What Led to Accolade Inc (NASDAQ: ACCD) Stock Crash?

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Accolade Inc (NASDAQ: ACCD) stock lost over 8.6% on 15th October, 2020 (as of 10:45 am GMT-4; Source: Google finance) post second quarter of 2021 update. The firm’s accounts receivable balance at the end of fiscal Q2, rose by over $7.7 million over the balance of the end of fiscal Q1 as COVID hit both airline customers.

The firm generated $36.8 million in revenue in the second fiscal quarter which is a rise of 24% year-over-year growth, driven by strength in new customer ads and therefore members, especially in the enterprise and midmarket segment.

Adjusted gross margin was flat at 43.3% against 43.8% in the prior year period, due to investments made in new customer launches including the defense health agency contract, which launched in May. Adjusted EBITDA loss in the second quarter of fiscal 2021 was $8.7 million, against favorably to $9.6 million in the prior year second fiscal quarter and was nearly $4 million better than the top of guidance from August. Cash and cash equivalents reached $222.1 million during the quarter.

The firm made a partnership with Pixel by LabCorp to bring at-home test collection to Accolade members and their families. This move would enable them to provide at-home COVID test collection kits to support employers and their teams through the next phase in this pandemic.

For the fiscal third quarter, the firm forecasts revenue in the range of $36 million to $37 million, which is 23% growth over the prior year at the midpoint and adjusted EBITDA loss in the range of $12 million to $14 million. For the full year they forecast revenue in the range of $159 million to $162 million, which is a $1 million increase for the range. On a long term perspective, the firm expect faster growth rates in current fiscal year driven by customer acquisition and retention as well as opportunities to grow the business across multiple vectors.

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