MARPAI REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Rhea-AI Summary

Marpai, Inc. announces financial results for Q4 2023 and full year 2023, showcasing revenue growth and operational improvements. The company reports net revenues of $8.7 million for Q4, a 14% increase year over year, and $37.2 million for the full year, a 52.6% improvement. Gross profit for Q4 was $3.0 million, up 6.5% from the previous year, and $12.9 million for the full year, a 79.2% increase. Operating expenses decreased by 30.6% in Q4 but increased by 19.7% for the full year. Marpai also reported an operating loss of $5.2 million in Q4, a 42.3% improvement, and $28.0 million for the full year, a 3.8% increase. The net loss for Q4 was $5.0 million, 41.1% lower year over year, and $28.8 million for the full year, an 8.6% increase. Basic and diluted earnings per share were ($0.65) for Q4, an improvement of $1.00 per share, and ($4.14) for the full year, an increase of $1.09 per share.

Financial Analyst

The recent financial results of Marpai, Inc. reflect a notable year-over-year improvement in both quarterly and annual figures. From a financial analysis perspective, the 14% increase in net revenues and the 6.5% increase in gross profit for Q4 2023 indicate a positive trajectory in the company's earnings capability. However, the company still reports an operating loss, which, despite a 42.3% improvement, suggests ongoing challenges in achieving profitability.

Investors may find the 52.6% increase in annual net revenues and 79.2% increase in annual gross profit compelling, as these metrics often serve as indicators of a company's growth and efficiency in generating income relative to costs. The reported increase in operating expenses by 19.7% year over year could raise concerns about the company's cost management strategies. However, the reclassification of goodwill impairment and gain on sale of a non-core business as contributing factors offers context to these figures.

The improvement in basic and diluted earnings per share (EPS) suggests a reduced loss per share, which may be viewed favorably by shareholders. However, the overall net loss increase of 8.6% year over year warrants scrutiny. While the EPS improvement is a positive signal, the absolute figures indicate that the company is still in a loss-making position.

Healthcare Industry Analyst

The Third-Party Administration (TPA) sector is a competitive space within the healthcare industry and Marpai's focus on affordable, intelligent healthcare for self-funded employer health plans is a strategic move to capture market share in the $22 billion TPA market. The acquisition of Maestro Health is a strategic initiative that appears to be driving financial improvement, as highlighted by the CEO.

From an industry standpoint, the ability to reduce costs for clients and improve the quality of care is a strong value proposition in the TPA market. Marpai's emphasis on operational and financial improvements could resonate well with potential clients looking for cost-effective healthcare solutions. The company's performance should be continuously monitored to assess whether these improvements translate into sustained profitability and market expansion.

Long-term, the integration of the Maestro Health acquisition and the effectiveness of corrective actions taken in Q4 will be important to Marpai's ability to compete effectively. The healthcare industry is highly regulated and subject to changes in policy, which could impact Marpai's operations and financial performance. Investors should consider these factors when evaluating the company's future prospects.

Market Research Analyst

While Marpai's financial results show promise in revenue growth, the market will likely focus on the company's ability to turn around its net loss situation. The operational efficiencies and strategic acquisitions are positive steps, but the market will look for evidence of sustainable profitability. The goodwill impairment reclassification indicates a non-cash accounting adjustment, which, while significant for financial reporting, may not directly affect the company's cash flow position.

The TPA market's demand is influenced by trends in employer-funded healthcare plans, which are subject to economic cycles and policy changes. Marpai's performance in the upcoming quarters will be critical in assessing whether the company can leverage its technology and service offerings to gain a competitive edge and achieve a positive net income.

Overall, the company's stock performance will likely be influenced by its ability to demonstrate continued revenue growth coupled with cost containment. The investor community will be keen to analyze the upcoming webcast for insights into management's strategy for the next fiscal year and beyond.

