MINNEAPOLIS--(BUSINESS WIRE)--Bright Health Group, Inc. (“Bright Health Group” or the “Company”) (NYSE: BHG), the first technology-enabled, Fully Aligned system of care built for healthcare's consumer retail market, today reported financial results for its Second Quarter ended June 30, 2022.
“Bright Health Group has made significant progress this year on reducing medical costs, accurate risk adjustment capture, and improving operational performance resulting in strong performance in the Second Quarter,” said Mike Mikan, President and CEO of Bright Health Group. “As we look forward, continued execution on these efforts as well as pricing action we’ve taken for next year supports a meaningful step closer to profitability in 2023, which gives us further conviction in our target of breakeven Adjusted EBITDA in 2024.”
Key Metrics
|
As of June 30, |
||
|
2022 |
|
2021 |
Consumer and Patient Metrics |
|
|
|
Bright HealthCare Commercial Consumers |
970,000 |
|
550,000 |
Bright HealthCare Medicare Advantage Consumers |
120,000 |
|
110,000 |
NeueHealth Value-Based Patients |
500,000 |
|
40,000 |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands) |
June 30, |
|
June 30, |
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Financial Metrics |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
1,576,628 |
|
|
$ |
1,113,840 |
|
|
$ |
3,412,203 |
|
|
$ |
1,988,398 |
|
Medical Cost Ratio (1) |
|
88.8 |
% |
|
|
86.8 |
% |
|
|
86.6 |
% |
|
|
83.5 |
% |
Operating Cost Ratio |
|
26.2 |
% |
|
|
23.4 |
% |
|
|
24.4 |
% |
|
|
23.6 |
% |
GAAP Net Loss |
$ |
(251,330 |
) |
|
$ |
(43,723 |
) |
|
$ |
(431,959 |
) |
|
$ |
(68,268 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
(194,860 |
) |
|
$ |
(93,766 |
) |
|
$ |
(269,690 |
) |
|
$ |
(107,593 |
) |
(1) |
Medical Cost Ratio for the three months ended June 30, 2022 and 2021, include a 130 basis point and 320 basis point, respectively, unfavorable impact from COVID-19 related costs. Medical Cost Ratio for the six months ended June 30, 2022 and 2021, include a 230 basis point and 360 basis point, respectively, unfavorable impact from COVID-19 related costs. |
See the table at the end of this release for additional information and a reconciliation of the non-GAAP measure used in the table above.
Financial Outlook
For full year 2022, Bright Health Group is providing the following guidance and commentary:
- Bright Health Group’s total Revenue is expected to be $6.8 billion to $7.1 billion with an expected enterprise Medical Cost Ratio between 90% and 94%.
- On a segment basis, Bright HealthCare end-of-year membership is expected to be approximately 1,000,000, while NeueHealth Revenue is expected to be approximately $2.2 billion.
- Intercompany Revenue elimination, comprised of payments from Bright HealthCare to NeueHealth for managing patient care and for network services, is expected to be approximately $1.2 billion.
- Adjusted EBITDA for 2022 is expected to be a loss of between $500.0 million and $800.0 million†.
Earnings Conference Call
As previously announced, Bright Health Group will discuss the Company’s results, strategy, and outlook on a conference call with investors at 8:00 a.m. Eastern Time today. Bright Health Group will host a live webcast of this conference call which can be accessed from the Investor Relations page of the company’s website (investors.brighthealthgroup.com). Following the call, a webcast replay will be available on the same site. This earnings release and the Form 8-K dated August 10, 2022, can be accessed on the Investor Relations page of the Company’s website. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website. Accordingly, investors should monitor this portion of our website, in addition to following our press releases, U.S. Securities and Exchange Commission (“SEC”) filings and public conference calls and webcasts.
