Ontrak Reports $2.0 Million Revenue in Q1 2025, Net Loss Increases to $6.9 Million

Ontrak, Inc. reported a revenue of $2.0 million for the first quarter of 2025, a decrease of 25% compared to $2.7 million in the same period of 2024. The decline in revenue was primarily attributed to a reduction in the average number of enrolled members, following the disenrollment of members from a health plan customer that opted not to continue its services after December 2024. The company's gross profit also fell to $746,000, down from $1.7 million, resulting in a gross profit margin of 37%, a significant drop from 64% in the prior year. Operating expenses increased by 10% to $6.6 million, driven by higher research and development costs and general administrative expenses.

The company reported a net loss of $6.9 million for the quarter, compared to a loss of $4.5 million in the same quarter of the previous year. This increase in net loss was influenced by a rise in interest expenses, which surged to $1.0 million from $183,000, largely due to a higher average outstanding loan balance. The total cash on hand as of March 31, 2025, was $4.1 million, with a negative working capital of approximately $3.1 million.

In terms of operational metrics, Ontrak's callable outreach pool for its WholeHealth+ program increased to 7,319 members, up 45% from 5,057 a year earlier. The company also launched its Ontrak Engage program, which added 22,152 eligible members to its outreach pool. These expansions are part of Ontrak's strategy to enhance its service offerings and improve member engagement.

Ontrak's financial position remains precarious, as it has incurred significant net losses and negative operating cash flows since its inception. The company has approximately $14.4 million in secured debt outstanding under its Keep Well Agreement, which includes covenants that it is currently not in compliance with. However, Acuitas, the lender, has waived these non-compliance issues through June 30, 2025. Management is actively seeking additional capital to fund operations and is exploring various avenues to stabilize its financial condition.

Looking ahead, Ontrak's management has expressed the need for additional capital to continue operations and execute its growth strategy. The company is engaged in discussions with potential customers and existing partners to expand its business relationships. However, there is no assurance that it will successfully raise the necessary funds or that it will be able to meet its financial obligations in the coming months.