(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
þ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Item 1. | Financial Statements |
(Unaudited) | ||||||||||||||
March 31, | December 31, | |||||||||||||
2024 | 2023 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of $ | ||||||||||||||
Accounts receivable - related party, net of $ | ||||||||||||||
Current portion of contract assets, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, equipment and software, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Non-current portion of contract assets, net | ||||||||||||||
Non-current portion of deferred contract costs | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Deferred tax assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Current portion of customer liabilities | ||||||||||||||
Current portion of customer liabilities - related party | ||||||||||||||
Accrued compensation and benefits | ||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||
Current portion of long-term debt | ||||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Non-current portion of customer liabilities | ||||||||||||||
Non-current portion of customer liabilities - related party | ||||||||||||||
Non-current portion of operating lease liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Deferred tax liabilities | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, at cost, | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net services revenue ($ | $ | $ | ||||||||||||
Operating expenses: | ||||||||||||||
Cost of services | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Other expenses | ||||||||||||||
Total operating expenses | ||||||||||||||
Income from operations | ||||||||||||||
Net interest expense | ||||||||||||||
Income (loss) before income tax provision | ( | |||||||||||||
Income tax provision | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Net income (loss) per common share: | ||||||||||||||
Basic | $ | ( | $ | |||||||||||
Diluted | $ | ( | $ | |||||||||||
Weighted average shares used in calculating net income (loss) per common share: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Consolidated statements of comprehensive income (loss) | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Other comprehensive income (loss): | ||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax | ( | |||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||
Total other comprehensive income (loss), net of tax | $ | $ | ( | |||||||||||
Comprehensive income (loss) | $ | ( | $ |
Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
CoyCo 2 share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock related to share-based compensation plans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock related to share-based compensation plans | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Refund of inducement dividend (see Note 12) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax of $ | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
CoyCo 2 share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock related to share-based compensation plans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock related to share-based compensation plans | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax of $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Operating activities | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of debt issuance costs | ||||||||||||||
Share-based compensation | ||||||||||||||
CoyCo 2 share-based compensation | ||||||||||||||
Provision (recoveries) for credit losses | ( | |||||||||||||
Deferred income taxes | ||||||||||||||
Non-cash lease expense | ||||||||||||||
Other | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable and related party accounts receivable | ||||||||||||||
Contract assets | ( | ( | ||||||||||||
Prepaid expenses and other assets | ||||||||||||||
Accounts payable | ( | ( | ||||||||||||
Accrued compensation and benefits | ( | ( | ||||||||||||
Lease liabilities | ( | ( | ||||||||||||
Other liabilities | ||||||||||||||
Customer liabilities and customer liabilities - related party | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing activities | ||||||||||||||
Purchases of property, equipment, and software | ( | ( | ||||||||||||
Acquisition of Acclara, net of cash acquired | ( | |||||||||||||
Other | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities | ||||||||||||||
Issuance of senior secured debt, net of discount and issuance costs | ||||||||||||||
Borrowings on revolver | ||||||||||||||
Repayment of senior secured debt | ( | |||||||||||||
Repayments on revolver | ( | |||||||||||||
Refund of inducement dividend | ||||||||||||||
Exercise of vested stock options | ||||||||||||||
Shares withheld for taxes | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||
Effect of exchange rate changes in cash, cash equivalents and restricted cash | ||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash, at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, at end of period | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Property, equipment and software purchases not paid | $ | $ | ||||||||||||
Noncash consideration paid for the acquisition of Acclara | $ | $ |
Fair Value | ||||||||
Cash consideration (1) | $ | |||||||
Issuance of warrant (2) | ||||||||
Total consideration | $ |
Purchase Price Allocation | ||||||||
Total purchase consideration | $ | |||||||
Allocation of consideration to assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | $ | |||||||
Accounts receivable | ||||||||
Property, equipment and software | ||||||||
Operating lease right-of-use assets | ||||||||
Intangible assets | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Accounts payable | ( | |||||||
Customer liabilities | ( | |||||||
Accrued compensation and benefits | ( | |||||||
Operating lease liabilities | ( | |||||||
Deferred income tax liabilities | ( | |||||||
Other liabilities | ( | |||||||
Net assets acquired | $ |
Useful Life | Gross Carrying Value | |||||||||||||
Customer Relationships | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net services revenue | $ | $ | ||||||||||||
Net loss | $ | ( | $ | ( |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Technology | ( | ( | ||||||||||||||||||||||||||||||||||||
Trade name | ( | ( | ||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Remainder of 2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
2029 | ||||||||
Thereafter | ||||||||
Total | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net operating fees | $ | $ | ||||||||||||
Incentive fees | ||||||||||||||
Modular and other fees (1) | ||||||||||||||
Net services revenue | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
Contract assets, net | ||||||||||||||
Current | $ | $ | ||||||||||||
Non-current | ||||||||||||||
Total contract assets, net | $ | $ | ||||||||||||
Contract liabilities | ||||||||||||||
Current (1) | $ | $ | ||||||||||||
Non-current (2) | ||||||||||||||
Total contract liabilities | $ | $ |
Contract Assets, net | ||||||||
Balance as of December 31, 2023 | $ | |||||||
Revenue recognized | ||||||||
Amounts billed | ( | |||||||
Write-offs | ( | |||||||
Balance as of March 31, 2024 | $ |
Contract Liabilities | ||||||||
Balance as of December 31, 2023 | $ | ( | ||||||
Advanced billings as of January 1, 2024 (1) | ( | |||||||
Advanced billings recognized | ||||||||
Additions | ( | |||||||
Revenue recognized | ||||||||
Balance as of March 31, 2024 | $ | ( |
Net operating fees | Incentive fees | ||||||||||
Remainder of 2024 | $ | $ | |||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
2029 | |||||||||||
