WELL Health Technologies Corp WHTCF

TD

[retiredcf]

Amazed that we're now in the red; no wonder people lose money in the markets. GLTA

Q2/F24: THE BEATS GO ON; MARGINS REBOUNDING; REVENUE GUIDANCE INCREASED AGAIN

THE TD COWEN INSIGHT

WELL extended its streak of beating consensus to 5 years. Revenue guidance was increased again, aided by stronger-than-expected organic growth at Circle (details here) and Wisp. There was no update on the Wisp/Circle strategic reviews, but we expect more colour
on the call. We think the solid Q2 beat should help the stock continue its strong rebound following the Q1 release in early May.

Event: This morning, WELL reported its Q2/F24 results. Conference Call: 1:00 p.m. ET (Dial- in: 1-888-664-6383).

Impact: SLIGHTLY POSITIVE

Streak of beating consensus extends to five years. Q2/F24 revenue was $243.1mm (TD: C $237.9mm/consensus: C$236.6mm) and Adjusted EBITDA was $30.9mm (TD: C$30.5mm/ consensus: C$29.6mm). The better-than-expected revenue was driven by Circle and Wisp, who accounted for most of the beat vs. our forecasts.

 Revenue grew 42% y/y.

Organic growth of 21% y/y (16% excluding absorptions).

Canadian Patient Services revenue of C$76.7mm (up 42% y/y).

U.S. Patient Services revenue of C$149.5mm (up 45% y/y).

•  Circle Medical revenue of $32.0mm, up 53% y/y organically with ~8.5% Adjusted EBITDA margins.

•  Wisp revenue of $24.2mm, up 27% y/y organically with ~3.4% Adjusted EBITDA margins.

  SaaS and Technology Services revenue of C$16.9mm (up 27% y/y, despite the sale of Intrahealth).

 Adjusted EBITDA margin was 12.7%, up from 12.2% last quarter.  F2024 guidance implies that margins bottomed in Q1/F24.

• FCFA2S of $0.033/share, down ~21% y/y.

• >1.40mm patient visits in Canada and the U.S., up 38% y/y and mostly driven by organic growth of 26% y/y.

  F2024 revenue guidance increased; significant pick up in H2/F24 margins expected.

 Revenue of C$970mm-C$990mm (TD/consensus: C$972.4mm).  Increased from C$960mm-C$980mm previously;

 Implies ~25%-28% y/y growth.

• Adjusted EBITDA at the upper range of its initial guidance of C$125mm-C$130mm (TD: C $129.2mm/consensus: C$127.2mm).

   Unchanged.

  •  Represents ~12.5%-15% growth.

  •  Implies ~13.1% margins at the mid-point and consequently, a continued rebound in margins in H2/F24 (mid-point of guidance implies H2/F24 Adjusted EBITDA margins of ~13.8%).

• FCFA2S of ~$55mm (unchanged).

 Implies ~30% y/y growth.

[JayEthy]

Unfortunately it seems like WELL just continues to get shorted, even when the quarterly earnings continue to beat.  It has to change this narrative at some juncture as us longs are growing impatient..... GLTA

[ahsh1kah]

It seems to be a pattern for WELL. You get good news on financials and the stock gets hammered. Health care is always for a long term hold. WELL earnings reports to date have indicated longer term slow and steady to profitability. GLTA