News Classic

Third Quarter 2024 Highlights

• Revenue increased 27% to €255 million
• Profit for the period increased €33 million to €37 million and expanded to 14.5% as a percentage of revenue
• Adjusted EBITDA¹ increased 30% to €66 million and Adjusted EBITDA margin¹ expanded to 25.8%
• Net cash generated from operating activities increased 55% to €118 million and Free cash flow¹ increased 192% to €62 million
• Customer Net Retention Rate¹ increased to 126%
• Repurchased $8.3 million of shares
• Further raised full year guidance to revenue growth of at least 24% to €1,090 million and Adjusted EBITDA growth of at least 29% to €216 million

ST. GALLEN, Switzerland, Nov. 07, 2024 (GLOBE NEWSWIRE) — Sportradar Group AG SRAD (“Sportradar” or the “Company”), a leading global sports technology company focused on creating immersive experiences for sports fans and bettors, today announced financial results for its third quarter ended September 30, 2024.

Carsten Koerl, Chief Executive Officer of Sportradar, said: “Our competitive advantages within the sports ecosystem, coupled with our growth-oriented strategy, is driving broad-based outperformance. We continue to deliver more value to our clients and partners, building shareholder value. We are at an important inflection point to drive operational leverage and cash generation, demonstrated by our expanding EBITDA margin and strong cash flow this past quarter. The significant cash flow has further strengthened our balance sheet and we are deploying our capital to execute on our growth strategy while returning capital to shareholders. Additionally, we continue to show strong momentum in the US, which we expect to be further bolstered by the growth of in-game betting and with the start of the NBA and NHL seasons.”

THIRD QUARTER AND YEAR TO DATE FINANCIAL RESULTS

Revenue

Total revenue for the third quarter was €255 million, up €54 million, or 27% year-over-year driven by 32% growth in Betting Technology & Solutions and 8% growth in Sports Content, Technology & Services.

Betting Technology & Solutions revenues of €210 million were up 32% year-over-year primarily driven by a 37% increase in Betting & Gaming Content benefiting from existing and new customer uptake of our products and premium pricing, as well as from the strong U.S. market growth. Additionally, Managed Betting Services grew 18% year-over-year, primarily driven by strong growth in Managed Trading Services from higher trading margins and increased betting activity from existing and new customers.

Sports Content, Technology & Services revenues of €45 million, increased 8% year-over-year primarily driven by 10% growth in Marketing & Media Services with strong growth in both European and North America ad:s revenue as several sportsbooks launched marketing campaigns.

The Company generated strong revenue growth globally with Rest of World up 23% and the United States up 46%. As a percentage of total Company revenues, United States revenue represented 20% of total Company revenue in the third quarter as compared to 17% in the prior year quarter due to market growth, additional customer uptake of our products and premium pricing.

Customer Net Retention Rate of 126% increased sequentially and from the prior year quarter demonstrating the strength in cross selling and upselling to clients most notably due to the new ATP rights deal and market growth in the United States.

Profit for the period from continuing operations

Profit for the period from continuing operations in the third quarter was €37 million, up €32 million, compared to €5 million in the same quarter a year ago. The increase was primarily driven by the strong operating results as well as €21 million in net foreign currency gains due to strengthening of the Euro against the U.S. dollar and €15 million of prior year one-time losses related to impairment on goodwill and intangible assets related to the impact of changes related to our business strategy and disposal of an equity-accounted investee. These increases were partially offset by higher financing costs of €14 million driven by the new ATP, NBA, and Bundesliga partnership deals.

Adjusted EBITDA

Third quarter Adjusted EBITDA was €66 million, up €15 million, compared to €50 million in the same quarter a year ago. The increase was primarily driven by the 27% revenue growth, partially offset by increased sport rights costs primarily related to the ATP partnership deal, higher purchased services driven by investments in developing our product portfolio, increased personnel expenses due to headcount growth and a higher bonus accrual in the current year.

Additional Business Highlights

• In conjunction with our partnership with the NBA, Sportradar has launched a suite of next generation products and solutions for the 2024 – 2025 season. Leveraging products such as 4Sight Streaming, emBET, Live Match Tracker and advanced visualizations, Sportradar can harness hundreds of thousands of data points per game to redefine the standards of fan engagement.
• Sportradar introduced micro markets for ATP tennis matches in collaboration with Tennis Data Innovations, expanding this cutting-edge product to tennis from other popular sports such as soccer and table tennis. The eight distinct micro markets are expected to generate approximately 1,500 new betting opportunities per match, opening fresh revenue streams for operators.
• Sportradar added paid search to its ad:s marketing service, allowing operators to more effectively reach and acquire customers searching betting and gaming-related topics online.
• Sportradar received several industry awards, including the Best Live Betting Product at SBC Summit 2024. In addition, Sportradar was recognized in two prestigious categories at the 2024 American Gambling Awards, winning Betting Product of the Year for its 4Sight technology and the Data Service Provider of the Year.

Balance Sheet and Liquidity

The Company’s cash and cash equivalents were €368 million as of September 30, 2024 as compared with €277 million as of December 31, 2023. The increase was primarily driven by net cash generated from operating activities of €271 million due to the strong operating performance, partially offset by net cash used in investing activities of €152 million, primarily from the acquisition of additional sports rights, most notably our new NBA and ATP deals, and from net cash used in financing activities of €26 million, due primarily to share repurchases. Free cash flow for the nine-months ended September 30, 2024 was €122 million, an increase of €71 million from the €51 million in the same period a year ago.

Including the undrawn credit facility, the Company had total liquidity of €588 million at September 30, 2024 as compared to €510 million as of September 30, 2023, and no debt outstanding.

2024 Annual Financial Outlook

Sportradar is further raising its fiscal 2024 outlook for revenue and Adjusted EBITDA as follows:

• Revenue of at least €1,090 million, up 24% year-over-year, compared with prior outlook of €1,070 million.
• Adjusted EBITDA of at least €216 million, up 29% year-over-year, compared with prior outlook of €204 million.
• Adjusted EBITDA margin of approximately 20%.

