Athenahealth Inc. Sees Strong Growth in Q1

Source: athenahealth.

It didn't start out looking like a great year for athenahealth, . Shares of the cloud-based healthcare software provider were down more than 10% year to date at the end of April.

Things are looking much better for the company now, though, after athenahealth announced its first-quarter financial results after the markets closed on Thursday. Shares climbed around 6% higher in after-hours trading. Here are the highlights from athenahealth's first-quarter results.

By the numbers CEO Jonathan Bush's goal is for athenahealth to return to its past achievements of 30% annual sales growth. The company didn't quite hit that goal in the first quarter -- but it came close. Athenahealth reported first-quarter revenue of$206.4 million, a 27% jump over the$163.0 million from the same quarter in 2014. Wall Street expected revenue of just over $205 million.

The company reported a loss in the first quarter of$8.8 million, or $0.23 per diluted share. On a non-GAAP basis, however, athenahealth earned$9.1 million, or $0.24 per diluted share. That more than doubled the $4.4 million, or $0.12 per diluted share, reported in the first quarter of 2014. It also beat the consensus analysts' estimate of $0.14 per share.

Athenahealth reaffirmed its previous full-year 2015 guidance. The company continues to estimate that revenue for the year will be a range of $905 million to $925 million. It also still expects non-GAAP earnings to be between $1.10 and $1.20 per diluted share.

Behind the numbers There are two bright spots that investors will particularly like about athenahealth's first-quarter performance. Although the company didn't make the 30% year-over-year sales growth target as a whole, athenahealth-branded services did hit the mark, with $192.1 million in sales during the first quarter.

This appears to signal that some of the issues that athenahealth encountered last year with McKesson might now be resolved. McKesson had a lot on its hands with the assimilation of PSS World Medical, resulting in some problems for athenahealth, which depends heavily on its sales partner.

Investors will also probably be quite pleased to see that Epocrates seems to have turned the corner. After multiple quarters of declining sales, revenue for Epocrates-branded services increased year over year in the first quarter of 2015. Granted, it was only a 2% bump, but after consecutive double-digit drops even that small increase is good news.

Looking aheadIf athenahealth can keep the momentum from the first quarter going, 2015 could be one of the best years for the company in a while. One key to pulling it off will be how well the company leverages its January acquisition of RazorInsights, aprovider of cloud-based electronic health record and financial solutions torural, critical-access, and community hospitals.

Jonathan Bush noted that this acquisition, combined with the partnership with Trinity Health, are "nothing less than energizing." Whether or not athenahealth sustains its first-quarter success through the rest of 2015 could depend on this energizing impact.

The article Athenahealth Inc. Sees Strong Growth in Q1 originally appeared on Fool.com.

Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Athenahealth and McKesson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.