Executive Summary

Q4 FY2024 revenue was $124.8M (+26% YoY) and Adjusted EBITDA reached a record $18.5M, with GAAP gross margin of 46.5% and Adjusted Gross Margin of 54.2% .
Management guided FY2025 revenue to $480–$500M and raised Adjusted EBITDA margin to 3–4% (from prior 2–4% preliminary), and issued Q1 FY2025 guidance of revenue $103–$106M and Adjusted EBITDA of $(9)M–$(12)M .
Growth was driven by performance guarantees, new customer launches, usage-based revenues (EMO case rates, primary care visit fees, partner ecosystem) and D2C virtual primary care; CFO highlighted nearly $100M FY2024 revenue from PlushCare (D2C) .
Wall Street consensus estimates from S&P Global were unavailable in our environment; comparisons vs consensus could not be performed (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

Record quarterly profitability: Adjusted EBITDA of $18.5M, the largest in company history, alongside a 54.2% Adjusted Gross Margin in Q4 .
Platform-connected and usage-based revenues accelerating, with usage-based revenue rising from 15% of revenue in FY2022 to 27% in FY2024, and expected 30–35% in FY2025; management emphasized the revenue flywheel from customer adoption and cohort usage growth .
Health plan partnerships as a growth engine (e.g., Blue Shield of California’s Virtual Blue plan powered by Accolade delivered 8–10% cost reduction and 11% fewer ER claims; rapid access metrics highlighted), supporting stronger ARR and diversified revenue streams .

Management quote: “We provide a unique blend of healthcare services and next generation technology that will further differentiate us in FY 2025 as we approach $500 million in revenues and forecast full year positive Adjusted EBITDA” – Rajeev Singh, CEO .

What Went Wrong

Seasonality and variability: heavy concentration of savings-based PG revenue in Q4 introduces intra-year variability; management reiterated the Q4 ramp from PGs and January launches .
Government exposure: gross dollar retention was 89%, with commentary noting the end of an autism demonstration and delayed T‑5 launch timing impacting retention; T‑5 revenue contribution not assumed in FY2025 guidance .
GLP‑1 dynamics saw sequential volatility (supply constraints and policy changes); while overall demand remains strong, Q2 FY2024 experienced a slight sequential decline in utilization-based revenues vs Q1 .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$96.9	$99.4	$124.8
YoY Revenue Growth %	11%	9%	26%
Net Loss ($USD Millions)	$(32.8)	$(21.1)	$(7.5)
Diluted EPS ($USD)	$(0.43)	$(0.28)	$(0.10)
Adjusted EBITDA ($USD Millions)	$(8.8)	$(4.6)	$18.5
Adjusted Gross Margin %	44.2%	46.3%	54.2%
GAAP Gross Margin %	N/A	N/A	46.5%

Non-GAAP reconciliation highlights:

Adjusted EBITDA excludes interest, taxes, D&A, stock-based comp, acquisition/integration costs, goodwill impairment, severance, and other items .

KPIs and Balance Sheet

KPI / Balance Metric	FY2024
ACV (year-end) ($USD Millions)	$351
ARR bookings ($USD Millions)	$86 (~20% YoY growth)
Gross Dollar Retention (GDR)	89%
Cash, Cash Equivalents & Marketable Securities ($USD Millions)	$237

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	Approx. +20% growth	$480–$500M	Quantified range provided (maintains ~20% growth)
Adjusted EBITDA Margin	FY2025	2%–4% of revenue	3%–4% of revenue	Raised (higher floor)
Revenue	Q1 FY2025	N/A	$103–$106M	New
Adjusted EBITDA	Q1 FY2025	N/A	$(9)M–$(12)M	New