Share Repurchase Program

In March of this year the Board of Directors approved a $200 million share repurchase program and commenced purchases during the second quarter. During the current quarter, the Company repurchased approximately 721,000 shares for a total of $8.3 million. Year to date through November 1, 2024, the Company has repurchased 1.7 million shares under the plan for a total of approximately $20 million.

Conference Call and Webcast Information

Sportradar will host a conference call to discuss the third quarter 2024 results today, November 7, 2024, at 8:00 a.m. Eastern Time. Those wishing to participate via webcast should access the earnings call through Sportradar’s Investor Relations website. An archived webcast with the accompanying slides will be available at the Company’s Investor Relations website for one year after the conclusion of the live event.

About Sportradar

Sportradar Group AG SRAD, founded in 2001, is a leading global sports technology company creating immersive experiences for sports fans and bettors. Positioned at the intersection of the sports, media and betting industries, the Company provides sports federations, news media, consumer platforms and sports betting operators with a best-in-class range of solutions to help grow their business. As the trusted partner of organizations like the ATP, NBA, NHL, MLB, NASCAR, UEFA, FIFA, and Bundesliga, Sportradar covers close to a million events annually across all major sports. With deep industry relationships and expertise, Sportradar is not just redefining the sports fan experience, it also safeguards sports through its Integrity Services division and advocacy for an integrity-driven environment for all involved.

For more information about Sportradar, please visit www.sportradar.com

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¹ Non-IFRS measure. See the sections captioned “Non-IFRS Financial Measures and Operating Metric” and “IFRS to Non-IFRS reconciliations” for more details.

CONTACT:

Investor Relations:
Jim Bombassei
j.bombassei@sportradar.com

Media:
Sandra Lee
press@sportradar.com

Non-IFRS Financial Measures and Operating Metric

We have provided in this press release financial information that has not been prepared in accordance with IFRS, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted purchased services, Adjusted personnel expenses, Adjusted other operating expenses, and Free cash flow, as well as our operating metric, Customer Net Retention Rate. We use these non-IFRS financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to IFRS measures, in evaluating our ongoing operational performance. We believe that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-IFRS financial measures to investors.

Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the reconciliation of these non-IFRS financial measures to their most directly comparable IFRS financial measures provided in the financial statement tables included below in this press release.

• “Adjusted EBITDA” represents earnings for the period from continuing operations adjusted for finance income and finance costs, income tax expense or benefit, depreciation and amortization (excluding amortization of capitalized sport rights licenses), foreign currency gains or losses, and other items that are non-recurring or not related to the Company’s revenue-generating operations, including share-based compensation, impairment charges or income, management restructuring costs, non-routine litigation costs, losses related to equity-accounted investee (SportTech AG), and professional fees for the Sarbanes-Oxley Act of 2002 and enterprise resource planning implementations.
  License fees relating to sport rights are a key component of how we generate revenue and one of our main operating expenses. Only licenses that meet the recognition criteria of IAS 38 are capitalized. The primary distinction for whether a license is capitalized or not capitalized is the contracted length of the applicable license. Therefore, the type of license we enter into can have a significant impact on our results of operations depending on whether we are able to capitalize the relevant license. As such, our presentation of Adjusted EBITDA reflects the full costs of our sport right’s licenses. Management believes that, by including amortization of sport rights in its calculation of Adjusted EBITDA, the result is a financial metric that is both more meaningful and comparable for management and our investors while also being more indicative of our ongoing operating performance.
  We present Adjusted EBITDA because management believes that some items excluded are non-recurring in nature and this information is relevant in evaluating the results relative to other entities that operate in the same industry. Management believes Adjusted EBITDA is useful to investors for evaluating Sportradar’s operating performance against competitors, which commonly disclose similar performance measures. However, Sportradar’s calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies. Adjusted EBITDA is not intended to be a substitute for any IFRS financial measure.
  Items excluded from Adjusted EBITDA include significant components in understanding and assessing financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation, or as an alternative to, or a substitute for, profit for the period, revenue or other financial statement data presented in our consolidated financial statements as indicators of financial performance. We compensate for these limitations by relying primarily on our IFRS results and using Adjusted EBITDA only as a supplemental measure.

• “Adjusted EBITDA margin” is the ratio of Adjusted EBITDA to revenue.
  The Company is unable to provide a reconciliation of Adjusted EBITDA guidance to profit (loss) for the period, its most directly comparable IFRS financial measure, on a forward-looking basis without unreasonable effort because items that impact this IFRS financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include but are not limited to foreign exchange gains and losses. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.

We present Adjusted purchased services, Adjusted personnel expenses, and Adjusted other operating expenses (“Non-IFRS expenses”) because management utilizes these financial measures to manage its business on a day-to-day basis and believes that they are the most relevant measures of expenses. Management believes these adjusted expense measures provide expanded insight to assess revenue and cost performance, in addition to the standard IFRS-based financial measures. Management believes these adjusted expense measures are useful to investors for evaluating Sportradar’s operating performance against competitors. However, Sportradar’s calculation of adjusted expense measures may not be comparable to other similarly titled performance measures of other companies. These adjusted expense measures are not intended to be a substitute for any IFRS financial measure.

• “Adjusted purchased services” represents purchased services less capitalized external development costs.
• “Adjusted personnel expenses” represents personnel expenses less share-based compensation awarded to employees, management restructuring costs, and capitalized personnel compensation.
• “Adjusted other operating expenses” represents other operating expenses plus impairment loss on trade receivables, less non-routine litigation, share-based compensation awarded to third parties, and certain professional fees.

We consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchase of property and equipment, the purchase of intangible assets and payment of lease liabilities, which can then be used, among other things, to invest in our business and make strategic acquisitions. A limitation of the utility of Free cash flow as a measure of liquidity is that it does not represent the total increase or decrease in our cash balance for the year.

• “Free cash flow” represents net cash from operating activities adjusted for payments for lease liabilities, acquisition of property and equipment, and acquisition of intangible assets.

