It's been an up-and-down kind of year for Allscripts Healthcare Solutions (NASDAQ:MDRX) so far in 2019. Investors reacted positively to the healthcare technology provider's first-quarter results reported in May. But it didn't take long for the momentum generated by those results to fade away.
Allscripts announced its second-quarter results after the market closed on Thursday. Those results were... up and down. Here are the highlights from Allscripts' Q2 update.
By the numbers
Allscripts reported second-quarter revenue of $444.5 million, a slight increase from the $441.4 million reported in the same quarter of the previous year. However, this total came in lower than the average analysts' revenue estimate of $448.9 million.
The company announced a net loss in the second quarter of $150 million, or $0.90 per share, based on generally accepted accounting principles (GAAP). This represented significant deterioration from Allscripts' net income of $65 million, or $0.36 per share, reported in the same quarter of 2018.
On a non-GAAP adjusted basis, Allscripts' net income in the second quarter was $29 million, or $0.17 per share. This reflected a decline from the prior-year-period adjusted net income of $32 million, or $0.19 per share. The good news, though, was that the company's Q2 adjusted earnings per share topped the consensus analysts' estimate of $0.16 per share.
Allscripts also reported bookings of $276 million in the second quarter, up 31% year over year. The company stated that its contract revenue backlog totaled $3.9 billion as of June 30, 2019.
Behind the numbers
Allscripts' revenue increase wasn't impressive, but it was at least headed in the right direction. Software delivery, support, and maintenance revenue rose 0.21% year over year to $285 million. The company's client service revenue increased by 1.6% over the prior-year-period total to $159.5 million.
But why did Allscripts' GAAP bottom line look so much worse? Blame it on the lawyers. The company recorded a $154 million charge related to legal and other costs for its agreement in principle with the Department of Justice (DOJ). Allscripts said that this agreement will hopefully resolve the previously disclosed investigations by the DOJ of some business practices of its subsidiary, Practice Fusion.
The non-GAAP earnings reported by Allscripts in Q2 looked much better, though. There was an adjustment for the big charge related to the DOJ agreement in principle as well as other smaller adjustments that combined to enable the company to beat the Wall Street earnings estimate for the quarter.
CEO Paul Black said that Allscripts anticipates strong performance in the remainder of 2019. He added that the company is "well positioned to drive long-term revenue and earnings growth, as we leverage our strategic platforms and maintain a disciplined capital deployment strategy."
Allscripts now projects full-year 2019 bookings to come in between $1.05 billion and $1.1 billion, up from the prior-year guidance of $900 million and $1 billion. Non-GAAP EPS for full-year 2019 is expected to be between $0.65 and $0.70, in line with its previous guidance. The company also expects third-quarter non-GAAP revenue will be between $445 million and $455 million, with fourth-quarter revenue between $460 million and $470 million.