Revenue Analysis
Total and Operating Revenue: Over the past four quarters from Q1 2023 to Q1 2024, ACHC consistently increased its total and operating revenue, which is a positive indicator of growth. Specifically, the total revenue has escalated from $704.267 million in Q1 2023 to $768.051 million in Q1 2024. This demonstrates a compound annual growth rate of approximately 9.07%, reflecting an expanding operational scale.
Gross Profit Margins: Gross profit has similarly shown a steady increase, rising from $678.246 million in Q1 2023 to $741.399 million in Q1 2024. This enhancement in gross profit mirrors the revenue growth, maintaining a consistent gross margin around 96%, which is a strong performer in the industry.
Cost Management
Cost of Revenue: The cost of revenue has been fairly stable, showing only minor fluctuations between $26.021 million and $26.652 million over the observed periods. This stability assists in maintaining healthy profit margins.
Operating Expense and Total Expenses: Operating expenses have shown some variability but generally increased in line with revenue growth, ensuring that the additional revenue does not disproportionately increase costs. For instance, in Q1 2024, operating expenses accounted for approximately $612.494 million out of total expenses of $639.146 million.
Profitability Analysis
EBITDA: EBITDA shows a rising trend from $137.211 million in Q1 2023 to $162.405 million in Q1 2024. There was a major dip in Q3 2023, but recovery was swift, indicating resilience in operational profitability.
Operating Income: Operating income escalated significantly from $112.113 million in Q1 2023 to $128.905 million in Q1 2024. This suggests that ACHC has improved its efficiency in generating revenue from its operating activities.
Pretax Income and Net Income: There’s significant improvement in net income, moving from $66.015 million in Q1 2023 to $76.383 million in Q1 2024. Pretax income followed a similar trajectory, which highlights effective tax management and operational profitability.
Cash Flow Indicators
Reconciled Depreciation: The reconciled depreciation has shown a gradual increase, indicating ongoing investments in assets but also highlights higher expenses related to asset depreciation which the company needs to manage efficiently.
Interest Expense: Interest expenses remained steady, reflecting stable finance management without excessive leverage.
Taxation
Tax Rate and Tax Provision: Tax rates have varied moderately between 20.3% to 25.27%, and the company has been managing its tax liabilities efficiently as shown by the tax provisions, which have been in proportion to their increase in pretax income.
Tax Effect of Unusual Items: The tax effects on unusual items have shown significant variability, suggesting one-time events that have impacted the financials separately from regular operations.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic EPS exhibited growth, underpinning a robust earning performance for shareholders. The EPS increased from $0.72 (basic) in Q1 2023 to $0.84 (basic) in Q1 2024.
Average Shares and Net Income Available to Common Stockholders: The diluted average shares have remained largely consistent, helping to stabilize the earnings per share. Net income available to common stockholders has shown growth which benefits shareholders directly.
Conclusion
ACHC has demonstrated solid revenue growth coupled with consistent cost management and improved profitability. While there are areas of high fluctuations such as in unusual items and EBITDA impacts, the company’s overall trajectory appears robust. Continuous monitoring of operational efficiency, along with strategic asset management and capital allocation, will be crucial for sustaining growth rates and shareholder returns.