WELL Health reports Q4 and full-year 2023 results

WELL Health Technologies Corp. announced its audited consolidated financial results for the fiscal year and fourth quarter ended December 31, 2023.

Hamed Shahbazi, Chairman and CEO of WELL commented, “We had an outstanding year in 2023 with record revenue, Adjusted EBITDA, Net Income and patient visits. I am proud to announce that with the inclusion of growth associated with our clinic absorption program where WELL is attracting clinics to its network for nominal consideration, we achieved organic growth of 15% and overall revenue growth of 36% in 2023 driven by strong operating results across all our business units. Our record achievements can be attributed to the Company’s discipline and focus on tech-enabling healthcare providers and supporting them by simplifying, modernizing, and digitizing their workflows and empowering them to deliver the best healthcare possible. In 2024 thus far, we have begun the year with an intense focus on enhanced profitability and capital efficiency and are very pleased to provide shareholders with new and enhanced guidance which features continued topline growth approaching $1 billion in revenues and accelerating Adjusted EBITDA growth into our guidance range of $125-130 million. What is exciting about our 2024 game plan is that it features less capital allocation and M&A activity and more emphasis on organic growth given the company’s growing attractiveness to care providers across Canada and the US.”

Shahbazi further added, “In support of our operating plan for 2024, we have strategically implemented comprehensive cost-cutting measures, including a streamlined approach to staff restructuring, increased utilization of AI and technology for process improvement and optimization, consolidation of suppliers, and tighter integration of our business units. These initiatives have not only strengthened our operational efficiency but also resulted in millions of dollars of annualized cost savings.”

Eva Fong, WELL’s CFO commented, “I am proud to announce that we achieved positive EPS, or Earnings Per Share, on an adjusted and unadjusted basis for the full year and fourth quarter of 2023. I am also very pleased that we were able to refinance our US$300 million credit facility with JP Morgan and a syndicate of investors on attractive terms. We generated $42.4M of Adjusted Free Cash flow(1) in 2023 and are in an excellent position to continue to fund our growth through our cash flows from operations and we expect to lower our overall debt levels, leverage ratio and interest costs in 2024.”

Fiscal 2023 annual financial highlights: 

• Total revenue for the year ended December 31, 2023, was $776.1 million, compared to total revenue of $569.1 million for the prior year, an increase of 36% driven by acquisitions and organic growth during the past year.
• Canadian Patient Services revenue was $230.4 million in 2023, an increase of 27% as compared to Canadian Patient Services revenue of $182.0 million in 2022.
• US Patient Services revenue was $476.9 million in 2023, an increase of 45% as compared to US Patient Services revenue of $329.6 million in 2022.
• SaaS and Technology revenue was $68.8 million in 2023, an increase of 20% as compared to SaaS and Technology revenue of $57.5 million in 2022.
• Adjusted Gross Profit was $372.3 million in 2023, an increase of 23% as compared to Adjusted Gross Profit of $303.3 million in 2022.
• Adjusted Gross Margin percentage was 48.0% in 2023, as compared to Adjusted Gross Margi percentage of 53.3% in 2022. The decrease in Adjusted Gross Margin percentage is driven by the Company’s increase in patient services revenue, most notably from recruitment revenue after the acquisition of CarePlus which has lower margins compared to other patient services and virtual services revenue.
• Adjusted EBITDA was $113.4 million in 2023, an increase of 8% as compared to Adjusted EBITDA of $104.6 million in 2022.
• Adjusted EBITDA to WELL shareholders was $88.4 million in 2023, an increase of 15% as compared to Adjusted EBITDA to WELL shareholders of $76.6 million in 2022.
• Adjusted Net Income> was $52.4 million, or $0.22 per share in 2023, a decrease of 2% as compared to Adjusted Net Income of $53.7 million, or $0.24 per share in 2022.
• Adjusted Free Cashflow was $42.4 million for 2023, a decrease of 13%, as compared to Adjusted Free Cashflow of $48.9 million for 2022. The decrease was mainly due to higher tax and interest payments offsetting the increase in shareholder’s EBITDA.
• Net Income was $16.6 million or $0.00 per share in 2023, a decrease of 11% as compared to Net Income of $18.7 million or $0.00 per share in 2022.

