Streamline Health Solutions, Inc. (NASDAQ:STRM) Q4 2025 Earnings Call Transcript

Streamline Health Solutions, Inc. (NASDAQ:STRM) Q4 2025 Earnings Call Transcript May 2, 2025

Operator: Greetings. Welcome to the Streamline Health Solutions Incorporated Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jacob Goldberger, Vice President of Finance. Thank you. You may begin.

Jacob Goldberger: Thank you for joining us for the corporate update and financial results review of Streamline Health Solutions for the 12 and three months ended January 31, 2025. As the conference call operator indicated, my name is Jacob Goldberger. Joining me on the call today are Ben Stilwill, President and Chief Executive Officer; and B.J. Reeves, Chief Financial Officer. At the conclusion of today’s prepared remarks, we will open the call for a question-and-answer session. If anyone participating on today’s call does not have a full text copy of our press release announcing these results, you can retrieve it from the company’s website at www.streamlinehealth.net or from numerous financial websites. Before we begin with prepared remarks, we want to be sure we are clear for everyone on the record how certain information, which may be provided today, as with all of our earnings calls should be viewed.

We, therefore, submit for the record the following statement. Statements made on this conference call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those we may discuss. Please refer to the company’s press releases and filings made with the US Securities and Exchange Commission, including our most recent Form 10-K annual report, which is on file with the SEC for more information about these risks, uncertainties, and assumptions and other factors. As always, we are presenting management’s current analysis of these items as of today.

Participants on this call should take into account these risks when evaluating the topics we will discuss. Please note Streamline is not undertaking any commitment or obligation to publicly revise any such forward-looking statements made today. On today’s call, we will discuss non-GAAP financial measures such as adjusted EBITDA and booked SaaS ACV. Management uses these measures to help provide a better insight to our financial performance. However, certain items of income and expense are not included in these measures, so these calculations may differ from those, which another entity may utilize in calculating their own non-GAAP measures. To help you compare these amounts on consistent terms, please refer to our website at www.streamlinehealth.net and our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.

I would now like to turn the call over to Ben Stilwill, CEO.

Ben Stilwill: Thanks Jacob, and thank you all for joining this morning. In fiscal 2024, we furthered our mission to ensure our health system clients be paid accurately for the care they provided. As of January 31, 2025, our solutions are delivering an annualized financial impact of more than $210 million across our client base. That impact is the result of our partnership with revenue cycle departments who leverage our solutions to maintain control over the financial outcomes of their health systems. And thanks to our solutions our team and our client partnerships, US health systems now have $210 million to care for their communities in 2025. As of the end of fiscal 2024, we had Booked SaaS ACV of $14 million. And as of April 30, 2025, Booked SaaS ACV totaled $14.6 million, $13.1 million of which was implemented.

Since we last reported our October 31, 2024 results, we booked an additional $1.4 million in new SaaS ACV and this was offset by $700,000 of churn, the majority of which was the result of two clients lost to an acquisition of those health systems. $350,000 of our new bookings were the result of our Oracle channel for RevID including a new CommunityWorks client. And we expect continued wins from this channel as our relationship with Oracle remains strong. The remaining new bookings represent significant new eValuator clients, which were sold through our direct channel and influenced by their peers and our talented sales team. We recently made the proactive decision to discontinue selling our quality module as an independent unit. While the module reflected an interesting market opportunity, it did not meet our bookings expectation and the call point was too distinct from eValuator and RevID.

So rather than invest further in a solution that would not deliver the returns we demand, we chose to redirect resources to initiatives that allow us to expand the impact of our solutions core value proposition. So in particular we have focused on our resources towards denials prevention functionality. So speaking of as of last night, we’re excited to debut our new denial prevention functionality within the eValuator platform, a major step forward in how we help clients protect revenue in real time. These new rules will enable eValuator users to proactively identify and prevent both outright denials and coding DRG downgrades before a claim is submitted. This capability is a result of a deep collaboration across our rules team, client partners, and our data science efforts, incorporating the insights from client feedback and machine learning trained on 835 remittance data we’ve received from select users.

