Q1 2025 Financial Results May 14, 2025 1 © 2025 Forian Inc. All Rights Reserved. Cautionary Statement Regarding Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward- looking statements often address expected future business and financial performance and financial condition ...

Revenue Performance - Revenues for the three months ended March 31, 2025, were $7,056,116, an increase of $2,178,738 (approximately 44.7%) compared to $4,877,378 for the same period in 2024[138]. - Revenue for Q1 2025 was $7,056,116, up from $4,877,378 in Q1 2024, indicating a significant increase in sales[154]. Cost and Expenses - Cost of revenues for the three months ended March 31, 2025, was $3,131,622, an increase of $1,428,265 (approximately 83.8%) compared to $1,703,357 for the same period in 2024, resulting in a gross profit margin decrease to 56% from 65%[140]. - Research and development expenses increased to $606,237 for the three months ended March 31, 2025, up $216,348 (approximately 55.5%) from $389,889 in 2024, primarily due to the Kyber acquisition[141]. - Sales and marketing expenses rose to $1,382,727 for the three months ended March 31, 2025, an increase of $327,586 (approximately 31%) compared to $1,055,141 in 2024, driven by the Kyber acquisition and higher compensation expenses[142]. - General and administrative expenses slightly decreased to $3,279,094 for the three months ended March 31, 2025, down $4,395 (approximately 0.1%) from $3,283,489 in 2024[143]. Operating Performance - The operating loss for the three months ended March 31, 2025, was $1,394,665, an improvement compared to an operating loss of $1,772,350 for the same period in 2024[138]. - Adjusted EBITDA for Q1 2025 was $(50,778), a decrease of $155,195 compared to $104,417 in Q1 2024, primarily due to higher costs of revenues and operating expenses[155]. - Adjusted EBITDA is used by management as a performance measure, excluding items such as depreciation, stock-based compensation, and interest expenses, to provide a clearer view of operational performance[146]. Cash Flow and Financial Position - Net cash provided by operating activities increased to $448,180 in Q1 2025, a rise of $2,656,250 compared to cash used of $(2,208,070) in Q1 2024[159]. - Net cash provided by investing activities was $838,125 in Q1 2025, an increase of $2,612,550 compared to $(1,774,425) in Q1 2024[160]. - As of March 31, 2025, the company's cash and marketable securities totaled $35,666,432, with outstanding principal and accrued interest on notes amounting to $6,750,326[156]. - The company sold BioTrack for $30,000,000, consisting of $20,000,000 in cash at closing and $10,000,000 in future payments, enhancing liquidity[156]. - Net cash used in financing activities decreased to $172,295 in Q1 2025, down by $859,068 from $(1,031,363) in Q1 2024, primarily due to changes in tax payments[161]. - The company expects to fund future operations and acquisitions through a combination of cash flow, available cash, marketable securities, and debt financing[156]. - The company redeemed $18,881,466 in outstanding principal and interest on its notes during 2024, improving its financial position[156]. Strategic Initiatives - The company acquired all outstanding equity interests of Kyber Data Science, LLC on October 31, 2024, which is expected to enhance its data management capabilities[128]. - The company plans to license data from additional vendors due to a vendor exiting the data licensing business by the end of 2026, which may impact future operations[132]. - The company continues to focus on expanding its marketing and sales efforts to build brand awareness and attract new clients[134]. Accounting and Compliance - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures[173].

Forian (FORA) Q1 2025 Earnings Call May 14, 2025 04:30 PM ET Company Participants Max Wygod - Co-Founder, CEO, President & Executive Chairman of the BoardMike Vesey - Chief Financial Officer Conference Call Participants Richard Baldry - MD & Senior Research Analyst Operator Greetings, and welcome to Foran, Inc. First Quarter twenty twenty five 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 ...

