Benefitfocus revenue up 29% for Q1

By Liz Segrist
lsegrist@scbiznews.com
Published May 6, 2014

Benefitfocus’ total revenue was $30.7 million for the first quarter, up 29% from a year prior, according to its financial results announced in a conference call Monday.

This is the second time the Daniel Island-based technology firm, which provides cloud-based platforms to manage employee benefits, has publicly reported its earnings after it went public on the Nasdaq in September.

Benefitfocus reported an operating loss of $11.8 million under generally accepted accounting practices for the first quarter ended March 31, a roughly 131% increase from the first quarter of 2013, when the operating loss was $5.1 million.

Benefitfocus CEO Shawn Jenkins said the benefits management industry continues to migrate to cloud-based platforms. (Photo by Liz Segrist)
Benefitfocus CEO Shawn Jenkins said the benefits management industry continues to migrate to cloud-based platforms. (Photo by Liz Segrist)

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GAAP net loss was $12.4 million for the first quarter, up 121% from a net loss of $5.6 million for the first quarter of 2013.

GAAP net loss per share was 51 cents, based on 24.5 million basic and diluted weighted-average common shares outstanding, compared with a GAAP net loss per share of $1.17 for the first quarter of 2013, based on 4.8 million basic and diluted weighted-average common shares outstanding.

For the first quarter 2014, cash flow from operations was $17,000, down 90% from first-quarter 2013, and free cash flow was $2.1 million, up 50% from the year prior.

This takes into account $2.1 million of capital expenditures and capitalized software in the first quarter of 2014. The company had $1.3 million in these expenses for the same time a year prior.

Starting tomorrow, Benefitfocus will host hundreds of prospective customers and partners at its annual One Place user conference this week in Charleston.

Benefitfocus President and CEO Shawn Jenkins will introduce the HR InTouch marketplace, a platform that will enable employers to enroll both full-time employees and those enrolling in health care plans through the public exchanges.

“Cloud-based benefits administration is still in its early days, and we are committed to continuing to push the pace of innovation in this market,” Jenkins said, noting the new marketplace has a recommendation engine to help employees with the enrollment process.

Looking ahead

During the earnings call yesterday, Jenkins said he expects the the migration of the benefits management industry to cloud-based platforms; the growing trend of employers moving to a defined contributed offering; and the implementation of the Affordable Care Act to increase demand for the company’s software.

Benefitfocus plans to increase its sales teams and invest $10 million incrementally for its private exchange offerings this year in response to the Affordable Care Act, Jenkins announced in a conference call earlier this year.

For the full year, Benefitfocus expects total revenue to be roughly $130 million and non-GAAP net loss to be roughly $60 million, according to its guidance.

Benefitfocus ended the quarter with 418 large employer customers, or those with more than 1,000 employees, including AmeriGas, California Institute of Technology, Janus Capital Group and Southeastern Freight Lines. This is up roughly 38% from the year prior.

At the quarter’s end, Benefitfocus had 43 insurance carrier customers, including United HealthCare and MassMutual. This is up from 36 a year ago.

The company reported that software revenue was $28.5 million for the first quarter, up 28% from last year. Professional services revenue was $2.2 million, up 38%; employer revenue was $13.3 million, up 54%; and insurance carrier revenue was $17.4 million, an increase of 14% from the first quarter of 2013.

The company also announced in December plans for a large expansion that will triple the company’s Daniel Island campus with five new buildings and 1,200 new jobs in addition to its roughly 800 current employees. The company was founded in 2000.

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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