Streamline Health Solutions - Earnings Call - Q4 2025

Executive Summary

• Q4 (quarter ended Jan 31, 2025): Revenue was $4.70M, up sequentially from $4.42M in Q3 but down YoY (Q4 FY2023: $5.4M). Net loss improved sequentially to ($2.1M). SaaS revenue was $3.1M (66% mix) as non‑renewals and lower legacy revenue continued to weigh, partially offset by new bookings and go‑lives.
• Management launched denial-prevention functionality within eValuator and reiterated an adjusted EBITDA positive run-rate in the first half of FY2025, signaling a path to profitability despite revenue headwinds.
• Booked SaaS ACV was $14.0M as of Jan 31, 2025, and $14.6M as of Apr 30, 2025 (of which $13.1M implemented), reflecting modest net bookings progress after churn earlier in the year; management highlighted Oracle channel traction (CommunityWorks) and faster implementations as near-term catalysts.
• Consensus estimates from S&P Global were unavailable for Q4, so beat/miss vs Street cannot be assessed; investors should focus on sequential trends, ACV/implementation progress, and the new denial-prevention launch as key stock catalysts. Values retrieved from S&P Global were unavailable.

What Went Well and What Went Wrong

• What Went Well

  • Denial-prevention launched in eValuator; CEO expects it to expand inpatient financial impact by >15% and potentially double outpatient impact based on back-testing and payer behavior modeling.
  • Oracle channel momentum: $350K of new RevID bookings via Oracle, plus a new CommunityWorks client; management expects continued wins from this channel.
  • Implementation velocity: Recent eValuator go‑live completed in 42 days; overall timelines materially improved vs prior years; run-rate adjusted EBITDA profitability reiterated for 1H FY2025.

• What Went Wrong

  • Revenue still pressured by SaaS non‑renewals and lower legacy Maintenance/Support and professional services; Q4 revenue fell YoY to $4.7M (from $5.4M).
  • Q4 net loss widened YoY to ($2.1M) due to lower revenue and higher non‑cash interest expense (partly offset by lower opex).
  • Liquidity/covenants: Cash was $2.2M at Jan 31; company amended covenants and drew an additional $1.0M on Mar 28, 2025—highlighting balance sheet constraints.

Transcript

Operator (participant)

As a reminder, this conference is being recorded. It is now my pleasure to introduce Jacob Goldberger, Vice President of Finance. Thank you. You may begin.

Jacob Goldberger (VP of Finance)

Thank you for joining us for the corporate update and financial results review of Streamline Health Solutions for the 12 and 3 months ended January 31, 2025. As the conference call operator indicated, my name is Jacob Goldberger. Joining me on the call today are Ben Stilwill, President and Chief Executive Officer, and B.J. Reeves, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. If anyone participating on today's call does not have a full-text copy of our press release announcing these results, you can retrieve it from the company's website at www.streamlinehealth.net or from numerous financial websites. Before we begin with prepared remarks, we want to be sure we are clear for everyone on the record how certain information, which may be provided today as with all of our earnings calls, should be viewed.

We therefore submit for the record the following statement: Statements made on this conference call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those we may discuss. Please refer to the company's press releases and filings made with the U.S. Securities and Exchange Commission, including our most recent Form 10-K annual report, which is on file with the SEC for more information about these risks, uncertainties, assumptions, and other factors. As always, we are presenting management's current analysis of these items as of today. Participants on this call should take into account these risks when evaluating the topics we will discuss.

Please note Streamline is not undertaking any commitment or obligation to publicly revise any such forward-looking statements made today. On today's call, we will discuss non-GAAP financial measures such as adjusted EBITDA and book size ACV. Management uses these measures to help provide better insight into our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those which another entity may utilize in calculating their own non-GAAP measures. To help you compare these amounts on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. I would now like to turn the call over to Ben Stilwill, CEO.

Ben Stilwill (President and CEO)

Thanks, Jacob, and thank you all for joining this morning. In fiscal 2024, we furthered our mission to ensure our health system clients be paid accurately for the care they provided. As of January 31st, 2025, our solutions are delivering an annualized financial impact of more than $210 million across our client base. That impact is the result of our partnership with revenue cycle departments who leverage our solutions to maintain control over the financial outcomes of their health systems. Thanks to our solutions, our team and our client partnerships, U.S. health systems now have $210 million to care for their communities in 2025. As of the end of fiscal 2024, we had book size ACV of $14 million, and as of April 30th, 2025, book size ACV totaled $14.6 million, $13.1 million of which was implemented.

Since we last reported our October 31st, 2024 results, we booked an additional $1.4 million in new size ACV, and this was offset by $700,000 of churn, the majority of which was the result of two clients lost to an acquisition of those health systems. $350,000 of our new bookings were the result of our Oracle channel for RevID, including a new Community Works client. We expect continued wins from this channel as our relationship with Oracle remains strong. The remaining new bookings represent significant new eValuator clients, which were sold through our direct channel and influenced by their peers and our talented sales team. We recently made the proactive decision to discontinue selling our Quality Module as an independent unit. While the module reflected an interesting market opportunity, it did not meet our bookings expectation, and the call point was too distinct from eValuator and RevID.

