Corvel Corp 10-Q for FY2025 Q3

Corvel Corp (CRVL)

10-Q 2025-02-06 For: 2024-12-31

Added on April 04, 2026

About this 10-Q

Corvel Corp filed this 10-Q on February 6, 2025, covering the quarter ended December 31, 2024 (FY2025 Q3).

Headline figures

Quarter ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $227.97M; up 12.7% from $202.3M a year earlier
Net income: $23.77M; up 39.1% from net income of $17.1M a year earlier
Diluted EPS: $0.46; up 39.4% from $0.33 a year earlier

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5128 Apache Plume Road, Suite 400
Fort Worth, TX		76109
(Address of principal executive offices)		(Zip Code)


Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐


		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Balance Sheets – December 31, 2024 (unaudited) and March 31, 2024	3
	Consolidated Income Statements (unaudited) – Three months ended December 31, 2024 and 2023	4
	Consolidated Income Statements (unaudited) – Nine months ended December 31, 2024 and 2023	6
	Consolidated Statements of Stockholders’ Equity (unaudited) – Three and nine months ended December 31, 2024 and 2023	6
	Consolidated Statements of Cash Flows (unaudited) – Nine months ended December 31, 2024 and 2023	7
	Notes to Consolidated Financial Statements (unaudited) – December 31, 2024	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

	Signatures	38


	December 31, 2024			March 31, 2024
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	162,944,000		$	105,563,000
Customer deposits		99,496,000			88,142,000
Accounts receivable, net		106,178,000			97,108,000
Prepaid taxes and expenses		14,543,000			11,418,000
Total current assets		383,161,000			302,231,000
Property and equipment, net		91,256,000			85,892,000
Goodwill		36,814,000			36,814,000
Other intangibles, net		505,000			821,000
Right-of-use asset, net		21,940,000			24,058,000
Deferred tax asset, net		4,639,000			3,545,000
Other assets		462,000			1,318,000
TOTAL ASSETS	$	538,777,000		$	454,679,000
Liabilities and Stockholders' Equity
Current Liabilities
Accounts and taxes payable	$	16,630,000		$	16,631,000
Accrued liabilities		200,108,000			167,868,000
Total current liabilities		216,738,000			184,499,000
Long-term lease liabilities		21,189,000			22,533,000
Total liabilities		237,927,000			207,032,000
Commitments and contingencies
Stockholders' Equity
Common stock, $.0001 par value: 360,000,000 shares authorized at December 31, 2024 and March 31, 2024; 165,763,203 shares issued (51,367,173 shares outstanding, net of Treasury shares) and 165,486,225 shares issued (51,386,688 shares outstanding, net of Treasury shares) at December 31, 2024 and March 31, 2024, respectively		5,000			3,000
Paid-in capital		246,693,000			233,629,000
Treasury stock (114,396,030 shares at December 31, 2024 and 114,099,537 shares at March 31, 2024)		(822,514,000	)		(793,905,000	)
Retained earnings		876,666,000			807,920,000
Total stockholders' equity		300,850,000			247,647,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	538,777,000		$	454,679,000


	Three Months Ended
	December 31, 2024		December 31, 2023
REVENUES	$	227,973,000	$	202,303,000
Cost of revenues		175,115,000		160,143,000
Gross profit		52,858,000		42,160,000
General and administrative expenses		22,058,000		19,798,000
Income before income tax provision		30,800,000		22,362,000
Income tax provision		7,029,000		5,267,000
NET INCOME	$	23,771,000	$	17,095,000
Net income per common and common equivalent share
Basic	$	0.46	$	0.33
Diluted	$	0.46	$	0.33
Weighted average common and common equivalent shares
Basic		51,388,000		51,318,000
Diluted		52,038,000		51,978,000


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Nine Months Ended
	December 31, 2024		December 31, 2023
REVENUES	$	664,075,000	$	588,078,000
Cost of revenues		512,528,000		459,788,000
Gross profit		151,547,000		128,290,000
General and administrative expenses		64,043,000		55,786,000
Income before income tax provision		87,504,000		72,504,000
Income tax provision		18,758,000		15,706,000
NET INCOME	$	68,746,000	$	56,798,000
Net income per common and common equivalent share
Basic	$	1.34	$	1.11
Diluted	$	1.32	$	1.09
Weighted average common and common equivalent shares
Basic		51,384,000		51,372,000
Diluted		51,999,000		52,056,000


