NextGen Healthcare Reports Fiscal 2023 Fourth Quarter and Full Year Results

5/16/2023

REMOTE-FIRST COMPANY/NEW YORK--(BUSINESS WIRE)--May 16, 2023-- NextGen Healthcare, Inc. (Nasdaq: NXGN), a leading provider of innovative, cloud-based healthcare technology solutions, today announced its operating results for the fiscal fourth quarter and year ended March 31, 2023.

Fiscal 2023 Fourth Quarter Highlights

  • Total revenue was $178.6 million compared to $151.3 million for the same period a year ago, an increase of 18.0%.
  • Recurring revenue was $161.9 million compared to $137.2 million for the same period a year ago, an increase of 18.0%.
  • Non-recurring revenue was $16.6 million compared to $14.0 million for the same period a year ago, an increase of 18.4%.
  • Fully diluted net loss per share was $0.38, which includes an accrual for the settlement of the DOJ matter, compared to $0.01 net income per share for the same period a year ago.
  • On a non-GAAP basis, fully diluted earnings per share was $0.31 compared to $0.19 for the same period a year ago.
  • Adjusted EBITDA was $33.7 million compared to $23.7 million for the same period a year ago.
  • Bookings, which reflects annual contract value excluding renewals, were $45.0 million and included several deals greater than $1.0 million.

Fiscal 2023 Full Year Highlights

  • Total revenue was $653.2 million compared to $596.4 million for the same period a year ago, an increase of 9.5%.
  • Fully diluted net loss per share was $0.04 compared to a net income per share of $0.02 for the same period a year ago.
  • On a non-GAAP basis, fully diluted earnings per share was $0.98 compared to $0.98 for the same period a year ago.
  • Adjusted EBITDA was $111.7 million compared to $114.2 million for the same period a year ago.
  • Bookings, which reflects annual contract value excluding renewals, were $166.5 million compared to $152.5 million for the same period a year ago.

“These solid results put us one step closer to achieving our long-term goal of double-digit revenue growth, operating leverage, and disciplined capital management,” said David Sides, president and chief executive officer of NextGen Healthcare. “We’re living our mission to advance ambulatory care with innovations for healthier communities, and find ourselves in a great position to deliver another year of balanced growth.”

Introducing Fiscal 2024 Financial Guidance

  • Revenue is expected to be in the range of $712 million to $722 million.
  • Adjusted EBITDA is expected to be in the range of $125 million to $131 million.
  • Non-GAAP earnings per share is expected to be in the range of $1.04 to $1.11.

Conference Call Information

NextGen Healthcare will host a conference call today at 5:00 p.m. EDT to discuss operating results from its fiscal 2023 fourth quarter and full year. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 800-343-4136 or 203-518-9843 for international callers and referencing participant code NXGNQ423 approximately 15 minutes prior to the call. A recording of the live webcast will be available on investor.nextgen.com after the call. It will be archived for 90 days.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our fiscal year 2024 outlook, financial and operating results and statements related to the settlement of the DOJ matter, strategic priorities, growth initiatives and expected capital expenditures. These forward-looking statements are based on the current beliefs, expectations, and assumptions of our management with respect to future events, only speak as of the date that they are made and are subject to significant risks and uncertainties. Such statements can be identified by the use of words such as “positioned,” “proposed,” “potential,” “project,” “expect,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate, “strategy,” “expectations,” “future,” “likely,” “may,” “should,” “will,” and similar terms, although not all forward-looking statements contain such words or expressions. Actual results could differ significantly from those set forth in the forward-looking statements.

Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements, including but not limited to: the final outcome of the DOJ investigation, including our ability to negotiate a final settlement agreement with the DOJ; potential additional investigations and proceedings from governmental entities or third parties related to the same or similar conduct; cybersecurity and data protection risks and related liabilities; potential litigation involving us; a shifting revenue mix that may impact gross margin; changes in laws and regulations applicable to our business; changes in market conditions and receptivity to our services and offerings; impact of strategic actions, including acquisitions and dispositions; management of and our success in integrating acquired businesses; our ability to maintain and expand our business with existing clients or effectively transition clients to newer products; our ability to attract new partners and successfully capture new opportunities; our ability to anticipate or respond quickly to market changes, execute our strategy and manage growth; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. A significant portion of the Company's quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company's revenues and operating results are very difficult to forecast. A major portion of the Company's costs and expenses are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company's period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance.

Additional discussion of these and other risks, uncertainties and factors that could affect our business and financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

USE OF NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than NextGen Healthcare, Inc., which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, gain on disposition of Commercial Dental assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, other regulatory and litigation matters, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income before provision for income taxes.

The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each quarter of fiscal year 2023 was 20.0%. The normalized non-GAAP tax rate expected to be applied to each quarter of fiscal year 2024 is 21.0%. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

The Company calculates free cash flow as total net cash provided by operating activities, net of cash used for the additions of capitalized software costs and equipment and improvements. The Company calculates net debt as line of credit and convertible senior notes less cash and cash equivalents and marketable securities. The Company calculates non-GAAP adjusted EBITDA by excluding net acquisition costs, amortization of acquired intangible assets, impairment of assets, restructuring costs, shareholder disputes and related costs, net of insurance, which include net securities litigation defense, proxy contest, other regulatory and litigation matters, and related costs, share-based compensation, and other non-run-rate expenses from GAAP income from operations and then adding back amortization of capitalized software costs and depreciation as presented within the condensed consolidated statements of cash flows. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA divided by total revenues. The Company calculates Rule of 40 as annual revenue growth rate plus non-GAAP adjusted EBITDA margin.

The Company’s future period guidance in this release includes adjustments for items not indicative of the Company’s core operations. Such adjustments are generally expected to be of a nature similar to those adjustments applied to the Company’s historic GAAP financial results in the determination of the Company’s non-GAAP diluted earnings per share. Such adjustments, however, may be affected by changes in ongoing assumptions and judgments as to the items that are excluded in the calculation of non-GAAP adjusted net income and adjusted diluted earnings per share, as described in this release. The exact amount and probable significance of these adjustments, including net acquisition costs, impairment of assets, restructuring costs, shareholder disputes and related costs, which include net securities litigation defense, proxy contest, other regulatory and litigation matters, and related costs, and other non-run-rate expenses, are not currently determinable without unreasonable efforts, but may be significant. These items cannot be reliably quantified or forecasted due to the combination of their historic and expected variability. It is therefore not practicable to reconcile this non-GAAP guidance to the most comparable GAAP measures.

About NextGen Healthcare, Inc.

NextGen Healthcare, Inc. (Nasdaq: NXGN) is a leading provider of innovative healthcare technology solutions. We are reimagining ambulatory healthcare with award-winning solutions that enable high-performing practices to create healthier communities. We partner with medical, behavioral and dental providers in their journey toward whole person health and value-based care. Our highly integrated, intelligent and interoperable solutions go beyond EHR and Practice Management to increase clinical quality and productivity, enrich the patient experience and drive superior financial performance. We are on a quest to achieve better healthcare outcomes for all. Learn more at nextgen.com, and follow us on Facebook, Twitter, LinkedIn, YouTube and Instagram.

NEXTGEN HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Recurring

$

161,936

 

 

$

137,227

 

 

$

593,918

 

 

$

539,713

 

Software, hardware, and other non-recurring

 

16,614

 

 

 

14,032

 

 

 

59,254

 

 

 

56,637

 

Total revenues

 

178,550

 

 

 

151,259

 

 

 

653,172

 

 

 

596,350

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

74,861

 

 

 

60,169

 

 

 

269,191

 

 

 

232,481

 

Software, hardware, and other non-recurring

 

11,893

 

 

 

7,949

 

 

 

44,881

 

 

 

31,034

 

Amortization of capitalized software costs and acquired intangible assets

 

