FinThrive, a healthcare software company supported by private equity firm Clearlake Capital, experienced a significant drop in its second-quarter earnings. Adjusted EBITDA decreased by 17% year-over-year to $40 million, down from $48 million in the same period last year. Revenue also slipped to $100 million from $105 million a year ago. Bookings, representing new contracts, fell to $12 million from $15 million.
To bolster its cash reserves, FinThrive borrowed $150 million from its credit facility. This action follows a previous debt refinancing less than two years ago. The company currently carries about $1 billion in debt maturing in 2028, with its first-lien term loan trading at 55-60 cents on the dollar, indicating significant risk to lenders. These financial struggles highlight potential difficulties even for companies with strong private equity backing.
While the Q2 results show a decline from the previous year, revenue and adjusted EBITDA did improve from the first quarter, suggesting a potential stabilization. However, the company's substantial debt load and the ongoing discussions with creditors for a potential debt overhaul, including a below-par debt exchange and new money, signal continued financial pressure. Previously, in November 2024, FinThrive completed a $1.8 billion liability management transaction that raised $155 million in new money and extended its revolver.
