Performant Financial Corporation (Nasdaq: PFMT), a leading provider of healthcare payment integrity services, today reported the following financial results for its second quarter ended June 30, 2024:

Second Quarter Financial Highlights

• Healthcare revenues of $27.9 million, compared to $23.9 million in the prior year period, an increase of approximately 17%.
• Total revenues of $29.4 million, compared to total revenues of $25.5 million in the prior year period.
• Net loss of $3.0 million, or $(0.04) per diluted share, compared to net loss of $4.0 million, or $(0.05) per diluted share, in the prior year period.
• Adjusted EBITDA of $0.5 million, compared to $(1.3) million in the prior year period.
• Adjusted net loss was $2.0 million, or $(0.03) per diluted share, compared to adjusted net loss of $3.2 million, or $(0.04) per diluted share, in the prior year period.

Second Quarter 2024 Results

Healthcare revenues in the second quarter of 2024 were $27.9 million, an increase of approximately 17% from $23.9 million in the prior year period. Total revenues in the second quarter were $29.4 million, an increase of 15% from total revenues of $25.5 million in the prior year period. Within healthcare, claims-based services revenue in the second quarter of 2024 was $13.7 million, while revenue from eligibility-based services in the second quarter was $14.3 million.

“Our healthcare revenue once again enjoyed strong double-digit year over year growth, driven by an increase in commercial client implementations and the continued ramp under our CMS RAC Region 2 contract," stated Simeon Kohl, CEO of Performant. "We continue to fuel future growth with 10 commercial implementations in the second quarter. We have implemented 20 commercial programs during 2024, which are estimated to contribute approximately $9 million in revenue at annualized steady state. Our larger initiatives to drive efficiency and productivity are progressing as planned, with positive early results. We remain committed to delivering innovative solutions and long-term value to our clients and stakeholders. I am pleased with the results we have driven in the first half of the year and the progress made on our operational and organization initiatives," Kohl further remarked.

Revenues from our customer care / outsourced services in the second quarter were $1.4 million, down from $1.5 million in the prior year period.

Net loss for the second quarter was $3.0 million, or $(0.04) per diluted share, compared to a net loss of $4.0 million, or $(0.05) per diluted share, in the prior year period. Adjusted EBITDA for the second quarter was $0.5 million as compared to $(1.3) million in the prior year period. Adjusted net loss for the second quarter was $2.0 million, or $(0.03) per share on a diluted basis, compared to adjusted net loss of $3.2 million, or $(0.04) per diluted share, in the prior year period.

“The strong results we delivered in the second quarter and first half of the year are a testament to the growth of our organization,” said Rohit Ramchandani, Chief Financial Officer. “We delivered strong revenue and profitability, fueled future growth with double-digit implementations, and simultaneously invested in efficiency initiatives. With second quarter results ahead of expectations, we are encouraged to reiterate our expectation of 2024 healthcare revenues in the range of $117 million to $122 million, total Company revenues to be in the range of $124 million to $129 million, and adjusted EBITDA in the range of $4 million to $5 million," Ramchandani further commented.

Note Regarding Use of Non-GAAP Financial Measures

In this press release, to supplement our consolidated financial statements, the Company presents adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per diluted share. These measures are not in accordance with accounting principles generally accepted in the United States of America (US GAAP) and accordingly reconciliations of adjusted EBITDA and adjusted net income (loss) to net income (loss) determined in accordance with US GAAP are included in the “Reconciliation of Non-GAAP Results” table at the end of this press release. We have included adjusted EBITDA and adjusted net income (loss) in this press release because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. Accordingly, we believe that adjusted EBITDA and adjusted net income (loss) provide useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and board of directors. Our use of adjusted EBITDA and adjusted net income (loss) has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under US GAAP. In particular, many of the adjustments to our US GAAP financial measures reflect the exclusion of items, specifically interest, tax, and depreciation and amortization expenses, equity-based compensation expense and certain other non-operating expenses, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be calculated differently from similarly titled non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. In regard to forward looking non-GAAP guidance, we are not able to reconcile the forward-looking non-GAAP adjusted EBITDA measure to the closest corresponding GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items. These items include, but are not limited to, impacts associated with interest expense, and depreciation and amortization expenses.

Earnings Conference Call

The Company will hold a conference call to discuss its second quarter 2024 results today at 5:00 p.m. Eastern. A live webcast of the call may be accessed on the Investor Relations section of the Company’s website at investors.performantcorp.com. To dial into the call you can dial 877-737-7051 or 201-689-8878 or preregister through the below link. After registering, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call.

A replay of the call will be available on the Company's website or by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13747328. The telephonic replay will be available approximately three hours after the call, through August 14, 2024.

About Performant Healthcare Solutions

Performant supports healthcare payers in identifying, preventing, and recovering waste and improper payments by leveraging advanced technology, analytics and proprietary data assets. Performant works with leading national and regional healthcare payers to provide eligibility-based, also known as coordination-of-benefits (COB) services, as well as claims-based services, which includes the audit and identification of improperly paid claims. Performant is a leading provider of these services in both government and commercial healthcare markets. Performant also provides advanced reporting capabilities, support services, customer care, and stakeholder training programs designed to mitigate future instances of improper payments.

To learn more, please visit http://www.performanthealth.com

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's outlook for revenues, net income (loss), adjusted EBITDA in 2024 and beyond, our commercial client growth strategy, our estimated revenue from commercial programs implemented in the first half of 2024, and the expected benefits of the RecordsOne technology asset acquisition. These forward-looking statements are based on current expectations, estimates, assumptions, and projections that are subject to change and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the Company’s ability to generate revenue following long implementation periods associated with new customer contracts; client relationships and the Company’s ability to maintain such client relationships; many of the Company’s customer contracts are subject to periodic renewal, are not exclusive, do not provide for committed business volumes; anticipated trends and challenges in the Company’s business and competition in the markets in which it operates; the Company’s indebtedness and compliance, or failure to comply, with restrictive covenants in the Company’s credit agreement; opportunities and expectations for growth in the various markets in which the Company operates; the Company’s ability to hire and retain employees with specialized skills that are required for its healthcare business; downturns in domestic or global economic conditions and other macroeconomic factors; the Company’s ability to generate sufficient cash flows to fund our ongoing operations and other liquidity needs; the impact of public health pandemics such as COVID-19 on the Company’s business and operations, opportunities and expectations for the markets in which the Company operates; the impacts of a failure of the Company’s operating systems or technology infrastructure or those of third-party vendors and subcontractors; the impacts of a cybersecurity breach or related incident to the Company or any of the Company’s third-party vendors and subcontractors; the adaptability of the Company’s technology platform to new markets and processes; the Company’s ability to invest in and utilize our data and analytics capabilities to expand its capabilities; the Company’s growth strategy of expanding in existing markets and considering strategic alliances or acquisitions; the Company’s ability to maintain, protect and enhance its intellectual property; expectations regarding future expenses; expected future financial performance; and the Company’s ability to comply with and adapt to industry regulations and compliance demands.

More information on potential factors that could affect the Company's financial condition and operating results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's annual report on Form 10-K for the year ended December 31, 2023 and subsequently filed reports on Forms 10-Q and 8-K. The forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements to conform these statements to actual results or revised expectations.

PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES

Quarterly and Annual Revenues

(In thousands)

(Unaudited)

We are providing the following historical breakdown of the quarterly and annual revenue contributions under the contribution breakdowns of our healthcare revenue results for the six months ended June 30, 2024, and for the years ended December 31, 2023 and 2022:

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