In addition, we define the following operating metric as follows:

• “Customer Net Retention Rate” is calculated for a given period by starting with the reported Trailing Twelve Month revenue from our top 200 customers as of twelve months prior to such period end, or prior period revenue. We then calculate the reported trailing twelve-month revenue from the same customer cohort as of the current period end, or current period revenue. Current period revenue includes any upsells and is net of contraction and attrition over the trailing twelve months but excludes revenue from new customers in the current period. We then divide the total current period revenue by the total prior period revenue to arrive at our Net Retention Rate.

Safe Harbor for Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking” statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events, including, without limitation, statements regarding future financial or operating performance, planned activities and objectives, anticipated growth resulting therefrom, market opportunities, strategies and other expectations, and our guidance and outlook, including expected performance for the full year 2024. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “projects”, “continue,” “contemplate,” “confident,” “possible” or similar words. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the following: economy downturns and political and market conditions beyond our control, including the impact of the Russia/Ukraine and other military conflicts and foreign exchange rate fluctuations; pandemics, such as the global COVID-19 pandemic, could have an adverse effect on our business; dependence on our strategic relationships with our sports league partners; effect of social responsibility concerns and public opinion on responsible gaming requirements on our reputation; potential adverse changes in public and consumer tastes and preferences and industry trends; potential changes in competitive landscape, including new market entrants or disintermediation; potential inability to anticipate and adopt new technology; potential errors, failures or bugs in our products; inability to protect our systems and data from continually evolving cybersecurity risks, security breaches or other technological risks; potential interruptions and failures in our systems or infrastructure; our ability to comply with governmental laws, rules, regulations, and other legal obligations, related to data privacy, protection and security; ability to comply with the variety of unsettled and developing U.S. and foreign laws on sports betting; dependence on jurisdictions with uncertain regulatory frameworks for our revenue; changes in the legal and regulatory status of real money gambling and betting legislation on us and our customers; our inability to maintain or obtain regulatory compliance in the jurisdictions in which we conduct our business; our ability to obtain, maintain, protect, enforce and defend our intellectual property rights; our ability to obtain and maintain sufficient data rights from major sports leagues, including exclusive rights; any material weaknesses identified in our internal control over financial reporting; inability to secure additional financing in a timely manner, or at all, to meet our long-term future capital needs; risks related to future acquisitions; and other risk factors set forth in the section titled “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, and other documents filed with or furnished to the SEC, accessible on the SEC’s website at www.sec.gov and on our website at https://investors.sportradar.com. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. One should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(Unaudited)

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Change in presentation related to sport rights expenses

During the third quarter, the Company has changed the presentation of expenses related to sport rights in its Statement of profit or loss and other comprehensive income. Previously, these expenses were split between ‘Purchased services and licenses (excluding depreciation and amortization)’, representing the portion of related sport rights expenses which were not eligible for capitalization and ‘Depreciation and amortization’, representing the portion of related sport rights expenses which were capitalized. However, starting this quarter, the expenses are combined and presented under a new line item titled ‘Sport rights expenses (including amortization of capitalized licenses)’.

The change in presentation intends to provide more relevant and reliable information to the users of our financial statements. This reclassification aligns the presentation of sport rights expenses with the nature of the costs and the way they are managed internally.

There is no change to the Company’s disclosures, measurement or recognition of non-capitalized costs and capitalized sport rights licenses in accordance with IAS 38 Intangible Assets reported in its Annual Report on Form 20-F for the year ended December 31, 2023.

The following table shows the reclassification of sport rights expenses (unaudited):

¹ Approximately €1.2 million and €7.2 million of sport rights expenses has been reclassified from amortization to purchased services and licenses for the three-month and nine-month periods ended September 30, 2023 as previously reported in the Company’s Form 6-K dated November 1, 2023.

Additional disclosures related to sport rights expenses

The following table shows the composition of sport rights expenses (unaudited):

IFRS to Non-IFRS Reconciliations

The following table reconciles Adjusted EBITDA to the most directly comparable IFRS financial performance measure, which is Profit for the period from continuing operations (unaudited):

The most directly comparable IFRS measure of Adjusted EBITDA margin is Profit for the period from continuing operations as a percentage of revenue as disclosed below (unaudited):

The most directly comparable IFRS measure of Free cash flow is Net cash from operating activities as disclosed below (unaudited):

The following tables show reconciliations of IFRS expenses included in profit for the period from continuing operations to expenses included in Adjusted EBITDA (unaudited):

EDINBURG, Va., Nov. 07, 2024 (GLOBE NEWSWIRE) — Shenandoah Telecommunications Company (“Shentel” or the “Company”) SHEN announced third quarter 2024 financial and operating results.

Third Quarter 2024 Highlights

• Glo Fiber Expansion Markets¹ experienced growth in a number of key metrics:
  • Added approximately 6,000 subscribers in the third quarter of 2024, ending the quarter with over 59,000 subscribers.
  • Passings grew approximately 22,000 to a total of approximately 320,000.
  • Revenue grew $5.8 million or 62% to $15.1 million compared to the same period in 2023. Excluding Horizon markets, revenue grew 56% over the same period in 2023.
• Integration of Horizon ahead of schedule and on track to exceed synergy targets.

“We had a record quarter for Glo Fiber net additions and revenue driving top line revenue growth.” said President and CEO, Christopher E. French. “We made great progress with the integration of our Horizon acquisition, converting four of the six Horizon back-office systems to-date with clear line of sight to finish the integration in early 2025. We now expect to realize $11 million in annual synergy savings. We expect Glo Fiber and synergies will be key growth catalysts in 2025 and drivers of margin expansion.”

Shentel’s third-quarter earnings conference call will be webcast at 8:00 a.m. ET on Thursday, November 7, 2024. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/.

