false000148164600014816462024-10-082024-10-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM 8-K
________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 8, 2024
________________________________________
Accolade, Inc.
(Exact name of Registrant as Specified in Its Charter)
________________________________________
Delaware001-3934801-0969591
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
1201 Third Avenue, Suite 1700
Seattle, WA 98101
(Address of Principal Executive Offices and Zip Code)
(206) 926-8100
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareACCDThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02.    Results of Operations and Financial Condition.
On October 8, 2024, Accolade, Inc. (the “Company”) issued a press release reporting its financial results for the fiscal second quarter ended August 31, 2024. A copy of such press release is furnished hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference under the Securities Act of 1933, as amended, or into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, except as expressly set forth by reference in such a filing.
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number
Exhibit Description
99.1
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Accolade, Inc.
Dated: October 8, 2024
By: /s/ Stephen Barnes
Stephen Barnes
Chief Financial Officer


Exhibit 99.1
accolade_logotypexcolor.jpg
Accolade Announces Results for Fiscal Second Quarter 2025
SEATTLE, October 8, 2024 -- Accolade, Inc. (NASDAQ: ACCD) today announced financial results for the fiscal second quarter ended August 31, 2024.
“As we enter the second half of fiscal year 2025, we are well positioned to deliver our first full year of Adjusted EBITDA profitability and positive cash flow. Accolade is proving the scalability and profitability of a business model and strategy that is fundamentally designed to improve the lives of millions of people and their families. Our focus remains on solving the Physician Gap through a physician-led advocacy approach that engages the entire healthcare ecosystem and enables a better healthcare experience for our members,” said Rajeev Singh, Accolade Chairman of the Board of Directors and Chief Executive Officer.
Financial Highlights for Fiscal Second Quarter ended August 31, 2024
Three months ended August 31,
% Change(2)
20242023
(in millions, except percentages)
GAAP Financial Data:
Revenue$106.4 $96.9 10 %
Net loss$(23.9)$(32.8)27 %
Non-GAAP Financial Data(1):
Adjusted EBITDA$(2.8)$(8.8)68 %
Adjusted Gross Profit$50.3 $42.8 17 %
Adjusted Gross Margin47.3%44.2%
(1)A reconciliation of GAAP to non-GAAP results has been provided in this press release in the accompanying Financial Tables. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
(2)Percentages are calculated from accompanying Financial Tables and may differ from percentage change of numbers in Financial Highlights table due to rounding.
Steve Barnes, Accolade Chief Financial Officer, commented, “Accolade continues to execute against our primary objective of delivering profitable growth and positive Adjusted EBITDA this year. Our first half results demonstrate our proven ability to grow top line revenue and manage our cost structure to achieve our profit goals. In the past year, our net cash position, compared to our convertible debt, has improved by more than $20 million, providing the operating leverage and flexibility to execute our strategy.”


Financial Outlook
Accolade provides forward-looking guidance on revenue and Adjusted EBITDA, a non-GAAP financial measure.
For the fiscal third quarter ending November 30, 2024, we expect:
•Revenue between $104 million and $107 million
•Adjusted EBITDA loss between $3 million and $5 million
For the fiscal year ending February 28, 2025, we expect:
•Revenue between $460 million and $475 million
•Adjusted EBITDA between $15 million and $20 million
Accolade has not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and has not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within the company’s control or cannot be reasonably predicted.
Quarterly Conference Call Details
The company will host a conference call today, October 8, 2024 at 8:00 a.m. E.T. to discuss its financial results.
To Listen via Telephone: Pre-registration is required by the conference call operator. Please pre-register by clicking here (https://register.vevent.com/register/BI0b6b999c6e7b47fdb26d7e8a774df09f). Upon registering, you will be emailed a dial-in number, direct passcode and unique PIN.
To Listen via Internet: The conference call can be accessed via a live audio webcast that will be available online at http://ir.accolade.com.
Replay: A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at http://ir.accolade.com.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “maintain,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms.
Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the risks described under the heading “Risk Factors” in Accolade’s most recently filed Annual Report on Form 10-K and subsequent filings, which should be read in conjunction with any forward-looking statements. All forward-looking statements in this press release are based on information available to Accolade as of the date hereof, and it does not assume


any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
About Accolade, Inc.
Accolade (Nasdaq: ACCD) is a Personalized Healthcare company that provides millions of people and their families with exceptional healthcare experiences so they can live their healthiest lives. Accolade’s employer, health plan, and consumer solutions combine virtual primary care and mental health, expert medical opinion, and best-in-class care navigation. These offerings are built on a platform that is engineered to care through predictive engagement of population health needs, proactive care that improves outcomes and cost savings, and by addressing barriers to access and continuity of care. Accolade consistently receives consumer satisfaction ratings of over 90%. For more information, visit accolade.com. Follow us on LinkedIn, Twitter, Instagram and Facebook.
Investor Contact:
Todd Friedman, Investor Relations, IR@accolade.com
Media Contact:
Public Relations, Media@accolade.com
Source: Accolade


