Executive Summary

Q2 FY2025 (quarter ended July 31, 2024) showed revenue down 22% YoY to $4.5M with a net loss of $2.8M ($0.05/share), but adjusted EBITDA improved materially to a loss of $0.3M vs a loss of $0.9M in Q2 FY2024, reflecting cost actions and SaaS mix shift .
Management lowered timing for reaching adjusted EBITDA breakeven run-rate ($15.5M implemented SaaS ARR) from 2H FY2024 to 2H FY2025 due to churn/non-renewals; booked SaaS ACV fell to $13.6M with $10.7M implemented .
Near-term outlook: sequential revenue expected to dip ~$0.3M in Q3 FY2025 and return to ~$4.5M in Q4 FY2025 as implementations ramp; OpEx expected to remain stable, supporting improved adjusted EBITDA trajectory into FY2025 .
Product/AI momentum (eValuator rule engine and RevID automation) and Oracle partnership are cited as growth catalysts, alongside upsell/cross-sell into existing enterprise clients .

What Went Well and What Went Wrong

What Went Well

Adjusted EBITDA improved to ($0.3M) from ($0.9M) YoY despite lower revenue, driven by restructuring and focus on higher-margin SaaS, highlighting operating leverage as mix shifts .
Product innovation and AI: eValuator’s AI-created/enhanced rules exceeded $4M of impact recently; RevID automation improving charge reconciliation speed and usability; “My eValuator” UX refresh launched to boost productivity .
Client success model delivering measurable ROI (e.g., $0.5M mischarges identified in one month; multi-facility clients seeing significant revenue recovery), strengthening references and upsell potential .

What Went Wrong

Booked SaaS ACV decreased to $13.6M amid $2.8M non-renewals (including outsourcing decisions), reducing visibility and delaying ARR breakeven timing to 2H FY2025 .
Revenue declined 22% YoY to $4.5M, and net loss widened modestly YoY on lower revenues and higher interest/valuation expense, despite lower OpEx; interest expense rose to $0.5M in the quarter .
Near-term top-line headwind: management guided Q3 FY2025 revenue down by ~$0.3M sequentially before returning to ~$4.5M in Q4 FY2025, underscoring timing risk in bookings/implementations .

Financial Results

Metric	Q2 FY2024 (older)	Q2 FY2025 (current)	Q1 FY2025 (newer)
Total Revenue ($USD)	$5.770M	$4.476M	$4.810M
Net Loss ($USD)	($2.515M)	($2.803M)	($1.645M)
EPS (Basic & Diluted)	($0.04)	($0.05)	($0.40)
Operating Loss ($USD)	($2.598M)	($2.215M)	($1.101M)
Adjusted EBITDA ($USD)	($0.893M)	($0.302M)	$0.226M
Adjusted EBITDA Margin (%)	-15.5%	-6.7%	4.7%
Operating Loss Margin (%)	-45.0%	-49.5%	-22.9%

Note: EPS comparability is impacted by the 1-for-15 reverse split effective Oct 4, 2024; Q2 FY2025 EPS reflects pre-split share count, Q1 FY2025 reflects post-split .

Segment Revenue Breakdown

Segment	Q2 FY2024	Q2 FY2025
SaaS Revenue ($USD)	$3.531M	$3.078M
Maintenance & Support ($USD)	$1.100M	$0.883M
Professional Fees & Licenses ($USD)	$1.139M	$0.515M
Total ($USD)	$5.770M	$4.476M

Additional Q1 FY2025 segment reference: SaaS $3.359M; Maintenance $0.737M; Professional $0.714M; Total $4.810M .

KPIs and Balance Sheet

KPI / Metric	Prior	Current
Booked SaaS ACV ($USD)	$15.0M as of Jan 31, 2024	$13.6M as of Jul 31, 2024
Implemented SaaS ACV ($USD)	$11.1M as of Jan 31, 2024	$10.7M as of Jul 31, 2024
New Contracts (Quarter ACV) ($USD)	—	$0.8M ACV in Q2 FY2025
Non-Renewals (Quarter ACV) ($USD)	—	$2.8M ACV churn in Q2 FY2025
Cash & Equivalents ($USD)	$3.2M (Jan 31, 2024)	$3.5M (Jul 31, 2024)
Total Debt ($USD)	$12.5M incl. term loan & notes (Apr 30, 2024)	$12.5M incl. term loan & notes (Jul 31, 2024)
Revolving Credit Facility Balance ($USD)	$1.5M (Jan 31, 2024)	$0 (Jul 31, 2024)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA Breakeven Run-Rate ($15.5M implemented SaaS ARR)	Timing	2H FY2024	2H FY2025	Lowered / delayed
Total Revenue	Q3 FY2025	—	~($0.3M) sequential decline vs Q2 → ~$4.2M implied	New outlook
Total Revenue	Q4 FY2025	—	Return to ~$4.5M	New outlook
Operating Expenses	FY2025	—	“Do not anticipate significant increases” through FY2025	Maintained tight cost discipline
Adjusted EBITDA	FY2025	—	Expect persistent profitability and improved cash use in FY2025	New outlook