Financial Data and Key Metrics Changes - Total first quarter revenue was $7,100,000, representing a 45% year-over-year growth [7][17] - Net loss for the quarter was $1,100,000, with adjusted EBITDA at a negative $51,000, compared to a loss of $1,200,000 and $104,000 year-over-year respectively [7][38] - Operating loss decreased to approximately $1,400,000 from $1,800,000 in the same quarter last year [48] Business Line Data and Key Metrics Changes - Revenue growth was driven by key new pharmaceutical projects and health services renewals, as well as the full first quarter contribution from Kyber Data Sciences [7][38] - The Kyber acquisition contributed approximately $1,700,000 or 35% to the revenue growth, with the remaining increase resulting from organic growth in the Life Sciences data business [17][47] Market Data and Key Metrics Changes - The company has approximately $34,000,000 of committed contracted backlog, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods [44] - The expected full year 2025 revenue is projected to be between $28,000,000 and $30,000,000, reflecting a growth of 39% to 49% year-over-year [44][50] Company Strategy and Development Direction - The company aims to enhance its offerings by integrating Kyber with its data factory and capitalizing on advanced analytics and predictive capabilities in the life sciences market [10][43] - The company continues to seek accretive and strategic mergers and acquisitions to enhance its financial profile and expand access to pharmaceutical clients [12][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting the momentum and opportunities in the market despite a turbulent macroeconomic environment [5][14] - The company is comfortable with its process of integrating new vendors and expects this to be a recurring theme in 2025 and into 2026 [11][42] Other Important Information - The company ended the period with $35,700,000 in cash and marketable securities and $6,800,000 in convertible notes maturing in September 2025 [49] - Adjusted EBITDA is expected to range from negative $1,000,000 to positive $1,000,000, primarily dependent on the speed at which Kyber achieves profitability [44][50] Q&A Session Summary Question: Can you characterize Kyber's revenue stream? - Kyber's revenue is typically based on one-year contracts, and the company is working to implement auto-renewals [22][52] Question: What will determine Kyber's move to profitability? - The expectation is that as Kyber grows its top line, it will flow down to EBITDA, with most expectations driven by revenue growth [25][53] Question: How do you feel about the M&A environment? - The market is bifurcated, with stronger private companies demanding premiums, while VC-backed companies are struggling with valuations, leading to more opportunities for acquisitions like Kyber [27][55] Question: Have you seen any hesitation in new deals due to executive orders affecting the pharma market? - There has been hesitation among companies waiting for FDA approvals, but overall, the company has been insulated from larger executive actions [29][57]

Revenue Performance - Revenue for Q1 2025 was $7.1 million, a 45% increase from $4.9 million in Q1 2024[5] - Revenue for the period ended March 31, 2025, was $7,056,116, compared to $4,877,378 for the same period in 2024, representing a year-over-year increase of approximately 44.7%[26] - For the full year 2025, revenue is expected to be in the range of $28 to $30 million[11] Net Loss and Adjusted EBITDA - Net loss for the quarter was $1.1 million, or $0.04 per share, compared to a net loss of $1.2 million, or $0.04 per share, in the prior year[5] - Net loss for the period ended March 31, 2025, was $(1,125,862), an improvement from a net loss of $(1,212,615) in the prior year, indicating a reduction in losses of about 7.1%[26] - Adjusted EBITDA for the quarter was $(0.1) million, a decline of 149% from $0.1 million in the prior year[5] - Adjusted EBITDA for the full year 2025 is expected to be in the range of ($1.0) to $1.0 million[11] - Adjusted EBITDA for the period ended March 31, 2025, was $(50,778), compared to $104,417 in the same period of 2024, reflecting a decline in operational performance[26] Cash and Liquidity - Cash, cash equivalents, and marketable securities totaled $35.7 million as of March 31, 2025[5] - Cash and cash equivalents at the end of the period were $5,704,671, up from $1,029,128 at the end of the previous year, marking a significant increase in liquidity[17] - Net cash provided by operating activities was $448,180 for the period, a substantial recovery from $(2,208,070) in the prior year[17] - Cash used in financing activities was $(172,295) for the period, a decrease from $(1,031,363) in the prior year, indicating improved cash management[17] Assets and Liabilities - Total current assets increased to $46.4 million from $44.5 million as of December 31, 2024[13] - Total liabilities increased to $18.6 million from $17.1 million as of December 31, 2024[13] Operational Improvements - The company achieved continued growth from pharmaceutical and biotech companies, reflecting increased adoption of its data solutions[5] - The company integrated Kyber Data Science's platform, enhancing its predictive analytics and financial services capabilities[5] - The company incurred stock-based compensation expense of $1,292,786 for the period, down from $1,658,915 in the previous year, indicating a reduction of approximately 22.1%[26] - The company reported accrued interest on convertible notes of $51,344 for the period, significantly lower than $197,630 in the previous year, reflecting a decrease of approximately 74.0%[17] - The company’s accounts receivable decreased by $(1,400,838) compared to $(1,694,851) in the previous year, indicating improved collection efforts[17] Marketable Securities - The company reported a gain on sale of marketable securities amounting to $30,546,000, compared to $45,359,108 in the previous year, showing a decrease of about 32.6%[17]

