Forian (FORA) 28 Mar 242023 Q4 Earnings call transcript

Greetings, and welcome to Forian Inc. Fourth Quarter and Full Year 2023 Financial Results Conference Call and Webcast. [Operator Instructions] Participating today from Forian are Max Wygod, Executive Chairman and Chief Executive Officer; and Michael Vesey, Chief Financial Officer.

Before we begin, I would like to remind you that management's remarks today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements due to a variety of important factors, including those discussed in the Risk Factors section of the company's annual report on Form 10-K filed with the SEC on March 30, 2023. discuss as of of will XXXX full management outlook revenue today. particular, an its estimate year In Estimating financial may performance and as incorrect it accurately is circumstances for future assumptions and internal performance that and may estimates on that based prove change. be involves to plans is difficult could is, There results a the from risk significant materially therefore, outlook actual that differ provided today.

date, change, forward-looking except obligation on the Words estimate, company's will, required of believe, identify variations company which expressions statements. statements as on available this today's may company's forian.com/investors. words March will the filed and in be financial and release as Form the to recorded. the transcript press at call law. as call in webcast including views investors to should XX, company's to no anticipated the press reconciliation copies to of with intended accordance available seek, our copy These company's is with propose assess undertakes recording risk release the regarding them and represent of limited include, full also non-GAAP and the the made of or similar and result today such financial webcast, are statements a risk versions will GAAP. and such company are on EBITDA, on forward-looking or not any be factors projected, such considered expressions supplement future webcast as forecast, be refer today's Any found are by measures unaudited, expect, as and or to may, of on be A operating the can update the as planned, regarding discussed these the website. XX-K of and prospects. Today's SEC section A but of future, important and performance as to, as metric the and measures its well for should, substitute being anticipate, to believes XXXX. Today's filings SEC call, prepared performance report intend, are which a annual anticipated of may be not growth, statements performance presenters certain of in Those comparable numbers both statements to words subject adjusted GAAP

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

you fourth full for Good Forian's afternoon, today XXXX and joining to of quarter and performance. business thank review all us year

to the on forward pleased perspective a XXXX. Forian's XXXX and to outlook care to we evolution transitioned am sharing larger We our and focused company. in also health sciences I see look progression life of as

solving will go more of summary share through capitalize long-term the anticipated call, to that fragmented partners with We on opportunities are and our front goal ecosystem, and the of supports business to are today's our linked Afterwards, a I a of detail. its Data Mike fourth ultimate highly We we provide efficiency XXXX our to in providing and health with we'll Forian have built in results, over some a analytics-ready, financial us. supports how that through positioning challenges. outcomes our the growth. On work enriched products. Forian in the products as difficult The Factory of the improving quarter of accurate will foundation information health most care's operating fiscal business call and data-driven to and I remarks hand financials

that start by to full strong the year. a year pleased XXXX fiscal sharing was am I

representing information XX% by year-over-year For our our $XX.X the full met of care driven health year XXXX, million our range, offerings. revenue growth, guidance

$X.X million to from continuing operations compares losses was million, million $X.X respectively. and $X.X was our Our adjusted year-over-year, million, EBITDA and which for net income year of the $XX.X

that total million, quarter of revenue to into saw $X.X customer fourth the financial fourth attrition the growth. impact expect quarter, some we XXXX. represents Our year-over-year X% we which In was continue early

Our $X.X of our and net million, EBITDA to $X.X operations $X.X compares a was $X.X loss the year-over-year, loss million, which for adjusted quarter million continuing million was from and respectively.

the in want conditions. challenging Before more XXXX first detail, few going a I to into accomplishments in despite of we facing fourth the noteworthy quarter macroeconomic acknowledge recognized

transformed and completed key First, of grow as on divestiture support subsidiary, $XX to and proceeds. care previously announced, XX XX, The strategic headcount a investing areas in from February services while to for approximately approximately reduced transitional health enabling business. BioTrack the to in XXX streamline operating divestiture we operations our Forian, cash seeing million employees successfully us our

science Throughout invest and assets sales continued team. in incremental to XXXX, life our data in we strategic

