On May 4, 2022 Signify Health, Inc. (NYSE: SGFY), a leading healthcare platform that leverages advanced analytics, technology and nationwide healthcare networks to create and power value-based payment programs, reported the Company’s financial results for the first quarter 2022 (Press release, Signify Health, MAY 4, 2022, View Source [SID1234613595]).
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"Our strong first quarter results demonstrate the significant value we are delivering to our clients as we continue to execute our growth strategy and make strategic investments in our business," said Kyle Armbrester, Chief Executive Officer of Signify Health. "The investments we have made to support increased customer demand for our comprehensive member evaluations enabled us to reach a record level of 564 thousand evaluations in the first quarter. Investment in people and processes also helped our Episodes of Care and BPCI-A program partners to improve health outcomes for patients and deliver meaningful savings as we continue to manage through the COVID-19 environment and its impact on program size and savings rate."
Mr. Armbrester continued, "The integration of Caravan Health is progressing well and clients are responding favorably to how the combined capabilities of Signify and Caravan can help them be more successful in their alternative payment strategies. Clients also are expressing interest in tapping into the significant access and scale we have in homes as part of their efforts to manage total cost of care. Caravan Health adds to our revenue diversification while supporting our mission to accelerate the transformation of the U.S. healthcare system from fee-for-service to value-based care."
First Quarter 2022 Financial Results
Total revenue for the first quarter increased 20% to $216.5 million, up from $180.0 million in the same period a year ago. Overall growth in the first quarter of 2022 was driven by a 23% increase in Home & Community Services (HCS) segment revenue to $186.9 million and a 7% increase in Episodes of Care Services (ECS) segment revenue to $29.6 million compared to a year ago.
The strong HCS revenue was a quarterly record and is attributable to an increase in in-home evaluations (IHE) volume, which grew to approximately 564 thousand from approximately 462 thousand in the first quarter of 2021.
ECS first quarter revenue growth was driven by an increase in program size and revenue generated by Caravan Health for one-month post acquisition.
First quarter total net loss improved to $16.3 million compared to a net loss of $51.7 million for the same period a year ago. Net loss included $28.9 million of other expense related to the remeasurement of the fair value of our Equity Appreciation Rights (EAR) due to an increase in the Company’s stock price in the first quarter.
Non-GAAP Adjusted EBITDA1 for the first quarter increased 31% to $45.0 million, compared to $34.4 million for the first quarter 2021, driven primarily by HCS revenue growth.
Non-GAAP Adjusted EBITDA margin1 for the first quarter was 20.8%, a 170-basis point improvement from the comparable year ago period.
2022 Outlook
The Company is maintaining its full year 2022 estimates as follows:
Total revenue in the range of $948 million to $971 million; and
Total adjusted EBITDA1 in the range of $212 million to $222 million.
1Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Refer to the reconciliation in "Non-GAAP Financial Measures." We have not reconciled 2022 guidance for adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, and have not provided forward-looking guidance for net income (loss) because of the uncertainty around certain items that may impact net income (loss), including, among others, stock-based compensation and the fair valuation of the EARs, that are not within our control or cannot be reasonably estimated.
Conference Call Information
Signify Health will host a conference call to discuss the Company’s first quarter 2022 results on May 5, 2022 at 8:30am ET. A live audio webcast of the conference call may be accessed through the investor relations section of Signify Health’s website at investors.signifyhealth.com/events/default.aspx and will be available for replay through July 5, 2022.