NXGN - NextGen Healthcare Reports Fiscal 2023 Third Quarter Results
Raises Full Year Revenue Guidance and Reaffirms Earnings
NextGen Healthcare, Inc. (Nasdaq: NXGN), a leading provider of innovative, cloud-based healthcare technology solutions, today announced its operating results for the fiscal third quarter ended December 31, 2022.
Fiscal 2023 Third Quarter Highlights
- Total revenue was $161.9 million compared to $149.7 million for the same period a year ago, an increase of 8%.
- Recurring revenue was $148.7 million compared to $134.5 million for the same period a year ago, an increase of 11%.
- Non-recurring revenue was $13.2 million compared to $15.2 million for the same period a year ago, a decrease of 14%.
- Bookings, which reflects annual contract value excluding renewals, was $44.8 million and included six deals greater than $1.0 million.
- Fully diluted net income per share was $0.12 compared to $0.08 for the same period a year ago.
- On a non-GAAP basis, fully diluted earnings per share was $0.26 compared to $0.24 for the same period a year ago.
- Issued $275.0 million convertible senior note with concurrent $40 million share repurchase.
- Acquired TSI Healthcare, a long-standing partner providing purpose-built clinical content and a differentiated service-oriented client experience.
“I’m pleased to report strong execution and solid results for the quarter. The team made great progress across multiple fronts, delivering revenue growth and demonstrating a disciplined approach to capital management,” said David Sides, president and chief executive officer of NextGen Healthcare. “We continue to make investments required for long-term profitability and remain confident in our ability to deliver durable growth in fiscal year 2024 and beyond.”
The company’s revised guidance for fiscal 2023, including the TSI acquisition and the convertible note issuance, is now as follows:
- Revenue is expected to be in the range of $642 million to $650 million, an increase from prior guidance range of $630 million to $640 million.
- Adjusted EBITDA is expected to be in the range of $110 million to $115 million, consistent with prior guidance.
- Non-GAAP earnings per share is expected to be in the range of $0.93 to $0.99, consistent with prior guidance.
Conference Call Information
NextGen Healthcare will host a conference call today at 5:00 p.m. EST to discuss operating results from its fiscal 2023 third quarter. Shareholders and interested participants may listen to a live broadcast of the call by dialing 800-343-4849 or 785-424-1699 for international callers and referencing participant code NXGNQ323 approximately 15 minutes prior to the call. A recording of the live webcast will be available on investor.nextgen.com after the call. It will be archived for 90 days.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our fiscal year 2023 outlook, financial and operating results, strategic priorities, growth initiatives and expected capital expenditures. These forward-looking statements are based on the current beliefs, expectations, and assumptions of the Company's management relating to the future (including, without limitation, statements concerning revenue, net income, and earnings per share). The words “positioned,” “proposed,” “potential,” “project,” “expect,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate, “strategy,” “expectations,” “future,” “likely,” “may,” “should,” “will,” variations thereof or similar expressions are intended to identify such forward-looking statements.
Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements, including but not limited to: changes in laws and regulations applicable to our business; changes in market conditions and receptivity to our services and offerings; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; our ability to maintain and expand our business with existing clients or effectively transition clients to newer products; our ability to attract new partners and successfully capture new opportunities; our ability to develop and grow partner relationships; our ability to attract and retain key employees; our ability to anticipate or respond quickly to market changes, execute our strategy and manage growth; the impact of litigation and governmental and regulatory agency investigations; the impact of governmental and regulatory agency investigations; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; the impact of the COVID-19 pandemic on our operations and demand for our services; impact of breaches or failures of the Company’s information security measures or unauthorized access to a customer’s data; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. Additional discussion of these and other risks, uncertainties and factors affecting our business is contained in our filings with the SEC, including our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q.
A significant portion of the Company's quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company's revenues and operating results are very difficult to forecast. A major portion of the Company's costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company's period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
USE OF NON-GAAP FINANCIAL MEASURES
This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than NextGen Healthcare, Inc., which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.
The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, gain on disposition of Commercial Dental assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income before provision for income taxes.
The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each quarter of fiscal year 2023 is 20.0%. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.
The Company calculates free cash flow as total net cash provided by operating activities, net of cash used for the additions of capitalized software costs and equipment and improvements. The Company calculates net debt as line of credit less cash and cash equivalents. The Company calculates non-GAAP adjusted EBITDA by excluding net acquisition costs, amortization of acquired intangible assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income from operations and then adding back amortization of capitalized software costs and depreciation as presented within the condensed consolidated statements of cash flows. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA divided by total revenues. The Company calculates Rule of 40 as annual revenue growth rate plus non-GAAP adjusted EBITDA margin.
