Executive Summary

Q1 revenue declined to $2.02M, down 25% YoY, with gross margin compressing to 37% as mix shifted toward lower-ARPU Engage members and a large 2024 customer termination rolled off; adjusted EBITDA was $(4.31)M and GAAP EPS was $(1.65) .
Management guided Q2 revenue to $2.2–$2.6M (8%–22% q/q), citing momentum from recent launches; they reiterated a “path to doubling run-rate revenue in 2025” if late-stage pipeline converts .
Financing: Ontrak secured a $10M commitment from Acuitas, bolstering near-term liquidity (Q1-end cash $4.09M; CFO also cited access to up to $10M total under demand-note facilities) .
Membership and outreach pools expanded meaningfully: total enrolled members ended Q1 at 3,165 (most since Q4’21), with Engage enrollment nearly doubling q/q, positioning for sequential revenue improvement but pressuring per-member revenue near term .
S&P Global consensus estimates were unavailable via the tool due to a missing SPGI mapping for OTRK; no reliable Wall Street consensus comparison could be performed (see Estimates Context) [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well
- Membership growth: total enrolled members rose to 3,165 (highest since Q4’21), with Engage enrollment expanding to 1,587 vs. 716 in Q4, validating multi-solution approach across lines of business .
- Commercial traction and pipeline: implementations at Intermountain and a Northeast regional plan are progressing; management highlighted late-stage discussions with a large Midwestern Medicaid plan and four additional proposals under review .
- Liquidity support and operational efficiency: $10M financing commitment from Acuitas enhances funding runway; teams are “more than twice as productive” vs. 2021 due to AI-enabled workflows .
What Went Wrong
- Revenue and margin compression: revenue fell 25% YoY to $2.02M and gross margin fell to 37% (from 61% in Q4’24) due to a 2024 customer termination and mix shift toward Engage, which carries lower revenue per member .
- Per-member revenue pressure: revenue per enrolled member per month was ~$254 vs. $500 in Q4’24 and $504 in Q1’24, reflecting larger Engage mix and lost customer .
- Continued losses and cash burn: adjusted EBITDA $(4.31)M; operating cash flow $(2.72)M; GAAP net loss $(6.89)M with $4.09M cash at quarter-end, necessitating continued access to external financing .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$2.57	$3.15	$2.02
Gross Margin %	~62% (CFO said Q3 was 62%)	61%	37%
Operating Loss ($USD Millions)	$(5.11)	$(4.36)	$(5.85)
Adjusted EBITDA ($USD Millions)	$(3.29)	$(2.84)	$(4.31)
Diluted EPS ($)	$(1.77)	$(9.54)	$(1.65)

Notes: All figures GAAP unless noted; Adjusted EBITDA is non-GAAP. Non-GAAP reconciliations provided by the company .

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
WholeHealth+ Enrolled (end of period)	2,007	1,409	1,578
Engage Enrolled (end of period)	498	716	1,587
Total Enrolled (end of period)	2,505 (sum)	2,125 (sum)	3,165 (CFO)
WH+ Callable Outreach Pool	6,689	4,908	7,319
Engage Callable Outreach Pool	498	20,648	22,152
New Enrollments (quarter)	1,166	1,641	2,039
Disenrollment Rate (avg monthly)	11% (Q4 context)	19%	10%
Rev/Member/Month (Health plan)	—	~$500	~$254

Cash and Liquidity

Operating cash flow: $(2.72)M in Q1’25; cash balance: $4.09M at March 31, 2025 .
Financing: $1.5M borrowed in Q1 and $0.5M post-quarter; up to $10M total short-term financing availability via commitments/demand notes .

Segment Breakdown: Not applicable; company reports as a single operating structure with product solutions (WholeHealth+, Engage, Quality) rather than segments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	$2.0–$2.3M (issued Apr 14, 2025)	N/A (period reported actuals $2.02M)	N/A (actuals supersede)
Revenue	Q2 2025	—	$2.2–$2.6M	New
Gross Margin Outlook	2025 near term	“Decrease slightly into mid-50s” (Q4 call)	“Maintain ~current level (~37%) and increase as WH+ mix rises; may dip during new launches” (Q1 call)	Lower near-term outlook vs prior commentary

