Multiple digital health companies are reporting first quarter earnings this week. Here are the figures for two notable companies.
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Amwell
Amwell, a Boston-based telehealth company, suffered a goodwill impairment charge worth more than $330 million in the first quarter of 2023.
The impairment charge came from sustained decrease in the company’s publicly quoted share price and market capitalization throughout the year, according to a filing to the Securities and Exchange Commission.
The impairment charge helped cause Amwell to post a net loss of $398.5 million, or $1.42 per share in the quarter, compared with a net loss of $61.6 million, or 26 cents per share, in 2022.
Amwell’s Converge telehealth platform connects all of its products in one place. The platform—which has absorbed a significant amount of research and development funding—experienced 28% growth in total visits in the first quarter of this year compared with the fourth quarter of 2022. More than one third of its total visits were provided on the platform.
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Jack Wallace, vice president of equity research at a global investment and advisory firm Guggenheim Securities, said the platform is central to the company’s growth aspirations.
“There's definitely a path to profitability and I continue to believe in their growth rate acceleration trajectory,” Wallace said. “The third quarter [of this year] in particular is where we need to see the potential increases in subscription revenue. We should see that, assuming they don't have any meaningful attrition.”
Wallace expected the company’s research and development costs would dip while its gross profit margin line would see a bump due to increased utilization of Converge.
Still, Wall Street did not respond favorably to the quarter. The company's stock closed on Thursday at $1.99 per share, which was down 6% from the start of the day.
Privia Health
Tech-driven physician enablement company Privia Health said it paused a contract with a health insurer in the first quarter of 2023.
Privia lost approximately 9,300 capitated lives because of this pause, which dropped its total number to just over 31,300 capitated lives. On the earnings call, Privia’s president and chief operating officer Parth Mehrotra did not disclose the health plan partner but blamed the pause on issues with the health plan's technology services partner.
Despite this setback, Mehrotra attempted to instill investor confidence on its quarterly earnings call Thursday. He said he didn't expect the pause to impact the company beyond the first quarter.
“This was an example of a risk that was not in our control," Mehrotra said. “It validates our decision to share the risk with the health plan partner in such arrangement, especially as we are starting out in these arrangements for the first year."
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Privia operates in 12 states and Washington, D.C. Its business relies on provider partnerships that aim to funnel patients into value-based care contracts. The company supports its provider partners with a population health platform for that transition.
For the quarter, Privia reported a net income of in the first quarter of $7.3 million, or six cents per share, compared with a net loss of $17.5 million, or 16 cents per share, in 2022. The company posted revenue of $386.3 million for the period, representing an increase of 23% from $313 million in 2021. Most of its revenue is through fee-for-service care.
In a separate move, Privia sold approximately 42.5 million shares of its stock in a secondary offering for $22.00 per share. The company said it would not receive any proceeds from the sale. Hedge fund Durable Capital Partners and investment firm Rubicon Founders were among those receiving shares.
Privia is one of the few digital health companies to see its share price increase after going public in May 2021 at $23 per share. The stock closed at $27.43 on Thursday.
This story first appeared in Digital Health Business & Technology.
