, 2023, due primarily to increased gross margin and decreased selling, general and administrative expenses, as explained above. Adjusted EBITDA Margin was 8.3% for the three months ended June 30, 2024, compared to 6.9% for the three months ended June 30, 2023. Liquidity and Capital Resources For the three months ended June 30, 2024, net cash from operating activities was $16.7 million, representing an increase of $9.1 million, or 119.8%, from $7.6 million for the three months ended June 30, 2023. The cash flows for the three months ended June 30, 2024 resulted primarily from the net loss of $2.8 million, adjusted for $10.1 million of non-cash items, consisting primarily of depreciation and amortization, net financial expenses, share-based compensation, and deferred taxes, partially offset by unrealized foreign exchange gain, and $9.4 million in favorable changes in non-cash working capital items. In comparison, the cash flows for the three months ended June 30, 2023 resulted primarily from the net loss of $7.2 million, adjusted for $14.1 million of non-cash items, consisting primarily of depreciation and amortization, net financial expenses, share-based compensation, and impairment of property and equipment and right-of-use assets and loss on lease termination, partially offset by the settlement of RSUs and unrealized foreign exchange gain, and $0.8 million in favorable changes in non-cash working capital items. Favorable changes in non-cash working capital items of $9.4 million during the three months ended June 30, 2024 consisted primarily of a $15.1 million decrease in accounts receivable and other receivables and a $7.9 million decrease in tax credits receivable, partially offset by a $7.5 million increase in unbilled revenues, a $3.7 million decrease in accounts payable and accrued liabilities, a $1.5 million decrease in deferred revenues, and a $0.9 million increase in prepaids. For the three months ended June 30, 2023, favorable changes in non-cash working capital items of $0.8 million consisted primarily of a $6.7 million decrease in accounts receivable and other receivables and a $4.2 million decrease in unbilled revenues, partially offset by a $5.7 million decrease in accounts payable and accrued liabilities, a $2.4 million increase in tax credits receivable, a $1.3 million decrease in deferred revenues, and a $0.9 million increase in prepaids. Strategic Business Plan Outlook Alithya embarked on a journey to be recognized as the trusted technology advisor of its clients. By the end of fiscal 2027, management believes that our achievement of this new scale and scope would allow us to leverage our industry knowledge, geographic presence, expertise, integrated offerings, and our position on the value chain to target higher value IT segments. Our strategic process begins with our agile approach to aligning our offerings with the most pressing challenges being experienced within the sectors that we service, and in our ability to continuously reinforce the building blocks of trusted relationships with our clients, our people, our investors, and our partners. To ensure that we remain innovative and relevant, we strive to meet or exceed the expectations of our stakeholders, including optimizing employee experiences, assisting our clients in achieving their missions, and creating greater value for our investors. More specifically, Alithya has developed a three-year strategic plan outlining objectives, keeping in mind our stakeholders' interests, with the primary goals detailed as follows: Increasing scale through organic growth and strategic acquisitions:Organic Growth: Alithya aims to achieve between 5 and 10 percent annualized organic growth.Acquisitions: Alithya plans to acquire complementary businesses totaling 150 million dollars of revenues.AI and IP Solutions: Alithya intends to increase the utilization of its AI and intellectual property solutions.Providing our investors, partners and stakeholders with long-term growing return on investment:Profitability: Alithya's Adjusted EBITDA Margin(1) is targeted to increase to within the range of 11 to 13 percent.Smart shoring centers: Alithya aims to deliver an increasing percentage of its business through smart shoring centers.Environmental goal: Alithya endeavours to obtain Carbon Care Certification® (Level 1), and to initiate steps towards achieving carbon neutrality certification (Level 2). The objectives in our three-year strategic plan, including our organic growth, acquisition, and profitability objectives, are based on our current business plan and strategies and are not intended to be a forecast or a projection of future results. Rather, they are objectives that we seek to achieve from the execution of our strategy over time, and contemplate our historical performance and certain assumptions including but not limited to (i) our ability to execute our growth strategies, (ii) our ability to identify and acquire complementary businesses on accretive terms, and (iii) our estimates and expectations in relation to future economic and business conditions and other factors. Forward-Looking Statements and Financial Outlook This press release contains statements that may constitute "forward-looking information", "forward-looking statements" or "financial outlook" within the meaning of applicable Canadian securities laws and the U.S. Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours (collectively "forward-looking statements"). Statements that do not exclusively relate to historical facts, as well as statements relating to management's expectations regarding the future growth, results of operations, performance and business prospects of Alithya, and other information related to Alithya's business strategy and future plans or which refer to the characterizations of future events or circumstances represent forward-looking statements. Such statements often contain the words "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "could," "would," "will," "may," "can," "continue," "potential," "should," "project," "target," and similar expressions and variations thereof, although not all forward-looking statements contain these identifying words. Forward-looking statements in this press release include, among other things, information or statements about: (i) our ability to generate sufficient earnings to support our operations; (ii) our ability to take advantage of business opportunities and meet our goals set in our three-year strategic plan; (iii) our ability to maintain and develop our business, including by broadening the scope of our service offerings, by leveraging artificial intelligence ("AI"), our geographic presence, our expertise, and our integrated offerings, and by entering into new contracts and penetrating new markets; (iv) our strategy, future operations, and prospects, including our expectations regarding future revenue resulting from bookings and backlog and providing stakeholders with long-term growing return on investment; (v) our ability to service our debt and raise additional capital; (vi) our estimates regarding our financial performance, including our revenues, profitability, costs and expenses, gross margins, liquidity, capital resources, and capital expenditures; (vii) our ability to identify suitable acquisition targets and realize the expected synergies or cost savings relating to their integration, and (viii) our ability to balance, meet and exceed the needs of our stakeholders. Forward-looking statements are presented for the sole purpose of assisting investors and others in understanding Alithya's objectives, strategies and strategic business plan outlook as well as its anticipated operating environment and may not be appropriate for other purposes. Although management believes the expectations reflected in Alithya's forward-looking statements were reasonable as at the date they were made, forward-looking statements are based on the opinions, assumptions and estimates of management and, as such, are subject to a variety of risks and uncertainties and other factors, many of which are beyond Alithya's control, and which could cause actual events or results to differ materially from those expressed or implied in such statements. Such risks and uncertainties include but are not limited to those discussed in the section titled "Risks and Uncertainties" of Alithya's Management Discussion and Analysis ("MD&A") for the year ended March 31, 2024, as well as in Alithya's other materials made public, including documents filed with Canadian and U.S. securities regulatory authorities from time to time and which are available on SEDAR+ at www.sedarplus.com and EDGAR at www.sec.gov. Additional risks and uncertainties not currently known to Alithya or that Alithya currently deems to be immaterial could also have a material adverse effect on its financial position, financial performance, cash flows, business or reputation. Forward-looking statements contained in this press release are qualified by these cautionary statements and are made only as of the date of this press release. Alithya expressly disclaims any obligation to update or alter any forward-looking statements, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by applicable law. Investors are cautioned not to place undue reliance on forward-looking statements since actual results may vary materially from them. Non-IFRS and Other Financial Measures This press release includes certain measures which have not been prepared in accordance with IFRS and other financial measures. Adjusted Net Earnings, Adjusted Net Earnings per Share, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-IFRS measures and Bookings, Book-to-Bill Ratio, Backlog, Gross