Business Overview - Forian's subscription and services-based solutions cover life sciences, pharmaceutical services, healthcare payer and provider, and financial services industries[25]. - As of February 10, 2023, Forian completed the sale of BioTrack, resulting in the cessation of software solutions for the cannabis industry, while retaining certain license rights[27]. - On October 31, 2024, Forian acquired 100% of Kyber Data Science LLC, enhancing its offerings in healthcare information products for the financial services industry[27]. - Forian's databases include billions of de-identified patient events dating back to 2014, representing the majority of the U.S. population, updated regularly to enhance data offerings[38]. - The U.S. healthcare spending is approximately 17% of GDP, with a growing emphasis on digitizing medical records and integrating disparate data sources[32]. - Forian's information products are largely subscription-based, with multi-year contracts providing tailored solutions to clients[41]. - The company aims to drive growth by acquiring new customers and increasing usage within the existing customer base through cross-selling additional information solutions[45]. - Forian's technology platform processes and integrates various data sources to produce a longitudinal database, enhancing its competitive edge in the market[44]. - The healthcare analytics market is segmented into clinical analytics, commercial analytics, and technology platform solutions, with increasing demand for integrated data solutions[33]. - Forian's competitive strengths include deep domain expertise, a diverse customer base, and a flexible approach to privacy-focused analytics software[44]. Financial Performance - Revenues for the year ended December 31, 2024, were $20,153,263, a decrease of $1,063,721 (approximately 5%) compared to $21,216,984 in 2023[150]. - Cost of revenues increased to $7,334,163 in 2024, up $1,857,131 (approximately 34%) from $5,477,032 in 2023, largely due to the Kyber acquisition and higher information licensing expenses[151]. - Gross profit as a percentage of revenues decreased to 64% in 2024 from 74% in 2023[151]. - Research and development expenses rose to $1,444,745 in 2024, an increase of $37,165 (approximately 3%) compared to $1,407,580 in 2023, influenced by the Kyber acquisition[152]. - Sales and marketing expenses decreased to $4,334,289 in 2024, down $623,544 (approximately 13%) from $4,957,833 in 2023, due to lower severance and commissions[153]. - General and administrative expenses were $12,536,940 in 2024, a slight decrease of $63,268 (approximately 0.5%) from $12,600,208 in 2023[154]. - Litigation settlements and related expenses decreased to $669,955 in 2024, down $363,030 (approximately 35%) from $1,032,985 in 2023[155]. - Adjusted EBITDA for the year ended December 31, 2024, was $489,134, a decrease of $2,509,334 compared to $2,998,468 for 2023[168]. - Net loss from continuing operations for 2024 was $(3,771,070), compared to a net income of $2,395,518 in 2023[167]. - Net cash provided by operating activities decreased to $282,827 in 2024 from $787,893 in 2023, a decline of $505,066[171]. Risks and Challenges - The company faces risks related to its limited operating history and may require additional capital for operations and expansion[59][60]. - The company depends on external data sources for its information products, which poses risks if access to this data is lost or restricted[61]. - The company’s growth strategy includes acquisitions, which may involve risks related to identifying suitable candidates and successful integration[62][63]. - The company faces risks related to the evolving federal and state privacy and data protection laws, which may increase operating costs and impact service delivery[84]. - Compliance with new privacy laws may require significant investment and could expose the company to liabilities if not adhered to properly[85]. - Cybersecurity threats pose significant risks to the company's systems and data, potentially leading to substantial costs related to rebuilding systems and defending against litigation[92]. - The competitive market for qualified personnel poses a challenge for the company in attracting and retaining necessary expertise, which could impact business continuity[77]. - Consolidation among customers may reduce service purchases, negatively affecting the company's revenue and financial condition[83]. - The company may struggle to accurately forecast operating results and growth rates, which could lead to lower-than-anticipated financial performance and stock price declines[82]. Compliance and Governance - The company has identified material weaknesses in its internal control over financial reporting, which could lead to inaccuracies in financial statements and loss of investor confidence[78]. - As of December 31, 2024, the company concluded that its disclosure controls and procedures were not effective, particularly regarding payables transactions and revenue recognition under ASC 606[79]. - The company intends to remediate identified material weaknesses, but insufficient remediation efforts could adversely affect financial reporting accuracy and compliance with SEC rules[80]. - The company has implemented practices to comply with applicable privacy laws, including engaging third parties for guidance on data de-identification[88]. - The company does not intend to pay dividends on its common stock, limiting returns to stockholders to stock price appreciation[97]. - Directors and management own approximately 46% of the company's common stock, allowing them to exert significant control over stockholder approval matters[98]. - The company is classified as an emerging growth company, allowing it to take advantage of reduced reporting requirements, which may affect its attractiveness to investors[105]. Cybersecurity and Data Management - The company prioritizes a strong cybersecurity program to safeguard sensitive information and protect its operations[110]. - The company maintains an enterprise-wide information systems security program to safeguard its information systems and assist in reporting cybersecurity incidents[115]. - The company evaluates third-party providers to manage risks associated with data breaches or cybersecurity incidents[118]. - The company has established oversight mechanisms for managing cybersecurity risks, involving regular assessments and engagement with external experts[117]. - The company relies on third-party vendors for data security, and any breaches in their systems could materially impact the company's operations and financial results[94]. Employee and Workforce - As of April 9, 2025, the company had 48 employees, with a positive relationship with its workforce and no organized work stoppages[55]. - Severance expenses for the year ended December 31, 2023, included $250,000 related to salary continuation for the former CEO[31]. - Separation expenses related to the CEO's resignation included $250,000 for salary continuation and $349,832 for accelerated vesting of stock for the six months ended June 30, 2023[218].