No explicit numeric guidance provided for operating expenses, tax, or segment-specific revenue; management reiterated qualitative outlook on pipeline conversions and run-rate revenue trajectory .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
AI/Technology Enablement	Launched/expanded AI initiatives and partnerships; tech as differentiator	Teams “more than twice as productive” vs 2021 due to AI-driven Advanced Engagement System and next-best-action	Strengthening operational impact
Value-Based Provider Model	Discussed shift to provider model and HEDIS/quality with Quality product	Medicaid provider status in two states; broadening to medical spend budgets; NCQA CVO recertified; pursuing case management accreditation	Expanding capability and credibility
Pipeline Conversion	Q3: new contracts and expansions; Q4: late-stage Midwest plan; six prospects with proposals	Late-stage Midwest Medicaid plan plus four proposals; path to double 2025 run-rate if converted	Advancing late-stage
Membership/Outreach	Q3/Q4 showed growing outreach pools; Engage launch	Total enrolled 3,165; Engage enrolled 1,587; outreach pools expanded further	Accelerating enrollment
Financing/Liquidity	Ongoing financing activities (Q3/Q4 demand notes)	New $10M commitment from Acuitas; $2.0M draws around quarter; cash $4.09M	Improved flexibility
Revenue/Margin Mix	Q4 CFO: margins to mid-50s with mix; Engage lowers ARPU	Q1 CFO: margin ~37% now; to rise as WH+ mix increases; Engage drives lower ARPU but expands TAM	Near-term pressure, medium-term mix lift

Management Commentary

CEO: “Membership in our Ontrak programs has nearly doubled year over year… Our AI-driven Advanced Engagement System has transformed how we deliver care… provide a path to doubling our run-rate revenue in 2025.” .
CEO on productivity: “Our teams are more than twice as productive as they were in 2021… automating routine tasks… next best action engine… leveraging AI to summarize completed calls.” .
President/CCO: “We continue to work toward executing a statement of work with a large Midwestern Medicaid plan… awaiting feedback on 4 other health plan financial proposals… overall reaction… has been extremely positive.” .
CFO: “Revenue was $2 million, reflecting a 25% decrease… due to the loss of a customer… quarterly revenue per enrolled member per month ~$254 vs. $500 in Q4’24… gross margin 37%… anticipate margins to maintain near current and increase as WH+ mix rises… Q2 revenue $2.2–$2.6M.” .

Q&A Highlights

The call concluded without a substantive analyst Q&A session; the operator closed the queue after prepared remarks (no incremental guidance clarifications on the call) .

Estimates Context

Wall Street consensus from S&P Global for Q1 2025 could not be retrieved due to a missing SPGI mapping for OTRK in the tool; as such, we cannot provide definitive beat/miss vs. consensus for revenue or EPS [SpgiEstimatesError].
Given limited access to consensus, investors should anchor on company-issued Q2 revenue outlook ($2.2–$2.6M) and pipeline conversion milestones for near-term revisions risk .

Key Takeaways for Investors

Mix is the core swing factor: accelerated Engage adoption boosts enrollment and broadens TAM but depresses near-term ARPU and margins; margin recovery hinges on increasing WholeHealth+ mix as pipeline converts .
Liquidity runway improved with $10M financing commitment and available demand-note capacity, offsetting cash burn; monitor draws and covenant/availability dynamics .
Sequential revenue inflection likely in Q2 (guide 8%–22% q/q), with further upside contingent on late-stage Midwest Medicaid plan and additional proposals .
KPIs are moving in the right direction: total enrolled members and outreach pools at multi-year highs, which should translate into revenue growth as cohorts mature .
Near-term valuation catalysts: contract signing(s) with large Medicaid plan(s), evidence of margin inflection from WH+ mix, and proof points on ROI/quality (HEDIS) for value-based model expansion .
Risk checks: high customer concentration (2024 termination impact), persistent losses, margin sensitivity during launch periods, and reliance on external financing .
Actionable: track Q2 print vs. $2.2–$2.6M guide, announcements on Midwest Medicaid SOW, WH+ vs. Engage mix progression, and quarterly gross margin trajectory as early validation of the doubling narrative .

Supporting documents:

Q1 2025 press release and financials .
Q1 2025 8‑K (Item 2.02) with Exhibit 99.1 .
Q1 2025 earnings call transcript .
Financing commitment press release (May 20, 2025) .
Q4 2024 and FY2024 press release and call .
Q3 2024 press release .

Ontrak, Inc. (OTRK)·Q1 2025 Earnings Summary