MultiPlan Corp (MPLN)·Q2 2024 Earnings Summary

Executive Summary

• Q2 revenue was $233.5M and Adjusted EBITDA $146.7M; GAAP net loss widened to $576.7M due to a non-cash $553.7M goodwill impairment; management cut FY24 revenue and EBITDA guidance and introduced a Q3 guide below prior expectations .
• Volume KPIs improved sequentially (billed charges +9% to $45.3B; identified savings +8% to $6.2B), but revenue yield fell (core PSAV -14 bps; overall -31 bps), pressuring top line vs internal plans .
• FY24 guidance reduced: revenue to $935–$955M (from $1,000–$1,030M) and Adjusted EBITDA to $580–$595M (from $630–$650M); Q3 revenue guided to $230–$245M and Adjusted EBITDA $140–$150M .
• Stock reaction catalysts: lowered FY24 guidance, yield volatility, and a disclosed ~3% revenue headwind in 2025 from a program change at a large client, partially offset by improving volumes and cost control narrative .

What Went Well and What Went Wrong

• What Went Well
  • Sequential volume recovery despite clearinghouse disruption earlier in the year; billed charges reached $45.3B and identified savings $6.2B (+9% and +8% q/q) .
  • Operating discipline: Adjusted EBITDA held at $146.7M with expenses “tight” and margin at 62.8% despite revenue pressure .
  • Strategic execution signals: expanded sales force, growing pipeline, product roadmap progress; CEO: “We added four new logos in Q2… sales are up 8% YoY… pipeline has grown by double digits in the first half” .
• What Went Wrong
  • Revenue yield volatility pressured revenue by ~$6.3M; core PSAV yield -14 bps (mixed shift and client credits), and overall yield -31 bps sequentially .
  • New product commercialization slower than expected (HST/BST conversion to revenue taking longer), contributing to guidance cut .
  • Large non-cash goodwill impairment ($553.7M) drove GAAP net loss; management cited share price/market factors and forecast revisions; goodwill now $2.76B vs $3.83B at 12/31/23 .

Financial Results

Segment performance – Q2 2024 vs Q1 2024 and YoY

Key KPIs and cash metrics

Guidance Changes

Note: Management also disclosed an expected ~3% revenue headwind in 2025 from a strategic program change at a large client .

Earnings Call Themes & Trends

Management Commentary

• “Results matter, and these results are disappointing and unacceptable… I am even more confident in our business today… our strategic plan… has come further into focus” – CEO Travis Dalton .
• “Our revised full year 2024 revenue guidance [is] $935 million to $955 million… adjusted EBITDA $580 million to $595 million” – CFO Jim Head .
• “Sequential increase in our volumes was mostly offset by a decline in revenues as a percentage of identified savings… core PSAV revenue yield fell about 14 bps… ~$6.3M impact” – CFO Jim Head .
• “We added a SVP of Corporate Affairs… VP of Government Affairs… a Chief Data Scientist… and… incoming CFO, Doug Garis” – CEO Travis Dalton .

Q&A Highlights

• Yield pressure and drivers: Non-contract factors (program mix, accruals, client credits) drove -14 bps PSAV yield; credits ran off by end-Q2; mix shifts may persist; volumes expected to offset as they grow .
• New product traction: HST/BST sales cycles and revenue conversion taking longer than budgeted; pipeline described as robust .
• 2025 headwind: ~3% revenue headwind disclosed from a strategic program change at a large client; management emphasized confidence in core and no broad trend of internalization .
• Second-half caution: Despite volume recovery, topline tempered by yield volatility and slower new product revenue; expenses held relatively flat with targeted investments .
• Capital structure: Company reiterated time and flexibility; engaging with investors; opportunistic approach to debt management without urgency .

Estimates Context

• We attempted to retrieve consensus estimates for Q2 2024 (revenue, EPS, EBITDA) and prior two quarters via S&P Global but could not due to a missing internal mapping for MPLN in the estimates tool. As a result, Wall Street consensus comparisons are unavailable in this environment. We searched for and would normally anchor to S&P Global consensus; please note unavailability for this report.

Key Takeaways for Investors

• Guidance reset lowers FY24 revenue/EBITDA and introduces a Q3 guide that reflects caution on yield and new product ramps; this is a likely overhang near term .
• Underlying volumes are improving, which, if sustained, can offset yield headwinds; watch billed charges and identified savings trajectory each quarter .
• Yield volatility remains the core watch item; management expects stabilization post client credits; any reversion to “high 4s” yield would be a positive inflection .
• 2025 setup includes a disclosed ~3% revenue headwind from a large-client program change; monitor offset from core growth and product monetization progress .
• Balance sheet strategy emphasizes organic investment and debt reduction; deleveraging pace depends on cash generation amid elevated interest expense ($320–$330M FY24) .
• Execution risk around sales conversion (HST/BST) persists; incremental proof points: signed wins, lives onboarded, ARR ramps, and provider-side analytics traction .
• Leadership transitions (new CFO, expanded data/government affairs leadership) aim to improve forecasting precision and stakeholder engagement—track any improvement in guidance credibility and disclosure quality .

Appendix: Additional Data Points

• Q2 GAAP details: revenue $233.476M; costs of services $61.369M; amortization $85.971M; impairment $553.701M; GAAP net loss $(576.727)M; basic/diluted shares 644.68M; EPS $(0.89) .
• Balance sheet at 6/30/24: cash $48.8M; total assets $5.74B; total debt (LT) $4.51B; shareholders’ equity $603.4M .
• Cash flow 1H24: CFO $68.2M; capex $(56.0)M; interest paid $(158.4)M .