Ontrak (OTRK) 13 Nov 242024 Q3 Earnings call transcript

Thank you for standing by, and welcome to the Ontrak Health Third Quarter 2024 Earnings Call. [Operator Instructions]. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Ryan Halsted, Investor Relations. sir. ahead, go Please

and all operator, today's participating call. thank you, for you in Thank

are Executive the Park, LaVerne, Osborne, the XXXX. company's results Brandon Joining call website. September ended Chief is today, released Chief XX, available Officer; at the quarter Officer. Earlier copy President Commercial Officer; release and Financial James of Chief A Ontrak financial press and Lou Mary on

other these to, condition SEC. and factors XX-Q outcomes any or or differ remarks than I certain expressly results, and guidance, would Brandon. forward-looking but the from which facts estimates, and filed this Ontrak may described that like concerning following Ontrak's and are statements include, these other results typically forward-looking performance not uncertainties. Other obligation used begin, business, and the in operating believes, These guarantees affect statements. actual we Factors statements. the Before of with I'd financial XX-K the conference the confidence, forward-looking not as make disclaims call forward-looking historical to in to With Form statements. are Form anticipate, may forward-looking call risk of future Therefore, materially Risk section The to statements. statements. by implied over and statements some All to to risks other are involve that, expressed targets, words but projects factors to expressions those may intend, update like expects, forward-looking identify the intent limited turn subject are are

members. start management. respect for our expansion Health our not to includes call yet for program you, care on thank physical newest customer exciting planned risks. may designed to news our more offering intensive the This and with those support qualify being needs, but bridging Ryan, gap showing still program to our you, aims some today. for plans solution XX,XXX rising health specialized This proactive who to I'd like WholeHealth+ sharing coaching for intervention approximately behavioral care by engaged their members expansion health for Sentara Thank everyone, and require

can Advantage Medicaid, Once intelligence are coaching Our of a augmented commercial. offered support. unique across care identified, businesses, Medicare proactively HARP, solution be human multiple to interaction including and engaged of personalized members lines and Engage through members blend offered and

marketplace Our the of have customers target customers we population expansions seamless the plan quality commercial plan new enjoy expansion this including spanning new of types, of engage health WholeHealth+ HARP, top January and a X WholeHealth+ outreach secured solution. on membership health of and year, which Medicaid, versatility regional of our plan our pool. Collectively, range since a in now then X showcasing offerings, is the

multiple our momentum. enthusiastic making and James and in pipeline product activity is our are tremendous further these believe will are accelerating we positive with continues pipeline the about progress launches. Overall, our of to the new our bringing funnel faster. impact revenues highlight prospects to We build the offerings down

clients demonstrable funnel serve. sales of cycle the as achieved they detail, Lou we to are near progressing with members and partners to programs are improvements the signature. and bottom as resonating our our clinical well a savings both closer strongly as existing The top potential as in the will existing through the As Mary as prospects those continue more the discuss build nicely bring well

pandemic. follow they redeterminations deal tailwinds our services with of at sales of inflection for Many our James acting significant represents describe Medicaid demand Several challenges for are macro post the a going currently our growth elevated shortly, the navigate to plans as while As trends Ontrak's facing driving funding bottom funnel will opportunities in growth. forward. continue medical trends the and cost as

believe strong targets. Significant close customers, retention meet I than want XX% and member a HEDIS and closure seeing including HEDIS greater than address and reimbursement tailwind, and scoring. Our problems are for this an health increasingly helps double what obtaining outreach on customer our rate, new members, the more scores our solutions risk to a we maintaining for differentiator. engagement Building diagnoses elevated ability and quality improve success to for a solution these how reducing particularly planned expansions, impact our ratings, HEDIS plan costs and standard. becoming current measure emphasis is we're which engagement our our HEDIS increasing Ontrak AI-driven resulting scores, directly HEDIS on There's metrics, clients. With efficiently be to leveraging highlight ratings gaps In gaps impact quoting engagement gap reimbursements. By for health on where our key impact The the industry quality for we has era partners. system exceed to achieving firsthand plans on plan enhanced impact plan health their metrics Ontrak's direct an

progress. Officer, pipeline Now our I'd speak to and who like Commercial to Lou about turn call President more Osborne, Chief the Mary will our over

progressing Thanks, reach above announced plan Brandon. given is to thrilled plan signing representing both health are HARP lines us in has rates recently include services light customer and business, the standards. solutions, This with the region, customer, green industry of large Medicaid, including The to enrollment help solutions that commercial gaps over new to of health care. high close new to I'm and XX,XXX well a previously of WholeHealth+. multiple quality the a Ontrak's expand Northeast have HEDIS in for launch

late and X our regarding poised momentum. Currently, for and a customer continued Digital we the X to announcements and our powered health X Health of continued have evidenced innovation, comprehensive as our recent strategic engagement expansions. focus on our adoption by are is integration of advanced Ontrak next customers sales of stage the health With by reviewing Twin, to the our interested system, financial which consists new contractual Mental growth care in framework and of proceed prospects current partnership prospects agreed cycle have active plan These and step terms. the in

work and the prospects is new move of health their system start we One major by this lives the to with opportunity financial larger receive the forward, of of next population, intent cohort Medicare XX,XXX our all a X Advantage in verbally expect agreed for million multiple initial to has This to lines care over prospect once statement these our partnership With terms the to across prospect, customer outcomes business expand an membership engagement. prominent West a clinical markup achieved to to are is and representing of lives. week.