Additionally, of the opportunities we to initially the earlier In business achieve show leverage model EBITDA our including assets, and plan advantage quarter, operating close of adjusted anticipated. fourth executed to and our new we the than as took strategic lab, that data a valuable We believe adding data differentiate analytics extensions. well that to serve proprietary by continuously some build our we sources breadth needs. can of customer information factory, open claims and long-term products as wide and data industry-leading acquire

sizing, of bringing bases subscription for we clients measuring both that marketing market and customers their to to power customer our products analytics-ready pricing example, analytics and new and commercial information assist across evidence. From in targeting real-world range of we expanding and accurate products and acquiring ROI bases existing products. For a market provide wide segmentation to customer

media are fundamentally support studies safety to health outcomes, care services health sure work Our make clients patient track generative of science patient product post commercial companies life outcomes solve prescribing life providers that and and companies understand as to with need closely our information platform approach have analytics-ready developing brought actual the want clients could they target understand and This to our that range science we largest to products educational life state-of-the-art and/or companies to pharma products to market Historically, health and messaging. research support usage, data-driven with have across needs. clients economics how as to better clean, clinical from the ecosystem. studies that being want on journey. Throughout XXXX, analytics benefit providers respective launch well We business. care and health new journey our their that right been generally commercial information sciences products their behavior care the service to serve analytics-ready in the to used that advanced

our Many a been claims focused of product. engagements, our longer engagement expansion of other multiple teams alternatives, science or land outside our opportunities our have cycles. specifically smaller life as a initial and engagements, single client This enterprise who clients sciences support not our strategy life on Increasingly, are has base. products as backed are customer across featuring brand an and solidify by led information recognized expand effective superior to to sales

have strong clients several We engagements. with life ongoing and multiple reoccurring expanding now science

database are As complex see I a data to clinical mentioned, of as the increased strengthened in our advantage our robust address in competitive believe expanded additional result outputs. perspective, We which and we product XXXX. From sources products with expect integrated anchored opportunities and science as Chronos. to known solutions data incorporate challenges our commercial management our back analytics-ready information our a life by team in revenue is sales capabilities, XXXX, half by innovative

the delivery comprehensive solutions industry us and and factory market. personnel us Our timely data unique experienced supported insightful by distinguish flexible technology, assets, in that enables high-quality, to options, data accurate, offer

We in on that to markets. better allow expect our come [indiscernible] new to XXXX products existing with will market us to capitalize

information purchasing We top to bundled and marketed solutions clients and on factory new prioritize licensed data applications will sit can that prioritize and products. that our of be directly

With of typically our continued investment into well commercialization usually our and and quarter segmentations fourth our capabilities, in as data volume our sources as We strongest. affiliations, data provider to seasonal product to trends and with expect provide we being see collaborations. diversity results, media factory launches the and increase the provider

being navigate still of market are growth, and anticipate we'll increased about sales see potential capital as That our oversight the to profitability, result, and broader XXXX. We cautious and, continue said, and understand about we customers our While cycles. optimistic have expenditures the we length a more we challenges.

which revenue includes unbilled unearned of We have as amounts and $XX that contracted revenue future approximately be will million committed recognized in periods. backlog,

nonrenewals As results. to discussed early few our be of in the reflected impact primarily XXXX earlier, due will the acquisitions

year-over-year expect incremental to XX% adjusted information long we invest we term, margins as continue in our X% reap In model revenue to margin and to believe XX%, of of our growth. we cost-based EBITDA of fixed growth XXXX, For attractive will X% the benefits assets revenue and products. the with

efforts forms These shares for to Finally, shareholders. to may various and opportunistic notes. include in increase of outstanding we the may our continuously development or come look corporate convertible repurchase opportunities value also

the In growth. conclusion, stage period marked our us, for a for of phase next setting XXXX transformational

offering effectively our data through unique and breadth of derived rapidly have automation. larger, portfolio We offerings and more technology competitors, data compete expertise to against expanded established our from assets management, in our value

health Forian science has data of can is factory that as established care products, range we foundational a additional services and upon strategically wide to and which cornerstone life clients, a analytics. introduce crucial serving a

of We a have robust our competitors have short relative revenue period profit space time in objectives our a our and sheet. to achieved in and balance

accomplishments industry. The of from our rarity distinguishes the us in others

now delivering impact and Our want and in make express throughout dedication care solidified a to gratitude top-tier run and instrumental and demanding a expansive in provider whose I our to will trusted the work commitment hard and turn Mike? unwavering positioning life to it our detail. in over exceptional as to financials focus the by information team have sciences to significant Mike through innovative my market. is been further year. I health the products developing