Margin as a Percentage of Revenues and Selling, General and Administrative as a Percentage of Revenues are other financial measures used in this press release. These measures are provided as additional information to complement IFRS measures by providing further understanding of Alithya's results of operations from management's perspective. They do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. They should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. They are used to provide investors with additional insight into Alithya's operating performance and thus highlight trends in Alithya's business that may not otherwise be apparent when relying solely on IFRS measures. Additional details for these non-IFRS and other financial measures can be found in section 5, "Non-IFRS and Other Financial Measures", of Alithya's MD&A for the quarter ended June 30, 2024, filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov, which includes explanations of the composition and usefulness of these non-IFRS financial measures and non-IFRS ratios and is incorporated by reference in this press release. The following table reconciles net loss to Adjusted Net Earnings: For the three months ended June 30, (in $ thousands) 2024 2023 $ $ Net loss (2,762) (7,245) Business acquisition, integration and reorganization costs 783 1,105 Amortization of intangibles 4,644 6,824 Share-based compensation 1,685 2,078 Impairment of property and equipment and right-of-use assets and loss on lease termination -- 1,383 Severance 1,502 -- Effect of income tax related to above items (908) (1,153) Adjusted Net Earnings (1)(2) 4,944 2,992 Basic and diluted loss per share (0.03) (0.08) Adjusted Net Earnings per Share (1)(2) 0.05 0.03 (1) Non-IFRS measure. See section 5 titled "Non-IFRS and Other Financial Measures" of Alithya's MD&A for the quarter ended June 30, 2024, filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov. (2) Figures for the three months ended June 30, 2023 reflect adjustments for certain changes to the calculations and assumptions. The following table reconciles net loss to EBITDA and Adjusted EBITDA: For the three months ended June 30, (in $ thousands) 2024 2023 $ $ Revenues 120,875 131,595 Net loss (2,762) (7,245) Net financial expenses 2,372 3,220 Income tax expense 756 150 Depreciation 1,095 1,668 Amortization of intangibles 4,644 6,824 EBITDA (1) 6,105 4,617 EBITDA Margin (1) 5.1 % 3.5 % Adjusted for: Foreign exchange gain (17) (128) Share-based compensation 1,685 2,078 Business acquisition, integration and reorganization costs 783 1,105 Impairment of property and equipment and right-of-use assets and loss on lease termination -- 1,383 Severance 1,502 -- Adjusted EBITDA (1) 10,058 9,055 Adjusted EBITDA Margin (1) 8.3 % 6.9 % (1) Non-IFRS measure. See section 5 titled "Non-IFRS and Other Financial Measures" of Alithya's MD&A for the quarter ended June 30, 2024, filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov. First Quarter Conference Call Alithya will hold a conference call to discuss first quarter results on August 14, 2024, at 9:00 a.m. Eastern Time. Interested parties can join the call by dialing 1-800-836-8184, or via webcast at https://app.webinar.net/wlbDkNGn2pY. A replay will be made available until August 21, 2024 (conference replay information: 1-888-660-6345, 28515#). Investor Day 2024 Alithya will host a hybrid Investor Day in Montreal, Canada on Tuesday, September 10, 2024, at 1:00 p.m. Eastern Time, at Club St. James, 1145 Union Avenue in downtown Montreal. The event will feature live and video presentations from senior management detailing our operating model for achieving the objectives of our 3-year strategic plan, which took effect on April 1, 2024. The registration form, full agenda, and list of speakers is available on the Company's dedicated Investor Day 2024 webpage at https://pages.alithya.com/alithya-2024-investor-day. Video recordings will be available and archived shortly after the conclusion of the event. About Alithya Empowered by the passion and enthusiasm of a talented global workforce, Alithya is positioned on the crest of the digital wave as a trusted advisor in strategy and digital technology services. Transforming the world one digital step at a time, Alithya leverages collective intelligence and expertise to develop practical IT solutions tailored to complex business challenges. As shared stewards of its clients' success, Alithya accompanies them through the full cycle of their digital evolutions, paving new roads to the future of their businesses. Living up to its name, meaning truth, Alithya embraces a business model that avoids industry buzzwords and technical jargon to deliver straight talk provided by collaborative teams focused on three main pillars: strategic consulting, enterprise transformation, and business enablement. With two gender