Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Babylon Again Delivers Strong Performance With Record Margins for Second Quarter 2022


Babylon Holdings Limited (NYSE: BBLN) ("Babylon"), one of the world's fastest-growing digital healthcare companies, today announced its financial and operating results for the second quarter ended June 30, 2022.

"Babylon has once again delivered very strong results that demonstrate our continued momentum," said Ali Parsa, CEO and Founder of Babylon. "From Q2 revenue growing 4.6x to $265.4 million and U.S. value-based care members growing by 220% year-over year, to up to 7x increase in the speed of high risk member sign-up, and a 31% ER avoidance in our longest serving VBC contract, to a 7.5% improvement in medical margins in the span of three quarters, almost all our key metrics are performing well. I am truly thankful to all Babylonians for their hard work and unwavering commitment to our mission, and to our members, providers and investors for the continued trust and support."

Charlie Steel, Chief Financial Officer, added, "Babylon has continued its track-record of strong operational performance through the second quarter of 2022, with our Cost of Care Delivery expense reducing as a percentage of revenue from last quarter and delivering Adjusted EBITDA results ahead of consensus estimates. We continue to remain focused on profitable growth and are on track to achieve our revenue guidance of $1.0 billion or greater for the full year of 2022, alongside our improved Adjusted EBITDA guidance of $(270.0) million or less announced in July."

Second Quarter Financial Results

Comparison of the following financial results for the three months ended June 30, 2022, compared to the three months ended June 30, 2021:

Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin are non-IFRS measures. An explanation of non-IFRS measures, a reconciliation of Adjusted EBITDA to the most comparable IFRS measure, Loss for the period, and the calculations of IFRS Loss for the Period Margin, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin, have been provided at the end of this press release.

Recent Highlights

% of Total U.S. VBC Members:

December 31,
2020

 

December 31,
2021

 

June 30,
2022

Medicaid

88

%

 

84

%

 

82

%

Medicare

12

%

 

7

%

 

12

%

Commercial

?

 

 

9

%

 

6

%

Total U.S. VBC Members1

66,000

 

 

167,000

 

 

269,000

 

______________________________

1 Rounded to nearest thousand. "U.S. VBC Members" means individuals who are covered by one of our U.S. value-based care agreements with a health plan or healthcare provider. Under these agreements, we take financial responsibility for all or some of the surpluses or deficits in total actual costs under the agreement compared to our negotiated fixed per member per month, or capitation, allocation. Total U.S. VBC Members for December 31, 2020 and December 31, 2021 as per Babylon's Annual Report on Form 20-F filed with the SEC on March 30, 2022. VBC membership figures may include some estimates for lagging data provided by health plans and may be subject to true-ups and adjustments in the future.

FY 2022 Financial Guidance

For the twelve months ending December 31, 2022, Babylon is reiterating its revenue guidance of $1.0 billion or greater, which represents a more than 3x increase over 2021 revenue driven predominantly by organic growth, fueled by state expansion in the U.S. with existing clients, as well as members from new clients.

Babylon is reiterating improved Adjusted EBITDA guidance for FY 2022 from $(295.0) million or less to $(270) million or less, implying a significant improvement in Adjusted EBITDA Margin from (184)% and (54)% in 2020 and 2021, with forecasted monthly Adjusted EBITDA of $(18) million or less by December 2022. Babylon continues to evaluate timing to reach profitability on both a cash flow and Adjusted EBITDA basis, which we are targeting as no later than 2025.

These statements are forward-looking and actual results may differ materially. Please refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. We are not able to reconcile projected Adjusted EBITDA loss for 2022 or December 2022, or 2022 Adjusted EBITDA Margin to its most directly comparable IFRS measure as we are not able to forecast Loss for the period on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect Loss for the period, including, but not limited to, changes in fair value of warrant liabilities, impairment expense, share-based compensation, foreign exchange gains or losses and gains and losses on sale of subsidiaries. Adjusted EBITDA should not be used to predict Loss for the period as the difference between the two measures is variable and may be significant.

