Forian (FORA) 12 May 232023 Q1 Earnings call transcript

Greetings, and welcome to Forian Inc.

First Quarter 2023 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal comments and webcast.

Participating today from Forian are Max Wygod, Executive Chairman and Chief Executive Officer; and Michael Vesey, Chief Financial Officer.

of like forward-looking you of statements Securities Reform I'd today management's the begin, Litigation contain may within Act we to that remind remarks Private Before XXXX. the meaning

SEC ended from files report Actual results due March a for on on section in Form of variety of indicated with discussed year those factors those Risk forward-looking XX-K to including those December important the XXXX. may as statements by the the XX, materially XXXX differ Factors XX, Company's the annual

Estimating accurately today. could involves is, and There circumstances performance materially differ to that for financial and difficult future outlook change. results incorrect as assumptions may therefore, from the performance a it is be estimates plans may is based significant on and provided risk internal that actual prove that

Words Any them on made as obligation this seek, date will, but the call statements takes plan, anticipated intend, variations as the and forward-looking words represent These except or prospects. to include, expect, required as of believe, today no forward-looking statements under law. estimate, company projected, such and anticipate, update forecast, similar company's expressions to views the limited not words of of growth, are statements future, and such may, or versions identify or statements these regarding expressions propose future to, are should, intended performance by

financial be in company performance may financial a considered with non-GAAP operating for measures call, Today's be supplement believes adjusted to assess certain which also accordance measures and on as our presenters the to prepared not should GAAP. refer will such as investors substitute and EBITDA, to its important to

company's company's in on GAAP March subject release with metric Risk report reconciliation XX, of in webcast, change, Those and on the including regarding are press XX-K the A anticipated today's unaudited the on numbers Form filed risks which the statements and are any the section can be be both comparable performance found Factors a annual result the of SEC available website. may as XXXX. of to discussed company's of

is as well as A and release of SEC florian.com/investors. at today's call and recorded. available press the webcast and copy be Today's being filings the transcript of will copies full recording webcast

the Interim Officer, am Sir, Chairman now Company's may Chief Executive Executive introduce begin. Max you and to pleased Wygod. I

Thank of only fiscal afternoon. our into you you. XXXX and the Good afternoon, thank year XXXX information our joining and a transition for nearing fiscal been and play a everyone, are days results XX reconfirmed quarter Forian approximately today, end since we It pure on end the our has reported company. first guidance. Friday close After call healthcare

growth now resulting success driving focused to increased Our customer able acquisition to product cross-selling first while we as a our customers. enterprise long-term challenging navigate are awareness of improvements the in healthcare macroeconomic strategy, and existing quarter results environment that reflects brand increased has operating against headwinds executing been in in the innovation in a and market,

and provide first I'll some our financial Mike details our Today, highlights results. on quarter then to from speak our results operational will and share

health improve outcomes patients differentiated of analytical healthcare through mission a our of customers we to and the oriented driven solutions. company, and As are performance information

and more our critical. of and importance be effective the to the more As steer continue products analytics the in is even efficient current to services customers leveraging through commercialization and of environment, delivery their

data client to our We deliver customers, to valuable unparalleled expertise help data with continue their domain leverage those due in and how to clients ability information assets, customers service. to superior improve win performance to solutions best to our

insights operational, customer accurate and financial data mastering customers product in large expertise Our clinical market our optimize that with performance. sophisticated capabilities highly and management data assets and clinical provides science data timely with and

quarter, first operation. strong the in building a we and the are it edge In leading as so, divestiture healthcare a discontinued and brand reliable the with treated fiscal scalable financial first BioTrack is our delivered quarter doing Forian information results new In space.

was Forian's revenue million, represented total first quarter which growth. $X.X XX% year-over-year

gain $X.X net for a sale on loss the million Our reflects net quarter $X.X of from and million. of a income BioTrack of the net of $X.X continuing million operations

Our adjusted EBITDA our loss was from previous continued reflecting from improvement million, quarters. continuing operations $X.X

proud team's in on am I of strong macroeconomic work growth in we environment. these delivering as our plan challenging our executed results the

deals, budgets in reported new as to win some while discretionary tightening expand cycles first and previously customers. As longer with upsells in saw as customers quarter, well delayed we sales we spending, existing the continued

successfully our overnight, differentiated can offerings. market We compete do set but and and back not bounce business to think scalable this I of growing the win we large in illustrating expect market by superior

clinical from Our uses datasets. analytics call of and de-identified built market. compliant uniquely master complex, normalize one Factory, have longitudinal and foundational the large the and methodologies integrate health HIPAA integrated technology, determinant lakes advanced been patient in we of the Data transform social level largest This data Forian to which solutions