Thereafter | |||||||||||
Total | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Billed receivables | $ | $ | |||||||||
Unbilled receivables | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Total accounts receivable, net (1) | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Beginning balance | $ | $ | ||||||||||||
Provision (recoveries) | ( | |||||||||||||
Write-offs | ( | ( | ||||||||||||
Ending balance | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
Senior Revolver (1) | $ | $ | ||||||||||||
Term A Loans | ||||||||||||||
Term B Loans | ||||||||||||||
Unamortized discount and issuance costs | ( | ( | ||||||||||||
Total debt | ||||||||||||||
Less: Current maturities | ( | ( | ||||||||||||
Total long-term debt | $ | $ |
Scheduled Maturities | ||||||||
Remainder of 2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
2029 | ||||||||
Total | $ |
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
$ | $ |
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
$ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
Foreign currency forward contracts | ||||||||||||||
Prepaid expenses and other current assets | $ | $ | ||||||||||||
Total foreign currency forward contracts | $ | $ | ||||||||||||
Interest rate swaps | ||||||||||||||
Prepaid expenses and other current assets | $ | $ | ||||||||||||
Other assets | ||||||||||||||
Total interest rate swaps | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Share-Based Compensation Expense Allocation Details: | |||||||||||
Cost of services | $ | $ | |||||||||
Selling, general and administrative | |||||||||||
Total share-based compensation expense (1) | $ | $ | |||||||||
Related tax benefits | $ | $ |
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
$ | $ | ( |
Options | Weighted- Average Exercise Price | |||||||||||||
Outstanding at December 31, 2023 | $ | |||||||||||||
Exercised | ( | |||||||||||||
Outstanding at March 31, 2024 | $ | |||||||||||||
Outstanding, vested and exercisable at March 31, 2024 | $ | |||||||||||||
Outstanding, vested and exercisable at December 31, 2023 | $ |
Weighted- Average Grant Date Fair Value | ||||||||||||||||||||||||||
RSUs | PBRSUs | RSU | PBRSU | |||||||||||||||||||||||
Outstanding and unvested at December 31, 2023 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Vested | ( | ( | ||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||
Outstanding and unvested at March 31, 2024 | $ | $ | ||||||||||||||||||||||||
Shares surrendered for taxes for the three months ended March 31, 2024 | ||||||||||||||||||||||||||
Cost of shares surrendered for taxes for the three months ended March 31, 2024 (in millions) | $ | $ | ||||||||||||||||||||||||
Shares surrendered for taxes for the three months ended March 31, 2023 | ||||||||||||||||||||||||||
Cost of shares surrendered for taxes for the three months ended March 31, 2023 (in millions) | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Business acquisition costs (1) | $ | $ | |||||||||
Integration costs (2) | |||||||||||
Technology transformation (3) | |||||||||||
Strategic initiatives (4) | |||||||||||
Facility-related charges (5) | |||||||||||
Other (6) | |||||||||||
Total other expenses | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Basic weighted-average common shares | ||||||||||||||
Add: Effect of dilutive equity awards | ||||||||||||||
Add: Effect of dilutive warrants | ||||||||||||||
Diluted weighted average common shares | ||||||||||||||
Net income (loss) per common share (basic) | $ | ( | $ | |||||||||||
Net income (loss) per common share (diluted) | $ | ( | $ |
Three Months Ended March 31, | ||||||||||||||
Customer Name | 2024 | 2023 | ||||||||||||
Ascension and its affiliates | % | % | ||||||||||||
Intermountain Healthcare | % | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cost of services | $ | $ | ||||||||||||
Selling, general and administrative | ||||||||||||||
Total depreciation and amortization | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash flows for operating leases | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations: | ||||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | 2024 vs. 2023 Change | |||||||||||||||||||||||||
2024 | 2023 | Amount | % | |||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||||||||
Net operating fees | $ | 381.5 | $ | 361.0 | $ | 20.5 | 6 | % | ||||||||||||||||||
Incentive fees | 15.6 | 23.6 | (8.0) | (34) | % | |||||||||||||||||||||
Modular and other fees | 206.8 | 161.0 | 45.8 | 28 | % | |||||||||||||||||||||
Total net services revenue | 603.9 | 545.6 | 58.3 | 11 | % | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of services | 497.6 | 434.7 | 62.9 | 14 | % | |||||||||||||||||||||
Selling, general and administrative | 64.4 | 47.0 | 17.4 | 37 | % | |||||||||||||||||||||
Other expenses | 33.9 | 30.2 | 3.7 | 12 | % | |||||||||||||||||||||
Total operating expenses | 595.9 | 511.9 | 84.0 | 16 | % | |||||||||||||||||||||
Income from operations | 8.0 | 33.7 | (25.7) | (76) | % | |||||||||||||||||||||
Net interest expense | 41.3 | 30.7 | 10.6 | 35 | % | |||||||||||||||||||||
Net income (loss) before income tax provision | (33.3) | 3.0 | (36.3) | n.m. | ||||||||||||||||||||||
Income tax provision | 1.8 | 1.4 | 0.4 | 29 | % | |||||||||||||||||||||
Net income (loss) | $ | (35.1) | $ | 1.6 | $ | (36.7) | n.m. | |||||||||||||||||||
Adjusted EBITDA (1) | $ | 152.2 | $ | 142.2 | $ | 10.0 | 7 | % |
Three Months Ended March 31, | 2024 vs. 2023 Change | |||||||||||||||||||||||||
2024 | 2023 | Amount | % | |||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||
Net income (loss) | $ | (35.1) | $ | 1.6 | $ | (36.7) | n.m. | |||||||||||||||||||
Net interest expense | 41.3 | 30.7 | 10.6 | 35 | % | |||||||||||||||||||||
Income tax provision | 1.8 | 1.4 | 0.4 | 29 | % | |||||||||||||||||||||
Depreciation and amortization expense (1) | 78.3 | 66.0 | 12.3 | 19 | % | |||||||||||||||||||||
Share-based compensation expense (2) | 30.2 | 10.5 | 19.7 | 188 | % | |||||||||||||||||||||
CoyCo 2 share-based compensation expense (3) | 1.8 | 1.8 | — | — | % | |||||||||||||||||||||
Other expenses (4) | 33.9 | 30.2 | 3.7 | 12 | % | |||||||||||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 152.2 | $ | 142.2 | $ | 10.0 | 7 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In millions) | ||||||||||||||
Net cash provided by operating activities | $ | 46.7 | $ | 54.7 | ||||||||||
Net cash used in investing activities | $ | (698.4) | $ | (25.6) | ||||||||||
Net cash provided by (used in) financing activities | $ | 656.1 | $ | (35.4) |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs (in millions) (1) | ||||||||||||||||||||||
January 1, 2024 through January 31, 2024 | — | $ | — | — | $ | 453.2 | ||||||||||||||||||||
February 1, 2024 through February 29, 2024 | — | — | — | 453.2 | ||||||||||||||||||||||
March 1, 2024 through March 31, 2024 | — | — | — | 453.2 | ||||||||||||||||||||||
(1) | On October 22, 2021, the Board adopted a repurchase program and authorized the repurchase of up to $200.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2021 Repurchase Program”). On January 9, 2022, the Board increased the authorization under the 2021 Repurchase Program to an aggregate amount of up to $500.0 million. The average price paid per share of common stock repurchased under the 2021 Repurchase Program is the execution price, including commissions paid to brokers. The timing and amount of any shares repurchased under the 2021 Repurchase Program will be determined by our management based on its evaluation of market conditions and other factors. The 2021 Repurchase Program may be suspended or discontinued at any time. | ||||
