NextGen Healthcare CEO Rusty Frantz said the company is performing well in a tough environment as revenue dipped 1% from $132 million to $131 million during the most recent quarter ending June 30.
The biggest driver of the revenue loss was reduced patient volume at the company's ambulatory practice clients, which negatively impacted its volume-based business, Frantz said during the company's fiscal 2021 first-quarter earnings call Thursday.
This was offset by the company's continued growth in subscription revenue and nonrecurring service revenue, he said.
“In the face of unprecedented conditions, NextGen delivered an exceptional performance by minimizing revenue impact, preserving earnings and generating free cash when patient visit volume was significantly reduced,” Frantz said.
“As we move through the quarter, our attention has turned back to innovation, commercial execution and growth based on our differentiated, future-facing ambulatory platform that is purpose built to engage patients in their wellness journey," he said.
During the quarter, NextGen saw volumes significantly decline initially and then recover to approximately 90% at pre-COVID-19 levels, where they have stayed, executives said.
"We believe that volume will be relatively stable to improving as people have learned how to interact with their providers in the COVID world, both virtually and in person. Therefore, we have modeled averaging between 90% to 95% over the last three quarters of our financial year," Frantz told analysts during the call.
The Irvine, California-based healthcare technology company reported its net loss for the quarter was $800,000 compared with net income of $1.2 million in the fiscal 2020 first quarter.
Fully diluted net loss per share was one cent in the fiscal 2021 first quarter compared to net income per share of two cents per share for the same period a year ago.
On a non-GAAP basis, fully diluted earnings per share for the fiscal 2021 first quarter was 21 cents, an increase of 31% year over year from earnings per share of 16 cents in the same period a year ago.
The earnings growth reflects the impact of both short-term and long-term cost actions the company has implemented, Frantz said.
NextGen's revenue and earnings in the quarter beat Wall Street forecasts as the consensus estimate was for quarterly earnings of four cents per share and revenue of $115 million.
"We are seeing many clients take advantage of the break to double down on investing and transforming for the new normal. We have seen some clients struggle and need guidance and help to get relaunched. We are blessed to have the opportunity to help bring health care back and the capabilities and scale to be a true positive force in the effort," Frantz said.
The COVID-19 pandemic drove rapidly increasing demand for the company's telehealth solution.
NextGen's patient experience platform provides a fully integrated approach to patient-provider interactions, including integrated virtual visits, patient self scheduling, previsit check-in and patient payments.
The company's clients executed more than 425,000 secured virtual visits in the first quarter alone versus roughly 40,000 in the previous quarter, Frantz said.
"We are seeing virtual visits level off a bit as our clients' patients up for an in-person experience with their same provider, an option not available with pure telehealth, but is a key benefit of NextGen's telepractice," he said.
Bookings came in at $25.6 million in the quarter, down 21% on a year over year basis, primarily as many clients were focused on reopening their practices, he said.
Virtual visits generated $4 million in bookings for the quarter.
With its acquisition of Topaz Information Solutions last year, the company has expanded into the behavioral health market to help open access to treatment.
"We believe we are uniquely positioned to address this problem by enabling caregivers to not only provide integrated and coordinated behavioral care but also physical care within an integrated experience and a single patient record to meet the pressing needs of total wellness within our communities," Frantz said.
The company's subscription and services bookings accounted for $9.2 million in the quarter, a 46% increase year over year, while perpetual software license and hardware bookings fell to $4.9 million, down 33% year over year and 15% sequentially.
Cash flow from operations was $17.7 million in the quarter compared to $17 million for the same period a year ago. Free cash flow was $11 million compared to $8.6 million during the period a year ago.
Given the continued uncertainty in the market, the company did not provide annual guidance.