CIBCHave a $6.50 target. GLTA
EQUITY RESEARCH
August 11, 2022 Flash Research
WELL HEALTH TECHNOLOGIES CORP.
Q2/F22 First Look: Solid Headline Beat And a 5% Lift To The
Full Year Revenue Outlook
Our Conclusion: Positive. WELL reported a strong Q2/F22, with revenue
8% above consensus and Adjusted EBITDA 14% above consensus. The
strong results were driven in part by organic growth improving to over 20%,
the highest organic growth results in the preceding 4 quarters. The company
updated its 2022 outlook, with revenue now expected to exceed $550MM
(previously expected to exceed $525MM) with Adjusted EBITDA of ~$100
million unchanged from the prior guide. We will be looking for more details
regarding segmented results, sources of organic growth and improved
profitability, and practice acquisition plans for the remainder of 2022 on this
afternoon’s earnings call at 1:00 p.m. ET.
Key Highlights
Q2 Results: WELL reported Q2/F22 revenue of $140MM, above consensus
and CIBCe ($129.9MM) and better than the pre-released result of “exceeding
$130MM.” Organic growth of 20% was up from ~15% in the prior quarter and
from 10% in Q4/21. Management noted strength across all segments through
both its in-person and online channels. Gross margin (ex-D&A) of 53.8% was
up from 48.9% in the prior year. Adjusted EBITDA of $26.4MM was above
consensus and pre-released commentary of “exceeding $23 million”.
Adjusted EBITDA margin was 18.8%, 90 bps ahead of consensus and 40
bps ahead of our estimate (17.9%/18.4%).
Updated 2022 Outlook: Noting no impact from macroeconomic factors on
its business, WELL increased 2022 revenue guidance by ~5% to $525MM to
‘exceeding $550 million’ given the strong organic growth in the quarter.
Adjusted EBITDA guidance was essentially unchanged, with commentary
shifting from “approaching $100 million” to “approximately $100 million”. The
new guidance is 4% ahead of consensus on revenue and in line with
consensus on EBITDA. WELL continues to expect run-rate revenue in the
U.S.-based Virtual Services businesses (WISP, Circle Medical) to exceed
$130MM by the end of 2022.
Patient Visit Metrics: Total omni-channel patient visits of 833,819
represented a 109% Y/Y increase and a 8% increase over the prior quarter.
MyHealth conducted 180k visits in the quarter, while Wisp recorded 152k
asynchronous visits. In total, WELL achieved 1.166 million patient
interactions during Q2.
Conference Call: Management will host a conference call at 1:00 p.m. ET
on Thursday, August 11. Webcast: link