WageWorks (NYSE: WAGE) reported second-quarter results on Aug. 1. The benefit administrator delivered a sharp increase in sales and profits, driven by robust demand across its product lines.
WageWorks results: The raw numbers
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What happened with WageWorks this quarter?
WageWorks' revenue surged 37% year over year to $119.9 million, fueled by a 46% rise in healthcare revenue, to $70 million, and a 55% jump in COBRA revenue, to $27.7 million.
"Our selling season continues on another record-setting pace; the pipeline is strong, as is demand across all of our products," said chairman and CEO Joseph Jackson during a conference call with analysts.
Jackson also highlighted WageWorks' recent deal with Automatic Data Processing (NASDAQ: ADP) as an exciting new growth driver:
Moreover, EBITDA -- adjusted to exclude stock-based compensation, acquisition-related expenses, and certain other items -- leapt 33% to $36.6 million. Adjusted (non-GAAP) operating income jumped 38% to $30.8 million.
All told, adjusted net income increased 33% to $17.7 million, or $0.46 per share.
For the third quarter, WageWorks expects revenue of between $115 million and $117.5 million, with adjusted EBITDA of $34 million to $36 million and non-GAAP EPS of $0.38 to $0.41.
Additionally, WageWorks raised its 2017 full-year revenue and EBITDA guidance slightly, including:
- Revenue of $479 million to $484 million, up from a prior forecast of $478 million to $484 million
- Adjusted EBITDA of $142 million to $146 million, up from $141 million to $145 million
However, WageWorks reduced its guidance for full-year adjusted EPS to $1.70 to $1.75 -- down from $1.75 to $1.80 -- mostly due to a higher expected share count resulting from WageWork's recent secondary offering.
"I expect our momentum to continue in the back half of the year and finish 2017 well above our targeted annual growth rate of 15% to 25%, with 9% to 14% of that coming from organic means," added Jackson. "We believe that the demand for consumer-directed benefits continues to build, and obviously, shows no signs of slowing down."
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