54% Increase in Revenue in the Fourth Quarter
2022 Versus Third Quarter 2022
Marpai, Inc. (“Marpai” or the “Company”)
(Nasdaq: MRAI), a technology company transforming the company
health plan for employers that self-fund their healthcare, today
reported financial results for the fourth quarter and year ended
December 31, 2022.
The Company’s consolidated results of operations include the
results of operations of Marpai and its wholly owned subsidiary,
Marpai Health, Inc., for all periods presented, and the results of
Marpai Administrators LLC.(“Marpai Administrators”), formerly
Continental Benefits, LLC, since its acquisition on April 1, 2021,
and of Maestro Health, LLC. (“Maestro Health”) since its
acquisition on November 1, 2022.
Financial Highlights
- Net revenues for the fourth quarter of 2022 were approximately
$7.6 million, compared to net revenue of approximately $4.9 million
for the third quarter of 2022, representing a sequential increase
of approximately $2.7 million, or 54%. This increase is primarily
due to the acquisition of Maestro Health.
- Net revenues for the year ended December 31, 2022, were
approximately $24.3 million compared to net revenues of
approximately $14.2 million for the year ended December 31, 2021,
representing an increase of approximately $10.1 million, or 71%.
This increase is primarily due to the acquisition of Maestro Health
and because the 2021 results did not include Marpai Administrator’s
revenues for the first quarter of 2021.
- The number of customers’ employees covered under the Company’s
administered health plans was 42,107, 16,357 and 21,074 on December
31, 2022, September 30, 2022 and June 30, 2022, respectively. This
increase is primarily due to the acquisition of Maestro
Health.
- Operating expenses (including cost of revenues) were
approximately $16.6 million for the fourth quarter of 2022, as
compared to approximately $10.8 million for the third quarter
of2022, reflecting the acquisition of Maestro Health, which
increased the overall level of activity of the Company.
- Operating expenses (including cost of revenues) for the full
year 2022 were $51.3 million, compared to approximately $30.1
million for 2021. This increase is primarily due to the acquisition
of Maestro Health and because the 2021 results did not include
Marpai Administrator’s operating expenses for the first quarter of
2021.
- Operating loss was approximately $8.9 million for the fourth
quarter of 2022 compared to approximately $5.8 million for third
quarter of 2022.
- Operating loss for the full year 2022 was $27 million compared
to $15.9 million for the full year 2021.
- Net loss was approximately $8.5 million for the fourth quarter
of 2022, compared to net loss of approximately $5.8 million for the
third quarter of 2022.
- 2022 full year net loss was approximately $26.5 million
compared to approximately $16 million in 2021.
- Adjusted negative EBITDA was approximately $7.0 million for the
fourth quarter of 2022 compared to adjusted negative EBITDA of
approximately $4.3 million in the third quarter of 2022.
- Adjusted negative EBITDA for the full year 2022 was $20.0
million compared to adjusted negative EBITDA of $12.7 million for
full year 2021.
A reconciliation of U.S. generally accepted accounting
principles (“GAAP”) to non-GAAP measures has been provided in the
financial statement tables included in this press release. An
explanation of these measures is also included below under the
heading “Non-GAAP Financial Measures.”
Acquisition of Maestro Health
On November 1, 2021, the Company closed the acquisition of
Maestro Health in a seller financed deal that more than doubled the
size of the Company. While the transaction contributed to the
increase of the Company’s consolidated operating loss in the fourth
quarter of 2022, we are now in the process of integrating the two
companies and expect the transaction to become accretive to our
monthly Adjusted EBITDA by the middle of 2023.
"2022 was a transformative year for Marpai, with our acquisition
of Maestro Health,” stated Edmundo Gonzalez, Chief Executive
Officer of Marpai. “We are focused on a few financial objectives.
First, we have reduced, and will continue to reduce, operating
costs as we integrate two legacy companies with similar functions
into one. This work is on-going. In addition, we must cross sell
our products to each legacy company customer base, as this alone
represents a significant revenue and profit opportunity,” said
Gonzalez.
Financial Guidance
The Company expects 2023 annual revenues to be between $34
million and $35 million and expects first quarter 2023 revenues to
be in a range of $9 million to $9.3 million. First quarter revenues
are expected to include approximately $0.5 million one- time run
out revenues.