Third Quarter 2024 Results

• Revenue in the third quarter of 2024 grew $20.2 million, or 30.0%, to $87.6 million, primarily driven by $16.9 million of revenue resulting from the acquisition of Horizon. Excluding Horizon, revenues grew $3.3 million or 4.9% primarily driven by Glo Fiber Expansion Markets Residential & SMB revenue growth of $5.3 million partially offset by declines in commercial fiber and Incumbent Broadband Markets² Residential & SMB revenue. Glo Fiber Expansion Markets revenue growth was driven by a 54% increase in broadband data subscribers and an 7% increase in broadband data Average Revenue per User (“ARPU”). Commercial Fiber revenue decreased, as expected, due to the previously disclosed decline in T-Mobile revenue from prior period backhaul circuit disconnects as part of decommissioning the former Sprint network. Incumbent Broadband Markets revenue declined 3% due to lower video and other revenue.

• Cost of services for the three months ended September 30, 2024, increased approximately $8.1 million, or 31.0%, compared with the three months ended September 30, 2023, primarily driven by $8.6 million of cost of services from Horizon partially offset by $0.4 million decline in the legacy Shentel markets due primarily to lower programming costs as customers continue to migrate to video service alternatives.

• Selling, general and administrative expense for the three months ended September 30, 2024, increased $5.1 million, or 22.0%, compared with the three months ended September 30, 2023, primarily driven by $3.7 million of selling, general and administrative costs from Horizon and higher advertising and sales headcount to support the Glo Fiber expansion.

• Integration and acquisition expense for the three months ended September 30, 2024 increased $0.5 million compared with the three months ended September 30, 2023, primarily driven by non-recurring acquisition-related costs related to the Horizon acquisition and integration.

• Depreciation and amortization for the three months ended September 30, 2024, increased $11.6 million, or 71.7%, compared with the three months ended September 30, 2023, primarily driven by $8.3 million of depreciation and amortization expense resulting from Horizon. The remaining increase in depreciation and amortization expense is attributable to the Company’s expansion of its Glo Fiber network.

• Net loss from continuing operations was $5.3 million in the third quarter of 2024 compared with net loss from continuing operations of $0.2 million in the third quarter of 2023. The increase in the net loss was due primarily to higher depreciation and amortization from Horizon and Glo Fiber network expansion and higher interest expense from higher borrowings.

• Adjusted EBITDA for the three months ended September 30, 2024 increased to $26.6 million, representing a $6.3 million, or 31.3%, increase compared with the three months ended September 30, 2023. The former Horizon markets contributed $4.7 million. Excluding the former Horizon markets, Adjusted EBITDA grew $1.7 million, or 8.3%, driven by the previously disclosed revenue growth partially offset by higher sales and marketing expenses to support new Glo Fiber markets. Adjusted EBITDA margins grew sequentially from 27% in the second quarter to 30% in the third quarter.

• Total homes passed grew 23,800 to approximately 554,000 including 320,000 Glo Fiber Expansion Market passings and 234,000 Incumbent Broadband Markets passings. Glo Fiber Expansion Markets broadband data subscriber net additions was approximately 6,000. Incumbent Broadband Markets data subscriber net additions were flat in the third quarter 2024.

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¹ _{Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.}
² _{Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.}

Other Information

• Capital expenditures were $226.5 million for the nine months ended September 30, 2024 compared with $189.3 million in the comparable 2023 period. The $37.1 million increase in capital expenditures was primarily driven by $20.8 million of capital expenditures in the former Horizon markets and expansion of the networks in Glo Fiber Expansion Markets and government-subsidized markets.

• As of September 30, 2024, our cash and cash equivalents totaled $43.1 million.

Earnings Call Webcast

Date: Thursday, November 7, 2024
Time: 8:00 a.m. ET
Listen via Internet: https://investor.shentel.com/
For Analysts, please register to dial-in at this link.

A replay of the call will be available for a limited time on the Investor Relations page of the Company’s website.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art fiber optic and cable networks to residential and commercial customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video, voice, high-speed Ethernet, dark fiber leasing, and managed network services. The Company owns an extensive regional network with over 16,300 route miles of fiber. For more information, please visit www.shentel.com.

This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q. Those factors may include, among others, the expected savings and synergies from the Horizon Transaction may not be realized or may take longer or cost more than expected to realize, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.

CONTACTS:
Shenandoah Telecommunications Company
Jim Volk
Senior Vice President and Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com

Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin

The Company defines Adjusted EBITDA as net (loss) income from continuing operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment expense, other income (expense), net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs, and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events, and other non-comparable items. A reconciliation of net (loss) income from continuing operations, which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is provided below herein.

Adjusted EBITDA margin is the Company’s calculation of Adjusted EBITDA, divided by revenue calculated in accordance with GAAP.

The Company uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of performance to evaluate operating effectiveness and assess its ability to increase revenues while controlling expense growth and the scalability of the Company’s business growth strategy. Adjusted EBITDA is also a significant performance measure used by the Company in its incentive compensation programs. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating the Company’s operating results. However, use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and investors and others should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies may calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

Supplemental Information

Operating Statistics

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(1) Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2) Penetration is calculated by dividing the number of users by the number of passings or available homes, as appropriate.
(3) Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
(4) Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.
(5) Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.

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^{(1) Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.}

Total revenues increased 14.8%
Net income of $2.1 million and Adjusted EBITDA growth of 18% to $25.6 million
9 new system-wide restaurants opened in 8 states

BRADENTON, Fla., Nov. 07, 2024 (GLOBE NEWSWIRE) — First Watch Restaurant Group, Inc. FWRG (“First Watch” or the “Company”), the leading Daytime Dining concept serving breakfast, brunch and lunch, today reported financial results for the thirteen weeks ended September 29, 2024 (“Q3 2024”).

“We are pleased with our performance in Q3 as it reflects our teams’ superb restaurant-level operations, especially considering an uneven consumer backdrop. Traffic picked up through the quarter, our employee turnover once again improved and remains favorable relative to the industry as a whole and Adjusted EBITDA grew 18%,” said Chris Tomasso, First Watch CEO and President. “We are committed to ensuring our people and real estate pipelines are in place to support our growth to 2,200 locations.”

