Q4 2024 Marpai Inc Earnings Call
John Powers, John Powers,
Good morning and welcome to the Mar-Pay 4th quarter and full year 2024 earnings conference call.
All participants will be in a listen only mode. Should you need assistance please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions.
Please note, this event is being recorded. I would not like to turn the conference over to Steve Johnson, Chief Financial Officer, please go ahead.
Speaker Change: Thank you, and good morning, and welcome to the Mar-Pay Fourth Quarter in full year 2020 for Earnings Releases Webcast. With me this morning is Damien Lamendola, CEO and Director of Mar-Pay, and John Powers, President of Mar-Pay.
Speaker Change: These actions will fuel growth and did you see more base profitability and 2025.
John Powers: So we're now to John.
Speaker Change: Like gave me and everyone on our leadership team I'm, a large shareholder of Marseille and committed to profitable growth aligned with our shareholders.
Speaker Change: As we transition from writing the ship to a high performing Tpa, we have increased their focus on revenue growth. We are actively recruiting high caliber sales executives and expect to add at least one or two within the next quarter.
Speaker Change: RP saves approach is resonating with not only our existing potential our existing clients, but also our potential clients, especially as health care costs continuing to rise in the low double digits.
Speaker Change: As we have discussed in earlier calls we have seen great success in focusing ourselves attaching to a few targeted industries, where there are higher labor costs and tight markets. For example, we recently brought any large northeast hospital system that needed a tpa partner that can deliver cost savings right away.
Speaker Change: One other success that we have been experiencing is leveraging strategic partners that refer business to us throughout the year and that's just on the typical January one benefit plan year.
Speaker Change: Finally recall that Damian has over 30 years' experience in the pharmacy benefit management or P. B M industry. It remains tightly aligned with fellow industry executives under Damien's leadership and expertise we are launching our payer access in the second half of 2025, which we anticipate will reduce prescription costs for our clients while offering.
Speaker Change: Our solutions for high cost specialty drugs in fact, we're evaluating the potential to expand that program to other sales channels outside of our current book of business.
Speaker Change: In addition to driving lower cost of health care My pay us differentiating ourselves by executing a superior member experience we were.
Speaker Change: Recently announced a collaboration with empower and their health care engagement platform, reducing the multiple portals apps, you, Justin Boyd and providing world class service we.
Speaker Change: We've begun to roll out of that project and expect it to be complete by the end of June.
Speaker Change: Another key lever for improving the member experience and good strategy to drive continuous improvements in our operational kpis.
Speaker Change: And our call center, we have gotten our average speed to answer to less than 10 seconds when handling member calls.
Speaker Change: On her face team we've got in the average claims processing turnaround time for a clean claim to just seven business days.
Speaker Change: As we mentioned previously we're utilizing our AI skills.
Speaker Change: To assist in our member improvement of our operations.
Speaker Change: Finally, we continue to build out our market saves program, providing value added services to drive the cost of health care down for our clients their employees and their families cost savings.
Speaker Change: <unk> continues to be the number one reason clients choosing independent GTA such as Marty.
Damien Lamendola: With that I would like to turn it back over to Damien.
Speaker Change: Thanks, John Murphy's listened to reduce health care cost is essential and as the largest shareholder I'm fully committed to it.
Damien Lamendola: We must also deliver financial success.
Damien Lamendola: He will discuss our progress on that front and I want to emphasize our strategic focus on achieving profitability in 2025 and rapidly maximize the profitability going forward.
Speaker Change: Belgium purpose with profit.
Damien Lamendola: Before working with urgency.
Damien Lamendola: The team of streamlining tools that vendors are paid currently offer too many choices for services, we've created a core package of services and <unk>.
Damien Lamendola: Client loss additional customization more pay will suddenly accommodate at the right price.
Damien Lamendola: We have a continuous improvement mindset, we will make targeted reductions and operating efficiencies are realized.
Speaker Change: I'm very excited about our new warfare Rx program that had been personally leading you remember you may remember in 2017 are successfully sold.
Damien Lamendola:
Damien Lamendola: The Carlyle group and it bring my deep knowledge of PV insight tomorrow.
Damien Lamendola: Anticipate solid revenue growth and profitability, but the total systems approach to data analytics in combination with our artificial intelligence capabilities under one roof.
Speaker Change: We're implementing an early alert program to drive savings through better medical management.
Speaker Change: I'm not happy with our stock price the market education is underway at par pay.
Speaker Change: And personally presenting along with our CFO, Steve Johnson, the planet Microcap showcase in Las Vegas.