Financial Tables
Accolade, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(In thousands, except share and per share data)
August 31,
2024		February 29,
2024
Assets
Current assets:
Cash and cash equivalents$173,315 $185,718 
Marketable securities61,035 51,315 
Accounts receivable, net21,224 21,800 
Unbilled revenue3,994 5,902 
Current portion of deferred contract acquisition costs4,299 4,369 
Prepaid and other current assets10,869 15,808 
Total current assets274,736 284,912 
Property and equipment, net18,927 19,140 
Operating lease right-of-use assets25,647 28,340 
Goodwill278,191 278,191 
Intangible assets, net147,642 165,407 
Deferred contract acquisition costs8,733 9,608 
Other assets2,196 2,553 
Total assets$756,072 $788,151 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$9,027 $13,749 
Accrued expenses and other current liabilities11,434 10,736 
Accrued compensation26,924 23,392 
Due to customers5,857 18,552 
Current portion of deferred revenue40,710 34,770 
Current portion of operating lease liabilities7,068 6,651 
Total current liabilities101,020 107,850 
Loans payable, net of unamortized issuance costs209,098 208,482 
Operating lease liabilities22,642 26,077 
Other noncurrent liabilities153 156 
Deferred revenue85 121 
Total liabilities332,998 342,686 
Commitments and Contingencies
Stockholders’ equity
Common stock par value $0.0001; 500,000,000 shares authorized; 80,373,402 and 78,070,781 shares issued and outstanding at August 31, 2024 and February 29, 2024, respectively
8 8 
Additional paid-in capital1,528,665 1,499,603 
Accumulated other comprehensive income (loss)26 (47)
Accumulated deficit(1,105,625)(1,054,099)
Total stockholders’ equity423,074 445,465 
Total liabilities and stockholders’ equity$756,072 $788,151 


Accolade, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)
Three months ended August 31,Six months ended August 31,
2024202320242023
Revenue$106,360 $96,864 $216,826 $190,090 
Cost of revenue, excluding depreciation and amortization56,922 55,317 115,533 109,520 
Operating expenses:
Product and technology22,477 25,602 48,786 51,501 
Sales and marketing24,932 24,076 53,126 49,109 
General and administrative16,536 16,259 32,544 32,339 
Depreciation and amortization10,637 10,818 21,029 22,458 
Total operating expenses74,582 76,755 155,485 155,407 
Loss from operations(25,144)(35,208)(54,192)(74,837)
Interest income, net1,687 1,714 3,384 2,635 
Other income (expense)(103)753 (9)1,143 
Loss before income taxes(23,560)(32,741)(50,817)(71,059)
Income tax expense(374)(84)(709)(175)
Net loss$(23,934)$(32,825)$(51,526)$(71,234)
Net loss per share, basic and diluted$(0.30)$(0.43)$(0.65)$(0.96)
Weighted-average common shares outstanding, basic and diluted80,072,04575,487,71779,102,86874,334,111
Other comprehensive income:
Unrealized income on marketable securities, net$60$—$73$—
Comprehensive loss$(23,874)$(32,825)$(51,453)$(71,234)
The following table summarizes the amount of stock-based compensation included in the condensed consolidated statements of operations:
Three months ended August 31,Six months ended August 31,
2024202320242023
Cost of revenue, excluding depreciation and amortization$866 $1,202 $1,764 $2,113 
Product and technology4,000 7,643 11,572 14,609 
Sales and marketing3,282 3,876 6,522 7,702 
General and administrative3,527 3,005 7,127 5,580 
Total stock-based compensation$11,675 $15,726 $26,985 $30,004 


Accolade, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Six months ended August 31,
20242023
Cash flows from operating activities:
Net loss$(51,526)$(71,234)
Adjustments to reconcile net loss to net cash used in
Operating activities:
Depreciation and amortization expense21,029 22,458 
Amortization of deferred contract acquisition costs2,682 2,368 
Noncash interest expense616 839 
Accretion of discounts/premiums on marketable securities, net(1,148)— 
Stock-based compensation expense26,985 30,004 
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue2,483 1,381 
Accounts payable and accrued expenses(4,075)(1,565)
Deferred contract acquisition costs(1,737)(2,082)
Deferred revenue and due to customers(6,791)6,707 
Accrued compensation3,532 (14,020)
Other liabilities(328)(1,000)
Other assets5,302 (1,181)
Net cash used in operating activities(2,976)(27,325)
Cash flows from investing activities:
Purchases of marketable securities(36,000)— 
Maturities of marketable securities27,500 — 
Capitalized software development costs(1,933)(4,698)
Purchases of property and equipment(1,071)(1,965)
Net cash used in investing activities(11,504)(6,663)
Cash flows from financing activities:
Proceeds from stock option exercises133 3,100 
Proceeds from employee stock purchase plan1,944 1,992 
Net cash provided by financing activities2,077 5,092 
Net decrease in cash and cash equivalents(12,403)(28,896)
Cash and cash equivalents, beginning of period185,718 321,083 
Cash and cash equivalents, end of period$173,315 $292,187 
Supplemental cash flow information:
Interest paid$645 $820 
Fixed assets and capitalized software included in accounts payable$73 $99 
Other receivable related to stock option exercises$— $4 
Income taxes paid$1,454 $303 


