Doctor working at computer

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What happened

Shares of athenahealth (NASDAQ:ATHN) are down 10.3% at 11:58 a.m. EST after the company announced fourth-quarter earnings that didn't meet investors' lofty expectations.

So what

Revenue increased 12% year over year in the fourth quarter, which many companies would gladly take. But that level of growth was a substantial slowdown from the earlier quarters; Athenahealth's full-year revenue grew by 17% year over year.

All three of Athenahealth's product lines -- athenaCollector, athenaClinicals, and athenaCommunicator -- saw additions of new physicians and providers. All told, Athenahealth added over 12,000 providers in 2016.

On the bottom line, adjusted earnings was up 38% to $0.45 per share, but again that dragged down the full-year adjusted earnings share growth, which was up 41% year over year.

Now what

Despite the slight slowdown in the fourth quarter, management thinks it's just a minor speed bump. Guidance is for revenue of $1.29 billion to $1.33 billion this year, which is 19% higher than last year at the low end of guidance.

Importantly, Athenahealth has quite a bit of operating leverage -- additional providers cost the company less, so more of their revenue flows to income -- which allows income to grow faster than revenue. This year adjusted operating income is expected to fall in the range of $170 million to $190 million, at least 28% higher than last year.

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends athenahealth. The Motley Fool has a disclosure policy.