The Company’s future period guidance in this release includes adjustments for items not indicative of the Company’s core operations. Such adjustments are generally expected to be of a nature similar to those adjustments applied to the Company’s historic GAAP financial results in the determination of the Company’s non-GAAP diluted earnings per share. Such adjustments, however, may be affected by changes in ongoing assumptions and judgments as to the items that are excluded in the calculation of non-GAAP adjusted net income and adjusted diluted earnings per share, as described in this release. The exact amount and probable significance of these adjustments, including net acquisition costs, impairment of assets, restructuring costs, shareholder disputes and related costs, which include net securities litigation defense, proxy contest, and related costs, and other non-run-rate expenses, are not currently determinable without unreasonable efforts, but may be significant. These items cannot be reliably quantified or forecasted due to the combination of their historic and expected variability. It is therefore not practicable to reconcile this non-GAAP guidance to the most comparable GAAP measures.
About NextGen Healthcare, Inc.
NextGen Healthcare, Inc. (Nasdaq: NXGN) is a leading provider of innovative healthcare technology solutions. We are reimagining ambulatory healthcare with award-winning solutions that enable high-performing practices to create healthier communities. We partner with medical, behavioral and dental providers in their journey toward whole person health and value-based care. Our highly integrated, intelligent and interoperable solutions go beyond EHR and Practice Management to increase clinical quality and productivity, enrich the patient experience and drive superior financial performance. We are on a quest to achieve better healthcare outcomes for all. Learn more at nextgen.com , and follow us on Facebook , Twitter , LinkedIn , YouTube and Instagram .
| NEXTGEN HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Recurring |
| $ |
| 148,720 |
|
|
|
|
| $ |
| 134,496 |
|
|
|
|
| $ |
| 431,982 |
|
|
|
|
| $ |
| 402,486 |
|
|
| Software, hardware, and other non-recurring |
|
|
| 13,157 |
|
|
|
|
|
|
| 15,225 |
|
|
|
|
|
|
| 42,640 |
|
|
|
|
|
|
| 42,605 |
|
|
| Total revenues |
|
|
| 161,877 |
|
|
|
|
|
|
| 149,721 |
|
|
|
|
|
|
| 474,622 |
|
|
|
|
|
|
| 445,091 |
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Recurring |
|
|
| 67,047 |
|
|
|
|
|
|
| 58,033 |
|
|
|
|
|
|
| 194,330 |
|
|
|
|
|
|
| 172,312 |
|
|
| Software, hardware, and other non-recurring |
|
|
| 11,515 |
|
|
|
|
|
|
| 7,978 |
|
|
|
|
|
|
| 32,988 |
|
|
|
|
|
|
| 23,085 |
|
|
| Amortization of capitalized software costs and acquired intangible assets |
|
|
| 6,787 |
|
|
|
|
|
|
| 8,193 |
|
|
|
|
|
|
| 20,665 |
|
|
|
|
|
|
| 24,246 |
|
|
| Total cost of revenue |
|
|
| 85,349 |
|
|
|
|
|
|
| 74,204 |
|
|
|
|
|
|
| 247,983 |
|
|
|
|
|
|
| 219,643 |
|
|
| Gross profit |
|
|
| 76,528 |
|
|
|
|
|
|
| 75,517 |
|
|
|
|
|
|
| 226,639 |
|
|
|
|
|
|