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit Number | Exhibit Description | ||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Furnished herewith. | ||||
R1 RCM INC. | |||||
By: | /s/ Lee Rivas | ||||
Lee Rivas | |||||
Chief Executive Officer | |||||
By: | /s/ Jennifer Williams | ||||
Jennifer Williams | |||||
Chief Financial Officer and Treasurer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accounts receivable, allowance | $ 46.8 | $ 48.3 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 446,143,706 | 445,436,482 |
Common stock, shares outstanding (in shares) | 420,729,691 | 420,201,507 |
Treasury stock, shares (in shares) | 25,414,015 | 25,234,975 |
Nonrelated Party | ||
Accounts receivable, allowance | $ 46.7 | $ 48.2 |
Related party | ||
Accounts receivable, allowance | $ 0.1 | $ 0.1 |
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Net services revenue | $ 603.9 | $ 545.6 |
Related party | ||
Net services revenue | $ 220.1 | $ 216.8 |
Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Accumulated Other Comprehensive Loss | ||
Net change on derivatives designated as cash flow hedges, tax | $ 0.3 | $ 0.5 |
Business Description and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | Business Description and Basis of Presentation Business Description R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the financial performance and patient experience for health systems, hospitals, and physician groups. The Company’s scalable operating models complement a healthcare organization’s infrastructure, driving sustainable improvements to net patient revenue and cash flows while driving revenue yield, reducing operating costs, and enhancing the patient experience. Acclara Acquisition On January 17, 2024, the Company completed the acquisition of the revenue cycle management (“RCM”) business (“Acclara”) of Providence Health & Services – Washington (“Providence”) and certain of its affiliates (the “Acclara Acquisition”). Concurrently with the closing of the acquisition and as part of the consideration thereof, the Company issued a warrant to acquire up to 12,192,000 shares of common stock, par value $0.01 per share, at an initial exercise price of $10.52 per share, of the Company to Providence (the “Providence Warrant”). The Company acquired 100% of the equity interests in Acclara. For further details on the total consideration paid, refer to Note 2, Acquisitions. The acquisition of Acclara extends our ability to deploy advanced technology solutions and drive execution to improve customer and patient outcomes. In conjunction with the acquisition, the Company began a 10-year partnership with Providence for comprehensive revenue cycle services that leverage the breadth of integrated technology and services capabilities of both the Company and Acclara. Basis of Presentation The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2024, the results of operations of the Company for the three months ended March 31, 2024 and 2023, and the cash flows of the Company for the three months ended March 31, 2024 and 2023. These financial statements include the accounts of R1 RCM Inc. and its wholly owned subsidiaries, including Acclara and its subsidiaries since the date of acquisition. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2024. When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates. For a discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024 (the “2023 Form 10-K”). Recently Issued Accounting Standards and Disclosures In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company prospectively adopted ASU 2022-03 effective January 1, 2024. Adoption of the new standard required changes to the valuation method used in accounting for equity consideration in business combinations occurring after January 1, 2024. There were no current period changes to equity consideration related to prior transactions to be evaluated under this guidance. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-07 will have on its consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-09 will have on its consolidated financial statement disclosures.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed. Acclara On January 17, 2024, the Company completed the acquisition of Acclara for a purchase price of $786.0 million. The following table summarizes the fair value of the total consideration paid:
(1) Cash consideration includes the repayment of Acclara’s pre-existing credit facility that was paid off at closing and was not assumed by the Company. (2) The provisional fair value of the warrant is estimated using the Black-Scholes option pricing model and is not discounted in accordance with ASU 2022-03. The warrant is subject to a three-year lock-up period and expires five years from the issuance date. The Company funded the cash consideration component and the Company’s associated transaction expenses with a combination of cash on hand and the incurrence of additional indebtedness (see Note 6, Debt). The purchase price has been provisionally allocated to assets acquired and liabilities assumed based on their established fair value as of the acquisition date. The fair value estimate of assets acquired and liabilities assumed is pending the completion of various elements, including gathering further information about the identification and valuation of all assets and liabilities acquired. Some of the more significant amounts that are not yet finalized relate to the fair value of intangible assets (including goodwill), trade accounts receivable, and income and non-income related taxes. Accordingly, management considers the balances shown in the following table to be preliminary, and there could be adjustments to the consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets acquired and their respective useful lives, among other adjustments. The preliminary fair value of assets acquired and liabilities assumed is:
The intangible assets preliminarily identified in conjunction with the Acclara Acquisition are as follows:
The goodwill recognized is primarily attributable to synergies that are expected to be achieved from the integration of Acclara. None of the goodwill is expected to be deductible for income tax purposes. The change in the carrying amount of goodwill from December 31, 2023 to March 31, 2024 is solely attributable to the goodwill recognized in conjunction with the Acclara Acquisition. As part of the acquisition, the Company recognized an indemnification asset of $4.5 million for indirect tax and income tax related to potential pre-transaction close tax obligations of Acclara. The indemnification asset was valued with the assistance of third-party tax experts and is a best estimate based on information available to the Company at this time. Included in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2024 are net services revenue of $57.1 million and net loss before income taxes of $2.7 million related to the operations of Acclara since the acquisition date of January 17, 2024. Pro Forma Results The following table summarizes, on a pro forma basis, the combined results of the Company as though the Acclara Acquisition had occurred on January 1, 2023. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period.
Adjustments, net of the income tax effects, that were made to net loss related to (i) depreciation and amortization to reflect the fair value of identified assets acquired, (ii) share-based compensation expense for awards replaced in connection with the acquisition, (iii) paying off Acclara’s debt and incurrence of debt by the Company, and (iv) the timing of acquisition-related costs.
