NantHealth, Inc. (NH) Q2 2022 Earnings Call Transcript

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NantHealth, Inc. (NH 44.44%)
Q2 2022 Earnings Call
Aug 04, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the NantHealth 2022 second quarter financial results conference call. [Operator instructions] As a reminder, this conference is being recorded Thursday, August 4, 2022. I would now like to turn the conference over to Robert Jaffe, investor relations with NantHealth. Please go ahead.

Robert Jaffe -- Investor Relations

Welcome, everyone, and thank you for joining us today to discuss NantHealth's 2022 second 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 would 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 refer 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 second 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 in 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 over to Ron Louks. Ron?

Ron Louks -- Chief Operating Officer

Thanks, Robert. Good afternoon, everyone, and welcome to NantHealth's 2022 second quarter financial results conference call. Turning briefly to our financial performance. We reported total revenue of $16.5 million, the third consecutive quarter of top-line growth.

Gross margin for the quarter was 55%. As we have been saying for several quarters, central to our growth strategy is a commitment to investing in our products and services. As you will hear in a moment, during the quarter we continued to launch new products, enhanced existing ones, and with regard to our Eviti Connect for autoimmune disease program, we continued to roll out new drugs and new drug regimens. Now let's discuss our software and services business, beginning with our Eviti business.

In the second quarter, Eviti Connect for Oncology won the Spring Digital Health "Connected Digital Health Merit Award", in recognition of the product's credibility and relevance of content and design. We received approval for full Delegated Entity status in three additional states: Mississippi, Virginia, and Iowa. This designation allows customers' needs to be fully supportive for Delegated Entity Services and provides growth opportunities with new customers in those states. We significantly grew the autoimmune offering, with coverage of more diseases, drugs, and treatments.

This expanded offering ensures a greater number of patients receive appropriate care while further growing the hard savings that Eviti for Autoimmune Diseases provides to the customers. And we introduced new site-of-service functionality to increase cost savings opportunities for our customers using Eviti Connect for Autoimmune Diseases. Now users are seamlessly redirected to the appropriate site of service for each drug in the treatment plan. Turning to Payer Engagement.

In May, we won the MedTech Breakthrough "Healthcare Insurance Innovation Award" in recognition of the platform's ability to break through digital health and technology markets. In June, we won the Spring Digital Health "Connected Digital Health Merit Award" from the Health Information Resource Center, which honors the world's best health resources created for consumers and health professionals. We added a new line of business with a major healthcare payer and strategic partner, which along with two other lines of business, is expected to go live in the second half of the current year. And we added new capabilities to NaviNet's Open Authorizations, including the ability to collect situational patient information as part of a prior authorization submission, making it easier for health plans to meet state and regulatory requirements.

Turning to our network monitoring business, the OpenNMS Group. We released OpenNMS Horizon 30, which introduced advancements that help organizations detect anomalies and changes in network traffic, ensuring that networks stay healthy and bandwidth-related issues are promptly identified. We released Grafana Plugin OpenNMS Helm version 8.0. Grafana dashboards could now incorporate filtering by monitoring location, improve flow metrics and support to display data more dynamically.

We released AI component ALEC, Architecture for Learning-Enabled Correlation, version 2.0. Users can now view correlated situations and their alarms directly in the topology map. And finally, we released the OpenNMS Plugin API 1.0, which provides a development ecosystem that clearly identifies documents and provides ongoing compatibility guarantees for integration points. To sum up, our products received three industry awards in the quarter in recognition of their innovation and value to customers.

Revenues increased for the third consecutive quarter and gross margin of around 55% have remained consistent over the last three years. We continue to launch new products and enhanced versions of existing products. Also, we continue to roll out new drugs and new drug regimens for Eviti Connect for Autoimmune Diseases product and expect to launch the IVIG treatment soon. 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, Ron. For Q2 2022, total revenue was $16.5 million, compared with $16.1 million in the prior-year second quarter. The year-on-year increase was mainly due to growth in increased Eviti services from the previous year. Year to date, revenue from 2022 is up approximately 2% from the same period last year.

Gross profit for the quarter was $9.2 million, which is a slight increase from $9.1 million in the same quarter last year. Gross profit percent was 55%, down from 56% this quarter last year. Total operating expenses increased 15% to $20.9 million from $17.7 million in the prior-year second quarter. This is a function of the continued investments we are making in our product portfolios and our platform and infrastructure technology build-out.

For Q2 2022, net loss from continuing operations was $12.5 million or $0.11 per share. This is compared with $15.5 million or $0.13 per share in the prior-year second quarter. On a non-GAAP basis, net loss from continuing operations in Q2 2022 was $11.4 million, or $0.10 per share. This compared with $9 million or $0.08 per share for the second quarter of last year.

Finally, cash and cash equivalents were approximately $5.7 million at June 30, 2022, which is compared with $16.1 million at March 31, 2022. Usage of cash was approximately $10.4 million, which was driven by interest payments, labor expenses, and other working capital needs. With that, I will now turn the call back over to Robert.

Robert Jaffe -- Investor Relations

Thanks, Bob. Operator, that completes our prepared remarks. We'd now like to open the call to questions.

Questions & Answers:

Operator

[Operator instructions] There are no questions at this time. I'll now turn the call back to you. Please continue with the presentation and/or closing remarks.

Robert Jaffe -- Investor Relations

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

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Robert Jaffe -- Investor Relations

Ron Louks -- Chief Operating Officer

Bob Petrou -- Chief Financial Officer

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