Full Year Benefit of Maestro Acquisition and Q4 Corrective Actions Driving Financial Improvement

TAMPA, Fla., March 26, 2024 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq: MRAI), an independent national Third-Party Administration (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans with affordable, intelligent healthcare, today announced financial results for the fourth quarter and fiscal year 2023. The Company expects to hold a webcast to discuss the results on March 27, 2024.

Q4 2023 Financial Highlights:

• Net revenues were $8.7 million for the three months ended December 31, 2023, an improvement of $1.1 million, or 14% higher year over year, for the three months ended December 31, 2022.
• Gross profit was $3.0 million for the three months ended December 31, 2023, an improvement of $0.2 million, or 6.5% higher year over year for the three months ended December 31, 2022.
• Operating expenses were $8.2 million for the three months ended December 31, 2022, an improvement of $3.6 million, or 30.6% lower year over year for the three months ended December 31, 2022.
• Operating loss was $5.2 million for the three months ended December 31, 2022, an improvement of $3.8 million, or 42.3% lower year over year for the three months ended December 31, 2022.
• Net loss was $5.0 million for the three months ended December 31, 2022, an improvement of $3.5 million, or 41.1% lower year over year for the three months ended December 31, 2022.
• Basic and diluted earnings per share were ($0.65) an improvement of $1.00 per share year over year for the three months ended December 31, 2022.

Full Year 2023 Highlights:

• Net revenues were $37.2 million for the year ended December 31, 2023, an improvement of $12.8 million, or 52.6% higher year over year compared to the year ended December 31, 2022.
• Gross profit was $12.9 million for the year ended December 31, 2023, an improvement of $5.7 million, or 79.2% higher year over year compared to the year ended December 31, 2022.
• Operating expenses were $40.9 million, for the year ended December 31, 2023, an increase of $6.7 million, or 19.7% higher year over year compared to the year ended December 31, 2022. The $1.3 million variance for the operating expenses and operating loss from our previously announced preliminary results was due to the reclassification of $3.0 million goodwill impairment and $1.7 million gain on sale of our non-core FSA business.
• Operating loss was $28.0 million for the year ended December 31, 2023, or an increase of $1.0 million, or 3.8% higher year over year compared to the year ended December 31, 2022.
• Net loss was $28.8 million for the year ended December 31, 2023, an increase of $2.3 million, or 8.6% higher, compared to the year ended December 31, 2022.
• Basic and diluted earnings per share were ($4.14) for the year ended December 31, 2023, an improvement of $1.09 per share compared to the year ended December 31, 2022.

"The Company delivered on several actions identified when the new executive team joined in early November 2023," said Damien Lamendola, Chief Executive Officer of Marpai. "We are starting to gain the benefits of the Maestro Health acquisition. We remain committed to our overall vision that Marpai Saves, through operational and financial improvements, reduces costs for our clients and improves the quality of care for our members."   

Webcast and Conference Call Information

Marpai expects to host a conference call and webcast on Wednesday, March 27, 2024, 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, 2023.

Investors interested in listening to the conference call may do so by dialing (800)-836-8184 for domestic callers or +1-646-357-8785 for international callers, or via webcast: https://app.webinar.net/8OgAYdJmbd9

About Marpai, Inc.

Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA company bringing value-oriented health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA sector serving self-funded employer health plans representing over $1 trillion in annual claims. Marpai works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to leading provider networks including Aetna and Cigna and all TPA services. For more information, visit www.marpaihealth.com, the content of which is not incorporated by reference into this press release.

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. 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 its financial results and that it remains committed to its overall vision that Marpai Saves, through operational and financial improvements, reduces cost for its clients and improving the quality of care for its members. 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.