About Bright Health Group
Bright Health Group is the first technology-enabled, Fully Aligned system of care built for healthcare's consumer retail market. Our differentiated approach aligns care delivery with the financing of care to drive better outcomes, lower costs, and enhance the consumer experience. We have two market-facing businesses: NeueHealth and Bright HealthCare. NeueHealth provides care delivery and value-based enablement services to approximately 500,000 value-based patients through our owned and affiliated clinics. Bright HealthCare offers Commercial and Medicare health plan products to over 1 million consumers across the nation. We believe everyone should have access to personal, affordable, and high-quality healthcare. Our mission is to Make healthcare right. Together. For more information, visit www.brighthealthgroup.com.
Notes
† A reconciliation of the projected Adjusted EBITDA, which is a forward-looking non-GAAP financial measure, to the most directly comparable GAAP financial measures, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as interest expense, income tax expense, depreciation and amortization, impairment of intangible assets, share-based compensation expense, transaction costs, changes in the fair value of contingent consideration, changes in the fair value of equity securities, contract termination costs, restructuring costs; and the tax effect of all such items. Historically, the Company has excluded these items from non-GAAP financial measures. The Company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business, are inherently unpredictable as to if or when they may occur. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Forward-Looking Statements
Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “projections,” “outlook,” and other similar expressions. These forward-looking statements include any statements regarding our plans and expectations with respect to Bright Health Group, Inc. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Factors that might materially affect such forward-looking statements include: our ability to continue as a going concern if we do not obtain additional financing; a lack of acceptance or slow adoption of our business model; our ability to retain existing consumers and expand consumer enrollment; our ability to obtain and accurately assess, code, and report Individual and Family Plan and Medicare Advantage risk adjustment factor scores for consumers; our ability to contract with care providers and arrange for the provision of quality care; our ability to accurately estimate our medical expenses, effectively manage our costs and claims liabilities or appropriately price our products and charge premiums; our ability to obtain claims information timely and accurately; the impact of the ongoing COVID-19 pandemic on our business and results of operations; the risks associated with our reliance on third-party providers to operate our business; the impact of modifications or changes to the U.S. health insurance markets; our ability to manage the growth of our business; our ability to operate, update or implement our technology platform and other information technology systems; our ability to retain key executives; our ability to successfully pursue acquisitions and integrate acquired businesses; the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, and social and political conditions or civil unrest; our ability to prevent and contain data security incidents and the impact of data security incidents on our members, patients, employees and financial results; our ability to comply with requirements to maintain effective internal controls; our ability to adapt to the new risks associated with our expansion into Direct Contracting; and the other factors set forth under the heading “Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q, and Form 8-K (including all amendments to those reports) and our other filings with the SEC. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or changes in our expectations.