competition can we transparency believe improve further to separate data assets, industry to better deliver care market, accuracy life and continue integrate ourselves enhance We healthcare will the in industry outcomes. to science and patient effectively ability and enable from the cost improving to that our drive incremental particular

offering predictable our base. a of offerings sold a Most recurring are strong on basis, subscription revenue

trust of satisfaction. greater approach delivery client retention and selling quality and consultative ensures our exceptional Our customer and genders

efficient in to them force data on deliver solutions a into expertise customer basis and management flexible the enables meet and an don't us one-size-fits-all-box. are to that needs technology enough Our

how quarter more to as at deliver better in conferences, Professional the we Forian ISPOR as beginning in second the examples Health we leading even thought be Research and spoke a at Economics our for superior such, is leader Society As this for recognized solutions example, and been clinical quarter, company as space. Outcomes Each insights of young a known have presenting

two other these growth complex emerging market will and the organizations. customer our our larger CROs science our increase companies fill We life companies and believe and that Biotech's current awareness pace events brands the and like beyond pharmaceutical in as midsize healthcare

opportunities to any our or of sheet accelerate value. growth strong a that advantage take long-term have can we Additionally, balance

We if organic the opportunities growth but synergistic our arises. and are confident in growth to also poised situation take of long-term are advantage

valuations private are come seen evaluate to multiples, down, opportunities reduction we in nearing some potential and public the increased M&A. company As discussions have to starting

Overall, milestone another Forian with divesting cannabis the event delivered of along and business. quarter, operating its financial solid

Our to revenue to growth, level, improved in margins and high quarters at cash from further flow team resulted executing forward committed growth come. we a look a and the

financial it now results Mike will over hand more I to in over go Mike? detail. our to

an results for Max. I will Thanks, XX, of Today, XXXX. financial overview provide March Forian's ended quarter the

shift, SEC dispositions has and of XXXX. the software impact Forian representing to solutions Forian security-grade no transaction previous our and previously filings, which longer this the in the BioTrack operations. businesses, on disposition our significant completed a Ingenia of February XX, As industry, disclosed a Through provide cannabis strategic on

reclassified Accordingly, quarter we with have the XXXX effective and operation results consistent our of reported for on have the accounted of operations first basis. a discontinued operating a disposed as previously businesses

My discussion today for financial press GAAP March will our reference release otherwise. a quarter XXXX, results on operations for issued noted comparative unless basis. The continuing the XX, today results ended presents Forian's

EBITDA, reported to the have as As of in the a track which prior uses management business. performance we measure adjusted also quarters,

include materials to the these net noted, presentation of As loss. release detailed adjusted a and press reconciliation EBITDA

a first last both the million year quarter revenue compared by revenues year. over up growth the of XX% of was million quarter in $X.X consolidated same were The to driven or $X.X last Our quarter new for The the recurring to provide customers our basis. from for a of stream multiyear and majority information continuing going-forward our revenue deliverables revenues over customers increased predictable existing a relationships. on information contracts providing our period,

quarter million from same net million expenses, year. a The partially loss continuing from were $X.X decrease operations $X.X sales from by reduction expenses Net improvement continuing million. offset income year million development loss offset million, from G&A decrease in loss such $X.X driven and in in the $X.X costs quarter for operations in other the changes to The last revenue primarily same by and $X.X a discussed operations partially of by compared resulted taxes. the decreased items and research above, a as to income was interest loss last which quarter from continuing of million increased $X.X and growth in when separation reduction the in

was taxes. quarter XXXX, of year on resulting operations, million of was net primarily from gain $X.X net Income tax, million. Loss sale from first period $X.X of last operations the discontinued discontinued from for BioTrack the the same of during

last EBITDA the negative continuing which from stock-based costs certain compared in Adjusted same million nonrecurring other year. the excludes operations, compensation, $X.X amortization was quarter $X.X million and depreciation, to negative

level with relative expect forward. investments the leverage made us a streamlining to business BioTrack in infrastructure with expense to going continue our of allow our to of incremental the divestiture We the to we growth revenue lower of

explanation an noted EBITDA, our net As items earnings today's a of included reconciling adjusted with of in is loss release. along the to reconciliation earlier,

to noted to ended cash $XX.X We prior million to prior should year sheet. and XXXX, turning from which Now, February due additional convertible to XX, no with million additional of in the that collected business maturities proceeds million, notes be with these our the forward. of be sale our exclude It $XX going grow September will amounts marketable BioTrack providing XXXX. $X.X liquidity and balance securities of

were revenues Our million healthcare $XX.X XXXX. in information

range XX% reflecting expect million, We prior year's million over increase be to XXXX of to the of the $XX.X revenues. XX% information in revenues $XX.X an to healthcare