Second Quarter 2022 Earnings Conference Call

Babylon will host a conference call to discuss second quarter 2022 results on August 9, 2022, at 5:00 p.m. Eastern Time. To participate in the Company's live conference call and webcast, please dial (866) 682-6100 for U.S. participants, 0800 756 3429 for U.K. participants, or +1 862-298-0702 for international participants. Alternatively, you can visit the "News & Events" section of https://ir.babylonhealth.com/ to access the live webcast. On this page, you can also find a "Call me" link for instant telephone access to the event, which will be made active 15 minutes prior to the scheduled start time. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

Additional Notes

Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin are non-IFRS measures. An explanation of non-IFRS measures, a reconciliation of Adjusted EBITDA to the most comparable IFRS measure, Loss for the period, and the calculations of IFRS Loss for the Period Margin, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin, have been provided at the end of this press release.

Accompanying supplemental information will be posted to the Investor Relations section of Babylon's website at https://www.babylonhealth.com.

About Babylon

Babylon is one of the world's fastest growing digital healthcare companies whose mission is to make high-quality healthcare accessible and affordable for every person on Earth.

Babylon is re-engineering how people engage with their care at every step of the healthcare continuum. By flipping the model from reactive sick care to proactive healthcare through the devices people already own, it offers millions of people globally ongoing, always-on care. Babylon has already shown that in environments as diverse as the developed UK or developing Rwanda, urban New York, or rural Missouri, for people of all ages, it is possible to achieve its mission by leveraging its highly scalable, digital-first platform combined with high quality, virtual clinical operations to provide integrated, personalized healthcare.

Founded in 2013, Babylon's technology and clinical services is supporting a global patient network across 15 countries and is capable of operating in 16 languages. In 2021 alone, Babylon helped a patient every 6 seconds, with approximately 5.2 million consultations and AI interactions. Importantly, this was achieved with a 93% user retention rate in our NHS GP at Hand service and 4 or 5 star ratings from more than 90% of our users across all of our geographies.

Babylon is also working with governments, health providers, employers and insurers across the globe to provide them with a new infrastructure that any partner can use to deliver high-quality healthcare with lower costs and better outcomes. For more information, please visit www.babylonhealth.com.

Forward-Looking Statements

This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or our future financial or operating performance. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements include, without limitation, information concerning Babylon's possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment and potential growth opportunities.

These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of Babylon's management's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to our future financial and operating results and that we may require additional financing; uncertainties related to our ability to continue as a going concern; the growth of our business and organization; risks associated with impairment of goodwill and other intangible assets; our failure to compete successfully; our ability to renew contracts with existing customers, and risks of contract renewals at lower fee levels, or significant reductions in members, pricing or premiums under our contracts due to factors outside our control; our dependence on our relationships with physician-owned entities; our ability to maintain and expand a network of qualified providers; our ability to increase engagement of individual members or realize the member healthcare cost savings that we expect; a significant portion of our revenue comes from a limited number of customers; the uncertainty and potential inadequacy of our claims liability estimates for medical costs and expenses; risks associated with estimating the amount and timing of revenue recognized under our licensing agreements and value-based care agreements with health plans; risks associated with our physician partners' failure to accurately, timely and sufficiently document their services; risks associated with inaccurate or unsupportable information regarding risk adjustment scores of members in records and submissions to health plans; risks associated with reduction of reimbursement rates paid by third-party payers or federal or state healthcare programs; risks associated with regulatory proposals directed at containing or lowering the cost of healthcare, including the ACO REACH model; immaturity and volatility of the market for telemedicine and our unproven digital-first approach; our ability to develop and release new solutions and services; the impact of COVID-19 or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide on our business; and the other risks and uncertainties identified in Babylon's Annual Report on Form 20-F filed with the SEC on March 30, 2022, and in other documents filed or to be filed by Babylon with the SEC and available at the SEC's website at www.sec.gov.

Babylon cautions that the foregoing list of factors is not exclusive and cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, Babylon does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this press release.

 

Table 1

Babylon Holdings Limited

Consolidated Statement of Profit and Loss and Other Comprehensive Loss

(Unaudited)

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

$'000

 

$'000

 

$'000

 

$'000

Revenue:

 

 

 

 

 

 

 

Value-based care

244,098

 

 

39,133

 

 

490,673

 

 

66,392

 

Software licensing

7,375

 

 

8,281

 

 

15,131

 

 

44,245

 

Clinical services

13,889

 

 

10,064

 

 

26,004

 

 

18,134

 

Total revenue

265,362

 

 

57,478

 

 

531,808

 

 

128,771

 

Claims expense

(238,764

)

 

(40,384

)

 

(486,316

)

 

(64,301

)

Clinical care delivery expense

(21,649

)

 

(16,013

)

 

(45,576

)

 

(27,836

)

Platform & application expenses

(13,356

)

 

(14,943

)

 

(30,059

)

 

(21,377

)

Research & development expenses

(18,658

)

 

(6,811

)

 

(28,715

)

 

(17,201

)

Sales, general & administrative expenses

(67,969

)

 

(45,127

)

 

(126,279

)

 

(76,606

)

Impairment expense

(53,224

)

 

?

