UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On March 18, 2025, Veradigm Inc., a Delaware corporation (the “Company”), announced that it has provided updated estimated, unaudited ranges of GAAP Revenue, GAAP Net Income (Loss) and Adjusted EBITDA and updated estimated unaudited cash positions, in each case, for fiscal 2023 and fiscal 2024 (collectively, the “Financial Information”). The Financial Information is contained in the press release attached hereto as Exhibit 99.1, which also contains the Company’s outlook for 2025, and such press release is incorporated herein by reference.
The Financial Information is preliminary, and final results for fiscal years 2023 and 2024 may differ from those contemplated by the Financial Information. The Financial Information is based on the Company’s estimates and is subject to completion of the Company’s financial closing procedures. In addition, the Financial Information has not been audited by the Company’s independent registered public accounting firm.
The information furnished pursuant to this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
On March 18, 2025, the Company announced that it filed its comprehensive Annual Report on Form 10-K for the year ended December 31, 2022, which also contains certain restated financial information, with the U.S. Securities and Exchange Commission. A copy of the Company’s press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits:
Exhibit No. |
Description | |
| 99.1 | Press Release issued by Veradigm Inc. on March 18, 2025 regarding financial update | |
| 99.2 | Press Release issued by Veradigm Inc. on March 18, 2025 regarding the filing of the Company’s comprehensive Annual Report on Form 10-K for the fiscal year ended December 31, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VERADIGM INC. | ||||||
| Date: March 18, 2025 | ||||||
| By: | /s/ Leland Westerfield | |||||
| Name: | Leland Westerfield | |||||
| Title: | Interim Chief Financial Officer | |||||
Exhibit 99.1
Veradigm Provides Updates on Fiscal 2023 and 2024 and an Outlook for Fiscal 2025
CHICAGO – March 18, 2025 – Veradigm® (OTCMKTS: MDRX), a leading provider of healthcare data and technology solutions, provided updates on financial information for fiscal 2023 and 2024 and an outlook for fiscal 2025.
“We remain confident in Veradigm’s business model and our value proposition,” said Tom Langan, Interim Chief Executive Officer. “We believe our core business is sound. We remain focused on remediating our material weaknesses and other internal control deficiencies, becoming current in our financial reporting, executing against our growth strategy to deliver end-to-end solutions for our clients, and relisting our common stock.”
Management currently estimates the following preliminary unaudited financial ranges for fiscal 2023:
| • | Revenue on a GAAP basis is estimated between $620 million and $625 million. Estimated revenue includes approximately $19 million of favorable customer settlements. |
| • | GAAP Net Income is estimated between $62 million and $65 million. |
| • | Adjusted EBITDA(1) is estimated between $139 million and $144 million. |
| • | Net Cash is $239 million as of December 31, 2023, comprised of Cash and cash equivalents of $447 million and Debt of $208 million that consists solely of the principal amount of the Company’s 2019 convertible notes. Cash is approximately flat with 2022 levels, reflecting net outflows for net equity investments of $59 million, outflows for capital expenditures of $30 million, outflows for Transaction and Other expenses(2) of $46 million, and outflows of approximately $5 million for net interest income, working capital, and taxes. |
Management currently estimates the following preliminary unaudited financial ranges for fiscal 2024:
| • | Revenue on a GAAP basis is estimated between $583 million and $588 million. Estimated revenue includes approximately $1 million of favorable customer settlements. |
| • | GAAP Net Loss is estimated between $49 million and $46 million. |
| • | Adjusted EBITDA(1) is estimated between $85 million and $90 million. |
| • | Net Cash is $87 million as of December 31, 2024, comprised of Cash and cash equivalents of $295 million, and Debt of $208 million that consists solely of the principal amount of the Company’s 2019 convertible notes. Cash decreased approximately $152 million from 2023 levels reflecting net inflows from equity investments of $13 million, outflows for acquisitions of $110 million, outflows for capital expenditures of $35 million, outflows for Transaction and Other expenses(2) of $103 million, and outflows of approximately $5 million for net interest income, working capital, and taxes. |
2025 Financial Outlook
| • | Revenue on a GAAP basis is expected to be approximately flat compared to 2024. |
| • | Net Cash is expected to remain positive. |
| (1) | Please refer to the “Explanation of Non-GAAP Financial Measures” section. |
| (2) | Please see the definition of Transaction and Other revenue and expenses in the “Explanation of Non-GAAP Financial Measures” section. |
Investor Conference Call and Webcast
Veradigm management plans to host an investor conference call and webcast to discuss the Company’s update at 8:00 a.m. Eastern Time on March 19, 2025.
To listen to the conference call, participants may log onto the Veradigm investor relations website. Participants also may access the conference call by dialing 877-405-1224 or 201-389-0848 and requesting Access ID # 13752381.
A replay of the call will be available for a period of one year on the Veradigm investor relations website.
About Veradigm®
Veradigm is a healthcare technology company that drives value through its unique combination of platforms, data, expertise, connectivity, and scale. The Veradigm Network features a dynamic community of solutions and partners providing advanced insights, technology, and data-driven solutions for the healthcare provider, payer, and biopharma markets. For more information about how Veradigm is fulfilling its mission of Transforming Health, Insightfully, visit www.veradigm.com, or find Veradigm on LinkedIn, Facebook, Twitter, Instagram, and YouTube.
© 2025 Veradigm LLC and/or its affiliates. All rights reserved. Cited marks are the property of Veradigm LLC and/or its affiliates. All other product or company names are the property of their respective holders, all rights reserved.
Disclaimer and Forward-Looking Statement Information
The estimated financial results contained in this press release are preliminary, and final results for fiscal 2023 and fiscal 2024 may change. These preliminary results are based on our estimates and are subject to completion of our financial closing procedures. In addition, these preliminary results have not been audited by our independent registered public accounting firm.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, the Company’s preliminary estimated unaudited 2023 and 2024 financial information and the Company’s financial guidance for 2025. These forward-looking statements are based on the current beliefs and expectations of the Company’s management with respect to future events, only speak as of the date that they are made and are subject to significant risks and uncertainties. Such statements can be identified by the use of words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “continue,” “can,” “may,” “look forward,” “aims,” “hopes,” and “seeks” and similar terms, although not all forward-looking statements contain such words or expressions. Actual results could differ significantly from those set forth in the forward-looking statements.
Important factors that may cause actual results to differ materially from those in the forward-looking statements include, among others: risks relating to the Company’s common stock not trading on a national securities exchange and deregistration from Section 12(b) of the Securities Exchange Act of 1934, as amended; a further material delay in the Company’s financial reporting or ability to hold an annual meeting of stockholders; an inability of the Company to timely prepare its delinquent financial statements; unanticipated factors or factors that the Company currently believes will not cause delay; the impacts of the Company’s reviews and investigation work, including on the Company’s remediation efforts and preparation of financial statements or other factors that could cause additional delay or adjustments; the possibility that any future reviews may identify additional errors and material weaknesses or other deficiencies in the Company’s accounting practices; the likelihood that the control deficiencies identified or that may be identified in the future will result in additional material weaknesses in the Company’s internal control over financial reporting; risks relating to the Company’s voluntary disclosure to the SEC of certain information; risks relating to the putative securities class action lawsuit filed against the Company, the putative stockholder derivative action filed against the Company, commercial litigation relating to the Company’s representations regarding its financial statements and any other future litigation or investigation relating to the Company’s internal control failures, reviews or investigation work; changes in the financial condition of the markets that the Company serves; the Company’s ability to enter into a new financing arrangement on acceptable terms, if at all; risks associated with the product and service offerings of Cascade Bio, Inc., which does business as ScienceIO (“ScienceIO”); the challenges, risks and costs involved with integrating the operations of ScienceIO with the Company’s operations, including the diversion of management’s attention from the Company’s ongoing business operations; the Company’s ability to realize the anticipated benefits of the ScienceIO acquisition; and other factors contained in the “Risk Factors” section and elsewhere in the Company’s filings with the SEC from time to time, including, but not limited to, the Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The Company does not undertake to update any forward-looking statements to reflect changed assumptions, the impact of circumstances or events that may arise after the date of the forward-looking statements, or other changes over time, except as required by law.
