Babylon Delivers Strong Third Quarter 2021 Operational and Financial Results
Babylon Holdings Limited (NYSE: BBLN) reported a remarkable 371% year-over-year revenue growth in Q3 2021, totaling $74.5 million, driven by value-based care revenue of $55.7 million. The company signed contracts to manage over 350,000 lives globally by early 2022, backed by new capital of approximately $460 million from its merger with Alkuri Global Acquisition Corp. Despite a net loss of $66 million, Babylon's operational leverage improved, with technology costs significantly decreasing. Babylon anticipates 2021 revenue of $321 million and projects substantial monthly run-rate revenue exceeding $60 million in 2022.
- Q3 2021 revenue increased 371% year-over-year to $74.5 million.
- New contracts will manage over 350,000 lives globally by early 2022.
- Successfully raised approximately $460 million through merger and financing.
- Technology costs decreased to 36% of revenue, improving operational leverage.
- 2021 revenue guidance maintained at $321 million.
- Net loss widened to $66 million from $38 million in Q3 2020.
- Adjusted EBITDA remains negative at $(47.5) million.
-
Third quarter 2021 revenue grew
371% year-over-year to$74.5 million -
Signed contracts in H2 2021 in the US and
UK added approximately 135,000 value-based care members -
Total contracts exceed
$60 million - Contracted to serve, by the beginning of 2022, over 24 million people, with the technology platform and fee-based clinical services, and manage over 350,000 lives globally, making Babylon one of the largest value-based care providers
-
Completed merger with Alkuri Global Acquisition Corp. and started trading on
New York Stock Exchange , under the ticker symbol BBLN, with approximately$460 million -
Signed new collaboration framework with
Microsoft with the aim to accelerate and enhance current AI and Machine Learning, and promote Babylon technology onMicrosoft Exchange
“Since our inception, we have delivered excellent returns for our investors. As we begin the next phase of our journey as a public company, we believe we can continue to do so as we focus on delivering excellent value propositions for our patients and partners.”
Babylon received gross proceeds of approximately
Third Quarter Financial Results and Operating Metrics Summary
Comparison of the following financial results and operating metrics for the three months ended
-
Revenue totaled
$74.5 million $15.8 million 371% year-over-year. This was primarily driven by the growth in value-based care revenue, which totaled$55.7 million -
Net loss totaled
$66.0 million $38.0 million -
Technology costs1 accounted for
36% of revenue versus135% of revenue for the same period last year, demonstrating the operational leverage of our technology platform. -
Adjusted EBITDA totaled
$(47.5) million $(32.6) million -
US value-based care members totaled approximately 100,000 as of
September 30, 2021 compared to zero onSeptember 30, 2020 .
Financial Highlights for the Nine Months Ended
-
For the nine-month period, revenue was
$203.2 million $38.3 million 430% -
Operating losses as a percentage of revenue have fallen from
314% to69% , further demonstrating Babylon’s ability to deliver operational leverage -
Adjusted EBITDA2 totaled
$(101.6) million $7.2 million $(108.9) million 430% year-over-year revenue growth, and revenue from software licensing -
Net loss totaled
$141.7 million $128.8 million -
Net cash used in operating activities was
$60.4 million $120.9 million
Recent Highlights
-
Successful listing on the
New York Stock Exchange (“NYSE”) onOctober 22, 2021 and combined with the previously-announced debt financing with AlbaCore, delivering gross proceeds of approximately$460 million -
Value-based care contracts being launched will add an estimated 135,000 members comprising 80,000 members in
Georgia ,California andMississippi and 55,000 members in theUK by the beginning of 2022 - With the new contract launches, adding 135,000 members, Babylon is on track to manage over 350,000 lives globally by the start of 2022
-
Total contracts exceed
$60 million -
Announced collaboration with
Microsoft (NASDAQ:MSFT) to explore opportunities to accelerate and enhance current AI and Machine Learning, to shift the focus from sick care to preventative health care -
Obtained
$200 million AlbaCore Capital Group which is focused on Environmental, Social and Governance (ESG) investing.
