Health tech company Accolade boosts revenue 25% in first report since IPO, as COVID-19 roils industry

Health tech company Accolade boosts revenue 25% in first report since IPO, as COVID-19 roils industry

Seattle entrepreneur and former Concur president Raj Singh was again in the earnings sizzling seat Thursday afternoon as the CEO of Accolade, strolling analysts and traders by means of the well being advantages expertise company’s first quarterly report since going public last month in a $1.2 billion preliminary public providing.

He was lucky to have constructive information to share with analysts and traders. Amid the uncertainty of the COVID-19 pandemic, Accolade reported a 25% increase in quarterly revenue to $35.9 million, whereas narrowing its loss by 12%, to $14 million.

The company’s inventory is up greater than 4% to $39 per share in after-hours buying and selling following the earnings report.

Accolade, with headquarters in Seattle and Philadelphia, helps staff at its consumer corporations navigate their well being advantages, using well being assistants who work instantly with members and might name on nurses and different clinicians as wanted. The company stated it had 60 company clients as of July 1, giving it greater than 1.7 million members. Accolade has 1,250 staff of its personal.

A number of the company’s largest clients, such as American Airways, have been impacted severely by COVID-19. Airways represented 22% of Accolade’s revenues in its final fiscal 12 months, and job cuts in the sector may negatively affect the company’s member base and revenue. Singh stated Accolade has factored these cuts into its revenue forecasts, with no information to report on that entrance since the IPO.

However COVID-19 can be serving to Accolade’s enterprise. The company has been in a position to convey different company clients aboard with new companies designed to assist staff navigate the fallout from the pandemic.

Singh stated on the earnings call that Johnson Controls, the constructing and services engineering large, has develop into an Accolade buyer. The contract is beginning with as many as 30,000 Johnson Controls staff in the U.S. underneath Accolade’s COVID Response Care initiative, which helps employers in providing schooling, testing, contact tracing, return-to-work clearance, and different companies.

Johnson Controls additionally signed on as a bigger Accolade well being and advantages buyer for subsequent 12 months, overlaying all of its U.S. staff, Singh stated.

Additionally in the quarter, Accolade launched a pilot program with the U.S. Defense Health Agency, its first federal government customer.

Singh stated the pandemic has elevated the significance of well being take care of corporations in a method that would in the end enhance demand for Accolade’s companies, making well being care and wellness “not a check-the-box profit, however as an alternative one thing that instantly impacts enterprise continuity.”

“We envision a world the place, simply as board audit committees now routinely evaluate infosec protections for his or her corporations, different board committees will now be reviewing the healthcare methods for his or her companies,” Singh stated on the decision.

As a part of its earnings report, Accolade stated it expects revenue between $158 million $161 million in its present fiscal 12 months, ending in February 2021, up from $132.5 million in its prior fiscal 12 months.

The company’s earnings steerage for the present fiscal 12 months factors to a lack of $32 million to $36 million in adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA), in contrast with a lack of $33.1 million final fiscal 12 months.

Diversifying its buyer base is a key difficulty for the company, as a result of a focus of massive clients driving its revenue. Accolade’s 4 largest company clients (Comcast Cable, American Airways, Lowe’s, and State Farm) have been accountable for an mixture whole of 59% of its revenue of $132.5 million for its 2020 fiscal 12 months, which ended in February, based on its earlier monetary filings. Its largest buyer, Comcast, was accountable for practically 1 / 4 of its 2020 revenue.

Accolade was based in 2007 by Michael Cline and Tom Spann. The company has been led since 2015 by Singh, who beforehand co-founded journey expense software program large Concur, which offered to SAP for $8.3 billion in 2014. Concur co-founder Mike Hilton is the Accolade chief product officer.

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