Highlights:

• Total revenues increased 14.8% to $251.6 million in Q3 2024 from $219.2 million in Q3 2023
• System-wide sales increased 8.0% to $291.8 million in Q3 2024 from $270.3 million in Q3 2023
• Same-restaurant sales growth of negative 1.9% and same-restaurant traffic growth of negative 4.4%*
• Income from operations margin decreased to 2.5% in Q3 2024 from 3.6% in Q3 2023
• Restaurant level operating profit margin** increased to 18.9% in Q3 2024 from 18.7% in Q3 2023
• Net income decreased to $2.1 million, or $0.03 per diluted share, in Q3 2024 from $5.4 million, or $0.09 per diluted share, in Q3 2023
• Adjusted EBITDA** increased to $25.6 million in Q3 2024 from $21.6 million in Q3 2023
• Opened 9 system-wide restaurants in 8 states, resulting in a total of 547 system-wide restaurants (466 company-owned and 81 franchise-owned) across 29 states
• Update regarding Hurricane Milton: All company-owned First Watch restaurants were fully operational shortly after Hurricane Milton and, as such, the storm is not expected to have a material impact on same-restaurant sales in the fourth quarter. As a result of associated construction-related disruptions, five company-owned new restaurant openings, previously expected in December 2024, have been rescheduled to January 2025.
• The Company experienced no check management in the third quarter, though planned, targeted marketing campaigns had a small impact on net per person average.

___________________
* Comparing the thirteen-week periods ended September 29, 2024 and October 1, 2023 in order to compare like-for-like periods. See “Key Performance Indicators” for additional information.
** See Non-GAAP Financial Measures Reconciliations section below.

For additional financial information related to the thirteen weeks ended September 29, 2024, refer to the Company’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2024, which can be accessed at https://investors.firstwatch.com in the Financials & Filings section.

Updated Outlook Fiscal Year 2024

Based upon third quarter results and current trends, the Company updated the following guidance metrics for the 52-week fiscal year ending December 29, 2024:

• Same-restaurant sales growth of around negative 1.0% with same restaurant traffic growth of negative 4.0%-4.5%
• Total revenue growth in the range of 16.5% to 17.0%⁽¹⁾
• Adjusted EBITDA⁽²⁾ in the range of $110.0 million to $112.0 million⁽¹⁾
• Total new system-wide restaurant openings anticipated to be 47, net of 2 company-owned restaurant closures (43 new company-owned restaurants and 6 new franchise-owned restaurants), which reflects the effect of five new restaurant openings delayed by Hurricane Milton and rescheduled to early 2025.
• Blended tax rate of around 33.0%
• Capital expenditures of around $130.0 million invested primarily in new restaurant projects and planned remodels⁽³⁾

______________________
(1) Includes net impact of approximately 7.0% in total revenue growth and approximately $14.0 million in Adjusted EBITDA associated with completed acquisitions.
(2) We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, a reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort.
(3) Does not include the capital outlays associated with the acquisition of franchise-owned restaurants.

Conference Call and Webcast

Chris Tomasso, Chief Executive Officer and President, and Mel Hope, Chief Financial Officer, will host a conference call and webcast to discuss these financial results for Q3 2024 on November 7, 2024 at 8:00 AM ET.

Interested parties may listen to the conference call via any one of two options:

The webcast will be archived shortly after the call has concluded.

Definitions

The following definitions apply to these terms as used in this release:

System-wide restaurants: the total number of restaurants, including all company-owned and franchise- owned restaurants.

System-wide sales: consists of restaurant sales from our company-owned restaurants and franchise-owned restaurants. We do not recognize the restaurant sales from our franchise-owned restaurants as revenue.

Same-restaurant sales growth: the percentage change in year-over-year restaurant sales (excluding gift card breakage) for the comparable restaurant base, which is defined as the number of company-owned First Watch branded restaurants open for 18 months or longer as of the beginning of the fiscal year (“Comparable Restaurant Base“). For the thirteen weeks ended September 29, 2024 and October 1, 2023, there were 344 restaurants and 327 restaurants, respectively, in our Comparable Restaurant Base.

Same-restaurant traffic growth: the percentage change in traffic counts as compared to the same period in the prior year using the Comparable Restaurant Base. For the thirteen weeks ended September 29, 2024 and October 1, 2023, there were 344 restaurants and 327 restaurants, respectively, in our Comparable Restaurant Base.

Adjusted EBITDA: a non-GAAP measure, is defined as net income (loss) before depreciation and amortization, interest expense, income taxes and items that the Company does not consider in the evaluation of its ongoing core operating performance.

Adjusted EBITDA margin: a non-GAAP measure, is defined as Adjusted EBITDA as a percentage of total revenues.

Restaurant level operating profit: a non-GAAP measure, is defined as restaurant sales, less restaurant operating expenses, which include food and beverage costs, labor and other related expenses, other restaurant operating expenses, pre-opening expenses and occupancy expenses. In addition, Restaurant level operating profit excludes corporate-level expenses and items that are not considered in the Company’s evaluation of its ongoing core operating performance.

Restaurant level operating profit margin: a non-GAAP measure, is defined as Restaurant level operating profit as a percentage of restaurant sales.

