Forian (FORA) Q3 Earnings call transcript Nov 13, 2024
2min read Forian Inc., a leading provider of data analytics and information services, recently held its third-quarter 2024 earnings call, shedding light on the company's current performance and future outlook. The call, led by Executive Chairman and CEO Max Wygod and CFO Michael Vesey, provided insights into Forian's positioning and strategic moves, as well as the financial metrics that drive its growth trajectory.
Current Performance and Strategic Moves
Forian's third-quarter revenue was relatively flat sequentially compared to the second quarter, amounting to $4.7 million, down from $5.3 million year-over-year. The revenue trend is attributed to macroeconomic factors and the impact of losing two major customer accounts in the first quarter of 2024. However, Wygod expressed optimism about the company's future, highlighting increased sales wins in healthcare services and life sciences. These wins are expected to yield significant benefits as Forian approaches the end of the year.
A notable strategic move for Forian was the acquisition of Kyber Data Science, an analytics firm specializing in financial data and predictive analytics. This acquisition is expected to expand Forian's addressable market and enhance its data science and predictive analytic capabilities. It also marks Forian's entry into the financial services sector, providing a valuable addition to its existing healthcare offerings.
Financial Overview
Michael Vesey, CFO, presented a detailed analysis of Forian's financial results for the quarter ended September 30, 2024. The company reported a net loss of $0.2 million and adjusted EBITDA of $0.2 million, a significant decrease from the previous year's net income of $4.3 million and adjusted EBITDA of $1.1 million. This decline was primarily due to lower revenues and higher cost of revenue, offset by a nonrecurring benefit from the termination of an inbound information contract.
Looking ahead, Forian expects its 2024 revenues to be at the top end of its previously stated range, with adjusted EBITDA remaining within the same range. The inclusion of Kyber's revenues in Forian's operating results, effective November 1, 2024, is expected to significantly boost the company's financial performance.
Future Outlook and Investor Inquiries
During the Q&A session, analysts probed deeper into Forian's financial outlook and strategic moves. Max Wygod clarified that the comment on breaking out of the revenue range in 2025 refers to Forian's core business excluding Kyber. He highlighted an increased rate of sales wins, larger contract renewals, and improving market conditions as key drivers of this optimistic outlook.
In response to a question about the acquisition of Kyber and its potential impact on sales and marketing investments, Wygod emphasized the importance of maintaining a focus on the bottom line while building efficiency within the existing sales team. He also noted that the acquisition has brought in strong individuals and new target markets, which will contribute to Forian's growth without necessarily requiring a large increase in sales headcount.
Conclusion
Forian's third-quarter earnings call painted a picture of a company navigating challenges while positioning itself for growth. The acquisition of Kyber Data Science is a strategic move that promises to expand Forian's reach and capabilities, particularly in the financial services sector. The company's financial metrics, while showing some fluctuations, are expected to improve significantly with the inclusion of Kyber's revenues.
As Forian moves into the final quarter of 2024, it faces a crucial period of transition and growth. The strategic moves and financial outlook presented in the earnings call suggest a company that is confident in its competitive position and agile in its response to market conditions. With a strong team, robust technology, and a focus on efficiency, Forian is poised to capitalize on the opportunities ahead.