Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

10. Segment Reporting

Management views the Company’s operating results in three reportable segments: (a) software and analytics, (b) network solutions and (c) technology-enabled services. Listed below are the results of operations for each of the reportable segments. This information is reflected in the manner utilized by management to make operating decisions, assess performance and allocate resources. Such amounts include allocations of corporate shared services functions that are essential to the core operations of the reportable segments such as information technology, operations and product development functions.  Segment assets and related depreciation expenses are not presented to management for purposes of operational decision making, and therefore are not included in the accompanying tables. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the notes to the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the SEC.

Software and Analytics

The software and analytics segment provides revenue cycle technology, revenue optimization, payment integrity, electronic payment, risk adjustment, quality reporting, data and analytics and engagement solutions.

Network Solutions

The network solutions segment provides financial and administrative information exchange solutions for medical, pharmacy and dental claims management and other standardized healthcare transactions, including clinical information exchange capabilities.

Technology-enabled Services

Thetechnology-enabled services segment provides communication and payment, eligibility and enrollment, healthcare consulting, payment automation and pharmacy benefits administration solutions.

Corporate and Eliminations

Inter-segment revenue and expenses primarily represent claims management and communication and payment solutions provided between segments.

Corporate and eliminations includes pass-through postage costs, management, administrative and certain other shared corporate services functions such as legal, finance, human resources and marketing, as well as eliminations to remove inter-segment revenue and expenses. These administrative costs are excluded from the adjusted EBITDA measure for each respective operating segment.

The revenue and adjusted EBITDA for the operating segments are as follows:

	Three Months Ended September 30, 2016
					Technology-
	Software and		Network		enabled		Corporate and
	Analytics		Solutions		Services		Eliminations		Consolidated
Revenue from external customers:
Solutions revenue	$	125,082	$	93,814	$	96,455	$	(7,765)	$	307,586
Postage revenue		—		—		—		73,880		73,880
Inter-segment revenue		—		198		1,513		(1,711)		—
Net revenue	$	125,082	$	94,012	$	97,968	$	64,404	$	381,466
Income (loss) before income taxes	$	39,804	$	50,911	$	30,052	$	(152,047)	$	(31,280)
Interest expense		—		—		—		46,534		46,534
Depreciation and amortization		—		—		—		65,899		65,899
EBITDA		39,804		50,911		30,052		(39,614)		81,153
Equity compensation		951		204		162		1,718		3,035
Acquisition accounting adjustments		106		—		116		—		222
Acquisition-related costs		362		22		39		466		889
MTS transaction-related costs		—		—		—		6,818		6,818
Monitoring fees and related costs		—		—		—		1,525		1,525
Strategic initiatives, duplicative and transition costs		2,318		532		582		2,509		5,941
Severance costs		1,589		174		213		2,429		4,405
Accretion		—		—		—		1,721		1,721
Impairment of long-lived assets		—		—		—		20		20
Other non-routine, net		1,180		4		14		(603)		595
EBITDA Adjustments		6,506		936		1,126		16,603		25,171
Adjusted EBITDA	$	46,310	$	51,847	$	31,178	$	(23,011)	$	106,324

	Three Months Ended September 30, 2015
					Technology-
	Software and		Network		enabled		Corporate and
	Analytics		Solutions		Services		Eliminations		Consolidated
Revenue from external customers:
Solutions revenue	$	97,766	$	93,415	$	103,720	$	(6,955)	$	287,946
Postage revenue		—		—		—		89,839		89,839
Inter-segment revenue		—		146		1,111		(1,257)		—
Net revenue	$	97,766	$	93,561	$	104,831	$	81,627	$	377,785
Income (loss) before income taxes	$	36,407	$	49,733	$	35,523	$	(164,847)	$	(43,184)
Interest expense		—		—		—		45,541		45,541
Depreciation and amortization		—		—		—		85,817		85,817
EBITDA		36,407		49,733		35,523		(33,489)		88,174
Equity compensation		428		187		218		1,798		2,631
Acquisition accounting adjustments		227		—		159		—		386
Acquisition-related costs		58		12		107		3,551		3,728
Monitoring fees and related costs		—		—		—		1,960		1,960
Strategic initiatives, duplicative and transition costs		879		396		614		1,270		3,159
Severance costs		429		195		354		(131)		847
Accretion		—		—		—		6,458		6,458
Impairment of long-lived assets		—		—		—		219		219
Contingent consideration		(4,660)		—		—		—		(4,660)
Other non-routine, net		252		385		(476)		(1,282)		(1,121)
EBITDA Adjustments		(2,387)		1,175		976		13,843		13,607
Adjusted EBITDA	$	34,020	$	50,908	$	36,499	$	(19,646)	$	101,781

