Rolling Meadowss-based software company Q4 Systems Corp. said acquisitions and the launch of HealthCare Exchange platform drove third quarter 2013 revenues up 40 percent over same period last year.
Revenue for the quarter totaled $9,14 million, compared to $6,53 million for the same period last year. The increase in revenues of $2,61 million was primarily due to the acquisition of social, mobile, analytics and cloud-related assets in the first quarter of 2013 and the expansion of the core businesses to include its newly-launched HealthCare Exchange.
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The launch of its Healthcare Exchange platform and the enrollment of its first 50,000 members marked a key milestone for the company in the third quarter. The early adoption of the Healthcare exchange platform by insurance carriers and third party health care providers such as WageWorks is a major achievement for Q4 Systems.
"We are pleased with our third quarter and first nine months of 2013 performance," said Q4 Systems Chairman Dhru Desai.
"The Healthcare Exchange Platform is the result of many years of research and development. We are proud of the fact that our QHIX platform is getting strong validation across all segments of the industry, and leading companies in Benefits space are choosing to build strategic relationships with Q4 Systems," Desai added. "We continue to build our core business units with sufficient capital to service our existing debt. We believe that the HealthCare Exchange Platform, a high-margin business, will be a substantial driver of revenue and earnings going forward."
Revenue for the nine months ending September 2013 was $28,147,799 compared to $19,917,130 for the same period in 2012, an increase of over 41 percent, the company said.
Cost of revenue totaled $6,526,156 compared to $5,051,425 for the same period during 2012. The increase in cost of revenue of $1,474,731 or 29% over the previous third quarter was due primarily to the inclusion of cost of revenue from the Company's acquisition of SMAC related assets in the first quarter of 2013. Cost of revenue is comprised primarily of the direct costs of employee and contract labor and related expenses. Cost of revenues for the nine months ending September 30, 2013 was $20,751,501 compared to $15,737,113 for the same period in 2012.
The gross margin percentage increased from 22.7% during the third quarter of 2012 to 28.6% during this quarter primarily due to addition of nonlinear subscription revenues. The gross margin for the nine months ending September 30, 2013 increased to 26.3% from 20.9% for the same period in 2012.