Executive Summary

Q2 FY2025 delivered solid top- and bottom-line growth: revenue rose 15% YoY to $224.4M and diluted EPS increased 17% YoY to $1.35; gross profit grew 15% to $50.7M with 22.6% gross margin .
Growth was led by previously launched large Network Solutions programs and continued strength in Patient Management; Net Revenue Retention reached 110%, indicating healthy customer expansion and retention .
Balance sheet remains strong with $138M cash and no borrowings; the company repurchased $9.6M of stock during the quarter, signaling confidence and ongoing capital return .
No formal guidance provided; S&P Global consensus estimates for revenue/EPS were not available, limiting beat/miss assessment. This shifts focus to operating execution signals (NRR, margin trajectory, program ramps) as near-term stock catalysts .

What Went Well and What Went Wrong

What Went Well

Broad-based growth with profitable execution: revenue +15% YoY to $224.4M; EPS +17% YoY to $1.35; gross profit +15% to $50.7M at 22.6% gross margin .
Commercial momentum and retention: “Net Revenue Retention for the quarter was 110%,” supported by “several large Network Solutions programs launched in previous quarters” and strong Patient Management sales/operations .
Financial flexibility: “Exited the quarter with $138 million in cash, cash equivalents, and no borrowings,” and repurchased $9.6M of stock . Management emphasized “conservative fiscal principles” enabling investment and shareholder returns .

What Went Wrong

No formal quantitative guidance, limiting visibility into trajectory for revenue, margins, and OpEx; investors must infer outlook from qualitative commentary .
Operating expenses increased YoY: G&A rose to $22.1M from $19.5M, reflecting ongoing investment and cost growth .
Concentration optics: management noted quarterly results “benefited from revenue generated by several large Network Solutions programs launched in previous quarters,” which some investors may view as increasing program concentration sensitivity .

Financial Results

Consolidated P&L vs. Prior Periods

Metric	Q4 FY2024 (Mar 31, 2024)	Q1 FY2025 (Jun 30, 2024)	Q2 FY2025 (Sep 30, 2024)	Q2 FY2024 (Sep 30, 2023)
Revenue ($)	$207,233,000	$211,722,000	$224,380,000	$195,522,000
Gross Profit ($)	$43,403,000	$48,155,000	$50,748,000	$44,252,000
Gross Margin (%)	20.9% (calc from 30:4)	22.7%	22.6%	22.6% (calc from 49:2)
Income from Operations ($)	$22,597,000	$28,035,000	$28,670,000	$24,714,000
Net Income ($)	$19,454,000	$21,577,000	$23,398,000	$19,898,000
Diluted EPS ($)	$1.12	$1.25	$1.35	$1.15

Notes: Gross margin for Q4 FY24 and Q2 FY24 shown for context via calculation from reported revenue and gross profit; Q1 and Q2 FY25 margins were disclosed by the company .

Balance Sheet and Capital Returns (Point-in-time)

Metric	Q2 FY2025 (Sep 30, 2024)	Prior FY Year-End (Mar 31, 2024)
Cash & Equivalents ($)	$138,349,000	$105,563,000
Accrued Liabilities ($)	$198,685,000	$167,868,000
Retained Earnings ($)	$852,895,000	$807,920,000
Long-term Lease Liabilities ($)	$22,922,000	$22,533,000
Share Repurchases (Quarter)	$9.6M	—

Segment and Mix Commentary (qualitative; no segment dollars disclosed)

Segment/Driver	Q2 FY2025 Commentary
Network Solutions	Results benefited from revenue of “several large Network Solutions programs launched in previous quarters” .
Patient Management	“Continued strong new sales and operational performance” .
Net Revenue Retention	110% in the quarter, indicating expansion and strong retention dynamics .

Guidance Changes

CorVel did not provide formal quantitative guidance in the Q2 FY2025 materials.

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025/Q3-Q4	N/A	No formal guidance provided	—
Gross Margin	FY2025	N/A	No formal guidance provided	—
OpEx	FY2025	N/A	No formal guidance provided	—
Tax rate, OI&E, Segment	FY2025	N/A	No formal guidance provided	—
Capital Returns	FY2025	N/A	Ongoing repurchases ($9.6M in Q2)	—

Earnings Call Themes & Trends

No Q2 FY2025 earnings call transcript was found in the document set.

Topic	Previous Mentions (Q-2: Q4 FY2024)	Previous Mentions (Q-1: Q1 FY2025)	Current Period (Q2 FY2025)	Trend
AI/Technology Initiatives	Introduced GAI-powered SaaS platform; deploying GAI to automate tasks and integrate with RMIS/provider platforms .	Enhanced communications platform integrated in CareMC; using AI in clinical bill review to identify anomalies and document activities .	Continued emphasis on “technological innovation” as a primary market share driver .	Expanding capabilities and commercialization.
Patient Management Execution	PM services increased 11% in FY2024; strong bookings and NRR 108% for FY2024 .	Solid YoY growth with margin improvement; platform enhancements to improve worker experience .	“Continued strong new sales and operational performance” in PM .	Sustained momentum.
Network Solutions Programs	—	—	Several large programs launched in previous quarters contributed to Q2 results .	Program ramp as growth driver.
Market Positioning/Engagement	Laudatory customer feedback; FY2024 bookings up; NRR 108% .	—	Partnership meeting and National Comp conference underscored market position; engagement and innovation cited as share gain drivers .	Reinforced positioning.
Financial Discipline/Capital Returns	Conservative fiscal practices; strong cash generation .	$132M cash; repurchased $9.5M in Q1 .	$138M cash; repurchased $9.6M in Q2; no borrowings .	Consistent cash return and balance sheet strength.

