Cerner Q1 revenue down, bookings up
Cerner Corporation announced financial results for the first quarter of 2015 this past week, with revenue "lower than expected" in the wake of its Siemens Health Services acquisition but bookings at "an all-time high."
[See also: Cerner adds FHIR power]
Bookings for Q1 stood at $1.2 billion – an increase of 32 percent compared to the same quarter last year, driven by "strong growth in traditional Cerner bookings with minimal bookings contribution from (Siemens) Health Services," said Marc G. Naughton, Cerner's chief financial officer, on a May 7 earnings call.
First quarter revenue was $996.1 million, according to Cerner – also a 27 percent increase compared to the same period in 2014, but nonetheless lower than predicted.
[See also: Cerner to buy Siemens health IT unit]
"The total is approximately $50 million below our guidance range with the shortfall roughly equally split between Cerner and Health Services," said Naughton. "On the Cerner side, the higher percentage of the record bookings that came from long-term contracts meant a lower percentage of items that generated in quarter revenue.
"It is important to note that our Q1 adjusted earnings results were not impacted by the lower revenue and our annual guidance for adjusted earnings remains the same," he added.
Cerner expects higher Q2 revenue numbers, between $1.175 billion and $1.225 billion, and now foresees full year 2015 revenue in the range of $4.65 billion and $4.8 billion.
Other highlights from the Q1 call:
- First quarter cash collections of $981.2 million and operating cash flow of $214.2 million.
- First quarter free cash flow of $68.9 million.
- First quarter days sales outstanding of 79 days – up from 66 days in the year-ago quarter.
- Total backlog of $13.0 billion, up 41 percent over the year-ago quarter.
"Cerner's first quarter results represent a solid start to the year," said Cerner CEO Neal Patterson in a statement. “With the exception of lower than expected revenue, all of our results were at or above expected levels, with bookings being particularly strong and representing an all-time high. The record bookings reflect great success at attaining new clients, both domestically and around the world, and position us for a good year."