R1 RCM Reports Mixed Financial Results, Increased Revenue and Debt, and Strategic Developments

R1 RCM Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. Total current assets increased to $768.9 million from $633.3 million at the end of 2023, while total assets rose to $5,749.3 million, up from $4,960.2 million. Long-term debt also saw a substantial increase, reaching $2,136.7 million compared to $1,570.5 million at the end of 2023. Total stockholders’ equity increased to $2,811.1 million from $2,751.4 million.

For the three months ended September 30, 2024, net services revenue was $656.8 million, a 15% increase from $572.8 million in the same period of 2023. This growth was primarily driven by revenue from the recently acquired Acclara, which contributed $71.5 million. However, net income for the quarter was a loss of $(19.9) million, a significant decline from a net income of $1.3 million in Q3 2023. For the nine months ended September 30, 2024, net services revenue totaled $1,888.6 million, up 12% from $1,679.1 million in the prior year, but the company reported a net loss of $(62.6) million compared to a net income of $1.9 million in the same period of 2023.

Operating expenses for the three months ended September 30, 2024, increased to $641.0 million from $531.6 million in Q3 2023, driven by higher costs associated with the Acclara acquisition and cyberattack-related expenses. The company incurred approximately $16.4 million in costs related to cyberattacks during the quarter.

R1 RCM completed the acquisition of Acclara on January 17, 2024, for $786.1 million, enhancing its technology solutions and patient outcomes. The company also entered a take-private merger agreement with Raven Acquisition Holdings, LLC, on July 31, 2024, which will result in the company being delisted from Nasdaq. The merger is expected to close by the end of 2024, pending stockholder approval.

Cash flows from operating activities for the nine months ended September 30, 2024, were $172.6 million, down from $221.3 million in the same period of 2023. The company reported net cash used in investing activities of $(752.7) million, primarily due to the Acclara acquisition. In financing activities, R1 RCM generated $574.3 million, significantly up from $(90.5) million in the prior year, largely due to new borrowings.

Overall, R1 RCM's financial performance reflects both growth in revenue and challenges related to increased operating expenses and net losses, alongside strategic developments including acquisitions and a pending merger.