NantHealth, Inc. (NASDAQ-GS: NH), a provider of enterprise solutions that help businesses transform complex data into actionable insights, today reported financial results for its first quarter ended March 31, 2021.

“Last month, we successfully completed a $137.5 million financing transaction and will use a portion of the proceeds to retire our existing convertible notes,” said Ron Louks, Chief Operating Officer, NantHealth. “We intend to use the balance of the proceeds to, among other things, support our growth initiatives, which include further developing our existing SaaS offerings, expanding our recently acquired OpenNMS business and investing in our data services and cloud capabilities.

“Turning to our 2021 first-quarter financial results, as expected revenues declined largely due to the accounting for amortization of services related to expired or renewed contracts at the end of the 2020 fourth quarter. While we remain committed to managing our overhead costs, we have continued the ramp up of our investment in research and development to improve and expand the innovative solutions we bring to our customers.

“Looking ahead, we see growing opportunities to expand and diversify our business within and beyond healthcare. Earlier this week, we launched Eviti Connect for autoimmune diseases, extending our proven payer solution beyond oncology, and announced plans to further develop the Eviti platform to allow us to expand into additional disease states, over time. In addition, we are expanding OpenNMS offerings to include a new cloud-based platform to supplement our already robust on-premise platform, which will both broaden the solutions we offer to our healthcare customers and attract new customers across a variety of industries.”

Software and Services Highlights:

• Clinical Decision Support (Eviti®):
  • In May, launched Eviti Connect for autoimmune diseases, bringing the Company’s payer solution for oncology to a disease type that affects more than 50 million in the U.S. alone. The Company developed a new, flexible platform that will enable it to expand into disease areas beyond oncology and autoimmune
  • Launched Eviti Connect 8.4, which included:
    • New functionality enables drug customization per payer or line of business providing more flexibility to meet diverse policies within the payer organization
    • New payer communication capability that reduces delays in treatment plan reviews
  • In May, Eviti Connect won the MedTech Breakthrough award for "Best MedTech Overall Software," recognized for the platform's innovative ability to break through digital health and technology markets

• Payer Engagement (NaviNet® and Population Health Management):
  • Continued customer renewals, securing three multi-year agreements in Q1 with over $700K of annual contract value
  • AllPayer, the Company's direct-to-provider solution, had its seventh consecutive quarter of growth
  • Enhanced NaviNet essential workflows to support automation and promote greater usability
    • Open Authorizations now allows health plans to configure rules defining which services do not require prior authorization. This increases transparency for providers and saves time by eliminating unnecessary requests
    • New Referral Submission API enables providers to automate management of referral requests through NaviNet, making it easier to guide patients to optimal quality and cost referral sites
  • Announced Population Health Management, a new product offering that integrates multiple data sources into one platform, providing a more complete view of the patient. This enables payers and providers to engage proactively with patients, increasing the quality of care while reducing costs

• Network Monitoring and Management (OpenNMS®):
  • Deployed a solution for a global energy customer that scales the monitoring and analysis of network communications by aggregating the data streams (netflow) to greatly improve scalability and usability of the solution
  • Initiated a Zero-touch Appliance service pilot with a large national retailer

Business and Financial Highlights

For the 2021 first quarter:

• Total net revenue was $16.2 million compared with $18.2 million in Q1 of 2020. Within total revenue, total software-related revenue was $16.2 million compared with $18.1 million in prior-year first quarter.
• Gross profit was $9.1 million, or 56% of total net revenue, compared with $11.0 million, or 60% of total net revenue, for the prior-year period.
• Selling, general and administrative (SG&A) expenses increased to $12.5 million from $12.4 million in the 2020 first quarter.
• Research and development (R&D) expenses increased to $5.0 million from $3.6 million.
• Net loss from continuing operations attributable to NantHealth, net of tax, was $15.4 million, or $0.14 per share, compared with $8.9 million, or $0.08 per share, in the 2020 first quarter.
• Non-GAAP net loss from continuing operations attributable to NantHealth was $9.6 million, or $0.09 per share, compared with $6.1 million, or $0.06 per share, for the first quarter of 2020.
• At March 31, 2021, cash and cash equivalents totaled $10.8 million.

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) to review its results of operations for the first quarter ended March 31, 2021. The conference call will be available to interested parties by dialing 844-309-3709 from the U.S. or Canada, or 281-962-4864 from international locations, passcode 8364209. The call will be broadcast via the Internet at www.nanthealth.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding topics such as the company’s financial status and performance, regulatory and operational developments, and other comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures

This news release contains references to Non-GAAP financial measures, including adjusted net loss and adjusted net loss per share, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. Other companies may define these measures in different ways. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Non-GAAP per share numbers are calculated based on one class of common stock and do not incorporate the effects, if any, of using the two-class method.

About NantHealth, Inc.

NantHealth, a member of the NantWorks ecosystem of companies, provides enterprise solutions that help businesses transform complex data into actionable insights. By offering efficient ways to move, interpret and visualize complex and highly sensitive information, NantHealth enables customers in healthcare, life sciences, logistics, telecommunications and other industries to automate, understand and act on data while keeping it secure and scalable. NantHealth’s product portfolio comprises the latest technology in payer/provider collaboration platforms for real-time coverage decision support (Eviti and NaviNet), molecular analysis (GPS Cancer) and data solutions that provide multi-data analysis, reporting and professional services offerings (Quadris). OpenNMS, a NantHealth subsidiary, helps businesses monitor and manage network health and performance. For more information, visit nanthealth.com, follow us on Twitter, Facebook and LinkedIn, and subscribe to our blog.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. Risks and uncertainties include, but are not limited to: our ability to successfully integrate a complex learning system to address a wide range of healthcare issues; our ability to successfully amass the requisite data to achieve maximum network effects; appropriately allocating financial and human resources across a broad array of product and service offerings; raising additional capital as necessary to fund our operations; achieving significant commercial market acceptance for our sequencing and molecular analysis solutions; establish relationships with, key thought leaders or payers’ key decision makers in order to establish GPS Cancer as a standard of care for patients with cancer; our ability to grow the market for our Systems Infrastructure, and applications; successfully enhancing our Systems Infrastructure and applications to achieve market acceptance and keep pace with technological developments; customer concentration; competition; security breaches; bandwidth limitations; our ability to integrate OpenNMS into our operations; our ability to obtain regulatory approvals; dependence upon senior management; the need to comply with and meet applicable laws and regulations; unexpected adverse events; clinical adoption and market acceptance of GPS Cancer; and anticipated cost savings. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our reports filed with the Securities and Exchange Commission.

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