Allscripts Healthcare Solutions on Monday reported $451 million in revenue for the 2019 fourth quarter, missing its own revenue expectations.
The $451 million figure is a 2% rise from the year-ago quarter, when the Chicago-based electronic health records vendor posted revenue of $442.3 million.
Revenue for Allscripts has been relatively flat over the past few quarters.
During a call with investment analysts in November, Allscripts CEO Paul Black had said he expected the company's bookings growth to propel "mid-single-digit organic revenue growth" in the fourth quarter. At the time, Allscripts said it expected its fourth quarter revenue to be in the range of $460 million to $470 million.
Allscripts posted $312 million in bookings for the 2019 fourth quarter, up 5.8% year-over-year.
Allscripts' revenue from software delivery, support and maintenance services was down 2.6% for the quarter at $281.6 million. That was offset by the company's $169.4 million in client services revenue, up 10.6% from the 2018 fourth quarter.
Rick Poulton, Allscripts' president and chief financial officer, said during a call with investment analysts Monday that the company's gross margins suffered from a few factors, including cybersecurity costs in its hosting business, delays in service implementations and the revenue mix in the company's payer and life sciences business, called Veradigm.
Poulton was appointed to serve as CFO effective Tuesday, after Allscripts' previous CFO Dennis Olis departed from the company. Poulton was already serving as president.
Poulton acknowledged Allscripts' lackluster free cash flow, which was -$18.4 million for the quarter. That's up from -$61.8 million during the same period one year ago.
"The free cash flow numbers are pathetic," Poulton said. "I don't know what's another word. We've had two years in a row now where it's been well below our expectations. There's a number of things that contributed to it, but it is what it is."
He said Allscripts' goal is to convert roughly 60% of non-GAAP net income, or net income not calculated according to generally accepted accounting principles, to free cash flow.
Allscripts' non-GAAP net income in the fourth quarter was $28 million, down 15.2% from the year-ago quarter. The company reported a $19 million GAAP net loss.
Allscripts has launched a review of the company's operations as part of an effort to align its resources and become more efficient, Poulton said. As part of that effort, Allscripts will hire an independent advisory firm to provide feedback into the company's operations review and jointly develop a "significant EBITDA margin improvement plan."
Allscripts' adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, margin in the 2020 fourth quarter was 16%.