Athenahealth Growing On All Fronts

According to researcher Millenium Research Group, EHR software market will grow 12% annually over the years through 2016 to $8.3 billion. An IDC report titled IDC MarketScape: U.S. Ambulatory EMR/EHR for Midsize and Large Practices 2011 Vendor Assessment claims that the ambulatory EHR market will see significant growth over the next few years, with adoption rates rising from 25% in 2009 to more than 80% by 2016. A survey commissioned by the Optum Institute for Sustainable Health on 10 hospitals found that 70% of the hospitals claimed to have their systems attested to meaningful use stage 1 criteria already, and 75% of them expected to reach stage 2 by 2014. The continued growth in investment and adoption of EHR systems is helping drive performance for leading provider, Athenahealth.

Athenahealth’s Financials
Athenahealth’s (NASDAQ:ATHN) Q4 revenues grew 33% over the year to $92.5 million, ahead of the market’s estimate of $92 million. The 58% growth in sales and marketing expenses hurt their net income for the quarter, which fell from $0.28 a year ago to $0.26. However, earnings were still ahead of the Street’s target of $0.24.

Revenue growth was driven by increased adoption of their revenue cycle management and EHR services. athenaCollector adoption by medical providers and physicians grew 21% over the year and the use of athenaClinicals by medical providers doubled during the period to 6,525. Adoption of athenaCommunicator also improved as the usage grew from 4,908 physicians and medical providers last year to 5,830 this year.

Athenahealth ended the year with revenues growing 32% over the year to $324.1 million. EPS for the year came in at $0.88.

Athenahealth’s Strategic Relationships
To continue to expand their market reach, Athenahealth recently entered into a strategic relationship with Medley Health. Medley Health assists independent primary care physicians by providing them membership practice marketing and communications services. As part of the agreement, the two players will work together to develop marketing and sales programs, product integration and strengthen provider-patient collaboration and communication.

Athenahealth’s Mobile Applications
They are also leveraging the technical competence acquired during the acquisition of Proxysys last year to develop mobile apps for health care providers. Their apps are currently under alpha testing and the company has not divulged expected timelines for the app to hit the market. Athena claims that the simple user interface of their iPhone app will support physicians with work outside of the office by lowering the number of their inbox tasks. The iPad app being built will have rules at every stage, and the aim is to give more control over documentation cycle time.

Athena’s stock is trading at $66.03 with a market capitalization of $2.33 billion. In October 2011, it touched a 52-week high of $72.70.