Forian Q3 2025 Earnings Call - Strong 66% Revenue Surge Fueled by Kyber Acquisition and Organic Growth

Conference Call Moderator, Forian: Welcome to Forian’s Third Quarter 2025 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal comments and webcast. Participating today from Forian are Max Wygod, Executive Chairman and Chief Executive Officer, and Michael Vesey, Chief Financial Officer. Before we begin, I would like to remind you that management’s remarks today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements due to a variety of important factors, including those discussed in the risk factors section of the company’s annual report on Form 10-K filed with the SEC on April 11, 2025. In particular, management will discuss an estimate of its full-year 2025 revenue outlook as of today.

Estimating financial performance accurately for future performance is difficult, as it involves assumptions and internal estimates that may prove to be incorrect and is based on plans and circumstances that may change. There is, therefore, a significant risk that actual results could differ materially from the outlook provided today. Any forward-looking statements made on the call today represent the company’s views as of this date, and the company undertakes no obligation to update them except as required by law. Words such as estimate, projected, expect, anticipate, forecast, planned, intend, believe, seek, may, will, should, future, propose, and variations of these words or similar expressions or versions of such words or expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding future growth, anticipated performance, and prospects.

Today’s presenters will also refer to certain non-GAAP financial measures on our call, such as adjusted EBITDA, which the company believes may be important to investors to assess its operating performance and should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of the comparable GAAP metric can be found in today’s press release and webcast, both of which are available on the company’s website. Those numbers are unedited, and any statements regarding the company’s anticipated performance may be subject to change, including as a result of risk discussed in the risk factors section of the company’s annual report on Form 10-K filed with the SEC on April 11, 2025. Today’s call and webcast is being recorded.

A copy of the recording, webcast, as well as the full transcript and copies of today’s press release and SEC filings will be available at forian.com forward slash investors. I am now pleased to introduce the company’s Executive Chairman and Chief Executive Officer, Max Wygod. Sir, you may begin.

Max Wygod, Executive Chairman and Chief Executive Officer, Forian: Thank you. Good afternoon, everyone, and thank you for joining us on our third quarter earnings call. This quarter reflects steady progress across our business as we continue to execute against our strategic priorities and strengthen Forian’s position as a trusted partner in healthcare analytics and real-world evidence generation. During today’s call, I’ll review our third quarter results and key operational highlights, followed by an updated view of our outlook for the remainder of 2025. Mike Vesey will then provide a detailed overview of the financial performance of the third quarter. Before addressing our results, I want to take note that we do not intend to discuss any updates relating to the previously announced take-private offer information of a special committee of the board. Consistent with our past communications, we will only comment further if and when an update becomes appropriate for public disclosure.

Turning to performance, Forian delivered another quarter of strong growth. Revenue for the third quarter was $7.76 million, an increase of 66% year over year, primarily reflecting contributions from the Kyber Data Science acquisition and the continued expansion in health economics and outcomes research projects. These results highlight the growing demand for integrated healthcare data assets and analytics that help clients answer increasingly complex questions about treatment patterns, patient outcomes, and market dynamics. Across our customer base, we see continued adoption of real-world data and real-world evidence to inform decision-making throughout the product lifecycle. Life science companies, for example, are using longitudinal claims, EMR, and laboratory data to better understand the real-world performance of therapies, identify unmet patient needs, and support evidence generation for regulators and payers.

Health service organizations and financial clients are also leveraging our data assets to monitor utilization trends, forecast demand, and benchmark performance across patient populations. Forian’s Data Factory continues to be a critical differentiator. It integrates, normalizes, and enriches data from a wide range of sources, including medical and pharmacy claims, EMR, laboratory, and social determinants of health data sets, to create a unified view of the healthcare ecosystem. This infrastructure enables our clients to access high-quality, timely, and de-identified data that can be applied to analytics, research, and predictive modeling with confidence. With the integration of Kyber, we have strengthened our analytical capabilities and expanded our reach into the financial markets segment, where high-quality healthcare data can generate meaningful predictive insights. Kyber’s Forecasting Models have demonstrated notable accuracy relative to consensus estimates for several leading biopharmaceutical companies, underscoring the value of combining advanced analytics with Forian’s proprietary data sets.