About First Watch

First Watch is the leading Daytime Dining concept serving made-to-order breakfast, brunch and lunch using fresh ingredients. A recipient of hundreds of local “Best Breakfast” and “Best Brunch” accolades, First Watch’s chef-driven menu rotates five times a year and includes elevated executions of classic favorites alongside specialties such as its Quinoa Power Bowl, Lemon Ricotta Pancakes, Chickichanga, Morning Meditation fresh juice and signature Million Dollar Bacon. After first appearing on the list in 2022 and 2023, First Watch was named 2024’s #1 Most Loved Workplace® in America by Newsweek and the Best Practice Institute. In 2023, First Watch was named the top restaurant brand in Yelp’s inaugural list of the top 50 most-loved brands in the U.S. In 2022, First Watch was awarded a sought-after MenuMasters honor by Nation’s Restaurant News for its seasonal Braised Short Rib Omelet. First Watch operates more than 540 First Watch restaurants in 29 states. For more information, visit www.firstwatch.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to any historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “outlook,” “potential,” “project,” “projection,” “plan,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other similar expressions. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed herein, in our Annual Report on Form 10-K as of and for the year ended December 31, 2023, including under Part I. Item 1A. “Risk Factors” and Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website at https://investors.firstwatch.com/financial-information/sec-filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: uncertainty regarding the Russia and Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events; our vulnerability to changes in economic conditions and consumer preferences; our inability to successfully open new restaurants or establish new markets; our inability to effectively manage our growth; potential negative impacts on sales at our and our franchisees’ restaurants as a result of our opening new restaurants; a decline in visitors to any of the retail centers, lifestyle centers, or entertainment centers where our restaurants are located; lower than expected same-restaurant sales growth; unsuccessful marketing programs and limited time new offerings; changes in the cost of food; unprofitability or closure of new restaurants or lower than previously experienced performance in existing restaurants; our inability to compete effectively for customers; unsuccessful financial performance of our franchisees; our limited control over our franchisees’ operations; our inability to maintain good relationships with our franchisees; conflicts of interest with our franchisees; the geographic concentration of our system-wide restaurant base in the southeast portion of the United States; damage to our reputation and negative publicity; our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media; our limited number of suppliers and distributors for several of our frequently used ingredients and shortages or disruptions in the supply or delivery of such ingredients; information technology system failures or breaches of our network security; our failure to comply with federal and state laws and regulations relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection, advertising and consumer protection; our potential liability with our gift cards under the property laws of some states; our failure to enforce and maintain our trademarks and protect our other intellectual property; litigation with respect to intellectual property assets; our dependence on our executive officers and certain other key employees; our inability to identify, hire, train and retain qualified individuals for our workforce; our failure to obtain or to properly verify the employment eligibility of our employees; our failure to maintain our corporate culture as we grow; unionization activities among our employees; employment and labor law proceedings; labor shortages or increased labor costs or health care costs; risks associated with leasing property subject to long-term and non-cancelable leases; risks related to our sale of alcoholic beverages; costly and complex compliance with federal, state and local laws; changes in accounting principles applicable to us; our vulnerability to natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism; our inability to secure additional capital to support business growth; our level of indebtedness; failure to comply with covenants under our credit facility; and the interests of our largest stockholder may differ from those of public stockholders.

The forward-looking statements included in this press release are made only as of the date hereof and are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Investor Relations Contact

Steven L. Marotta
941-500-1918
investors@firstwatch.com

Media Relations Contact

Jenni Glester
407-864-5823
jglester@firstwatch.com

Non-GAAP Financial Measures (Unaudited)

To supplement the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use the following non-GAAP measures, which present operating results on an adjusted basis: (i) Adjusted EBITDA, (ii) Adjusted EBITDA margin, (iii) Restaurant level operating profit and (iv) Restaurant level operating profit margin. Our presentation of these non-GAAP measures includes isolating the effects of some items that are either nonrecurring in nature or vary from period to period without any correlation to our ongoing core operating performance. These supplemental measures of performance are not required by or presented in accordance with GAAP. Management believes these non-GAAP measures provide investors with additional visibility into our operations, facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance, help to identify operational trends and allow for greater transparency with respect to key metrics used by management in our financial and operational decision making. Our non-GAAP measures may not be comparable to similarly titled measures used by other companies and have important limitations as analytical tools. These non-GAAP measures should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP as they may not provide a complete understanding of our performance. These non-GAAP measures should be reviewed in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

Management uses Adjusted EBITDA and Adjusted EBITDA margin (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the Company’s operating results and the effectiveness of our business strategies and (iii) internally as benchmarks to compare the Company’s performance to that of its competitors.

Non-GAAP Financial Measures Reconciliations

Adjusted EBITDA and Adjusted EBITDA margin – The following table reconciles Net income and Net income margin, the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted EBITDA margin for the periods indicated:

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(1) Represents costs related to process improvements and strategic initiatives. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(2) Represents non-cash, stock-based compensation expense which is recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(3) Represents professional service costs incurred in connection with the Delaware Voluntary Disclosure Agreement Program related to unclaimed or abandoned property. These costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(4) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, expenses related to debt, secondary offering costs and, in 2024, an offsetting gain on release of contingent consideration liability.
(5) Represents insurance recoveries, net of costs incurred, in connection with hurricane damage, which were recorded in Other income, net on the Consolidated Statements of Operations and Comprehensive Income.
(6) Represents costs related to the disposal of assets due to retirements, replacements or certain restaurant closures. There were no impairments recognized during the periods presented.
(7) Represents costs incurred for hiring qualified individuals. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(8) Severance costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(9) Represents the non-cash portion of straight-line rent expense recorded within both Occupancy expenses and General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.

Restaurant level operating profit and Restaurant level operating profit margin

Restaurant level operating profit and Restaurant level operating profit margin are not indicative of our overall results, and because they exclude corporate-level expenses, do not accrue directly to the benefit of our stockholders. We will continue to incur such expenses in the future. Restaurant level operating profit and Restaurant level operating profit margin are important measures we use to evaluate the performance and profitability of each operating restaurant, individually and in the aggregate and to make decisions regarding future spending and other operational decisions. We believe that Restaurant level operating profit and Restaurant level operating profit margin provide useful information about our operating results, identify operational trends and allow for transparency with respect to key metrics used by us in our financial and operational decision-making.

The following tables reconcile Income from operations and Income from operations margin, the most directly comparable GAAP financial measures, to Restaurant level operating profit and Restaurant level operating profit margin for the periods indicated:

____________________________
(1) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, expenses related to debt, secondary offering costs and, in 2024, an offsetting gain on release of contingent consideration liability.
(2) Represents costs related to the disposal of assets due to retirements, replacements or certain restaurant closures. There were no impairments recognized during the periods presented.
(3) Represents the non-cash portion of straight-line rent expense recorded within Occupancy expenses on the Consolidated Statements of Operations and Comprehensive Income.