7,276

 

 

 

7,643

 

 

 

27,941

 

 

 

31,889

 

Total cost of revenue

 

94,030

 

 

 

75,761

 

 

 

342,013

 

 

 

295,404

 

Gross profit

 

84,520

 

 

 

75,498

 

 

 

311,159

 

 

 

300,946

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

83,327

 

 

 

50,046

 

 

 

223,424

 

 

 

209,661

 

Research and development costs, net

 

20,027

 

 

 

19,428

 

 

 

82,300

 

 

 

76,657

 

Amortization of acquired intangible assets

 

1,336

 

 

 

882

 

 

 

3,665

 

 

 

3,525

 

Impairment of assets

 

1,587

 

 

 

2,329

 

 

 

3,163

 

 

 

3,906

 

Restructuring costs

 

2,152

 

 

 

—

 

 

 

2,473

 

 

 

539

 

Total operating expenses

 

108,429

 

 

 

72,685

 

 

 

315,025

 

 

 

294,288

 

Income (loss) from operations

 

(23,909

)

 

 

2,813

 

 

 

(3,866

)

 

 

6,658

 

Interest income

 

1,891

 

 

 

22

 

 

 

3,541

 

 

 

101

 

Interest expense

 

(3,404

)

 

 

(541

)

 

 

(6,298

)

 

 

(1,499

)

Other income (expense), net

 

661

 

 

 

(21

)

 

 

10,927

 

 

 

(64

)

Income (loss) before provision for income taxes

 

(24,761

)

 

 

2,273

 

 

 

4,304

 

 

 

5,196

 

Provision for income taxes

 

479

 

 

 

1,925

 

 

 

6,958

 

 

 

3,578

 

Net income (loss)

$

(25,240

)

 

$

348

 

 

$

(2,654

)

 

$

1,618

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.38

)

 

$

0.01

 

 

$

(0.04

)

 

$

0.02

 

Diluted

$

(0.38

)

 

$

0.01

 

 

$

(0.04

)

 

$

0.02

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

66,049

 

 

 

66,929

 

 

 

67,005

 

 

 

67,370

 

Diluted

 

66,049

 

 

 

67,547

 

 

 

67,005

 

 

 

67,788

 

NEXTGEN HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

 

 

 

March 31, 2023

 

 

March 31, 2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

98,719

 

 

$

59,829

 

Restricted cash and cash equivalents

 

 

7,269

 

 

 

6,918

 

Marketable securities

 

 

139,612

 

 

 

—

 

Accounts receivable, net

 

 

88,498

 

 

 

76,057

 

Contract assets

 

 

19,561

 

 

 

25,157

 

Income taxes receivable

 

 

5,248

 

 

 

6,507

 

Prepaid expenses and other current assets

 

 

42,916

 

 

 

37,102

 

Total current assets

 

 

401,823

 

 

 

211,570

 

Equipment and improvements, net

 

 

6,421

 

 

 

9,120

 

Capitalized software costs, net

 

 

54,516

 

 

 

43,958

 

Operating lease assets

 

 

3,335

 

 

 

11,316

 

Deferred income taxes, net

 

 

29,472

 

 

 

19,259

 

Contract assets, net of current

 

 

5,572

 

 

 

1,910

 

Intangibles, net

 

 

28,968

 

 

 

24,303

 

Goodwill

 

 

321,756

 

 

 

267,212

 

Other assets

 

 

44,238

 

 

 

39,026

 

Total assets

 

$

896,101

 

 

$

627,674

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

12,022

 

 

$

9,125

 

Contract liabilities

 

 

61,601

 

 

 

61,280

 

Accrued compensation and related benefits

 

 

36,241

 

 

 

48,736

 

Income taxes payable

 

 

622

 

 

 

99

 

Operating lease liabilities

 

 

3,826

 

 

 

8,089

 

Other current liabilities

 

 

83,799

 

 

 

53,533

 

