Health IT company Allscripts’s data analytics business is on the rise, with double-digit earnings in the second quarter of 2021.
The company’s overall revenue was flat during the quarter, with a modest 1% increase from $ 369 million a year ago to $ 374 million, Allscripts announced in its second quarter earnings report (PDF).
“Our earnings results, however, were really a tale of two different stories,” said Rick Poulton, Allscripts president and chief financial officer, during the second quarter earnings call.
“In our core financial and clinical segment, revenue remained essentially flat both year-over-year and sequentially, and this continues to reflect a conscious effort on our part to drive gross margins by emphasizing revenue quality and acceptable customer levels. . profitability, “he said.
Allscripts reported a particularly strong quarter in its life sciences data business within the Veradigm segment, both for quarter revenue and new partnership development, Poulton said.
The company’s Veradigm business has the largest patient database of linked electronic health records claims available for research, sourced from and directly connected to clinical platforms.
Allscripts expects those double-digit gains to continue for the remainder of 2021.
Allscripts signed a partnership agreement with PRA Health Sciences to create an EHR-based clinical research network, reaching more than 25,000 physicians and 40 million patients across the United States, according to Poulton.
RELATED: Allscripts Seeks To Leverage Microsoft’s Partnership As Tech Giant Expands Healthcare Ambitions
“The association will use Veradigm’s study source platform in conjunction with PRA’s clinical research technology support, so that clinicians can offer clinical research as a care option for their patients. This is another example of the value of the last mile connection to doctor and patient that Veradigm brings to life sciences companies and on a scale that is unmatched in the industry, ”he said.
The life sciences branch of Veradigm’s business is gaining traction as the industry shifts toward real-world evidence as a fundamental pillar of drug discovery, Poulton told investors on the call.
Allscripts’ ambulatory footprint combined with third-party association data creates an “unmatched network of point-of-care access,” he said.
He added: “And that’s really getting the interest of just about everyone in the life sciences space right now. So we’re riding that wave, and it’s absolutely a big part of what’s behind our perspectives on revenue for Veradigm. It’s not the only thing Veradigm is doing, but that’s a big part right now. “
As it looks to invest more in its data analytics business, Allscripts will potentially seek complementary acquisitions to increase its capabilities, CEO Paul Black said during the earnings call.
“We see long-term growth opportunities there. Assets in that space tend to be expensive, but on smaller scales, it may make sense for us to increase some of our assets. That could be around data records, it could be around other capabilities, rather than building them organically, “he said.
The company is also investing heavily in its EHR software through a five-year cloud partnership with tech giant Microsoft.
“We look forward to benefiting from the investments we have made to offer Sunrise as the healthcare platform, delivered in the cloud through our partnership with Microsoft. This is resonating with our customer base, and we believe it will be a critical factor in helping us win new logos in the US replacement market and the international greenfield market, “Black said during the call.
The company anticipates that the cloud-based Sunrise EHR will drive new sales due to high availability, cybersecurity, disaster recovery and business continuity capabilities, it said.
RELATED: Allscripts, Microsoft Establishes 5-Year Cloud Partnership to Improve EHR Software
The Chicago-based company reported a quarterly profit of $ 22 million compared to a net loss of $ 8 million in the second quarter of 2020. Earnings, adjusted for non-recurring costs and stock option expenses, came to 23 cents. in the quarter compared to 17 cents in the same period a year ago.
Allscripts quarterly earnings beat Wall Street estimates and revenue for the quarter also beat analyst expectations, according to the Zacks Consensus Estimate.
Reserves during the quarter grew 10% from $ 164 million a year ago to $ 180 million in the second quarter of 2021.
Allscripts also reserved a $ 5 million recovery related to its settlement with the Department of Justice on Practice Fusion.
The company hired a financial advisory firm in 2020 to develop a margin improvement plan to boost its financial performance.
RELATED: Allscripts Reports $ 414 Million In Q4 With Strong Growth In Its Veradigm Data Business
The company has set a long-term goal of achieving an adjusted EBITDA margin of 18% to 20% for the core clinical and financial solutions segment of its business. Allscripts also set a goal of achieving an adjusted EBITDA margin of 30% for the data coordination, analytics and care segment.
Adjusted EBITDA totaled $ 69 million in the second quarter of 2021, compared to $ 54 million in the second quarter of 2020. The company reported an Adjusted EBITDA margin of 18.4% compared to 14.6% a year ago. anus.
The company generated $ 69 million of cash flow from continuing operations and $ 51 million of free cash flow in the second quarter.
“In the second quarter, Allscripts continued to benefit from the actions we took to position the company on a sustainable path to improve margins, generate free cash flow, and serve our customers with strategic innovations as they continue to manage the pandemic. Our strong results enabled us to continue investing in our platforms to deliver value to our clients while maintaining disciplined cost management and returning a significant amount of capital to our shareholders, ”Black said in a statement.
The company expects to get $ 1.5 billion in revenue by 2021.
Allscripts raised its outlook for Adjusted EBITDA for full year 2021 between $ 265 million and $ 275 million, an increase from the previous outlook of between $ 240 million and $ 260 million. The company also expects free cash flow between $ 115 million and $ 125 million, an increase from the previous outlook of between $ 90 million and $ 100 million.
“Going forward, we hope to benefit as healthcare providers, payers, and life sciences companies shift their focus toward acquiring best-in-class solutions from vendors that can deliver an integrated financial and clinical solution together. with data and analysis that generate better results on the spot. be careful, “Black said.