For more information contact:
Investors:
Jenny Gelinas
312-506-1237
jenny.gelinas@veradigm.com
Media:
Amanda Cohen
412-919-2417
amanda.cohen@veradigm.com
Table 1
Veradigm Inc.
Full Year 2023 & 2024 Revenue, Net Income, and Adjusted EBITDA
Estimated Range
(Issued March 18, 2025)
(In millions)
(Unaudited)
| Full Year 2023 | Full Year 2024 | |||||||
| Provider1 |
||||||||
| Revenue, GAAP2 |
$ | 490 - $493 | $ | 466 - $469 | ||||
| Payer & Life Science1 |
||||||||
| Revenue, GAAP |
$ | 130 - $132 | $ | 117 - $119 | ||||
| Total Veradigm |
||||||||
| Revenue, GAAP2 |
$ | 620 - $625 | $ | 583 - $588 | ||||
| Net Income (Loss), GAAP |
$ | 60 - $64 | ( | $-49) - ($-46 | ) | |||
| Adjusted EBITDA |
$ | 139 - $144 | $ | 85 - $90 | ||||
| 1 | Supplemental financial information |
| 2 | Estimated revenue includes favorable customer settlements of approximately $19 million in 2023 and $1 million in 2024, that reflect services provided over prior years. |
Table 2
Veradigm Inc.
Year End 2023 and 2024 Cash and Debt
(Issued March 18, 2025)
(In millions)
(Unaudited)
| Net Cash | December 31, 2023 |
December 31, 2024 |
||||||
| Cash, cash equivalents and restricted cash |
$ | 447 | $ | 295 | ||||
| Funded debt (consisting of the principal amount of the 2019 convertible notes) |
$ | 208 | $ | 208 | ||||
Table 3
Veradigm Inc.
2023 Bridge of Estimated Range issued on January 10, 2024 to Estimated Range issued on March 18, 2025
(In millions)
(Unaudited)
| Full Year 2023 | ||||||||||||
| Estimated Range (Reaffirmed March 13, 2024) |
Variance | Estimated Range (Issued March 18, 2025) |
||||||||||
| Revenue, GAAP1 |
$ | 608 - $622 | $ | 12 - $3 | $ | 620 - $625 | ||||||
| Net Income, GAAP |
N/A | N/A | $ | 62 - $65 | ||||||||
| Adjusted EBITDA |
$ | 122 - $135 | $ | 17 - $9 | $ | 139 - $144 | ||||||
| 1 | Estimated revenue includes approximately $19 million of favorable customer settlements that reflect services provided over prior years. |
Table 4
Veradigm Inc.
2024 Bridge of Prior Guidance issued March 13, 2024 to Estimated Range issued on March 18, 2025
(In millions)
(Unaudited)
| Full Year 2024 | ||||||||||||
| Guidance (Reaffirmed May 28, 2024) |
Variance | Estimated Range (Issued March 18, 2025) |
||||||||||
| Revenue, GAAP1 |
$ | 620 - $635 | ($-37) - ($-47) | $583 - $588 | ||||||||
| Net Loss, GAAP |
N/A | N/A | ($-49) - ($-46) | |||||||||
| Adjusted EBITDA |
$ | 104 - $113 | ($-19) - ($-23) | $85 - $90 | ||||||||
| 1 | Estimated revenue includes approximately $1 million of favorable customer settlements that reflect services provided over prior years. |
Table 5
Veradigm Inc.
Full Year 2023
Non-GAAP Financial Information Reconciliation - Estimated Adjusted EBITDA Range
(Issued March 18, 2025)
(In millions)
(Unaudited)
| Full Year 2023 | ||||||||
| Estimated | Estimated | |||||||
| Low End | High End | |||||||
| Net Income (loss) |
$ | 62 | $ | 65 | ||||
| Net Income margin |
10 | % | 10 | % | ||||
| Less: |
||||||||
| Loss (income) from discontinued operations |
($ | 2 | ) | ($ | 2 | ) | ||
| Net Income from continuing operations |
$ | 60 | $ | 64 | ||||
| Plus: |
||||||||
| Interest (income) expense, net |
(16 | ) | (16 | ) | ||||
| Other (income) expense |
(21 | ) | (21 | ) | ||||
| Depreciation and amortization |
53 | 53 | ||||||
| Stock-based compensation expense |
18 | 18 | ||||||
| Transaction and other, Revenue Items |
(19 | ) | (19 | ) | ||||
| Transaction and other, Expense Items |
46 | 46 | ||||||
| Income tax (benefit) provision |
17 | 18 | ||||||
| Adjusted EBITDA |
$ | 139 | $ | 144 | ||||
| Adjusted EBITDA margin 1 |
23 | % | 24 | % | ||||
| 1 | Estimated revenue excludes approximately $19 million of favorable customer settlements that reflect services provided over prior years. |
Table 6
Veradigm Inc.
Full Year 2024
Non-GAAP Financial Information Reconciliation - Estimated Adjusted EBITDA
(Issued March 18, 2025)
(In millions)
(Unaudited)
| Full Year EBITDA | ||||||||
| Estimated | Estimated | |||||||
| Low End | High End | |||||||
| Net Income (loss) |
($ | 49 | ) | ($ | 46 | ) | ||
| Net Income margin |
-8 | % | -8 | % | ||||
| Plus: |
||||||||
| Interest (income) expense, net |
(8 | ) | (8 | ) | ||||
| Other (income) expense |
(4 | ) | (4 | ) | ||||
| Depreciation and amortization |
47 | 47 | ||||||
| Stock-based compensation expense |
20 | 20 | ||||||
| Transaction and other, revenue Items |
(1 | ) | (1 | ) | ||||
| Transaction and other, expense Items |
103 | 103 | ||||||
| Income tax (benefit) provision |
(24 | ) | (22 | ) | ||||
| Adjusted EBITDA |
$ | 85 | $ | 90 | ||||
| Adjusted EBITDA margin 1 |
15 | % | 15 | % | ||||
| 1 | Estimated revenue excludes approximately $1 million of favorable customer settlements that reflect services provided over prior years. |
Explanation of Non-GAAP Financial Measures
Veradigm reports its financial results in accordance with U.S. generally accepted accounting principles, or GAAP. To supplement this information, Veradigm presents Adjusted EBITDA and Adjusted EBITDA margin, which are considered non-GAAP financial measures under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. The definition of this non-GAAP financial measure is presented below:
| • | Adjusted EBITDA is a non-GAAP financial measure and consists of GAAP net income/(loss and adjusts for: interest (income)/expense, net; other (income)/expense; depreciation and amortization; income tax (benefit)/provision; stock-based compensation expense; asset impairment charges; and transaction and other revenue and expenses. Reconciliations to GAAP net income/(loss) are found in Tables 5 and 6 within this press release. |
| • | Adjusted EBITDA margin is a non-GAAP measure that is calculated by dividing Adjusted EBITDA by revenue excluding favorable customer settlements. See the reconciliations in Tables 5 and 6 within this press release with respect to Adjusted EBITDA. |
Management believes that Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental information to management and investors regarding the underlying performance of Veradigm business operations. In particular, transaction and other revenue and expenses, recorded in accordance with GAAP, can make it difficult to make meaningful comparisons of the underlying operations of the business without considering the non-GAAP adjustments provided and discussed herein.