Bright Health Group, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) |
|||||||
|
June 30,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,427,517 |
|
|
$ |
1,061,179 |
|
Short-term investments |
|
833,923 |
|
|
|
193,835 |
|
Accounts receivable, net of allowance of $6,737 and $4,074, respectively |
|
144,878 |
|
|
|
113,474 |
|
Direct contracting performance year receivable |
|
396,104 |
|
|
|
— |
|
Prepaids and other current assets |
|
357,989 |
|
|
|
291,712 |
|
Total current assets |
|
3,160,411 |
|
|
|
1,660,200 |
|
Other assets: |
|
|
|
||||
Long-term investments |
|
861,675 |
|
|
|
675,192 |
|
Property, equipment and capitalized software, net |
|
47,937 |
|
|
|
38,344 |
|
Goodwill |
|
835,450 |
|
|
|
835,140 |
|
Intangible assets, net |
|
316,249 |
|
|
|
343,860 |
|
Other non-current assets |
|
39,335 |
|
|
|
45,603 |
|
Total other assets |
|
2,100,646 |
|
|
|
1,938,139 |
|
Total assets |
$ |
5,261,057 |
|
|
$ |
3,598,339 |
|
Liabilities, Redeemable Noncontrolling Interest, Redeemable Preferred Stock and Shareholders’ Equity (Deficit) |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Medical costs payable |
$ |
1,049,874 |
|
|
$ |
817,975 |
|
Accounts payable |
|
120,541 |
|
|
|
118,140 |
|
Unearned revenue |
|
56,872 |
|
|
|
53,295 |
|
Risk adjustment payable |
|
1,847,883 |
|
|
|
931,170 |
|
Direct contracting performance year obligation |
|
310,603 |
|
|
|
— |
|
Short-term borrowings |
|
— |
|
|
|
155,000 |
|
Other current liabilities |
|
245,276 |
|
|
|
207,238 |
|
Total current liabilities |
|
3,631,049 |
|
|
|
2,282,818 |
|
Other liabilities |
|
36,091 |
|
|
|
41,994 |
|
Total liabilities |
|
3,667,140 |
|
|
|
2,324,812 |
|
Commitments and contingencies (Note 10) |
|
|
|
||||
Redeemable noncontrolling interests |
|
164,454 |
|
|
|
128,407 |
|
Series A redeemable preferred stock, $0.0001 par value; 100,000,000 shares authorized in 2022 and 2021; 750,000 and — shares issued and outstanding in 2022 and 2021, respectively |
|
747,481 |
|
|
|
— |
|
Shareholders’ equity (deficit): |
|
|
|
||||
Common stock, $0.0001 par value; 3,000,000,000 shares authorized in 2022 and 2021; 629,322,217 and 628,622,872 shares issued and outstanding in 2022 and 2021, respectively |
|
63 |
|
|
|
63 |
|
Additional paid-in capital |
|
2,915,056 |
|
|
|
2,861,243 |
|
Accumulated deficit |
|
(2,170,751 |
) |
|
|
(1,700,851 |
) |
Accumulated other comprehensive loss |
|
(50,386 |
) |
|
|
(3,335 |
) |
Treasury stock, at cost, 2,522,148 shares at June 30, 2022 and December 31, 2021, respectively |
|
(12,000 |
) |
|
|
(12,000 |
) |
Total shareholders’ equity (deficit) |
|
681,982 |
|
|
|
1,145,120 |
|
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) |
$ |
5,261,057 |
|
|
$ |
3,598,339 |
|
Bright Health Group, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Premium revenue |
$ |
1,437,329 |
|
|
$ |
1,042,086 |
|
|
$ |
3,117,779 |
|
|
$ |
1,902,717 |
|
Direct contracting revenue |
|
137,205 |
|
|
|
— |
|
|
|
320,002 |
|
|
|
— |
|
Service revenue |
|
12,845 |
|
|
|
12,085 |
|
|
|
25,273 |
|
|
|
20,523 |
|
Investment income (loss) |
|
(10,751 |
) |
|
|
59,669 |
