- Record Q2 2021 revenue of $15.7 million; an increase of 461% compared to Q2 2020.
- Closed the acquisitions of Aspiria, Rxi, VisionPros and Oncidium in Q2 2021, adding $96 million of annual revenue.
- Launch of new Complete Health Platform with national client with over 10,000 employees.
- Complete Health Platform gains momentum with enterprise clients; increase of over 260,000 employees, driving growth in Enterprise Health Solutions and Digital Health Services.
- Strong financial expectations with annualized revenue run rate exceeding $140 million and positive Adjusted EBITDA1 in Q3 2021.
VANCOUVER, British Columbia, Aug. 25, 2021 (GLOBE NEWSWIRE) — CloudMD Software & Services Inc. (TSXV:DOC)(OTCQB:DOCRF)(Frankfurt: 6PH) (the “Company” or “CloudMD”), a healthcare technology company revolutionizing the delivery of care, announced its financial results for the second quarter ended June 30, 2021. All financial information is presented in Canadian dollars unless otherwise indicated.
Dr. Essam Hamza, CEO of CloudMD commented, “I am very pleased with our second-quarter financial results as we delivered another strong quarter that reflects consistent growth across all divisions of the Company. Q2 2021 was an impactful quarter for CloudMD as we closed three of the largest acquisitions to date and added $96 million to our annualized revenue run rate, which will be fully recognized in Q3 2021. We are proud of the significant growth we have delivered already, and we are extremely excited about the future of CloudMD. The integration of our health technology solutions into one comprehensive healthcare ecosystem is on track and we have achieved impressive early adoption rates which will continue to drive organic growth. We are confident in our vision to disrupt healthcare delivery with a whole-person, patient-focused approach, which will translate into meaningful revenue growth in the future.”
Second Quarter 2021 Financial Highlights
- Q2 2021 revenue was $15.7 million, compared to $8.8 million in Q1 2021 and $2.8 million in Q2 2020. The increase is primarily attributable to acquisition growth with 4 acquisitions completed in the quarter, and 14 acquisitions completed in the last twelve months. Excluding the impact of Q2 2021 business acquisitions, the Company achieved a 9% organic growth rate from its existing businesses over Q1 2021.
- Q2 2021 gross margin1 was 36%, compared to 41% in Q1 2021 and 37% in Q2 2020. The decrease is due to revenue mix where patient support programs, a high-volume, and currently low-margin business, represented approximately 20% of revenues for the current quarter.
- Net comprehensive loss attributable to equity holders of the Company in Q2 2021 was $6.2 million or $0.03 per share, compared to $5.3 million or $0.03 per share in Q1 2021 and $2.8 million or $0.03 per share in Q2 2020.
- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) was a loss of $0.7 million in Q2 2021, compared to a loss of $1.5 million in Q1 2021 and a loss of $1.3 million in Q2 2020. The Adjusted EBITDA calculation adjusts for share-based compensation, costs related to financing, acquisitions, integration, litigation including associated loss provisions, and change in fair value of contingent consideration. Adjusted EBITDA is used by management to evaluate the Company’s cash operating performance, and a complete definition and calculation are provided further below.
- Cash and cash equivalents were $60.9 million as at June 30, 2021, compared to $99.2 million at March 31, 2021 and $59.7 million at December 31, 2020. In Q2 2021, the Company completed 4 acquisitions during the period and secured a debt facility of up to $62 million.
Second Quarter Corporate Highlights
- On April 6, 2021, the Company announced that it closed the acquisition of Aspiria, adding another leading Employee and Student-focused assistance program to the Company’s Enterprise Health Solutions (“EHS”) division.
- On May 12, 2021, the Company announced that it closed the acquisition of Rxi, a proprietary specialty drug management and patient support platform.
- On June 16, 2021, the Company appointed Karen Adams as President.
- On June 16, 2021, the Company announced that Oncidium acquired a strategic tuck-in acquisition (Cira Health Solutions), adding $17 million to the Company’s annualized revenue run rate.
- On June 24, 2021, the Company announced the closing of VisionPros, a rapidly growing digital eyewear platform.
- On June 28, 2021, the Company announced the closing of Oncidium, and secured credit facilities of up to $62 million from Bank of Montreal.
Outlook
CloudMD is focused on creating innovation in the delivery of healthcare services, by leveraging technology to improve access to care leading to better health outcomes. Through its team-based, patient-centric approach, CloudMD provides one, connected platform for patients, healthcare practitioners, and enterprise clients to address whole-person, coordinated care. The Company has a multi-pronged growth strategy that focuses on organic growth, accretive mergers and acquisitions, and leveraging assets across all divisions.