 

MARPAI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)
		December 31, 2023		December 31, 2022
ASSETS:
Current assets:
Cash and cash equivalents		$                    1,147		$                          13,765
Restricted cash		12,345		9,353
Accounts receivable, net of allowance for credit losses of $24,617 and $23,458		1,125		1,438
Unbilled receivable		768		350
Due from buyer for sale of business unit		800
Prepaid expenses and other current assets		892		1,602
Other receivables		8		31
Total current assets		17,085		26,538
Property and equipment, net		611		1,506
Capitalized software, net		2,128		4,589
Operating lease right-of-use assets		2,373		3,842
Goodwill		3,017		5,837
Intangible assets, net		5,177		6,323
Security deposits		1,267		1,293
Other long-term asset		21		22
Total assets		$                  31,679		$                          49,950
LIABILITIES AND STOCKHOLDERS'  (DEFICIT) EQUITY
Current liabilities:
Accounts payable		$                    4,649		$                            1,458
Accrued expenses		2,816		5,275
Accrued fiduciary obligations		11,573		9,024
Deferred revenue		661		288
Current portion of operating lease liabilities		512		1,311
Other short-term liabilities		632		—
Due to related party		—		3
Total current liabilities		20,843		17,360
Other long-term liabilities		19,401		20,204
Operating lease liabilities, net of current portion		3,684		4,772
Deferred tax liabilities		1,189		1,480
Total liabilities		45,117		43,815
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock, $0.0001 par value, 227,791,050 shares authorized; 7,960,938 issued and    outstanding at December 31, 2023 and 5,319,758 issued and outstanding at December 31,    2022 (1)		1		1
Additional paid-in capital		63,307		54,128
Accumulated deficit		(76,746)		(47,994)
Total stockholders' (deficit) equity		(13,438)		6,134
Total liabilities and stockholders' (deficit) equity		$                  31,679		$                          49,950

 

MARPAI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
		Twelve Months Ended
		December 31, 2023		December 31, 2022
Revenue		$                    37,155		$                          24,342
Costs and expenses
Cost of revenue (exclusive of depreciation and amortization    shown separately below)		24,239		17,136
General and administrative		19,177		12,319
Sales and marketing		6,597		6,939
Information technology		5,834		6,373
Research and development		1,312		3,708
Depreciation and amortization		3,897		3,538
Impairment of goodwill		3,018		-
Facilities		2,472		1,013
Loss on disposal of assets		335		273
Gain on sale of business unit		(1,749)		-
Total costs and expenses		65,132		51,299
Operating loss		(27,977)		(26,957)
Other expenses
Other income		489		235
Interest expense, net		(1,527)		(267)
Foreign exchange loss		(27)		—
Loss before provision for income taxes		(29,042)		(26,989)
Income tax benefit		(290)		(521)
Net loss		$                  (28,752)		$                         (26,468)
Net loss per share, basic & fully diluted		$                      (4.14)		$                             (5.23)
Weighted average common shares outstanding, basic and    diluted		6,951,669		5,059,959
MARPAI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
		Three Months Ended
		December 31, 2023		December 31, 2022
Revenue		$                      8,707		$                            7,628
Costs and expenses
Cost of revenue (exclusive of depreciation and amortization    shown separately below)		5,709		4,813
General and administrative		3,239		4,379
Sales and marketing		1,103		2,109
Information technology		1,059		2,510
Research and development		21		1,024
Depreciation and amortization		923		1,034
Impairment of goodwill		3,018		—
Facilities		554		426
Loss on disposal of assets		(15)		213
Gain on sale of business unit		(1,749)		-
Total costs and expenses		13,862		16,508
Operating loss		(5,155)		(8,880)
Other expenses
Other income		258		107
Interest expense, net		(425)		(226)
Foreign exchange loss		6		5
Loss before provision for income taxes		(5,316)		(8,994)
Income tax benefit		(290)		(521)
Net loss		$                    (5,026)		$                           (8,473)
Net loss per share, basic & fully diluted		$                        0.65		$                              1.63
Weighted average common shares outstanding, basic and    diluted		7,738,879		5,186,573

 

