R1 RCM Inc. (NASDAQ:RCM) Q3 2019 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 08:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the R1 RCM Third Quarter Earnings Call.
[Operator Instructions] I would now like to hand the conference over to your speaker today, Atif Rahim, Head of Investor Relations. Please go ahead.
Good morning, everyone, and welcome to the call. Certain statements made during this call may be considered forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, any statements about our future growth, plans and performance, including statements about our forecast for 2019 and 2020, our ability to successfully implement new technologies and platforms, expected uses of cash, expected timing of new business deployment and expected new business are forward-looking statements.
These statements are often identified by the use of words such as anticipate, believe, estimate, expect, intend, design, may, plan, project, would and similar expressions or variations. Investors are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements made on today's call involve risks and uncertainties. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so, except to the extent required by applicable law.
Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, the factors discussed under the heading Risk Factors in our annual report on our latest Form 10-K.
Now I'd like to turn the call over to Joe.
Thanks, Atif. Good morning, everyone, and thank you for joining us. Our third quarter results were once again driven by continued strong operational performance. Revenue for the quarter was $301.2 million, up 20% year-over-year, and adjusted EBITDA was $48.9 million, up $28.5 million from the third quarter of last year.
Strong performance on A/R-related metrics, technology-driven productivity improvement and the transition of work to our shared service centers have progressed smoothly and ahead of our expectations in 2019.
The combination of these operational drivers has contributed to EBITDA upside this quarter as well as the increase in EBITDA guidance earlier this year. The team overall has done a superb job of delivering on our customer commitments ahead of the plans we had entering 2019. The high-quality results we've delivered are being reflected in reference checks performed by potential new customers, and this is translating to a continued increase in activity on the commercial front.
I'm pleased to announce that in the third quarter, we signed a new operating partner agreement with a large physician organization with annual NPR approaching $700 million. The agreement is for a seven-year term and covers our full suite of end-to-end services. Deployment activities began in early October, and we expect the steady state financial contribution from this contract to be better than the operating partner economics we have provided in the past, for an equivalent $700 million managed NPR contract.
This is an important win for us on two dimensions.