CloudMD’s primary focus is driving organic growth by realizing synergies across its healthcare ecosystem. The Company’s organic growth will be largely driven by: (1) strengthening and broadening channel partners; (2) realizing cross-selling opportunities to existing customers across CloudMD; (3) the deployment and adoption of the Complete Health Platform in the second half of 2021; (4) new product launches to existing customers (e.g. iCBT); and (5) US expansion of its North American offerings.
CloudMD’s proprietary platform has translated to its Enterprise Health Solutions Division, providing a leading full-service employer healthcare platform. The Company has already seen impressive adoption rates across its client base, as well as cost savings and cross-selling synergies. With the closing of Oncidium, CloudMD’s EHS division is now the largest and fastest-growing division, with over $70 million in annualized revenue and operating profitably. CloudMD has a robust sales pipeline and remains focused on driving additional growth by securing multi-year contracts with clients across North America.
The Company has a strong balance sheet and will continue to deploy capital towards a robust pipeline of accretive, synergistic acquisitions, focused on products, capabilities, clinical specialties, and technologies that are highly scalable and rapidly growing. CloudMD is actively seeking potential tuck-in acquisition targets that are complementary to its business and digital healthcare strategy.
CloudMD will continue to focus on delivering meaningful shareholder value by executing on its growth strategy through accretive acquisition, strategic capital allocation, and continuing to achieve organic growth across all divisions.
Selected Financial Information
All results were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.
| (In thousands of Canadian dollars, except per share amounts) | Three months ended |
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| June 30, |
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| 2021 | 2020 | (%) | 2021 | 2020 | (%) | |||||||||||
| Revenue | $ | 15,659 | $ | 2,790 | 461 | % | $ | 24,434 | $ | 5,847 | 318 | % | ||||
| Cost of sales | (10,102 | ) | (1,759 | ) | 474 | % | (15,286 | ) | (3,692 | ) | 314 | % | ||||
| Gross profit (1) | 5,557 | 1,031 | 439 | % | 9,148 | 2,155 | 325 | % | ||||||||
| Gross margin | 35.5 | % | 37.0 | % | 37.4 | % | 36.9 | % | ||||||||
| Expenses | 11,533 | 3,432 | 236 | % | 20,665 | 6,197 | 233 | % | ||||||||
| Loss before other items | (5,976 | ) | (2,401 | ) | 149 | % | (11,517 | ) | (4,042 | ) | 185 | % | ||||
| Other items, taxes, non-controlling interest | (174 | ) | (367 | ) | -53 | % | 60 | (349 | ) | -117 | % | |||||
| Net comprehensive loss attributable to equity holders of the Company | (6,150 | ) | (2,768 | ) | 122 | % | (11,457 | ) | (4,391 | ) | 161 | % | ||||
| Loss per share, basic and diluted | $ | (0.03 | ) | $ | (0.03 | ) | 0 | % | $ | (0.06 | ) | $ | (0.05 | ) | 20 | % |
| (1) Gross profit is a non-GAAP measure as described in the Non-GAAP Financial Measures section of this News Release. | ||||||||||||||||
| (In thousands of Canadian dollars) | Three months ended |
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| June 30, |
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| 2021 | 2020 | (%) | 2021 | 2020 | (%) | |||||||||||
| Net comprehensive loss attributable to equity holders of the Company | $ | (6,150 | ) | $ | (2,768 | ) | 122 | % | $ | (11,457 | ) | $ | (4,391 | ) | 161 | % |
| Add: | ||||||||||||||||
| Interest and accretion expense | 112 | 66 | 69 | % | 200 | 127 | 57 | % | ||||||||
| Income taxes | 115 | – | 100 | % | 155 | – | 100 | % | ||||||||
| Depreciation and amortization | 829 | 209 | 297 | % | 1,518 | 411 | 269 | % | ||||||||
| EBITDA(1) for the period | (5,094 | ) | (2,493 | ) | 104 | % | (9,584 | ) | (3,853 | ) | 149 | % | ||||
| Share-based compensation | 1,438 | 504 | 185 | % | 3,033 | 949 | 220 | % | ||||||||
| Financing-related costs | 122 | 195 | -37 | % | 871 | 260 | 235 | % | ||||||||
| Acquisition-related and integration costs, net | 2,860 | 98 | 2822 | % | 3,672 | 118 | 3012 | % | ||||||||
| Litigation costs and loss provision | (57 | ) | 403 | -114 | % | 46 | 403 | -89 | % | |||||||
| Change in fair value of contingent consideration | 11 | – | 100 | % | (326 | ) | – | -100 | % | |||||||
| Adjusted EBITDA for the period | $ | (720 | ) | $ | (1,293 | ) | -44 | % | $ | (2,288 | ) | $ | (2,123 | ) | 8 | % |
| (1) EBITDA is a non-GAAP measure as described in the Non-GAAP Financial Measures section of this News Release. | ||||||||||||||||
Second Quarter 2021 Earnings Conference Call
CloudMD invites all interested parties to join the conference call or webinar:
CloudMD Q2 2021 Earnings Call
Date: Today, August 25, 2021
Time: 2:00 pm PT / 5:00 pm ET
Toll-Free Dial-In Number: (833) 562-0117
International Dial-In Number: (661) 567-1009