Fourth quarter 2023 financial highlights:

• WELL achieved record quarterly revenue of $231.2 million in Q4-2023, an increase of 48% as compared to revenue of $156.5 million generated in Q4-2022. The increase in revenue was mainly driven by acquisitions, seasonally strong patient visits in the Company’s primary care and WELL Health USA businesses and healthy organic growth of the Company’s virtual services businesses.
• Canada Patient Services revenue was $67.6 million in Q4 2023, an increase of 31% as compared to Canada Patient Services revenue of $51.5 million in Q4-2022.
• US Patient Services revenue was $143.5 million in Q4-2023, an increase of 55% as compared to US Patient Services revenue of $92.3 million in Q4-2022.
• SaaS and Technology revenue was $20.2 million in Q4-2023, an increase of 60% as compared to SaaS and Technology revenue of $12.6 million in Q4-2022.
• Adjusted Gross Profit was $101.0 million in Q4-2023, an increase of 26% as compared to Adjusted Gross Profit of $80.2 million in Q4-2022.
• Adjusted Gross Margin percentage was 43.7% during Q4-2023 compared to Adjusted Gross Margin percentage of 51.3% in Q4-2022.
• Adjusted EBITDA was $30.8 million in Q4-2023, an increase of 13% as compared to Adjusted EBITDA of $27.2 million in Q4-2022.
• Adjusted EBITDA to WELL shareholders was $22.6 million in Q4-2023, an increase of 7% as compared to Adjusted EBITDA to WELL shareholders of $21.1 million in Q4-2022.
• Adjusted Net Income was $11.2 million, or $0.05 per share in Q4-2023, as compared to Adjusted Net Income of $12.5 million, or $0.05 per share in Q4-2022.
• Adjusted Free Cashflow was $12.7 million in Q4-2023, an increase of 23%, as compared to Adjusted Free Cashflow of $10.3 million in Q4-2022.
• Net Income was $33.8 million or $0.12 per share in Q4-2023, an increase of 53% as compared to Net Income of $22.1 million or $0.09 per share in Q4-2022.

Fourth quarter and annual 2023 patient visit metrics:
For the full year, WELL achieved a total of over 4.2 million patient visits and 6.1 million care interactions in 2023. Patient visits grew 22% in 2023 compared to the prior year, and total care interactions grew 29% over the same period. This growth was driven through a combination of acquisitions and organic growth.

WELL achieved a total of over 1.2 million patient visits in Q4-2023, representing a year-over-year increase of 30% compared to Q4-2022, and a 27% increase compared to Q3-2023. In addition, WELL conducted over 547,000 technology interactions in Q4-2023 and completed 98,000 billed provider hours. Combining WELL’s patient visits, technology interactions, and billed provider hours, WELL achieved a total of over 1,769,000 care interactions in Q4-2023.

Fourth quarter 2023 business highlights:
On October 1, 2023, the Company completed its transaction with HEALWELL AI or “HEALWELL” in which the Company acquired the Ontario clinics from HEALWELL, obtained representation on HEALWELL’s board of directors, invested $4.0 million as part of a $10 million convertible debenture offering, and acquired a call option to purchase up to 30.8 million Class A Subordinate Voting shares and 30.8 million Class B Multiple Voting shares in HEALWELL over time, subject to the achievement of certain performance metrics.

On October 1, 2023, the Company acquired a 100% interest in Proack Security Inc. (“Proack”). Proack is a leading provider of offensive security assessments, offering services like penetration testing, red teaming, and social engineering to proactively identify and mitigate cybersecurity threats. Acquired by Cycura, WELL Health’s Cybersecurity Business Unit, Proack enhances Cycura’s capabilities in safeguarding sensitive data and maintaining robust security across healthcare and corporate networks.

On October 18, 2023, the Company announced the launch of WELL AI Decision Support. WELL AI Decision Support is a solution that utilizes artificial intelligence to aid healthcare providers in early disease diagnosis and preventative health, particularly in identifying over 110 complex or rare diseases. Developed by HEALWELL, this technology has been validated in both Canadian and U.S. healthcare systems. It aims to bridge the gap in healthcare diagnostics and patient care, ensuring more accurate and timely diagnoses, and is available through WELL’s digital marketplace for EMR tools and applications.

On November 9, 2023, the Company announced the launch of the WELL Longevity+ Program, a progressive extension of its preventative health division and designed to redefine the future of personal and corporate wellness. WELL Longevity+ enhances preventative health with advanced precision diagnostics and AI technologies for the early detection of serious health conditions to dramatically improve early diagnosis of major chronic diseases, paving the way for earlier treatment interventions.

On November 21, 2023, the Company announced the launch of WELL AI Inbox Admin, a powerful AI-powered system that creates efficient custom workflows to help optimize clinical operations and manage incoming documents such as faxes which are still prevalent in Canada’s healthcare ecosystem. WELL AI Inbox Admin seamlessly integrates with ‘EMR’ or Electronic Medical Records systems such as WELL’s OSCARPro EMR, enabling quick patient information retrieval and the ability to quickly triage and prioritize urgent matters, while its referral management features save time and enhance patient care pathways.
MB Bureau