Source: athenahealth 

It's been something of a roller-coaster ride for athenahealth, (NASDAQ:ATHN) when it comes to earnings results over the last several quarters. The cloud-based healthcare solutions provider missed analysts' estimates in first quarter of 2014 but then followed up with an impressive beat in the second quarter and met expectations to the penny in the third quarter.

What about the fourth quarter? Athenahealth announced results after the market closed on Thursday, with shares up around 1% in after-hours trading. Here are the highlights. 

By the numbers
The roller coaster ride took a turn upward during the fourth quarter. Athenahealth reported adjusted earnings of $22.5 million, or $0.58 per diluted share. That figure handily beat the consensus analysts' estimate of $0.39 per share. However, it represented only a slight increase from the $22.1 million, or $0.57 per diluted share, reported for fourth quarter of 2013. On a GAAP basis, earnings were $8.7 million, or $0.22 per diluted share, compared to $13.1 million, or $0.34 per diluted share, in the fourth quarter of the prior year. 

Athenahealth announced fourth-quarter revenue of $213.2 million. This number comfortably beat the average analysts' estimate of $207.83 million. It also reflected a solid 24% year-over-year increase compared to the $171.6 million reported in the same period of 2013.

For the full year 2014, athenahealth's adjusted earnings came in at $49.5 million, or $1.31 per diluted share. That's nearly 12% higher than the $44.3 million, or $1.16 per diluted share, reported in full year 2013. On a GAAP basis, athenahealth recorded a net loss for 2014 of $3.1 million, or $0.08 per diluted share. In 2013, the company earned $2.6 million, or $0.07 per diluted share, on a GAAP basis.

Full-year revenue for 2014 was $752.6 million. This was a hefty 26% jump over the $595.0 million reported in 2013.

Behind the numbers
There are plenty of things to like about athenahealth's fourth-quarter results. Investors can be appreciative of the company's beat on revenue and earnings. And an uptick in gross margin from 66.2% in the fourth quarter of 2013 to 67.1% in the last quarter is encouraging.

Several factors drove this good news. Athenahealth-branded services experienced solid revenue growth. Net new active physicians increased nicely for athenaCollector and athenaClinicals.The company also kept the growth in direct operating expenses and research and development costs at manageable levels.

On the other hand, there were a few areas that investors won't like so much. Although athenahealth beat earnings expectations, the company still only achieved minimal year-over-year improvement during the fourth quarter. While 2,480 net new physicians began using athenaCommunicator during the quarter, that's a big drop-off from the 4,186 added in the same period of 2013.

Epocrates also continues to bleed. Revenue from Epocrates-branded services plunged 32% year over year during the fourth quarter. That's worse than the 27% year-over-year drop experienced in the third quarter. 

A couple of worrisome areas still exist on the cost side as well. Sales and marketing expenses are growing faster than revenue is. And general and administrative costs soared by more than 50% year-over-year during the fourth quarter -- a result of athenahealth's increasing headcount.

Looking ahead
The company provided new 2015 guidance with its fourth-quarter results. This update was only made to incorporate changes relating to its recent acquisition of RazorInsights and the purchase of Beth Israel Deaconess Medical Center's Web-based clinical applications and electronic health record platform.  

Athenahealth now projects revenue for this year to fall between $905 million and $925 million. The consensus analysts' estimate if for revenue of $916.6 million. Adjusted earnings are now expected to be in the range of $1.10-$1.20 per share -- less than the $1.27 average analysts' estimate for 2015. 

It remains to be seen whether athenahealth's investments in increased staffing and acquisitions will pay off. If they do, the stock could return to its high-flying ways of years past.

In the meantime, though, investors might want to keep in mind a statement made by athenahealth CEO Jonathan Bush. He said in January 2013 that his company's stock "trades at a very high multiple", noting that a flatulent mouse in Brazil could affect the stock's price significantly. Athenahealth's forward price-to-earnings multiple at the time was 62. Now it's 115.