| 225,448 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative |
|
|
| 46,177 |
|
|
|
|
|
|
| 47,238 |
|
|
|
|
|
|
| 140,097 |
|
|
|
|
|
|
| 159,615 |
|
|
| Research and development costs, net |
|
|
| 19,621 |
|
|
|
|
|
|
| 19,390 |
|
|
|
|
|
|
| 62,273 |
|
|
|
|
|
|
| 57,229 |
|
|
| Amortization of acquired intangible assets |
|
|
| 919 |
|
|
|
|
|
|
| 881 |
|
|
|
|
|
|
| 2,329 |
|
|
|
|
|
|
| 2,643 |
|
|
| Impairment of assets |
|
|
| 247 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,576 |
|
|
|
|
|
|
| 1,577 |
|
|
| Restructuring costs |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 321 |
|
|
|
|
|
|
| 539 |
|
|
| Total operating expenses |
|
|
| 66,964 |
|
|
|
|
|
|
| 67,509 |
|
|
|
|
|
|
| 206,596 |
|
|
|
|
|
|
| 221,603 |
|
|
| Income from operations |
|
|
| 9,564 |
|
|
|
|
|
|
| 8,008 |
|
|
|
|
|
|
| 20,043 |
|
|
|
|
|
|
| 3,845 |
|
|
| Interest income |
|
|
| 1,530 |
|
|
|
|
|
|
| 50 |
|
|
|
|
|
|
| 1,650 |
|
|
|
|
|
|
| 79 |
|
|
| Interest expense |
|
|
| (2,239 |
| ) |
|
|
|
|
| (321 |
| ) |
|
|
|
|
| (2,894 |
| ) |
|
|
|
|
| (958 |
| ) |
| Other income (expense), net |
|
|
| (21 |
| ) |
|
|
|
|
| (9 |
| ) |
|
|
|
|
| 10,266 |
|
|
|
|
|
|
| (43 |
| ) |
| Income before provision for income taxes |
|
|
| 8,834 |
|
|
|
|
|
|
| 7,728 |
|
|
|
|
|
|
| 29,065 |
|
|
|
|
|
|
| 2,923 |
|
|
| Provision for income taxes |
|
|
| 1,019 |
|
|
|
|
|
|
| 2,535 |
|
|
|
|
|
|
| 6,479 |
|
|
|
|
|
|
| 1,653 |
|
|
| Net income |
| $ |
| 7,815 |
|
|
|
|
| $ |
| 5,193 |
|
|
|
|
| $ |
| 22,586 |
|
|
|
|
| $ |
| 1,270 |
|
|
| Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
| $ |
| 0.12 |
|
|
|
|
| $ |
| 0.08 |
|
|
|
|
| $ |
| 0.34 |
|
|
|
|
| $ |
| 0.02 |
|
|
| Diluted |
| $ |
| 0.12 |
|
|
|
|
| $ |
| 0.08 |
|
|
|
|
| $ |
| 0.33 |
|
|
|
|
| $ |
| 0.02 |
|
|
| Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
| 66,561 |
|
|
|
|
|
|
| 67,958 |
|
|
|
|
|
|
| 67,317 |
|
|
|
|
|
|
| 67,514 |
|
|
| Diluted |
|
|
| 67,307 |
|
|
|
|
|
|
| 68,167 |
|
|
|
|
|
|
| 68,005 |
|
|
|
|
|
|
| 67,851 |
|
|
| NEXTGEN HEALTHCARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) |
|
|
|
|
| December 31, 2022 |
|
|
|
|
| March 31, 2022 |
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
| $ |
| 241,550 |
|
|
|
|
| $ |
| 59,829 |
|
|
| Restricted cash and cash equivalents |
|
|
|
|
| 7,920 |
|
|
|
|
|
|
| 6,918 |
|
|
| Accounts receivable, net |
|
|
|
|
| 79,419 |
|
|
|
|
|
|
| 76,057 |
|
|
| Contract assets |
|
|
|
|
| 19,594 |
|
|
|
|
|
|
| 25,157 |
|
|
| Income taxes receivable |
|
|
|
|
| 6,897 |
|
|
|
|
|
|
| 6,507 |
|
|
| Prepaid expenses and other current assets |
|
|
|
|
| 34,257 |
|
|
|
|
|
|
| 37,102 |
|
|
| Total current assets |
|
|
|
|
| 389,637 |
|
|
|
|
|
|
| 211,570 |
|
|
| Equipment and improvements, net |
|
|
|
|
| 7,230 |
|
|
|
|
|
|
| 9,120 |
|
|
| Capitalized software costs, net |
|
|
|
|
| 52,603 |
|
|
|
|
|
|
| 43,958 |
|
|
| Operating lease assets |
|
|
|
|
| 4,982 |
|
|
|
|
|
|
| 11,316 |
|
|
| Deferred income taxes, net |
|
|
|
|
| 19,970 |
|
|
|
|
|
|
| 19,259 |
|
|
| Contract assets, net of current |
|
|
|
|
| 4,280 |
|
|
|
|
|
|
| 1,910 |
|
|
