Performant Financial (PFMT) - 2025 Q1 - Quarterly Report

Revenue Growth - Total revenues for the three months ended March 31, 2025, were $33.269 million, an increase of 21.7$27.334 million for the same period in 2024[84]. - Healthcare total revenues reached $33.186 million, up from$25.800 million, reflecting a growth of 28.5% year-over-year[84]. - Claims-based services generated $17.104 million in revenue, a 37.7$12.412 million in the prior year[84]. - Eligibility-based services revenue was $16.082 million, compared to$13.388 million, marking a 20.2% increase[84]. - Total revenues for the three months ended March 31, 2025, were $33.3 million, an increase of approximately$5.9 million, or 22%, compared to $27.3 million for the same period in 2024[110]. - Healthcare revenues reached$33.2 million for the three months ended March 31, 2025, representing a 29% increase compared to the same period in 2024, driven by growth in eligibility-based and claims-based services[111]. Outsourced Services Impact - The company ceased providing outsourced services, resulting in a significant drop in revenues from $1.534 million to$83,000[84][94]. - Customer Care / Outsourced Services revenues decreased to approximately $0.1 million, a decline of 95$81 thousand, a decrease of approximately $3.9 million, or 98$4.0 million for the same period in 2024[118]. - Adjusted EBITDA for the three months ended March 31, 2025, was $3.3 million, compared to a loss of$1.2 million for the same period in 2024[123]. - Cash provided by operating activities was $2.9 million for the three months ended March 31, 2025, primarily due to increasing revenues outpacing operating expenses[128]. Cash and Credit Position - Cash and cash equivalents totaled$10.0 million as of March 31, 2025, an increase from $9.3 million as of December 31, 2024[124]. - As of March 31, 2025,$8.0 million was outstanding under the new $25 million Credit Agreement, with$14.2 million available for additional borrowings[125]. - The Credit Agreement with Wells Fargo Bank includes a $25 million revolving loan commitment, with$8.0 million outstanding as of March 31, 2025[132][134]. - The annual interest rate under the Credit Agreement was 7.1% as of March 31, 2025[134]. - The company has $14.2 million of additional available credit under the Credit Agreement as of March 31, 2025[134]. - The Credit Agreement matures on October 27, 2026, with the option for the company to prepay borrowings without penalty[135][136]. Compliance and Financial Covenants - The company is subject to financial covenants requiring a minimum liquidity and a fixed charge coverage ratio of not less than 1.25 to 1.00[138]. - As of March 31, 2025, the company was in compliance with all financial covenants under the Credit Agreement[139]. Risks and Economic Factors - The company faces risks related to client contract cancellations, which could significantly impact revenues due to high client concentration[103]. - Macroeconomic factors, including fluctuations in Medicare expenditures, may influence the company's business and results of operations[105]. - The company has exposure to interest rate changes, with a potential increase of$80 thousand in annual interest expense if rates rise by 100 basis points[140]. - Future investments of excess cash may be made in short-term investments, which could be affected by market interest rate changes[141]. Growth Outlook - The company anticipates continued growth in its healthcare services as it expands its technology-enabled services platform[93]. - The company’s revenue model is primarily success-based, earning fees based on the amount of funds recovered for clients[82].