 

 

(53,224

)

 

?

 

Operating loss

(148,258

)

 

(65,800

)

 

(238,361

)

 

(78,550

)

Finance costs

(9,816

)

 

(1,251

)

 

(16,444

)

 

(2,243

)

Finance income

128

 

 

14

 

 

383

 

 

28

 

Change in fair value of warrant liabilities

10,791

 

 

?

 

 

16,366

 

 

?

 

Loss on settlement of warrants

(2,375

)

 

?

 

 

(2,375

)

 

?

 

Exchange (loss) / gain

(7,350

)

 

482

 

 

(7,797

)

 

(91

)

Net finance expense

(8,622

)

 

(755

)

 

(9,867

)

 

(2,306

)

Gain on sale of subsidiary

?

 

 

?

 

 

?

 

 

3,917

 

Share of loss of equity-accounted investees

?

 

 

(821

)

 

?

 

 

(1,276

)

Loss before taxation

(156,880

)

 

(67,376

)

 

(248,228

)

 

(78,215

)

Tax (provision) / benefit

(199

)

 

2,501

 

 

(208

)

 

2,493

 

Loss for the period

(157,079

)

 

(64,875

)

 

(248,436

)

 

(75,722

)

Other comprehensive loss

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Currency translation differences

1,495

 

 

1,687

 

 

(2,258

)

 

(67

)

Other comprehensive loss for the period, net of income tax

1,495

 

 

1,687

 

 

(2,258

)

 

(67

)

Total comprehensive loss for the period

(155,584

)

 

(63,188

)

 

(250,694

)

 

(75,789

)

Loss attributable to:

 

 

 

 

 

 

 

Equity holders of the parent

(157,079

)

 

(64,441

)

 

(248,436

)

 

(74,907

)

Non-controlling interest

?

 

 

(434

)

 

?

 

 

(815

)

 

(157,079

)

 

(64,875

)

 

(248,436

)

 

(75,722

)

Total comprehensive loss attributable to:

 

 

 

 

 

 

 

Equity holders of the parent

(155,584

)

 

(62,754

)

 

(250,694

)

 

(74,974

)

Non-controlling interest

?

 

 

(434

)

 

?

 

 

(815

)

 

(155,584

)

 

(63,188

)

 

(250,694

)

 

(75,789

)

Net loss per share, Basic and Diluted

(0.41

)

 

(0.26

)

 

(0.64

)

 

(0.31

)

 

Table 2

Babylon Holdings Limited

Consolidated Statement of Cash Flows

(Unaudited)

 

 

For the Six Months Ended June 30,

 

2022

 

2021

 

$'000

 

$'000

Cash flows from operating activities

 

 

 

Loss for the period

(248,436

)

 

(75,722

)

Adjustments to reconcile Loss for the period to net cash used in operating activities:

 

 

 

Share-based compensation

18,966

 

 

12,344

 

Depreciation and amortization

21,402

 

 

13,322

 

Impairment expense

53,224

 

 

?

 

Finance costs

16,444

 

 

2,243

 

Finance income

(383

)

 

(28

)

Change in fair value of warrant liabilities

(16,366

)

 

?

 

Loss on settlement of warrants

2,375

 

 

?

 

Exchange loss

7,797

 

 

91

 

Taxation

208

 

 

(2,493

)

Gain on sale of subsidiary

?

 

 

(3,917

)

Share of loss of equity-accounted investees

?

 

 

1,276

 

 

(144,769

)

 

(52,884

)

Working capital adjustments

 

 

 

Decrease / (increase) in trade and other receivables

5,489

 

 

(12,414

)

Increase / (decrease) in trade and other payables

12,335

 

 

44,372

 

(Increase) / decrease in assets/liabilities held for sale

?

 

 

1,460

 

Net cash used in operating activities

(126,945

)

 

(19,466

)

Cash flows from investing activities

 

 

 

Development costs capitalized

(17,449

)

 

(16,254

)

Capital expenditures

(6,977

)

 

(2,444

)

Interest received

383

 

 

7

 

Proceeds from sale of investment in subsidiary

?

