Performant Financial Corp Reports $123M Revenue with 8% Growth, Faces $9.9M Net Loss

Performant Financial Corp reported a total revenue of approximately $123.0 million for the fiscal year ending December 31, 2024, marking an increase of 8% from $113.7 million in 2023. The growth in revenue was primarily driven by a significant rise in healthcare revenues, which reached $118.3 million, up 11% from the previous year. This increase was attributed to the successful implementation of commercial contracts and the expansion of services under the Centers for Medicare & Medicaid Services (CMS) Region 2 contract. Notably, revenues from claims-based services surged by 25% to $56.4 million, while eligibility-based services saw a modest increase of 1% to $61.9 million.

Despite the revenue growth, Performant reported a net loss of $9.9 million for 2024, an increase from the $7.5 million loss in 2023. The company's operating expenses also rose, totaling $132.5 million, up from $119.9 million the previous year. This increase was largely due to higher salaries and benefits, which grew by 11% to $100.4 million, reflecting the company's ongoing investment in its healthcare services. Additionally, other operating expenses rose by 9% to $32.1 million, driven by technology innovation costs and increased depreciation expenses.

In terms of strategic developments, Performant has been actively expanding its service offerings and client base. The company was awarded a new Recovery Audit Contractor (RAC) contract for the New York State Office of the Medicaid Inspector General, expected to commence in 2025. This contract aligns with Performant's strategy to enhance its presence in the state Medicaid market. Furthermore, the company has de-emphasized its customer care and outsourced services, anticipating minimal revenue from this segment moving forward.

Operationally, Performant's employee count stood at 964 as of December 31, 2024, with a revenue generation rate of approximately $125,000 per employee, up from $117,000 in 2023. The company continues to leverage its technology-enabled services platform to improve efficiency and productivity in its operations. However, the filing noted that the company faces challenges related to client contract renewals and the competitive landscape, which could impact future revenue streams.

Looking ahead, Performant remains focused on expanding its payment integrity services within the healthcare market, capitalizing on the projected growth in healthcare spending. The company plans to pursue strategic alliances and acquisitions to enhance its capabilities and enter new markets. However, management cautioned that the ability to generate revenue from new contracts may be hindered by long implementation periods and the potential for client contract terminations, which could adversely affect financial performance in the near term.