Good afternoon, ladies and gentlemen, and welcome to the Performant Healthcare Q4 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Wednesday, March 12, 2025. I will now turn the conference over to Jon Bozzuto, Head of Investor Relations. Please go ahead. Thank you, Operator. Good afternoon, everyone. By now, you should have received a copy of the earnings release for the company's Q4 and full year 2024 results. If you have not, a copy is available on the Investor Relations page of our website at performanthealthcare.com. On today's call will be Simeon Kohl, Chief Executive Officer, and Rohit Ramchandani, Chief Financial Officer. Before we begin, I'd like to remind you that some of the comments made on today's call, including our financial guidance, are forward-looking statements. These statements are subject to risks and uncertainties, including those described in the company's filings with the SEC. Actual results may differ materially from those described during the call. In addition, all forward-looking statements are made as of today, and the company does not undertake to update any forward-looking statements based on new circumstances or revised expectations. Please note page three of our earnings release, which covers forward-looking statements. Rather than reading that section aloud, we incorporated it by reference into the prepared remarks. Also, all non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I would now like to turn the call over to Simeon Kohl. Sim? Thank you, Jon. Good afternoon, everyone, and thank you for joining us. I'm excited to host our first earnings call as Performant Healthcare, marking the completion of our strategic transformation into a dedicated healthcare company. 2024 was another remarkable chapter in our business evolution as we continue to drive innovation and pursue our mission to combat fraud, waste, and abuse in the U.S. healthcare system, a mission that closely aligns with the priorities of the new administration. Today, I will begin with our 2024 results, followed by what you can expect in 2025. Performant finished the year on a positive note as demand for our services remained strong, especially with our commercial clients. Healthcare revenue ended the year at $118.3 million, marking another year of double-digit revenue growth for Performant Healthcare. Revenue growth varied across both our client markets, with commercial delivering strong growth of 18%, and government amidst a variety of macro impacts still expanded by 3%. Government growth was slower than anticipated, primarily due to election-related sensitivities with our auditing work and the natural maturation of our CMS/MSP engagement, now in its second successive term and ninth straight year with Performant Healthcare. Performant is a far more diversified business than in past years. When we first pivoted to a healthcare-focused strategy in 2021, healthcare revenues comprised less than two-thirds of our total revenues, and less than one-third of healthcare revenue itself came from commercial clients. At that time, our goal was to leverage the gold standard work we delivered to CMS in order to expand our presence in the commercial market, a strategy that has proven to be highly successful. Fast forward to the end of 2024, and commercial clients now account for almost 60% of healthcare revenue, up from 28% in 2021. Our growth opportunities within the commercial market remain significant. Today, we have contracts with five of the top seven MCOs and are approaching an additional 20 mid-market payers. Expanding wallet share, particularly with the largest MCOs, remains a key focus. As I've mentioned previously, program expansion within existing clients is a testament to the value of our services. Within our existing commercial client base, we've successfully expanded our footprint, achieving an average revenue growth of over 35% within existing clients since 2021. By leveraging proven technology to identify savings and deliver high-quality results, we help our clients maintain network harmony while effectively managing medical expenses. Ultimately, our clients seek to grow with a trusted partner, and at Performant, that's not what we've strived to be, it's what we've become. The strategy has led to another record year of program growth, with 42 commercial programs implemented during 2024. We currently anticipate these contracts to generate over $18 million in annual revenue at steady state in the next two to three years. Despite delays in the sales and implementation cycle stemming from the Change Healthcare disruption, we successfully met and exceeded our target for new implementations in 2024. Our sales pipeline remains robust, enabling us to set a similar goal in 2025. Turning to our internal achievements, building a world-class organization begins with our people, and fostering a strong, engaged workforce remains a top priority. In 2024, we made significant progress in key talent metrics, including higher engagement scores, improved retention, and expanded performance-based incentives. We also launched an employee stock purchase plan, further reinforcing our commitment to shared success. This follows performance recognition with a Comparably award for Best Company Outlook in 2024, a testament to our team's confidence in the company's