 

 

2,213

 

Payment for acquisition of subsidiaries

?

 

 

(13,835

)

Purchase of shares in associates and joint ventures

?

 

 

(5,000

)

Net cash used in investing activities

(24,043

)

 

(35,313

)

Cash flows from financing activities

 

 

 

Proceeds from issuance of notes and warrants

100,000

 

 

?

 

Payment of equity and debt issuance costs

(5,499

)

 

?

 

Interest paid

(4,644

)

 

(1,826

)

Principal payments on leases

(2,435

)

 

(2,293

)

Other financing activities, net

(1,736

)

 

(366

)

Net cash provided by (used in) financing activities

85,686

 

 

(4,485

)

Net increase in cash and cash equivalents

(65,302

)

 

(59,264

)

Cash and cash equivalents at January 1,

262,581

 

 

101,757

 

Effect of movements in exchange rate on cash held

(10,322

)

 

(112

)

Cash and cash equivalents at end of period

186,957

 

 

42,381

 

 

Table 3

Babylon Holdings Limited

Consolidated Statement of Financial Position

(Unaudited)

 

 

June 30, 2022

 

December 31, 2021

 

$'000

 

$'000

ASSETS

 

 

 

Non-current assets

 

 

 

Right-of-use assets

17,972

 

 

7,844

 

Property, plant and equipment

26,698

 

 

24,990

 

Goodwill

43,041

 

 

93,678

 

Other intangible assets

105,846

 

 

111,421

 

Total non-current assets

193,557

 

 

237,933

 

Current assets

 

 

 

Right-of-use assets

5,057

 

 

3,999

 

Trade and other receivables

28,333

 

 

24,119

 

Prepayments and contract assets

18,417

 

 

26,000

 

Cash and cash equivalents

186,957

 

 

262,581

 

Total current assets

238,764

 

 

316,699

 

Total assets

432,321

 

 

554,632

 

EQUITY AND LIABILITIES

 

 

 

EQUITY

 

 

 

Ordinary share capital

16

 

 

16

 

Share premium

927,183

 

 

922,897

 

Share-based payment reserve

101,132

 

 

80,371

 

Retained earnings

(1,086,422

)

 

(837,986

)

Foreign currency translation reserve

(2,285

)

 

(27

)

Total capital and reserves

(60,376

)

 

165,271

 

Total equity

(60,376

)

 

165,271

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Loans and borrowings

268,665

 

 

168,601

 

Contract liabilities

54,781

 

 

70,396

 

Lease liabilities

18,028

 

 

8,442

 

Deferred grant income

7,504

 

 

7,236

 

Deferred tax liability

764

 

 

1,019

 

Total non-current liabilities

349,742

 

 

255,694

 

Current liabilities

 

 

 

Trade and other payables

30,818

 

 

22,686

 

Accruals and provisions

43,283

 

 

36,856

 

Claims payable

38,657

 

 

24,628

 

Contract liabilities

20,552

 

 

23,786

 

Warrant liability

2,881

 

 

20,128

 

Lease liabilities

5,245

 

 

4,190

 

Deferred grant income

1,519

 

 

1,208

 

Loans and borrowings

?

 

 

185

 

Total current liabilities

142,955

 

133,667

 

Total liabilities

492,697

 

389,361

 

Total liabilities and equity

432,321

 

 

554,632

 

 

Table 4
Babylon Holdings Limited
Non-IFRS Financial Measures
(Unaudited)

EBITDA is defined as profit (loss) for the period, adjusted for finance costs and income, depreciation and amortization, and tax provision or benefit. Adjusted EBITDA is defined as profit (loss) for the period, adjusted for finance costs and income, depreciation and amortization, tax provision or benefit, impairment expenses, change in fair value of warrant liabilities, loss on settlement of warrants, share-based compensation, foreign exchange gain or loss, restructuring and other one-time benefit arrangements and gain or loss on sale of subsidiaries. Loss for the period is the most directly comparable IFRS measure to Adjusted EBITDA. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Total revenue for the corresponding period. Medical Loss Ratio and Medical Margin are derived from amounts presented in the Statement of Profit and Loss included in the table below.

We believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin (collectively, the "Non-IFRS Measures") are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating activities.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin have certain limitations, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under IFRS. We caution investors that amounts presented in accordance with our definitions of any of the Non-IFRS Measures may not be comparable to similar measures disclosed by other issuers, because some issuers calculate certain of the Non-IFRS Measures differently or not at all, limiting their usefulness as direct comparative measures.