The foregoing forward-looking statements reflect our
expectations as of today's date. Given the number of risk factors,
uncertainties and assumptions discussed below, actual results may
differ materially. We do not intend to update our financial outlook
until our next quarterly results announcement.
Webcast and Conference Call Information
Marpai will host a conference call and webcast tomorrow, on
Thursday, March 30, 2022 at 8:30 a.m. ET to answer questions about
the Company's operational and financial highlights for its fourth
quarter and year ended December 31, 2022.
Investors interested in listening to the conference call may do
so by dialing (866)-652-5200 for domestic callers or
+1-412-317-6060 for international callers, or by dialing
1-855-669-9657 for Canadian callers ,or via webcast:
https://app.webinar.net/07JEr5B2x8G
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing
AI-powered health plan services to employers that directly pay for
employee health benefits. Primarily competing in the $22 billion
TPA (Third Party Administrator) sector serving self-funded employer
health plans representing over $1 trillion in annual claims, Marpai
maximizes the value of the health plan as measured in health
outcomes. Marpai takes a member-centric approach to connect members
to health solutions predicted to have a high probability of
positive outcomes, and aims to bring value-based care to the
self-insured market. With effective early intervention, disease
management, claims processing and proactive member outreach, Marpai
works to deliver the healthiest member population for the health
plan budget. Operating nationwide, Marpai offers access to provider
networks including Aetna and Cigna and all TPA services. For more
information, visit www.marpaihealth.com.
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements, as that
term is defined in the Private Litigation Reform Act of 1995, that
involve significant risks and uncertainties, including statements
regarding anticipated 2023 and first quarter 2023 results.
Forward-looking statements can be identified through the use of
words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," “guidance,” "may," "can,"
"could", "will", "potential", "should," "goal" and variations of
these words or similar expressions. For example, the Company is
using forward looking statements when it discusses that it believes
that the Maestro Health transaction will become accretive to its
monthly Adjusted EBIDTA by the middle of 2023, its future financial
goals in 2023,and its first quarter revenue guidance. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect Marpai's current expectations and speak
only as of the date of this release. Actual results may differ
materially from Marpai's current expectations depending upon a
number of factors. These factors include, among others, adverse
changes in general economic and market conditions, competitive
factors including but not limited to pricing pressures and new
product introductions, uncertainty of customer acceptance of new
product offerings and market changes, risks associated with
managing the growth of the business. Except as required by law,
Marpai does not undertake any responsibility to revise or update
any forward-looking statements whether as a result of new
information, future events or otherwise.
More detailed information about Marpai and the risk factors that
may affect the realization of forward-looking statements is set
forth in Marpai's filings with the Securities and Exchange
Commission. Investors and security holders are urged to read these
documents free of charge on the SEC's web site at http://www.sec.gov.
Use of Non-GAAP Financial Measures and Their
Limitations
In addition to our results and measures of performance
determined in accordance with U.S. GAAP presented in this press
release, we believe that certain non-GAAP financial measures are
useful in evaluating and comparing our financial and operational
performance over multiple periods, identifying trends affecting our
business, formulating business plans and making strategic
decisions.
Adjusted EBITDA is a key performance measure that our management
uses to assess our financial performance and is also used for
internal planning and forecasting purposes.
We believe that Adjusted EBITDA, together with a reconciliation
to net loss, helps identify underlying trends in our business and
helps investors make comparisons between our company and other
companies that may have different capital structures, tax rates, or
different forms of employee compensation. Accordingly, we believe
that Adjusted EBITDA provides useful information to investors and
others in understanding and evaluating our operating results,
enhancing the overall understanding of our past performance and
future prospects, and allowing for greater transparency with
respect to a key financial metric used by our management in its
financial and operational decision-making. Our use of Adjusted
EBITDA has limitations as an analytical tool, and you should not
consider these measures in isolation or as a substitute for
analysis of our financial results as reported under U.S. GAAP. Some
of these potential limitations include:
- other companies, including companies in our industry which have
similar business arrangements, may report Adjusted EBITDA, or
similarly titled measures but calculate them differently, which
reduces their usefulness as comparative measures;
- although depreciation and amortization expenses are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future, and Adjusted EBITDA does not reflect cash
capital expenditures for such replacements or for new capital
expenditure requirements;
- Adjusted EBITDA also does not reflect changes in, or cash
requirements for, our working capital needs or the potentially
dilutive impact of stock-based compensation; and
- Adjusted EBITDA does not reflect the interest expense, or the
cash requirements necessary to service interest or principal
payments, on our debt that we may incur.
