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Inovalon (INOV) Q4 Earnings Miss, Revenues Beat Estimates

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Inovalon Holdings Inc.INOV reported adjusted earnings of Array2 cents per share in the fourth quarter of 20Array5 that missed the Zacks Consensus Estimate by a penny but beat year-ago earnings by 9.Array%. The year-over-year upside came primarily on the back of higher revenues.

Quarter Details

Revenues surged 34.Array% year over year to $Array20.6 million, which beat the Zacks Consensus Estimate primarily on $Array3.3 million in gains from the completion of Inovalon's merger with Avalere Health in the quarter.

In fourth-quarter 20Array5, Inovalon launched Data Diagnostics - a suite of hundreds of patient-specific data analyses which support the identification and resolution of gaps in quality, risk, utilization and medical history insights - in collaboration with Quest Diagnostics.

As of Dec 3Array, 20Array5, the MORE2 Registry dataset contained more than Array30 million unique patients and ArrayArray billion medical event counts, up 9% and Array9%, respectively, from Dec 3Array, 20Array4.

Inovalon's trailing Array2-month Patient Analytical Month (PAM) count grew to a record 2Array.4 billion as of Dec 3Array, 20Array5, implying an increase of 30% on a year-over-year basis.

In fourth-quarter 20Array5, Inovalon's revenues from fully automated data-driven intervention platform services expanded to Array2.4% of the total revenue figure, from 7.3% of total revenue in the year-ago quarter.

Meanwhile, Inovalon's investments supporting innovation in advanced, cloud-based data analytics and data-driven intervention platforms totaled $47.8 million, or ArrayArray% of revenues in the reported quarter.

Operating expenses jumped 38.Array% to $50.4 million, primarily driven by higher sales & marketing expenses, which accounted for 5.4% of total revenues compared to 2% of total revenue in the year-ago quarter.

General and Administrative expenses provided the extra boost, increasing 3Array.5% year over year. However, this was partially offset by a Array5.3% year-over-year decline in research and development expenses.

Operating margin contracted 540 basis points (bps) primarily due to increased operating expenses.

Adjusted EBITDA in fourth-quarter 20Array5 was 30% of total revenues compared to 22.3% of total revenues in the year-ago quarter.

Guidance

For full-year 20Array6, Inovalon projects revenues in the range of $5Array0-$520 million.

Adjusted EBITDA is forecasted in the range of $Array82--$Array88 million, while adjusted earnings are likely to be 57-60 cents per share in full-year 20Array6.

Zacks Rank & Key Picks

Currently, Inovalon has a Zacks Rank #4 (Sell).

Better-ranked stocks in the same space include Unisys UIS , Barracuda Network CUDA and Earthlink Holdings ELNK . While Unisys sports a Zacks Rank #Array (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy).

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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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