Healthcare consumerism is taking hold among medical practices as providers are focused on offering patients services like virtual visits, online payment options and self-scheduling tools.
This is helping drive new business opportunities for ambulatory technology company NextGen Healthcare. The company reported $37.5 million in bookings during its fiscal 2021 third quarter, up 22% compared to the same period a year ago. A quarter of those bookings came from new clients, and the company is adding new customers at an accelerated rate, NextGen Healthcare CEO Rusty Frantz said during the company's fiscal 2021 third-quarter earnings call Wednesday.
The company is seeing rapidly increasing demand for patient-centric tools such as mobile check-in for patients and online patient payment processing options integrated with electronic health record (EHR) systems.
In March 2020, NextGen rolled out a patient experience platform with integrated virtual visit capabilities as a result of its recent acquisitions and integration of Medfusion and Otto Health. NextGen's telehealth and patient engagement platform includes integrated virtual visits, patient self-scheduling, previsit check-in and patient payments.
"Patients have a journey through a practice. What our clients want is a seamless, integrated experience that is pleasing and consistent to the patient as that activates, engages and attracts patients to their practice," Frantz said.
"The power of our integrated platform continues to gain traction in the market," he said.
NextGen Healthcare delivered strong financial results in a challenging environment as revenue grew 3% from $138 million from the third quarter of 2020 to $142 million during the most recent quarter ending Dec. 31, Frantz said during the earnings call.
The company's quarterly revenue exceed Wall Street forecasts. Three analysts surveyed by Zacks expected $140.9 million.
“Our solid fiscal third-quarter results demonstrate that our strategy is working—both within our client base and with increasing new client bookings. This success reflects the strength of our integrated platform and client experience,” he said. “As we look forward, we expect to continue to drive revenue growth as well as investing in opportunities to expand that growth in the future.”
The company recently added new capabilities to its NextGen Office EHR platform for small practices that provides embedded telehealth tools for virtual visits combined with revenue cycle management services. Outsourcing medical billing makes sense for resource-constrained small practices, and telehealth enables providers to continue treating patients—regulating visit volume and flow, the company said in a press release (PDF).
While the shift to virtual care last year was crucial to continue to see patients, practices are focused on integrating telehealth into their workflows, Frantz said. "I'd say probably 20% to 30% of our clients’ patient volume is going virtual. I don’t see them going much higher than that. The clinician and patient communicating together effectively in an informed way is what is important to providers, and telehealth is another way for that to happen."
The company has seen double-digit growth in its subscription services, which now makes up its largest revenue stream, according to Frantz.
Reduced patient volume at the company's ambulatory practice clients negatively impacted its volume-based business through most of 2020, but patient volume has rebounded to around 95% of pre-COVID-19 levels, NextGen Healthcare Chief Financial Officer Jamie Arnold said.
The Irvine, California-based reported its net income for the quarter dropped to $464,000 compared with net income of $4.4 million in the same quarter a year ago.
Fully diluted earnings per share was one cent in the fiscal 2021 second quarter compared to net income per share of seven cents for the same period a year ago.
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On a non-GAAP basis, fully diluted earnings per share for the fiscal 2021 second quarter was 26 cents, an increase of 13% year over year from earnings per share of 23 cents in the same period a year ago.
The results surpassed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 24 cents per share.
NextGen Healthcare reported cash flow from operations was $28 million in the fiscal 2021 second quarter compared to $23.6 million for the same period a year ago. Free cash flow was $20 million compared to $17 million in the same period a year ago.
Cash flow from operations was $27.9 million in the fiscal 2021 third quarter compared to $23.6 million for the same period a year ago. Free cash flow was $20.3 million in fiscal 2021 third quarter compared to $17 million in the same period a year ago.
NextGen raised its guidance for its fiscal year results. The company is expecting annual revenue between $547 million and $555 million from the prior range of $535 million to $551 million. Annual non-GAAP earnings per share are expected to be between 92 cents and 98 cents from the prior range of 83 cents and 93 cents, the company announced.
The company's fiscal year 2020 revenue was $540 million.