	Three Months Ended December 31, 2024
	Common Shares		Stock Amount		Paid-in- Capital			Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – September 30, 2024		165,715,800	$	3,000	$	242,894,000			(114,310,320	)	$	(813,020,000	)	$	852,895,000	$	282,772,000
Stock issued under stock option plan, net of shares repurchased		47,403		—		1,978,000			—			—			—		1,978,000
Stock-based compensation expense		—		—		1,823,000			—			—			—		1,823,000
Purchase of treasury stock		—		—		—			(85,710	)		(9,494,000	)		—		(9,494,000	)
Adjusted shares outstanding		—		2,000		(2,000	)		—			—			—		—
Net income		—		—		—			—			—			23,771,000		23,771,000
Balance – December 31, 2024		165,763,203	$	5,000	$	246,693,000			(114,396,030	)	$	(822,514,000	)	$	876,666,000	$	300,850,000

	Three Months Ended December 31, 2023
	Common Shares		Stock Amount		Paid-in- Capital			Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – September 30, 2023		165,212,526	$	3,000	$	226,595,000			(113,854,077	)	$	(775,400,000	)	$	771,371,000	$	222,569,000
Stock issued under stock option plan, net of shares repurchased		71,478		—		2,114,000			—			—			—		2,114,000
Stock-based compensation expense		—		—		1,076,000			—			—			—		1,076,000
Purchase of treasury stock		—		—		—			(131,973	)		(9,324,000	)		—		(9,324,000	)
Net income		—		—		—			—			—			17,095,000		17,095,000
Balance – December 31, 2023		165,284,004	$	3,000	$	229,785,000			(113,986,050	)	$	(784,724,000	)	$	788,466,000	$	233,530,000


	Nine Months Ended December 31, 2024
	Common Shares		Stock Amount		Paid-in- Capital			Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – March 31, 2024		165,486,225	$	3,000	$	233,629,000			(114,099,537	)	$	(793,905,000	)	$	807,920,000	$	247,647,000
Stock issued under employee stock purchase plan		3,306		—		342,000			—			—			—		342,000
Stock issued under stock option plan, net of shares repurchased		273,672		—		8,348,000			—			—			—		8,348,000
Stock-based compensation expense		—		—		4,376,000			—			—			—		4,376,000
Purchase of treasury stock		—		—		—			(296,493	)		(28,609,000	)		—		(28,609,000	)
Adjusted shares outstanding		—		2,000		(2,000	)		—			—			—		—
Net income		—		—		—			—			—			68,746,000		68,746,000
Balance – December 31, 2024		165,763,203	$	5,000	$	246,693,000			(114,396,030	)	$	(822,514,000	)	$	876,666,000	$	300,850,000


	Nine Months Ended December 31, 2023
	Common Shares		Stock Amount		Paid-in- Capital			Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – March 31, 2023		164,962,098	$	3,000	$	218,700,000			(113,453,598	)	$	(748,195,000	)	$	731,668,000	$	202,176,000
Stock issued under employee stock purchase plan		5,391		—		336,000			—			—			—		336,000
Stock issued under stock option plan, net of shares repurchased		316,515		—		7,059,000			—			—			—		7,059,000
Stock-based compensation expense		—		—		3,690,000			—			—			—		3,690,000
Purchase of treasury stock		—		—		—			(532,452	)		(36,529,000	)		—		(36,529,000	)
Net income		—		—		—			—			—			56,798,000		56,798,000
Balance – December 31, 2023		165,284,004	$	3,000	$	229,785,000			(113,986,050	)	$	(784,724,000	)	$	788,466,000	$	233,530,000


	December 31, 2024			March 31, 2024
Billed receivables	$	69,933,000		$	58,936,000
Allowance for expected credit losses		(7,247,000	)		(4,245,000	)
Unbilled receivables		43,492,000			42,417,000
Accounts receivable, net	$	106,178,000		$	97,108,000


	Nine Months Ended
	December 31, 2024
Beginning balance at April 1, 2024	$	29,961,000
Additions		43,587,000
Revenue recognized from beginning of period		(13,242,000	)
Revenue recognized from additions		(29,573,000	)
Ending balance at December 31, 2024	$	30,733,000


	Three Months Ended
		December 31, 2023
Risk-free interest rate		4.65%
Expected volatility		36%
Expected dividend yield		0.00%
Expected weighted average life of option in years		4.2 years


Range of Exercise Price	Number of Outstanding Options		Weighted Average Remaining Contractual Life		Outstanding Options – Weighted Average Exercise Price		Exercisable Options – Number of Exercisable Options		Exercisable Options – Weighted Average Exercise Price
$11.05 to $29.23		365,172		2.25	$	22.64		365,172	$	22.64
$29.24 to $52.00		411,330		2.64		47.97		212,598		45.52
$52.01 to $66.85		346,896		3.46		62.40		116,964		60.29
$66.86 to $102.27		107,427		5.41		85.38		12,009		74.09
Total		1,230,825		3.00	$	47.79		706,743	$	36.63