Core Insights - Forian Inc. has announced a partnership with Databricks to provide access to its Chartis™ product through the Databricks Marketplace, enhancing visibility into healthcare data and analytics solutions [1][4] - The Chartis™ product utilizes a proprietary scoring algorithm to track provider connections, improving decision-making in the healthcare ecosystem [2] - The collaboration aims to empower healthcare organizations, researchers, and pharmaceutical companies with tools to enhance patient care and outcomes [4][5] Company Overview - Forian Inc. specializes in data management and analytics solutions for the life sciences, healthcare, and financial services sectors, recently expanding its capabilities through the acquisition of Kyber Data Science [6] - The company integrates and commercializes large-scale healthcare information, providing insights through Real World Evidence (RWE) studies and market analytics [6] Partnership Details - The partnership with Databricks allows Forian to extend the reach of its data products, making high-quality healthcare support more accessible [4] - Databricks Marketplace facilitates the sharing of live data across platforms, enhancing security and governance [3][5] - The integration of Chartis™ into the Databricks Marketplace is expected to drive innovation and efficiency in healthcare and life sciences [5]

Financial Data and Key Metrics Changes - Revenue in Q3 2024 was $4.7 million, down from $5.3 million year-over-year, indicating a decrease of approximately 11.3% [7][10] - Net loss for the quarter was $0.2 million compared to a net income of $4.3 million in the same quarter last year, reflecting a significant decline [7][11] - Adjusted EBITDA was $0.2 million, down from $1.2 million year-over-year, primarily due to lower revenue and higher costs [11] Business Line Data and Key Metrics Changes - The company experienced increased sales wins in healthcare services and life sciences, although the revenue impact from these sales has not yet been fully realized [6] - Quarterly revenue has remained between $4.6 million and $5.4 million since Q1 2024, attributed to macroeconomic factors and customer attrition [6][10] Market Data and Key Metrics Changes - The company noted improved sales momentum and a higher rate of contract renewals and expansions, suggesting a more favorable market environment [14][15] - The acquisition of Kyber Data Science is expected to expand the addressable market to include financial service customers, enhancing the company's market position [8] Company Strategy and Development Direction - Forian aims to strengthen its data relationships and continue investing in its information platform to drive innovation and growth [9][11] - The acquisition of Kyber is seen as a strategic move to enhance data science capabilities and provide unique insights derived from healthcare data [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in breaking out of the current revenue range in 2025, driven by improved sales momentum and the impact of the Kyber acquisition [6][10] - The company anticipates that the revenue for 2024 will be at the top end of the previously provided range of $19 million to $20 million, while maintaining adjusted EBITDA within the previously provided range [12] Other Important Information - The company ended the period with $49.4 million in cash and marketable securities, indicating a strong balance sheet [12] - A nonrecurring benefit of $0.5 million related to the termination of an inbound information contract was noted, which impacted the financial results for the quarter [11] Q&A Session Summary Question: Can you elaborate on the revenue trends and expected breakout in 2025? - Management indicated that the commentary on revenue was excluding Kyber, and noted improved sales momentum with expanded relationships and larger contract renewals expected to impact future revenue [14][15] Question: What factors are contributing to the higher rate of wins? - Management attributed the improved market conditions and seasonal trends, noting that the appetite for information contracts has increased [15][16] Question: With significant cash reserves, will the company invest more aggressively in sales and marketing? - Management stated that while they are looking for strong sales individuals, they believe the recent acquisition will help enhance their sales capabilities without necessarily increasing headcount [18] Question: What were the terms of the Kyber acquisition? - Management clarified that the acquisition involved assuming normal operating liabilities and that more details on revenue will be available in Q1 [19]