Financial Outlook
“Our revenue growth in the third quarter, in conjunction with the new contract launches, demonstrates the continued momentum in our business as we deliver on our 2021 and 2022 revenue targets,” said
FY 2021 Financial Guidance
Babylon reiterates its previously provided public guidance and continues to expect revenue of
Our guidance on full-year 2021 Adjusted EBITDA is now a range of
We are not able to reconcile projected Adjusted EBITDA to its most directly comparable IFRS measure as we are not able to forecast IFRS loss on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect IFRS loss for the period, including, but not limited to, impairment expense, share-based compensation, foreign exchange gains or losses and gains and losses on sale of subsidiaries. Adjusted EBITDA should not be used to predict IFRS loss as the difference between the two measures is variable and may be significant.
This financial guidance and other statements above are forward-looking statements and actual results may differ materially. Please refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Third Quarter 2021 Earnings Conference Call
Babylon will host a conference call to discuss third quarter 2021 results on
Additional Notes
Accompanying supplemental information will be posted to the Investor Relations section of Babylon’s website at https://www.babylonhealth.com.
About Babylon
Babylon is one of the world’s fastest growing digital healthcare companies whose mission is to make high-quality healthcare accessible and affordable for every person on Earth.
Babylon is re-engineering how people engage with their care at every step of the healthcare continuum. By flipping the model from reactive sick care to proactive healthcare through the devices people already own, it offers 24 million people globally ongoing, always-on care. Babylon has already shown that in environments as diverse as the developed
Founded in 2013, Babylon’s technology and clinical services is supporting a global patient network across 15 countries, with 15 languages available. And through a combination of its value-based care model, Babylon 360, and its work in primary care through
Babylon is already working with governments, health providers and insurers across the globe in order to provide them with a new infrastructure that any partner can use to deliver high-quality healthcare with lower costs and better outcomes. For more information, please visit www.babylonhealth.com.
Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or our future financial or operating performance. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements include, without limitation, information concerning Babylon’s possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment and potential growth opportunities.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of Babylon’s management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to our future financial and operating results; the growth of our business and organization; our failure to compete successfully; our dependence on our relationships with physician-owned entities to hold contracts and provide healthcare services; our ability to maintain and expand a network of qualified providers; our ability to attract new customers and expand member enrollment with existing clinical services and Babylon 360 customers; our ability to retain existing customers and existing customers’ willingness to license additional applications and services from us; a significant portion of our revenue comes from a limited number of customers; a portion of our revenue is subject to the achievement of performance metrics and healthcare cost savings and may not be representative of revenue for future periods; the significant risks associated with estimating the amount of revenue that we recognize under our value-based care agreements with health plans; the impact of COVID-19 or any other pandemic, epidemic or outbreak of an infectious disease in
Babylon cautions that the foregoing list of factors is not exclusive and cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, Babylon does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this release.