• WELL surpassed $1 billion annualized revenue run-rate with record revenue of $251.7 million in Q3-2024, marking a 27%⁽¹⁾ increase compared to Q3-2023, mainly driven by organic growth of 23%.
• WELL achieved record Adjusted EBITDA⁽²⁾ of $32.7 million in Q3-2024, an increase of 16% as compared to Q3-2023.
• WELL achieved a record total of 1.5 million total patient visits in Q3-2024 an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis.
• WELL increases its 2024 annual guidance range for revenue of $985 million to $995 million, while maintaining Adjusted EBITDA guidance to be in the upper half of $125 million to $130 million.

VANCOUVER, BC, Nov. 7, 2024 /PRNewswire/ – WELL Health Technologies Corp. WELL WHTCF (the “Company” or “WELL“), a digital healthcare company focused on positively impacting health outcomes by leveraging technology to empower healthcare practitioners and their patients globally, is pleased to announce its interim consolidated financial results for the quarter ended September 30, 2024.

Hamed Shahbazi, Founder and CEO of WELL, commented, “Third quarter of 2024 was one of the best quarters in the Company’s history by just about every objective and important metric. WELL delivered record quarterly performances for revenue, Adj EBITDA, free cashflow, patient visits and organic growth in the third quarter. We are also pleased to report that we surpassed $1 billion in annualized revenue run-rate, one quarter ahead of our previously stated plan. Record results were driven by our Canadian Patient Services business which delivered robust revenue growth of 35% YoY. Our current pipeline of acquisitions, which includes 17 signed LOIs and definitive agreements pending close, is the strongest we’ve had representing over $100 million in revenues with a heavy emphasis on our Canadian lines of business. As of the end of Q3-2024, WELL proudly supports a network of over 4,000 providers and clinicians delivering care through our physical and virtual clinics. We also continue to evolve and innovate our clinical offerings and are pleased to announce that this past week we launched a new weight care and GLP-1 offering in Canada on our Tia Health virtual care platform. This is just the beginning as we are excited about innovating and delivering superior patient outcomes for Canadians in this category. I am proud to raise our 2024 annual revenue guidance to $985 to $995 million, not including any un-announced acquisitions. As we close out 2024, our focus remains on enhancing profitability as we are projecting a healthy year-over-year increase in free cash flow to shareholders this year. We are a very healthy and growing Company and getting stronger as we are on track to deliver record revenue, Adjusted EBITDA, and Adjusted Net Income for 2024, while boosting cash flow, reducing debt, minimizing net share issuances to the lowest yearly rate ever, and reflecting significant reductions in earnout payments.”

Mr. Shahbazi further added, “Both of WELL’s US based virtual care platforms, Wisp and Circle Medical continue to outperform with Wisp experiencing 35% revenue growth in Q3-2024 versus Q3-2023 and recently successfully launching their weight care and GLP-1 offering in 20 states. Also, Circle Medical achieved 61% year-over-year quarterly revenue growth while maintaining profitability. The strategic review process, including potential sale of these two assets, is continuing, and making progress.”

Eva Fong, WELL’s Chief Financial Officer, added, “Earlier this year we implemented a comprehensive cost-cutting program to support our 2024 operating plan, which is contributing to our record Adjusted EBITDA results this quarter and on a YTD basis. In Q3-2024, we generated $16.2 million in Adjusted Free Cashflow⁽²⁾ available to shareholders or 6.5 cents per share and our aim is to improve on this next year. Along with these savings and strong cash flows, we are on track to reduce annual share dilution to its lowest level this fiscal year, driven in part by shifting much of our earnout payment obligations to cash and transitioning some of our employee incentive programs to be more cash-based rather than relying on share-based compensation. Additionally, we plan to sustain our share buyback program as we haven’t issued any new shares since beginning this program and continue to favour cash vs shares, as our Board of Directors believes the current share price does not fully reflect the underlying value of the Company. I am pleased to report that WELL is in a strong financial position and is able to continue funding organic growth and future acquisitions through cash flows from operations.”

Third Quarter 2024 Financial Highlights:

• WELL achieved record quarterly revenue of $251.7 million in Q3-2024, an increase of 23% as compared to revenue of $204.5 million generated in Q3-2023 (or 27%⁽¹⁾ with reference to continuing operations). This growth was primarily driven by organic growth of 23%. Growth from acquisitions of 4% was offset by the impact from divestitures.
• Canadian Patient Services revenue was $78.0 million in Q3-2024, an increase of 35% as compared to $57.8 million in Q3-2023.
• U.S. Patient Services revenue was $158.2 million in Q3-2024, an increase of 21% as compared to $130.7 million in Q3-2023.
• SaaS and Technology Services revenue from continuing businesses was $15.6 million in Q3-2024, an increase of 19% as compared to $13.1 million in Q3-2023.
• Adjusted Gross Profit⁽²⁾ was $112.3 million in Q3-2024, an increase of 19% as compared to Adjusted Gross Profit⁽²⁾ of $94.2 million in Q3-2023.
• Adjusted Gross Margin⁽²⁾ percentage was 44.6% during Q3-2024 compared to Adjusted Gross Margin⁽²⁾ percentage of 46.1% in Q3-2023. The decrease in Adjusted Gross Margin⁽²⁾ percentage was primarily driven by the addition of recruiting revenue from the acquisition of CarePlus, which has lower margins compared to other Patient Services and SaaS and Technology Services revenue.
• Adjusted EBITDA⁽²⁾ was $32.7 million in Q3-2024, an increase of 16% as compared to Adjusted EBITDA⁽²⁾ of $28.2 million in Q3-2023.
• Adjusted EBITDA to WELL shareholders⁽²⁾ was $25.1 million in Q3-2024, an increase of 10% as compared to Adjusted EBITDA to WELL shareholders⁽²⁾ of $22.9 million in Q3-2023.
• Adjusted Net Income⁽²⁾ was $13.0 million, or $0.05 per share in Q3-2024, as compared to Adjusted Net Income⁽²⁾ of $12.9 million, or $0.05 per share in Q3-2023.

