Ontrak (OTRK) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue was $3.1 million, down 11% year-over-year; full year revenue was $10.8 million, down 15% year-over-year.

• Secured three new regional health plan customers and four health plan expansions in the past 14 months, including Medicaid, HARP, commercial, and Medicare Advantage plans.

• Launched WholeHealth Plus with Intermountain Health, enrolling over 325 members in the first month, and over 450 members with the Northeast Regional Plan.

• Q4 operating loss was $(4.4) million, a 16% improvement year-over-year; full year operating loss was $(17.8) million, a 16% improvement year-over-year.

• Active sales pipeline with six late-stage health plan prospects and 20 additional prospects, representing over 15 million lives.

Financial highlights

• Q4 2024 revenue was $3.1 million, down 11% year-over-year due to a lost customer, partially offset by a new customer.

• Q4 net loss was $(5.2) million, or $(9.54) diluted net loss per share; full year net loss was $(25.5) million, or $(17.02) diluted net loss per share.

• Gross margin for Q4 was 61%, slightly down from 62% in Q3 and 64.6% in Q4 2023.

• Operating cash flow for Q4 was -$4.3 million; net cash used in operating activities was $(13.4) million for 2024.

• Year-end cash reserves were $5.7 million, down from $9.7 million last year.

Outlook and guidance

• Q1 2025 revenue expected between $2 million and $2.3 million, a 27%-36% sequential decrease due to customer loss and ramp-up of new contracts.

• Revenue run rate expected to recover by Q2 2025 as new customer implementations stabilize.

• Management expects pipeline prospects, including a large Midwest plan, could more than double run-rate revenue.