MARPAI, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     (in thousands)
		Twelve Months Ended
		December 31, 2023		December 31, 2022
Cash flows from operating activities:
Net loss		$                (28,752)		$                         (26,468)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,897		3,538
Loss on disposal of assets		335		273
Share-based compensation		2,099		3,105
Warrant expense		242		—
Shares issued to vendors in exchange for services		79		39
Amortization of right-of-use asset		1,502		599
Goodwill impairment		3,018		—
Gain on sale of business unit		(1,749)		—
Non-cash interest		1,527		259
Deferred taxes		(290)		(521)
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivable		(105)		(597)
Prepaid expense and other assets		710		893
Other receivables		22		60
Security deposit		26		—
Accounts payable		3,191		181
Accrued expenses		(2,496)		(2,052)
Accrued fiduciary obligations		2,548		(12,823)
Operating lease liabilities		(1,887)		(661)
Due To related party		(3)		(3)
Other liabilities		337		(1,068)
Other asset		—		7
Net cash used in operating activities		(15,749)		(35,239)
Cash flows from investing activities:
Cash and restricted cash acquired as part of acquisitions		—		33,388
Capitalization of software development costs		—		(603)
Proceeds from sale of business unit		1,000		—
Disposal of property and equipment		27		—
Purchase of property and equipment		—		(363)
Net cash provided by (used in) investing activities		1,027		32,422
Cash flows from financing activities:
Proceeds from issuance of common stock in a public offering, net		6,432		—
Payments to seller for acquisition		(1,663)		—
Proceeds from issuance of warrants		32		—
Proceeds from issuance of common stock in a private offering, net		295		—
Proceeds from stock option exercises		—		—
Net cash provided by financing activities		5,096		—
Net decrease in cash, cash equivalents and restricted cash		(9,626)		(2,817)
Cash, cash equivalents and restricted cash at beginning of period		23,117		25,934
Cash, cash equivalents and restricted cash at end of period		$                  13,491		$                          23,117
Reconciliation of cash, cash equivalents, and restricted cash reported in    the condensed consolidated balance sheet
Cash and cash equivalents		$                    1,147		$                          13,764
Restricted cash		12,344		9,353
Total cash, cash equivalents and restricted cash shown in the condensed    consolidated statement of cash flows		$                  13,491		$                          23,117
Supplemental disclosure of non-cash activity
Measurement period adjustment to Goodwill		$                       198		$                                 —
Long term liability incurred in connection with the acquisition of Maestro Health, LLC		$                         —		$                          19,900

 

 

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SOURCE Marpai

What were Marpai's net revenues for Q4 2023?

Marpai reported net revenues of $8.7 million for the three months ended December 31, 2023, a 14% increase year over year.

What was Marpai's gross profit for Q4 2023?

Marpai's gross profit for Q4 2023 was $3.0 million, a 6.5% increase year over year.

How did Marpai's operating expenses change in Q4 2023?

Marpai's operating expenses decreased by 30.6% in Q4 2023 compared to the same period in 2022.

What was Marpai's net loss for Q4 2023?

Marpai reported a net loss of $5.0 million for the three months ended December 31, 2023, a 41.1% improvement year over year.

What were Marpai's net revenues for the full year 2023?

Marpai reported net revenues of $37.2 million for the year ended December 31, 2023, a 52.6% increase compared to the previous year.

What was Marpai's operating loss for the full year 2023?

Marpai reported an operating loss of $28.0 million for the year ended December 31, 2023, a 3.8% increase year over year.

What were Marpai's basic and diluted earnings per share for Q4 2023?

Marpai's basic and diluted earnings per share were ($0.65) for the three months ended December 31, 2023, an improvement of $1.00 per share year over year.

When will Marpai host a conference call and webcast to discuss the financial results?

Marpai will host a conference call and webcast on Wednesday, March 27, 2024, at 8:30 a.m. ET to answer questions about the financial results.