future. Our results and industry recognition reflect the strategic investments we've made in people, technology, and quality since our business transition in 2021. Over the past four years, we have laid a strong foundation for sustainable growth and strengthened our solid reputation in the payment integrity space. The decision to remove financial from our name and fully embrace Performant Healthcare marks a pivotal turning point. This milestone signals the beginning of phase II of our transition, one focused on profitability and margin expansion. Rohit has previously shared the two key themes of our margin expansion: one, reaching a more scaled business at $150-$160 million of revenue, and two, the timely accomplishment of our technology initiatives to deliver workflow efficiency. In terms of revenue, when I consider the client base we have built and the implementations we have scheduled ahead of us, we have visibility into the majority of the path to scaled revenues. Coupling with the planned operational efficiencies gives us confidence in the path to scaled EBITDA margins. Let me pause to emphasize the significance of this statement. We firmly believe that a majority of our path to scaled adjusted EBITDA margins is driven by visible growth within our existing client base and improvements in our operational efficiencies. Since we began reporting the expected steady state revenue of our new commercial program implementations in 2022, we have successfully implemented over 100 programs with an expected cumulative ACV of approximately $46 million. A significant portion of new commercial implementations completed during the last two years of our back-to-back record years are still ramping. As I've mentioned before, these programs require upfront investment before generating revenue, let alone reaching steady state margins. Our strong implementation success has created a substantial front log, temporarily compressing margins as we scale operations. The New York State RAC and CMS RAC Region 2 contracts add to our portfolio of subscale contracts, many of which are currently operating at negative margins. Successfully ramping these contracts is critical, and we have a proven track record of doing just that. In addition to scaling contracts, our commitment to improving workflow efficiency is evident through our strategic investments and technology initiatives. Central to this effort is the Project Turing technology initiative. As we entered 2024, we had a clear vision to transform our technology strategy and enhance our workflows while also making strategic investments into our sales, marketing, and business development teams. We've made significant progress, having attracted key talent to maintain our competitive edge and win new business. Regarding our technology roadmap, we are in the process of implementing what I consider next-generation technologies, including AI and natural language processing. Our approach remains thoughtful and measured as we roll out these technologies, all aimed at improving KPI efficiency. Early results continue to validate our thesis of shortening the contract implementation timeline while increasing productivity, all in support of our goal to achieve 20% adjusted EBITDA margins. We are excited to keep advancing our workflow automation and integrating our AI and NLP technologies throughout the business. Performant is uniquely positioned to realize significant gains from AI technology, thanks to the vast trove of healthcare claims data we've amassed over the years. As we've been implementing our model and testing our workflows, we've already seen positive adoption of new technologies by our nurses, coders, and other frontline employees. While these initiatives are still in progress, I want to emphasize that we are highly focused on improving our efficiency and eliminating sources of friction across the enterprise, which will be key to delivering meaningful margin expansion over time. I'll now take a few minutes to recap what you can expect from Performant in 2025. Our business transformation and investment strategy has focused on our people, technology, and quality to build a strong reputation, positioning us to effectively create a sustainable growth pipeline for commercial, state, and federal opportunities. 2025 is an exciting year for Performant as it marks the first year in which we are ramping contract cohorts in all three end markets. In the state market, we are excited to launch our first state RAC contract with New York. The contract was officially signed in February, and a full-scale implementation is expected to begin in early April. Thanks to our early efforts to understand process and data flows, we are optimistic about generating revenue ahead of the typical contract ramp cycle, potentially before the end of 2025. As I've mentioned before, this contract is a key milestone for us as we now look to expand our presence and reputation in the state Medicaid market. I have already discussed at length our significant commercial opportunity, but it bears repeating. We currently have over 100 commercial programs in various stages of maturity, and we are highly encouraged by the growth in this area. Finally, on the federal front, this is our most established and mature market. Over the years, we have built a sterling reputation