WELL Health Technologies Corp T.WELL

Alternate Symbol(s): WHTCF | T.WELL.DB

Healthcare

WELL Health Technologies Corp. is a practitioner-focused digital healthcare company. The Company develops technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. Its business units include Canadian Patient Services, WELL Health USA Patient Services and SaaS and Technology Services. WELL Health USA Patient and Provider Services includes Primary Circle Medical, Primary WISP, Specialized CRH Medical, and Specialized Provider Staffing. Its healthcare and digital platform includes front and back-office management software applications that help physicians run and secure their practices. Its focused markets include the gastrointestinal market, women's health, primary care and mental health. Its solutions enable 34,000 healthcare providers between the United States and Canada and power owned and operated healthcare’s in Canada with 165 clinics supporting primary care, specialized care and diagnostic services.

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Post by retiredcfon May 08, 2024 1:06pm

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Post# 36029259

TD Details

Q1/F24 QUICK TAKE: ANOTHER BEAT AND RAISE IN A SOLID START TO THE YEAR

THE TD COWEN INSIGHT

WELL continued its >4-year streak of beating consensus with a slight Q1 beat while it also increased its F2024 revenue and Adjusted EBITDA guidance. We believe the increase in the Adjusted EBITDA guidance in particular as well as the introduction of FCFA2S guidance (>$55mm; ~30% growth) and its focus on minimizing share dilution is likely to be well- received by investors.

Event: This morning, WELL reported its Q1/F24 results. Conference Call: 1:00 p.m. ET (Dial- in: 1 888-664-6383).

Impact: POSITIVE
Q1/F24 results a slight beat. Q1/F24 revenue was $231.6mm (TD: C$227.5mm/consensus:

C$227.3mm) and Adjusted EBITDA was $28.3mm (TD: C$27.3mm/consensus: C$27.6mm).

Revenue grew 37% y/y.
- Organic growth of 13%.
- Canadian Patient Services revenue of C$75.7mm (up 49% y/y).
- U.S. Patient Services revenue of C$140.4mm (up 42% y/y).
- SaaS and Technology Services revenue of C$15.4mm (down 20% y/y, partly due to the sale of Intrahealth).
Adjusted EBITDA margin was 12.2%, down from 13.3% last quarter.
FCFA2S of $0.05/share, up 11% y/y.
~1.3mm patient visits in Canada and the U.S., up 34% y/y and mostly driven by organic growth of 19% y/y.

F2024 guidance increased by ~1%; FCFA2S guidance introduced (implies ~30% y/y growth).

For F2024, WELL is now guiding to:

Revenue of C$960mm-C$980mm (TD: C$959.3mm/consensus: C$957.3mm), an increase from C$950mm-C$970mm previously.

Implies ~24%-26% y/y growth.

Adjusted EBITDA at the upper range of its prior guidance of C$125mm-C$130mm (TD: C $128.7mm/consensus: C$126.9mm).

Implies ~12.5%-15% growth and ~13.3% margins at the mid-point.
We believe Adjusted EBITDA margins are set to rebound in Q2/F24, aided by the

realization of the benefits from its recent company-wide cost optimization initiatives (has already resulted in millions of dollars in annualized cost savings) and at recently acquired clinics, including the Manitoba Clinic and the MCI Ontario/Alberta clinics, which we believe are now generating positive margins.

FCFA2S of >$55mm.
Implies ~30% y/y growth from $42.4mm in F2023.

Focus on minimizing share dilution. WELL intends to reduce yearly share issuances/dilution by a significant percentage from F2023 to the lowest on record, which should significantly increase FCF/share growth. We believe this means WELL will be reducing its use of stock- based compensation (in favour of cash-based compensation) and share issuances related for M&A as well as continuing to buy back stock through its NCIB.