Forian Inc. Q4 FY2023 earnings call

• Transitioned to a healthcare and life sciences focused company in 2023. • Successfully divested BioTrack for $30 million in cash proceeds in February 2023, reducing headcount and streamlining operations. • Invested in incremental strategic data assets and life science sales team in 2023. • Achieved operating leverage and adjusted EBITDA earlier than anticipated. • Acquired new data assets in Q4 2023 including lab, close and open claims data. • Serves a wide breadth of customers in healthcare and life sciences, with analytics-ready subscription products. • Has approximately $38 million of committed contracted backlog. • Anticipates seasonal trends with Q4 typically being the strongest quarter.

Full year 2023: Revenue was $20.5 million, representing 25% year-over-year growth. Net income from continuing operations was $1.7 million and adjusted EBITDA was $2.3 million. Fourth quarter 2023: Revenue was $5.4 million, 8% year-over-year growth. Net loss from continuing operations for the quarter was $0.4 million and adjusted EBITDA was $1.0 million.

• 2024 revenue expected to grow 5% to 15% year-over-year. • Adjusted EBITDA margins expected to be 8% to 12% in 2024 as continuing to invest in information assets and products. • Has $38 million of committed contracted backlog including unearned revenue and unbilled amounts.

• Customer attrition, primarily due to acquisitions, impacting early 2024 results. • Broader market challenges leading to longer and more oversight in sales cycles. • Actual results may differ materially from forward-looking statements due to various factors including those in the Risk Factors section of the 10-K.

Q: What was the customer attrition in Q4 2023 due to?

A: Max Wygod stated it was related to customers not renewing, mostly due to being acquired, and it's a few clients with the majority of commitments for revenue locked in contractually.

Q: Regarding the revenue guidance range for 2024, is the growth rate expected to be higher in the back half?

A: Max Wygod mentioned it's too early to tell exactly, but generally expects headwinds in Q1/Q2 with growth picking up in the back half to reach the full year guidance.

Q: Where are the incremental dollars being spent?

A: Michael Vesey said the biggest piece is increases to data assets, with a reinvestment in the company to get to the next level of growth, including new data sources and sales offerings.

Q: Thoughts on growth potential over the next three to five years?

A: Max Wygod said if midpoint of 2024 outlook is hit, quarterly sales growth will pick up dramatically, and they expect to invest to grow from the current point, focusing on making an impact beyond current sales plans