Well being tech firm Accolade boosts income 25% in first report since IPO, as COVID-19 roils business

Accolade CEO Raj Singh talking on the 2018 GeekWire Summit. (GeekWire Picture / Dan DeLong)

Seattle entrepreneur and former Concur president Raj Singh was again within the earnings sizzling seat Thursday afternoon because the CEO of Accolade, strolling analysts and buyers by the well being advantages expertise firm’s first quarterly report since going public last month in a $1.2 billion preliminary public providing.

He was lucky to have constructive information to share with analysts and buyers. Amid the uncertainty of the COVID-19 pandemic, Accolade reported a 25% increase in quarterly revenue to $35.9 million, whereas narrowing its loss by 12%, to $14 million.

The corporate’s inventory is up greater than 4% to $39 per share in after-hours buying and selling following the earnings report.

An Accolade chart detailing COVID-19 exercise amongst its members within the quarter ending Might 31, its fiscal first quarter.

Accolade, with headquarters in Seattle and Philadelphia, helps workers at its shopper firms navigate their well being advantages, using well being assistants who work instantly with members and may name on nurses and different clinicians as wanted. The corporate stated it had 60 company prospects as of July 1, giving it greater than 1.7 million members. Accolade has 1,250 workers of its personal.

A few of the firm’s greatest prospects, reminiscent of American Airways, have been impacted severely by COVID-19. Airways represented 22% of Accolade’s revenues in its final fiscal 12 months, and job cuts within the sector may negatively influence the corporate’s member base and income. Singh stated Accolade has factored these cuts into its income forecasts, with no information to report on that entrance because the IPO.

However COVID-19 can also be serving to Accolade’s enterprise. The corporate has been capable of carry different company prospects aboard with new providers designed to assist workers navigate the fallout from the pandemic.

Singh stated on the earnings call that Johnson Controls, the constructing and services engineering large, has change into an Accolade buyer. The contract is beginning with as many as 30,000 Johnson Controls workers within the U.S. below Accolade’s COVID Response Care initiative, which helps employers in providing training, testing, contact tracing, return-to-work clearance, and different providers.

Johnson Controls additionally signed on as a bigger Accolade well being and advantages buyer for subsequent 12 months, masking all of its U.S. workers, Singh stated.

Additionally within the quarter, Accolade launched a pilot program with the U.S. Defense Health Agency, its first federal government customer.

Singh stated the pandemic has elevated the significance of well being look after firms in a approach that might finally enhance demand for Accolade’s providers, making well being care and wellness “no longer a check-the-box benefit, but instead something that directly impacts business continuity.”

“We envision a world where, just as board audit committees now routinely review infosec protections for their companies, other board committees will now be reviewing the healthcare strategies for their businesses,” Singh stated on the decision.

As a part of its earnings report, Accolade stated it expects income between $158 million $161 million in its present fiscal 12 months, ending in February 2021, up from $132.5 million in its prior fiscal 12 months.

The corporate’s earnings steerage for the present fiscal 12 months factors to a lack of $32 million to $36 million in adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA), in contrast with a lack of $33.1 million final fiscal 12 months.

Diversifying its buyer base is a key challenge for the corporate, on account of a focus of huge prospects driving its income. Accolade’s 4 largest company prospects (Comcast Cable, American Airways, Lowe’s, and State Farm) have been answerable for an combination whole of 59% of its income of $132.5 million for its 2020 fiscal 12 months, which led to February, in line with its earlier monetary filings. Its largest buyer, Comcast, was answerable for almost 1 / 4 of its 2020 income.

Accolade was based in 2007 by Michael Cline and Tom Spann. The corporate has been led since 2015 by Singh, who beforehand co-founded journey expense software program large Concur, which offered to SAP for $8.3 billion in 2014. Concur co-founder Mike Hilton is the Accolade chief product officer.

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