Accolade (ACCD) Q1 2025 earnings summary

Executive summary

• Revenue for fiscal Q1 reached $110.5 million, up 18% year-over-year, driven by new customers, higher service utilization, and timing of revenue recognition, which also positively impacted adjusted EBITDA and gross margin.

• Net loss narrowed to $27.6 million from $38.4 million in the prior year quarter, reflecting improved gross margins and operational efficiencies.

• Adjusted EBITDA loss improved to $3.3 million from $12.6 million year-over-year, supporting the path to profitability.

• The company remains a market leader in personalized healthcare, leveraging AI and virtual care, and is committed to long-term value creation for all stakeholders.

• Leadership emphasized continued investment in healthcare AI, member engagement, and product innovation to drive sustainable growth.

Financial highlights

• Revenue: $110.5 million, up 18% year-over-year; access fees rose 16% and usage-based fees rose 26%.

• Adjusted Gross Margin improved to 47.8% from 43.5% year-over-year; GAAP gross margin increased to 39.6% from 33.3%.

• Adjusted EBITDA loss for Q1 was $3.3 million, a 73% improvement year-over-year.

• Cash, cash equivalents, and marketable securities totaled $230.6 million at quarter-end.

• Net loss per share improved to $0.35 from $0.52 year-over-year.

Outlook and guidance

• Fiscal 2025 revenue guidance set at $460-$475 million, reflecting 11%-15% year-over-year growth.

• Positive adjusted EBITDA of $15-$20 million expected for fiscal 2025.

• Q2 revenue guidance is $104-$106 million, with an adjusted EBITDA loss of $8-$10 million.

• Q3 adjusted EBITDA expected to be break-even, with significant positive adjusted EBITDA in Q4 due to revenue ramp from savings PG recognition and new customer launches.

• Long-term model projects mid-teens revenue growth and 300-400 basis points of adjusted EBITDA margin expansion annually.