| Intangibles, net |
|
|
|
|
| 31,563 |
|
|
|
|
|
|
| 24,303 |
|
|
| Goodwill |
|
|
|
|
| 321,284 |
|
|
|
|
|
|
| 267,212 |
|
|
| Other assets |
|
|
|
|
| 39,474 |
|
|
|
|
|
|
| 39,026 |
|
|
| Total assets |
|
|
| $ |
| 871,023 |
|
|
|
|
| $ |
| 627,674 |
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
|
| $ |
| 14,509 |
|
|
|
|
| $ |
| 9,125 |
|
|
| Contract liabilities |
|
|
|
|
| 62,592 |
|
|
|
|
|
|
| 61,280 |
|
|
| Accrued compensation and related benefits |
|
|
|
|
| 25,818 |
|
|
|
|
|
|
| 48,736 |
|
|
| Income taxes payable |
|
|
|
|
| 12 |
|
|
|
|
|
|
| 99 |
|
|
| Operating lease liabilities |
|
|
|
|
| 4,312 |
|
|
|
|
|
|
| 8,089 |
|
|
| Other current liabilities |
|
|
|
|
| 46,955 |
|
|
|
|
|
|
| 53,533 |
|
|
| Total current liabilities |
|
|
|
|
| 154,198 |
|
|
|
|
|
|
| 180,862 |
|
|
| Contract liabilities, net of current |
|
|
|
|
| 11,117 |
|
|
|
|
|
|
| — |
|
|
| Deferred compensation |
|
|
|
|
| 7,569 |
|
|
|
|
|
|
| 7,230 |
|
|
| Convertible senior notes, net, noncurrent |
|
|
|
|
| 266,589 |
|
|
|
|
|
|
| — |
|
|
| Operating lease liabilities, net of current |
|
|
|
|
| 4,992 |
|
|
|
|
|
|
| 11,934 |
|
|
| Other noncurrent liabilities |
|
|
|
|
| 8,794 |
|
|
|
|
|
|
| 4,570 |
|
|
| Total liabilities |
|
|
|
|
| 453,259 |
|
|
|
|
|
|
| 204,596 |
|
|
| Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock, $0.01 par value; authorized 100,000 shares; 70,888 shares and 69,245 shares issued at December 31, 2022 and March 31, 2022, respectively; 66,039 shares and 67,075 shares outstanding at December 31, 2022 and March 31, 2022, respectively |
|
|
|
|
| 709 |
|
|
|
|
|
|
| 692 |
|
|
| Treasury stock, at cost, 4,849 shares and 2,170 shares at December 31, 2022 and March 31, 2022, respectively |
|
|
|
|
| (85,752 |
| ) |
|
|
|
|
| (35,874 |
| ) |
| Additional paid-in capital |
|
|
|
|
| 351,834 |
|
|
|
|
|
|
| 329,917 |
|
|
| Accumulated other comprehensive loss |
|
|
|
|
| (1,865 |
| ) |
|
|
|
|
| (1,909 |
| ) |
| Retained earnings |
|
|
|
|
| 152,838 |
|
|
|
|
|
|
| 130,252 |
|
|
| Total shareholders' equity |
|
|
|
|
| 417,764 |
|
|
|
|
|
|
| 423,078 |
|
|
| Total liabilities and shareholders' equity |
| $ |
| 871,023 |
| $ |
| 627,674 |
| NEXTGEN HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
| $ |
| 7,815 |
|
|
|
|
| $ |
| 5,193 |
|
|
|
|
| $ |
| 22,586 |
|
|
|
|
| $ |
| 1,270 |
|
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of capitalized software costs |
|
|
| 5,678 |
|
|
|
|
|
|
| 5,975 |
|
|
|
|
|
|
| 16,403 |
|
|
|
|
|
|
| 17,592 |
|
|
| Amortization of debt issuance costs |
|
|
| 199 |
|
|
|
|
|
|
| 127 |
|
|
|
|
|
|
| 453 |
|
|
|
|
|
|
| 381 |
|
|
| Amortization of other intangibles |
|
|
| 2,026 |
|
|
|
|
|
|
| 3,100 |
|
|
|
|
|
|
| 6,590 |
|
|
|
|
|
|
| 9,298 |
|
|
| Change in fair value of contingent consideration |
|
|
| (100 |
| ) |
|
|
|
|
| 7 |
|
|
|
|
|
|
| (100 |
| ) |
|
|
|
|
| 7 |
|
|
| Deferred income taxes |
|
|
| 463 |
|
|
|
|
|
|
| 6 |
|
|
|
|
|
|
| 463 |
|
|
|
|
|
|
| 35 |
|
|
| Depreciation |
|
|
| 1,195 |
|
|
|
|
|
|
| 1,625 |
|
|
|
|
|
|
| 3,841 |
|
|
|
|
|
|
| 5,406 |
|
|