Rather than invest further in a solution that would not deliver the returns we demand, we chose to redirect resources to initiatives that allow us to expand the impact of our solution's core value proposition. In particular, we have focused our resources towards denial prevention functionality. Speaking of, as of last night, we're excited to debut our new denial prevention functionality within the eValuator platform, a major step forward in how we help clients protect revenue in real time. These new rules will enable eValuator users to proactively identify and prevent both outright denials and coding DRG downgrades before a claim is submitted. This capability is the result of a deep collaboration across our rules team, client partners, and our data science efforts, incorporating the insights from client feedback and machine learning trained on 835 remittance data we've received from select users.

By leveraging real-world denial patterns, we've built rules that are not only clinically sound but directly aligned with payer behavior. Based on extensive back testing, we expect these new rules to expand the inpatient financial impact of eValuator by more than 15% and potentially double the financial impact on outpatient cases. That is particularly important given the surge in denial activity we're seeing across the industry the last couple of years, especially from commercial payers, which tend to represent higher dollar patient populations for our clients. These denials are placing an unsustainable burden on providers, and we believe our denial prevention functionality is launching at exactly the right time to provide much-needed relief and measurable value.

Our client success team has been sharing this new functionality with our clients over the last couple of months, and they are universally excited and will be quickly translating those client results into a data story and narrative to arm our direct sellers. Our RevID clients are more excited than ever to talk about their partnerships with Streamline. Last week, one of our RevID users, Chris Reginald, presented to a packed room at a user conference how they leveraged our solution to develop a charge reconciliation program and the impact of adding this tool and workflow to their revenue cycle. Many of these Community Works-type systems have not historically had the resources to attack charge capture, but many sorely need it. As I've noted, we had a successful new booking from a Community Works user recently and have been receiving significant inbound interest from that cohort.

We're leaning into those user stories in a bigger way with webinars and finding ways to encourage further peer-to-peer marketing from our clients. We expect the enhanced value offered by new features like denials prevention and improving client reference ability to translate to an increased rate of bookings in fiscal 2025. Our implementation teams continue to make strides in their ability to execute projects across both solutions. Our most recent eValuator go-live was completed 42 days after contract signature, and our most recent client win wants to go live by July 1st. We expect to maintain this rapid pace on the eValuator side, and our RevID implementation time continues to accelerate. Our new future push pipeline and improved implementation execution mean we maintain our expectation related to achieving an EBITDA profitable run rate as we exit the second quarter of fiscal 2025.

Healthcare systems need to be able to succeed in the revenue cycle so that they can get paid for the care they provide. We believe it is our duty to develop the products and provide the insights so they can succeed. With that, I'd like to turn the call over to our CFO, B.J. Reeves. B.J.

B.J. Reeves (CFO)

Thanks, Ben. As Ben mentioned, our booked size ACV as of January 31st, 2025, totaled $14 million, and as of April 30th, 2025, totaled $14.6 million. Currently, $13.1 million of our booked size ACV is implemented, and we anticipate we successfully implement and achieve an EBITDA profitable ARR run rate during the first half of fiscal 2025. Total revenue for the fourth quarter of fiscal 2024 was $4.7 million as compared to $5.4 million during the fourth quarter of fiscal 2023. For the 12 months ended January 31st, 2025, revenue totaled $17.9 million as compared to $22.6 million during fiscal 2024. The change in total revenue is attributable to previously announced size non-renewals as well as lower revenue from the company's legacy maintenance and support contracts and professional service offerings offset by new bookings and go-lives in the company's size business.

Size revenue for the fourth quarter of fiscal 2024 totaled $3.1 million, 66% of total revenue, compared to size revenue of $3.4 million, or 64% of total revenue during the fourth quarter of fiscal 2023. For the 12 months ending January 31st, 2025, size revenue totaled $11.8 million, or 66% of total revenue, compared to $14.1 million, or 62% of total revenue during fiscal 2023. As previously reported, the company had a size contract which did not renew at the end of its 2023 fiscal year. Net loss for the fourth quarter of fiscal 2024 was $2.1 million compared to net loss of $1.4 million during the fourth quarter of fiscal 2023. Fiscal 2024's net loss totaled $10.2 million compared to a net loss of $18.7 million during fiscal 2023.

The increased net loss during the fourth quarter was the result of the lower total revenue and higher non-cash interest expense offset by lower total operating expenses as compared to the fourth quarter of fiscal 2023. The improved net loss in fiscal year 2024 was the result of $10.8 million of non-cash impairment charges incurred during fiscal year 2023 that did not recur in the current fiscal year. Cash and cash equivalents as of January 31st, 2025, were $2.2 million as compared to $3.2 million as of January 31st, 2024. The company had a $1 million outstanding balance on its revolving credit facility as of January 31st, 2025, compared to $1.5 million as of January 31st, 2024.