Because of these and other limitations, you should consider our
non-GAAP measures only as supplemental to other GAAP-based
financial measures.
MARPAI, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands)
December 31, 2022
December 31, 2021
ASSETS:
Current assets:
Cash and cash equivalents
$
13,764
$
19,183
Restricted cash
9,353
6,751
Accounts receivable, net of allowance for
credit losses of $23 and $0
1,438
209
Unbilled receivable
350
15
Prepaid expenses and other current
assets
1,602
743
Other receivables
31
91
Total current assets
26,538
26,992
Property and equipment, net
1,506
890
Capitalized software, net
4,589
6,305
Operating lease right-of-use assets
3,842
2,044
Goodwill
5,837
2,383
Intangible assets, net
6,323
5,508
Security deposits
1,293
52
Other long-term asset
22
28
Total assets
$
49,950
$
44,202
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current liabilities:
Accounts payable
$
1,458
$
1,126
Accrued expenses
5,275
2,525
Accrued fiduciary obligations
9,024
5,541
Deferred revenue
288
1,165
Current portion of operating lease
liabilities
1,311
784
Due to related party
3
4
Total current liabilities
17,359
11,145
Other long-term liabilities
20,204
45
Operating lease liabilities, net of
current portion
4,772
1,302
Deferred tax liabilities
1,480
2,001
Total liabilities
43,815
14,493
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value,
227,791,050 shares authorized; 21,279,032 issued and outstanding at
December 31, 2022 and 20,299,727 issued and outstanding at December
31, 2021
2
2
Additional paid-in capital
54,126
51,232
Accumulated deficit
(47,994
)
(21,526
)
Total stockholders’ equity
6,134
29,708
Total liabilities and stockholders’
equity
$
49,950
$
44,202
MARPAI, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands)
Year ended December
31,
2022
2021
Revenue
$
24,342
$
14,227
Costs and expenses
Cost of revenue (exclusive of depreciation
and amortization shown separately below)
17,136
10,289
General and administrative
12,319
8,056
Sales and marketing
6,939
4,965
Information technology
6,373
2,492
Research and development
3,708
1,734
Depreciation and amortization
3,538
1,962
Facilities
1,013
590
Loss on disposal of assets
273
—
Total costs and expenses
51,299
30,088
Operating loss
(26,957
)
(15,861
)
Other income (expenses)
Other income, net
234
173
Interest expense
(268
)
(427
)
Foreign exchange loss
(0
)
(19
)
Loss before provision for income
taxes
(26,990
)
(16,135
)
Income tax benefit
(521
)
(150
)
Net loss
$
(26,468
)
$
(15,985
)
Net loss per share, basic & fully
diluted(1)
$
(1.31
)
$
(1.59
)
Weighted average number of common
shares, basic and fully diluted(1)
20,239,837
10,076,494
(1)
Reflects 4.555821-for-1 forward stock
split that became effective September 2, 2021. The computation of
basic and diluted net loss per share was retroactively adjusted for
all periods presented. See Note 16 to the consolidated financial
statements.
MARPAI, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands)
Three Months ended December
31,
2022
2021
Revenue
$
7,628
$
5,896
Costs and expenses
Cost of revenue (exclusive of depreciation
and amortization shown separately below)
4,813
4,226
General and administrative
4,379
2,914
Sales and marketing
2,108
1,932
Information technology
2,511
991
Research and development
1,024
616
Depreciation and amortization
1,034
739
Facilities
426
227
Loss on disposal of assets
213
—
Total costs and expenses
16,508
11,645
Operating loss
(8,880
)
(5,749
)
Other income (expenses)
Other income, net
107
63
Interest expense
(226
)
(42
)
Foreign exchange loss
5
(1
)
Loss before provision for income
taxes
(9,005
)
(5,729
)
Income tax benefit
(521
)
—
Net loss
$
(8,484
)
$
(5,729
)
Net loss per share, basic & fully
diluted(1)
$
(0.41
)
$
(0.34)
Weighted average number of common
shares, basic and fully diluted(1)
20,710,198
16,694,213
(2)
Reflects 4.555821-for-1 forward stock
split that became effective September 2, 2021. The computation of
basic and diluted net loss per share was retroactively adjusted for
all periods presented. See Note 16 to the consolidated financial
statements.