| Excess tax deficiency (benefit) from share-based compensation |
|
|
| (244 |
| ) |
|
|
|
|
| 194 |
|
|
|
|
|
|
| (678 |
| ) |
|
|
|
|
| 834 |
|
|
| Gain on disposition of Commercial Dental assets |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (10,296 |
| ) |
|
|
|
|
| — |
|
|
| Impairment of assets |
|
|
| 247 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,576 |
|
|
|
|
|
|
| 1,577 |
|
|
| Loss on disposal of equipment and improvements |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 74 |
|
|
|
|
|
|
| 77 |
|
|
| Loss on foreign currency exchange rates |
|
|
| (20 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (13 |
| ) |
|
|
|
|
| — |
|
|
| Non-cash operating lease costs |
|
|
| 510 |
|
|
|
|
|
|
| 1,368 |
|
|
|
|
|
|
| 2,192 |
|
|
|
|
|
|
| 4,455 |
|
|
| Provision for bad debts |
|
|
| 500 |
|
|
|
|
|
|
| 463 |
|
|
|
|
|
|
| 1,100 |
|
|
|
|
|
|
| 1,142 |
|
|
| Share-based compensation |
|
|
| 9,063 |
|
|
|
|
|
|
| 7,050 |
|
|
|
|
|
|
| 26,516 |
|
|
|
|
|
|
| 18,685 |
|
|
| Changes in assets and liabilities, net of amounts acquired: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
| (1,098 |
| ) |
|
|
|
|
| 1,445 |
|
|
|
|
|
|
| (2,625 |
| ) |
|
|
|
|
| 6,319 |
|
|
| Contract assets |
|
|
| 7,191 |
|
|
|
|
|
|
| (3,731 |
| ) |
|
|
|
|
| 7,189 |
|
|
|
|
|
|
| (4,786 |
| ) |
| Accounts payable |
|
|
| 964 |
|
|
|
|
|
|
| 2,484 |
|
|
|
|
|
|
| 4,117 |
|
|
|
|
|
|
| 3,592 |
|
|
| Contract liabilities |
|
|
| (6,680 |
| ) |
|
|
|
|
| 1,373 |
|
|
|
|
|
|
| (4,941 |
| ) |
|
|
|
|
| 2,016 |
|
|
| Accrued compensation and related benefits |
|
|
| (3,169 |
| ) |
|
|
|
|
| 7,966 |
|
|
|
|
|
|
| (23,591 |
| ) |
|
|
|
|
| (8,355 |
| ) |
| Income taxes |
|
|
| (3,112 |
| ) |
|
|
|
|
| 2,110 |
|
|
|
|
|
|
| 822 |
|
|
|
|
|
|
| (7,214 |
| ) |
| Deferred compensation |
|
|
| 588 |
|
|
|
|
|
|
| 396 |
|
|
|
|
|
|
| 339 |
|
|
|
|
|
|
| 1,051 |
|
|
| Operating lease liabilities |
|
|
| (3,328 |
| ) |
|
|
|
|
| (4,702 |
| ) |
|
|
|
|
| (7,425 |
| ) |
|
|
|
|
| (10,062 |
| ) |
| Other assets and liabilities |
|
|
| (16,507 |
| ) |
|
|
|
|
| (16,292 |
| ) |
|
|
|
|
| (8,615 |
| ) |
|
|
|
|
| (6,684 |
| ) |
| Net cash provided by operating activities |
|
|
| 2,181 |
|
|
|
|
|
|
| 16,157 |
|
|
|
|
|
|
| 35,977 |
|
|
|
|
|
|
| 36,636 |
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additions to capitalized software costs |
|
|
| (8,490 |
| ) |
|
|
|
|
| (6,124 |
| ) |
|
|
|
|
| (26,906 |
| ) |
|
|
|
|
| (17,837 |
| ) |
| Additions to equipment and improvements |
|
|
| (632 |
| ) |
|
|
|
|
| (352 |
| ) |
|
|
|
|
| (2,058 |
| ) |
|
|
|
|
| (2,037 |
| ) |
| Payments for acquisitions, net of cash acquired |
|
|
| (47,451 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (47,451 |
| ) |
|
|
|
|
| — |
|
|
| Proceeds from disposition of Commercial Dental assets |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 11,253 |
|
|
|
|
|
|
| — |
|
|
| Net cash used in investing activities |
|
|
| (56,573 |
| ) |
|
|
|
|
| (6,476 |
| ) |
|
|
|
|
| (65,162 |
| ) |
|
|
|
|
| (19,874 |
| ) |
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from convertible senior notes |
