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athenahealth Crushes Q4 Earnings Estimate, Revenues Meet

athenahealth Inc. ATHN reported earnings of 45 cents per share in the fourth quarter of 2015, well ahead of the Zacks Consensus Estimate of 16 cents. However, the figure deteriorated 22.4% from the year-ago quarter.

Athenahealth Inc. (ATHN) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany

The year-over-year decline can be primarily attributed to margin contraction, which fully offset revenue growth of almost 21% in the quarter. Revenues totaled $257.5 million, with Business Services improving 23.3% that fully offset a 20.8% decline in Implementation and Other revenues. Revenues were almost in line with the Zacks Consensus Estimate.

Adjusted gross margin contracted 200 basis points (bps) on a year-over-year basis to 62.2%.

Total operating expenses, as a percentage of revenues, surged 440 bps to 97.4%. Direct operating and selling & marketing (S&M) expenses rose 200 bps each, while depreciation & amortization (D&A) expenses increased 170 bps in the quarter.

As a result, adjusted operating margin contracted 590 bps from the year-ago quarter to 12.1%.

Meanwhile, revenues increased 23% year over year to $924.7 million in full-year 2015. Adjusted earnings increased 3.1% to $1.35.

Physician Details

Revenues from athenahealth-branded services increased 21% year over year to $195.9 million in the reported quarter.

During the quarter, athenahealth added 2,148 physicians to athenaCollector, 1,126 physicians to athenaClinicals, and 1,965 physicians to athenaCommunicator. However, the figures reflect a decline from 2,317 physicians, 1,353 physicians and 2,480 physicians added in the year-ago quarter, respectively.

Guidance

For full-year 2016, athenahealth projects total revenues in the range of $1.085-$1.115 billion. Adjusted earnings are forecasted in the $1.65-$1.85 per share range.

Adjusted gross margin are projected in the range of 63.5%-64.5%, while operating income is estimated in the band of $120-$135 million.

Zacks Rank & Other Key Picks

Currently, athenahealth sports a Zacks Rank #1 (Strong Buy). Other favorably ranked stocks include Computer Programs & Systems CPSI , Omnicell OMCL and Streamline Health Solutions STRM . All the three stocks carry the same Zacks Rank as athenahealth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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