Total current liabilities

 

 

198,111

 

 

 

180,862

 

Contract liabilities, net of current

 

 

10,310

 

 

 

—

 

Deferred compensation

 

 

8,033

 

 

 

7,230

 

Convertible senior notes, net, noncurrent

 

 

266,843

 

 

 

—

 

Operating lease liabilities, net of current

 

 

4,095

 

 

 

11,934

 

Other noncurrent liabilities

 

 

8,274

 

 

 

4,570

 

Total liabilities

 

 

495,666

 

 

 

204,596

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, $0.01 par value; authorized 100,000 shares; 70,875 shares and 69,245 shares issued at March 31, 2023 and March 31, 2022, respectively; 66,026 shares and 67,075 shares outstanding at March 31, 2023 and March 31, 2022, respectively

 

 

709

 

 

 

692

 

Treasury stock, at cost, 4,849 shares and 2,170 shares at March 31, 2023 and March 31, 2022, respectively

 

 

(85,752

)

 

 

(35,874

)

Additional paid-in capital

 

 

359,342

 

 

 

329,917

 

Accumulated other comprehensive loss

 

 

(1,462

)

 

 

(1,909

)

Retained earnings

 

 

127,598

 

 

 

130,252

 

Total shareholders' equity

 

 

400,435

 

 

 

423,078

 

Total liabilities and shareholders' equity

$

896,101

$

627,674

NEXTGEN HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(25,240

)

 

$

348

 

 

$

(2,654

)

 

$

1,618

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Amortization of capitalized software costs

 

6,168

 

 

 

5,424

 

 

 

22,571

 

 

 

23,016

 

Amortization of debt issuance costs

 

381

 

 

 

127

 

 

 

834

 

 

 

508

 

Amortization of other intangibles

 

2,445

 

 

 

3,099

 

 

 

9,035

 

 

 

12,397

 

Net amortization (accretion) of premiums/discounts on marketable securities

 

(476

)

 

 

—

 

 

 

(476

)

 

 

—

 

Change in fair value of contingent consideration

 

200

 

 

 

—

 

 

 

100

 

 

 

7

 

Deferred income taxes

 

(9,539

)

 

 

180

 

 

 

(9,076

)

 

 

215

 

Depreciation

 

1,247

 

 

 

1,496

 

 

 

5,088

 

 

 

6,902

 

Excess tax deficiency (benefit) from share-based compensation

 

(374

)

 

 

(191

)

 

 

(1,052

)

 

 

643

 

Impairment of assets

 

1,587

 

 

 

2,329

 

 

 

3,163

 

 

 

3,906

 

Loss on disposal of equipment and improvements

 

16

 

 

 

20

 

 

 

90

 

 

 

97

 

Loss on foreign currency exchange rates

 

30

 

 

 

—

 

 

 

17

 

 

 

—

 

Non-cash operating lease costs

 

524

 

 

 

1,277

 

 

 

2,716

 

 

 

5,732

 

Provision for bad debts

 

814

 

 

 

773

 

 

 

1,914

 

 

 

1,915

 

Restructuring costs, net of amounts paid

 

1,990

 

 

 

—

 

 

 

1,990

 

 

 

—

 

Share-based compensation

 

6,942

 

 

 

7,867

 

 

 

33,458

 

 

 

26,552

 

Gain on disposition of Commercial Dental assets

 

—

 

 

 

—

 

 

 

(10,296

)

 

 

—

 

Changes in assets and liabilities, net of amounts acquired:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(9,754

)

 

 

(6,750

)

 

 

(12,379

)

 

 

(431

)

Contract assets

 

(1,259

)

 

 

(824

)

 

 

5,930

 

 

 

(5,610

)

Accounts payable

 

(3,784

)

 

 

(5,921

)

 

 

333

 

 

 

(2,329

)

Contract liabilities

 

(1,798

)

 

 

6,401

 

 

 

(6,739

)

 

 

8,417

 

Accrued compensation and related benefits

 

