Ensemble RCM LLC

Overview Key strengths Key risks Strong revenue visibility, with large percentage of revenues under multiyear contracts. Significant customer concentration, with 47% of revenue derived from Bon Secours Mercy Health (BSMH) in fiscal 2022. Financial policy is slightly less aggressive than typical financial sponsor-owned health care information technology (HCIT) companies. Limited track record in full outsource contracts, with a large percentage of contracts signed in the last four years. Strong organic growth opportunity lowers the likelihood of a large, debt-funded acquisition. The company is likely to make future debt-funded dividends. Ensemble has shown strong organic expansion on the back of robust patient volumes and new client wins. Its revenue grew approximately 27% in the first nine months of 2023 relative to

...We expect continued organic growth in Ensemble RCM LLC's main end-to-end revenue cycle management (RCM) business as it focuses on scaling and creating efficiencies. Ensemble has shown strong organic expansion on the back of robust patient volumes and new client wins. Its revenue grew approximately 27% in the first nine months of 2023 relative to the corresponding period in 2022, outperforming our previous revenue growth expectations. Meanwhile, the company's EBITDA margin somewhat compressed to the 24% area in 2023 as it onboarded large end-to-end clients from 2022 (Ardent) and 2023 (Valley Health), increased its selling, general, and administrative spend to support strong growth and proprietary software development, and expanded its global workforce while grappling with labor costs. We expect margins to compress slightly in 2024, and expect the company to focus on efficiencies and benefit from economies of scale. As Ensemble continues to grow in scale, we expect each additional contract...

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