NextGen Healthcare Revenue Surges 16.2% as Cloud-Based Healthcare Tech Provider Strengthens Market Position

NextGen Healthcare, Inc. (Nasdaq: NXGN), a cloud-based healthcare technology solutions provider, disclosed fiscal 2024 first quarter operating results for the period ending June 30, 2023, marking a period of accelerated growth and improved profitability. The company’s top-line performance significantly outpaced prior-year figures, with strategic bookings demonstrating sustained customer demand.

Strong Revenue Momentum Across All Segments

The company logged total revenues of $178.2 million during the quarter, up 16.2% from $153.3 million in the corresponding year-ago period. This growth trajectory reflects broad-based strength across the healthcare technology market. Recurring revenues, which represent the most stable component of the business, climbed to $163.4 million from $139.8 million, representing a 16.9% year-over-year expansion. This resilient recurring revenue stream underscores the sticky nature of NextGen’s customer relationships and the essential role its solutions play in healthcare operations.

Non-recurring software and hardware revenues contributed $14.8 million compared to $13.5 million previously, an increase of 9.5%. This diversified revenue composition—with recurring revenues accounting for 91.7% of the total—provides a stable financial foundation.

Breaking down the recurring revenue categories:

• Subscription services reached $52.5 million versus $42.8 million year-ago
• Support and maintenance services totaled $38.5 million, slightly down from $39.1 million
• Managed services increased to $34.8 million from $30.6 million
• Transactional and data services surged to $37.6 million from $27.2 million, demonstrating significant momentum in this high-margin segment

Profitability and Earnings Metrics Show Material Improvement

On a fully diluted basis, the company reported net income per share of $0.09 compared to $0.02 in the prior year period. When adjusted for non-GAAP items, diluted EPS rose to $0.24 from $0.16, reflecting enhanced operational efficiency and the scaling benefits of the existing cost structure.

Adjusted EBITDA for the quarter reached $27.7 million, up from $20.1 million year-ago, representing a 37.8% increase. The corresponding adjusted EBITDA margin expanded to 15.6% from 13.1%, demonstrating the company’s ability to convert incremental revenue into bottom-line profit growth.

The income statement also revealed improving operational leverage. Gross profit expanded to $79.8 million from $73.2 million, while operating income surged to $9.1 million compared to $1.2 million in the prior year, reflecting both revenue growth and controlled cost management.

Bookings and Business Development Activity

New bookings, representing annual contract value excluding renewals, totaled $38.9 million during the quarter. Notably, the company captured four enterprise deals valued above $1.0 million each, indicating successful execution in the large-account segment and continued market share gains among mid-to-large healthcare organizations.

Fiscal Year 2024 Guidance Adjustment

Management raised the midpoint of its fiscal 2024 full-year revenue guidance, now targeting revenues between $714 million and $722 million, compared to the prior guidance range of $712 million to $722 million. While the raise appears modest at the midpoint level, it reflects management’s increased conviction in near-term market conditions and execution capability.

For adjusted EBITDA, the company maintained its prior guidance range of $125 million to $131 million. Non-GAAP earnings per share guidance remained unchanged at $1.04 to $1.11 for the full fiscal year.

Balance Sheet and Capital Position

Cash and equivalents stood at $70.3 million as of June 30, 2023, down from $98.7 million at the prior fiscal quarter end, reflecting working capital deployment and capital allocation priorities. Marketable securities totaled $147.8 million, providing additional financial flexibility.

The company’s total assets reached $868.5 million against total liabilities of $457.9 million, yielding shareholders’ equity of $410.5 million. The convertible senior notes (noncurrent) represented $267.2 million of the liability base, a strategic financing structure that provides capital without immediate dilution.

Management Perspective

David Sides, President and Chief Executive Officer of NextGen Healthcare, commented on the results: “Our solid execution across all business units during the first quarter demonstrates sustained momentum from fiscal 2023. The company is well-positioned to achieve double-digit revenue growth throughout the fiscal year, while simultaneously creating meaningful operating leverage and demonstrating disciplined capital stewardship.”

Operational Efficiency Highlighted by Cash Flow Analysis

Free cash flow for the quarter was negative $16.8 million, reflecting seasonal patterns typical in the company’s business—specifically the concentration of Q1 investments in software development and infrastructure. Operating activities consumed $8.1 million in cash, while capital expenditures on software development and equipment improvements totaled $8.7 million combined.

This pattern is not unusual for technology companies in early fiscal quarters and does not diminish the company’s full-year cash generation prospects, particularly as seasonal customer contract deployments and renewals accelerate in subsequent quarters.

Market Position and Strategic Context

NextGen Healthcare positions itself as a comprehensive cloud-based solution provider for ambulatory healthcare settings, offering integrated EHR, practice management, and data analytics capabilities. The company’s technology supports medical, behavioral health, and dental practices in their transition toward value-based care models.

The 91.7% composition of recurring revenues reflects a successful software-as-a-service (SaaS) business model transition, where predictable subscription and support revenues dominate the top line over discretionary software license sales. This structural shift enhances earnings quality and improves forecast visibility.

Forward-Looking Framework

The company’s ability to raise revenue guidance midpoint despite a conservative initial range suggests management confidence in accelerating customer adoption, cross-selling opportunities, and upsell dynamics within the existing customer base. The steady adjusted EBITDA guidance, paired with improved per-share earnings assumptions, reflects the company’s commitment to balanced growth and profitability expansion simultaneously.

The technology healthcare sector continues to benefit from secular tailwinds including digital health adoption acceleration, interoperability requirements driving platform consolidation, and practices’ ongoing migration to cloud-based infrastructure from legacy on-premise systems.

NextGen Healthcare will conduct an investor conference call at 5:00 p.m. EDT today for stakeholders seeking additional detail on the quarter’s results and forward outlook. Participants may access the live webcast through the company’s investor relations website, with a recording available for 90 days following the call.