10,449

 

 

 

6,717

 

 

 

(13,142

)

 

 

(1,638

)

Income taxes

 

1,968

 

 

 

1,564

 

 

 

2,790

 

 

 

(5,650

)

Deferred compensation

 

464

 

 

 

(441

)

 

 

803

 

 

 

610

 

Operating lease liabilities

 

(1,383

)

 

 

(2,672

)

 

 

(8,808

)

 

 

(12,734

)

Other assets and liabilities

 

26,065

 

 

 

(3,914

)

 

 

17,450

 

 

 

(10,598

)

Net cash provided by operating activities

 

7,683

 

 

 

16,909

 

 

 

43,660

 

 

 

53,545

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Additions to capitalized software costs

 

(8,081

)

 

 

(7,663

)

 

 

(34,987

)

 

 

(25,500

)

Additions to equipment and improvements

 

(219

)

 

 

(545

)

 

 

(2,277

)

 

 

(2,582

)

Payments for acquisitions, net of cash acquired

 

(3,851

)

 

 

—

 

 

 

(51,302

)

 

 

—

 

Proceeds from disposition of Commercial Dental assets

 

—

 

 

 

—

 

 

 

11,253

 

 

 

—

 

Proceeds from sales of marketable securities

 

506

 

 

 

—

 

 

 

506

 

 

 

—

 

Purchases of marketable securities

 

(140,087

)

 

 

—

 

 

 

(140,087

)

 

 

—

 

Net cash used in investing activities

 

(151,732

)

 

 

(8,208

)

 

 

(216,894

)

 

 

(28,082

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Proceeds from convertible senior notes

 

—

 

 

 

—

 

 

 

275,000

 

 

 

—

 

Proceeds from line of credit

 

—

 

 

 

—

 

 

 

50,000

 

 

 

—

 

Repayments on line of credit

 

—

 

 

 

—

 

 

 

(50,000

)

 

 

—

 

Payment of debt issuance costs

 

—

 

 

 

—

 

 

 

(8,483

)

 

 

—

 

Proceeds from issuance of shares under employee plans

 

1,440

 

 

 

4,137

 

 

 

6,835

 

 

 

5,014

 

Repurchase of common stock

 

—

 

 

 

—

 

 

 

(49,878

)

 

 

(35,874

)

Payment of contingent consideration related to acquisitions

 

—

 

 

 

—

 

 

 

—

 

 

 

(540

)

Payments for taxes related to net share settlement of equity awards

 

(874

)

 

 

(441

)

 

 

(10,851

)

 

 

(5,891

)

Net cash provided by (used in) financing activities

 

566

 

 

 

3,696

 

 

 

212,623

 

 

 

(37,291

)

Effect of exchange rate changes on cash and cash equivalents

 

1

 

 

 

—

 

 

 

(148

)

 

 

—

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(143,482

)

 

 

12,397

 

 

 

39,241

 

 

 

(11,828

)

Cash, cash equivalents, and restricted cash at beginning of period

 

249,470

 

 

 

54,350

 

 

 

66,747

 

 

 

78,575

 

Cash, cash equivalents, and restricted cash at end of period

$

105,988

 

 

$

66,747

 

 

$

105,988

 

 

$

66,747

 

NEXTGEN HEALTHCARE, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)

 

The following table presents our revenues disaggregated by our major revenue categories and by occurrence:

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Recurring revenues:

 

 

 

 

 

 

 

 

 

 

 

Subscription services

$

52,022

 

 

$

42,055

 

 

$

184,047

 

 

$

162,636

 

Support and maintenance

 

38,850

 

 

 

39,887

 

 

 

153,520

 

 

 

155,623

 

Managed services

 

34,452

 

 

 

27,741

 

 

 

129,115

 

 

 

111,377

 

Transactional and data services

 

36,612

 

 

 

27,544

 

 

 

127,236

 

 

 

110,077

 

Total recurring revenues

 

161,936

 

