MARPAI ANNOUNCES PRELIMINARY UNAUDITED FINANCIAL RESULTS FOR FOURTH QUARTER AND FULL YEAR 2023

Rhea-AI Summary

Marpai, Inc. announces unaudited preliminary financial results for Q4 and full year 2023, showing improvements in net revenues and operating expenses. The company expects to discuss the results in a webcast on March 27, 2024.

Positive

• Net revenues for Q4 2023 were $8.7 million, a 14% increase from Q4 2022.
• Full year 2023 net revenues were $37.2 million, a 53% improvement from the prior year.
• Operating expenses for Q4 2023 were $6.9 million, a 41% decrease from Q4 2022.
• Full year 2023 operating expenses were $39.6 million, down from 140% to 107% of net revenues.
• Operating loss for Q4 2023 was $3.9 million, $5.0 million better than Q4 2022.
• Full year 2023 operating loss was $26.7 million, slightly lower than the prior year.
• The company expects a $3.0 million non-cash goodwill impairment charge in Q4 2023.
• CEO Damien Lamendola highlights progress in executing short-term actions and leveraging Maestro acquisition synergies.
• The company aims to improve operational and financial aspects to save money for clients and enhance healthcare quality.

Negative

• None.

Insights

Financial Analyst

Observing the preliminary financial results from Marpai, Inc., the increase in net revenues by approximately 53% for the full year signals a robust growth trajectory. This growth is particularly noteworthy given the broader context of the $22 billion TPA market, which is highly competitive and subject to rapid changes in healthcare policy and technology. The data suggests that Marpai's strategies, possibly including the Maestro acquisition, are yielding positive financial outcomes.

However, the operating expenses accounting for 107% of net revenues, despite a reduction from the previous year, indicate that the company is still spending more than it earns. This is a critical point for investors, as it raises concerns about the company's pathway to profitability. The reduction in operating loss is a positive sign, but it's essential to consider the sustainability of the company's cost structure and the effectiveness of its corrective actions.

The goodwill impairment charge of $3.0 million is another focal point. While non-cash and not affecting liquidity, it reflects adjustments in the company's valuation of acquired assets, which could suggest that the Maestro acquisition has not met initial expectations in terms of value generation. This could have implications for future earnings and market valuation.

Market Research Analyst

From a market perspective, Marpai's performance must be contextualized within the broader third-party administration industry trends. The industry is moving towards intelligent healthcare solutions that promise cost savings and improved quality of care. Marpai's emphasis on leveraging synergies from its acquisition of Maestro is in line with these trends. The company's ability to deliver on its vision of saving money for clients and improving healthcare quality will be a critical differentiator in attracting and retaining self-funded employer health plans.

Considering the 14% increase in Q4 revenues year-over-year, Marpai appears to be gaining momentum at the year's end. This could be indicative of successful integration of acquisitions and effective market strategies. However, the full impact of these strategies on market share and competitive positioning will require ongoing assessment, especially as the company prepares for its annual audit and finalizes its financial statements.

Medical Research Analyst

The healthcare industry, particularly the sector that Marpai operates in, is highly sensitive to innovations and regulatory changes. The company's focus on intelligent healthcare suggests an alignment with the industry's push towards data-driven decision-making and personalized care. This strategy could potentially lead to long-term cost savings and improved health outcomes for members, which is a compelling value proposition for self-funded employer health plans.

In terms of the business model, Marpai's role as a Third-Party Administrator (TPA) positions it at the intersection of healthcare service delivery and financial management. The company's performance, therefore, hinges on its ability to manage these two aspects efficiently. The reported operational improvements and expected synergies from the Maestro acquisition could enhance Marpai's capabilities in administering health plans, which is crucial for its credibility and client satisfaction.

Full Year Impact of Maestro Acquisition and Q4 Corrective Actions Driving Improvement

TAMPA, Fla., March 6, 2024 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq: MRAI), an independent national Third-Party Administration (TPA) company transforming the $22 billion TPA market supporting self-funded employer health plans with affordable, intelligent, healthcare, today announced unaudited preliminary financial results for the fourth quarter and fiscal year 2023. In addition, the Company expects to report its full fourth quarter and fiscal year 2023 results following the close of market on March 26, 2024. The unaudited results in this press release are preliminary and subject to the completion of accounting and annual audit procedures and are therefore subject to adjustment. The Company expects to hold a webcast to discuss the results on March 27, 2024.

