Forian Inc. Q3 FY2024 earnings call

Key Points

• Revenue in Q3 was relatively flat sequentially with Q2, but there were increased sales wins in healthcare services and life sciences, though not fully realized in Q3.
• Since Q1 2024, quarterly revenue ranged between $4.6M and $5.4M due to macro end market factors and customer account attrition.
• Acquired Kyber Data Science in Q3, which expands addressable market to financial services, adds brand equity, and strengthens data science capabilities.
• Q3 2024 net loss was $0.2M, adjusted EBITDA was $0.2M, compared to net income of $4.3M and adjusted EBITDA of $1.1M YoY.
• Q3 2024 expenses included a $0.5M nonrecurring benefit from termination of an inbound information contract.

In the third quarter, Forian generated revenue of $4.7 million, which is a year-over-year decrease from $5.3 million. The revenue has been impacted by customer attrition and reduced revenue from early-stage customers. The company acquired Kyber Data Science, which expands the addressable market to include financial service customers and enhances data science and predictive analytic capabilities. The revenue contribution of Kyber will be included from November 1, 2024 onwards.

Forward-Looking Statements

• Include Kyber Data Sciences' results in operating results effective November 1, 2024.
• Expect 2024 revenues to be at the top end of the previously stated range of $19M to $20M.
• Anticipate adjusted EBITDA to remain within the previously provided range of negative $0.5M to positive $0.5M.

Risks Identified

• Macro end market factors impacting revenue.
• Customer attrition affecting revenue trajectory.
• Uncertainty in assumptions used for forward-looking statements, as actual results may differ materially from outlooks.

Q: Unidentified Analyst: What were the terms of the Kyber Data Sciences acquisition?

A: Max Wygod: It wasn't a pure purchase price; Kyber will operate differently under Forian, with more color on revenue in Q1 regarding [Technical Difficulty] revenue, and it's a small acquisition.