Management also uses this information internally for forecasting and budgeting, as it believes that this measure is indicative of core operating results. In addition, management may use Adjusted EBITDA to measure achievement under Veradigm’s stock and cash incentive compensation plans. Note, however, Adjusted EBITDA and Adjusted EBITDA margin are performance measures only, and they do not provide any measure of cash flow or liquidity. Non-GAAP financial measures are not in accordance with, or an alternative for, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Veradigm’s results of operations as determined in accordance with GAAP. Investors and potential investors are encouraged to review the definitions and reconciliations of the non-GAAP financial measures within this press release with the GAAP financial measures contained within this press release.
Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. Veradigm excludes stock-based compensation expense from Adjusted EBITDA and Adjusted EBITDA margin because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Veradigm business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods, and such expense will recur in future periods.
Depreciation and Amortization. Depreciation and amortization, which are excluded from Adjusted EBITDA and Adjusted EBITDA margin, are non-cash expenses arising from allocating the cost of fixed assets, intangibles and capitalized software over time.
Transaction and Other. Transaction and other revenue and expenses relate to certain favorable and unfavorable legal settlements, severance, investigations, internal reviews, restatement-related accounting advisory services and legal services and other charges incurred in connection with activities that are considered not reflective of our core business. Veradigm excludes transaction and other revenue and expenses from Adjusted EBITDA and Adjusted EBITDA margin because it believes (i) the amount of such revenue or expenses in any specific period may not directly correlate to the underlying performance of Veradigm business operations and (ii) such revenue or expenses can vary significantly between periods.
Exhibit 99.2
Veradigm Files Fiscal 2022 Form 10-K and Restated Financial Statements
CHICAGO – March 18, 2025 – Veradigm® (OTCMKTS: MDRX), a leading provider of healthcare data and technology solutions, announced today that it filed its comprehensive Annual Report on Form 10-K for the year ended December 31, 2022, which also contains certain restated financial statements for periods in fiscal year 2022, 2021 and 2020 (the “2022 Form 10-K”), with the Securities and Exchange Commission (“SEC”).
“This filing represents an important step toward regaining compliance with our financial reporting obligations,” said Tom Langan, Interim Chief Executive Officer of Veradigm. “We remain focused on remediating our material weaknesses and other internal control deficiencies, becoming current in our financial reporting, executing against our growth strategy to deliver end-to-end solutions for our clients, and relisting our common stock. I would like to recognize our Veradigm employees for the dedication and work to earn our customers’ business every day.”
“We are pleased to have filed the 2022 Form 10-K as part of a comprehensive undertaking that involved a detailed and thorough examination of our financial statements, as well as our accounting policies and processes,” said Lee Westerfield, Interim Chief Financial Officer of Veradigm.
The adjustments to the Company’s revenue from continuing operations in the 2022 Form 10-K are consistent with the amounts that were estimated in the Form 12b-25 filed by the Company on March 4, 2025.
For further information regarding the circumstances that led to the financial statement restatements and the Company’s remediation efforts, please see the sections entitled “Explanatory Note” and Item 9A, “Controls and Procedures”, in the 2022 Form 10-K.
About Veradigm®
Veradigm is a healthcare technology company that drives value through its unique combination of platforms, data, expertise, connectivity, and scale. The Veradigm Network features a dynamic community of solutions and partners providing advanced insights, technology, and data-driven solutions for the healthcare provider, payer, and biopharma markets. For more information about how Veradigm is fulfilling its mission of Transforming Health, Insightfully, visit www.veradigm.com, or find Veradigm on LinkedIn, Facebook, Twitter, Instagram, and YouTube.
© 2025 Veradigm LLC and/or its affiliates. All rights reserved. Cited marks are the property of Veradigm LLC and/or its affiliates. All other product or company names are the property of their respective holders, all rights reserved.
For more information contact:
Investors:
Jenny Gelinas
312-506-1237
jenny.gelinas@veradigm.com
Media:
Amanda Cohen
412-919-2417
amanda.cohen@veradigm.com
Table 1
Veradigm Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
| December 31, 2022 |
(As Restated) December 31, 2021 |
(As Restated) December 31, 2020 |
||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 446.6 | $ | 133.7 | $ | 472.8 | ||||||
| Restricted cash |
1.3 | 1.3 | 5.5 | |||||||||
| Accounts receivable, net |
119.1 | 119.7 | 122.5 | |||||||||
| Contract assets |
56.6 | 65.2 | 63.2 | |||||||||
| Income tax receivable |
0.0 | 0.0 | 25.4 | |||||||||
| Prepaid expenses and other current assets |
56.0 | 51.8 | 47.7 | |||||||||
| Current assets attributable to discontinued operations |
0.0 | 277.6 | 349.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current assets |
$ | 679.6 | $ | 649.3 | $ | 1,086.3 | ||||||
| Fixed assets, net |
9.5 | 17.7 | 29.2 | |||||||||
| Software development costs, net |
75.1 | 81.2 | 81.6 | |||||||||
| Intangible assets, net |
89.3 | 149.7 | 166.0 | |||||||||
| Goodwill |
