Inovalon Holdings, Inc (INOV) has reported 54 percent jump in profit for the quarter ended Mar. 31, 2017. The company has earned $3.64 million, or $0.02 a share in the quarter, compared with $2.36 million, or $0.02 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $9.68 million, or $0.07 a share compared with $7.48 million or $0.05 a share, a year ago.

Revenue during the quarter grew 5.50 percent to $108.31 million from $102.66 million in the previous year period. Gross margin for the quarter expanded 549 basis points over the previous year period to 64.65 percent. Total expenses were 94.17 percent of quarterly revenues, down from 96.79 percent for the same period last year. This has led to an improvement of 262 basis points in operating margin to 5.83 percent.

Operating income for the quarter was $6.32 million, compared with $3.30 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $24.95 million compared with $18.54 million in the prior year period. At the same time, adjusted EBITDA margin improved 498 basis points in the quarter to 23.04 percent from 18.06 percent in the last year period.

"During the first quarter of 2017, we delivered financial results ahead of plan and continued to see a number of positive forces building in our business," said Keith Dunleavy, M.D., Inovalon’s chief executive officer and chairman of the Board. "We continue to achieve meaningful expansion of our platform capabilities, analytical sophistication, compute scale, connectivity, and proprietary datasets. This combination is increasingly strengthening and differentiating the Company. Together with our investments in sales and marketing, this is supporting an ongoing expansion of our client base and new contract wins across a widening range of market adjacencies. Altogether, this is providing us an increasing level of confidence in our 2017 outlook."

For financial year 2017, Inovalon Holdings forecasts revenue to be in the range of $440.50 million to $455 million.  It projects net income to be in the range of $19.50 million to $24 million. The company expects adjusted net income to be in the range of $42.20 million to $46.60 million,  the company expects diluted earnings per share to be in the range of $0.13 to $0.16. The company expects diluted earnings per share to be in the range of $0.29 to $0.32 on adjusted basis.

Cash flow from investing activities was $51.04 million for the quarter as against cash outgo of $2.24 million in the last year period.

The company has spent $33.17 million cash to carry out financing activities during the quarter as against cash inflow of $0.79 million in the last year period.

Cash and cash equivalents stood at $147.89 million as on Mar. 31, 2017, up 16.55 percent or $21 million from $126.88 million on Mar. 31, 2016.

Working capital drops significantly
Inovalon Holdings has witnessed a decline in the working capital over the last year. It stood at $566.67 million as at Mar. 31, 2017, down 27.46 percent or $214.55 million from $781.22 million on Mar. 31, 2016. Current ratio was at 7.03 as on Mar. 31, 2017, down from 12.34 on Mar. 31, 2016.

Days sales outstanding went up to 89 days for the quarter compared with 84 days for the same period last year.

At the same time, days payable outstanding went up to 46 days for the quarter from 42 for the same period last year.