Executive Summary

Q1 2024 revenue was $2.68M, up 6% year over year but down sequentially from Q4 2023 ($3.54M); adjusted EBITDA loss improved 38% YoY to $(3.37)M and operating loss improved 41% YoY to $(4.27)M .
Management guided Q2 2024 revenue to $2.4–$2.8M and noted enrolled members declined net 237 in Q1 due to a customer non-renewal, with gross margin stable at 63.6% (vs. 64.6% in Q4) .
Strategic wins: AHCA approval to serve Community Care Plan’s adult Medicaid population and expansions with Sentara Health (commercial and ASO); pipeline ~26 prospects representing ~15M members; NPS 77 and demonstrated clinical/utilization outcomes (ER visits −32%, inpatient −62%, medical costs −43%) .
Financing/liquidity: $6.4M cash at quarter-end; subsequent $3.0M demand note draws and ~$2.0M warrant exercises post-quarter bolstered capital; Nasdaq minimum bid price exception granted contingent on a reverse split by Sept. 23, 2024 and sustained compliance by Oct. 7, 2024 .

What Went Well and What Went Wrong

What Went Well

AHCA approval and Community Care Plan launch expected to expand outreach pool by ~10%, with statewide Medicaid re-procurement positioning for multi-year membership growth opportunities .
Operating metrics and unit economics: Adjusted EBITDA loss improved 38% YoY to $(3.37)M; operating loss improved 41% YoY to $(4.27)M, reflecting cost discipline and process efficiencies .
Clinical and utilization outcomes underpin ROI: NPS 77; GAD-7/PHQ-9 improvements through 9 months; ER visits −32%, inpatient admissions −62%, medical costs −43%—a compelling value proposition for payers .

Management quotes:

“We are thrilled to announce our approval by the Florida Agency for Health Care Administration…to serve its adult Medicaid population.” — Brandon LaVerne, CEO/COO .
“We reduced emergency room visits by 32%, inpatient admissions by 62% and overall medical costs by 43%.” — Brandon LaVerne .

What Went Wrong

Sequential revenue decline and net member attrition: revenue fell from $3.54M in Q4 to $2.68M; net enrollment decreased by 237, with average monthly disenrollment rate 22% in Q1 (would have been ~11% absent the customer non-renewal) .
Revenue per enrolled member per month dropped to ~$504 (from $546 in Q4), indicating mix/engagement/pricing headwinds despite YoY growth in average enrolled members .
Nasdaq compliance risk persists: Company granted a temporary exception contingent on shareholder approval and reverse split by September; failure to comply results in delisting—an overhang for the equity story .

Financial Results

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$2.529	$3.715	$3.539	$2.680
Gross Profit ($USD Millions)	$1.682	$2.675	$2.287	$1.705
Gross Margin (%)	66.5%	72.0%	64.6%	63.6%
Operating Loss ($USD Millions)	$(7.227)	$(4.064)	$(5.213)	$(4.273)
Net Loss ($USD Millions)	$(8.350)	$(6.418)	$(6.396)	$(4.458)
Net Loss per Common Share ($)	$(2.26)	$(1.76)	$(0.29)	$(0.11)
Adjusted EBITDA ($USD Millions)	$(5.433)	$(2.649)	$(3.558)	$(3.372)
Non-GAAP Net Loss ($USD Millions)	$(7.694)	$(5.659)	$(5.797)	$(3.714)

KPIs and Operational Metrics

KPI	Q3 2023	Q4 2023	Q1 2024
Ending Enrolled Members (WholeHealth+)	2,297	1,758	1,521
Effective Outreach Pool (Period-End)	10,180 avg (quarter)	2,161 (12/31/23)	5,057 (3/31/24)
Gross Enrollments (Quarter)	1,272	654	925
Annualized Enrollment Rate	50%	63%	108%
Avg Monthly Disenrollment Rate	11%	16%	22% (≈11% ex-nonrenewal)
Graduations (Quarter)	187	194	194
Revenue per Enrolled Member per Month ($)	$552	$546	$504
Cash from Operations ($USD Millions)	$(1.8) (Q3’23)	$(3.6) (Q4’23)	$(3.259) (Q1’24)
Cash Balance ($USD Millions)	$3.2 (Q3’23)	$9.701 (Q4’23)	$6.400 (Q1’24)

Segment Breakdown: Not disclosed; revenue reported on a consolidated basis .

