
Sharecare announces third quarter 2021 financial results and operational highlights
"Our team delivered strong revenue and adjusted EBITDA ahead of guidance while increasing our investment in technology and sales to drive consistent double-digit growth going forward," said
Third Quarter 2021 Financial Results
All comparisons, unless otherwise noted, are to the three months ended
- Revenue of
$105.6 million compared to$80.2 million , an increase of$25.4 million , or 32% - Net loss of
$43.1 million compared to net loss of$6.4 million , an increase to net loss of$36.7 million . Net loss in the third quarter of 2021 included$11.1 million in non-cash stock compensation;$16.8 million in transaction related acquisition costs and other costs associated with our business combination withFalcon Capital Acquisition Corp ;$12.1 million in amortization of deferred financing fees associated with the settlement of debt; and$2.3 million of other non-cash or non-operational costs. Excluding these costs, the Adjusted Net Loss was$0.8 million in the current quarter. - Adjusted EBITDA of
$7.9 million compared to$13.3 million , a decrease of$5.4 million which reflects increased investments in the current period for both technology and sales force expansion to support growth and a reversal of temporary cost reduction actions in the prior year, including furloughing employees as a direct and prudent reaction to COVID-19. - Net loss per share of
$0.13 compared to$0.03 , a decrease of$0.10 which reflects the aforementioned items impacting net loss. - Adjusted earnings per share of
$0.00 compared to$0.01 , a decrease of$0.01 which excludes the impact of non-cash and non-operational expenses.
Third Quarter 2021 Operational Highlights
- Added new employer, government, provider, and life sciences clients to support fiscal 2022 growth objectives. Includes a diverse group of Fortune 500 companies as well as mid-size and regional organizations.
- Launched Unwinding by
Sharecare , a broad-based mental well-being app designed to help people better understand how their minds work, reduce their stress, and build healthier habits. - Expanded leadership team with executive hires from UST and Salesforce.
- Closed the acquisition of CareLinx, a home health company with a network of 450,000 tech-enabled caregivers who deliver personal care services in the home.
- Announced enhancements to a suite of solutions for pharmaceutical and life sciences brands to enable patient engagement and optimize outcomes.
- Released new well-being research revealing broad improvements in
U.S. metro areas in 2020 while gaps increased for rural America.
Financial Outlook
Q4 2021 Financial Guidance
For the three months ending
- Revenue in the range of
$120.3 to$121.3 million , an increase of$14.7 to$15.7 million over the third quarter of 2021 and an increase of$31.9 to$32.9 million over the same period in the prior year - Adjusted EBITDA in the range of
$8 to$9 million
FY 2021 Financial Guidance
For the twelve months ending
- Revenue in the range of
$414 to$415 million , which reflects no change from prior guidance - Adjusted EBITDA in the range of
$29 to$30 million ; which reflects an increase in the midpoint of guidance range
Conference Call
The Company will host a conference call to review the second quarter results today,
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with
The calculations and reconciliations of historic Adjusted EBITDA, Adjusted Net Income (Loss), and Adjusted EPS to net income (loss), the most directly comparable financial measure stated in accordance with GAAP, are provided below and in the accompanying financial tables. Investors are encouraged to review the reconciliations and not to rely on any single financial measure to evaluate our business.
We have not reconciled Adjusted EBITDA guidance to net income (loss) because we do not provide guidance for net income (loss) or for items that we do not consider indicative of our on-going performance, including, but not limited to, the impact of significant non-recurring items, as certain of these items are out of our control and/or cannot be reasonably predicted. Accordingly, reconciliations of Adjusted EBITDA guidance to the corresponding
Adjusted EBITDA
We calculate adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization, (ii) interest income, (iii) interest expense, (iv) loss on extinguishment of debt, (v) other expense/(income) (non-operating), (vi) loss from equity method investment, (vii) income tax (benefit) expense, (viii) share-based compensation, (ix) severance, (x) warrants issued with revenue contracts, and (xi) transaction and closing costs. We do not view the items excluded as representative of our ongoing operations.
Adjusted Net Income (Loss)
We calculate Adjusted net income (loss) as net income (loss) attributable to
Adjusted Earnings (Loss) Per Share
We calculate Adjusted EPS as adjusted net income (loss), as defined above, divided by the number of weighted average common shares outstanding - basic and diluted.
