Despite posting a $490 million net loss in the second quarter, value-based care technology company, Signify Health remained bullish on growth after its February acquisition of Caravan Health.
The Dallas-based company attributed the loss to winding down a segment of its business focused on episodes of care and a decrease in the company’s stock price. The company said the decision to exit the business segment netted a $519.9 million loss on impairment charges.
The Wall Street Journal reported on Wednesday that Signify was courting buyers after going public in 2021. The company’s CEO, Kyle Armbrester, declined to comment during its quarterly earnings call on Thursday.
“Regarding recent media reports, focused on potential M&A, we do not comment on market speculation and we will not answer questions on the topic,” Armbrester said.
Armbrester expressed confidence in the company’s future growth, citing a 15% increase in Q2 adjusted earnings before interest, taxes, depreciation, and amortization.
The acquisition of Caravan Health contributed $16.6 million in revenue in the second quarter making up a relatively small portion of the company's more than $246 million total revenue. The company remains bullish on the segment’s growth and estimated $48 million revenue from Caravan in the 10-month period following the acquisition.
During the earnings call, Armbrester said Signify continues to seek other acquisitions beyond Caravan.
“We’ve got a good pipeline of organizations and companies that we’re engaged with. I mean, I think our focus always is on talking acquisitions is ones that have out the gate synergies,” Armbrester said. “We’re really excited about Caravan is that we landed integration materially in three months.”
Signify did not provide future outlooks on its episodes of care service line that is winding down, only stating CMS declined the company’s request to end the segment ahead of the 90-day requirement.
Signify was trading at $19.42 per share as of press time, which is a 5% increase from its opening price on Thursday of $18.50. In the past year, Signify has seen an overall 27% decrease in its share price from a high of $28.12 per share in August 2021.