|
|
|
(50,851 |
) |
|
|
65,158 |
|
Total revenue |
|
1,576,628 |
|
|
|
1,113,840 |
|
|
|
3,412,203 |
|
|
|
1,988,398 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Medical costs |
|
1,398,166 |
|
|
|
904,630 |
|
|
|
2,978,762 |
|
|
|
1,589,200 |
|
Operating costs |
|
413,320 |
|
|
|
261,060 |
|
|
|
832,238 |
|
|
|
469,300 |
|
Depreciation and amortization |
|
13,229 |
|
|
|
7,195 |
|
|
|
26,270 |
|
|
|
11,776 |
|
Total operating expenses |
|
1,824,715 |
|
|
|
1,172,885 |
|
|
|
3,837,270 |
|
|
|
2,070,276 |
|
Operating loss |
|
(248,087 |
) |
|
|
(59,045 |
) |
|
|
(425,067 |
) |
|
|
(81,878 |
) |
Interest expense |
|
337 |
|
|
|
4,142 |
|
|
|
1,530 |
|
|
|
4,688 |
|
Other income |
|
2 |
|
|
|
— |
|
|
|
(782 |
) |
|
|
— |
|
Loss before income taxes |
|
(248,426 |
) |
|
|
(63,187 |
) |
|
|
(425,815 |
) |
|
|
(86,566 |
) |
Income tax (benefit) expense |
|
2,904 |
|
|
|
(19,464 |
) |
|
|
6,144 |
|
|
|
(18,298 |
) |
Net loss |
|
(251,330 |
) |
|
|
(43,723 |
) |
|
|
(431,959 |
) |
|
|
(68,268 |
) |
Net earnings attributable to noncontrolling interests |
|
(23,336 |
) |
|
|
(795 |
) |
|
|
(37,941 |
) |
|
|
(1,412 |
) |
Series A preferred stock dividend accrued |
|
(9,461 |
) |
|
|
— |
|
|
|
(18,399 |
) |
|
|
— |
|
Net loss attributable to Bright Health Group, Inc. common shareholders |
$ |
(284,127 |
) |
|
$ |
(44,518 |
) |
|
$ |
(488,299 |
) |
|
$ |
(69,680 |
) |
Basic and diluted loss per share attributable to Bright Health Group, Inc. common shareholders |
$ |
(0.45 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.78 |
) |
|
$ |
(0.46 |
) |
Basic and diluted weighted-average common shares outstanding |
|
629,201 |
|
|
|
160,942 |
|
|
|
628,984 |
|
|
|
150,616 |
|
Bright Health Group, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(431,959 |
) |
|
$ |
(69,680 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
26,270 |
|
|
|
11,776 |
|
Impairment of intangible assets |
|
6,720 |
|
|
|
— |
|
Share-based compensation |
|
53,141 |
|
|
|
19,054 |
|
Deferred income taxes |
|
1,154 |
|
|
|
(18,018 |
) |
Unrealized loss (gain) on equity securities |
|
57,151 |
|
|
|
(62,754 |
) |
Other, net |
|
4,582 |
|
|
|
8,681 |
|
Changes in assets and liabilities, net of acquired assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(31,404 |
) |
|
|
(14,427 |
) |
Direct contracting performance year receivable |
|
(396,104 |
) |
|
|
— |
|
Other assets |
|
(60,991 |
) |
|
|
(39,883 |
) |
Medical cost payable |
|
231,899 |
|
|
|
223,125 |
|
Risk adjustment payable |
|
916,713 |
|
|
|
318,758 |
|
Accounts payable and other liabilities |
|
35,312 |
|
|
|
120,847 |
|
Unearned revenue |
|
3,577 |
|
|
|
(333 |
) |
Direct contracting performance year obligation |
|
310,603 |
|
|
|
— |
|
Net cash provided by operating activities |
|
726,664 |
|
|
|
497,146 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of investments |
|
(1,140,896 |
) |
|
|
(596,811 |
) |
Proceeds from sales, paydown, and maturities of investments |
|
204,775 |
|
|
|
449,636 |
|
Purchases of property and equipment |
|
(15,154 |
) |
|
|
(10,554 |
) |
Business acquisitions, net of cash acquired |
|
(310 |
) |
|
|
(210,492 |
) |
Net cash used in investing activities |
|
(951,585 |
) |
|
|
(368,221 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from issuance of preferred stock |
|
747,481 |
|
|
|
— |
|
Proceeds from issuance of common stock |
|
672 |
|
|
|
9,616 |
|
Net proceeds from short-term borrowings |
|
(155,000 |
) |
|
|
— |
|
Distribution to Noncontrolling interest |
|
(1,894 |
) |
|
|
— |
|
Payments for debt issuance costs |
|
— |
|
|
|
(3,391 |
) |