EBITDA to loss as infrastructure, net leverage our XXXX. continue a EBITDA achieving adjusted second in improvements contribution in continued the expect We and of half adjusted positive our we

the And questions. with who will over open for to call that, the I operator will line turn the

Street [Operator line first the Martinuzzi you. with Lake open. Please, Markets. Thank is from comes our line of your question Instructions] And Eric Capital

$X.XX It's out sequentially, off question, solid to top Hi, at, there amount, and I did line bottom the in there good Was business line. was execution we QX. there, just only Or on the explanation it a did year both a what's one-time the have for but I that down? million want not congrats decline QX? good on in see finished QX -- was and a recur it it QX a sequentially to was small sequentially. starting say, did

business. Mike. sell we our, time of particularly is business. most call The about makes in also contract, the talked recurring out, two you do we reason business, from up what is flavors. it, from our it's point revenue variability Eric, Hi which But is past, basically we pointed the in sell as some Yes. quarter-to-quarter, revenue One quarter-to-quarter, one-time there with

that to does tend fluctuate. So

So, a straight line. not always

look for back If trends are Difficulty]. [Technical big last at you see there year, down you our

the Can You're last breaking sentences? couple up, of Mike. you repeat

Yes, sure.

we look from quarter-to-quarter. trend take you give at was a quarter-to-quarter was last flat the If from that resulting from our revenue you'll that does with same have year a chart revenues, thing, quarterly which is the our point-in-time there variability period see some really

is trend of sequentially. line variability when up look the no to the is each while at there So kind right, you quarter

it. Got

I back little a normalized a number. was less of If was QX. it looking side, in than think more expense adjusted kind was the OpEx off, sizable at for what bit $XXX,XXX part should -- on that that there given severance then you the allowed we a we of that look, I post I to of be And QX? Okay. expecting EBITDA was OpEx If

Yes.

QX of I trend number think of is the the reset kind our line.

I think of mentioned line. majority the is on there'll that noise down QX. be reclassified quarter, So in expense last separately some discontinued separation or we either is that operations I disclosed line noise to reality the The

could starting the you QX new And… expenses I look think as at So our point.

about back the off expense? separation You're you talking if

pretty want our then data bringing step of correct. business the information the of to and expect and That's call continue marketing in for grow. the And more going we our set. to it invest to we'll that forward, is the that, much Yes. But sales short you by also into revenues factory, on add term rest will we capabilities, functions information if right, opportunistically as

year, see that in you to commentary? larger it, that And EBITDA Max, versus to from about the tight for if least the demand pharma ask Is larger environment, your case bit milestone. stable larger, demand, I at I QX. know med the handle the you And more last half on being budgets tentative regarding things a I looking tech Okay. wanted little of the look good smaller and don't reiteration the accounts. in of base source talked to to adjusted but your of of and discretionary as weeks six customers, and you had think the you that want back forward positive still talked customer kind the about more smaller spending

is. days, not same industry much we mean, changes but the rest It dynamics see short-term the I over of that are XX the seeing.

general. in large made generally and merchant have biotech We pharma [indiscernible] pharma size versus

or pushed there a certain they're So kind general been bit see class. a we change budgets But the on [indiscernible] dynamic do spending. in of as get little tighter hasn't

to to and expect do we seasonality [Technical results in our we expect Difficulty] have the However,

you lost the I on there. sentence last

little You in bit a said tighter the…?

-- tightness do Yes. business presented. expect some are we're It's new to seeing and up but to we that little we growth picking guidance see bit a in also hit budgets, the

I What business battle, environment. wanted was new as expected? -- to in landed the -- Yes. vendor. specifically but you a down it bring really An It's hard drill wanted ones you on new -- on this uphill a to is the to? tough

highest be closed It of for they product. opportunities our to later, this as can accurate, in And is. where the just quality I winning healthcare really that's our the other information use mission-critical the saw our products. clients had show so information sell opportunities. want differentiation think and some we're Certain we We they more first that And quarter in of out.

you. Got

then to the $XX a for I balance at And February And of cash snapshot on of QX sheet you XXXX. of got due the uses are cash? solid it's that in good that the What see of the good $X focused there. end another of understand million Okay. million you with

potential cognizant and right take great are to perspective. it's down our could while and a sheet unique of. that come So size most very companies as have also sheet an strong and from are both earnings there's balance see valuations balance in struggling we be industry, a we the to But different of waiting very been development we're opportunistic advantage that if now, business

if able or we're now, into take but sales will opportunity base a that we're someone the we very has on arises. client can of proactive, prudent or So advantage technology a that upsell to be right being

Got Thanks for QX. the right. you. of good questions rest my in All taking and luck

Thanks, Eric.

Eric. Thanks,

for in participation, and any the you ladies Instructions] and gentlemen, questions your now All right, Thank you. you disconnect. I'm [Operator may further not showing queue. thank