Kyber’s hedge fund clients have been able to find substantial alpha in our forecasts. For example, for three of the most tracked healthcare companies, argenx, Alnylam, and BridgeBio, Kyber was able to model results significantly closer than consensus estimates. These models were enhanced by Forian data offerings that were developed while under the Forian umbrella. This is a good example of why we will continue to invest to have cost-effective long-term data relationships and attractive new offerings. For the third quarter, net loss was $151,000 and adjusted EBITDA was $471,000, compared to a net loss of $205,000 and an adjusted EBITDA of $186,000 in the prior year period. These results demonstrate improved operating leverage and continued progress towards profitability while maintaining disciplined investment in data and product innovation. Looking ahead, we expect full-year 2025 revenue to finish near the high end of our previously communicated range.

We continue to invest selectively in areas that will enhance the quality, depth, and utility of our data assets, with a focus on creating scalable products that deliver differentiated insights for our clients. In summary, Forian delivered another solid quarter characterized by disciplined execution, expanding client engagement, and ongoing operational improvement. We remain focused on driving sustainable growth, enhancing profitability, and strengthening our position in the rapidly evolving market for real-world data and analytics. I will now turn the call over to Mike for a detailed review of the financials. Mike.

Michael Vesey, Chief Financial Officer, Forian: Thanks, Max. Today, I will provide an overview of Forian’s financial results for the quarter ended September 30, 2025. My discussion today will reference comparative results for the quarter ended September 30, 2024, unless noted otherwise. As previously noted, we completed the acquisition of Kyber Data Science on October 31, 2024. As a result, our operating results for 2025 include the operations of Kyber as of that date. The press release issued today presents Forian’s financial results on a GAAP basis. As in prior quarters, we have also reported adjusted EBITDA, which management uses as a measure to track the performance of the business. As noted, the press release and these presentation materials include a detailed reconciliation of adjusted EBITDA to net income or loss. Our consolidated revenues of $7.8 million were up $3.1 million, or 66%, compared to the same quarter last year.

The impact of the Kyber acquisition contributed approximately $2 million, or 43%, to the growth rate, with the remaining increase resulting from our organic growth in our life sciences data business. Operating loss was approximately $0.5 million, compared to a loss of $0.8 million in the same quarter last year. The decrease in operating loss was primarily due to the aforementioned higher revenues and lower stock compensation, partially offset by higher expenses related to the inclusion of Kyber operations and increased data costs. Net other income decreased $0.2 million from the prior year, from $0.5 million to $0.3 million, due to lower interest income and expense resulting from the utilization of our cash and marketable securities balance to retire our convertible notes. We paid the remaining balance of $6.8 million of principal and accrued interest due on the notes upon their maturity on September 1, 2025.

Adjusted EBITDA, which excludes stock-based compensation, depreciation, amortization, costs related to litigation, and certain other non-recurring items, was $0.5 million, compared to $0.2 million in the same quarter last year. The increase in adjusted EBITDA resulted primarily from the higher revenues and incremental expenses related to the inclusion of Kyber and higher data costs noted above. As noted earlier, a reconciliation of our net income or loss to adjusted EBITDA, along with an explanation of the reconciling items, is included in today’s earnings release. Now, turning to our balance sheet, we ended the period with $28.2 million of cash and marketable securities and $29.2 million of working capital. As previously mentioned, our convertible notes matured on September 1, 2025, and were fully repaid. Reviewing our financial outlook, we ended 2024 with revenues of $20.2 million and adjusted EBITDA of $0.5 million.

Our outlook for 2025 is for revenues of $28 million-$30 million, reflecting growth of 39%-49% over the previous year, and adjusted EBITDA of negative $1 million to positive $1 million. We expect to finish the year with results at the high end of our previously issued guidance for both revenue and adjusted EBITDA. Now, I will turn the call over to the operator, who will open the line for questions.

Conference Call Moderator, Forian: Thank you so much. As a reminder, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. As I see no further questions, I will conclude our Q&A session and conference for today. Thank you all for participating. You may now.