532.6 | 498.4 | 498.6 | |||||||||
| Deferred taxes, net |
37.2 | 0.0 | 0.0 | |||||||||
| Contract assets - long-term |
0.0 | 0.0 | 0.0 | |||||||||
| Right-of-use assets - operating leases |
12.0 | 18.3 | 27.1 | |||||||||
| Other assets |
69.4 | 79.7 | 65.2 | |||||||||
| Long-term assets attributable to discontinued operations |
0.0 | 816.8 | 909.5 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
$ | 1,504.7 | $ | 2,311.1 | $ | 2,863.5 | ||||||
|
|
|
|
|
|
|
|||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable |
$ | 30.9 | $ | 2.2 | $ | 12.8 | ||||||
| Accrued expenses |
66.8 | 62.9 | 68.3 | |||||||||
| Accrued compensation and benefits |
35.9 | 30.3 | 41.8 | |||||||||
| Deferred revenue |
90.1 | 87.9 | 115.3 | |||||||||
| Current operating lease liabilities |
6.6 | 6.1 | 6.6 | |||||||||
| Current liabilities attributable to discontinued operations |
0.0 | 299.0 | 697.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current liabilities |
230.3 | 488.4 | 942.1 | |||||||||
| Long-term debt |
200.4 | 350.1 | 167.6 | |||||||||
| Deferred revenue |
0.0 | 0.2 | 0.1 | |||||||||
| Deferred taxes, net |
0.0 | 18.7 | 18.2 | |||||||||
| Long-term operating lease liabilities |
12.4 | 16.8 | 22.9 | |||||||||
| Other liabilities |
44.1 | 33.8 | 32.5 | |||||||||
| Long-term liabilities attributable to discontinued operations |
0.0 | 42.7 | 66.7 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
$ | 487.2 | $ | 950.7 | $ | 1,250.1 | ||||||
|
|
|
|
|
|
|
|||||||
| Total stockholders’ equity |
$ | 1,017.5 | $ | 1,360.4 | $ | 1,613.4 | ||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and stockholders’ equity |
$ | 1,504.7 | $ | 2,311.1 | $ | 2,863.5 | ||||||
|
|
|
|
|
|
|
|||||||
Table 2
Veradigm Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
(Unaudited)
| Twelve Months Ended December 31, | ||||||||||||
| 2022 | (As Restated) 2021 |
(As Restated) 2020 |
||||||||||
| Revenue: |
||||||||||||
| Provider |
$ | 465.9 | $ | 478.4 | $ | 463.0 | ||||||
| Payer & Life Science |
122.1 | 99.0 | 93.1 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Revenue |
588.0 | 577.4 | 556.1 | |||||||||
| Cost of revenue: |
||||||||||||
| Provider |
232.8 | 244.2 | 247.8 | |||||||||
| Payer & Life Science |
46.8 | 50.8 | 44.1 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total cost of revenue |
279.6 | 295.0 | 291.9 | |||||||||
|
|
|
|
|
|
|
|||||||
| Gross profit |
308.4 | 282.4 | 264.2 | |||||||||
| Selling, general and administrative expenses |
169.2 | 111.8 | 155.7 | |||||||||
| Research and development |
97.9 | 84.1 | 78.6 | |||||||||
| Asset impairment charges |
7.5 | 0.5 | 10.2 | |||||||||
| Amortization of intangible and acquisition-related assets |
60.9 | 9.3 | 11.9 | |||||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from operations |
(27.1 | ) | 76.7 | 7.8 | ||||||||
| Interest income (expense), net (a) |
(1.7 | ) | (12.7 | ) | (33.8 | ) | ||||||
| Other income (expense) |
(35.0 | ) | 93.7 | 13.3 | ||||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) before income taxes |
(63.8 | ) | 157.7 | (12.7 | ) | |||||||
| Income tax (provision) benefit |
43.8 | (29.9 | ) | (15.0 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations, net of tax |
(20.0 | ) | 127.8 | (27.7 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from discontinued operations |
(7.1 | ) | 15.8 | (70.9 | ) | |||||||
| Gain (loss) on sale of discontinued operations |
(10.3 | ) | 0.6 | 1,156.8 | ||||||||
| Income tax (provision) benefit from discontinued operations |
(49.0 | ) | (4.5 | ) | (362.2 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from discontinued operations, net of tax |
(66.4 | ) | 11.9 | 723.7 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net Income (loss) |
($ | 86.4 | ) | $ | 139.7 | $ | 696.0 | |||||
|
|
|
|
|
|
|
|||||||
| Diluted earnings per Common Share: |
||||||||||||
| Income (loss) from continuing operations, net of tax |
($ | 20.0 | ) | $ | 127.8 | ($ | 27.7 | ) | ||||
| Plus: Interest expense, net of tax1 |
$ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations2 |
(20.0 | ) | 127.8 | (27.7 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from discontinued operations, net of tax |
(66.4 | ) | 11.9 | 723.7 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net Income (loss)2 |
($ | 86.4 | ) | $ | 139.7 | $ | 696.0 | |||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations per share - basic |
($ | 0.18 | ) | $ | 0.98 | ($ | 0.17 | ) | ||||
| Income (loss) from discontinued operations per share - basic |
($ | 0.59 | ) | $ | 0.09 | $ | 4.54 | |||||
|
|
|
|
|
|
|
|||||||
| Income (loss) per share - basic |
($ | 0.77 | ) | $ | 1.07 | $ | 4.37 | |||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations per share - diluted2 |
($ | 0.18 | ) | $ | 0.92 | ($ | 0.17 | ) | ||||
| Income (loss) from discontinued operations per share - diluted |
($ | 0.59 | ) | $ | 0.09 | $ | 4.54 | |||||
| Income (loss) per share - diluted2 |
($ | 0.77 | ) | $ | 1.01 | $ | 4.37 | |||||
| Weighted average common shares outstanding: |
||||||||||||
| Basic |
112.1 | 130.1 | 159.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Diluted |
112.1 | 138.7 | 159.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Twelve Months Ended December 31, | ||||||||||||
| 2022 | Restated 2021 |
Restated 2020 |
||||||||||
| (a) Interest income (expense), net |
||||||||||||
| Interest expense |
(4.1 | ) | (5.4 | ) | (18.3 | ) | ||||||
| Interest income |
4.7 | 0.2 | 0.5 | |||||||||
| Non-cash charges to interest expense |
(2.3 | ) | (7.5 | ) | (16.0 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Interest income (expense), net |
($ | 1.7 | ) | ($ | 12.7 | ) | ($ | 33.8 | ) | |||
|
|
|
|
|
|
|
|||||||
| 1 | Associated with 0.875% Convertible Senior Notes |
| 2 | Net of tax after the effect of assumed conversions of convertible notes |
Table 3
Veradigm Inc.