About
Important Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the
Forward-looking statements in this press release include, but are not limited to, our ability to realize the expected benefits of partnerships or other relationships with third parties or customers on our future growth objectives and the statements under the caption "Financial Outlook." We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from expected results. Descriptions of some of the factors that could cause actual results to defer materially from these forward-looking statements are discussed in more detail in our filings with the
Media Relations:
jen@sharecare.com
Investor Relations:
evan.smith@sharecare.com
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CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands, except share and per share amounts) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue |
$ |
105,618 |
$ |
80,236 |
$ |
293,686 |
$ |
240,392 |
|||||||
Costs and operating expenses: |
|||||||||||||||
Costs of revenue (exclusive of depreciation and amortization below) |
51,255 |
36,905 |
144,283 |
117,153 |
|||||||||||
Sales and marketing |
12,492 |
6,338 |
36,047 |
24,227 |
|||||||||||
Product and technology |
16,334 |
10,459 |
52,600 |
31,606 |
|||||||||||
General and administrative |
46,307 |
15,402 |
85,060 |
53,085 |
|||||||||||
Depreciation and amortization |
8,751 |
6,056 |
22,601 |
19,103 |
|||||||||||
Total costs and operating expenses |
135,139 |
75,160 |
340,591 |
245,174 |
|||||||||||
Income (loss) from operations |
(29,521) |
5,076 |
(46,905) |
(4,782) |
|||||||||||
Other income (expense): |
|||||||||||||||
Interest income |
20 |
8 |
49 |
61 |
|||||||||||
Interest expense |
(12,836) |
(8,102) |
(26,941) |
(23,525) |
|||||||||||
Loss on extinguishment of debt |
(1,148) |
— |
(1,148) |
— |
|||||||||||
Other income (expense) |
(86) |
41 |
(20,815) |
(270) |
|||||||||||
Total other expense |
(14,050) |
(8,053) |
(48,855) |
(23,734) |
|||||||||||
Loss before income tax benefit |
(43,571) |
(2,977) |
(95,760) |
(28,516) |
|||||||||||
Income tax benefit |
507 |
467 |
520 |
694 |
|||||||||||
Loss from equity method investment |
— |
(3,902) |
— |
(3,902) |
|||||||||||
Net loss |
(43,064) |
(6,412) |
(95,240) |
(31,724) |
|||||||||||
Net (loss) income attributable to noncontrolling interest in subsidiaries |
51 |
(104) |
(31) |
(372) |
|||||||||||
Net loss attributable to |
$ |
(43,115) |
$ |
(6,308) |
$ |
(95,209) |
$ |
(31,352) |
|||||||
Net loss per share attributable to common stockholders, basic and diluted (1) |
$ |
(0.13) |
$ |
(0.03) |
$ |
(0.36) |
$ |
(0.15) |
|||||||
Weighted-average common shares outstanding, basic and diluted (1) |
334,982,150 |
222,927,484 |
263,558,268 |
220,150,504 |
(1) |
Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2 of the 10-Q |
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited) |
|||||||
(In thousands, except share and per share amounts) |
|||||||
As of |
As of |
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
325,915 |
$ |
22,603 |
|||
Accounts receivable, net (net of allowance for doubtful accounts of |
85,062 |
70,540 |
|||||
Other receivables |
2,520 |
3,152 |
|||||
Prepaid expenses |
10,056 |
3,876 |
|||||
Other current assets |
2,502 |
1,521 |
|||||
Total current assets |
426,055 |
101,692 |
|||||
Property and equipment, net |
4,586 |
4,073 |
|||||
Other long term assets |
11,918 |
6,226 |
|||||
Intangible assets, net |
151,481 |
78,247 |
|||||
|
189,702 |
75,736 |
|||||
Total assets |
$ |
783,742 |
$ |
265,974 |
|||
Liabilities, Redeemable Non-Controlling Interest, Redeemable |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
22,248 |
$ |
19,346 |
|||
Accrued expenses and other current liabilities |
41,828 |
41,669 |
|||||
Deferred revenue |
21,037 |
9,907 |
|||||
Contract liabilities, current |
4,470 |
4,045 |
|||||
Debt, current |
– |
1,011 |
|||||
Total current liabilities |
89,583 |
75,978 |
|||||
Contract liabilities, noncurrent |