Non-GAAP adjustments include stock-based compensation, restructuring/severance costs, and changes in fair value of warrant liability (with reconciliations provided) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q1 2024	$2.5–$2.9	Actual: $2.68	Met guidance
Revenue ($USD Millions)	Q2 2024	N/A	$2.4–$2.8	New range

No explicit guidance provided for margins, OpEx, OI&E, tax rate, or dividends in Q1 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023, Q4 2023)	Current Period (Q1 2024)	Trend
AI/Technology Initiatives	Introduced Advanced Engagement System; AI-driven coach notes; next-best-action; virtual assistant; 90% improvement in coach capacity; EDI Gateway deployment	Continued AI-enabled engagement; strong NPS (77); evidence-based outcomes; ReQoL introduced to product suite	Improving capability/adoption
Medicare Advantage Macro	Headwinds: funding pressures, declining star ratings, elevated utilization; Ontrak positioned to help quality scores and costs	Reinforced outcomes and cost savings that support quality scores; continued pitch to MA plans	Persistent headwinds; Ontrak value proposition emphasized
Product Performance (WholeHealth+)	Reported PMPM savings ($750) for Medicaid; strong clinical improvements; expanded Sentara engagement pipeline	Clinical/utilization outcomes reiterated; graduations and enrollment dynamics; expansions with Sentara (commercial, ASO)	Positive outcomes; scaling with customers
Regional/Customer Developments	Pending state approval for regional Medicaid plan; Sentara expansions in pipeline	AHCA approval for Community Care Plan; expected outreach start in 30–60 days; Medicaid re-procurement broadens opportunity	Accelerating in Florida
Regulatory/Listing	Reverse split completed in 2023; ongoing compliance risks noted in forward-looking statements	Nasdaq minimum bid price exception contingent on reverse split, sustained bid ≥$1.00; delisting risk if not achieved	Listing overhang remains
R&D/Measurement	EDI Gateway; ReQoL integration planned; measurement-based care emphasized	ReQoL introduced; ongoing PHQ-9/GAD-7 tracking across 3/6/9 months improvements	Measurement capability expanding

Management Commentary

“With the addition of Community Care Plan, our overall outreach pool…is estimated to grow by upwards of 10%.” — Brandon LaVerne, CEO/COO .
“Over 60% of Ontrak enrollees…enrolled after only one conversation.” — Brandon LaVerne .
“We reduced emergency room visits by 32%, inpatient admissions by 62% and overall medical costs by 43%.” — Brandon LaVerne .
“Sentara is offering WholeHealth+ to a broader commercial population into a new ASO population…a 6.5x increase in…members eligible.” — Mary Louise Osborne, President/CCO .
“Revenue of $2.7 million…6% year-over-year…about $504 per health plan enrolled member per month…down from $546 in Q4.” — James Park, CFO .
“Average monthly disenrollment rate was 22%…due to the customer that did not renew…without [that] ~11%.” — James Park .
“For Q2 2024, we anticipate revenue in the range of $2.4 million and $2.8 million.” — James Park .

Q&A Highlights

The available Q1 transcript includes prepared remarks and guidance but does not contain a published Q&A section; hence, no Q1 analyst Q&A details were accessible in the provided document set .
For near-term context, Q4 Q&A emphasized: timing and revenue impact of the AHCA approval; Medicaid disenrollment impacts largely realized; and confirmation that a customer departure contributed to sequential revenue decline in Q4 .

Estimates Context

Wall Street consensus via S&P Global for OTRK was unavailable due to a mapping error in the CIQ company database at the time of retrieval; no estimate comparisons can be provided.
As a result, we anchor comparisons to company guidance and reported results and explicitly note the absence of S&P Global consensus for Q1 and Q2 .

Key Takeaways for Investors

Sequential softness driven by a customer non-renewal and elevated disenrollment; watch Q2 revenue ($2.4–$2.8M) for stabilization and the impact of Sentara expansions and Community Care Plan onboarding .
Gross margin stability (~63–65%) amid scaling indicates operational discipline; monitor revenue per member per month ($504 in Q1) and member mix to assess unit economics trajectory .
Florida Medicaid re-procurement and AHCA approval are multi-year catalysts; Community Care Plan’s expanded regions could materially expand the outreach pool and eventual enrollments .
Clinical/utilization outcomes (ER −32%, inpatient −62%, costs −43%) and NPS 77 support the payer ROI narrative; strengthens case for expansions across MA and Medicaid lines .
Liquidity actions (demand notes, warrant exercises) extend runway; however, Nasdaq compliance requires a reverse split and sustained minimum bid—an important technical catalyst and risk .
Near-term trading: headlines around AHCA implementations, additional pilot wins (two prominent health plans in final contracting) and evidence of enrollment re-acceleration could drive sentiment .
Medium-term thesis: If Ontrak converts pipeline and expands with existing logos while maintaining margins and demonstrating outcomes, operating leverage can improve; execution on member growth and retention is key .

Ontrak, Inc. (OTRK)·Q1 2024 Earnings Summary