NantHealth, Inc. (NH) Q1 2022 Earnings Call Transcript

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NantHealth, Inc. (NH 57.48%)
Q1 2022 Earnings Call
May 05, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the NantHealth 2022 first quarter financial results conference call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question-and-answer session. [Operator instructions] As a reminder, this conference is being recorded, Thursday, May 5, 2022.

I would now like to turn the conference over to Robert Jaffe, Investor Relations for NantHealth. Please go ahead.

Robert Jaffe -- Investor Relations

Thank you, operator. Welcome, everyone, and thank you for joining us today to discuss NantHealth's 2022 first quarter financial results. On the call today are Ron Louks, chief operating officer; and Bob Petrou, our chief financial officer. This call is being broadcast live at www.nanthealth.com.

A playback will be available for three months on NantHealth's website. I'd like to make the cautionary statement and remind everyone that forward-looking information discussed on today's call is covered under the Safe Harbor provisions of the Litigation Reform Act. The company's discussion today will include forward-looking information reflecting management's current forecast of certain aspects of the company's future, and actual results could differ materially from those stated or implied. In addition, during the course of this call, we referred to non-GAAP financial measures that are not prepared in accordance with U.S.

generally accepted accounting principles, and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review NantHealth's press release announcing its full 2022 first quarter financial results for the company's reasons for including those non-GAAP financial measures in its financial results announcement. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also attached to the company's earnings press release issued earlier today. In a moment, Ron will discuss the business followed by Bob who will discuss the financial results.

We will then open the call for questions. With that said, I will now turn the call for Ron Louks. Ron?

Ron Louks -- Chief Operating Officer

Thanks, Robert. Good afternoon, everyone, and welcome to NantHealth's 2022 first quarter financial results conference call. Turning briefly to our financial performance, we reported positive momentum in Q1. With total revenue increasing to $16.4 million over the previous quarter total revenue $16 million.

Our main strategy to help drive further growth is to continue to invest in the development of our products and services, including expansion of our cloud and data analytics capabilities. These investments are delivering results in the form of new product launches and enhanced functionality of our products and services. Eviti Connect, for example, recently expanded beyond oncology and autoimmune diseases. In a NantHealth partner portal added on demand customer access through interactive reporting.

We're also seeing customer interest continue to grow for data enrichment services and pilot programs for cloud services offered by our OpenNMS group. As a result, we are increasingly optimistic about the prospects across our portfolio. Now, let's discuss our software and services business, beginning with our Eviti business. In the first quarter, we signed a multiyear renewal with a leading nonprofit multi-state health plan serving government sponsored programs.

The agreement significantly expands the scope of Eviti Connect for oncology services, provider to the plan, including the addition of full delegation services and evidence based radiation oncology care. We expanded full delegation capabilities to include radiation oncology services in addition to medical oncology. This enables customers to assign prior authorization decisions to NantHealth. Also, we had a new functionality that allows health plan customers to approve and assign a prior authorization Eviti code to portions of a treatment plan.

This eliminates the need for complete plan resubmission and speeds up treatment to patients. Turning to payer engagement, we received high cross certification, which is a highly stringent benchmark that ensures NantHealth continues to be key regulations and industry defined security requirements. This place in NantHealth and NaviNet open in an elite group of organizations worldwide that have earned this status for information security. In May 2022, NaviNet Open won the MedTech Breakthrough Health Care Insurance Innovation Award, recognized for the platform's innovative ability to breakthrough digital health and technology markets.

This is the second year in a row that a NantHealth product has been recognized for this prestigious award. And we enhanced NaviNet Open authorizations with new processes for automating the collection of additional procedure code modifiers, and reducing the need for manual follow up by the health plan. Turning to our network monitoring business, the OpenNMS Group. We released OpenNMS in 2022, the optimized and hardened version of the OpenNMS platform available to annual maintenance subscribers.

Early in 2022, features enhanced security, improved analytics for netflow processing, simplified -- menu and communication and enhanced geo location with IP addresses. We signed several new professional service agreements with customers using Horizon and Meridian versions of the OpenNMS platform. And finally, we completed global delivery of one new hardware appliances, expanding the existing hardware appliance beta program with a large consumer electronics retailer. To sum up, we reported a solid first quarter with increases to Q1 revenues and gross profit from Q4.

Recent launch of [Inaudible] performance, and our plan is to continue to invest in the development of our products and services to drive further the growth. With that overview of our business, I'll turn the call over to Bob to discuss our financial results in more detail. Bob?

Bob Petrou -- Chief Financial Officer

Thank you, Bob. For the first quarter 2022, total revenue was $16.4 million compared with $16.2 million in the prior year first quarter. Quarter-on-quarter revenue grew 2.2% in Q1 2022 versus Q4 2021. The year-on-year and quarter-on-quarter increases were mostly due to the growth in our Eviti product solutions.

Gross profit for the quarter was $9.2 million, compared with $9.1 million for the same quarter in the prior year. Gross margin as a percent of total revenue was 56% for both periods. Total operating expenses increased to $21.7 million from $18.5 million in the prior year first quarter. This was mainly driven by the continued funding of the development of our product offerings.

For Q1 2022, net loss from continuing operations was approximately $16 million, or $0.14 per share. This is compared with $15.5 million or $0.14 per share in the prior year first quarter. On a non-GAAP basis, net loss from continuing operations in Q1 was $12.2 million or $0.11 per share. This is compared with $9.6 million, or $0.09 per share in the first quarter of last year.

Finally, cash and cash equivalents were approximately $16.1 million at March 31, 2022, compared with $29.1 million on December 31, 2021. Usage of cash was approximately $13 million, which was driven by growth in opex and other working capital needs that are required in the first quarter of every year. With that, I will now turn the call back over to Robert.

Robert Jaffe -- Investor Relations

Thanks, Bob. Operator, we've completed the prepared remarks. We now like to open up the call to questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] One moment, please, for the first question. [Operator instructions] No questions at this time. I will now turn the presentation back to the speaker.

Robert Jaffe -- Investor Relations

Thanks, operator, and thank you, everyone, for joining us today. We look forward to sharing our progress on our next planned conference call. Have a good night.

Operator

[Operator signoff]

Duration: 9 minutes

Call participants:

Robert Jaffe -- Investor Relations

Ron Louks -- Chief Operating Officer

Bob Petrou -- Chief Financial Officer

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