 

 

137,227

 

 

 

593,918

 

 

 

539,713

 

 

 

 

 

 

 

 

 

 

 

 

 

Software, hardware, and other non-recurring revenues:

 

 

 

 

 

 

 

 

 

 

 

Software license and hardware

 

8,487

 

 

 

7,145

 

 

 

27,860

 

 

 

31,347

 

Other non-recurring services

 

8,127

 

 

 

6,887

 

 

 

31,394

 

 

 

25,290

 

Total software, hardware and other non-recurring revenues

 

16,614

 

 

 

14,032

 

 

 

59,254

 

 

 

56,637

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

178,550

 

 

$

151,259

 

 

$

653,172

 

 

$

596,350

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring revenues as a percentage of total revenues

 

90.7

%

 

 

90.7

%

 

 

90.9

%

 

 

90.5

%

NEXTGEN HEALTHCARE, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)

 

RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Income before provision for income taxes - GAAP

$

(24,761

)

 

$

2,273

 

 

$

4,304

 

 

$

5,196

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs, net

 

832

 

 

 

—

 

 

 

2,345

 

 

 

—

 

Amortization of acquired intangible assets

 

2,445

 

 

 

3,099

 

 

 

9,035

 

 

 

12,397

 

Amortization of deferred debt issuance costs

 

381

 

 

 

127

 

 

 

834

 

 

 

508

 

Gain on disposition of Commercial Dental assets

 

—

 

 

 

—

 

 

 

(10,296

)

 

 

—

 

Impairment of assets

 

1,587

 

 

 

2,329

 

 

 

3,163

 

 

 

3,906

 

Restructuring costs

 

2,152

 

 

 

—

 

 

 

2,473

 

 

 

539

 

Shareholder disputes, other regulatory and litigation matters, and related costs, net of insurance*

 

36,026

 

 

 

531

 

 

 

36,513

 

 

 

29,747

 

Share-based compensation

 

6,942

 

 

 

7,867

 

 

 

33,458

 

 

 

26,552

 

Other non-run-rate expenses**

 

160

 

 

 

107

 

 

 

939

 

 

 

4,486

 

Total adjustments to GAAP income before provision for income taxes:

 

50,525

 

 

 

14,060

 

 

 

78,464

 

 

 

78,135

 

Income before provision for income taxes - Non-GAAP

 

25,764

 

 

 

16,333

 

 

 

82,768

 

 

 

83,331

 

Provision for income taxes

 

5,153

 

 

 

3,266

 

 

 

16,554

 

 

 

16,666

 

Net income - Non-GAAP

$

20,611

 

 

$

13,067

 

 

$

66,214

 

 

$

66,665

 

Diluted net income per share - Non-GAAP

$

0.31

 

 

$

0.19

 

 

$

0.98

 

 

$

0.98

 

Weighted-average shares outstanding (diluted):

 

66,561

 

 

 

67,547

 

 

 

67,647

 

 

 

67,788

 

 

 

 

 

 

 

 

 

 

 

 

 

* Includes $35,095 of legal settlement and related costs associated with the DOJ investigation regulatory matter.

** Other non-run-rate expenses for the three months ended March 31, 2023 consist of $111 excess lease-related expense for vacated facilities and $49 of professional services costs not related to core operations.

Other non-run-rate expenses for the three months ended March 31, 2022 consist of $107 excess lease-related expense for vacated facilities.

Other non-run-rate expenses for the year ended March 31, 2023 consist of $740 excess lease-related expense for vacated facilities and $199 of professional services costs not related to core operations.

Other non-run-rate expenses for the year ended March 31, 2022 consist primarily of $1,242 excess lease-related expense for vacated facilities, lease termination costs, and other costs, including retention bonuses, related to the restructuring plan and $2,707 of executive transition costs, including severance and other costs related to the departure of the CEO, $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic, and $39 of professional services costs not related to core operations.