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at March 31, 2024 and December 31, 2023:
The fair value of the identifiable intangible assets was determined in the period of their acquisition utilizing an income approach to derive the present value of future cash flows from developed technology, customer relationships, trade name, and favorable leasehold interests. Intangible asset amortization expense was $58.2 million and $50.1 million for the three months ended March 31, 2024 and 2023, respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has no indefinite-lived intangible assets. Estimated annual amortization expense related to intangible assets with definite lives as of March 31, 2024 is as follows:
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Revenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contract term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. Disaggregation of Revenue In the following table, revenue is disaggregated by source of revenue:
(1) Modular and other revenue is comprised of service fees related to solutions focused on revenue recovery, clinical integrity, revenue optimization, and regulatory navigation as well as functional outsourcing solutions focused on driving revenue cycle improvements. Contract Balances The following table provides information about contract assets, net and contract liabilities from contracts with customers:
(1) Current contract liabilities include $2.9 million and $2.4 million classified in the current portion of customer liabilities - related party as of March 31, 2024 and December 31, 2023, respectively. (2) Non-current contract liabilities include $11.3 million and $11.8 million classified in the non-current portion of customer liabilities - related party as of March 31, 2024 and December 31, 2023, respectively. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2024 were as follows:
(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the year. Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.
The amounts presented in the table above include variable fee estimates of the Company’s physician group RCM services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period. The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less. The Company has elected certain of the optional exemptions from the disclosure requirements for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Company applies a practical expedient to its modular RCM solutions and does not disclose information about variable consideration from remaining performance obligations when the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.
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Accounts Receivable and Allowance for Credit Losses |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers.
(1) Includes $26.5 million and $26.1 million for accounts receivable - related party, net as of March 31, 2024, and December 31, 2023, respectively. The Company evaluates its accounts receivable for expected credit losses monthly. Accounts receivable due from end-to-end RCM customers are evaluated individually as it was determined that the unique nature and scope of our operating partner agreements make the circumstances around credit losses dissimilar. Accounts receivable due from modular service customers are evaluated using the pooling approach due to the homogeneous population of the receivables. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, the length of time a balance has been outstanding, and the Company’s assessment of each customer’s ability to pay, which is based on input from key Company personnel assigned to the customer, the status of ongoing operations with the customer, and business and industry factors, such as significant shifts in the healthcare environment that could impact the customer’s financial health. Changes in the allowance for credit losses on a consolidated basis related to accounts receivable are as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The carrying amounts of debt consist of the following:
(1) As of March 31, 2024, the Company had $80.0 million in borrowings outstanding, $1.2 million letters of credit outstanding, and $518.8 million of availability under the $600.0 million senior secured revolving credit facility (“Senior Revolver”). On April 3, 2024, the Company incurred additional borrowings of $75.0 million under the Senior Revolver to fund working capital needs as a result of the Change Healthcare cyberattack. Second Amendment to the Second A&R Credit Agreement In conjunction with the closing of the Acclara Acquisition, the Company entered into Amendment No. 2 (the “Second Amendment”) to the second amended and restated credit agreement (the “Second A&R Credit Agreement”) executed on June 21, 2022. For further details on the Second A&R Credit Agreement, refer to Note 10 of the audited consolidated financial statements included in the Company’s 2023 Form 10-K. Pursuant to the Second Amendment, among certain other amendments, the lenders named in the Second Amendment agreed, severally and not jointly, to extend additional borrowings in the form of Term B Loans (the “Incremental Term B Loans” and together with the then existing senior secured term B loan, the “Term B Loans”) to the Company in an aggregate principal amount equal to $575.0 million. The Company used the proceeds of the Incremental Term B Loans, together with cash on hand and borrowings of $80.0 million under the Senior Revolver, to finance (i) the cash consideration for the Acclara Acquisition and (ii) fees and costs incurred in connection with the acquisition and related transactions. In conjunction with entering into the Second Amendment, the Company incurred $10.6 million and capitalized $5.7 million of debt issuance costs. The initial senior secured term A loan (the “Existing Term A Loan”) and Senior Revolver mature on July 1, 2026, the incremental senior secured term A loan (together with the Existing Term A Loan, the “Term A Loans”) matures on June 21, 2027, and the Term B Loans mature on June 21, 2029. The variable interest rate as of March 31, 2024 was 7.58% for the Term A Loans and Senior Revolver and 8.33% for the Term B Loans. The Second A&R Credit Agreement contains a number of financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2024. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries. Debt Maturities Scheduled maturities of the Company’s long-term debt are summarized as follows:
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of March 31, 2024, the Company had recorded $0.3 million of unrealized gains in accumulated other comprehensive loss related to foreign currency hedges. The Company estimates that $0.3 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 12 months. The net gains reclassified into cost of services were as follows:
As of March 31, 2024, the Company’s foreign currency forward contracts had maturities extending no later than December 31, 2024, and had a total notional value of $106.0 million. The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2024, the Company had recorded $11.1 million of unrealized gains in accumulated other comprehensive loss related to interest rate swaps. The Company estimates that $9.5 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 12 months. The net gains reclassified into interest expense were as follows:
As of March 31, 2024, the Company’s interest rate swaps extended no later than June 30, 2025, and had a total notional value of $500.0 million. The Company also utilizes fair value hedges to manage its currency risk arising from its global business services centers. These contracts typically have a term of one month in order to manage currency risks between the timing of transaction costs and payment. For the three months ended March 31, 2024, the Company had recognized $0.1 million of losses in earnings related to foreign currency forward contracts designated as fair value hedges. The fair value of derivative instruments designated as fair value hedges was $0.1 million of unrealized loss as of March 31, 2024 and $0.0 million of unrealized gains as of December 31, 2023. As of March 31, 2024, the Company’s foreign currency forward contracts designated as fair value hedges had maturities extending no later than April 30, 2024 and had a total notional value of $27.0 million. The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 were as follows:
As of March 31, 2024 and December 31, 2023, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $8.6 million and $7.5 million, respectively. The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Statements of Cash Flows. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.
