In its first quarter as a public company, One Medical saw its sales grow 25% to $78.8 million, but the company also reported wider-than-expected quarterly losses.
The San Francisco-based primary care provider said it lost $33.9 million, or 40 cents a share, in the first quarter, compared with a loss of $6.7 million, or 37 cents a share, in the year-ago period, according to its first-quarter 2020 financial filings.
While the company's revenue topped views, Wall Street analysts expected a loss of 18 cents a share for the quarter on revenue of $74.8 million, according to Zacks Investment Research.
The company's stock fell more than 7% in the extended session Wednesday, MarketWatch reported.
One Medical, which went public in January, markets itself as a membership-based, tech-integrated and consumer-focused primary care platform. The company is currently in 11 different markets across the U.S. and plans to add more later in 2020. However, while the company has been growing its overall size, it has continually reported losses.
The company reported adjusted EBITDA was a loss of $13.5 million compared with a loss of $2.5 million in the first quarter of 2019.
One Medical Chief Financial Officer Bjorn Thaler said the company ended the first quarter with $375.4 million of cash and short-term marketable securities and only $2.2 million of debt.
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The company membership jumped 25% during the quarter, now totaling 455,000 members, well ahead of its expectations, said Amir Dan Rubin, chair, and CEO and president of One Medical, during the company's earnings call Wednesday.
During the second quarter, One Medical expects membership to grow to between 465,000 to 475,000 members.
For the full-year 2020, the company is projecting membership to reach between 500,000 to 515,000, an increase to its previous guidance of 495,000 to 510,000 year-end membership count, the company said in its filing.
"As our Q2 membership guide implies, we are on track to add more members in the first half of this year than any other first half in our history," Rubin said.
The company began to feel the financial impact of COVID-19 in just the final few weeks of the first quarter, with strong momentum in January and February and better-than-anticipated performance in March, Thaler said.
"COVID-19 has driven an acceleration in membership growth while, at the same time, creating near-term revenue headwinds," he said. The company expects a larger financial headwind from extended quarantines and self-isolation practices in the second quarter.
The company's total quarterly revenue included membership revenue of $15.2 million, which grew 27% year over year. Net patient service revenue was $34 million, and partnership revenue came to $29.5 million. Collectively, these two revenue streams grew 25% year over year.
"Our team has engaged with hundreds of thousands of members digitally, arranged for COVID-19 testing services, donned PPE to deliver care, conducted video chats and remote visits, and followed up with patients on test results and subsequent care needs," Rubin said.
During the quarter, One Medical extended its digital solution, including virtual visit capabilities, and also expanded in-person care and testing services while also providing more virtual behavioral health services, he said.
Nearly a quarter of a million One Medical members sought care digitally over the span of several weeks, according to the company.
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Beginning in March, the company also stood up 18 mobile testing sites, along with in-office testing locations to support COVID-19 response.
The primary care provider launched a work site reentry program, called One Medical Healthy Together, to support employers as they begin to transition workforces back into shared environments. That program virtually screens employees for key symptoms and clinical risk factors, offers testing services and supports ongoing digital screening and follow-up care as needed.
Also, One Medical opened a new location in Portland, Oregon, in March. Thaler said the company expects to open 20 to 25 new offices in 2020, having deferred some offices that were due to open in the latter half of the year into 2021.
Thaler said during the month of April One Medical's total utilization across all billable services, which includes in-office volumes, remote visits and COVID-19 testing, averaged approximately 55% of pre-COVID-19 levels. Executives said they expect utilization to slowly ramp back up as communities reopen.
Rubin said there are long-term tailwinds for the company based on its "human-centered and technology-powered" model of care.
He cited a recent study published in JAMA Open Network that showed its membership-based primary care model combining virtual, near-site and worksite services saved one of its employers 45% in total healthcare costs.
For the second quarter, One Medical is projecting revenue between $56 million and $66 million and adjusted EBITDA between a loss of $36 million and a loss of $26 million.
No other guidance for 2020 was provided "because of uncertainties around the duration and extent of the continued COVID-19 pandemic," the company said.