Conference ID: 6446418
Webcast Link: https://edge.media-server.com/mmc/p/o2cjg6ix
Financial Statements and Management’s Discussion and Analysis
This news release should be read in conjunction with the Company’s condensed interim consolidated financial statements and related notes, and management’s discussion and analysis for the three and six months ended June 30, 2021, and 2020, copies of which can be found at www.sedar.com.
Non-GAAP Financial Measures
In addition to the results reported in accordance with IFRS, the Company uses various non-GAAP financial measures, which are not recognized under IFRS, as supplemental indicators of the Company’s operating performance and financial position. These non-GAAP financial measures are provided to enhance the user’s understanding of the Company’s historical and current financial performance and its prospects for the future. Management believes that these measures provide useful information in that they exclude amounts that are not indicative of the Company’s core operating results and ongoing operations and provide a more consistent basis for comparison between quarters and years. Details of such non-GAAP financial measures and how they are derived are provided below as well as in conjunction with the discussion of the financial information reported.
Since non-GAAP financial measures do not have any standardized meanings prescribed by IFRS, other companies may calculate these non-IFRS measures differently and our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Accordingly, investors are cautioned not to place undue reliance on them and are also urged to read all IFRS accounting disclosures presented in the audited consolidated financial statements and the accompanying notes for the years ended December 31, 2020, and 2019.
EBITDA
EBITDA is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. EBITDA referenced herein relates to earnings before interest, taxes, depreciation and amortization. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the cash operating income (loss) of the business. Please refer to the section on EBITDA for reconciliation.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Adjusted EBITDA referenced herein relates to earnings before interest; taxes; depreciation; amortization; share-based compensation; financing-related costs; acquisition-related and integration costs, net; litigation costs and loss provision; change in fair value of contingent consideration; and loss from discontinued operations. This measure does not have a comparable IFRS measure and is used by the Company to evaluate its cash operating income (loss) of the business, adjusted for factors that are unusual in nature or factors that are not indicative of the operating performance of the Company. Please refer to the section on Adjusted EBITDA for reconciliation.
Gross Profit
Gross Profit is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross Profit referenced herein relates to revenues less cost sales. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the business.
Gross Margin
Gross Margin is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross Margin referenced herein is defined as gross profit as a percent of total revenue. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the business.
About CloudMD Software & Services
CloudMD Software & Services Inc. (TSXV:DOC)(OTCQB:DOCRF)(Frankfurt: 6PH) is digitizing the delivery of healthcare by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient’s healthcare journey and provides better access to care and improved outcomes. Through CloudMD’s proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, healthcare navigation, educational resources and artificial intelligence (AI). CloudMD’s Enterprise Health Solutions Division includes one of the top 4 Employee Assistance Programs in Canada and offers one comprehensive, digitally connected platform for corporations, insurers and advisors to better manage the health and wellness of their employees and customers.
CloudMD currently services a combined ecosystem of over 7,000 psychiatrists, approximately 4,500 therapists and counsellors, approximately 4,000 psychologists, over 22,000 family physicians, over 34,000 medical specialists, over 1,500 allied health professionals, over 500 clinics, and over 5 million individuals across North America. For more information visit: https://investors.cloudmd.ca.
Forward-Looking Statements
This news release contains forward-looking statements that are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including with respect to its business plans. Although CloudMD believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. These forward-looking statements speak only as of the date on which they are made, and CloudMD undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances unless otherwise required to do so by law.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
