Delivers 32% year-over-year quarterly revenue growth and exceeds guidance. Increases guidance for fiscal year ending 2021. Significant new client wins across the platform set strong foundation for financial performance in fiscal year ending 2022
Sharecare, a digital health company, announced financial results for the quarter ended September 30, 2021.
“Our team delivered strong revenue and adjusted EBITDA ahead of guidance while increasing our investment in technology and sales to drive consistent double-digit growth going forward,” said Jeff Arnold, co-founder, chairman, and CEO of Sharecare. “All channels demonstrated strong underlying trends with Enterprise moving closer to our goal of nearly 10 million lives on the platform by year-end, Provider delivering strong record retrieval volumes, and Consumer adding a significant number of new brands to its roster at higher average revenue per program. The strength of our performance across all channels in the quarter and year-to-date supports the increase in the midpoint of our adjusted EBITDA guidance for the year as well as sets a strong foundation to deliver on our fiscal 2022 outlook.”
Third Quarter 2021 Financial Results
All comparisons, unless otherwise noted, are to the three months ended September 30, 2020.
- Revenue of $105.6 million compared to $80.2 million, an increase of $25.4 million, or 32%
- Net loss of $43.1 million compared to net loss of $6.4 million, an increase to net loss of $36.7 million. Net loss in the third quarter of 2021 included $11.1 million in non-cash stock compensation; $16.8 million in transaction related acquisition costs and other costs associated with our business combination with Falcon Capital Acquisition Corp; $12.1 million in amortization of deferred financing fees associated with the settlement of debt; and $2.3 million of other non-cash or non-operational costs. Excluding these costs, the Adjusted Net Loss was $0.8 million in the current quarter.
- Adjusted EBITDA of $7.9 million compared to $13.3 million, a decrease of $5.4 million which reflects increased investments in the current period for both technology and sales force expansion to support growth and a reversal of temporary cost reduction actions in the prior year, including furloughing employees as a direct and prudent reaction to COVID-19.
- Net loss per share of $0.13 compared to $0.03, a decrease of $0.10 which reflects the aforementioned items impacting net loss.
- Adjusted earnings per share of $0.00 compared to $0.01, a decrease of $0.01 which excludes the impact of non-cash and non-operational expenses.
Third Quarter 2021 Operational Highlights
- Added new employer, government, provider, and life sciences clients to support fiscal 2022 growth objectives. Includes a diverse group of Fortune 500 companies as well as mid-size and regional organizations.
- Launched Unwinding by Sharecare, a broad-based mental well-being app designed to help people better understand how their minds work, reduce their stress, and build healthier habits.
- Expanded leadership team with executive hires from UST and Salesforce.
- Closed the acquisition of CareLinx, a home health company with a network of 450,000 tech-enabled caregivers who deliver personal care services in the home.
- Announced enhancements to a suite of solutions for pharmaceutical and life sciences brands to enable patient engagement and optimize outcomes.
- Released new well-being research revealing broad improvements in U.S. metro areas in 2020 while gaps increased for rural America.
Q4 2021 Financial Guidance
For the three months ending December 31, 2021, the Company expects:
- Revenue in the range of $120.3 to $121.3 million, an increase of $14.7 to $15.7 million over the third quarter of 2021 and an increase of $31.9 to $32.9 million over the same period in the prior year
- Adjusted EBITDA in the range of $8 to $9 million
FY 2021 Financial Guidance
For the twelve months ending December 31, 2021, the Company expects:
- Revenue in the range of $414 to $415 million, which reflects no change from prior guidance
- Adjusted EBITDA in the range of $29 to $30 million; which reflects an increase in the midpoint of guidance range
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with U.S. GAAP, we believe the non-GAAP measures Adjusted EBITDA, Adjusted Net Income (Loss), and Adjusted Earnings (Loss) Per Share (“Adjusted EPS”) are useful in evaluating our operating performance. We use Adjusted EBITDA, Adjusted Net Income (Loss), and Adjusted EPS to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. In particular, we believe that the use of these non-GAAP measures is helpful to our investors as these metrics are used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures.
The calculations and reconciliations of historic Adjusted EBITDA, Adjusted Net Income (Loss), and Adjusted EPS to net income (loss), the most directly comparable financial measure stated in accordance with GAAP, are provided below and in the accompanying financial tables. Investors are encouraged to review the reconciliations and not to rely on any single financial measure to evaluate our business.
We have not reconciled Adjusted EBITDA guidance to net income (loss) because we do not provide guidance for net income (loss) or for items that we do not consider indicative of our on-going performance, including, but not limited to, the impact of significant non-recurring items, as certain of these items are out of our control and/or cannot be reasonably predicted. Accordingly, reconciliations of Adjusted EBITDA guidance to the corresponding U.S. GAAP measures are not available without unreasonable effort.
We calculate adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization, (ii) interest income, (iii) interest expense, (iv) loss on extinguishment of debt, (v) other expense/(income) (non-operating), (vi) loss from equity method investment, (vii) income tax (benefit) expense, (viii) share-based compensation, (ix) severance, (x) warrants issued with revenue contracts, and (xi) transaction and closing costs. We do not view the items excluded as representative of our ongoing operations.
Adjusted Net Income (Loss)
We calculate Adjusted net income (loss) as net income (loss) attributable to Sharecare, Inc. adjusted to exclude (i) amortization of acquired intangibles, (ii) amortization of deferred financing fees, (iii) change in fair value of warrant liability and contingent consideration, (iv) loss from equity method investments, (v) share-based compensation, (vi) severance, (vii) warrants issued with revenue contracts, (viii) transaction and closing costs, and (ix) the related income tax adjustments. We do not view the items excluded as representative of our ongoing operations.
Adjusted Earnings (Loss) Per Share
We calculate Adjusted EPS as adjusted net income (loss), as defined above, divided by the number of weighted average common shares outstanding – basic and diluted.