Financial Highlights:

• Net Revenues
  • For the fourth quarter of 2023, net revenues were approximately $8.7 million, an improvement of nearly $1.1 million or approximately 14% higher from the fourth quarter of 2022.
  • Full year 2023 net revenues were approximately $37.2 million, an improvement of nearly $12.8 million, or approximately 53% better than prior year.
• Operating Expenses
  • For the fourth quarter of 2023, operating expenses were approximately $6.9 million, an improvement of approximately $4.9 million or 41% lower from the fourth quarter of 2022.
  • Full year 2023 operating expense was approximately $39.6 million, approximately 107% of net revenues down from 140% of net revenues in the prior year.
• Operating Loss
  • For the fourth quarter of 2023, operating loss was approximately $3.9 million or approximately $5.0 million better than the fourth quarter of 2022.
  • Full Year 2023 operating loss was approximately $26.7 million, down slightly from the prior year.
• Goodwill Impairment
  • The Company expects to take a $3.0 million non-cash goodwill impairment charge in the fourth quarter of 2023.

"The Company made significant progress with the execution of our previously announced short-term actions in the fourth quarter of 2024, while beginning to leverage the synergies of the Maestro acquisition," said Damien Lamendola, Chief Executive Officer of Marpai. "We remain committed to operational and financial improvements as the Company delivers on our vision of saving money for our clients and improving the quality of healthcare for our members." 

The foregoing forward-looking statements reflect our expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until the filing of our annual report on Form 10-K.

Webcast and Conference Call Information

Marpai expects to host a conference call and webcast on Wednesday, March 27, 2024, at 8:30 a.m. ET to answer questions about the Company's operational and financial highlights for its fourth quarter and year ended December 31, 2023.

Investors interested in listening to the conference call may do so by dialing (800)-836-8184 for domestic callers or +1-646-357-8785 for international callers, or via webcast: https://app.webinar.net/8OgAYdJmbd9

About Marpai, Inc.

Marpai, Inc. (Nasdaq: MRAI) is a leading, national TPA company bringing value-oriented health plan services to employers that directly pay for employee health benefits. Primarily competing in the $22 billion TPA sector serving self-funded employer health plans representing over $1 trillion in annual claims. Marpai works to deliver the healthiest member population for the health plan budget. Operating nationwide, Marpai offers access to leading provider networks including Aetna and Cigna and all TPA services. For more information, visit www.marpaihealth.com, the content of which is not incorporated by reference into this press release.

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "guidance," "may," "can," "could", "will", "potential", "should," "goal" and variations of these words or similar expressions. For example, the Company is using forward looking statements when it discusses its preliminary unaudited financial results and its commitment to operational and financial improvements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Marpai's current expectations and speak only as of the date of this release. Actual results may differ materially from Marpai's current expectations depending upon a number of factors. These factors include, among others, adverse changes in general economic and market conditions, competitive factors including but not limited to pricing pressures and new product introductions, uncertainty of customer acceptance of new product offerings and market changes, risks associated with managing the growth of the business. Except as required by law, Marpai does not undertake any responsibility to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

More detailed information about Marpai and the risk factors that may affect the realization of forward-looking statements is set forth in Marpai's filings with the Securities and Exchange Commission. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov.

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SOURCE Marpai

FAQ

What were Marpai, Inc.'s net revenues for Q4 2023?

Marpai, Inc.'s net revenues for Q4 2023 were approximately $8.7 million, showing a 14% increase from Q4 2022.

How much were Marpai, Inc.'s full year 2023 net revenues?

Marpai, Inc.'s full year 2023 net revenues were approximately $37.2 million, reflecting a 53% improvement from the prior year.

What were Marpai, Inc.'s operating expenses for Q4 2023?

Marpai, Inc.'s operating expenses for Q4 2023 were approximately $6.9 million, marking a 41% decrease from Q4 2022.

What was Marpai, Inc.'s operating loss for Q4 2023?

Marpai, Inc.'s operating loss for Q4 2023 was approximately $3.9 million, $5.0 million better than Q4 2022.

What is the expected non-cash goodwill impairment charge for Marpai, Inc. in Q4 2023?

Marpai, Inc. expects to take a $3.0 million non-cash goodwill impairment charge in Q4 2023.

Who is the CEO of Marpai, Inc.?

Damien Lamendola is the Chief Executive Officer of Marpai, Inc.