Proceeds from IPO |
|
— |
|
|
|
887,328 |
|
Payments for IPO offering costs |
|
— |
|
|
|
(4,530 |
) |
Net cash provided by financing activities |
|
591,259 |
|
|
|
889,023 |
|
Net increase in cash and cash equivalents |
|
366,338 |
|
|
|
1,017,948 |
|
Cash and cash equivalents – beginning of year |
|
1,061,179 |
|
|
|
488,371 |
|
Cash and cash equivalents – end of period |
$ |
1,427,517 |
|
|
$ |
1,506,319 |
|
Bright Health Group, Inc. and Subsidiaries Segment Information (in thousands) (Unaudited) |
|||||||||||||||
Bright HealthCare |
Three Months Ended |
|
Six Months Ended |
||||||||||||
(in thousands) |
June 30, |
|
June 30, |
||||||||||||
Statements of income (loss) and operating data: |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
||||||||
Bright HealthCare: |
|
|
|
|
|
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Commercial revenue |
$ |
945,274 |
|
|
$ |
683,943 |
|
|
$ |
2,108,498 |
|
|
$ |
1,304,999 |
|
Medicare Advantage revenue |
|
419,594 |
|
|
|
339,906 |
|
|
|
849,907 |
|
|
|
560,775 |
|
Investment income |
|
5,433 |
|
|
|
1,158 |
|
|
|
6,301 |
|
|
|
2,404 |
|
Total revenue |
|
1,370,301 |
|
|
|
1,025,007 |
|
|
|
2,964,706 |
|
|
|
1,868,178 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Medical costs |
|
1,220,897 |
|
|
|
894,059 |
|
|
|
2,544,621 |
|
|
|
1,569,115 |
|
Operating costs |
|
372,972 |
|
|
|
242,329 |
|
|
|
744,636 |
|
|
|
432,302 |
|
Depreciation and amortization |
|
6,034 |
|
|
|
4,583 |
|
|
|
12,073 |
|
|
|
6,940 |
|
Total operating expenses |
|
1,599,903 |
|
|
|
1,140,971 |
|
|
|
3,301,330 |
|
|
|
2,008,357 |
|
Operating loss |
$ |
(229,602 |
) |
|
$ |
(115,964 |
) |
|
$ |
(336,624 |
) |
|
$ |
(140,179 |
) |
|
|
|
|
|
|
|
|
||||||||
Medical Cost Ratio (MCR) |
|
89.5 |
% |
|
|
87.3 |
% |
|
|
86.0 |
% |
|
|
84.1 |
% |
Commercial MCR |
|
89.0 |
% |
|
|
81.2 |
% |
|
|
82.9 |
% |
|
|
77.2 |
% |
Medicare Advantage MCR |
|
90.3 |
% |
|
|
99.7 |
% |
|
|
93.5 |
% |
|
|
100.1 |
% |
NeueHealth |
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands) |
June 30, |
|
June 30, |
||||||||||||
Statements of income (loss) data: |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
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NeueHealth: |
|
|
|
|
|
|
|
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Revenue: |
|
|
|
|
|
|
|
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Premium revenue |
$ |
276,460 |
|
|
$ |
36,172 |
|
|
$ |
731,462 |
|
|
$ |
64,846 |
|
Direct contracting revenue |
|
137,205 |
|
|
|
— |
|
|
|
320,002 |
|
|
|
— |
|
Service revenue |
|
24,651 |
|
|
|
19,631 |
|
|
|
48,772 |
|
|
|
35,253 |
|
Investment income (loss) |
|
(16,184 |
) |
|
|
58,511 |
|
|
|
(57,152 |
) |
|
|
62,754 |
|
Total revenue |
|
422,132 |
|
|
|
114,314 |
|
|
|
1,043,084 |
|
|
|
162,853 |
|
Operating expenses |
|
|
|
|
|
|
|
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Medical costs |
|
381,387 |
|
|
|
28,415 |
|
|
|
1,006,381 |
|
|
|
47,897 |
|
Operating costs |
|
52,035 |
|
|
|
26,368 |
|
|
|
110,949 |
|
|
|
51,819 |
|
Depreciation and amortization |
|
7,195 |
|
|
|
2,612 |
|
|
|
14,197 |
|
|
|
4,836 |
|
Total operating expenses |
|
440,617 |
|
|
|
57,395 |
|
|
|
1,131,527 |
|
|
|
104,552 |
|
Operating income (loss) |
$ |
(18,485 |
) |
|
$ |
56,919 |
|
|
$ |
(88,443 |
) |
|
$ |
58,301 |
|
|
|
|
|
|
|
|
|
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Medical Cost Ratio (MCR) |
|
92.2 |
% |
|
|
78.6 |
% |
|
|
95.7 |
% |
|
|
73.9 |
% |
Non-GAAP Financial Measures