| ____________________________ |
1 Comprises Platform and Application Expenses and Research and Development Expenses |
2 An explanation of non-IFRS measures and the reconciliation to the most comparable IFRS measures have been provided in the accompanying Table 4 at the end of this press release |
|
||||||||||||
Table 1 |
||||||||||||
|
||||||||||||
Consolidated Statements of Profit and Loss and Other Comprehensive Loss |
||||||||||||
(In thousands, except per share amounts, unaudited) |
||||||||||||
|
|
|
|
|
|
|
||||||
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||
| Revenue: | ||||||||||||
| Software licensing revenue | 7,983 |
|
8,231 |
|
52,228 |
|
18,585 |
|
||||
| Clinical services revenue | 10,764 |
|
7,580 |
|
28,898 |
|
19,729 |
|
||||
| Value-based care revenue | 55,715 |
|
- |
|
122,107 |
|
- |
|
||||
| Total revenue | 74,462 |
|
15,811 |
|
203,233 |
|
38,314 |
|
||||
| Cost of care delivery | (68,336 |
) |
(8,068 |
) |
(160,473 |
) |
(26,888 |
) |
||||
| Platform & application expenses | (7,127 |
) |
(10,924 |
) |
(28,504 |
) |
(23,822 |
) |
||||
| Research & development expenses | (19,339 |
) |
(10,390 |
) |
(36,540 |
) |
(31,271 |
) |
||||
| Sales, general & administrative expenses | (42,166 |
) |
(23,707 |
) |
(118,771 |
) |
(76,470 |
) |
||||
| Operating loss | (62,506 |
) |
(37,278 |
) |
(141,055 |
) |
(120,137 |
) |
||||
| Finance costs and income | (2,049 |
) |
(478 |
) |
(4,264 |
) |
(3,041 |
) |
||||
| Exchange (loss)/gain | (396 |
) |
259 |
|
(487 |
) |
(1,887 |
) |
||||
| Net finance (expense) | (2,445 |
) |
(219 |
) |
(4,751 |
) |
(4,928 |
) |
||||
| Gain on sale of subsidiary | - |
|
- |
|
3,917 |
|
- |
|
||||
| Share of loss of equity-accounted investees | (1,017 |
) |
(426 |
) |
(2,293 |
) |
(735 |
) |
||||
| Loss before taxation | (65,968 |
) |
(37,923 |
) |
(144,182 |
) |
(125,800 |
) |
||||
| Tax (provision)/benefit | (7 |
) |
(63 |
) |
2,486 |
|
(3,000 |
) |
||||
| Loss for the period | (65,975 |
) |
(37,986 |
) |
(141,696 |
) |
(128,800 |
) |
||||
| Other comprehensive loss | ||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||
| Currency translation differences | (159 |
) |
918 |
|
(226 |
) |
2,448 |
|
||||
| Other comprehensive (loss) / gain for the period, net of income tax | (159 |
) |
918 |
|
(226 |
) |
2,448 |
|
||||
| Total comprehensive loss for the period | (66,134 |
) |
(37,068 |
) |
(141,922 |
) |
(126,352 |
) |
||||
| Loss attributable to: | ||||||||||||
| Equity holders of the parent | (65,247 |
) |
(37,658 |
) |
(140,153 |
) |
(127,643 |
) |
||||
| Non-controlling interest | (728 |
) |
(328 |
) |
(1,543 |
) |
(1,157 |
) |
||||
(65,975 |
) |
(37,986 |
) |
(141,696 |
) |
(128,800 |
) |
|||||
| Total comprehensive loss attributable to: | ||||||||||||
| Equity holders of the parent | (65,406 |
) |
(36,740 |
) |
(140,379 |
) |
(125,195 |
) |
||||
| Non-controlling interest | (728 |
) |
(328 |
) |
(1,543 |
) |
(1,157 |
) |
||||
(66,134 |
) |
(37,068 |
) |
(141,922 |
) |
(126,352 |
) |
|||||
| Net loss per share, basic and diluted |
( |
) |
( |
) |
( |
) |
( |
) |
||||
|
||||||
Table 2 |
||||||
|
||||||
Consolidated Statement of Cash Flows |
||||||
(In USD thousands, unaudited) |
||||||
For the Nine Months Ended |
||||||
2021 |
|
2020 |
||||
| Cash flows from operating activities | ||||||
| Loss for the period | (141,696 |
) |
(128,800 |
) |
||
| Adjustments for: | ||||||