By leveraging real-world denial patterns, we built rules that are not only clinically sound, but directly aligned with payer behavior. And based on extensive back testing, we expect these new rules to expand the inpatient financial impact of eValuator by more than 15% and potentially double the financial impact on outpatient cases. That’s particularly important given the surge in denial activity we’re seeing across the industry in the last couple of years, especially from commercial payers, which tend to represent higher dollar patient populations for our clients. These denials are placing an unsustainable burden on providers and we believe our denial prevention functionality is launching at exactly the right time to provide much needed relief and measurable value.

Our client success team has been sharing this new functionality with our clients over the last couple of months and they are universally excited and we’ll be quickly translating those client results into a data story and narrative to arm our direct sellers. Our RevID clients are more excited than ever to talk about their partnerships with Streamline. Last week one of our RevID users Chris Regional presented to a packed room at a user conference how they leverage our solution to develop a charge reconciliation program and the impact of adding this tool and workflow to their revenue cycle. Many of these CommunityWorks type systems have not historically had the resources to attack charge capture, but many sorely need it. And as I’ve noted we had a successful new booking from CommunityWorks user recently and have been receiving significant inbound interest from that cohort.

We’re leaning into those user stories in a bigger way with webinars and finding ways to encourage further peer-to-peer marketing from our clients. We expect the enhanced value offered by new features like denials prevention and improving client referenceability to translate to an increased rate of bookings in fiscal 2025. Our implementation teams continue to make strides in their ability to execute projects across both solutions. Our most recent eValuator go-live was completed 42 days after contract signature and our most recent client win wants to go live by July 1st. We expect to maintain this rapid pace on the eValuator side and our RevID implementation time continues to accelerate. Our new feature push pipeline and improved implementation execution mean we maintain our expectation related to achieving an EBITDA profitable run rate as we exit the second quarter of fiscal 2025.

Health care systems need to be able to succeed in the revenue cycle so that they can get paid for the care they provide. We believe it is our duty to develop the products and provide the insights so they can succeed. With that I’d like to turn the call over to our CFO, B.J. Reeves. B.J.?

B.J. Reeves: Thanks Ben. As Ben mentioned, our Booked SaaS ACV as of January 31st, 2025 totaled $14 million and as of April 30th, 2025 totaled $14.6 million. Currently, $13.1 million of our Booked SaaS ACV is implemented and we anticipate we successfully implement and achieve an EBITDA profitable ARR run rate during the first half of fiscal 2025. Total revenue for the fourth quarter of fiscal 2024 was $4.7 million as compared to $5.4 million during the fourth quarter of fiscal 2023. For the 12 months ended January 31st, 2025, revenue totaled $17.9 million as compared to $22.6 million during fiscal 2024. The change in total revenue is attributable to previously announced SaaS non-renewals as well as lower revenue from the company’s legacy maintenance and support contracts and professional service offerings offset by new bookings and go-lives in the company’s SaaS business.

SaaS revenue for the fourth quarter of fiscal 2024 totaled $3.1 million 66% of total revenue compared to SaaS revenue of $3.4 million or 64% of total revenue during the fourth quarter of fiscal 2023. For the 12 months ending January 31st, 2025, SaaS revenue totaled $11.8 million or 66% of total revenue compared to $14.1 million or 62% of total revenue during fiscal 2023. As previously reported, the company had a SaaS contract which did not renew at the end of its 2023 fiscal year. Net loss for the fourth quarter of fiscal 2024 was $2.1 million compared to net loss of $1.4 million during the fourth quarter of fiscal 2023. Fiscal 2024’s net loss totaled $10.2 million, compared to a net loss of $18.7 million during fiscal 2023. The increased net loss during the fourth quarter was the result of the lower total revenue and higher non-cash interest expense offset by lower total operating expenses as compared to the fourth quarter of fiscal 2023.

The improved net loss in fiscal year 2024 was the result of $10.8 million of noncash impairment charges incurred during fiscal year 2023 that did not recur in the current fiscal year. Cash and cash equivalents as of January 31, 2025 were $2.2 million as compared to $3.2 million as of January 31, 2024. The company had a $1 million outstanding balance on its revolving credit facility as of January 31, 2025, compared to $1.5 million as of January 31, 2024. Subsequent to the end of the fiscal period on March 28, 2025, the company and its principal lender amended certain financial covenants related to the company’s senior term loan and revolving line of credit, which are described in more detail in the company’s annual report on Form 10-K for the fiscal year ended January 31, 2025.