Reference: Prior Q4 FY2024 guidance (for context) was revenue $121.5–$125.5M and Adjusted EBITDA $16–$20M; actuals came in at $124.8M and $18.5M respectively .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY2024)	Previous Mentions (Q3 FY2024)	Current Period (Q4 FY2024)	Trend
AI/technology leverage	AI to improve advocate efficiency, quality, analytics; path to higher margins	Expanded AI examples; raised long-term Adjusted EBITDA margin target to 15–20% by FY2029	AI flagged as contributor to profitability; award recognition; ongoing deployment	Increasing emphasis and impact
Health plan partnerships	Growing channel; competitive wins and new partner for Advocacy/Care	Continued strength; ARR contribution from health plans	Blue Shield of CA results; BCBS Arkansas launch; health plans as growth engine	Expanding
Platform-connected/usage-based revenue	Bundled offerings driving adoption; slight sequential GLP‑1 utilization volatility	Mix shift to usage-based revenues; strong EMO utilization	Usage-based share rising to 30–35% in FY2025; platform-connected revenues doubling in FY2023–24	Accelerating
Macro/GLP‑1 dynamics	Employer policy shifts; demand strong; volatility expected	Sequential moderation vs Q1 surge; diversified revenue mitigates impact	Continued demand, with campaigns to drive primary care utilization; health plan co-branded engagement	Volatile but manageable
Government/TRICARE T‑5	Awaiting appeal resolution; minimal assumptions in long-term guide	Not resolved; no material assumptions in out-year guide	Modest autism demo growth; no material T‑5 modeled in FY2025	Neutral until resolved
D2C virtual primary care (PlushCare)	Double-digit % of new members tied to weight loss/GLP‑1; enterprise rollout value props	Cash balance and note repurchase improved BS; D2C contributing	~$100M FY2024 D2C revenue; attractive margins; cohort growth	Strong growth

Management Commentary

Strategic positioning: “Accolade is amongst that select group that has succeeded… positioned to build a strong and enduring business… we expect top line growth in the neighborhood of 20% and profitable adjusted EBITDA on a full year basis” – CEO .
Revenue drivers: “Growth was driven by PG performance, new customer launch revenues, usage-based visit and case rate revenues and D2C virtual primary care” – CFO .
Health plan results: “Virtual Blue powered by Accolade… Reduction in overall cost 8–10% and ER claims down 11%… 2/3 of members received an appointment within a single day” – CEO .
Margin trajectory: “We plan to deliver full year profitability on an Adjusted EBITDA basis… long-term target of 15–20% Adjusted EBITDA margins” – CFO ; reiterated higher long-term margins with AI-driven efficiencies .

Q&A Highlights

Performance guarantees: PGs remained consistent vs prior years despite elevated healthcare costs; contracts designed to outperform the index; platform-connected services aid PG attainment .
Attach rates and wallet share: High attach of Accolade Care and Expert Medical Opinion; model customer PMPM increased ~50% over time via added services; large revenue expansion opportunity .
Seasonality and usage-based fees: New cohorts ramp over 2–3 years; once mature, usage fees are fairly consistent, with some flu-season impact; co-branded health plan launches ramp over time .
Health plan channel momentum: Expect growing contribution from health plans; examples include Blue Shield CA and BCBS Arkansas .
Government outlook: Autism care demo modest growth; T‑5 revenues not assumed until closer to program innovations; more color expected in 2–3 quarters .

Estimates Context

We attempted to retrieve Wall Street consensus estimates via S&P Global for Q2–Q4 FY2024 EPS and revenue; estimates were unavailable in our environment due to missing CIQ mapping for ACCD. As a result, we cannot present actuals vs consensus or bold beats/misses relative to Wall Street expectations in this recap.
Company-level guidance and actuals are provided and compared where applicable (see Financial Results and Guidance Changes) .

Key Takeaways for Investors

Profitability inflection point: Q4 delivered record Adjusted EBITDA ($18.5M) and FY2025 is guided to positive Adjusted EBITDA of 3–4% of revenue; margin trajectory supported by AI and platform efficiencies .
Diversifying revenue mix: Usage-based and platform-connected revenues are rising toward 30–35% of FY2025 revenue, creating mid-year monetization without incremental S&M and expanding wallet share .
Health plan catalysts: Strong outcomes from Blue Shield of CA’s Virtual Blue and new BCBS Arkansas offering underscore channel leverage and TAM expansion; expect continued ARR contributions from health plans .
Cohort-driven growth: High attach rates (Care, EMO, partners) and rising utilization across cohorts should drive durable revenue expansion and unit economics improvement; model case shows ~50% PMPM lift .
Balanced growth with discipline: Management targets ~20% top-line growth with a profitability focus; FY2025 revenue $480–$500M and raised EBITDA margin guide signal confidence .
D2C strength supports scale: Nearly $100M FY2024 D2C revenue (PlushCare) with attractive margins adds diversified growth and complements B2B offerings .
Government optionality: T‑5 not in FY2025 assumptions; resolution could add incremental upside later; current guidance prudently excludes it .

Accolade, Inc. (ACCD)·Q4 2024 Earnings Summary