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Share-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The total share-based compensation expense relating to the Company’s stock options, RSUs, and performance-based restricted stock units (“PBRSUs”) that has been included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) was as follows:
(1) Included in total share-based compensation expense are (i) $1.8 million of share-based compensation expense for the three months ended March 31, 2024 of CoyCo 2, L.P., a shareholder of the Company (“CoyCo 2”), and (ii) $1.8 million of shared-based compensation expense of CoyCo 2 for the three months ended March 31, 2023. This expense relates to equity awards held by certain Cloudmed employees that were modified as part of the Company’s acquisition of Revint Holdings, LLC (“Cloudmed”) into awards of CoyCo 2 and were granted for services that benefit the Company’s operations. The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense and included in operating activities. The Company recognized the following income tax expense/(benefit) associated with vesting and exercises of equity awards:
The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses progress and achievement on PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved by the Human Capital Committee of the Company’s Board of Directors to the reported performance, and latest projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units (as defined in the 2023 Form 10-K), which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility. Stock options A summary of the options activity during the three months ended March 31, 2024 is shown below:
Restricted stock units and performance-based restricted stock units A summary of the RSU and PBRSU activity during the three months ended March 31, 2024 is shown below:
RSUs granted during the three months ended March 31, 2024, include an aggregate 1,983,791 RSUs of the Company that were issued upon consummation of the Acclara Acquisition to replace outstanding unvested options of Acclara. The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury. Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 11,350,164.
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Other Expenses |
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Other Expenses | Other Expenses Other expenses are incurred in connection with acquisition and integration initiatives, various exit activities, strategic and transformation initiatives, organizational changes to improve our business alignment and cost structure, review of strategic alternatives, and stockholder litigation. The following table summarizes the other expenses recognized for the three months ended March 31, 2024 and 2023.
(1) Costs, including legal, consulting, insurance premiums, and bank fees, that directly relate to the due diligence and closing of business acquisitions and include changes to contingent consideration, if applicable. Costs also include compensation expenses associated with the close of the transactions. (2) Costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, and certain payroll costs. (3) Costs relate to projects underway to create a new platform that consolidates the Cloudmed and R1 customer solutions and migrates them to a cloud environment to reduce onboarding costs and accelerate the delivery of value to the Company’s customers. These projects are expected to be completed in 2025. Certain of these costs incurred qualify for capitalization and have been recorded on the Consolidated Balance Sheet. (4) Costs primarily relate to business restructuring activities as part of the Company’s growth strategy and include consulting costs, compensation costs of employees dedicated to the Company’s strategic growth efforts, and severance. In 2023, these costs included changes in contingent consideration and retention costs related to acquisitions completed by Cloudmed prior to being acquired by R1. (5) As part of evaluating its real estate footprint in relation to acquisitions and remote work practices adopted following COVID, the Company has exited certain facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited facilities that will continue over the duration of the lease term. (6) For the three months ended March 31, 2024, costs include fees associated with legal, financial, and other advisors engaged to perform a review of strategic alternatives under the direction of a special committee formed by the Board of Directors on March 11, 2024. For the three months ended March 31, 2023, costs include expenses related to the Company’s stockholder litigation. For further details, refer to Note 12, Commitments and Contingencies.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred. The Company recognized income tax expense for the three months ended March 31, 2024 on the year-to-date pre-tax loss. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for foreign taxes, state taxes, non-deductible expenses, and discrete items. The Company recognized income tax expense for the three months ended March 31, 2023 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for foreign taxes, state taxes, non-deductible expenses, and discrete items. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2020 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from to six years. Certain income tax returns since fiscal year 2009 for the Company’s India subsidiaries are currently open for final determination. The Company’s Philippines subsidiary is currently under audit for the tax period ended on December 31, 2022. At December 31, 2023, the Company had gross deferred tax assets of $137.9 million, of which $23.7 million related to net operating loss (“NOL”) carryforwards. The Company expects to have positive taxable income, allowing the Company to utilize its NOL carryforwards and other deferred tax assets.
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Earnings (Loss) Per Share |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by adjusting the denominator used in the basic net income (loss) per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of RSUs and PBRSUs. Basic and diluted net income (loss) per common share are calculated as follows:
Because of their anti-dilutive effect, 19,030,415 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2024. Additionally, for the three months ended March 31, 2024, TCP-ASC ACHI Series LLLP’s (“TCP-ASC”), IHC Health Services, Inc.’s (“Intermountain”), and Providence’s exercisable warrants to acquire up to 40.5 million, 1.5 million, and 12.2 million shares, respectively, of the Company’s common stock were excluded from the diluted earnings per share calculation because they were anti-dilutive. For the three months ended March 31, 2023, 768,030 common share equivalents were excluded from the diluted earnings per share calculation because of their anti-dilutive effect.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows. In re R1 RCM Inc. Stockholders Litigation The parties to the R1 RCM Inc. Stockholders Litigation matter agreed to settle all claims in the lawsuit pursuant to a Stipulation of Settlement (“Stipulation”) that became finalized and effective on January 15, 2024. TCP-ASC, Ascension, and TowerBrook collectively contributed $39.8 million to the settlement, and Cloudmed’s stockholders contributed $2.1 million. The Company directors at the time of the Cloudmed acquisition contributed $3.6 million, funded entirely by D&O insurance maintained by the Company. The Company did not contribute any additional monetary amount to the settlement. On January 30, 2024, the Company received $16.4 million from the settlement for the derivative claims in the lawsuit. The remainder of the amounts to be paid under the Stipulation (less allocated attorneys’ fees and notice and administrative costs) will be distributed to the settlement class, as defined in the Stipulation. In addition, under the terms of the Stipulation, the parties agreed to eliminate the board size approval right under the Amended and Restated Investor Rights Agreement with TCP-ASC and the Investor Rights Agreement with CoyCo 1, L.P. and CoyCo 2. Amendments to those Investor Agreements were entered into on February 5, 2024. For further information regarding this matter, refer to the 2023 Form 10-K. The Company has recorded the settlement in the first quarter of 2024 in conjunction with the effective date of and cash receipt from the settlement. The receipt of $16.4 million was recorded to Additional paid-in capital on the Consolidated Balance Sheet and accounted for as a refund of amounts paid as an inducement dividend, which was originally recorded as an equity transaction during the three months ended March 31, 2021. The cash received was classified under financing activities on the Consolidated Statements of Cash Flows. Graziosi v R1 RCM Inc. In May 2016, the Company was served with a False Claims Act (“FCA”) case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, FCA penalties, and attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal FCA. The case was originally filed under seal in 2013 in the federal district court in Chicago and was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend through 2024, with trial, if necessary, likely to be scheduled in 2025. The Company believes it has meritorious defenses to all claims in the case and is vigorously defending itself against these claims.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions This note encompasses transactions between Ascension and its affiliates and the Company pursuant to the Master Professional Services Agreement, including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company’s agreements with Ascension, see Note 1 and Note 19 of the 2023 Form 10-K. In conjunction with the Cloudmed acquisition, New Mountain Capital, L.L.C. (“New Mountain”) became a related party. There were no material transactions with New Mountain subsequent to the Cloudmed acquisition. Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impracticable to assign the dollar amount associated with services provided to Ascension.
