In response to the company's second-quarter earnings report, shares of Livongo Health (NASDAQ:LVGO), a maker of health-monitoring devices, fell as much as 23% in afternoon trading on Thursday. Shares were down about 15% as of 2:30 p.m. EDT today.
The headline numbers from the second quarter were mixed:
- Revenue jumped 145% to $40.9 million. That nicely exceeded the $39.7 million that Wall Street had expected.
- Livongo for Diabetes members grew 140% to 192,000.
- Client count grew 92% to 720.
- Net loss under generally accepted accounting principles (GAAP) more than doubled to $14.2 million, or $0.76 per share.
- Non-GAAP (adjusted) net loss was $0.46 per share. That was $0.05 worse than analysts' consensus estimate.
Here's management's guidance for the upcoming quarter and the full year:
- Third-quarter revenue is expected to land between $42 million and $43 million. Wall Street is currently expecting $42.3 million.
- Third-quarter adjusted EBITDA is expected to land between negative $12 million and negative $13 million.
- Full-year 2019 revenue is expected to land between $159 million and $162 million. That's above the consensus estimate on Wall Street that calls for $158.4 million in total revenue.
- Full-year 2019 adjusted EBITDA is expected to land between negative $39 million and negative $41 million.
Traders appear to be reacting to the higher-than-expected quarterly loss.
Livongo Health boasts triple-digit revenue growth, so you'd think that Wall Street would care much more about revenue than what's happening on the bottom line. That doesn't seem to be the case today, which is a bit of a head-scratcher.
The good news for investors is that this earnings report confirms that Livongo Health's products remain as popular as ever and the company continues to have success at signing up new members and customers. If the company can continue to grow at this rate, then the share price should eventually respond accordingly.