2,894 |
6,261 |
|||||
Warrant liabilities |
34,692 |
4,963 |
|||||
Long-term debt |
243 |
171,213 |
|||||
Other long-term liabilities |
47,814 |
17,015 |
|||||
Total liabilities |
175,226 |
275,430 |
|||||
Commitments and contingencies |
|||||||
Redeemable non-controlling interest |
— |
4,000 |
|||||
Series A redeemable convertible preferred stock, |
58,205 |
— |
|||||
Stockholders' equity (deficit): |
|||||||
Common stock |
34 |
22 |
|||||
Additional paid-in capital |
1,037,377 |
377,134 |
|||||
Accumulated other comprehensive loss |
(1,728) |
(702) |
|||||
Accumulated deficit |
(487,322) |
(392,113) |
|||||
Total |
548,361 |
(15,659) |
|||||
Non-controlling interest in subsidiaries |
1,950 |
2,203 |
|||||
Total stockholders' equity (deficit) (1) |
550,311 |
(13,456) |
|||||
Total liabilities, redeemable non-controlling interest, redeemable |
$ |
783,742 |
$ |
265,974 |
(1) |
Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2 in the 10-Q. |
|
|||||||||||||||
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss |
$ |
(43,064) |
$ |
(6,412) |
$ |
(95,240) |
$ |
(31,724) |
|||||||
Add: |
|||||||||||||||
Depreciation and amortization |
8,751 |
6,056 |
22,601 |
19,103 |
|||||||||||
Interest income |
(20) |
(8) |
(49) |
(61) |
|||||||||||
Interest expense |
12,836 |
8,102 |
26,941 |
23,525 |
|||||||||||
Loss on extinguishment of debt |
1,148 |
— |
1,148 |
— |
|||||||||||
Other expense (income) |
86 |
(41) |
20,815 |
270 |
|||||||||||
Loss from equity method investments |
— |
3,902 |
— |
3,902 |
|||||||||||
Income tax benefit |
(507) |
(467) |
(520) |
(694) |
|||||||||||
Share-based compensation |
11,130 |
630 |
25,517 |
6,443 |
|||||||||||
Severance |
700 |
506 |
965 |
2,303 |
|||||||||||
Warrants issued with revenue contracts(a) |
21 |
91 |
59 |
354 |
|||||||||||
Transaction and closing costs |
16,822 |
965 |
18,844 |
1,153 |
|||||||||||
Adjusted EBITDA(b) |
$ |
7,903 |
$ |
13,324 |
$ |
21,081 |
$ |
24,574 |
(a) |
Represents the non-cash value of warrants issued to clients for meeting specific revenue thresholds. |
|
(b) |
Includes non-cash amortization associated with contract liabilities recorded in connection with acquired businesses. |
|
|||||||||||||||
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET INCOME (LOSS) AND ADJUSTED EARNINGS (LOSS) PER SHARE |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands, except share and per share data) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss attributable to |
$ |
(43,115) |
$ |
(6,308) |
$ |
(95,209) |
$ |
(32,312) |
|||||||
Add: |
|||||||||||||||
Amortization of acquired intangibles(a) |
1,425 |
943 |
3,653 |
2,982 |
|||||||||||
Amortization of deferred financing fees |
12,135 |
2,195 |
15,466 |
5,616 |
|||||||||||
Change in fair value of warrant liability and contingent consideration |
63 |
30 |
21,719 |
302 |
|||||||||||
Loss from equity method investments |
— |
3,902 |
— |
3,902 |
|||||||||||
Share-based compensation |
11,130 |
630 |
25,517 |
6,443 |
|||||||||||
Severance |
700 |
506 |
965 |
2,303 |
|||||||||||
Warrants issued with revenue contracts |
21 |
91 |
59 |
354 |
|||||||||||
Transaction and closing costs |
16,822 |
965 |
18,844 |
1,153 |
|||||||||||
Adjusted net income (loss) (b) |
$ |
(819) |
2,954 |
$ |
(8,986) |
(9,257) |
|||||||||
Weighted-average common shares outstanding, basic and diluted |
334,982,150 |
222,927,484 |
263,558,268 |
220,150,504 |
|||||||||||
Loss per share |
$ |
(0.13) |
$ |
(0.03) |
$ |
(0.36) |
$ |
(0.15) |
|||||||
Adjusted earnings (loss) per share |
$ |
0.00 |
$ |
0.01 |
$ |
(0.03) |
$ |
(0.04) |
(a) |
Represents non-cash expenses related to the amortization of intangibles in connection with acquired businesses. |
||||||||
(b) |
The income tax effect of the Company's non-GAAP reconciling items are offset by valuation allowance adjustments of the same amount given the Company is in a full valuation allowance position. |
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