Condensed Non-GAAP Financial Information
(In millions, except per share amounts and percentages)
(Unaudited)
| Twelve Months Ended December 31, | ||||||||||||
| 2022 | (As Restated) 2021 |
(As Restated) 2020 |
||||||||||
| Revenue, GAAP |
$ | 588.0 | $ | 577.4 | $ | 556.1 | ||||||
| Gross profit, GAAP |
$ | 308.4 | $ | 282.4 | $ | 264.2 | ||||||
| Depreciation and amortization |
37.0 | 37.5 | 33.6 | |||||||||
| Acquisition-related amortization |
6.8 | 7.1 | 9.9 | |||||||||
| Stock-based compensation expense |
1.3 | 1.1 | 1.7 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total non-GAAP gross profit |
$ | 353.5 | $ | 328.1 | $ | 309.4 | ||||||
|
|
|
|
|
|
|
|||||||
| Non-GAAP Gross margin 1 |
60.1 | % | 56.8 | % | 55.6 | % | ||||||
| Net Income |
($ | 86.4 | ) | $ | 139.7 | $ | 696.0 | |||||
| Less: |
||||||||||||
| Loss (income) from discontinued operations |
$ | 7.1 | ($ | 15.8 | ) | $ | 70.9 | |||||
| Loss (gain) on sale of business, net from discontinued operations |
$ | 10.3 | ($ | 0.6 | ) | ($ | 1,156.8 | ) | ||||
| Income tax provision (benefit) from discontinued operations |
$ | 49.0 | $ | 4.5 | $ | 362.2 | ||||||
| Income (loss) from continuing operations, net of tax, GAAP |
($ | 20.0 | ) | $ | 127.8 | ($ | 27.7 | ) | ||||
| Plus: |
||||||||||||
| Interest (income) expense, net |
1.7 | 12.7 | 33.8 | |||||||||
| Other (income) expense |
35.0 | (93.7 | ) | (13.3 | ) | |||||||
| Depreciation and amortization |
113.5 | 65.3 | 71.2 | |||||||||
| Income tax (benefit) provision |
(43.8 | ) | 29.9 | 15.0 | ||||||||
| Stock-based compensation expense |
29.6 | 13.6 | 13.5 | |||||||||
| Asset impairment charges |
7.5 | 0.5 | 10.2 | |||||||||
| Transaction and other |
17.9 | 12.6 | 19.6 | |||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA |
$ | 141.4 | $ | 168.7 | $ | 122.3 | ||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA margin 2 |
24.0 | % | 29.2 | % | 22.0 | % | ||||||
| Net Income |
($ | 86.4 | ) | $ | 139.7 | $ | 696.0 | |||||
| Plus: Interest expense, net of tax4 |
0.0 | 0.0 | 0.0 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net Income (loss)3 |
($ | 86.4 | ) | $ | 139.7 | $ | 696.0 | |||||
| Loss (income) from discontinued operations |
7.1 | (15.8 | ) | 70.9 | ||||||||
| (Gain) on sale of business, net from discontinued operations |
10.3 | (0.6 | ) | (1,156.8 | ) | |||||||
| Income tax provision (benefit) from discontinued operations |
49.0 | 4.5 | 362.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations3 |
($ | 20.0 | ) | $ | 127.8 | ($ | 27.7 | ) | ||||
| Less: Interest expense, net of tax4 |
0.0 | 0.0 | 0.0 | |||||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations, net of tax |
($ | 20.0 | ) | $ | 127.8 | ($ | 27.7 | ) | ||||
| Acquisition-related amortization |
67.7 | 16.3 | 21.7 | |||||||||
| Stock-based compensation expense |
29.6 | 13.6 | 13.5 | |||||||||
| Transaction and other |
17.9 | 12.6 | 19.6 | |||||||||
| Other non-operating (income) expense |
16.0 | 0.3 | 16.5 | |||||||||
| Asset impairment charges |
7.5 | 0.0 | 10.2 | |||||||||
| Tax rate alignment |
(61.8 | ) | (18.2 | ) | (1.6 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Non-GAAP net income |
$ | 56.9 | $ | 152.4 | $ | 52.2 | ||||||
|
|
|
|
|
|
|
|||||||
| GAAP effective tax rate |
69 | % | 19 | % | -120 | % | ||||||
| Non-GAAP effective tax rate |
24 | % | 24 | % | 24 | % | ||||||
| Weighted shares outstanding - basic |
112.1 | 130.1 | 159.3 | |||||||||
| Weighted shares outstanding - diluted |
112.1 | 138.7 | 159.3 | |||||||||
| The net effect of convertible notes and note hedges |
5.0 | (2.8 | ) | 2.7 | ||||||||
| Non-GAAP Weighted shares outstanding - diluted |
117.1 | 135.9 | 162.0 | |||||||||
| Income (loss) from continuing operations per share - diluted3 |
($ | 0.18 | ) | $ | 0.92 | ($ | 0.17 | ) | ||||
| Income (loss) from discontinued operations per share - diluted |
($ | 0.59 | ) | $ | 0.09 | $ | 4.54 | |||||
|
|
|
|
|
|
|
|||||||
| Income (loss) per share - diluted3 |
($ | 0.77 | ) | $ | 1.01 | $ | 4.37 | |||||
|
|
|
|
|
|
|
|||||||
| Non-GAAP Income (loss) per share - diluted |
$ | 0.49 | $ | 1.12 | $ | 0.32 | ||||||
|
|
|
|
|
|
|
|||||||
| 1 | Non-GAAP Gross margin is calculated by dividing Non-GAAP Gross profit by revenue. |
| 2 | Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. |
| 3 | Net of tax after the effect of assumed conversions of convertible notes |
| 4 | Associated with 0.875% Convertible Senior Notes |
Table 4
Veradigm Inc.
Supplemental Condensed Non-GAAP Financial Information
(In millions, except per share amounts)
(unaudited)
| 2020 | 2021 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
| (As Restated) |
(As Restated) | (As Restated) |
(As Restated) |
(As Restated) |
||||||||||||||||||||||||||||||||||||||||
| Total | Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||||||||||||||||||
| Provider |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 463.0 | $ | 113.2 | $ | 117.3 | $ | 118.7 | $ | 129.2 | $ | 478.4 | $ | 113.4 | $ | 114.1 | $ | 116.0 | $ | 122.4 | $ | 465.9 | ||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 254.6 | $ | 63.3 | $ | 65.7 | $ | 64.4 | $ | 77.5 | $ | 270.9 | $ | 64.6 | $ | 63.0 | $ | 66.6 | $ | 73.2 | $ | 267.4 | ||||||||||||||||||||||
| Gross margin, Non-GAAP 1 |
55.0 | % | 55.9 | % | 56.0 | % | 54.3 | % | 60.0 | % | 56.6 | % | 57.0 | % | 55.2 | % | 57.4 | % | 59.8 | % | 57.4 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Payer & Life Science |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 93.1 | $ | 21.6 | $ | 23.7 | $ | 25.7 | $ | 28.0 | $ | 99.0 | $ | 23.5 | $ | 34.4 | $ | 30.4 | $ | 33.8 | $ | 122.1 | ||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 54.8 | $ | 11.9 | $ | 13.6 | $ | 14.8 | $ | 16.9 | $ | 57.2 | $ | 14.8 | $ | 24.7 | $ | 21.5 | $ | 25.1 | $ | 86.1 | ||||||||||||||||||||||
| Gross margin, Non-GAAP 1 |
58.9 | % | 55.1 | % | 57.4 | % | 57.6 | % | 60.4 | % | 57.8 | % | 63.0 | % | 71.8 | % | 70.7 | % | 74.3 | % | 70.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Total Veradigm |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 556.1 | $ | 134.8 | $ | 141.0 | $ | 144.4 | $ | 157.2 | $ | 577.4 | $ | 136.9 | $ | 148.5 | $ | 146.4 | $ | 156.2 | $ | 588.0 | ||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 309.4 | $ | 75.2 | $ | 79.3 | $ | 79.2 | $ | 94.4 | $ | 328.1 | $ | 79.4 | $ | 87.7 | $ | 88.1 | $ | 98.3 | $ | 353.5 | ||||||||||||||||||||||
| Gross margin, Non-GAAP 1 |
55.6 | % | 55.8 | % | 56.2 | % | 54.8 | % | 60.1 | % | 56.8 | % | 58.0 | % | 59.1 | % | 60.2 | % | 62.9 | % | 60.1 | % | ||||||||||||||||||||||
| Adjusted EBITDA |
$ | 122.3 | $ | 32.4 | $ | 38.9 | $ | 36.8 | $ | 60.6 | $ | 168.7 | $ | 27.7 | $ | 37.5 | $ | 33.9 | $ | 42.3 | $ | 141.4 | ||||||||||||||||||||||
| Adjusted EBITDA margin2 |
22.0 | % | 24.0 | % | 27.6 | % | 25.5 | % | 38.5 | % | 29.2 | % | 20.2 | % | 25.3 | % | 23.2 | % | 27.1 | % | 24.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Net Income, Non-GAAP |
$ | 52.2 | $ | 14.8 | $ | 28.8 | $ | 27.2 | $ | 81.6 | $ | 152.4 | $ | 10.5 | $ | 6.6 | $ | 15.7 | $ | 24.0 | $ | 56.9 | ||||||||||||||||||||||
| Non-GAAP Weighted shares outstanding - diluted |
162.0 | 146.5 | 142.0 | 128.6 | 125.3 | 135.9 | 125.1 | 119.6 | 113.3 | 111.1 | 117.1 | |||||||||||||||||||||||||||||||||
| Non-GAAP Income (loss) per share - diluted |
$ | 0.32 | $ | 0.10 | $ | 0.20 | $ | 0.21 | $ | 0.65 | $ | 1.12 | $ | 0.08 | $ | 0.06 | $ | 0.14 | $ | 0.22 | $ | 0.49 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| 1 | Non-GAAP Gross margin is calculated by dividing Non-GAAP Gross profit by revenue. |
| 2 | Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. |
Table 5
Veradigm Inc.