parity certifications obtained in Canada and the United States, and in pursuit of indigenous relations and carbon neutral certifications, Alithya strives to balance its desire to do the right thing with its commitment to doing things right. Note to readers: Management's Discussion and Analysis and the interim consolidated financial statements and notes for the three months ended June 30, 2024 are available on SEDAR+ at www.sedarplus.com, on EDGAR at www.sec.gov and on the Company's website at www.alithya.com. Shareholders may, upon request, receive a hard copy of these documents free of charge. View original content:https://www.prnewswire.com/news-releases/alithya-reports-strong-cash-flow-generation-and-gross-margin-as-a-percentage-of-revenues-302221829.html SOURCE Alithya Canada inc. Market News and Data brought to you by Benzinga APIs

WELL Health Reports Record Results for Q2-2024 Driven by an Acceleration in Organic Growth and Raises Annual Guidance - WELL Health Technologies (OTC:WHTCF)

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. VANCOUVER, BC, Aug. 14, 2024 /PRNewswire/ - WELL Health Technologies Corp. WELLWHTCF (the "Company" or "WELL"), a digital healthcare company focused on positively impacting health outcomes by leveraging technology to empower healthcare practitioners and their patients globally, is pleased to announce its interim consolidated financial results for the quarter ended June 30, 2024. Hamed Shahbazi, Founder and CEO of WELL, commented, "The second quarter of 2024 exceeded expectations, showcasing the strength of our technology-driven care platforms. We are very pleased to report 42% year-over-year revenue growth, driven by accelerated organic growth of 21% which includes contribution from our absorption program where we recruit clinics to our network for nominal cost. This marks our 22nd consecutive record-breaking revenue quarter, highlighting our sustained momentum. We are proud to once again improve our annual revenue guidance to $970 million to $990 million and report that we are on track to achieve one billion in revenues by the end of 2024 if we include acquisitions that are currently in our acquisition pipeline. Additionally, we are maintaining our guidance on Adjusted EBITDA in the upper range of $125 million to $130 million despite facing additional costs as a result of our projection of materially reduced share issuances for stock-based compensation. We remain focused on enhancing profitability and capital efficiency and continue to project a 30% year-over-year increase in free cash flow to shareholders in 2024. Our strong organic growth and healthy cash flows increasingly allow us to fund acquisitions, earn-outs, and employee incentives with cash. We are still on track to deliver record revenue, Adjusted EBITDA, and Net Income in 2024, while increasing cash flows, reducing debt, improving leverage, lowering share issuances, and decreasing earn-out payments." Mr. Shahbazi further added, "As of the end of Q2-2024, WELL proudly supported a network of over 3,900 providers and clinicians delivering care through our physical and virtual clinics. Our Canadian clinic transformation program continues to drive efficiencies in our clinics systemwide while driving enhanced organic growth. The clinics that have recently joined our network under our M&A or absorption programs are improving in terms of their overall operations and profitability. This success is driven by our focus on cost optimization, digital workflow integration, patient engagement technologies, and the implementation of advanced AI tools such as the ambient AI scribe and various co-pilot technologies powered by our partner HEALWELL AI. We remain committed to empowering healthcare professionals with the latest in cutting-edge technology." Eva Fong, WELL's Chief Financial Officer, added, "I am proud to announce that during Q2 2024 we paid down $14 million in debt and reduced our leverage ratio to 2.67x for bank debt and 3.45x for all debt including convertible debentures. I'm also pleased to report that we achieved positive IFRS net income in Q2 2024, and notably, our net income remains positive even if we exclude the unrealized gains from our investments in HEALWELL AI. Much of our progress is due to the comprehensive cost-cutting program that was implemented earlier this year that has significantly strengthened our operational efficiency and generated substantial annualized cost savings. In Q2-2024, we generated a record $35.2 million in cash flow from operating activities. In addition to these substantial savings and strong cash flows, this fiscal year we plan to reduce our yearly share dilution to its lowest level ever since being launched as a company. The Company is in an excellent position to continue funding its organic growth and future acquisition plans through cash flows from operations." 