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

businesses, we XX, this operations. the a impact have filings, today in disclosed industry, Forian shift, unless which results and our continuing security-grade disposition basis. My on the Through the XXXX, discontinued operations and transaction, results first XXXX, of effective for disposed previously BioTrack Engini on quarter As consistent our will noted of comparative has December no solutions significant operations of XX, had operations dispositions as a on to our reference February have cannabis otherwise. representing completed with accounted longer off previous discussion a previous and ended businesses the Forian reclassified strategic operating reported our Accordingly, the in SEC software quarter the provides XXXX. for for

Forian's today a press basis. on issued financial results The release GAAP presents

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

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

revenues relationships. or our growth same for increased compared new quarter from X% revenues the of were year driven over million quarter the up last same of was to and The Our $X.X million existing customers the quarter year. revenue last consolidated $X.X by both in

basis. Loss resulting going-forward quarters, over a for million. to a the deliverables period, income analytics primarily Decrease of predictable decreased quarter past and previously from information decreased growth, to majority net of higher the loss million from life $X.X for continuing focus million BioTrack. revenue was proceeds the in the serving interest expenses operations customers last from health in provide information and continuing providing our $X.X operating from to $X.X the market, the streamlining by from care contracts of quarter revenue on disposition multiyear the our driven stream As same organization recurring sciences of our a mentioned investment on products year resulting of

$X.X items, leverage Adjusted the the amortization, costs to last streamlined EBITDA other quarter demonstrating same operating litigation continuing negative compared nonrecurring in depreciation, $X in stock-based business. which and million our was operations, related compensation, excludes from year, certain to million

our continue to and to over lower capital-efficient intend revenue we in to long to to expect us our investments of leverage information also relative While growth to the level continue those business our make offerings, expand allow infrastructure with term. incremental investments a expense product model we enhance to

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

adjustment Technology. reconciliation this lawsuits the You an adjustment litigation-related expenses expenses resulting in will quarter. from This defend X activity of included for against at is note that comprised incurred Helix legacy to premerger we

information Further can of we with Technologies Helix as the XX-K the classified the filing subsidiaries discussed, be previously have in them disposed our operations financial operating discontinued regarding and our statements. litigation in found As SEC. off

leaving in transaction December 'XX, X.X in our convertible to Turning ended XX.X sheet. to million with a common cash an with and XXXX. XXXX. September the million and maturities $XX.X in shares our marketable accrued with stock million approximately prior outstanding of balance October interest securities approximately $XX.X million We repurchased We notes no investor period private us with at XX, of and

Additionally, XXXX. our an we $X redeemed discounted additional in a notes of face million at March value of

the achieved proceeds of we operating sale received in With are capitalize the improvements arise. on from growth positioned flow as XXXX, incremental they cash and our opportunities well cash BioTrack, in we feel to

our of review XXXX. a outlook for Now

the Adjusted XXXX. loss million million as EBITDA XX.X% increased million XX% revenues percent $X.X prior year was increased prior over Our XXXX to of Adjusted EBITDA to EBITDA or $X.X of the $X.X revenues for year. for full an a compared year. the in

revenues the over XXXX some part to expect prior increase We X% year year. headwinds in early overcoming the of XX% after between and the

EBITDA X% we range in growth. continue of achieving a as to and XX% information products be the We expect while adjusted in as of percentage to profitable to invest our assets revenue

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

Markets. line Martinuzzi it's [Operator Instructions] and One Lake of question, our from the first moment Street for Eric Capital with

the the that customer good like to finish I questions a year have did But regarding mentioned. you attrition there. Looks some

it you QX to of some in customer the was due to customer I to? around had was attrition I As XXXX the QX attrition say acquisitions. timeframe want XXXX due recall, What

we the it why we related Max here. announced going so notified early earlier The it's Eric, XXXX. were that publicly. that's customer the just in ones at an mentioned QX into time impacted earlier revenue attrition We was to and

not few to due mostly have was renew that that them being a customers We acquired. do and

be However, in revenue for majority XXXX the expect of a commitments kind clients, few locked to it's and we contractually. optimistic fairly on of with

expect change ones don't the we So outside now. a we're of big mentioning

Okay.