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Segments and Customer Concentrations |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Customer Concentrations | Segments and Customer Concentrations The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment. Customers comprising greater than 10% of net services revenue are as follows:
The loss of customers within the Ascension health system or Intermountain network could have a material adverse impact on the Company’s operations. As of March 31, 2024 and December 31, 2023, the Company had a concentration of credit risk with Ascension, representing 8% and 10% of accounts receivable, respectively.
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Supplemental Financial Information |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | Supplemental Financial Information The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:
Supplemental cash flow information related to leases are as follows:
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net income (loss) | $ (35.1) | $ 1.6 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business Description and Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2024, the results of operations of the Company for the three months ended March 31, 2024 and 2023, and the cash flows of the Company for the three months ended March 31, 2024 and 2023. These financial statements include the accounts of R1 RCM Inc. and its wholly owned subsidiaries, including Acclara and its subsidiaries since the date of acquisition. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2024. When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates.
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Recently Issued Accounting Standards and Disclosures | Recently Issued Accounting Standards and Disclosures In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company prospectively adopted ASU 2022-03 effective January 1, 2024. Adoption of the new standard required changes to the valuation method used in accounting for equity consideration in business combinations occurring after January 1, 2024. There were no current period changes to equity consideration related to prior transactions to be evaluated under this guidance. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-07 will have on its consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-09 will have on its consolidated financial statement disclosures.
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Revenue Recognition | Revenue RecognitionRevenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contract term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. |
Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquisitions | The following table summarizes the fair value of the total consideration paid:
(1) Cash consideration includes the repayment of Acclara’s pre-existing credit facility that was paid off at closing and was not assumed by the Company. (2) The provisional fair value of the warrant is estimated using the Black-Scholes option pricing model and is not discounted in accordance with ASU 2022-03. The warrant is subject to a three-year lock-up period and expires five years from the issuance date.
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Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The preliminary fair value of assets acquired and liabilities assumed is:
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Schedule of Intangible Assets Identified with Acquisition | The intangible assets preliminarily identified in conjunction with the Acclara Acquisition are as follows:
The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at March 31, 2024 and December 31, 2023:
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Schedule of Pro Forma Results | The following table summarizes, on a pro forma basis, the combined results of the Company as though the Acclara Acquisition had occurred on January 1, 2023. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period.
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Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | The intangible assets preliminarily identified in conjunction with the Acclara Acquisition are as follows:
The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at March 31, 2024 and December 31, 2023:
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Schedule of Estimated Annual Amortization Expense | Estimated annual amortization expense related to intangible assets with definite lives as of March 31, 2024 is as follows:
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Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenue By Source | In the following table, revenue is disaggregated by source of revenue:
(1) Modular and other revenue is comprised of service fees related to solutions focused on revenue recovery, clinical integrity, revenue optimization, and regulatory navigation as well as functional outsourcing solutions focused on driving revenue cycle improvements.
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Schedule of Contract Assets and Contract Liabilities | The following table provides information about contract assets, net and contract liabilities from contracts with customers:
(1) Current contract liabilities include $2.9 million and $2.4 million classified in the current portion of customer liabilities - related party as of March 31, 2024 and December 31, 2023, respectively. (2) Non-current contract liabilities include $11.3 million and $11.8 million classified in the non-current portion of customer liabilities - related party as of March 31, 2024 and December 31, 2023, respectively. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2024 were as follows:
(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the year.
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Schedule of Transaction Price Allocated to the Remaining Performance Obligation | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.
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Accounts Receivable and Allowance for Credit Losses (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Components of Account Receivable | Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers.
(1) Includes $26.5 million and $26.1 million for accounts receivable - related party, net as of March 31, 2024, and December 31, 2023, respectively.
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Schedule of Allowance for Credit Losses | Changes in the allowance for credit losses on a consolidated basis related to accounts receivable are as follows:
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Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values Long-Term Debt | The carrying amounts of debt consist of the following:
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Scheduled Maturities of Long-term Debt | Scheduled maturities of the Company’s long-term debt are summarized as follows:
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Gains | The net gains reclassified into cost of services were as follows:
The net gains reclassified into interest expense were as follows:
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Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 were as follows:
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Expense | The total share-based compensation expense relating to the Company’s stock options, RSUs, and performance-based restricted stock units (“PBRSUs”) that has been included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) was as follows:
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Schedule of Income Tax Expense/(Benefit) | The Company recognized the following income tax expense/(benefit) associated with vesting and exercises of equity awards:
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Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award | A summary of the options activity during the three months ended March 31, 2024 is shown below:
A summary of the RSU and PBRSU activity during the three months ended March 31, 2024 is shown below:
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Other Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Expenses | The following table summarizes the other expenses recognized for the three months ended March 31, 2024 and 2023.
(1) Costs, including legal, consulting, insurance premiums, and bank fees, that directly relate to the due diligence and closing of business acquisitions and include changes to contingent consideration, if applicable. Costs also include compensation expenses associated with the close of the transactions. (2) Costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, and certain payroll costs. (3) Costs relate to projects underway to create a new platform that consolidates the Cloudmed and R1 customer solutions and migrates them to a cloud environment to reduce onboarding costs and accelerate the delivery of value to the Company’s customers. These projects are expected to be completed in 2025. Certain of these costs incurred qualify for capitalization and have been recorded on the Consolidated Balance Sheet. (4) Costs primarily relate to business restructuring activities as part of the Company’s growth strategy and include consulting costs, compensation costs of employees dedicated to the Company’s strategic growth efforts, and severance. In 2023, these costs included changes in contingent consideration and retention costs related to acquisitions completed by Cloudmed prior to being acquired by R1. (5) As part of evaluating its real estate footprint in relation to acquisitions and remote work practices adopted following COVID, the Company has exited certain facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited facilities that will continue over the duration of the lease term. (6) For the three months ended March 31, 2024, costs include fees associated with legal, financial, and other advisors engaged to perform a review of strategic alternatives under the direction of a special committee formed by the Board of Directors on March 11, 2024. For the three months ended March 31, 2023, costs include expenses related to the Company’s stockholder litigation. For further details, refer to Note 12, Commitments and Contingencies.