Third Quarter 2024 Patient Visit Metrics:

WELL achieved a record 1.5 million total patient visits in Q3-2024, an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis. Total patient visits were comprised of 798,000 patient visits in Canada and 682,000 patient visits in the US. Canadian patient visits increased 46% while US patient visits increased 35%, on a year-over-year basis. Growth in total patient visits over the past year was primary driven by organic growth, including the clinic absorption program as well as acquisitions.

Total Care Interactions were 2.2 million in Q3-2024, a year-over-year increase of 41% compared to Q3-2023 and representing 9.0 million Total Care Interactions on an annualized run-rate basis.  

Third Quarter 2024 Business Highlights:

On July 10, 2024, the Company announced the approval of a historic $44 million project, Health Compass II, the largest DIGITAL project ever awarded to advance AI-powered tech enablement for care providers. This initiative, led by WELL and its consortium partners, aims to enhance AI and interoperability in Canadian healthcare. As the lead commercialization partner and first customer, WELL will provide expertise and interoperability, enabling the development of new AI tools to support healthcare providers and improve patient outcomes.

On July 17, 2024, the Company announced the launch of its AI-powered co-pilot for cardiologists, powered by HEALWELL AI, to improve the detection of cardiovascular disease (CVD). This co-pilot, an extension of the WELL AI Decision Support (WAIDS) product offering, will be deployed in WELL Diagnostic Centers, Canada’s largest cardiology and medical diagnostic group, across over 40 locations in Ontario. This initiative aims to assist cardiologists in identifying high-risk patients, enhancing early detection and management of CVD.

On August 13, 2024, the Company announced that its majority-owned subsidiary, Circle Medical, surpassed a $100 million USD revenue run rate, reporting $8.87 million in revenue for July 2024, reflecting 65% year-over-year growth. Circle Medical has been profitable on an Adjusted EBITDA basis for over 2.5 years and maintains a gross margin of approximately 55%.

On August 21, 2024, the Company announced that its majority-owned subsidiary, Wisp, surpassed one million patients served and achieved a revenue run rate of over CAD$100 million, based on July 2024 results. Wisp recorded USD$6.5 million in revenue for July, reflecting 30% year-over-year growth. Wisp also launched over ten new products in 2024, expanding its offerings in fertility, menopause, and at-home testing, while preparing for additional product launches.

On September 10, 2024, the Company announced the acquisition of three primary care clinics in British Columbia and definitive agreements to acquire four diagnostic imaging clinics in Alberta. WELL also reported a Pre-Tax Unlevered ROIC of 14% for its Canadian clinics business. The Company’s acquisition pipeline includes 5 signed LOIs representing $11.8 million in revenue.

Events Subsequent to September 30, 2024:

On October 17, 2024, the Company announced the launch of a comprehensive weight care vertical by its majority-owned subsidiary, Wisp. This new service provides personalized online consultations and access to four weight care solutions, including GLP-1 medications, to support women with hormonal imbalances such as perimenopause, menopause, PCOS, and endometriosis. Wisp also introduced its first over-the-counter weight-loss supplement designed to promote women’s metabolic health, further expanding its menopause care offerings. Wisp now serves over 1.2 million patients as it continues to enhance its women’s healthcare services.

On November 4, 2024, the Company announced the acquisition of Canadian clinical assets from Jack Nathan Medical Corp. including a network of 16 owned and operated clinics, which generated revenue of over $10 million in the past 12 months. The portfolio of owned and operated clinics is expected to operate profitably on an adjusted EBITDA basis in 2025, following immediate synergies with WELL’s shared services program and application of WELL’s clinic transformation program. WELL will also acquire 62 licensee clinics that generate approximately $2.2 million annually in high margin revenue and will become the model for WELL’s new ‘Affiliate Clinic’ business stream. On closing, WELL will acquire Jack Nathan’s rights to operate medical clinics in Walmart Canada stores, creating a platform to expand its network within Walmart Canada’s footprint of over 400 Canadian locations.

Outlook: 

WELL anticipates maintaining its strong performance through the remainder of 2024, with a strategic focus on enhancing operations for organic growth and profitability. The company continues to pursue capital-efficient growth opportunities while effectively managing costs to deliver robust growth and sustained cash flow to shareholders. Management is pleased to update its guidance, which includes only announced acquisitions:

• Annual revenue for 2024 is projected to be in the range of $985 million to $995 million.
• Adjusted EBITDA⁽²⁾ for 2024 is projected to be in the upper half of $125 million to $130 million.
• Adjusted Free Cashflow⁽²⁾ available to shareholders is expected to be approximately $55 million, before the potential impact of increases in capital expenditures in Q4 and timing of tax payments. Management believes these capital expenditures to be a prudent use of cash given WELL’s strong cash flow generation.

WELL plans to advance its U.S. and Canadian Patient Services businesses through both organic and strategic growth, prioritizing capital efficiency. This approach will enable the company to optimize per share financial performance. In Canada, WELL aims to strengthen its market leadership as the nation’s premier pan-Canadian clinical network, offering a highly integrated, tech-enabled outpatient healthcare system. WELL is also committed to growing its WELL Provider Solutions or WPS business both organically and inorganically and demonstrating clear leadership in the Canadian healthcare IT landscape.

Leveraging its deep technological expertise and strategic relationship with HEALWELL AI, WELL is prioritizing investments in AI technologies, with plans to continue to develop and launch innovative products and enhancements across its provider and clinic network.

To boost operational efficiency and profitability, earlier this year WELL has implemented a cost optimization program, including staff restructuring and other cost-saving measures. The company’s strong organic growth and healthy cash flow position it well to continue executing its growth strategies while progressively reducing debt.

Conference Call:

WELL will hold a conference call to discuss its 2024 Third Quarter financial results on Thursday, November 7, 2024, at 1:00 pm ET (10:00 am PT). Please use the following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local), 1-888-664-6383 (Toll-Free) or +1-416-764-8650 (International).

The conference call will also be simultaneously webcast and can be accessed at the following audience URL: https://well.company/events.

Selected Unaudited Financial Highlights:

Please see SEDAR for complete copies of the Company’s condensed interim consolidated financial statements and interim MD&A for the quarter ended September 30, 2024.