• Revenue: $234.5 million for Q1 2024, a decrease of 0.9% from Q1 2023.

• Adjusted EBITDA: $146.8 million for Q1 2024, down 6.1% from the prior year quarter.

• Net Promoter Score: 73, indicating a 25% increase from the previous year.

• New Sales: Closed 73 opportunities, representing a 36% year-over-year increase.

• Free Cash Flow: Generated $19.2 million in levered free cash flow during Q1 2024.

• Debt Reduction: Reduced the face value of debt by over $24 million.

• Impairment Charges: Recorded non-cash impairment charges totaling $519.1 million due to stock price and market conditions.

• Warning! GuruFocus has detected 7 Warning Signs with MPLN.

Release Date: May 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MultiPlan Corp (NYSE:MPLN) reported a positive 73 net promoter score across all clients, indicating strong client satisfaction and service excellence.

• The company increased its sales pipeline and closed 73 opportunities, representing a 36% year-over-year increase in new sales.

• MultiPlan Corp (NYSE:MPLN) signed four new logos with HST's value-driven health plans and made progress in marketing its new balance bill protection product.

• The company successfully closed its first Plan Optics sale in the first quarter, with a growing pipeline indicating momentum in platform transparency products and predictive analytics.

• MultiPlan Corp (NYSE:MPLN) is expanding strategic partnerships, exploring new growth opportunities which will be detailed in future quarters.

Negative Points

• First quarter revenues were slightly below the low end of guidance at $234.5 million, impacted by a cybersecurity incident at a major medical claims clearinghouse.

• The cybersecurity incident disrupted claims flow, reducing expected revenue by an estimated $5 million to $6 million for the quarter.

• Despite efforts to control expenses, first quarter adjusted EBITDA expenses increased by $7.4 million year-over-year due to structural cost increases and investments.

• The company recorded non-cash impairment charges of $516.4 million for goodwill and $2.7 million for intangibles due to a reassessment of asset values influenced by current financial market conditions and stock price.

• Revenue yield declined about 4 basis points sequentially across the business, impacting revenue by approximately $4.4 million.

Q & A Highlights

Q: Can you discuss the impact of the clearinghouse outage on your Q1 results and how you sized the $5 million to $6 million impact? A: Jim Head, CFO, explained that the outage was initially underestimated in its duration and impact, affecting claims processing significantly in March. The $5 million to $6 million estimated impact was based on average claim volumes and client activity slowdowns. The persistence of the issue into April led to cautious Q2 guidance, anticipating a gradual resolution.