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Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Income (Loss) Per Common Share | Basic and diluted net income (loss) per common share are calculated as follows:
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Segments and Customer Concentrations (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Customer Concentration, Net Services Revenue | Customers comprising greater than 10% of net services revenue are as follows:
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Supplemental Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Depreciation and Amortization Expense | The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:
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Schedule of Cash Flow, Supplemental Cash Flow Information | Supplemental cash flow information related to leases are as follows:
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Business Description and Basis of Presentation - Narrative (Details) - $ / shares |
Jan. 17, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, shares outstanding (in shares) | 420,729,691 | 420,201,507 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Acclara | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, shares outstanding (in shares) | 12,192,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Initial exercise price (in dollars per share) | $ 10.52 | ||
Percentage of voting interest acquired | 100.00% | ||
Partnership agreement term | 10 years |
Acquisitions - Narrative (Details) - Acclara - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Jan. 17, 2024 |
|
Business Acquisition [Line Items] | ||
Indemnification asset | $ 4.5 | |
Net services revenue | $ 57.1 | |
Net loss before income taxes, since acquisition date | $ 2.7 |
Acquisitions - Fair Value Total Consideration Paid (Details) - Acclara $ in Millions |
Jan. 17, 2024
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Cash consideration | $ 726.2 |
Issuance of warrant | 59.8 |
Total consideration | $ 786.0 |
Acclara | |
Business Acquisition [Line Items] | |
Lock-up period (in year) | 3 years |
Lock-up period term (in year) | 5 years |
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Jan. 17, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Allocation of consideration to assets acquired and liabilities assumed: | |||
Goodwill | $ 3,049.4 | $ 2,629.4 | |
Acclara | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Total purchase consideration | $ 786.0 | ||
Allocation of consideration to assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 64.3 | ||
Accounts receivable | 48.1 | ||
Property, equipment and software | 6.8 | ||
Operating lease right-of-use assets | 12.3 | ||
Intangible assets | 374.0 | ||
Goodwill | 420.0 | ||
Other assets | 8.1 | ||
Accounts payable | (4.6) | ||
Customer liabilities | (1.2) | ||
Accrued compensation and benefits | (21.7) | ||
Operating lease liabilities | (16.2) | ||
Deferred income tax liabilities | (84.6) | ||
Other liabilities | (19.3) | ||
Net assets acquired | $ 786.0 |
Acquisitions - Schedule of Intangible Assets Information (Details) - Acclara - Customer Relationships $ in Millions |
Jan. 17, 2024
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Useful Life | 12 years |
Gross Carrying Value | $ 374.0 |
Acquisitions - Pro Forma Results (Details) - Acclara - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Business Acquisition [Line Items] | ||
Net services revenue | $ 615.7 | $ 621.7 |
Net loss | $ (20.3) | $ (37.1) |
Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 2,054.2 | $ 1,680.2 |
Accumulated Amortization | (427.7) | (369.5) |
Net Book Value | 1,626.5 | 1,310.7 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 791.9 | 417.9 |
Accumulated Amortization | (73.1) | (60.5) |
Net Book Value | 718.8 | 357.4 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,238.8 | 1,238.8 |
Accumulated Amortization | (341.6) | (299.5) |
Net Book Value | 897.2 | 939.3 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 23.5 | 23.5 |
Accumulated Amortization | (13.0) | (9.5) |
Net Book Value | $ 10.5 | $ 14.0 |
Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset amortization expense | $ 58.2 | $ 50.1 |
Intangible Assets - Future Amortization (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2024 | $ 176.3 | |
2025 | 220.0 | |
2026 | 219.4 | |
2027 | 219.4 | |
2028 | 219.3 | |
2029 | 141.8 | |
Thereafter | 430.3 | |
Net Book Value | $ 1,626.5 | $ 1,310.7 |
Revenue Recognition - Disaggregated Revenue by Source (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Disaggregation of Revenue [Line Items] | ||
Net services revenue | $ 603.9 | $ 545.6 |
Net operating fees | ||
Disaggregation of Revenue [Line Items] | ||
Net services revenue | 381.5 | 361.0 |
Incentive fees | ||
Disaggregation of Revenue [Line Items] | ||
Net services revenue | 15.6 | 23.6 |
Modular and other fee | ||
Disaggregation of Revenue [Line Items] | ||
Net services revenue | $ 206.8 | $ 161.0 |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Contract assets, net | ||
Current | $ 96.3 | $ 94.4 |
Non-current | 41.4 | 37.7 |
Total contract assets, net | 137.7 | 132.1 |
Contract liabilities | ||
Current | 7.9 | 9.1 |
Non-current | 14.8 | 14.5 |
Total contract liabilities | 22.7 | 23.6 |
Related party | ||
Contract liabilities | ||
Current | 2.9 | 2.4 |
Non-current | 11.3 | 11.8 |
Current portion of customer liabilities | 5.7 | 5.2 |
Non-current portion of customer liabilities | $ 11.3 | $ 11.8 |
Revenue Recognition - Changes to Contract Assets (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Contract Assets, net | |
Balance as of December 31, 2023 | $ 132.1 |
Revenue recognized | 93.1 |
Amounts billed | (87.0) |
Write-offs | (0.5) |
Balance as of March 31, 2024 | 137.7 |
Contract Liabilities | |
Balance as of December 31, 2023 | (23.6) |
Advanced billings | (69.6) |
Advanced billings recognized | 69.6 |
Additions | (2.6) |
Revenue recognized | 3.5 |
Balance as of March 31, 2024 | $ (22.7) |
Accounts Receivable and Allowance for Credit Losses - Components of Receivables, Net (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed receivables | $ 265.9 | $ 218.5 |
Unbilled receivables | 98.8 | 99.2 |
Allowance for credit losses | (46.8) | (48.3) |
Total accounts receivable, net | 317.9 | 269.4 |
Related party | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for credit losses | (0.1) | (0.1) |
Total accounts receivable, net | $ 26.5 | $ 26.1 |
Accounts Receivable and Allowance for Credit Losses - Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 48.3 | $ 15.2 |
Provision (recoveries) | (0.5) | 1.1 |
Write-offs | (1.0) | (0.2) |
Ending balance | $ 46.8 | $ 16.1 |
Debt - Maturities of Long-Term Debt (Details) $ in Millions |
Mar. 31, 2024
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Remainder of 2024 | $ 72.8 |