by consistently delivering high-quality work for CMS and HHS through multiple administrations. At Performant, our operations are centered on policy, standards, and data. Nonetheless, 2024 presented its share of challenges, particularly as the scope of the RAC program was tamped down, influenced by the election cycle. However, we remain optimistic based on early signals from the new administration and from DOGE, which has shown a clear interest in pursuing fraud, waste, and abuse oversight within the federal government. Performant is uniquely positioned to support these efforts should the program be reprioritized, which is in direct alignment with the government's stated objectives. Given the evolving landscape, it is crucial for us to remain agile and adaptable, ensuring we can either impact or quickly pivot our approach as circumstances warrant. We do acknowledge that currently much remains to be determined as new leadership appointments occur and policy agendas take shape. The need for our services remains clear and undeniable. According to CMS's 2024 improper payment fact sheet, an estimated $31 billion in inaccurate payments were made within the Fee-for-Service Medicare program alone. This highlights the importance of the role we play in safeguarding the integrity of the government programs. Looking at our current book of business with CMS, we anticipate that by the end of 2025, the CMS RAC Region 2 contract will reach steady state. This contract has ramped nicely, and we expect that positive momentum to continue. Regarding CMS RAC Regions 3, 4, and 5, we are actively engaged in the ongoing RFP process. This includes Performant's re-compete for Region 5, which we've held since 2016 and expires in 2025, as well as the opportunity to win Regions 3 and 4. As I mentioned last quarter, we will encounter some short-term disruption in our existing RAC Region 5 work due to the typical wind-down activities associated with this process. Given the strong track record we've had as a healthcare company, both with government and commercial plans, this disruption is not expected to hinder our double-digit growth expectation and is incorporated into our upcoming 2025 revenue guidance. The operational momentum we've built positions us well as we head into 2025. We are forecasting revenues to be in the range of $131-$135 million for the year, and we are forecasting adjusted EBITDA to be in the range of $8-$9 million, which is nearly a double that of our 2024 adjusted EBITDA at the midpoint. We believe 2025 is an important year for Performant, but our efforts to expand the company's margins will continue beyond 2025. Rohit will provide more detailed insights on our expectations later in the call. As I wrap up, I want to express my gratitude to the team for their exceptional work. The optimism I feel today is a direct result of our strategic decisions we've made and the dedication that has brought us to this point. What I am most proud of is how effectively we've invested in our future. Looking at our contract wins that are set to scale, I am genuinely excited about the growth visibility we now have. The solid foundation we've collectively built positions us for long-term success, and I couldn't be more confident in what lies ahead for Performant. With that, I'll hand it over to Rohit Ramchandani, our Chief Financial Officer, for a discussion of the financials. Rohit? Thanks, Simeon. Good afternoon, everyone. Building on Simeon's highlights, 2024 was indeed a strong year for Performant, with consistent performance and sustained growth delivering another record quarter and year. In the Q4 of 2024, our success in capitalizing on previously implemented opportunities and scaling operations was evident. Total company revenue in the quarter was just shy of $35 million, with healthcare revenue contributing over $34 million, showing growth of about 10% over the same prior year period. Full-year revenue ended at $123 million, including healthcare revenue, which grew 11%, ending the year at just over $118 million. Given the broader industry dynamics we discussed throughout 2024, we're extremely pleased to have delivered results within our expected range. This highlights the resilience of our growth strategy in the commercial market and the strength of our overall business model. Our services are mission-critical for payers, particularly in a time of rising utilization and ever-stressed MLR ratios. We are encouraged by the new administration's objectives to reduce waste, which is a core facet of payment integrity. However, we realize there is a level of unpredictability in the actions that may be taken by this administration. Our 2025 guidance ranges take these factors into account, reflecting both on the evolving landscape as well as our ability to have delivered results in 2024 despite facing headwinds. Turning to our results by submarkets, within our claims-based business, also known as claims auditing, revenue in the Q4 of 2024 reached over $16 million, contributing to a full-year total of $56.4 million, reflecting growth rates of 10% and 25% respectively compared to the prior year periods. These revenue amounts reflect both a quarterly and annual record for our claims-based services. Our comprehensive one-stop-shop set of claims auditing products continues to bear fruit as our growth within commercial clients continues at breakneck speed. In 2023, we had spoken about reconfiguring the factory workflow with a few larger clients through specific audit types. Those projects have also proven effective, as we saw both an increase in revenue per audit and a decrease in cost per audit in our internal metrics. We expect these trends to continue, particularly on the cost side, in conjunction with the technology initiatives being introduced through Project Turing. Shifting to our eligibility services, revenue in the Q4 of 2024 was just over $18 million, contributing to a full-year total of $61.9 million. This represents year-over-year growth of roughly 11% and 1% respectively. Commercial clients were a driving force behind our eligibility growth as well. I'd like to highlight that even though the mature CMS-MSP relationship is providing a growth headwind, we are consistently setting new records in impact delivered to that client, despite the different economic terms of this second Performant contract compared to our first. We are doing so without losing sight of our profitability goals. In thinking about commercial implementations overall, we completed 42 in 2024, which we currently anticipate will generate over $18 million in annualized revenue at steady state. This includes 10 new implementations in the Q4. Since early 2022, we have implemented over 100 commercial programs. In the last three years, we've also introduced estimations for annual steady-state revenue of these implementations to assess revenue growth and near-term margin impact as these new contracts ramp. This framework provides a clearer view of our estimations for the transition from implementation costs to break-even and ultimately profitability, detail of which can be seen in our investor presentation on the website. I share this because, before this, our business has been subscale against our margin targets. However, when we consider the substantial volume of implemented programs that have yet to reach steady state, what Simeon referred to as the front log, we gain visibility into both the path to scaled revenues and margin expansion as these cohorts mature. We are excited to see our revenues continue to scale, which, in tandem with our technology initiatives, we believe will help us achieve our 20% adjusted EBITDA margin target. Before pivoting to the expense side, I want to take a moment and quickly discuss the results of our customer care outsource services market. It contributed approximately $500,000 in revenue for the Q4 of 2024 and $450,000 for the full year. As I mentioned last quarter, we did make the decision to de-emphasize our focus on this market and wind down our customer care operations. This will also mark the last time we discuss the isolated revenue results for customer care, and we are pleased to announce we have identified another student loan service provider to transition our remaining staff to. We are deeply grateful for the hard work and dedication of that team and wish them all the best in their future endeavors. Looking ahead, we do not anticipate meaningful revenues in customer care for 2025. With that, going forward, we will no longer need to splice out healthcare revenues from total revenues, as they should be treated as one and the same, further reinforcing our focus on Performant Healthcare. As a dedicated healthcare strategy. Now, shifting back to operating expenses, they were $35.5 million in the Q4 of 2024, or $4.8 million higher compared to the Q4 of the prior year, and roughly $132.5 million for the full year, or $12.5 million higher compared to 2023. This was primarily driven by increasing salaries as we scaled the business and technology initiatives related to Project Turing. Adjusted EBITDA for the Q4 of 2024 was a positive $3.1 million, and for the full year, was within our expectations at $4.4 million, representing $1 million of growth from 2023. The discrete investments related to Project Turing, alongside sales, marketing, and business development, suppressed our profitability in 2024. We had estimated these investments at $3-$3.5 million at the start of 2024. Despite these discrete investments and the smaller revenues from customer care, our adjusted EBITDA margins expanded year- over- year. We continue to remain optimistic that as we scale and wind down some of these discrete investments, they will translate into efficiency gains and we will see margins truly scale. We also believe our capital structure remains appropriate at this time. We ended the year with a net cash position with $9.3 million in cash and $8 million drawn under our revolver. We had our best year of operating cash flows since transitioning to a pure-play healthcare company and currently believe we will be cash flow positive by the end of 2025 as we scale and continue to realize efficiencies from Project Turing. We remain confident in our ability to grow organically and scale our business while still making the necessary investments to drive future growth. I'd like to now dive further into our financial guidance for 2025. Regarding revenue, I'd like to reiterate that we expect minimal to no revenues from customer care and that the total revenue guidance Simeon shared of $131-$135 million is exclusively focused on healthcare markets. It