| Finance costs and income | 4,264 |
|
3,041 |
|
||
| Depreciation and amortization | 22,145 |
|
9,531 |
|
||
| Share based compensation | 19,585 |
|
2,452 |
|
||
| Taxation | (2,486 |
) |
3,000 |
|
||
| Exchange loss | 487 |
|
1,887 |
|
||
| Impairment expense | - |
|
33 |
|
||
| Share of net loss of associates and joint ventures | 2,293 |
|
735 |
|
||
| Gain on sale of subsidiary | (3,917 |
) |
- |
|
||
(99,325 |
) |
(108,121 |
) |
|||
| Working capital adjustments | ||||||
| (Increase) in trade and other receivables | (18,015 |
) |
(6,165 |
) |
||
| Increase/(Decrease) in trade and other payables | 56,966 |
|
(6,631 |
) |
||
| Net cash used in operating activities | (60,374 |
) |
(120,917 |
) |
||
| Cash flows from investing activities | ||||||
| Capital expenditure | (5,331 |
) |
(501 |
) |
||
| Interest received | 30 |
|
7 |
|
||
| Development costs capitalized | (24,074 |
) |
(25,937 |
) |
||
| Acquisition of subsidiary, net of cash acquired | (13,835 |
) |
- |
|
||
| Purchase of shares in associates and joint ventures | (5,000 |
) |
(7,500 |
) |
||
| Proceeds from sale of investment in subsidiary | 2,213 |
|
- |
|
||
| Net cash used in investing activities | (45,997 |
) |
(33,931 |
) |
||
| Cash flows from financing activities | ||||||
| Proceeds from borrowings | 63,000 |
|
357 |
|
||
| Repayment of borrowings | (15,000 |
) |
- |
|
||
| Payment of debt issuance costs | (1,000 |
) |
- |
|
||
| Payment from exercise of share options | (482 |
) |
- |
|
||
| Fees directly attributable to equity raise | - |
|
(10,245 |
) |
||
| Net proceeds from issue of share capital | - |
|
11,907 |
|
||
| Principal payments on leases | (2,677 |
) |
(935 |
) |
||
| Interest paid | (2,816 |
) |
(2,713 |
) |
||
| Net cash inflow / (outflow) from financing activities | 41,025 |
|
(1,629 |
) |
||
| Net (decrease) in cash and cash equivalents | (65,346 |
) |
(156,477 |
) |
||
| Cash and cash equivalents at |
101,757 |
|
214,888 |
|
||
| Effect of movements in exchange rate on cash held | 721 |
|
1,333 |
|
||
| Cash and cash equivalents at end of period | 37,132 |
|
59,744 |
|
||
|
||||||
Table 3 |
||||||
|
||||||
Consolidated Statement of Financial Position |
||||||
(In USD thousands, unaudited) |
||||||
|
|
|
||||
2021 |
|
2020 |
||||
| ASSETS | ||||||
| Non-current assets | ||||||
| Right-of-use assets | 7,297 |
|
2,572 |
|
||
| Property, plant and equipment | 5,964 |
|
1,334 |
|
||
| Investments in associates | 11,583 |
|
8,876 |
|
||
30,503 |
|
17,832 |
|
|||
| Other intangible assets | 102,048 |
|
78,853 |
|
||
| Total non-current assets | 157,395 |
|
109,467 |
|
||
| Current assets | ||||||
| Right-of-use assets | 3,783 |
|
1,942 |
|
||
| Trade and other receivables | 31,124 |
|
13,525 |
|
||
| Prepayments and contract assets | 11,789 |
|
8,841 |
|
||
| Cash and cash equivalents | 37,132 |
|
101,757 |
|
||
| Assets held for sale | - |
|
3,282 |
|
||
| Total current assets | 83,828 |
|
129,347 |
|
||
| Total assets | 241,223 |
|
238,814 |
|
||
| EQUITY AND LIABILITIES | ||||||
| EQUITY | ||||||
| Ordinary share capital | 10 |
|
10 |
|
||
| Preference share capital | 4 |
|
3 |
|
||
| Share premium | 557,569 |
|
485,221 |
|
||
| Share based payment reserve | 52,861 |
|
32,185 |
|
||
| Retained earnings | (609,658 |
) |
(469,504 |
) |
||
| Foreign currency translation reserve | 1,449 |
|
1,675 |
|
||
| Total capital and reserves | 2,235 |
|
49,590 |
|
||