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 Canada and 640,000 patient visits in the US. Canadian Patient Services visits increased 41% while US Patient Services visits increased 34%, on a year-over-year basis. Growth in patient visits over the past year was primary driven by organic growth, including the clinic absorption program as well as acquisitions. 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 Growth Y/Y Growth Y/Y Organic Growth 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 April 30, 2024, the Company announced a five-year collaboration with Microsoft to enhance digital healthcare across North America, integrating Microsoft's cloud and AI with WELL's platform. This partnership focuses on elevating WELL's scalability and operational efficiency, aiming to transform healthcare delivery for large enterprises, including the public sector. The collaboration will also modernize WELL's cloud infrastructure, optimize costs, ensure data security, and integrate Azure OpenAI Service to advance healthcare solutions. On May 2, 2024, the Company announced the launch of the second generation WELL AI Decision Support ("WAIDS"), featuring advanced chronic disease screening for conditions like diabetes and hypertension. This enhanced WAIDS version facilitates patient risk stratification and expands its disease detection capabilities. Powered by HEALWELL AI, the technology aids clinicians in decision-making, addressing chronic diseases that significantly impact Canadians. On June 1, 2024, the Company completed the purchase to acquire all primary care medical clinics operated by Shoppers Drug Mart Inc. ("Shoppers") under "The Health Clinic by Shoppers™" brand. The acquisition included 10 clinics, with over 35 physicians, located in British Columbia and Ontario. Events Subsequent to June 30, 2024: On July 10, 2024, the Company announced the approval of a historic $44 million project, Health Compass II, the largest DIGITAL project ever awarded to advance AI-powered tech enablement for care providers. This initiative, led by WELL and its consortium partners, aims to enhance AI and interoperability in Canadian healthcare. As the lead commercialization partner and first customer, WELL will provide expertise and interoperability, enabling the development of new AI tools to support healthcare providers and improve patient outcomes. On July 17, 2024, the Company announced the launch of its AI-powered co-pilot for cardiologists, powered by HEALWELL AI, to improve the detection of cardiovascular disease (CVD). This co-pilot, an extension of the WELL AI Decision Support (WAIDS) product offering, will be deployed in WELL Diagnostic Centers, Canada's largest cardiology and medical diagnostic group, across over 40 locations in Ontario. This initiative aims to assist cardiologists in identifying high-risk patients, enhancing early detection and management of CVD. 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 U.S. and Canadian Patient Services businesses through both organic and strategic growth, prioritizing capital efficiency. This approach will enable the Company to use business cash flows for debt reduction and minimizing share issuance. In Canada, WELL aims to strengthen its market leadership as the nation's premier pan-Canadian clinical network, offering a highly integrated, tech-enabled outpatient healthcare system. 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 Wednesday, August 14, 2024, at 1:00 pm ET (10:00 am PT). Please use the following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local), 1-888-664-6383 (Toll-Free) or +1-416-764-8650 (International). 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 June 30, 2024. Quarter ended Six months ended June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 $'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 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. WELL HEALTH TECHNOLOGIES CORP. Per: "Hamed Shahbazi" Hamed Shahbazi Chief Executive Officer, Chairman and Director About WELL Health Technologies Corp. 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 Canada and power the largest owned and operated healthcare ecosystem in Canada with more than 180 clinics supporting primary care, specialized care, and diagnostic services. In the United States WELL's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care, and mental health. WELL is publicly traded on the Toronto Stock Exchange under the symbol "WELL" and on the OTC Exchange under the symbol "WHTCF". To learn more about WELL, please visit: www.well.company. 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/well-health-reports-record-results-for-q2-2024-driven-by-an-acceleration-in-organic-growth-and-raises-annual-guidance-302222234.html SOURCE WELL Health Technologies Corp. Market News and Data brought to you by Benzinga APIs