also contemplates the transitional wind-down of a RAC Region 5 and does not account for any potential upside from DOGE or other government program integrity initiatives. Turning to adjusted EBITDA, we are guiding 2025 to be in the range of $8-$9 million, which nearly doubles our results from 2024 at the midpoint. I do want to highlight a few metrics within our adjusted EBITDA guidance that affect the potential profitability of this business. First, with respect to ramping contracts, based upon our announced new commercial implementations over the past 12 quarters, coupled with our illustrative contract ramp cycles, which can be found in our investor deck, we currently estimate approximately $3-$4 million in net ramp-up spend for new commercial implementations across 2025. Of note, the investments needed for our recent record levels of implementations are in effect partially offsetting the run-rate profitability of some of our older fully ramped implementations. In addition, we estimate the recently awarded New York RAC contract will result in approximately $1.5 million in additional ramp-up costs in 2025. Collectively, this estimates at $4.5-$5.5 million in net implementation costs in 2025. This couples with the expected ongoing Project Turing spend of approximately $1-$2 million in operating expenses for 2025, in addition to our more normalized technology OpEx spend during the year. Note, I'm not saying an extra $1-$2 million compared to last year, but an extra $1-$2 million compared to what we would expect at steady state once the project completes. Now, while not indicative of what we actually expect for our adjusted EBITDA in 2025, which remains at $8-$9 million, after backing up the investments I described, we believe our adjusted EBITDA would have been in the range of $13.5-$16.5 million. While the guidance of adjusted EBITDA of $8-$9 million reflects these costs, we did want to provide this illustration into our margin profile, which, coupled with forecasted increased revenues, illustrates a path toward our margin target of 20% plus adjusted EBITDA margins. In the interim, we'll continue to invest and do what is best for our business in the long term. Of course, we will still have continued implementation costs and potential Project Turing costs in 2026 and beyond, which will suppress our true adjusted EBITDA potential. We have identified tangible benefits from AI and NLP technologies and believe this is a critical time to integrate those advanced technologies into our workflows. The spend on this, alongside other components of Project Turing, is a short-term margin detractor but will ultimately drive long-term efficiency and directly contribute to our margin expansion. When considering earnings seasonality, we expect stronger year-over-year revenue growth in the Q1, after which we will see the wind-down effects of RAC Region 5. Even so, we expect a similar pattern to 2024, with the Q1 being the lightest in terms of revenue and adjusted EBITDA and growing throughout the year. In summary, 2024 was a milestone year for the company. The investments we made are driving tangible results and providing clear evidence of sustained growth. Despite unique industry headwinds, we delivered full-year results squarely within our expectations. These results, along with other significant business wins throughout 2024, give us confidence to guide to double-digit revenue growth in 2025 alongside meaningful margin expansion. This next phase of our company's evolution is focused on profitability, and we remain committed to our goal of approaching 20% adjusted EBITDA margins, which may be achieved upon full execution of Project Turing and if we are able to sustain revenues of $150-$160 million plus. I once again want to thank our team for their relentless execution and commitment to our vision. Operator, will you please open up the lines for questions? Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Jacob Stephan from Lake Street Capital. Your line is now open. Hey, guys. Appreciate you taking the questions. Just wanted to ask, you know, when you say kind of your average revenue CAGR of existing clients on the commercial side is 35%, I think that would imply, you know, net dollar retention of 135%, obviously, assuming no churn. Maybe you could kind of help us piece out, you know, any churn of commercial clients or any headwinds that, you know, may ultimately bring that 35% CAGR kind of down. Jacob, I think that's a good question. Good pick-up from you. You're thinking about that, right? That is a net number. If there was downward movement in a client, upward movement in that same client or other clients, it would blend together to the 35%. We generally don't have attrition in our customers. Really, it would just be the ebbs and flows of utilization programs, volumes that could be things bringing that down. The 35% is a net number of all of that blended together. Okay. Great. Thank you. The next one, you know, is the $3-$4 million of incremental OpEx for your commercial programs. Is kind of per $18-$20 million in commercial revs a good way to, you know, think about, you know, moving forward as we look at kind of, you know, incremental expense needed to ramp commercial clients? Sort of. I think I'd still point to the illustrative economics and