The following is a summary of the Ontrak, Inc. (OTRK) Q3 2024 Earnings Call Transcript:

Financial Performance:

• In Q3 2024, Ontrak, Inc. reported a revenue of $2.6 million, a 31% decrease compared to the same period last year.

• Quarterly revenue per health plan enrolled member per month averaged approximately $449, reflecting a decline from previous quarters.

• The company experienced a gross margin of 62%, which is lower compared to 65.6% in Q2 of 2024 and 72% in Q3 of 2023.

Business Progress:

• Ontrak announced customer expansion with Sentara Health Plans, expecting to offer their Engage solution to approximately 20,000 members.

• Announced a new customer, a large health plan in the Northeast, and plans to close over 30,000 HEDIS gaps in care with this customer.

• Achieved a net increase of 313 members during Q3, including the addition of 1,166 new members.

Opportunities:

• Expanded service offerings and customer base across multiple lines, including Medicaid HARP, Medicare Advantage, and Commercial sectors.

• Projected significant revenue growth due to new launches and customer expansions, with anticipated annual revenue of $11 million to $13 million.

• Significant opportunities at the bottom of the sales funnel represent an additional $9 million to $12 million of potential annual revenue.

Risks:

• Current and future revenue decreases due to the mix shift involving newer customers with different pricing structures and the inclusion of lower revenue Engage members.

• Challenges of maintaining growth and customer retention in light of economic and industry-specific pressures.

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