On March 28, 2025, the company drew an additional $1 million from its revolving line of credit. And that concludes our prepared remarks. Operator, please begin the question-and-answer session.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question is from Neil Cataldi with Blueprint Capital Management. Please proceed.

Neil Cataldi: Hi, Ben. Thanks for taking my questions today.

Ben Stilwill: Hi, Neil.

Neil Cataldi: I’ll start with denials prevention. It sounds like this is ready to go in terms of your ability to sell the product. Can you talk a little bit about what that means for the current customer base? And how does it play into the marketability of eValuator?

Ben Stilwill: Yes, sure. Great question. So we learned a lot from the quality module that we had debuted last year and try to lean more into where clients could find value out of the core functionality of eValuator. We’ve been on this stick of trying to have our clients get things right the first time pre-bill before the bill goes out the door and this really denials is the ultimate — the final whatever the payer did with the provider. If we can get those signals into the prebill workflow it’s immensely helpful to make sure that the claim is bulletproof by the time that it leaves the health system and goes to the payer. So it’s hugely valuable. It’s something that our clients are super excited about and we did a lot of hands-on showing the clients what we were doing and getting their feedback along the way.

Neil Cataldi: Okay. So maybe for those new to the story you built the product you rolled it out last year. You had some people use it test it. The data has come back. It’s been really good. And now there’s a bit of a focus to push it forward.

Ben Stilwill: Yes, exactly. So now we’re able to quantify what we’re actually impacting as far as preventing denials. And it was done talking to our clients around how they view denial prevention and the coding cycle and everything like that. And so now they’re able to go to their executives and say, this is what my actual coding function is doing, as far as preventing this huge denial problem that the industry is having.

Neil Cataldi: Okay. Great. You mentioned implementation time lines, 42 days I think you said on eValuator implementation, that sounds like it’s really improved. And so I was wondering what changed? What are you guys doing to enable these quicker implementations? Is it a one-off? Or are we sort of resetting the expectation on how quick you guys can go a little bit faster now?

Ben Stilwill: Yes. I think, 42 days is still less than the average, certainly, less than our financial forecast, but it is obviously a good example. But we’ve significantly dropped our overall average time. So a couple of years ago, we were talking about four to six months for an eValuator implementation. Most of them are getting done in two, maybe three months or less, obviously, in this case. And then we’re — we’ve learned a lot doing that, standardizing data, standardizing training, making sure that people have the ability to have success on day one. And I think probably the most important part is on the RevID side of things, it’s a little bit more complicated of an implementation. When we first acquired the solution, it was upwards of nine months to a year of implementation, and that’s dropping dramatically with each implementation we’re doing based on taking the eValuator playbook into RevID. So I think we’ll see that number also significantly reduce.

Neil Cataldi: Okay. And my last one, I know you guys have made a lot of changes to the sales force over the past year. It’s been a little, I don’t know quiet, I guess, with bookings at the start of this year. What gives you guys confidence that there’s some momentum building in the pipeline and that we’ll see stronger bookings going forward?

Ben Stilwill: Yeah. I think we’re really trying to lean into our clients — the current client journeys that people have been successful with. So trying to put whether it was last week where we had a RevID user at the Oracle conference or having webinars with our clients, speaking live with prospects and current clients. We’re really trying to celebrate those victories so that when the salesperson does pick up the phone, it’s much more likely that they will say, yes, that’s a club I want to be part of. That’s an organization I want to be involved with. And we’ve seen a lot of top-of-funnel activity as a result of having our clients really be the focus as opposed to purely just us showing up at a trade show or what have you. So I think we’ll — we’ve seen some activity recently. I mean, I don’t want to oversell the Oracle conference we were just at, but a lot of activity there and the webinars and starting to get things that are more moving on the top of the funnel.

Neil Cataldi: Okay. Great. Look forward to seeing the progress. Thanks, guys.

Ben Stilwill: Thanks, Neil.

Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over for closing remarks.

Jacob Goldberger: Thank you all for your support of Streamline Health. We look forward to speaking with you all again when we report our first quarter 2025 results.

Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time. And thank you for your participation.