The following is a summary of the Ontrak, Inc. (OTRK) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Ontrak reported Q2 2024 revenue of $2.5 million, a 17% year-over-year decrease.

• Revenue per health plan enrolled member per month decreased to $463, compared to $528 in Q2 2023.

• Gross margin for Q2 was 65.7%, a slight increase from 63.6% in Q1 2024 but down from 72.8% in Q2 2023.

• Cash flow from operations was negative $4.5 million in Q2, an improvement from negative $5.1 million the prior year.

• Ontrak projects Q3 2024 revenues to be between $2.4 million to $2.8 million.

Business Progress:

• Ontrak signed a contract with a major Northeast regional health plan which will potentially double their current outreach pool.

• The company plans to launch its WholeHealth+ program and Engage Coaching Only solution with the new customer within the next 60 days.

• Ontrak's solutions have demonstrated statistically significant medical cost savings in a final study with an existing Medicaid customer.

• The pipeline remains strong with 26 active prospects representing about 15 million members across various business lines.

Opportunities:

• Ontrak's new contracts and expansion into additional regions in Florida with community care plans denotes potential growth in their operational scale and service delivery.

• The technological advancements such as AI implementation and Mental Health Digital Twin technology are set to enhance their service offerings and customer satisfaction.

Risks:

• Ontrak faces risks in integrating new pricing strategies and managing a higher portion of Engage members, which potentially lowers revenue per enrolled member.

• Financial dependence on securing additional capital, such as through the Keep Well Agreement and exercise of warrants, reflects some liquidity risks and the need for sustainable funding.

More details: Ontrak IR

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