Supplemental Non-GAAP Financial Information Reconciliation - Financial Trend Details
(In millions)
(unaudited)
| 2020 | 2021 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
| (As Restated) |
(As Restated) | (As Restated) |
(As Restated) |
(As Restated) |
||||||||||||||||||||||||||||||||||||||||
| Total | Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||||||||||||||||||
| Provider |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 463.0 | $ | 113.2 | $ | 117.3 | $ | 118.7 | $ | 129.2 | $ | 478.4 | $ | 113.4 | $ | 114.1 | $ | 116.0 | $ | 122.4 | $ | 465.9 | ||||||||||||||||||||||
| Gross profit, GAAP |
$ | 215.2 | $ | 54.2 | $ | 56.4 | $ | 55.2 | $ | 68.4 | $ | 234.2 | $ | 55.9 | $ | 54.7 | $ | 58.3 | $ | 64.2 | $ | 233.1 | ||||||||||||||||||||||
| Depreciation and Amortization |
29.8 | 7.7 | 7.9 | 7.8 | 7.1 | 30.5 | 7.2 | 6.9 | 6.8 | 7.5 | 28.4 | |||||||||||||||||||||||||||||||||
| Acquisition-related amortization |
8.1 | 1.3 | 1.3 | 1.3 | 1.4 | 5.3 | 1.1 | 1.1 | 1.1 | 1.4 | 4.7 | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense |
1.5 | 0.1 | 0.1 | 0.1 | 0.6 | 0.9 | 0.4 | 0.3 | 0.4 | 0.1 | 1.2 | |||||||||||||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 254.6 | $ | 63.3 | $ | 65.7 | $ | 64.4 | $ | 77.5 | $ | 270.9 | $ | 64.6 | $ | 63.0 | $ | 66.6 | $ | 73.2 | $ | 267.4 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Payer & Life Science |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 93.1 | $ | 21.6 | $ | 23.7 | $ | 25.7 | $ | 28.0 | $ | 99.0 | $ | 23.5 | $ | 34.4 | $ | 30.4 | $ | 33.8 | $ | 122.1 | ||||||||||||||||||||||
| Gross profit, GAAP |
$ | 49.0 | $ | 9.6 | $ | 11.3 | $ | 12.4 | $ | 14.9 | $ | 48.2 | $ | 12.1 | $ | 21.9 | $ | 18.7 | $ | 22.6 | $ | 75.3 | ||||||||||||||||||||||
| Depreciation and Amortization |
3.8 | 1.7 | 1.7 | 1.8 | 1.8 | 7.0 | 2.2 | 2.2 | 2.2 | 2.0 | 8.6 | |||||||||||||||||||||||||||||||||
| Acquisition-related amortization |
1.8 | 0.5 | 0.5 | 0.5 | 0.3 | 1.8 | 0.5 | 0.6 | 0.6 | 0.4 | 2.1 | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense |
0.2 | 0.1 | 0.1 | 0.1 | (0.1 | ) | 0.2 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 54.8 | $ | 11.9 | $ | 13.6 | $ | 14.8 | $ | 16.9 | $ | 57.2 | $ | 14.8 | $ | 24.7 | $ | 21.5 | $ | 25.1 | $ | 86.1 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Table 6
Veradigm Inc.
Supplemental Non-GAAP Financial Information Reconciliation - Financial Trend Details
(In millions, except per share amounts)
(unaudited)
| 2020 | 2021 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
| (As Restated) | (As Restated) | (As Restated) | (As Restated) | (As Restated) | ||||||||||||||||||||||||||||||||||||||||
| Total | Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||||||||||||||||||
| Total Veradigm |
||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 556.1 | $ | 134.8 | $ | 141.0 | $ | 144.4 | $ | 157.2 | $ | 577.4 | $ | 136.9 | $ | 148.5 | $ | 146.4 | $ | 156.2 | $ | 588.0 | ||||||||||||||||||||||
| Gross profit, GAAP |
$ | 264.2 | $ | 63.8 | $ | 67.7 | $ | 67.6 | $ | 83.3 | $ | 282.4 | $ | 68.0 | $ | 76.6 | $ | 77.0 | $ | 86.8 | $ | 308.4 | ||||||||||||||||||||||
| Depreciation and amortization |
33.6 | 9.4 | 9.6 | 9.6 | 8.9 | 37.5 | 9.4 | 9.1 | 9.0 | 9.5 | 37.0 | |||||||||||||||||||||||||||||||||
| Acquisition-related amortization |
9.9 | 1.8 | 1.8 | 1.8 | 1.7 | 7.1 | 1.6 | 1.7 | 1.7 | 1.8 | 6.8 | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense |
1.7 | 0.2 | 0.2 | 0.2 | 0.5 | 1.1 | 0.4 | 0.3 | 0.4 | 0.2 | 1.3 | |||||||||||||||||||||||||||||||||
| Gross profit, Non-GAAP |
$ | 309.4 | $ | 75.2 | $ | 79.3 | $ | 79.2 | $ | 94.4 | $ | 328.1 | $ | 79.4 | $ | 87.7 | $ | 88.1 | $ | 98.3 | $ | 353.5 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Net Income (loss) |
$ | 696.0 | $ | 20.3 | $ | 31.4 | $ | 14.3 | $ | 73.7 | $ | 139.7 | $ | 23.6 | ($ | 83.0 | ) | ($ | 0.4 | ) | ($ | 26.6 | ) | ($ | 86.4 | ) | ||||||||||||||||||
| Interest expense, net of tax2 |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.5 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||
| Net Income (loss)1 |
$ | 696.0 | $ | 20.3 | $ | 31.4 | $ | 14.3 | $ | 73.7 | $ | 139.7 | $ | 24.1 | ($ | 83.0 | ) | ($ | 0.4 | ) | ($ | 26.6 | ) | ($ | 86.4 | ) | ||||||||||||||||||
| Loss (income) from discontinued operations |
70.9 | (19.0 | ) | (3.2 | ) | 6.8 | (0.4 | ) | (15.8 | ) | 4.3 | 3.0 | 0.5 | (0.7 | ) | 7.1 | ||||||||||||||||||||||||||||
| Loss (gain) on sale of business, net from discontinued operations |
(1,156.8 | ) | (0.6 | ) | 0.0 | 0.0 | 0.0 | (0.6 | ) | 0.0 | 10.3 | 0.0 | 0.0 | 10.3 | ||||||||||||||||||||||||||||||
| Income tax provision (benefit) from discontinued operations |
362.2 | 5.1 | 0.2 | (2.0 | ) | 1.2 | 4.5 | (9.8 | ) | 61.4 | (3.0 | ) | 0.4 | 49.0 | ||||||||||||||||||||||||||||||
| Income (loss) from continuing operations1 |
($ | 27.7 | ) | $ | 5.8 | $ | 28.4 | $ | 19.1 | $ | 74.5 | $ | 127.8 | $ | 18.6 | ($ | 8.3 | ) | ($ | 2.9 | ) | ($ | 26.9 | ) | ($ | 20.0 | ) | |||||||||||||||||
| Interest expense, net of tax2 |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | (0.5 | ) | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||
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| Net Income (loss) from continuing operations, GAAP |
($ | 27.7 | ) | $ | 5.8 | $ | 28.4 | $ | 19.1 | $ | 74.5 | $ | 127.8 | $ | 18.1 | ($ | 8.3 | ) | ($ | 2.9 | ) | ($ | 26.9 | ) | ($ | 20.0 | ) | |||||||||||||||||
| Interest (income) expense, net |
33.8 | 2.8 | 2.9 | 3.6 | 3.4 | 12.7 | 2.1 | 1.8 | (0.4 | ) | (1.8 | ) | 1.7 | |||||||||||||||||||||||||||||||
| Other (income) expense |
(13.3 | ) | (1.2 | ) | (18.3 | ) | (14.0 | ) | (60.2 | ) | (93.7 | ) | (0.1 | ) | 30.0 | 3.9 | 1.2 | 35.0 | ||||||||||||||||||||||||||
| Depreciation and amortization |
71.2 | 16.7 | 16.7 | 16.5 | 15.4 | 65.3 | 15.7 | 28.4 | 34.6 | 34.8 | 113.5 | |||||||||||||||||||||||||||||||||
| Income tax (benefit) provision |