Subsequent to the end of the fiscal period on March 28th, 2025, the company and its principal lender amended certain financial covenants related to the company's senior term line and revolving line of credit, which are described in more detail in the company's annual report on Form 10-K for the fiscal year ended January 31st, 2025. On March 28th, 2025, the company drew an additional $1 million from its revolving line of credit. That concludes our prepared remarks. Operator, please begin the question and answer session.

Operator (participant)

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Neil Cataldi with Blueprint Capital Management. Please proceed.

Neil Cataldi (Principal)

Hey, Ben. Thanks for taking a few of my questions today.

Ben Stilwill (President and CEO)

Yeah, hey, Neil.

Neil Cataldi (Principal)

I'll start with denials. Yeah, I'll start with denials prevention. Sounds like this is ready to go in terms of your ability to sell the product. Can you talk a little bit about what that means for the current customer base and how does it play into the marketability of eValuator?

Ben Stilwill (President and CEO)

Yeah, sure. Great question. We learned a lot from the Quality Module that we had debuted last year and tried to lean more into where clients could find value out of the core functionality of eValuator. We've been on this shtick of trying to have our clients get things right the first time, pre-bill, before the bill goes out the door. This really, denials is the ultimate, the final, whatever the payer did with the provider. If we can get those signals into the pre-bill workflow, it's immensely helpful to make sure that the claim is bulletproof by the time that it leaves the health system and goes to the payer. It's hugely valuable. It's something that our clients are super excited about, and we did a lot of hands-on showing the clients what we were doing and getting their feedback along the way.

Neil Cataldi (Principal)

Okay. Maybe for those new to the story, you built the product, you rolled it out last year, you had some people use it, test it, the data's come back, it's been really good, and now there's a bit of a focus to push it forward.

Ben Stilwill (President and CEO)

Yeah, exactly. Now we're able to quantify what we're actually impacting as far as preventing denials. It was done talking to our clients around how they viewed denial prevention and the coding cycle and everything like that. Now they're able to go to their executives and say, "This is what my actual coding function is doing as far as preventing this huge denial problem that the industry is having.

Neil Cataldi (Principal)

Okay, great. You mentioned implementation timelines, 42 days, I think you said on an eValuator implementation. That sounds like it's really improved. I was wondering what changed. What are you guys doing to enable these quicker implementations? Is it a one-off, or are we sort of resetting the expectation on how quick you guys can go a little bit faster now?

Ben Stilwill (President and CEO)

Yeah, I think 42 days is still less than the average, certainly less than our financial forecast, but it is obviously a good example. We have significantly dropped our overall average time. A couple of years ago, we were talking about four to six months for an eValuator implementation. Most of them are getting done in two, maybe three months or less, obviously, in this case. We learned a lot doing that, standardizing data, standardizing training, making sure that people have the ability to have success on day one. I think probably the most important part is on the RevID side of things, it is a little bit more complicated of an implementation. When we first acquired the solution, it was upwards of nine months to a year of implementation, and that is dropping dramatically with each implementation we are doing based on taking the eValuator playbook into RevID.

I think we'll see that number also significantly reduce.

Neil Cataldi (Principal)

Okay. My last one, I know you guys have made a lot of changes to the sales force over the past year. It's been a little, I don't know, quiet, I guess, with bookings the start of this year. What gives you guys confidence that there's some momentum building in the pipeline and that we'll see stronger bookings going forward?

Ben Stilwill (President and CEO)

Yeah, I think we're really trying to lean into our clients, the current client journeys that people have been successful with. Trying to put, whether it was last week where we had a RevID user at the Oracle conference or having webinars with our clients, speaking live with prospects and current clients, we're really trying to celebrate those victories so that when the salesperson does pick up the phone, it's much more likely that they will say, "Yeah, that's a club I want to be part of. That's an organization I want to be involved with." We have seen a lot of top-of-funnel activity as a result of having our clients really be the focus as opposed to purely just us showing up at a trade show or what have you. I think we've seen some activity recently.

I mean, I don't want to oversell the Oracle conference we were just at, but a lot of activity there and the webinars and starting to get things that are more moving on the top of the funnel.

Neil Cataldi (Principal)

Okay, great. Look forward to seeing the progress. Thanks, guys.

Ben Stilwill (President and CEO)

Thanks, Neil.

Operator (participant)

We have reached the end of our question and answer session. I would like to turn the conference back over for closing remarks.

Jacob Goldberger (VP of Finance)

Thank you all for your support of Streamline Health. We look forward to speaking with you all again when we report our first quarter 2025 results.

Operator (participant)

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.