Pacific Health Care Organization Reports 12% Revenue Growth and 195% Net Income Increase for Quarter Ending June 30, 2025

Pacific Health Care Organization, Inc. (PHCO) reported significant financial performance improvements in its latest 10-Q filing for the quarter ending June 30, 2025. The company achieved total revenues of $1.73 million for the three months ended June 30, 2025, marking a 12% increase from $1.54 million in the same period last year. For the six months, revenues rose to $3.55 million, up 21% from $2.94 million in the prior year. The net income for the quarter was $636,907, a substantial increase of 195% compared to $215,556 in the previous year, while net income for the six months reached $929,570, up 125% from $412,959.

The financial results reflect a mix of operational changes and strategic developments. Notably, the company received Employee Retention Credit (ERC) refunds totaling $488,655, which contributed significantly to other income and net income. This refund included $419,801 recorded as other income and $68,854 as interest income. The increase in revenues was driven by growth in Medical Case Management services, which saw a 67% increase in the quarter, attributed to an uptick in managed claims and the expansion of employee advocate services.

Operationally, PHCO experienced fluctuations in its service lines. Health Care Organization (HCO) revenues decreased by 20% due to the phase-out of services for a significant customer, while Medical Provider Network (MPN) revenues increased by 18% due to new customer additions and increased activity from existing clients. Medical bill review revenues decreased by 16%, reflecting a reduction in bill review requests. The company also reported a 9% increase in salaries and wages, primarily due to the addition of one employee, and a notable rise in data maintenance fees, which surged by 198% due to timing in service delivery.

Looking ahead, PHCO's management expressed confidence in its ability to sustain operations and growth, supported by cash on hand and anticipated cash flows. The company plans to continue investing in technology and expanding its service offerings, particularly in employee advocate services, which have shown promising growth. However, management acknowledged potential risks, including economic conditions that could impact customer demand and workforce size, as well as the ongoing need to manage customer concentration risks. Overall, the outlook remains cautiously optimistic as PHCO navigates these challenges while aiming for further growth in its service lines.