The following table presents a reconciliation of specific IFRS measures to the Non-IFRS Measures used by management. These include EBITDA and Adjusted EBITDA from the most directly comparable IFRS measure, Loss for the period, and the calculations of IFRS Loss for the Period Margin, Adjusted EBITDA Margin, Medical Loss Ratio and Medical Margin, for the three and six months ended June 30, 2022 and 2021:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

$'000

 

$'000

 

$'000

 

$'000

Loss for the period

(157,079

)

 

(64,875

)

 

(248,436

)

 

(75,722

)

Adjustments to calculate EBITDA:

 

 

 

 

 

 

 

Finance costs and income

9,688

 

 

1,237

 

 

16,061

 

 

2,215

 

Depreciation and amortization

11,944

 

 

7,474

 

 

21,402

 

 

13,322

 

Tax provision / (benefit)

199

 

 

(2,501

)

 

208

 

 

(2,493

)

EBITDA

(135,248

)

 

(58,665

)

 

(210,765

)

 

(62,678

)

Adjustments to calculate Adjusted EBITDA:

 

 

 

 

 

 

 

Impairment expense

53,224

 

 

?

 

 

53,224

 

 

?

 

Change in fair value of warrant liabilities

(10,791

)

 

?

 

 

(16,366

)

 

?

 

Loss on settlement of warrants

2,375

 

 

?

 

 

2,375

 

 

?

 

Share-based compensation

10,564

 

 

9,542

 

 

18,966

 

 

12,344

 

Exchange loss / (gain)

7,350

 

 

(482

)

 

7,797

 

 

91

 

Restructuring and other one-time benefit arrangements

3,848

 

 

?

 

 

3,848

 

 

?

 

Gain on sale of subsidiary

?

 

 

?

 

 

?

 

 

(3,917

)

Adjusted EBITDA

(68,678

)

 

(49,605

)

 

(140,921

)

 

(54,160

)

 

 

 

 

 

 

 

 

Total revenue

265,362

 

 

57,478

 

 

531,808

 

 

128,771

 

Value-based care revenue

244,098

 

 

39,133

 

 

490,673

 

 

66,392

 

Claims expense

(238,764

)

 

(40,384

)

 

(486,316

)

 

(64,301

)

 

 

 

 

 

 

 

 

IFRS Loss for the Period Margin

(59.2

) %

 

(112.9

) %

 

(46.7

) %

 

(58.8

) %

Adjusted EBITDA Margin

(25.9

) %

 

(86.3

) %

 

(26.5

) %

 

(42.1

) %

 

 

 

 

 

 

 

 

Medical Loss Ratio

97.8

%

 

103.2

%

 

99.1

%

 

96.9

%

Medical Margin

2.2

%

 

(3.2

) %

 

0.9

%

 

3.1

%

 


These press releases may also interest you

at 01:03
The last Boeing 747 left the company's widebody factory in advance of its delivery to Atlas Air in early 2023. "For more than half a...

at 00:48
KONKA Group Co. Ltd. ("the Company"; 000016. SZ), a leading technology company, and MBC GROUP, the largest and leading media company in the Middle East and North Africa (MENA) region, have recently announced a strategic partnership that will allow...

at 00:45
Proactive, provider of real-time news and video interviews on growth companies listed in Australia, has covered the following companies: Bellevue Gold Ltd is a step closer to becoming Australia's next high-grade gold producer after receiving firm...

6 déc 2022
TSX VENTURE COMPANIES BULLETIN TYPE:  Cease Trade OrderBULLETIN DATE:  December 6, 2022TSX Venture Companies A  Cease Trade Order has been issued by the British Columbia and Ontario Securities Commissions on December 5, 2022 against the following...

6 déc 2022
Axon Enterprise, Inc. ("Axon") today announced the pricing of its private offering of $600 million aggregate principal amount of 0.50% Convertible Senior Notes due 2027 (the "Notes") to persons reasonably believed to be qualified institutional...

6 déc 2022
Robert F. Kennedy Human Rights (RFKHR) today held its annual Ripple of Hope Gala which honored exemplary leaders across government, business, advocacy, and entertainment who have demonstrated an unwavering commitment to social change and worked to...



News published on 9 august 2022 at 16:20 and distributed by: