Earnings call transcript: Marpai Q2 2025 shows improved loss but revenue decline

Marpai Inc. reported its financial results for Q2 2025, revealing a net revenue of $4.7 million, a decrease of 35% compared to the same quarter last year. Despite this, the company showed significant improvement in reducing its operating and net losses. The stock price closed at $1.436, reflecting a 3.62% decline on the day of the earnings release. According to InvestingPro data, the stock has shown remarkable volatility, delivering a 128% return over the past year and nearly 58% over the last six months. With a market capitalization of $24.8 million, Marpai trades above its Fair Value estimate, suggesting current pricing may be stretched.

Key Takeaways

• Marpai’s Q2 2025 net revenue fell by 35% compared to Q2 2024.
• Operating expenses improved by 70% year-over-year.
• The company relaunched its MarpaiRx platform, transferring nearly 2,000 lives in August.
• Marpai aims for profitability by 2026, focusing on technology-driven solutions.

Company Performance

Marpai’s performance in Q2 2025 showed a mixed picture. While the company faced a significant drop in net revenue, it managed to cut operating expenses by 70%, leading to a 71% improvement in operating loss. The net loss stood at $4.4 million, marking a 66% improvement compared to the previous year. This indicates progress in Marpai’s efforts to streamline operations and reduce costs.

Financial Highlights

• Revenue: $4.7 million, down 35% from Q2 2024
• Operating expenses: $4.4 million, a 70% improvement from the previous year
• Operating loss: $3.6 million, a 71% improvement
• Net loss: $4.4 million, a 66% improvement
• Basic and diluted loss per share: $0.28, a 95¢ improvement from Q2 2024

Outlook & Guidance

Marpai has set ambitious goals for the future, with plans to achieve profitability by 2026. The company is focusing on its technology-driven healthcare solutions, aiming to capitalize on the $150 billion TPA market. The strategic initiative to exit unprofitable contracts and the relaunch of MarpaiRx are part of its roadmap to improve financial performance. InvestingPro data shows analysts anticipate modest revenue growth of 1.37% for FY2025, though the company is not expected to achieve profitability this year. Access the full Pro Research Report for detailed analysis of Marpai’s growth prospects and competitive position.

Executive Commentary

CEO Damian Lamandola expressed optimism, stating, "This is more than a company. It’s a movement." He emphasized Marpai’s evolution into a "technology powerhouse" and reiterated the company’s mission to "dramatically reduce health care costs."

Risks and Challenges

• Continued revenue decline could hinder Marpai’s path to profitability.
• Competition in the fragmented TPA market poses challenges to scaling.
• Dependence on technology enhancements requires sustained investment.
• Economic uncertainties could impact employer spending on healthcare services.

Marpai’s Q2 2025 earnings results highlight both challenges and opportunities. While the company continues to face revenue pressures, its strategic initiatives and cost-cutting measures are steps toward a potentially profitable future.

Full transcript - Marpai Inc (MRAI) Q2 2025:

Conference Operator: Good morning, and welcome to the Marpay Second Quarter twenty twenty five Earnings Webcast. All participants will be in listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Steve Johnson, Chief Financial Officer.

Please go ahead.

Steve Johnson, Chief Financial Officer, Marpay: Thank you, and welcome this morning to our Marpay Second Quarter Earnings Release. With me this morning is Damian Lamandola, Director and CEO of Marpay. Before we begin, I’d like to draw your attention to the forward looking statements included in this presentation. Alright. Everybody have a chance to read all that?

Good. We’ll move on. We found it helpful, especially for our new investors, to begin with outlining what exactly is a third party administrator or commonly referred to as a TPA. TPAs are organizations that handle the claims processing and reporting components of a self funded health benefit plan. As employer considers or maintains a self funded health program plan, they typically will engage the services of a TPA.

TPAs offer standard services such as plan design and claim administration, but the real benefits come from the value added solutions that a TPA can provide. Marpay offers a suite of cost containment products bundled under the umbrella of Marpay saves. We also provide in-depth data analytics, giving employers valuable insights into the workforce’s health trends. These insights help identify services that would be most impactful for their members. A key advantage TPAs offer is transparency.

Unlike traditional fully funded insurance solutions, our TPA model gives employers direct access to data and information they wouldn’t otherwise have, empowering them to make better decisions. In looking at the TPA market, the TPA industry has a massive total addressable market of over 150,000,000,000. Healthcare is complex, and the demand for services and technology solutions to navigate the complexity is growing with TPA services forecasted at a compounded annual growth rate of 12.1% through 02/1931. TPAs also enjoy a recurring revenue model whereby our clients pay a monthly administrative fee based on a per employee per month, or what we refer to as a PEPM basis. And finally, the TPA market is highly fragmented, which provides an attractive opportunity for a national independent TPA like Marpay to scale and realize the benefits of operating leverage.