Company Performance - Forian Inc. reported quarterly earnings of $0.03 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, representing an earnings surprise of 200% [1] - The company posted revenues of $4.69 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.58%, and down from $5.35 million year-over-year [2] - Over the last four quarters, Forian has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Stock Outlook - Forian shares have declined approximately 30.3% since the beginning of the year, contrasting with the S&P 500's gain of 25.5% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at $0.01 on revenues of $4.97 million, and $0.04 on revenues of $19.43 million for the current fiscal year [7] - The current Zacks Rank for Forian is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Computer - Services industry, to which Forian belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Forian's stock performance [5]

Revenue Performance - Forian's revenues for the three months ended September 30, 2024, were $4,686,312, a decrease of $662,157 compared to $5,348,469 for the same period in 2023[144] - Revenues for the nine months ended September 30, 2024, were $14,340,791, representing a decrease of $771,607 from $15,112,398 for the same period in 2023[151] Cost of Revenues - Cost of revenues for the three months ended September 30, 2024, was $1,402,920, an increase of $40,365 compared to $1,362,555 for the same period in 2023[146] - Cost of revenues for the nine months ended September 30, 2024, was $4,913,195, an increase of $1,021,713 from $3,891,482 for the same period in 2023[153] Gross Profit - Gross profit as a percentage of revenues decreased to 70% for the three months ended September 30, 2024, compared to 75% for the same period in 2023[146] Operating Expenses - Research and development expenses for the three months ended September 30, 2024, were $291,962, an increase of $27,181 compared to $264,781 for the same period in 2023[147] - Sales and marketing expenses for the three months ended September 30, 2024, were $956,983, a decrease of $356,229 compared to $1,313,212 for the same period in 2023[148] - General and administrative expenses for the three months ended September 30, 2024, were $2,822,253, a decrease of $65,518 compared to $2,887,771 for the same period in 2023[149] Litigation Expenses - Litigation settlements and related expenses for the nine months ended September 30, 2024, were $1,152,670, an increase of $401,190 compared to $751,480 for the same period in 2023[157] Adjusted EBITDA - Adjusted EBITDA for the three months ended September 30, 2024 was $185,916, a decrease of $886,231 compared to $1,072,147 for the same period in 2023[179] - Adjusted EBITDA for the nine months ended September 30, 2024 was $368,535, down $934,197 from $1,302,732 for the same period in 2023[180] - The decrease in Adjusted EBITDA is primarily due to lower revenues and higher cost of sales, partially offset by decreases in operating expenses[179][180] - Management excludes depreciation and amortization, stock-based compensation, interest expense, and other items from Adjusted EBITDA to provide a clearer view of operational performance[162][164][165][168] - The Company recognizes that Adjusted EBITDA has limitations and should not be considered a substitute for U.S. GAAP financial measures[175][177] Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2024, was $1,467,084, an increase of $2,854,434 compared to $1,387,350 for the same period in 2023[183] - Net cash used in investing activities was $730,177 for the nine months ended September 30, 2024, an increase of $3,091,229 compared to cash provided by investing activities of $2,361,052 for the same period in 2023[185] - Net cash used in financing activities was $1,138,037 for the nine months ended September 30, 2024, an increase of $30,046 compared to $1,107,991 for the same period in 2023[186] - The total net decrease in cash and cash equivalents for the nine months ended September 30, 2024, was $3,335,298, compared to an increase of $2,640,411 for the same period in 2023[182] Asset Sales - The Company sold BioTrack for $30,000,000, consisting of $20,000,000 in cash at closing and $10,000,000 in future payments[181] - The Company sold a minority equity interest in a customer for cash proceeds of $5,805,858, with future contingent earnout payments of up to $3,600,000 in 2025 and 2026[181] Cash and Debt - As of September 30, 2024, the Company's cash and marketable securities totaled $49,357,888[181] - Outstanding principal and accrued interest on the Notes, due September 1, 2025, amounted to $24,370,509[181] - The Company expects to fund operations and potential acquisitions through cash flow from operating activities, available cash, marketable securities, debt financing, and/or additional equity issuances[181]