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2024, Q1 FY2025)	Current Period (Q2 FY2025)	Trend
AI/technology initiatives	Introduced AI model; $1M impact in first 6 weeks; “My eValuator” UX launch	AI rules now exceed $4M impact; risk scoring engine; ongoing rule deployments every two weeks	Expanding scope and impact
Market/macro and outsourcing	Health systems balancing in-house vs outsourcing; long sales cycles; cost-to-collect focus	Churn largely tied to outsourcing decisions; positioning to help systems “take back the revenue cycle”	Headwind from outsourcing; messaging pivot
Product performance (RevID, eValuator)	RevID re-architecture; automation focus; RevID implementations maturing	RevID automation improving workflows; eValuator rules/denials identification roadmap	Continued enhancements
Oracle partnership	Emphasis as key channel; recent go-lives; joint presentations	Several Oracle go-lives; referenceable clients; active introductions by Oracle	Strengthening channel
Sales pipeline & execution	Tailored strategy (displacement, Oracle, new channel, upsell)	CEO directly owning growth; expect >2x H1 bookings in H2; target $0.5M ACV deals per quarter	Execution intensifying
Regulatory/legal / corporate actions	—	1-for-15 reverse split to maintain Nasdaq compliance (effective Oct 4, 2024)	Listing compliance action

Management Commentary

“During the second quarter…we won new contracts totaling $0.8M ACV and received notifications of non-renewals for contracts with aggregate ACV of $2.8M…we have revised our expected timeline to achieve [adjusted EBITDA breakeven] from the second half of fiscal 2024 to the second half of fiscal 2025.” — Management release .
“Our AI model…continues to create and enhance rules for eValuator clients, exceeding $4M recently…we’ve developed a powerful risk scoring engine within eValuator…expanding to coding changes that occurred outside eValuator.” — CEO prepared remarks .
“We currently anticipate that third quarter fiscal 2024 [FY2025] total revenue will decline sequentially by approximately $300,000 but will return to approximately $4.5M…Total operating expense…$6.7M vs $8.4M prior year; we do not anticipate significant increases…through FY2025.” — CFO .

Q&A Highlights

Pipeline conversion: Management expects a “good uptick” in H2 bookings, with line of sight to closes before fiscal year-end and a cadence of ~$0.5M ACV deals per quarter; CEO now directly owning the growth function .
Value proposition vs outsourcing: Prospects “disenfranchised” by outsourcing outcomes; messaging pivot to “take back the revenue cycle,” emphasizing cost-to-collect reductions and in-house control .
Oracle partnership: Multiple successful go-lives, referenceable clients, active introductions; eValuator sales are more complex enterprise motions vs RevID .
Estimates of sequential revenue and OpEx trajectory: Q3 dip (~$0.3M) then Q4 back to ~$4.5M; OpEx expected stable, enabling improved adjusted EBITDA .

Estimates Context

Wall Street consensus (S&P Global) for Q2 FY2025 EPS and revenue was unavailable via S&P Global for STRM during this analysis window; as a result, beat/miss vs consensus cannot be assessed. Estimates coverage appears limited for this micro-cap issuer [SpgiEstimatesError].

Key Takeaways for Investors

Mix shift and cost discipline are driving adjusted EBITDA improvement even on lower revenue; achieving the $15.5M implemented ARR threshold remains the key milestone for sustainable profitability in FY2025 .
Churn tied to outsourcing is the principal headwind; management’s messaging and services-led model aim to improve retention and win-backs while accelerating new logos via Oracle/channel strategies .
Near-term revenue cadence likely choppy (Q3 dip, Q4 recovery) due to implementation timing; OpEx stability provides downside protection to EBITDA trajectory .
AI and product innovation (eValuator rules/denials, RevID automation) are differentiators that can enhance ROI and sales conversion; enterprise upsell/cross-sell into existing base is a material lever .
Corporate action: 1-for-15 reverse split executed to maintain Nasdaq listing; note EPS/share count comparability issues across pre/post-split periods in modeling .
Focus for positioning: Monitor booked ACV, implemented ARR progress, churn trends, and Oracle/channel deal flow; these will drive path to breakeven timing and multiple expansion .

Sources: Q2 FY2025 press release and 8-K (Item 2.02) with detailed financials and KPIs ; Q2 FY2025 earnings call transcript (prepared remarks and Q&A) ; Q1 FY2025 press release (trend context) ; Q4 FY2024 earnings call (prior quarter themes) ; Reverse stock split press release .

STREAMLINE HEALTH SOLUTIONS INC. (STRM)·Q2 2025 Earnings Summary