I’ll turn it over to Damian to address the Marpay advantage.

Damian Lamandola, Director and CEO, Marpay: Good morning. Marpay has a national footprint, allowing us to service employers with multistate locations, which many of our regional competitors can’t do. Marpay also offers significant cost saving programs with the relaunch of our pharmacy benefit management company called MarpayRx. This will be game changing. As a leading independent TPA, we put our clients first.

With a robust arsenal of services, Marpay assists with benefit plan design and aggressive negotiates aggressively negotiates on our client’s behalf to manage costs. A quick reminder in case you are new to Marpay, I founded years ago a pharmacy benefit management company called Welldine Rx and sold it to a private equity firm called Carlyle back in 2017. My passion for health care and knowledge of the PBM space drove our strategy to relaunch Marp ARX. Marp ARX delivers savings for health plans and members. We will be slashing specialty drug costs for our clients.

And our real time technology will deliver better outcomes. Steve will now cover our second quarter results.

Steve Johnson, Chief Financial Officer, Marpay: Thank you, Damian. In the second quarter, net revenues were $4,700,000 for the three months ended 06/30/2025, 2,500,000.0 or approximately 35% lower than the second quarter in 2024. Operating expenses were 4,400,000.0 for the three months ended in quarter two. 9,900,000.0 or a 70% improvement over the 2024. But as you look in the details of our 10 Q, you will see that we did have a $7,600,000 goodwill impairment in the 2024.

And you see there even excluding that, we maintained significant reductions in operating expenses. Our operating loss was $3,600,000 in Q2, dollars 8,700,000.0 or a 71% improvement over the second quarter in twenty twenty four. Our net loss was $4,400,000 for Q2, dollars 8,700,000.0 or a 66% improvement over the same period of last year. And again, excluding the 7,600,000.0 goodwill impairment, we’re still showing a $1,100,000 improvement in our net loss year over year. Basic and diluted loss per share was 28 for the three months ended 06/30/2025, an improvement of 95¢ per share from the second quarter in twenty twenty four.

Now we’d like to provide a little bit of an update for the 2025 and early indications for 2026. Our year over year revenue decline reflects the successful execution of our strategic initiative to right size the business by exiting unprofitable legacy contracts. We’ve been sharing that information over the last probably four or five earnings calls and sharing with that, and we continue to move forward with that. Cost of revenues was higher as the company invested in new member engagement tools and system enhancements. We expect this to continue in Q3, but taper off in Q4.

These enhancements will help to further reduce costs and improve member experiences. Sales pipeline remains strong with a few deals already signed for q four. We are moving into the busy season. If you recall, is probably roughly, you know, 75 to 85% of of employers out there renew their benefits on a calendar basis. And so January 1 is our Super Bowl.

It’s a little bit earlier than the NFL from that side. But we’re expect to provide more significant update in our next earnings call as we shared last quarter. Our next earnings call will probably be in early to mid November and we will have a much more solid report to share with our investors. The comprehensive relaunch of MarPy RX is proceeding well, with nearly 2,000 lives transferred to the program thus far in August. With the continued execution of operating cost reductions and anticipated net gain in lives for 2026, we expect that Marpay will be profitable in 2026.

I will now turn it over to Damian to share his final thoughts.

Damian Lamandola, Director and CEO, Marpay: Marpay delivered strong second quarter results. Despite a year over year reduction in revenue, we believe the company is now much better positioned for substantial growth. This transformation was nothing short of extraordinary. We’ve evolved from a simple TPA into a technology powerhouse, leveraging industry leading innovations to elevate the member experience. The journey is far from over, but we’re already excited about what we’re architecting for the next wave of enhancements for the 2025.

Leveraging my deep experience in pharmaceutical services, we now have operational Marpay RX, a PBM platform that is now is not just an addition, but a true differentiator in the TPA space. This

Conference Operator: is

Damian Lamandola, Director and CEO, Marpay: more than a company. It’s a movement. Our story has only just begun, and our mission is clear, to spearhead the market wide revolution that will dramatically reduce health care costs for America’s self funded employers, all while building a profitable enterprise. At this time, I’ll turn it back over to the operator to open the line for questions.

Conference Operator: We will now begin the question and answer session. Again, if you have a question, please press star, then one. Concludes our question and answer session. I would like to turn the conference back over to Steve Johnson for any closing remarks.

Steve Johnson, Chief Financial Officer, Marpay: Thank you very much. And again, appreciate everyone’s participation and continued support. Feel free to visit our investor relations website at ir.marpehealth.com. And we look forward to speaking again and highlighting our third quarter results. Thank you very much.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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