Non-GAAP Financial Measures
In addition to our financial results determined in accordance with GAAP, we use the following non-GAAP financial measures to help us evaluate trends, establish budgets, measure the effectiveness and efficiency of our operations, and determine employee incentives. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. In evaluating these non-GAAP financial measures, you should be aware that in the future we expect to incur expenses similar to the adjustments in this presentation. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or nonrecurring items.
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization, and excluding stock-based compensation and severance costs. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors, as they eliminate the impact of certain noncash expenses and allow a direct comparison of these measures between periods without the impact of noncash expenses and certain other nonrecurring operating expenses.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) adjusted to exclude interest expense (income), net, income tax expense (benefit), depreciation and amortization, stock-based compensation, acquisition and integration-related costs, goodwill impairment, change in fair value of contingent consideration, severance costs, and other expense (income). Severance costs include severance payments related to the realignment of our resources. Other expense (income) includes debt extinguishment gain or loss and foreign exchange gain or loss. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance. We believe Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry, as this measure generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
Adjusted Gross Profit, Adjusted Gross Margin and Adjusted EBITDA have certain limitations, including that they exclude the impact of certain non-cash charges, such as depreciation and amortization, whereas underlying assets may need to be replaced and result in cash capital expenditures, and stock-based compensation expense, which is a recurring charge.


The following table presents, for the periods indicated, a reconciliation of our revenue to Adjusted Gross Profit:
Three months ended August 31,Six months ended August 31,
2024202320242023
(in thousands, except percentages)
(in thousands, except percentages)
Revenue$106,360 $96,864 $216,826 $190,090 
Cost of revenue, excluding depreciation and amortization(56,922)(55,317)(115,533)(109,520)
Amortization of acquired intangible assets, cost of revenue(7,014)(7,000)(14,027)(14,015)
Depreciation of property and equipment, cost of revenue(1,178)(1,160)(2,252)(2,106)
GAAP gross profit$41,246$33,387$85,014$64,449
GAAP gross margin38.8%34.5%39.2%33.9%
GAAP gross profit$41,246 $33,387 $85,014 $64,449 
Amortization of acquired intangible assets, cost of revenue7,014 7,000 14,027 14,015 
Depreciation of property and equipment, cost of revenue1,178 1,160 2,252 2,106 
Stock‑based compensation, cost of revenue866 1,202 1,764 2,113 
Severance costs, cost of revenue— 92 — 726 
Adjusted Gross Profit$50,304$42,841$103,057$83,409
Adjusted Gross Margin47.3%44.2%47.5%43.9%
The following table presents, for the periods indicated, a reconciliation of our Adjusted EBITDA to our net loss:
Three months ended August 31,Six months ended August 31,
2024202320242023
(in thousands)(in thousands)
Net loss$(23,934)$(32,825)$(51,526)$(71,234)
Adjusted for:
Interest income, net(1,687)(1,714)(3,384)(2,635)
Income tax expense37484709175
Depreciation and amortization10,63710,81821,02922,458
Stock‑based compensation11,67515,72626,98530,004
Acquisition and integration‑related costs(1)
— (48)— (21)
Severance costs(2)
— (52)— 1,050 
Other expense (income)103 (753)9 (1,143)
Adjusted EBITDA$(2,832)$(8,764)$(6,178)$(21,346)
(1)For the three and six months ended August 31, 2023, acquisition and integration-related costs represent expenses associated with litigation inherited through the PlushCare acquisition.
(2)Severance costs represent expenses associated with workforce realignment actions taken by management.

v3.24.3
Cover
Oct. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 08, 2024
Entity Registrant Name Accolade, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39348
Entity Tax Identification Number 01-0969591
Entity Address, Address Line One 1201 Third Avenue
Entity Address, Address Line Two Suite 1700
Entity Address, City or Town Seattle
Entity Address, State or Province WA
Entity Address, Postal Zip Code 98101
City Area Code 206
Local Phone Number 926-8100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.0001 par value per share
Trading Symbol ACCD
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001481646
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