Leading medical billing and records software provider Athenahealth’s (ATHN) fourth-quarter fiscal 2010 adjusted (excluding one-time items such as amortization charges) earnings of 21 cents per share topped the Zacks Consensus Estimate of 15 cents while exceeding the year-ago earnings of 12 cents.
Net income (as reported) for the quarter zoomed roughly 69% year over year to $7.3 million as higher utilization of its web-based solutions fueled healthy double-digit revenue growth. For fiscal 2010, adjusted earnings of 37 cents a share surpassed the Zacks Consensus Estimate of 34 cents and the year-ago earnings of 29 cents.
Revenues for the quarter spiked 27% year over year to $69.4 million, beating the Zacks Consensus Estimate of $68 million. For the full year, sales shot up 30% year over year $245.5 million, also above the Zacks Consensus Estimate of $244 million.
Revenues were boosted by sustained strong adoption of the Massachusetts-based company’s flagship billing and practice management solution athenaCollector and electronic health record (“EHR”) service athenaClinicals by physicians.
Use of athenaCollector by medical providers and physicians rose 16% and 22% year over year, respectively, in 2010. Moreover, utilization of athenaClinicals by medical providers more than doubled during the year.
Adjusted gross margin for the quarter increased to 66.3% from 62.7% a year-ago while adjusted EBITDA margin rose to 29.1% from 23.9%. Adjusted operating margin climbed to 24.5% from 19.8% from a year-ago.
Balance Sheet & Cash Flow
Athenahealth ended fiscal 2010 with cash, cash equivalents and short-term investments of $116.2 million, up 40% year over year. Total debt and capital lease obligations fell 25.6% year over year to $9.2 million. Cash flow from operations during the year increased 38% year over year to $44.7 million.
Outlook
Athenahealth has not provided any updated guidance for fiscal 2011. The company, in December 2010, issued its financial forecasts for the year with earnings expected in a band of 68 to 78 cents a share on revenues of $300-$315 million. The corresponding Zacks Consensus Estimates are 46 cents and $308 million, respectively.
Athenahealth is a leading provider of web-based business services for physician practices. The company’s services leverage proprietary web-native practice management and EHR software, integrated back-office service operations and automated patient communication services.
Athenahealth faces stiff competition across all of its operating platforms from established Health IT players such as Allscripts-Misys (MDRX) and Quality Systems (QSII). Nevertheless, the company remains optimistic about the growth prospects in each of its end-markets boosted by the expanded adoption of its premium solutions.
ATHENAHEALTH IN (ATHN): Free Stock Analysis Report
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis Report
QUALITY SYS (QSII): Free Stock Analysis Report
Zacks Investment Research