|
|
| 275,000 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 275,000 |
|
|
|
|
|
|
| — |
|
|
| Proceeds from line of credit |
|
|
| 50,000 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 50,000 |
|
|
|
|
|
|
| — |
|
|
| Repayments on line of credit |
|
|
| (50,000 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (50,000 |
| ) |
|
|
|
|
| — |
|
|
| Payment of debt issuance costs |
|
|
| (8,483 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (8,483 |
| ) |
|
|
|
|
| — |
|
|
| Payment of contingent consideration related to acquisitions |
|
|
| — |
|
|
|
|
|
|
| (540 |
| ) |
|
|
|
|
| — |
|
|
|
|
|
|
| (540 |
| ) |
| Proceeds from issuance of shares under employee plans |
|
|
| 2,820 |
|
|
|
|
|
|
| (232 |
| ) |
|
|
|
|
| 5,395 |
|
|
|
|
|
|
| 877 |
|
|
| Repurchase of common stock |
|
|
| (40,000 |
| ) |
|
|
|
|
| (35,874 |
| ) |
|
|
|
|
| (49,878 |
| ) |
|
|
|
|
| (35,874 |
| ) |
| Payments for taxes related to net share settlement of equity awards |
|
|
| (3,853 |
| ) |
|
|
|
|
| (249 |
| ) |
|
|
|
|
| (9,977 |
| ) |
|
|
|
|
| (5,450 |
| ) |
| Net cash provided by (used in) financing activities |
|
|
| 225,484 |
|
|
|
|
|
|
| (36,895 |
| ) |
|
|
|
|
| 212,057 |
|
|
|
|
|
|
| (40,987 |
| ) |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
| 70 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (149 |
| ) |
|
|
|
|
| — |
|
|
| Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
| 171,162 |
|
|
|
|
|
|
| (27,214 |
| ) |
|
|
|
|
| 182,723 |
|
|
|
|
|
|
| (24,225 |
| ) |
| Cash, cash equivalents, and restricted cash at beginning of period |
|
|
| 78,308 |
|
|
|
|
|
|
| 81,564 |
|
|
|
|
|
|
| 66,747 |
|
|
|
|
|
|
| 78,575 |
|
|
| Cash, cash equivalents, and restricted cash at end of period |
| $ |
| 249,470 |
|
|
|
|
| $ |
| 54,350 |
|
|
|
|
| $ |
| 249,470 |
|
|
|
|
| $ |
| 54,350 |
|
|
| NEXTGEN HEALTHCARE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (In thousands) |
| The following table presents our revenues disaggregated by our major revenue categories and by occurrence: |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Recurring revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subscription services |
| $ |
| 45,850 |
|
|
|
|
| $ |
| 41,158 |
|
|
|
|
| $ |
| 132,025 |
|
|
|
|
| $ |
| 120,581 |
|
|
| Support and maintenance |
|
|
| 37,382 |
|
|
|
|
|
|
| 38,246 |
|
|
|
|
|
|
| 114,670 |
|
|
|
|
|
|
| 115,736 |
|
|
| Managed services |
|
|
| 32,963 |
|
|
|
|
|
|
| 27,521 |
|
|
|
|
|
|
| 94,663 |
|
|
|
|
|
|
| 83,636 |
|
|
| Transactional and data services |
|
|
| 32,525 |
|
|
|
|
|
|
| 27,571 |
|
|
|
|
|
|
| 90,624 |
|
|
|
|
|
|
| 82,533 |
|
|
| Total recurring revenues |
|
|
| 148,720 |
|
|
|
|
|
|
| 134,496 |
|
|
|
|
|
|
| 431,982 |
|
|
|
|
|
|
| 402,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software, hardware, and other non-recurring revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software license and hardware |
|
|
| 5,258 |
|
|
|
|
|
|
| 8,920 |
|
|
|
|
|
|
| 19,373 |
|
|
|
|
|
|
| 24,202 |
|
|
| Other non-recurring services |
|
|
| 7,899 |
|
|
|
|
|
|
| 6,305 |
|
|
|
|
|
|