15.0 | 2.9 | 3.6 | 5.9 | 17.5 | 29.9 | (23.7 | ) | (28.0 | ) | (10.0 | ) | 17.9 | (43.8 | ) | |||||||||||||||||||||||||||||
| Stock-based compensation expense |
13.5 | 3.6 | 3.5 | 3.2 | 3.3 | 13.6 | 6.9 | 10.5 | 5.7 | 6.5 | 29.6 | |||||||||||||||||||||||||||||||||
| Asset impairment charges |
10.2 | 0.0 | 0.2 | 0.4 | (0.1 | ) | 0.5 | 2.0 | 0.4 | 1.2 | 3.9 | 7.5 | ||||||||||||||||||||||||||||||||
| Transaction and other |
19.6 | 1.8 | 1.9 | 2.1 | 6.8 | 12.6 | 6.7 | 2.7 | 1.8 | 6.7 | 17.9 | |||||||||||||||||||||||||||||||||
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| Adjusted EBITDA |
$ | 122.3 | $ | 32.4 | $ | 38.9 | $ | 36.8 | $ | 60.6 | $ | 168.7 | $ | 27.7 | $ | 37.5 | $ | 33.9 | $ | 42.3 | $ | 141.4 | ||||||||||||||||||||||
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| Income (loss) from continuing operations, net of tax, as reported |
($ | 27.7 | ) | $ | 5.8 | $ | 28.4 | $ | 19.1 | $ | 74.5 | $ | 127.8 | $ | 18.1 | ($ | 8.3 | ) | ($ | 2.9 | ) | ($ | 26.9 | ) | ($ | 20.0 | ) | |||||||||||||||||
| Acquisition-related amortization |
21.7 | 4.1 | 4.1 | 4.1 | 4.0 | 16.3 | 3.8 | 17.0 | 23.5 | 23.4 | 67.7 | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense |
13.5 | 3.6 | 3.5 | 3.2 | 3.3 | 13.6 | 6.9 | 10.5 | 5.7 | 6.5 | 29.6 | |||||||||||||||||||||||||||||||||
| Transaction and other |
19.6 | 1.8 | 1.9 | 2.1 | 6.8 | 12.6 | 6.7 | 2.7 | 1.8 | 6.7 | 17.9 | |||||||||||||||||||||||||||||||||
| Other non-operating (income) expense |
16.5 | 1.3 | (3.6 | ) | 1.3 | 1.3 | 0.3 | 0.0 | 14.4 | 1.4 | 0.2 | 16.0 | ||||||||||||||||||||||||||||||||
| (Gain) loss on business transactions |
0.0 | 0.0 | 0.0 | (0.0 | ) | 0.0 | (0.0 | ) | 0.0 | 0.0 | 0.0 | (0.0 | ) | (0.0 | ) | |||||||||||||||||||||||||||||
| Asset impairment charges |
10.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 2.0 | 0.4 | 1.2 | 3.9 | 7.5 | |||||||||||||||||||||||||||||||||
| Tax rate alignment |
(1.6 | ) | (1.8 | ) | (5.5 | ) | (2.6 | ) | (8.3 | ) | (18.2 | ) | (27.0 | ) | (30.1 | ) | (15.0 | ) | 10.2 | (61.8 | ) | |||||||||||||||||||||||
| Non-GAAP net income |
$ | 52.2 | $ | 14.8 | $ | 28.8 | $ | 27.2 | $ | 81.6 | $ | 152.4 | $ | 10.5 | $ | 6.6 | $ | 15.7 | $ | 24.0 | $ | 56.9 | ||||||||||||||||||||||
| GAAP effective tax rate |
-120 | % | 34 | % | 11 | % | 24 | % | 19 | % | 19 | % | 425 | % | 77 | % | 77 | % | -201 | % | 69 | % | ||||||||||||||||||||||
| Non-GAAP effective tax rate |
24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | ||||||||||||||||||||||
| Weighted shares outstanding - basic |
159.3 | 140.2 | 136.6 | 123.9 | 120.1 | 130.1 | 115.9 | 114.3 | 110.2 | 108.1 | 112.1 | |||||||||||||||||||||||||||||||||
| Weighted shares outstanding - diluted |
162.0 | 149.1 | 145.3 | 131.4 | 127.8 | 138.7 | 138.7 | 118.7 | 113.3 | 111.1 | 116.8 | |||||||||||||||||||||||||||||||||
| Less the net effect of convertible notes and note hedges |
0.0 | (2.6 | ) | (3.3 | ) | (2.8 | ) | (2.5 | ) | (2.8 | ) | (13.6 | ) | 0.9 | 0.0 | 0.0 | 0.3 | |||||||||||||||||||||||||||
| Non-GAAP Weighted shares outstanding - diluted |
162.0 | 146.5 | 142.0 | 128.6 | 125.3 | 135.9 | 125.1 | 119.6 | 113.3 | 111.1 | 117.1 | |||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations per share - diluted2 |
($ | 0.17 | ) | $ | 0.04 | $ | 0.20 | $ | 0.15 | $ | 0.58 | $ | 0.92 | $ | 0.13 | ($ | 0.07 | ) | ($ | 0.03 | ) | ($ | 0.25 | ) | ($ | 0.18 | ) | |||||||||||||||||
| Income (loss) from discontinued operations per share - diluted |
$ | 4.54 | $ | 0.10 | $ | 0.02 | ($ | 0.04 | ) | ($ | 0.01 | ) | $ | 0.09 | $ | 0.04 | ($ | 0.65 | ) | $ | 0.02 | $ | 0.00 | ($ | 0.59 | ) | ||||||||||||||||||
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| Income (loss) per share - diluted2 |
$ | 4.37 | $ | 0.14 | $ | 0.22 | $ | 0.11 | $ | 0.57 | $ | 1.01 | $ | 0.17 | ($ | 0.72 | ) | ($ | 0.01 | ) | ($ | 0.25 | ) | ($ | 0.77 | ) | ||||||||||||||||||
| Non-GAAP Net Income (loss) per share - diluted |
$ | 0.32 | $ | 0.10 | $ | 0.20 | $ | 0.21 | $ | 0.65 | $ | 1.12 | $ | 0.08 | $ | 0.06 | $ | 0.14 | $ | 0.22 | $ | 0.49 | ||||||||||||||||||||||
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| 1 | Net of tax after the effect of assumed conversions of convertible notes |
| 2 | Associated with 0.875% Convertible Senior Notes |
Explanation of Non-GAAP Financial Measures
Veradigm reports its financial results in accordance with U.S. generally accepted accounting principles, or GAAP. To supplement this information, Veradigm presents non-GAAP gross profit, gross margin, Adjusted EBITDA, Adjusted EBITDA margin, effective income tax rate, net income (loss), diluted weighted shares outstanding and diluted income (loss) per share, which are considered non-GAAP financial measures under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. The definitions of non-GAAP financial measures are presented below:
| • | Non-GAAP gross profit consists of GAAP gross profit, as reported, and excludes acquisition-related amortization; stock-based compensation expense; and depreciation and amortization. Reconciliations to GAAP gross profit are found in Tables 3, 5, and 6 within this press release. |
| • | Non-GAAP gross margin is a non-GAAP measure that is calculated by dividing non-GAAP gross profit by revenue. |
| • | Adjusted EBITDA is a non-GAAP financial measure and consists of GAAP net income/(loss) from continuing operations and adjusts for: interest (income)/expense, net; other (income)/expense; depreciation and amortization; income tax (benefit)/provision; stock-based compensation expense; asset impairment charges; and transaction and other revenue and expenses. Reconciliations to GAAP net income/(loss) are found in Tables 3 and 6 within this press release. |
| • | Adjusted EBITDA margin is a non-GAAP measure that is calculated by dividing Adjusted EBITDA by revenue. See the reconciliations in Tables 3 and 6 within this press release with respect to Adjusted EBITDA. |