extrapolating that for each cohort as they show on our investor deck. The $3-$4 million is meant to be our estimation of what's going to show up in calendar year 2025 as a result of not just last year's implementations, but some of the work still going on for the year before and a little bit of the tail end of the 2023 ones or, sorry, 2022. Excuse me. Okay. Got it. Understood. I'll hop back in the queue. Appreciate the color. Your next question comes from the line of George Sutton from Craig-Hallum. Your line is now open. Thank you. Simeon, you mentioned the pre-election sensitivities that had some impact in the latter part of 2024. I'm curious, now that we're two months in, can you give us a sense of how those sensitivities might have changed thus far? And how would you, you know, with your best guess at this point, assume we're going to be acting going forward? Yeah. Look, still in the early innings, as we mentioned, policies are still shaping. We're still seeing some of the appointments. Clearly, the appointment of the administrators and the confirmation doesn't happen until the end of this week. Things are still a little bit of a lull. You know, look, as we get the overall tenor and theme and as we think about DOGE, et cetera, you know, it's hard not to be cautiously optimistic. Certainly, it's helping to identify and reduce wasteful spend. It's the core of what we do. That is, as we said in prepared remarks, is well aligned. Some of the leadership change that we've already seen in this in terms of appointment, one in particular, has extensive background in Medicare program integrity. That's another encouraging data point, right? Look, this was an already well-established program to kind of further pursue improper payments consistent with DOGE and what we're hearing with this administration. It might seemingly present some potential tailwinds, and we're cautiously optimistic about that. As we've mentioned in the prepared remarks, it's just a bit too early to kind of further speculate or attempt to quantify that, George. Just asking it a little differently, you mentioned a potential reprioritization from the DOGE effort. I'm curious how that might make its way to you. Would you assume that a RAC region would have a larger revenue opportunity? Just kind of curious how you would think that would flow through for you. Yeah. I mean, if we think about it, you know, ultimately, DOGE and this administration has been signaling that, you know, pursuing improper payments is clearly a key objective. As we've discussed, and I think just even yesterday, the General Accountability Office reported a pretty significant number of improper payments in the Medicare Fee-for-Service program, right? As we think about that, clearly, the opportunity to further pursue and expand some of the audits, right? If we think about today, the RAC program has various governors in place, different than our commercial opportunities. This might present that natural opportunity to kind of release some of those governors and maybe expand the audit opportunities. That is where we see the potential slowdown in terms of increasing opportunities kind of region by region. Again, really, really hard to speculate on that at this point in terms of what that means, how do we further quantify. Our hope is once we see, you know, the confirmation of the new leadership here at CMS working closely with the Center for Program Integrity, et cetera, you know, we'll start to see, I think, things shape and get a little bit more details and be able to update you guys in further quarter updates. Lastly, for me, just to clarify, you had talked about your AI or your technology roadmap, which includes more with AI. And the AI investments that you've made thus far, mostly through acquisition, had been more focused on the cost side. I'm curious if there is a revenue dynamic that you would anticipate with some of these AI investments you're making. Yeah. Again, early innings, but if you think about AI, it helps us ultimately select claims that have the highest likelihood of being paid improperly, right? As we think about that, it clearly gives us a greater opportunity to increase our hit rate. We are not having to audit as many claims. To your point on the cost side, that is certainly a helpful component there. Ultimately, our scoring ability, when we think about prioritizing those claims, you know, trying to find where we think there is the highest opportunity from a dollar standpoint. That is what helps us on the revenue side, George. Great. Thank you very much. Sure. There are no further questions at this time. I will now turn the call over to our CEO, Simeon Kohl, for closing remarks. Please go ahead. Thanks, Operator. Thanks, everyone, for joining us today. As we reflect on 2024, we're super proud of the progress we've made, as we shared in our prepared remarks in kind of all facets of the business. As I mentioned, you know, we do have strong visibility into our growth trajectory, and we remain super focused on expanding our margins and increasing our profitability. We appreciate everyone's support. We look forward to sharing further updates in the coming quarters. If you have any questions, please don't hesitate to reach out in the interim. Thanks again. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.