We use the non-GAAP financial measure Adjusted EBITDA. We define Adjusted EBITDA as Net Loss excluding Interest Expense, Income Taxes, Depreciation and Amortization, adjusted for the impact of impairment of intangible assets, acquisition and financing-related transaction costs, share-based compensation, changes in the fair value of contingent consideration, changes in the fair value of equity securities, contract termination costs and restructuring costs. This non-GAAP measure has been presented in this quarterly Earnings Release as a supplemental measure of financial performance that is not required by or presented in accordance with GAAP because we believe it assists management and investors in comparing our operating performance across reporting periods on a consistent basis by excluding and including items that we do not believe are indicative of our core operating performance. Management believes this measure is useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Adjusted EBITDA is not a recognized term under GAAP and should not be considered as an alternative to Net Income (Loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentation of Adjusted EBITDA has limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented:
|
Three Months Ended
|
|
Six Months Ended
|
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($ in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss |
$ |
(251,330 |
) |
|
$ |
(43,723 |
) |
|
$ |
(431,959 |
) |
|
$ |
(68,268 |
) |
Interest expense |
|
337 |
|
|
|
4,142 |
|
|
|
1,530 |
|
|
|
4,688 |
|
Income tax expense (benefit) |
|
2,904 |
|
|
|
(19,464 |
) |
|
|
6,144 |
|
|
|
(18,298 |
) |
Depreciation and amortization |
|
13,229 |
|
|
|
7,195 |
|
|
|
26,270 |
|
|
|
11,776 |
|
Impairment of intangible assets |
|
— |
|
|
|
— |
|
|
|
6,720 |
|
|
|
— |
|
Transaction costs (a) |
|
299 |
|
|
|
3,130 |
|
|
|
410 |
|
|
|
5,150 |
|
Share-based compensation expense (b) |
|
20,220 |
|
|
|
13,878 |
|
|
|
53,141 |
|
|
|
19,054 |
|
Change in fair value of equity securities (c) |
|
16,183 |
|
|
|
(58,511 |
) |
|
|
57,151 |
|
|
|
(62,754 |
) |
Change in fair value of contingent consideration (d) |
|
— |
|
|
|
(413 |
) |
|
|
— |
|
|
|
1,059 |
|
Contract termination costs (e) |
|
500 |
|
|
|
— |
|
|
|
1,241 |
|
|
|
— |
|
Restructuring costs (f) |
|
2,798 |
|
|
|
— |
|
|
|
9,662 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(194,860 |
) |
|
$ |
(93,766 |
) |
|
$ |
(269,690 |
) |
|
$ |
(107,593 |
) |
(a) |
Transaction costs include accounting, tax, valuation, consulting, legal and investment banking fees directly relating to business combinations and certain costs associated with our initial public offering. These costs can vary from period to period and impact comparability, and we do not believe such transaction costs reflect the ongoing performance of our business. |
|
(b) |
Represents non-cash compensation expense related to stock option and restricted stock award grants, which can vary from period to period based on a number of factors, including the timing, quantity and grant date fair value of the awards. |
|
(c) |
Beginning in 2022, Adjusted EBITDA excludes the impact of changes in unrealized gains and losses on equity securities. The comparable period in 2021 has been recast to exclude changes in unrealized gains and losses on equity securities. |
|
(d) |
Represents the non-cash change in fair value of contingent consideration from business combinations, which is remeasured at fair value each reporting period. |
|
(e) |
Represents amounts paid for early termination of an existing vendor contracts. |
|
(f) |
Restructuring costs represents severance costs as part of a workforce reduction in 2022. |