Speaker Change: 24th this exclusive investor conferences attended by sophisticated investors seeking high potential companies.
Steve Johnson: With that I'll hand, it over Steve to cover the financial highlights.
Speaker Change: Thank you Jamie.
Speaker Change: Please refer to our SEC filed 10-K for details I'll review. The highlights are the following achievements are that we achieved in the fourth quarter and 2024.
Speaker Change: We ended the quarter with about 800000 in cash on hand.
Speaker Change: While revenue declined by approximately 6% from Q3, we cut operating expenses by 5% saving approximately 300000 and will continue to review our client portfolio to focus on more profitable clients.
Speaker Change: Our operating loss was reduced from approximately $3 1 billion to approximately to approximately $2 7 million for the fourth quarter.
Speaker Change: And our net loss was 1.2 million down from $2 4 million from Q3, and even more significantly down from Q4 of 2023.
Speaker Change: Earnings per share were a loss of just eight cents, which was an improvement of 22 cents from Q3 in 2024.
Speaker Change: One of the key things is we had a lot of activity.
Speaker Change: In 2024, and we thought it'd be good to provide some additional commentary around and of course that in adjusted EBITDA.
Speaker Change: Metrics.
Speaker Change: So our adjusted EBITDA is calculated as earnings before interest taxes, depreciation and amortization, excluding nonrecurring transactions.
Speaker Change: Stock based compensation.
Speaker Change: The adjusted EBITDA loss for the year ended December 31, 2024 was $9 1 million as compared to a loss.
Speaker Change: $20 2 million for the year ended December 31 2023.
Speaker Change: Mass is improvement year over year.
Speaker Change: The improved adjusted EBITDA loss was due to the actions taken throughout 2023, and 2024 to better utilize our resources and reduce our expenses as we shared on our quarterly calls.
Speaker Change: Please note.
Speaker Change: That we provide our net loss to adjusted EBITDA reconciliation table I laid it on your screen as well in our press release and 10-K filing.
Damien Lamendola: With that I'd like to turn it back over to Damien.
Damien Lamendola: Thanks Pete.
Speaker Change: I'm demanding results.
Speaker Change: S C E O and largest shareholder I'm riding on the leadership team to aggressively pursue.
Speaker Change: Got it.
Speaker Change: Populating a culture of high performance from the highest levels of management to every team member.
Speaker Change: And our dedication to our shareholders customers and partners.
Speaker Change: Innovating, we're executing and we're delivering real results for primary solutions and delivering tangible value.
Speaker Change: We're not waiting for opportunities, we're creating there.
Speaker Change: Continued confidence and support are deeply appreciate it.
Speaker Change: Thank you Dan at this time, we will be open up the conference call for questions.
Speaker Change: We will now begin the question and answer session Task. A question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Speaker Change: Your first question comes from Ian Cassel with I F. E. M. Your line is now open.
Speaker Change: Congrats on the progress throughout 2024.
Speaker Change: I have a few different questions and I'll just ask two or three of them then I'll jump back in the queue and then maybe ask the remainder if there aren't any more but.
Speaker Change: 2024, definitely seems like a turnaround.
Speaker Change: Type of year, and it's a little bit of shaking the tree with the current customer base I think you've probably had some customers that were kind of unprofitable and you're glad to see them go but also replacing them with with new profitable customers. You know just thinking about churn for 2024 and going into 2025 is a lot of the churn now behind us.
Speaker Change: You still think well have some more of the tree that needs shaken.
Speaker Change: Thanks, Ian and John you want to take that one.
Speaker Change: Alright.
Speaker Change: I'll go and take it is.
Steve Johnson: Steve Sorry, Oh, sorry about that I was on mute.
Speaker Change: Yes.
Speaker Change: We definitely are continuing to focus our attention on our most profitable clients.
Speaker Change: I believe our overall attrition rate is definitely within line with the industry average.
Speaker Change: In early 2025, we will see some of that attrition flows through early in the year, but we have closed a significant amount of business throughout the first quarter and have a very strong pipeline for the remainder of the year. So we remain extremely optimistic.
Speaker Change: Okay, that's great to hear and another question I had would be you know your cash position I think you drew down $5 million to.
Speaker Change: To support the company, how do you think about the cash position and the planned growth looking ahead.
Speaker Change: Yeah, Ian we ended the year with approximately.
Speaker Change: Approximately $800000 in cash of course, all our actions have greatly reduced our our cash burn and certainly the.
Speaker Change: Additional <unk> 5 million from R.
