Performant Financial Corporation Announces Financial Results for First Quarter 2018

Performant Financial Corporation (NASDAQ:PFMT), a leading provider of technology enabled recovery and related analytics services reported the financial results for its first quarter ended March 31, 2018.

The company had a total revenue of $57 million compared to revenues of $33.1 million in the prior year which is up by 72.2 percent.

As quoted in the press release:

First Quarter Financial Highlights

• Net income of $8.5 million, or $0.16 per diluted share, compared to a net loss of $3.0 million, or $(0.06) per diluted share, in the prior year period
• Adjusted EBITDA of $(3.4) million, compared to adjusted EBITDA of $2.8 million in the prior year period
• Adjusted net loss of $4.3 million, or $(0.08) per diluted share, compared to an adjusted net loss of $1.9 million or $(0.04) per diluted share in the prior year period

Update Regarding the Department of Education Defaulted Federal Student Loans Award:

“We disagree with the Department of Justice’s decision, particularly given that the Department of Education held over $120 billion in defaulted student loans as of September 30, 2017.  Moreover, between 2015 and 2017 over $62 billion in student loans defaulted, which coincides with the wind down of the old unrestricted contract,” stated Lisa Im, Performant’s Chief Executive Officer.  “However, we will continue to stay close to this situation because default rates are going to necessitate that actions be taken before long. As a reminder, our previously stated comments regarding 2018 guidance and the snapshot of our view of Performant in 2021, which reflects a business with over $200 million of revenues and 20% EBITDA margins, excluded any potential impact of an award from the Department of Education.”

Business Outlook

“We are gaining momentum through the first quarter and are pleased to have started our MSP CRC operations in earnest.  In addition to the MSP CRC, we have a handful of other contracts that require investment before we see meaningful revenues.  We believe we will continue to invest through the first half of the year, with the expectation of revenue momentum building into Q3 and Q4.  While we are disappointed with the Department of Education’s short term decision to cancel the current procurement, we believe the dramatic increase in defaults from 2015 to 2017 will need to be addressed in some way by the Department. We will stay close to this situation, however, want to reiterate that we anticipate strong growth in other parts of our business.  We reiterate our guidance for 2018 with revenues between $123 and $150 million, and adjusted EBITDA between $2 and $6 million,” stated Im.

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