Pacific Health Care Organization, Inc. (PHCO) reported an 8% increase in total revenues for the fiscal year ending December 31, 2024, reaching $6.07 million compared to $5.63 million in the previous year. The growth was driven by significant increases in revenue from Medical Provider Networks (MPN), medical bill review, utilization review, and medical case management services, which rose by 19%, 6%, 11%, and 29%, respectively. However, revenue from Health Care Organizations (HCO) decreased by 18%, primarily due to a decline in employee enrollments and reported injuries, as well as the timing of service delivery for a significant customer transitioning away from PHCO's services.
Operating expenses increased by 5% to $5.21 million, largely due to higher salaries and wages, as well as general and administrative costs. This increase was partially offset by a reduction in bad debt provisions and data maintenance expenses. Consequently, income from operations rose by 26% to $852,623, while net income increased by 15% to $883,584, reflecting a net income per share of $0.07, up from $0.06 in the prior year.
In terms of operational developments, PHCO's customer base remains concentrated, with three major customers accounting for 43% of total sales in both fiscal years 2024 and 2023. The company has also expanded its employee advocate services to six states outside California, contributing to a 184% increase in related revenues. Despite these gains, the company faces challenges from competitive pricing pressures and potential customer terminations, which could impact future revenues.
PHCO's workforce consisted of 29 full-time employees and one part-time employee as of March 2025, with plans to hire an additional employee to support the growing employee advocate program. The company continues to focus on enhancing its service offerings and exploring strategic acquisitions to drive growth. However, management acknowledges the risks associated with customer concentration and market competition, which could affect future performance.
Looking ahead, PHCO anticipates that economic conditions, including inflation and labor market challenges, may influence customer demand for its services. The company is committed to maintaining its operational efficiency and exploring new opportunities for growth while managing the inherent risks in its business model.
About PACIFIC HEALTH CARE ORGANIZATION INC
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