athenaHealth beats by $0.06, misses on revs; lowers FY17 guidance; announces increased cost savings, laying off 9% of workforce
- Reports Q3 (Sep) earnings of $0.56 per share, $0.06 better than the Capital IQ Consensus of $0.50; revenues rose 10.1% year/year to $304.6 mln vs the $310.52 mln Capital IQ Consensus.
- Co issues downside guidance for FY17, sees FY17 revs of $1.20-1.22 bln from $1.21-1.25 bln vs. $1.22 bln Capital IQ Consensus; booking to $300-350 mln from $350-400 mln; adj. profit to $135-150 mln from $120-140 mln.
- We continue to face weaker utilization trends and a more challenging demand environment. In addition, some of our non-athenaOne revenue initiatives are not ramping as quickly as planned. We also expect a negative impact of approximately $4 million on our 2017 revenue from hurricanes Harvey and Irma. Despite these growth headwinds, we are making progress on our initiatives to run the business more efficiently while continuing to focus on growth in 2018 and beyond.
- As previously announced on August 1, 2017, the Board of Directors and mgmt team have been conducting a strategic review of our operational and financial strategy, leadership and governance. As a result of this review, today we are announcing an increase to our previously identified cost savings target. On October 13, 2017, the Board approved a comprehensive strategic plan to generate $100 million to $115 million of gross pre-tax expense savings. Co expects to reduce workforce by ~9%.
- "Looking ahead to 2018, while we are still working through our annual budget process, and are not yet in a position to provide guidance, we are committing to significant operating margin improvement next year. We are holding ourselves accountable to achieve at least 15% non-GAAP operating margin in 2018.
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