Speaker Change: Our strategic financial partner H E. B capital was very very a helpful, especially driving our growth.
Speaker Change: In 2025.
Speaker Change: And we have plans in place to cover our requirements until the company's cash flow positive in 2025.
Speaker Change: Okay I appreciate that color and another question I would have would be and you mentioned strategic partnerships in your prepared remarks I was wondering if you could kind of provide a little bit more color on some of those strategic partnerships you have or ones that you expect to bring on to help accelerate the growth.
John: Sure. This is John.
John: We recently announced two significant collaborations with health and tech and empower.
John: Those bolt our two way streets, where we drive revenue for each organizations and bring leads to one another.
John: We have two additional ones that we're extremely optimistic about but at this point in time, we're not at Liberty to share so keep an eye for announcements on those.
John: These collaborations supercharge your sales cycle and definitely allow us to close blocks of business not just at one once he Tuesday approach leveraging our alliances.
Speaker Change: Thanks for that color.
John: You.
Speaker Change: How should people think about mart pays value proposition compared to the competitors that are out there.
John: Great question.
John: We we focus definitely driving significant savings to bend that healthcare employee benefits trends were the best in class.
John: <unk> member experience I recently met with a broker that I thought would share some of that feedback.
John: And what they said was my pay a solid in all aspects of the Tpa business. Many of this space helped us loss and supposedly teachers Martina is focused on the basics and getting good results. So we're going to continue to drive that.
John: Drive savings and best in class member experience and those are the two main reasons why anyone would choose an independent GPA such as Mark day.
John: So were extremely optimistic we're going to continue to drive those home for the remainder of the year.
Speaker Change: Okay White light I was going to ask all the questions I had.
Speaker Change: I know that you guys seem to be really excited about our PE or ex.
Speaker Change: And I'm just curious if you can maybe provide a little bit more color on why that product or or additional product is.
Speaker Change: So important and crucial to the growth of the company moving forward.
Damien Lamendola: Hi, this is damian.
Damien Lamendola: And with my years of experience in the <unk> space and have in fact, the industry for a long time.
Damien Lamendola: Lately pbms have attracted significant negative attention but.
Damien Lamendola: But we see an opportunity for more pay our apps as we viewed the pending legislation.
Damien Lamendola: And we took more transparency constructing a new morphing, our edge program to be complying with the legislation.
Damien Lamendola: At the same time delivering significant savings to our.
Damien Lamendola: Clients. We believe this will give us a significant competitive advantage in this space.
Speaker Change: One of the other things units I'm really excited.
Damien Lamendola: Exciting us is.
Damien Lamendola: First of all to have a.
Damien Lamendola: Our resource and expert such as Damian.
Damien Lamendola: The charge.
Speaker Change: On that and the second is when we look at our competitors out there on average.
Speaker Change: They're driving about 20% of their T T revenue through prescriptions and rebates there.
Speaker Change: And our percentage.
Speaker Change: While we don't specifically disclose it is has currently been way under the industry average and so just by.
Speaker Change: Improving the program and getting it out there we expect a large jump in our revenue and those programs.
Speaker Change: Grams tend to be very high margin as well, which again will be a significant driver of our profitability.
Speaker Change: <unk> ability by the end of 2025 people in this venue you don't Wanna add one more thing.
Speaker Change: The reason I'm so so.
Speaker Change: Citing a passionate about adding RFA Rx it gives us a total systems approach to health care in other words, we were doing everything we're seeing the prescription information of data and working with clients on that as well as the medical as well as all the other services.
Speaker Change: That in combination with our new AI capabilities to analyze this data.
Speaker Change: Give a better feedback.
Speaker Change: Doctors work with their patients their approval and their overall outcome and reduce the cost of their care, but yet improve on their their outcomes and improve upon their health.
Speaker Change: This gives us maximum bill ability to do that and so we expect to have greater savings with that for patients for doctors and a greater outcome. So we're very excited about.
Speaker Change: That's great to hear thanks for the color on that.
Speaker Change: Again, if you have a question. Please press Star then one.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Dee Johnson for any closing remarks.
Speaker Change: Thank you.
Speaker Change: This complete smart page fourth quarter 2024 earnings call. If you do have any additional questions or require further information.
Speaker Change: Get the.
Speaker Change: Next slide up there for you all.
Speaker Change: Please see the information on the screen or go to our Investor Relations website at IR Doc Murphy health Dot com.
Speaker Change: This webcast will be available for replay.
Speaker Change: Thank you again for joining us this morning.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].