Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ontrak Inc (OTRK, Financial) has successfully secured a subcontractor role with Community Care Plan to serve the adult Medicaid population in Florida, expecting to increase its outreach pool by 10%.
- The company highlighted a significant opportunity for growth with the Community Care Plan, which is expanding its reach across Florida, potentially increasing Ontrak's target outreach pool organically.
- Ontrak Inc (OTRK) reported a strong Net Promoter Score of 77, indicating high customer satisfaction and superior patient experience compared to the healthcare industry benchmark of 58.
- The company demonstrated effective member engagement, with over 60% of enrollees joining the Whole Health Plus program after just one conversation, showcasing efficient and effective outreach strategies.
- Ontrak Inc (OTRK) has shown robust health utilization outcomes, reducing emergency room visits by 32%, inpatient admissions by 62%, and overall medical costs by 43%, indicating strong performance in enhancing health outcomes and reducing costs.
Negative Points
- Despite new enrollments, Ontrak Inc (OTRK) experienced a net decrease of 237 members in the first quarter due to higher disenrollment rates, which rose to 22% compared to previous quarters.
- The company's revenue per health plan enrolled member per month decreased from $546 in Q4 of 2023 to $504 in Q1 of 2024, indicating a drop in revenue efficiency.
- Ontrak Inc (OTRK)'s gross margin slightly declined from 66.5% in the first quarter of the previous year to 63.6% in the current quarter, reflecting some challenges in maintaining profitability levels.
- The company's cash flow from operations was negative $3.3 million, although it showed improvement from the previous year, it still indicates challenges in cash flow management.
- Ontrak Inc (OTRK) is facing uncertainties with potential new client contracts, as final agreements and expansions with two prominent health plans are still under negotiation and pending finalization.
Q & A Highlights
Q: At what sort of annual revenue do you think you could attain with community care plans?
A: Brandon LaVerne, Interim CEO and COO of Ontrak Inc, stated that while specific customer revenues are generally not disclosed, the initial revenue from the community care plan is expected to be less than $1 million. However, this could potentially increase significantly as the plan expands and more members join in 2025.
Q: How many potential cloud clients comprise your current pipelines?
A: Mary Osborne, President and CCO of Ontrak Inc, mentioned that they currently have three health plan customers, each with multiple lines of business.
Q: When do you believe you might be able to add the next new clients?
A: Mary Osborne explained that two prominent health care plans are in the final stages of review, with expected feedback within the next 30 to 60 days. Following this, signatures and launch could occur shortly thereafter.
Q: Is all of the disenrollment fallout for Medicaid losses gone now, or do you expect to see more of this near term?
A: Brandon LaVerne noted that while the majority of disenrollment issues seem to be resolved, some states have extended timelines which might affect the numbers slightly. However, the situation has significantly stabilized.
Q: What are the financial results for this quarter?
A: James Park, CFO of Ontrak Inc, reported a revenue of $2.7 million for the first quarter, marking a 6% year-over-year increase. This was primarily due to a 15% increase in average enrolled members.
Q: Can you provide details on the operational efficiencies and expected outcomes for the new contracts?
A: Mary Osborne highlighted that Ontrak is set to provide comprehensive services including AI-infused solutions and behavioral health support to community care plan members. This includes up to 52 weeks of whole person care and access to behavioral health providers as needed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