 

RECONCILIATION OF FREE CASH FLOW

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net cash provided by operating activities

$

7,683

 

 

$

16,909

 

 

$

43,660

 

 

$

53,545

 

Additions to capitalized software costs

 

(8,081

)

 

 

(7,663

)

 

 

(34,987

)

 

 

(25,500

)

Additions to equipment and improvements

 

(219

)

 

 

(545

)

 

 

(2,277

)

 

 

(2,582

)

Free cash flow

$

(617

)

$

8,701

 

 

$

6,396

 

 

$

25,463

NEXTGEN HEALTHCARE, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands)

 

RECONCILIATION OF ADJUSTED EBITDA

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Income from operations - GAAP

$

(23,909

)

 

$

2,813

 

 

$

(3,866

)

 

$

6,658

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs, net

 

832

 

 

 

—

 

 

 

2,345

 

 

 

—

 

Amortization of acquired intangible assets

 

2,445

 

 

 

3,099

 

 

 

9,035

 

 

 

12,397

 

Impairment of assets

 

1,587

 

 

 

2,329

 

 

 

3,163

 

 

 

3,906

 

Restructuring costs

 

2,152

 

 

 

—

 

 

 

2,473

 

 

 

539

 

Shareholder disputes, other regulatory and litigation matters, and related costs, net of insurance*

 

36,026

 

 

 

531

 

 

 

36,513

 

 

 

29,747

 

Share-based compensation

 

6,942

 

 

 

7,867

 

 

 

33,458

 

 

 

26,552

 

Other non-run-rate expenses**

 

160

 

 

 

107

 

 

 

939

 

 

 

4,486

 

Total adjustments to GAAP income from operations

 

50,144

 

 

 

13,933

 

 

 

87,926

 

 

 

77,627

 

Income from operations - Non-GAAP

 

26,235

 

 

 

16,746

 

 

 

84,060

 

 

 

84,285

 

Amortization of capitalized software costs

 

6,168

 

 

 

5,424

 

 

 

22,571

 

 

 

23,016

 

Depreciation

 

1,247

 

 

 

1,496

 

 

 

5,088

 

 

 

6,902

 

Depreciation and Amortization - Non-GAAP

 

7,415

 

 

 

6,920

 

 

 

27,659

 

 

 

29,918

 

Adjusted EBITDA - Non-GAAP

$

33,650

 

 

$

23,666

 

 

$

111,719

 

 

$

114,203

 

Total revenues

$

178,550

 

 

$

151,259

 

 

$

653,172

 

 

$

596,350

 

Adjusted EBITDA margin - Non-GAAP

 

18.8

%

 

 

15.6

%

 

 

17.1

%

 

 

19.2

%

 

 

 

 

 

 

 

 

 

 

 

 

* Includes $35,095 of legal settlement and related costs associated with the DOJ investigation regulatory matter.

** Other non-run-rate expenses for the three months ended March 31, 2023 consist of $111 excess lease-related expense for vacated facilities and $49 of professional services costs not related to core operations.

Other non-run-rate expenses for the three months ended March 31, 2022 consist of $107 excess lease-related expense for vacated facilities.

Other non-run-rate expenses for the year ended March 31, 2023 consist of $740 excess lease-related expense for vacated facilities and $199 of professional services costs not related to core operations.

Other non-run-rate expenses for the year ended March 31, 2022 consist primarily of $1,242 excess lease-related expense for vacated facilities, lease termination costs, and other costs, including retention bonuses, related to the restructuring plan and $2,707 of executive transition costs, including severance and other costs related to the departure of the CEO, $498 of incremental costs and penalties primarily due to the cancellation of certain events directly associated with the COVID-19 pandemic, and $39 of professional services costs not related to core operations.

 

 

Media Relations Contact
Tami Andrade
(949) 517-2380
tandrade@nextgen.com

Investor Relations Contact
James Hammerschmidt
(949) 237-6112
jhammerschmidt@nextgen.com

Source: NextGen Healthcare, Inc.