| 23,267 |
|
|
|
|
|
|
| 18,403 |
|
|
| Total software, hardware and other non-recurring revenues |
|
|
| 13,157 |
|
|
|
|
|
|
| 15,225 |
|
|
|
|
|
|
| 42,640 |
|
|
|
|
|
|
| 42,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
| $ |
| 161,877 |
|
|
|
|
| $ |
| 149,721 |
|
|
|
|
| $ |
| 474,622 |
|
|
|
|
| $ |
| 445,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Recurring revenues as a percentage of total revenues |
|
|
| 91.9 |
| % |
|
|
|
|
| 89.8 |
| % |
|
|
|
|
| 91.0 |
| % |
|
|
|
|
| 90.4 |
| % |
| NEXTGEN HEALTHCARE, INC. NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) |
| RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Income before provision for income taxes – GAAP |
| $ |
| 8,834 |
|
|
|
|
| $ |
| 7,728 |
|
|
|
|
| $ |
| 29,065 |
|
|
|
|
| $ |
| 2,923 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition costs, net |
|
|
| 1,288 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,513 |
|
|
|
|
|
|
| — |
|
|
| Amortization of acquired intangible assets |
|
|
| 2,026 |
|
|
|
|
|
|
| 3,099 |
|
|
|
|
|
|
| 6,590 |
|
|
|
|
|
|
| 9,298 |
|
|
| Amortization of deferred debt issuance costs |
|
|
| 199 |
|
|
|
|
|
|
| 127 |
|
|
|
|
|
|
| 453 |
|
|
|
|
|
|
| 381 |
|
|
| Gain on disposition of Commercial Dental assets |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (10,296 |
| ) |
|
|
|
|
| — |
|
|
| Impairment of assets |
|
|
| 247 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,576 |
|
|
|
|
|
|
| 1,577 |
|
|
| Restructuring costs |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 321 |
|
|
|
|
|
|
| 539 |
|
|
| Shareholder disputes and related costs, net of insurance |
|
|
| 142 |
|
|
|
|
|
|
| 2,224 |
|
|
|
|
|
|
| 487 |
|
|
|
|
|
|
| 29,216 |
|
|
| Share-based compensation |
|
|
| 9,063 |
|
|
|
|
|
|
| 7,050 |
|
|
|
|
|
|
| 26,516 |
|
|
|
|
|
|
| 18,685 |
|
|
| Other non-run-rate expenses* |
|
|
| 167 |
|
|
|
|
|
|
| 351 |
|
|
|
|
|
|
| 779 |
|
|
|
|
|
|
| 4,379 |
|
|
| Total adjustments to GAAP income before provision for income taxes: |
|
|
| 13,132 |
|
|
|
|
|
|
| 12,851 |
|
|
|
|
|
|
| 27,939 |
|
|
|
|
|
|
| 64,075 |
|
|
| Income before provision for income taxes - Non-GAAP |
|
|
| 21,966 |
|
|
|
|
|
|
| 20,579 |
|
|
|
|
|
|
| 57,004 |
|
|
|
|
|
|
| 66,998 |
|
|
| Provision for income taxes |
|
|
| 4,393 |
|
|
|
|
|
|
| 4,116 |
|
|
|
|
|
|
| 11,401 |
|
|
|
|
|
|
| 13,400 |
|
|
| Net income - Non-GAAP |
| $ |
| 17,573 |
|
|
|
|
| $ |
| 16,463 |
|
|
|
|
| $ |
| 45,603 |
|
|
|
|
| $ |
| 53,598 |
|
|
| Diluted net income per share - Non-GAAP |
| $ |
| 0.26 |
|
|
|
|
| $ |
| 0.24 |
|
|
|
|
| $ |
| 0.67 |
|
|
|
|
| $ |
| 0.79 |
|
|
| Weighted-average shares outstanding (diluted): |
|
|
| 67,307 |
|
|
|
|
|
|
| 68,167 |
|
|
|
|
|
|
| 68,005 |
|
|
|
|
|
|
| 67,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Other non-run-rate expenses for the three months ended December 31, 2022 consist of $167 excess lease-related expense for vacated facilities. |
|
|
| RECONCILIATION OF FREE CASH FLOW |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Net cash provided by operating activities |
| $ |
| 2,181 |
|
