Pacific Health Care Organization Reports 30% Revenue Growth and 48% Net Income Increase in Q1 2025

Pacific Health Care Organization, Inc. (PHCO) reported a significant increase in financial performance for the first quarter of 2025, with total revenues reaching $1.82 million, a 30% increase from $1.40 million in the same period of 2024. The company's net income also rose by 48% to $292,663, compared to $197,403 in the prior year. This growth was driven by substantial increases in various service lines, particularly Health Care Organization (HCO) revenues, which surged by 72% to $494,129, and Medical Case Management revenues, which increased by 54% to $516,311.

In terms of expenses, PHCO reported a 23% increase, totaling $1.50 million, up from $1.22 million in the previous year. The rise in expenses was primarily attributed to higher salaries and wages, which increased by 8% due to the addition of new employees, and a significant 60% rise in professional fees, reflecting increased legal and accounting services. Notably, data maintenance fees saw a dramatic increase of 1,168%, largely due to the timing of service deliveries for a major customer phasing out its services.

Operationally, PHCO has expanded its employee advocate services to six states outside of California, contributing to a 64% increase in related revenues. The company continues to focus on reducing customer concentration risks, as three major customers accounted for approximately 46% of total sales during the quarter. The company’s cash position improved, with cash and cash equivalents increasing to $2.36 million from $2.07 million at the end of 2024, and net cash provided by operating activities rose to $330,726.

Looking ahead, PHCO's management expressed optimism about sustaining growth through both organic development and potential acquisitions. The company plans to continue investing in technology and infrastructure to enhance service delivery and operational efficiency. However, management acknowledged that economic conditions, including inflation and labor market challenges, could impact future performance. The company remains committed to adapting its strategies to navigate these uncertainties while aiming to expand its service offerings and customer base.