MARPAI, INC. REPORTS THIRD QUARTER 2022 RESULTS
Marpai, Inc. (Nasdaq: MRAI) reported Q3 2022 financial results, with net revenue of approximately $4.9 million, down 11.1% from Q2 2022. This decline was attributed to a reduction in employees covered under their plans, which dropped to 16,357 by September 30, 2022. Operating expenses decreased to around $10.8 million, yet the net loss was approximately $5.8 million. Following the acquisition of Maestro Health, Marpai aims to integrate operations and expand its customer base significantly. Financial guidance for Q4 2022 remains undisclosed due to the acquisition.
- Acquisition of Maestro Health expected to more than double customer base and members served, enhancing market position.
- Operating expenses decreased from $12.2 million in Q2 to $10.8 million in Q3, showing cost management efforts.
- Net revenue decreased by $619,000 (11.1%) from Q2 to Q3 due to loss of customers.
- Net loss of approximately $5.8 million, though improved from $6.7 million in Q2.
NEW YORK, Nov. 9, 2022 /PRNewswire/ -- Marpai, Inc. ("Marpai" or the "Company") (Nasdaq: MRAI), an AI-technology company transforming the
The Company's consolidated results of operations include the results of operations of Marpai and its wholly owned subsidiary, Marpai Health, Inc., for all periods presented, and the results of Marpai Administrators, LLC (formerly Continental Benefits, LLC) since its acquisition on April 1, 2021.
Financial Highlights
- Net revenue of approximately
$4.9 million for the three months ended September 30, 2022, compared to net revenue of approximately$5.6 million for the three months ended June 30, 2022, representing a sequential decrease of approximately$619,000 , or11.1% . This decline was caused by the third quarter decline in the number of our customers' employees covered under our plans. - The number of our customers' employees covered under the Company's administered health plans was 16,357, 21,074 and 21,139 on September 30, 2022, June 30, 2022, and March 31, 2022, respectively. As we explained on our second quarter earnings conference call, effective September 1, 2022, we decided not to renew the contracts of three customers who in our opinion were failing to fulfil their contractual obligations. These three customers accounted for more than 4,000 employees.
- Operating expenses (including cost of revenues) were approximately
$10.8 million for the three months ended September 30, 2022, as compared to approximately$12.2 million for the three months ended June 30, 2022, and approximately$11.8 million for the three months ended March 31, 2022. - Operating expenses (including cost of revenues) excluding stock based compensation expenses were approximately
$10.1 million for the three months ended September 30, 2022 compared to approximately$11.1 million for the three months ended June 30, 2022, and approximately$11.1 million for the three months ended December 31, 2021. - Net loss was approximately
$5.8 million for the three months ended September 30, 2022, compared to net loss of approximately$6.7 million for the three months ended June 30, 2022, and a net loss of approximately$5.5 million for the three months ended March 31, 2022. - Adjusted negative EBITDA was approximately
$4.3 million for the three months ended September 30, 2022 compared to adjusted negative EBITDA of approximately$4.7 million for the three months ended June 30, 2022 and compared to adjusted negative EBITDA of approximately$4.0 million for the three months ended March 31, 2022. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Other Highlights
On November 1, 2022, the Company announced the closing of the acquisition of Maestro Health, LLC ("Maestro Health") in a deal that more than doubles the size of the Company. Maestro Health is a leading TPA based in Chicago, Illinois that serves over 80 self-insured employers. Together, the joint company brings AI-powered health plan services to over 40,000 employees nationwide, making it the leading technology player in the market. The acquisition is expected to more than double the number of customers and members that Marpai serves.
"Having closed the Maestro acquisition on October 31, we are now laser focused on the integration of the two companies, as well as our January 1, 2023 sales," said Edmundo Gonzalez, Chief Executive Officer of Marpai.
Financial Guidance
Due to the Maestro Health acquisition, which closed on October 31, 2022, we are not providing financial guidance for the fourth quarter at this time.
Webcast and Conference Call Information
Marpai will host a conference call and webcast tomorrow, on November 10, 2022 at 8:30 a.m. ET to answer questions about the Company's operational and financial highlights for its third quarter of 2022 as well as on the previously announced acquisition of Marpai Health.
Investors interested in listening to the conference call may do so by dialing 1-800-289-0459 for domestic callers or +1-929-477-0443 for international callers, or by dialing 1-647-484-0473 for Canadian callers.
The participant passcode to be used by the dialers is : 404193.
Investors can also listen via webcast: https://app.webinar.net/dPjlQJjQENW.
For interested individuals unable to join the conference call, a recording of the webcast will also be available on the Marpai, Inc. investor relations website: https://ir.marpaihealth.com.
About Marpai, Inc.
Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing AI-powered health plan services to employers that directly pay for employee health benefits. Primarily competing in the
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, including statements regarding anticipated future results. 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 the expected integration of Maestro Health and that the acquisition of Maestro Health is expected to double the size of the company and double the number of customers and members that Marpai serves.. 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 (the "SEC"). Investors and security holders are urged to read these documents free of charge on the SEC's website at http://www.sec.gov.