customer prospect customer for as large as lives our new line WholeHealth+ is over include several for one solution Blues ] well the plan in of government Midwest our current and The The solution. other regions for a Medicaid [ second WholeHealth+ new is business. Engage interested XXX,XXX with in a the for and Engage expansions X new

momentum. to continues pipeline total Our build

over to to now Officer, addition I call have turn X just the lives. I'd In prospects, James our representing we planned Chief described, additional the also million Financial like XX Park. approximately And opportunities to active XX

reflecting are X,XXX quarter Mary in X,XXX began includes with of members Thanks, of ENGAGE part reached of the decrease that the of simple to X,XXX, a members Lou. In QX, was current concluded year. and at which decrease same our program. a customer a revenue due average We last XX% period beginning resulting XX The with million, our the to $X.X compared the the loss year.

decrease revenue $XXX XXXX enrolled This represents a to QX of the plan revenue new lower primary per due pricing shift engaged The is quarterly $XXX factor from month. approximately month from and from member $XXX. health to a different with QX average Our of resulting contributing in customers inclusion this members structures per of decline XXXX. in per per the mix with newer and member

have while discussed prior As mainly customers consistent margins. value-based our efficiencies quarters, in have structures gained with operations, as worked in and pricing flexible with we we

through of member the compared year. revenue our anticipate the last continue move we to rest As we to year, month decrease per per

new to is X,XXX our which rate we new from for enrollments annualizes pool, new at XXX rate contrasts in rate data, higher quarter, launch. In and QX This due new of X,XXX XX% XXXX QX in as X,XXX gross current QX quarter, XX% stood experienced compared we enrollment of XX% we enrollments and of QX of to to the to QX disenrollment of members enrollment The any QX the the quarter. that a figure compared membership August our customers XXXX. our new with XXXX. Regarding Dividing XX% QX it in the averaged and increase rate XXXX enrollment our XX% by XX% QX XXXX. in monthly members customer announced enrollment during of average outreach we in for of in in added XXXX

Taking periods. net represents which and account of enrolled XXX enrolled we our Additionally, This graduations, at increase is XX% this graduation program of from during achieved beginning approximately graduate rate a quarter. quarter saw enrollments, new quarter. the the with of members we the consistent prior members XXX the disenrollment members into

gross represents QX last achieved XX.X% from margin and of recorded XX% year. of in we XXXX QX QX, margin a This For of a XX%. in decrease

Looking ahead, their levels. we gross our to anticipate maintain current margin

during due slight proactively our periods This initiate we expansions. practice member-facing new However, to for when decreases expansions. experience preparation employees these we hiring may is of customer in

flow cash balance statement. sheet the to Turning and

negative in Our showed last in year million QX QX for $X.X negative XXXX. compares $X.X million. same a of flow a the million $X.X negative operating and This quarter cash to

at at the a $X $X.X we quarter the represents reserves on of hand the As million from the conclusion of cash stood had end, year. previous our million. decrease This

quarter demand for and subject $X of the drew million quarter down to million we a subsequent note future During draws total with $X.X to available approval. end,

exercise about revenues received to the subsequent end, cash million $X.X addition, we warrants. Thinking quarter ahead. of proceeds In from of

XX% The now $XX approximately million increase million our annual bottom Mary represent million Our revenue annual X under customers contract. expansion week. XXX% Lou million current XX% which last $XX are an and revenue, current $X announced approximately significant of increase the of opportunities or contract to $XX customers to due to mentioned at a includes approximate of that under the additional account to the for funnel from

and launching Northeast XX% announced as of our to and newest or XXXX, QX of last anticipate week. $X.X expansion revenues launched solution a the Engage new to continue outreach increase for million in XX% sequential the in members million Specifically, range the customer we $X.X we

for Now we will open it up questions.

Instructions]. [Operator

This program does to remarks. Brandon back like the today's program. to question-and-answer conclude any for now hand of the I'd further session

afternoon. great today. a joining Thank you, all our thank Jonathan, call and for you Have on

conference. Thank participation today's gentlemen, you, in the and for program. does conclude ladies This your

Good now You may disconnect. day.