HMS Holdings Corp. (NASDAQ:HMSY) Q3 2019 Earnings Conference Call Transcript
Nov 01, 2019 • 08:30 am ET
Ladies and gentlemen thank you for standing by and welcome to the HMS third quarter conference call. [Operator Instructions]
I would now like to hand the conference over to your speaker today Robert Borchert Senior Vice President Investor Relations. Please go ahead sir.
Thank you, Victor. And good morning everyone. Joining me our ability our chairman and chief executive officer and Jeff Sherman, our chief financial officer. This call is being webcast can be accessed via the investor relations section of our company's website HMS com. They especially highlighting our financial results are also posted on our IR website. Bill and Jeff will first provide their perspective on our recent financial operating results and business album. Outlook and then we will open the line for questions.
I'd like to remind you that the financial results reported today and in this morning's press release are preliminary and are not final until our Form 10-Q for the third quarter ended September 30 2019 is filed. Some of the statements we will make today are forward-looking in nature based on our current expectations and a view of our business as we see it today. Such statements including those related to our updated full year 2019 financial guidance future financial and operating performance and future business plans and objectives are subject to risks and uncertainties that may cause actual results to differ materially. As a result they should be considered in conjunction with the cautionary statements in today's press release and the risk factors described in the company's most recent SEC filings including our Form 10-K. Finally we may refer to certain non-GAAP measures this morning. Reconciliations of these measures to comparable GAAP measures are included in our press release posted to our website.
With that I will now hand the call over to Bill.
Thank you Robert and good morning everyone. HMS did post mixed results for the third quarter versus a strong quarter this time last year with revenue and adjusted EBITDA down year-over-year but cash flow is up significantly. Through the first nine months of 2019 our total revenue increased 4.6% with adjusted EBITDA up 16.5% including the reserve releases in both years and an investment gain this quarter. We continue to generate strong cash flow with year-to-date operating cash flow up 60% from a year ago on a comparable basis. This significant cash generation is enabling us to invest in our IT infrastructure and product capabilities in order to support our future growth. Overall we remain confident in the trajectory and strength of our business given our year-to-date performance recent expansions of client work and very strong contract signings in Q3 across all lines of business. With respect to each of our service lines we have mentioned on past calls the potential for quarter-to-quarter variability which on a whole impacted us favorably in Q2 and negatively in Q3. COB revenue did decline 10.5% when compared to one of the strongest COB quarters ever in the third quarter a year