Management Commentary

“CorVel’s conservative fiscal principles have created a strong balance sheet with positive cash flow, providing financial flexibility and allowing the Company to prioritize investments in systems, technological innovation, and growth initiatives while returning value to shareholders.”
“The quarterly results benefited from revenue generated by several large Network Solutions programs launched in previous quarters and the continued strong new sales and operational performance of the Patient Management Segment.”
“In addition to successfully winning and implementing new customers, the Net Revenue Retention for the quarter was 110%.”

Contextual governance update subsequent to Q2: founder and Chairman V. Gordon Clemons retired as Board Chair (Nov 29, 2024); CEO Michael G. Combs was appointed Chairman, with Clemons remaining as an outside consultant .

Q&A Highlights

No Q2 FY2025 earnings call transcript was available in the document set; therefore, no Q&A themes or clarifications can be reported for this quarter.

Estimates Context

S&P Global consensus estimates for revenue and EPS for Q2 FY2025 and Q1 FY2025 were not available in the dataset; the tool returned actuals only and no consensus values for either metric, so beat/miss analysis cannot be determined from S&P Global for these periods [Values retrieved from S&P Global].
Given the absence of consensus, investors should focus on disclosed operating metrics: YoY growth (+15% revenue, +17% EPS), gross margin at 22.6%, 110% NRR, and contribution from Network Solutions program ramps .

Financial Detail Tables

Income Statement Detail (YoY and Sequential context)

Metric	Q2 FY2024	Q1 FY2025	Q2 FY2025
Revenues ($)	$195,522,000	$211,722,000	$224,380,000
Cost of Revenues ($)	$151,270,000	$163,567,000	$173,632,000
Gross Profit ($)	$44,252,000	$48,155,000	$50,748,000
General & Administrative ($)	$19,538,000	$20,120,000	$22,078,000
Income from Operations ($)	$24,714,000	$28,035,000	$28,670,000
Net Income ($)	$19,898,000	$21,577,000	$23,398,000
Diluted EPS ($)	$1.15	$1.25	$1.35

KPIs and Capital Returns

KPI	Q1 FY2025	Q2 FY2025
Gross Margin (%)	22.7%	22.6%
Net Revenue Retention (%)	—	110%
Cash & Equivalents ($)	$131,908,000 (June 30)	$138,349,000 (Sep 30)
Share Repurchases ($)	$9.5M	$9.6M
Borrowings	None disclosed	None disclosed

Key Drivers and “Why”

Network Solutions ramp and PM execution: Management explicitly attributes Q2 strength to large Network Solutions programs launched in prior quarters and strong PM sales/operations—this underpins revenue acceleration and sustained gross profit levels .
Customer health and expansion: 110% NRR suggests existing customers are expanding usage/spend, which can drive organic growth without proportionate new-logo acquisition .
Investment posture: G&A rose YoY as CorVel sustains investment in systems/innovation; prior quarter commentary highlighted deployment of AI and communications platforms that can improve efficiency and outcomes longer term .
Capital allocation: Cash build with no borrowings and steady buybacks provide downside support and optionality for continued R&D and selective M&A, consistent with management’s conservative fiscal approach .

Key Takeaways for Investors

Durable growth with disciplined execution: double-digit revenue and EPS growth, with gross margins holding ~22.6% even as investments continue .
Commercial momentum/visibility: 110% NRR and program ramps in Network Solutions point to recurring/expanding revenue streams; watch for sustainability of program-driven contribution .
Operating leverage watch: G&A rose YoY, but operating income advanced; future margin expansion depends on throughput from AI/automation and scaling of launched programs .
Capital returns + balance sheet: $138M cash, no borrowings, ongoing repurchases support TSR and provide optionality for organic and inorganic initiatives .
Guidance/estimates gap: Lack of formal guidance and unavailable S&P Global consensus complicate beat/miss narratives; monitor qualitative signals (NRR, bookings, program implementations) and subsequent quarter prints for trend confirmation .
Governance continuity: Chairman transition after quarter-end with CEO assuming Chair role; founder remains an advisor—continuity plus potential for continued strategic focus and innovation cadence .

Citations

Q2 FY2025 8-K/press release data and tables:
Q1 FY2025 press release and tables:
Q4 FY2024 8-K press release and tables:
Governance press release (Chairman transition):
S&P Global estimates availability note: S&P Global consensus not available for CRVL revenue/EPS in Q1/Q2 FY2025 [Values retrieved from S&P Global].

CORVEL CORP (CRVL)·Q2 2025 Earnings Summary