Use of Non-GAAP Financial Measures and Their Limitations
In addition to our results and measures of performance determined in accordance with U.S. GAAP presented in this press release, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.
Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes.
We believe that Adjusted EBITDA, together with a reconciliation to net loss, helps identify underlying trends in our business and helps investors make comparisons between our company and other companies that may have different capital structures, tax rates, or different forms of employee compensation. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these potential limitations include:
- other companies, including companies in our industry which have similar business arrangements, may report Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures;
- although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditures for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the potentially dilutive impact of stock-based compensation; and
- Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur.
Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial measures.
MARPAI, INC. AND SUBSIDIARIES | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(in thousands, except share and per share data) | |||
(unaudited) | |||
30-Sep | 31-Dec | ||
2022 | 2021 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 4,748 | $ 19,183 | |
Restricted cash | $ 4,967 | $ 6,751 | |
Accounts receivable | 191 | 209 | |
Unbilled, receivable | 16 | 15 | |
Prepaid expenses and other current assets | 366 | 743 | |
Other current assets | 57 | 91 | |
Total current assets | 10,345 | 26,992 | |
Property and equipment, net | 737 | 890 | |
Capitalized software, net | 5,411 | 6,305 | |
Operating lease right-of-use assets | 1,526 | 2,044 | |
Goodwill | 2,383 | 2,383 | |
Intangible assets,net | 4,930 | 5,508 | |
Security deposits | 52 | 52 | |
Other long-term asset | 28 | 28 | |
Total assets | $ 25,412 | $ 44,202 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||
Current liabilities: | |||
Accounts payable | $ 693 | $ 1,126 | |
Accrued expenses | 2,339 | 2,525 | |
Accrued fiduciary obligations | 3,899 | 5,541 | |
Deferred revenues | 871 | 1,165 | |
Current portion of operating lease obligations | 846 | 784 | |
Due to related party | 3 | 4 | |
Total current liabilities | 8,651 | 11,145 | |
Other long-term liabilities | 45 | 45 | |
Operating lease liabilities, net of current portion | 728 | 1,302 | |
Deferred tax liabilities | 2,001 | 2,001 | |
Total liabilities | 11,425 | 14,493 | |
Commitments and contingencies | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Common stock, | |||
and 29,299,727 issued and outstanding at September, 2022 and | 2 | 2 | |
Additional paid-in-capital | 53,445 | 51,233 | |
Accumulated deficit | (39,460) | (21,526) | |
Total stockholders' equity (deficit) | 13,987 | 29,709 | |
Total liabilities & stockholders' equity (deficit) | $ 25,412 | $ 44,202 | |
MARPAI, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(in thousands, except share and per share data) | ||||
(unaudited) | ||||
Three Months Ended | ||||
2022 | 2021 | |||
Revenues | $ 4,938 | $ 4,799 | ||
Costs and Expenses | ||||
Cost of revenue (exclusive of depreciation and | ||||
amortization shown separately below) | $ 3,625 | $ 3,343 | ||
General and Administrative | $ 2,718 | $ 2,230 | ||
Sales and Marketing | $ 1,054 | $ 1,589 | ||
Information Technology | $ 1,538 | $ 770 | ||
Research and development | $ 782 | $ 569 | ||
Depreciation and amortization | $ 842 | $ 802 | ||
Facilities | $ 193 | $ 232 | ||
Loss on Disposal of Asset | $ - | $ - | ||
Total costs and expenses | $ 10,752 | $ 9,535 | ||
Operating Loss | $ (5,814) | $ (4,736) | ||
Other income (expenses) | ||||
Interest expense , net | $ (3) | $ (109) | ||
Other income | $ 56 | $ 55 | ||
Foreign exchange loss | $ (19) | $ (3) | ||
(Loss) income before provision for income taxes | $ (5,780) | $ (4,793) | ||
Income tax benefit | $ - | $ - | ||
Net loss | $ (5,780) | $ (4,793) | ||
Net loss per share, basic & fully diluted (1) | $ (0.28) | $ (0.47) | ||
Weighted average number of common shares, basic | 20,348,655 | 10,261,001 | ||
and fully diluted (1) | ||||
(1) Reflects 4.55821-for-1 forward split that became effective September 2, 2021. The computation of basis and diluted net loss | ||||
per share was retroatively adjusted for all periods presented . | ||||
MARPAI, INC. AND SUBSIDIARIES | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(in thousands, except share and per share data) | |||
(unaudited) | |||
Nine Months Ended | |||
2022 | 2021 | ||
Revenues | $ 16,713 | $ 8,331 | |
Costs and Expenses | |||
Cost of revenue (exclusive of depreciation and | |||