	Nine Months Ended September 30, 2016
					Technology-
	Software and		Network		enabled		Corporate and
	Analytics		Solutions		Services		Eliminations		Consolidated
Revenue from external customers:
Solutions revenue	$	387,624	$	282,633	$	295,243	$	(23,138)	$	942,362
Postage revenue		—		—		—		234,205		234,205
Inter-segment revenue		—		555		4,200		(4,755)		—
Net revenue	$	387,624	$	283,188	$	299,443	$	206,312	$	1,176,567
Income (loss) before income taxes		119,926		150,849		92,870		(447,389)		(83,744)
Interest expense		—		—		—		139,720		139,720
Depreciation and amortization		—		—		—		188,882		188,882
EBITDA		119,926		150,849		92,870		(118,787)		244,858
Equity compensation		2,290		526		506		4,767		8,089
Acquisition accounting adjustments		461		(2)		356		—		815
Acquisition-related costs		2,346		56		82		1,270		3,754
MTS transaction-related costs		—		—		—		15,787		15,787
Monitoring fees and related costs		—		—		—		4,710		4,710
Strategic initiatives, duplicative and transition costs		5,273		1,287		1,367		6,605		14,532
Severance costs		2,462		1,031		1,307		3,002		7,802
Accretion		—		—		—		10,645		10,645
Impairment of long-lived assets		—		—		—		251		251
Other non-routine, net		1,334		238		167		1,720		3,459
EBITDA Adjustments		14,166		3,136		3,785		48,757		69,844
Adjusted EBITDA	$	134,092	$	153,985	$	96,655	$	(70,030)	$	314,702

	Nine Months Ended September 30, 2015
					Technology-
	Software and		Network		enabled		Corporate and
	Analytics		Solutions		Services		Eliminations		Consolidated
Revenue from external customers:
Solutions revenue	$	231,193	$	276,315	$	322,743	$	(20,089)	$	810,162
Postage revenue		—		—		—		268,119		268,119
Inter-segment revenue		—		268		3,282		(3,550)		—
Net revenue	$	231,193	$	276,583	$	326,025	$	244,480	$	1,078,281
Income (loss) before income taxes		77,416		143,278		112,609		(396,295)		(62,992)
Interest expense		—		—		—		121,685		121,685
Depreciation and amortization		—		—		—		183,446		183,446
EBITDA		77,416		143,278		112,609		(91,164)		242,139
Equity compensation		1,641		828		(350)		4,695		6,814
Acquisition accounting adjustments		834		3		478		—		1,315
Acquisition-related costs		91		64		935		5,792		6,882
Monitoring fees and related costs		—		—		—		5,138		5,138
Strategic initiatives, duplicative and transition costs		2,370		1,162		877		3,744		8,153
Severance costs		(145)		(151)		4,075		1,185		4,964
Accretion		—		—		—		15,254		15,254
Impairment of long-lived assets		—		—		—		1,180		1,180
Contingent consideration		(4,730)		(95)		—		—		(4,825)
Other non-routine, net		360		1,481		(214)		(1,410)		217
EBITDA Adjustments		421		3,292		5,801		35,578		45,092
Adjusted EBITDA	$	77,837	$	146,570	$	118,410	$	(55,586)	$	287,231