add to It's on Mike, and I'll that.

account leaving when we earnings be that that well. on of but remember the their as aware churn in the particular account they up that tail see the QX may contract a to it flows when doing or the we're may have QX, -- of into kind our impact the You of we be our could finish a in P&L because them, churn falls impact way through call

you. Got

in a XXXX, the growth here sounds revenue that the it given rate in like that for in sales part back expecting the in double we it? year, to XX%, on Okay. talking still back how rate a the rate the in to front quarterly half. And investment of front the the the rate by offset then front half. basis, least guidance half, growth be of than greater you're a range digits maybe digits Is of half the Are at growth X% your in you're growth about, mid-single thinking

maybe to this headwinds but everything it ] it's correct. think expect We in on too off up that's a marketplace QX, the to early tell, bit little that full to I to pick but generally X year we're the exactly guidance based back see [ get in QX, half of seeing in number.

Okay. just it. put maybe a point to on finer And

of a the million revenue start down in we take had Do year? You to QX. step $X.X

back the to muted -- our half normal But outlook growth we the it. then particular of and year, Eric, dry is quarter-by-quarter a avoid to way part decline due the to we look not will Yes. return because -- we will want the that. at X the on to rates having don't And totally I think I from giving think known the account. the be overcome first growth to in

or revenue, so, -- just call Okay. of an full year think roughly, All that which amount $XX.X the the rate, I kind versus a growth million it, unchanged million midpoint, given the right. or so we'd so EBITDA $X.X kind about, off talking the throwing be And XX% of of at adjusted then reported. you is year about

mentioned you're in business. going you to investing So that the be

on more are new Is on the So it this on R&D? Is top sales it incremental we sets? but data investments? licensing spending line, Where you're EBITDA. the you're dollars? growing growing adjusted of not the focused Is

is increases of it piece assets. biggest our data to the Eric,

our in and basically our you'll QX see cost incrementally of in an also in QX, So increase -- sales.

sales So past, certain talked functions have any there as of is to we we is if a kind about of in a the that. cost a step variable extent, fixed in or number

to that in reinvest then of And of more did growth to to we half some rapid the the achieve back So mid-XXXX. profitability we want this got in year.

that. XXXX, on leverage in have we an then, that data out through go see sales some new have on we'll us of the very of a competitive have the end in value-added past, of top year. And going have pitches as year, couple as puts sources the we us to we the at out the stronger of we and sell allows a position the we existing and And a there. better So some to them brought at and offering, in we'll back go beginning expense in increase of on it customers services our also

call don't at the -- of it level look It's next what's growth lack I it's a the because I'll the in So discretionary. kind to that's company driving in know way get if the really it. reinvestment we of is of EBITDA growth to

I Yes. these incremental that data actually to takes it And and make is add, the time assets develop color Eric, new will only when we them. or investments commercialize products, even in

of can is a a revenue. usually quarters it before a turns pure there lag that couple So be into

So as step assets the new will revenue kind that you it take does sell. believe to bit make these but of grow products the investments, the as of into a time function, develop we little we

for question kind a picture. me bigger is Okay. Last just of

the for looking next the outlook of growth to years? you growth XX% XXXX, how for think for a the but of Assuming just the not midpoint and say, potential we're the XXXX, X story bang out-year we and company, about out do guidance, X over I'm

midpoint, just up sales quarters. growth over the we picking -- the dramatically you described the of last if you actually if in couple quarterly hit quite be what think will I and the reach

higher year entering that's the the we're year. a exiting than be pretty run So where I with we'd think rate

that being I revenue in a said, perspective, speaking winning X with to make remember, trajectory. on our X new So some we're about these That difference. really penetration from markets relatively we of happy products so we'd really pretty think of and small numbers have be excited and getting an acceleration or of can

So this we expect from to to point. invest grow

team an sales versus our impact looking management on just I do make think how the and are and current we really plan. sales delivering executing the

session I you participating, may And for the and conclude that, for further I as will in queue, webcast questions now disconnect. Q&A thank and you today, the all no see with and