amortization shown separately below) | $ 12,324 | $ 6,064 | |
General and Administrative | $ 7,940 | $ 5,045 | |
Sales and Marketing | $ 4,830 | $ 3,033 | |
Information Technology | $ 3,862 | $ 1,501 | |
Research and development | $ 2,684 | $ 1,118 | |
Depreciation and amortization | $ 2,444 | $ 1,223 | |
Facilities | $ 586 | $ 459 | |
Loss on Disposal of Asset | $ 60 | $ - | |
Total costs and expenses | $ 34,730 | $ 18,443 | |
Operating Loss | $ (18,017) | $ (10,112) | |
Other income (expenses) | |||
Interest expense , net | $ (7) | $ (385) | |
Other income | $ 95 | $ 110 | |
Foreign exchange loss | $ (5) | $ (19) | |
(Loss) income before provision for income taxes | $ (17,934) | $ (10,406) | |
Income tax benefit | $ - | $ 150 | |
Net loss | $ (17,934) | $ (10,256) | |
Net loss per share, basic & fully diluted (1) | $ (0.90) | $ (1.31) | |
Weighted average number of common shares, basic | 20,019,116 | 7,846,348 | |
and fully diluted (1) | |||
(1) Reflects 4.55821-for-1 forward split that became effective September 2, 2021. The computation of basis and diluted net loss | |||
per share was retroatively adjusted for all periods presented . | |||
MARPAI, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Nine Months Ended | |||||||||
2022 | 2021 | ||||||||
Cash flows (used in) operating activities | |||||||||
Net loss | $ (17,934) | $ (10,256) | |||||||
Adjustments to reconcile net loss to net cash (used in) operating activities: | |||||||||
Depreciation and amortization | 2,444 | 1,224 | |||||||
Share-based compensation | 60 | - | |||||||
Loss on disposal of assets | 2,464 | 962 | |||||||
Amortization of right-to-use asset | 517 | 43 | |||||||
Amortization of debt discount | - | 27 | |||||||
Non-cash interest | - | 352 | |||||||
Marketing services performed in exchange for convertible note | - | 75 | |||||||
Deferred Taxes | (150) | ||||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable and unbilled receivables | 16 | (245) | |||||||
Prepaid expenses and other assets | 377 | (381) | |||||||
Other receivables | 35 | 50 | |||||||
Accounts payable | (433) | 1,566 | |||||||
Accrued expenses | (436) | 397 | |||||||
Accrued fiduciary obligations | (1,642) | 993 | |||||||
Operating lease liabilities | (512) | (74) | |||||||
Other liabilities | (295) | (109) | |||||||
Net cash (used in ) operating activities | (15,339) | (5,526) | |||||||
Cash flows from investing activities | |||||||||
Cash and restricted cash acquired as part of acquisition | - | 11,384 | |||||||
Capitalization of software development costs | (810) | (1,211) | |||||||
Purchase of property and equipment | (70) | (67) | |||||||
Net cash (used in) investing activities | (880) | 10,106 | |||||||
Cash flows from financing activities | |||||||||
Proceeds from stock options exercises | - | - | |||||||
Proceeds from convertible notes | - | 550 | |||||||
Proceeds from short-term loan | - | 2,000 | |||||||
Proceeds from issuance of warrants | - | 53 | |||||||
Net cash provided by financing activities | - | 2,053 | |||||||
Net increase in cash, cash equivalents and restricted cash | (16,219) | 7,183 | |||||||
Cash, cash equivalents and restricted cash at beginning of the period | 25,933 | 1,818 | |||||||
Cash, cash equivalents and restricted cash at end of period | $ | 9,714 | 9,001 | ||||||
Reconciliation of cash, cash equivalents and restricted cash reported in the | |||||||||
condensed consolidated balance sheet | |||||||||
Cash and cash equivalents | $ 4,748 | $ 1,191 | |||||||
Restricted cash | 4,966 | 7,810 | |||||||
Total cash, cash equivalents and restricted cash as shown in the | |||||||||
condensed consolidated balance sheet | $ 9,714 | $ 9,001 | |||||||
MARPAI, INC. AND SUBSIDIARIES | ||||||
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED EBITDA | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2022 | 2021 | 2022 | 2021 | |||
Net Income (loss) | $ (5,780) | $ (4,793) | $ (17,934) | $ (10,257) | ||
Interest expense and foreign exchange loss, net | $ (34) | $ 57 | $ (82) | $ 295 | ||
Income tax benefit | $ - | $ - | $ - | $ (150) | ||
Disposal of asset | $ - | $ - | $ 60 | $ - | ||
Depreciation and amortization expense | $ 842 | $ 802 | $ 2,444 | $ 1,223 | ||
Stock based compensation expense | $ 697 | $ 256 | $ 2,464 | $ 962 | ||
Adjusted EBITDA | $ (4,275) | $ (3,678) | $ (13,048) | $ (7,927) | ||
View original content:https://www.prnewswire.com/news-releases/marpai-inc-reports-third-quarter-2022-results-301673634.html
SOURCE Marpai
FAQ
What are the key financial results for Marpai (MRAI) in Q3 2022?
How did the acquisition of Maestro Health impact Marpai (MRAI)?
Why did Marpai (MRAI) see a decline in revenue in Q3 2022?
What is Marpai's (MRAI) financial guidance for Q4 2022?
When will Marpai (MRAI) hold its next conference call?
