Image Source: Athenahealth

The last 12 months have been pretty busy for athenahealth (ATHN). You wouldn't know that from the healthcare technology company's stock price, though. Shares began February of 2016 in nearly the exact same place as they were a year ago.

Could that situation soon change? It doesn't look like athenahealth's fourth-quarter results -- announced after the market closed Thursday -- will cause any big moves, though shares fell around 1% in after-hours trading. Here are the highlights from the quarter.  

Athenahealth results: The raw numbers


Q4 2015 Actuals

Q4 2014 Actuals

Growth (YOY)


$257.5 million

$213.2 million


Net Income From Continuing Operations

$7.7 million

$8.7 million


Earnings Per Share




Source: Yahoo Finance! 

What happened with athenahealth this quarter?
Sales grew at a solid pace. That's the good news. But the bad news was that athenahealth's GAAP earnings slipped year-over-year. Non-GAAP earnings also fell to $17.8 million, or $0.45 per diluted share, from Q4 2014's $22.5 million, or $0.58 per diluted share. 

The problem was that athenahealth spent a lot more money. Direct operating expenses rose 28% compared to the prior year period. Selling and marketing costs soared 30%.

However, athenahealth did notch several achievements during the fourth quarter, including:

  • Adding 2,148 active physicians to athenaCollector
  • Adding 1,126 active physicians to athenaClinicals
  • Adding 1,965 active physicians to athenaCommunicator

What about the outlook for 2016? The company provided guidance for this year that didn't disappoint. It expects revenue between $1.085 billion and $1.115 billion. Adjusted earnings per share are projected to be between $1.65 and $1.85.

What management had to say
Looking at the big picture, Athenahealth CEO Jonathan Bush said:

Our network has grown to serve more than 75,000 providers, 38 million patients, and 98,000 information trading partners. Notably, our network has touched over 74 million patients over the years. Its inherent shared knowledge backed by our highly efficient back-office services helps keep our clients profitable and agile in the face of industry change.

As Kristi Matus, chief financial and administrative officer, also noted, "In 2015, we grew athenahealth-branded bookings by over 30%, onboarded a record 13,067 providers onto our network, and improved the efficiency and effectiveness of our service offerings." 

Looking forward
Investors will definitely want to pay attention to athenahealth's entrance into the major hospital market. In January, athenahealth announced a deal with the University of Toledo Medical Center, its first contract with a large hospital.  

This deal is sure to catch the attention of Cerner (CERN), which has the largest global market share among electronic health record vendors. Comparing Cerner to athenahealth is a little like comparing Goliath to David. Cerner, for example, racked up $1.128 billion in revenue in the third quarter alone -- more than athenahealth made in revenue for all of 2015.

But Cerner and other big hospital EHR vendors shouldn't be too complacent. Athenahealth began its relationship with the University of Toledo by first winning its physician group's business back in 2014. The company was able to build upon that relationship to ultimately win over the hospital's business. That's a progression that could be repeated elsewhere. Athenahealth's success with physicians could be the slingshot that allows it to slay some giants over time.