Analyst Says Accolade's Q1 Earning, Annual Guidance Reflect Solid Performance Amid Uncertain Macroeconomic Environment

Accolade Inc ACCD posted Q1 FY24 sales of $93.2 million, up 9% Y/Y, beating the consensus of $90.30 million.

The company posted an EPS loss of $(0.52), ahead of the consensus of $(0.62) and much lower than the $(4.92) posted a year ago.

For Q2 FY24, the company forecasts sales of $93-$95 million (consensus $93.22 million), with an adjusted EBITDA of $(11)-$(14) million.

For FY24, Accolade expects revenue of $410-$414 million compared to prior expectations of about $410 million and the consensus of $409.93 million. 

The company expects adjusted EBITDA loss of $(6)-$(12) million, better than $(8)-$(16) million expected earlier.

William Blair (Outperform) writes that the upside to adjusted EBITDA was a 'bright spot,' reinforcing confidence in management's clear pathway to profitability in fiscal 2025.

It notes that the company's strong FY23 bookings and three-year average contract length reinforce visibility in the current fiscal year and provide substantial visibility into 2025.

The analyst says the pipeline commentary also remains a bright spot, reinforcing the growth outlook for fiscal 2024 and beyond, and the management indicated that the company is experiencing strong win rates across all solution sets and business lines, despite concerns over elevated levels of competition for digital health solutions and broader macro uncertainties in the employer market.

Price Action: ACCD shares are up 11.87% at $14.14 on the last check Friday.