MARPAI, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Year ended December
31,
2022
2021
Cash flows from operating
activities:
Net loss
$
(26,468
)
$
(15,985
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
3,538
1,962
Loss on disposal of assets
273
—
Share-based compensation
3,105
1,231
Shares issued to vendors in exchange for
services
39
—
Amortization of right-of-use asset
599
100
Amortization of debt discount
—
27
Non-cash interest
259
366
Convertible note issued for professional
services
—
75
Deferred taxes
(521
)
(150)
Changes in operating assets and
liabilities:
Accounts receivable and unbilled
receivable
(597
)
(132)
Prepaid expense and other assets
893
(350)
Other receivables
61
9
Security deposit
—
3
Accounts payable
181
41
Accounts payable – related party
—
(16
)
Accrued expenses
(2,052
)
962
Accrued fiduciary obligations
(12,822
)
1,470
Operating lease liabilities
(661
)
(100
)
Due to related party
(3
)
(240
)
Other liabilities
(1,068
)
(40
)
Other asset
7
(28
)
Net cash used in operating activities
(35,239
)
(10,795
)
Cash flows from investing
activities:
Cash and restricted cash acquired as part
of acquisitions (see Note 4)
33,388
11,384
Capitalization of software development
costs
(603
)
(1,463
)
Purchases of intangible asset
—
(3
)
Purchase of property and equipment
(363
)
(273
)
Net cash provided by investing
activities
32,423
9,644
Cash flows from financing
activities:
Proceeds from initial public offering,
net
—
25,379
Proceeds from warrant exercises
—
900
Repayment of convertible note
—
(783
)
Proceeds from stock option exercises
0
0
Proceeds from convertible notes
—
550
Proceeds from short-term loan
—
3,000
Repayment of short-term loan
—
(3,000
)
Payment for initial public offering
costs
—
(832
)
Proceeds from issuance of warrants
—
53
Net cash provided by financing
activities
0
25,267
Net (decrease) increase in cash, cash
equivalents and restricted cash
(2,817
)
24,115
Cash, cash equivalents and restricted
cash at beginning of period
25,934
1,819
Cash, cash equivalents and restricted
cash at end of period
$
23,117
$
25,934
Reconciliation of cash, cash
equivalents, and restricted cash reported in the consolidated
balance sheets
Cash and cash equivalents
$
13,765
$
19,183
Restricted cash
$
9,352
$
6,751
Total cash, cash equivalents and
restricted cash shown in the consolidated statement of cash
flows
23,117
25,934
Supplemental disclosure of non-cash
activity
Conversion of convertible notes into
common stock at the closing of the CB Acquisition, net
$
—
$
4,090
Conversion of convertible notes into
common stock at the IPO
$
—
$
5,107
Office improvements included in accrued
expenses
$
—
$
28
Common stock issued as part of the CB
Acquisition
$
—
$
8,500
Long term liability incurred in connection
with the acquisition of Maestro Health, LLC
$
19,900
$
—
MARPAI, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET LOSS TO
NON-GAAP ADJUSTED EBITDA
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net loss
$ (8,534)
$ (5,729)
$ (26,468)
$ (15,985)
Interest expense and foreign exchange
loss, net
115
(21)
33
274
Income tax benefit
(521)
-
(521)
(150)
Loss on disposal of asset
213
-
273
-
Depreciation and amortization expense
1,094
739
3,538
1,962
Stock based compensation expense
680
269
3,143
1,231
Adjusted EBITDA
$ (6,953)
$ (4,742)
$ (20,002)
$ (12,668)
(in thousands)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230329005851/en/
Investor Relations contact: Simon Li 813-822-3950
Simonli@marpaihealth.com
Marpai (NASDAQ:MRAI)
Historical Stock Chart
From Sep 2024 to Oct 2024
Marpai (NASDAQ:MRAI)
Historical Stock Chart
From Oct 2023 to Oct 2024