| • | Non-GAAP effective income tax rate is based on non-GAAP pre-tax earnings and consists of the statutory federal income tax rate, Veradigm effective state income tax rate and adjustments for permanent differences. |
| • | Non-GAAP net income (loss) consists of GAAP net income/(loss), as reported, less discontinued operations and adds back acquisition-related amortization; stock-based compensation expense; asset impairment charges; transaction and other revenue and expenses; and non-cash charges to interest expense and other. Non-GAAP net income also includes a GAAP to non-GAAP tax rate alignment adjustment. Reconciliations to GAAP net income (loss) are found in Tables 3 and 6 within this press release. |
| • | Non-GAAP diluted weighted shares outstanding consists of diluted weighted shares outstanding, as reported, less the dilutive impact of the Company’s 0.875% convertible notes (the “convertible notes”) due to the intent to settle the principal in cash and shares to be delivered at settlement by the convertible note hedge. |
| • | Non-GAAP diluted income (loss) per share consists of non-GAAP net income, as defined above, divided by non-GAAP diluted weighted shares outstanding, as defined above, during the applicable period. |
Management believes that non-GAAP gross profit, gross margin, Adjusted EBITDA, Adjusted EBITDA margin, effective income tax rate, net income (loss), diluted weighted shares outstanding and diluted income (loss) per share provide useful supplemental information to management and investors regarding the underlying performance of Veradigm business operations. Acquisition accounting adjustments and transaction and other
revenue and expenses recorded in accordance with GAAP can make it difficult to make meaningful comparisons of the underlying operations of the business without considering the non-GAAP adjustments provided and discussed herein.
Management also uses this information internally for forecasting and budgeting, as it believes that these measures are indicative of core operating results. In addition, management may use non-GAAP diluted income (loss) per share and Adjusted EBITDA to measure achievement under Veradigm’s stock and cash incentive compensation plans. Note, however, that non-GAAP diluted income (loss) per share and Adjusted EBITDA are performance measures only, and they do not provide any measure of cash flow or liquidity.
Non-GAAP financial measures are not in accordance with, or an alternative for, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Veradigm’s results of operations as determined in accordance with GAAP. Investors and potential investors are encouraged to review the definitions and reconciliations of non-GAAP financial measures with GAAP financial measures contained within this press release.
Acquisition-Related Amortization. Acquisition-related amortization expense is a non-cash expense arising primarily from the acquisition of intangible assets in connection with acquisitions or investments. Veradigm excludes acquisition-related amortization expense from non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income, Adjusted EBITDA and Adjusted EBITDA margin because it believes (i) the amount of such expenses in any specific period may not directly correlate with the underlying performance of Veradigm’s business operations and (ii) such expenses can vary significantly between periods because of new acquisitions and full amortization of previously acquired intangible assets. Investors should note that the use of these intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation, and the related amortization expense will recur in future periods.
Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. Veradigm excludes stock-based compensation expense from non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income (loss) and Adjusted EBITDA because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Veradigm business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods, and such expense will recur in future periods.
Asset impairment charges. Asset impairment charges, which are excluded from Adjusted EBITDA, Adjusted EBITDA margin and Non-GAAP net income (loss), reflect non-cash charges related to the abandonment of certain leased spaces and write-offs based on management’s assessment of the likelihood of near-term recovery of certain investments’ value.
Depreciation and Amortization. Depreciation and amortization, which are excluded from non-GAAP gross profit, non-GAAP gross margin, Adjusted EBITDA and Adjusted EBITDA margin, are non-cash expenses arising from allocating the cost of fixed assets, intangibles and capitalized software over time.
Transaction and Other. Transaction and other revenue and expenses relate to certain favorable and unfavorable legal settlements, severance, investigations, internal reviews, restatement-related accounting and legal advisory services and other charges incurred in connection with activities that are considered not reflective of our core business. Veradigm excludes transaction and other revenue and expensesfrom non-GAAP net income (loss), Adjusted EBITDA and Adjusted EBITDA margin because it believes (i) the amount of
such revenue or expenses in any specific period may not directly correlate to the underlying performance of Veradigm business operations and (ii) such revenue or expenses can vary significantly between periods.
Non-Cash Charges to Interest Expense and Other. Non-cash charges to interest expense include the amortization of the discount and debt issuance costs associated with the convertible notes. Other includes certain other income and expense and impairments on long-term investments and gains and losses on business transactions and certain asset disposals.
Tax Rate Alignment. Tax rate alignment aligns the applicable period’s effective tax rate to the expected annual non-GAAP effective tax rate.