2025 | 72.8 |
2026 | 704.1 |
2027 | 436.1 |
2028 | 10.8 |
2029 | 1,014.7 |
Total | $ 2,311.3 |
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Derivative [Line Items] | ||
Accumulated gain, net of tax, recognized in other comprehensive loss | $ 8.6 | $ 7.5 |
Foreign currency hedges | Cash flow hedging | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Gain reported in accumulated other comprehensive income | 0.3 | |
Gain to be reclassified within next 12 months | 0.3 | |
Notional amount | 106.0 | |
Foreign currency hedges | Fair Value Hedging | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount | 27.0 | |
Losses in earnings | 0.1 | |
Unrealized gain (loss) on fair value hedging instruments | (0.1) | $ 0.0 |
Interest rate swaps | Cash flow hedging | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Gain reported in accumulated other comprehensive income | 11.1 | |
Gain to be reclassified within next 12 months | 9.5 | |
Notional amount | $ 500.0 |
Derivative Financial Instruments - Derivative Gain (Loss) (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Derivatives, net gain (loss) reclassified | $ 0.1 | $ 0.3 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivatives, net gain (loss) reclassified | $ 2.9 | $ 1.9 |
Derivative Financial Instruments- Schedule Of Derivative Instruments as Hedged on Consolidated Balance Sheets (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Derivative asset, current | $ 0.1 | $ 0.5 |
Derivative, fair value, net | 0.1 | 0.5 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative asset, current | 9.5 | 8.7 |
Derivative asset, noncurrent | 1.6 | 0.9 |
Derivative, fair value, net | $ 11.1 | $ 9.6 |
Share-Based Compensation - Compensation Expense Allocation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 32.0 | $ 12.3 |
Related tax benefits | 7.6 | 2.6 |
CoyCo 2 | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense capitalized to deferred contract costs | 1.8 | 1.8 |
Cost of services | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 18.8 | 6.9 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 13.2 | $ 5.4 |
Share-Based Compensation - Income Tax Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-Based Payment Arrangement [Abstract] | ||
Income tax benefit | $ 0.8 | $ (0.5) |
Share-Based Compensation - Stock Options Activity (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Options | ||
Outstanding at beginning of period (in shares) | 2,647,202 | |
Exercised (in shares) | (189,490) | |
Outstanding at end of period (in shares) | 2,457,712 | |
Outstanding, vested and exercisable at end of period (in shares) | 2,457,712 | 2,647,202 |
Weighted- Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 3.41 | |
Exercised (in dollars per share) | 3.18 | |
Outstanding at end of period (in dollars per share) | 3.43 | |
Outstanding, vested and exercisable at end of period (in dollars per share) | $ 3.43 | $ 3.41 |
Other Expenses - Schedule of Other Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Other Income and Expenses [Abstract] | ||
Business acquisition costs | $ 15.7 | $ 0.1 |
Integration costs | 8.7 | 15.8 |
Technology transformation | 6.8 | 3.6 |
Strategic initiatives | 0.8 | 4.4 |
Facility-related charges | 1.3 | 1.2 |
Other | 0.6 | 5.1 |
Total other expenses | $ 33.9 | $ 30.2 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Statute of limitations minimum (in years) | 3 years | |
Statute of limitations maximum (in years) | 6 years | |
Gross deferred tax assets | $ 137.9 | |
Deferred tax assets related to operating loss carryforwards | $ 23.7 |
Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (35.1) | $ 1.6 |
Net income (loss) | $ (35.1) | $ 1.6 |
Basic weighted-average common shares (in shares) | 420,427,136 | 417,346,840 |
Add: Effect of dilutive equity awards (in shares) | 0 | 4,621,205 |
Add: Effect of dilutive warrants (in shares) | 0 | 30,957,744 |
Diluted weighted average common shares (in shares) | 420,427,136 | 452,925,789 |
Net income (loss) per common share (basic) (in dollars per share) | $ (0.08) | $ 0 |
Net income (loss) per common share (diluted) (in dollars per share) | $ (0.08) | $ 0 |
Earnings (Loss) Per Share - Narrative (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 19,030,415 | 768,030 |
Warrant | TCP-ASC ACHI Series LLLP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 40,500,000 | |
Warrant | Intermountain | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 1,500,000 | |
Warrant | Providence’s | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 12,200,000 |
Commitments and Contingencies - Narrative (Details) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Jan. 30, 2024
USD ($)
|
Sep. 27, 2023
USD ($)
|
May 31, 2016
plaintiff
|
|
Loss Contingencies [Line Items] | |||
Number of plaintiffs | plaintiff | 1 | ||
Number of additional plaintiffs | plaintiff | 3 | ||
TCP-ASC Recapitalization Litigation | Pending litigation | |||
Loss Contingencies [Line Items] | |||
Settlement amount contributed | $ 39.8 | ||
TCP-ASC Recapitalization Litigation | Pending litigation | Cloudmed | |||
Loss Contingencies [Line Items] | |||
Settlement amount contributed | 2.1 | ||
TCP-ASC Recapitalization Litigation | Pending litigation | Individual Defendants | |||
Loss Contingencies [Line Items] | |||
Settlement amount contributed | $ 3.6 | ||
TCP-ASC Recapitalization Litigation | Pending litigation | TCP-ASC, Acension, and Towebrook | |||
Loss Contingencies [Line Items] | |||
Litigation expenses | $ 16.4 |
Segments and Customer Concentrations - Narrative (Details) - segment |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | |
Number of reporting segments | 1 | |
Ascension and its affiliates | Accounts receivable | Customer concentration risk | ||
Segment Reporting Information [Line Items] | ||
Concentration percentage (as a percent) | 8.00% | 10.00% |
Segments and Customer Concentrations - Concentration Risk by Customer (Details) - Revenue - Customer concentration risk |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Ascension and its affiliates | ||
Concentration Risk [Line Items] | ||
Concentration percentage (as a percent) | 36.00% | 40.00% |
Intermountain Healthcare | ||
Concentration Risk [Line Items] | ||
Concentration percentage (as a percent) | 10.00% | 11.00% |
Supplemental Financial Information - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | $ 19.6 | $ 15.9 |
Cost of services | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | 19.3 | 15.5 |
Selling, general and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | $ 0.3 | $ 0.4 |
Supplemental Financial Information - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 7.3 | $ 6.2 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 13.6 | $ 3.1 |
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