| Non-controlling interests | (2,774 |
) |
(1,231 |
) |
||
| Total equity | (539 |
) |
48,359 |
|
||
| LIABILITIES | ||||||
| Non-current liabilities | ||||||
| Other long term liabilities | 2,388 |
|
- |
|
||
| Contract liabilities | 74,903 |
|
57,274 |
|
||
| Deferred grant income – tax credit | 5,948 |
|
7,488 |
|
||
| Lease liabilities | 7,916 |
|
2,011 |
|
||
| Deferred tax liability | 768 |
|
- |
|
||
| Total non-current liabilities | 91,923 |
|
66,773 |
|
||
| Current liabilities | ||||||
| Trade and other payables | 22,564 |
|
11,635 |
|
||
| Accruals and provisions | 52,494 |
|
18,636 |
|
||
| Contract liabilities | 21,817 |
|
18,744 |
|
||
| Deferred grant income – tax credit | 1,157 |
|
- |
|
||
| Lease liabilities | 4,043 |
|
2,488 |
|
||
| Loans and borrowings | 47,764 |
|
70,357 |
|
||
| Liabilities directly associated with the assets held for sale | - |
|
1,822 |
|
||
| Total current liabilities | 149,839 |
|
123,682 |
|
||
| Total liabilities | 241,762 |
|
190,455 |
|
||
| Total liabilities and equity | 241,223 |
|
238,814 |
|
||
|
||||||||||||
Table 4 |
||||||||||||
|
||||||||||||
Reconciliation of IFRS Loss for the Period to EBITDA and Adjusted EBITDA |
||||||||||||
(In USD thousands, unaudited) |
EBITDA is defined as profit (loss), adjusted for depreciation, amortization, net finance income (costs), and income taxes. Adjusted EBITDA is defined as profit (loss), adjusted for depreciation, amortization, net finance income (costs), income taxes, share-based compensation, impairment expenses, foreign exchange gains or losses and gains or losses on sale of subsidiaries.
We believe that EBITDA and Adjusted EBITDA are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because it permits investors to evaluate our recurring profitability from our ongoing operating activities.
EBITDA and Adjusted EBITDA have certain limitations, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under IFRS. We caution investors that amounts presented in accordance with our definition of EBITDA and Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because some issuers calculate EBITDA and Adjusted EBITDA differently or not at all, limiting their usefulness as direct comparative measures.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most directly comparable IFRS measure, loss, for the three-month and nine-month periods ended
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||
| IFRS Loss for the Period | (65,975 |
) |
(37,986 |
) |
(141,696 |
) |
(128,800 |
) |
||||
| Adjustments to calculate EBITDA: | ||||||||||||
| Depreciation and amortization | 8,823 |
|
3,072 |
|
22,145 |
|
9,531 |
|
||||
| Finance costs and income | 2,049 |
|
478 |
|
4,264 |
|
3,041 |
|
||||
| Tax provision/(benefit) | 7 |
|
63 |
|
(2,486 |
) |
3,000 |
|
||||
| EBITDA | (55,096 |
) |
(34,373 |
) |
(117,773 |
) |
(113,228 |
) |
||||
| Adjustments to calculate Adjusted EBITDA: | ||||||||||||
| Share-based compensation | 7,241 |
|
2,019 |
|
19,585 |
|
2,452 |
|
||||
| Impairment expense | - |
|
- |
|
- |
|
32 |
|
||||
| Exchange (gain)/ loss | 396 |
|
(259 |
) |
487 |
|
1,887 |
|
||||
| Gain on sale of subsidiary | - |
|
- |
|
(3,917 |
) |
- |
|
||||
| Adjusted EBITDA | (47,459 |
) |
(32,613 |
) |
(101,618 |
) |
(108,857 |
) |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211112005356/en/
Media
press@babylonhealth.com
Investors
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