	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value as of December 31, 2024
Options outstanding at October 1, 2024		1,285,827		$	47.71
Granted		—			—
Exercised		(48,108	)		42.82
Cancelled – forfeited		(6,894	)		68.49
Cancelled – expired		—			—
Ending outstanding		1,230,825		$	47.79		3.00	$	78,123,656
Ending vested and expected to vest		1,074,012		$	46.12		3.04	$	69,960,809
Ending exercisable at December 31, 2024		706,743		$	36.63		2.53	$	52,746,881


	Nine Months Ended
	December 31, 2024			December 31, 2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,559,000		$	6,378,000
Operating lease liabilities arising from obtaining ROU assets	$	40,637,000		$	52,287,000
Finance lease liabilities arising from obtaining ROU assets	$	358,000		$	358,000
Additions/(reductions) to ROU assets resulting from additions/(reductions) to operating lease liabilities	$	(10,210,000	)	$	(31,000	)



2025	$	2,601,000
2026		8,831,000
2027		7,214,000
2028		6,294,000
2029		4,048,000
Thereafter		3,591,000
Total lease payments		32,579,000
Less interest		(3,038,000	)
Total lease liabilities	$	29,541,000


	December 31, 2024			December 31, 2023
Patient management services		64.0	%		65.1	%
Network solutions services		36.0	%		34.9	%


					Total Number of		Maximum Number
					Shares Purchased		of Shares Remaining
					as Part of Publicly		Available to
	Total Number of		Average Price Paid		Announced		be Purchased
Period	Shares Purchased		Per Share		Program		Under the Program
October 1 to October 31, 2024		33,102	$	104.11		33,102		2,656,578
November 1 to November 30, 2024		25,734	$	116.42		25,734		2,630,844
December 1 to December 31, 2024		26,874	$	117.04		26,874		2,603,970
Total		85,710	$	111.86		85,710		2,603,970


	December 31, 2024		March 31, 2024
Accounts payable	$	14,585,000	$	16,410,000
Income taxes payable and uncertain tax positions		2,045,000		221,000
Total accounts and taxes payable	$	16,630,000	$	16,631,000


	December 31, 2024		March 31, 2024
Payroll, payroll taxes and employee benefits	$	48,138,000	$	26,291,000
Customer deposits		99,496,000		88,142,000
Accrued professional service fees		9,527,000		9,838,000
Self-insurance accruals		2,507,000		3,818,000
Deferred revenue		30,733,000		29,961,000
Operating lease liabilities		8,352,000		8,864,000
Other		1,355,000		954,000
Total accrued liabilities	$	200,108,000	$	167,868,000


	Three Months Ended								Percentage
	December 31, 2024			December 31, 2023			Change		Change
Revenue	$	227,973,000		$	202,303,000		$	25,670,000		12.7	%
Cost of revenues		175,115,000			160,143,000			14,972,000		9.3	%
Gross profit		52,858,000			42,160,000			10,698,000		25.4	%
Gross profit as percentage of revenue		23.2	%		20.8	%
General and administrative expenses		22,058,000			19,798,000			2,260,000		11.4	%
General and administrative as percentage of revenue		9.7	%		9.8	%
Income before income tax provision		30,800,000			22,362,000			8,438,000		37.7	%
Income before income tax provision as percentage of revenue		13.5	%		11.1	%
Income tax provision		7,029,000			5,267,000			1,762,000		33.5	%
Net income	$	23,771,000		$	17,095,000		$	6,676,000		39.1	%
Weighted average common and common equivalent shares
Basic		51,388,000			51,318,000			70,000		0.1	%
Diluted		52,038,000			51,978,000			60,000		0.1	%
Net income per common and common equivalent shares
Basic	$	0.46		$	0.33		$	0.13		39.4	%
Diluted	$	0.46		$	0.33		$	0.13		39.4	%


3.1		Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation of the Company. Incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 26, 2024 (File No. 000-19291).

3.2		Fourth Amended and Restated Certificate of Incorporation of the Company. Incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 filed with the SEC on August 6, 2020 (File No. 000-19291).

31.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2*		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*		The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filing.


	CORVEL CORPORATION

Dated: February 6, 2025	By:	/s/ Michael G. Combs
	Michael G. Combs, Chief Executive Officer and President (Principal Executive Officer)

Dated: February 6, 2025	By:	/s/ Brandon T. O’Brien
	Brandon T. O’Brien,
	Chief Financial Officer (Principal Financial Officer)