|
|
|
| $ |
| 16,157 |
|
|
|
|
| $ |
| 35,977 |
|
|
|
|
| $ |
| 36,636 |
|
|
| Additions to capitalized software costs |
|
|
| (8,490 |
| ) |
|
|
|
|
| (6,124 |
| ) |
|
|
|
|
| (26,906 |
| ) |
|
|
|
|
| (17,837 |
| ) |
| Additions to equipment and improvements |
|
|
| (632 |
| ) |
|
|
|
|
| (352 |
| ) |
|
|
|
|
| (2,058 |
| ) |
|
|
|
|
| (2,037 |
| ) |
| Free cash flow |
| $ |
| (6,941 |
| ) |
| $ |
| 9,681 |
| $ |
| 7,013 |
| $ |
| 16,762 |
| NEXTGEN HEALTHCARE, INC. NON-GAAP FINANCIAL MEASURES (In thousands) |
| RECONCILIATION OF ADJUSTED EBITDA |
|
|
| Three Months Ended December 31, |
|
|
|
|
| Nine Months Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Income from operations – GAAP |
| $ |
| 9,564 |
|
|
|
|
| $ |
| 8,008 |
|
|
|
|
| $ |
| 20,043 |
|
|
|
|
| $ |
| 3,845 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition costs, net |
|
|
| 1,288 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,513 |
|
|
|
|
|
|
| — |
|
|
| Amortization of acquired intangible assets |
|
|
| 2,026 |
|
|
|
|
|
|
| 3,099 |
|
|
|
|
|
|
| 6,590 |
|
|
|
|
|
|
| 9,298 |
|
|
| Impairment of assets |
|
|
| 247 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 1,576 |
|
|
|
|
|
|
| 1,577 |
|
|
| Restructuring costs |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 321 |
|
|
|
|
|
|
| 539 |
|
|
| Shareholder disputes and related costs, net of insurance |
|
|
| 142 |
|
|
|
|
|
|
| 2,224 |
|
|
|
|
|
|
| 487 |
|
|
|
|
|
|
| 29,216 |
|
|
| Share-based compensation |
|
|
| 9,063 |
|
|
|
|
|
|
| 7,050 |
|
|
|
|
|
|
| 26,516 |
|
|
|
|
|
|
| 18,685 |
|
|
| Other non-run-rate expenses* |
|
|
| 167 |
|
|
|
|
|
|
| 351 |
|
|
|
|
|
|
| 779 |
|
|
|
|
|
|
| 4,379 |
|
|
| Total adjustments to GAAP income from operations |
|
|
| 12,933 |
|
|
|
|
|
|
| 12,724 |
|
|
|
|
|
|
| 37,782 |
|
|
|
|
|
|
| 63,694 |
|
|
| Income from operations - Non-GAAP |
|
|
| 22,497 |
|
|
|
|
|
|
| 20,732 |
|
|
|
|
|
|
| 57,825 |
|
|
|
|
|
|
| 67,539 |
|
|
| Amortization of capitalized software costs |
|
|
| 5,678 |
|
|
|
|
|
|
| 5,975 |
|
|
|
|
|
|
| 16,403 |
|
|
|
|
|
|
| 17,592 |
|
|
| Depreciation |
|
|
| 1,195 |
|
|
|
|
|
|
| 1,625 |
|
|
|
|
|
|
| 3,841 |
|
|
|
|
|
|
| 5,406 |
|
|
| Depreciation and Amortization - Non-GAAP |
|
|
| 6,873 |
|
|
|
|
|
|
| 7,600 |
|
|
|
|
|
|
| 20,244 |
|
|
|
|
|
|
| 22,998 |
|
|
| Adjusted EBITDA - Non-GAAP |
| $ |
| 29,370 |
|
|
|
|
| $ |
| 28,332 |
|
|
|
|
| $ |
| 78,069 |
|
|
|
|
| $ |
| 90,537 |
|
|
| Total revenues |
| $ |
| 161,877 |
|
|
|
|
| $ |
| 149,721 |
|
|
|
|
| $ |
| 474,622 |
|
|
|
|
| $ |
| 445,091 |
|
|
| Adjusted EBITDA margin - Non-GAAP |
|
|
| 18.1 |
| % |
|
|
|
|
| 18.9 |
| % |
|
|
|
|
| 16.4 |
| % |
|
|
|
|
| 20.3 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Other non-run-rate expenses for the three months ended December 31, 2022 consist of $167 excess lease-related expense for vacated facilities. |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230124006004/en/
Media Relations Contact
Tami Andrade
(949) 237-6083
tandrade@nextgen.com
Investor Relations Contact
James Hammerschmidt
(949) 237-6112
jhammerschmidt@nextgen.com