Cotiviti Holdings Inc. announced unaudited consolidated financial results for the third quarter and nine months ended September 30, 2016. Total revenue for the quarter increased 14% to $156.2 million, compared to $136.9 million in the third quarter a year ago. Revenue growth was driven by a 16% increase in the Healthcare segment to $138.5 million, with the Global Retail and Other segment contributing $17.8 million, essentially flat compared to the same period a year ago Net income increased 163% to $4.6 million, or $0.05 per diluted share for the third quarter, compared to a loss of $7.3 million in the prior year quarter, or $0.09 per diluted share. Net loss in the third quarter of 2015 was driven by a $27.8 million impairment charge on the company's trademark assets due to the Cotiviti rebranding. Non-GAAP adjusted EBITDA for the quarter was $61.6 million, compared to $51.9 million for the quarter a year ago, or a 19% increase. Non-GAAP adjusted net income for the quarter was $33.7 million, or $0.36 per diluted share, compared to $26.5 million, or $0.34 per diluted share a year ago. Operating income was $24.155 million against $4.128 million a year ago. Income from continuing operations before income taxes was $5.294 million against loss of $11.865 million a year ago. Income from continuing operations was $4.583 million against loss of $7.294 million a year ago.

Total revenue for the nine months ended September 30, 2016, increased 17% to $457.3 million, compared to $389.9 million for the same period a year ago. Revenue growth was driven by a 20% increase in the Healthcare segment to $403.6 million, with the Global Retail and Other segment contributing $53.6 million, up slightly from the same period a year ago. Net income increased 403% to $23.6 million, or $0.27 per diluted share for the nine months ended September 30, 2016, compared to a $4.7 million in the prior year period, or $0.06 per diluted share. The increase in net income for 2016 to date is driven by the 17% increase in revenue partially offset by a $16.4 million loss on extinguishment of debt due to debt repayments in the second quarter and the refinancing in the third quarter, as well as stock-based compensation of $21.5 million. Results for the nine months ended September 2015 were adversely impacted by a $27.8 million impairment charge on the Company's trademark assets due to the Cotiviti rebranding. Non-GAAP adjusted EBITDA for the nine-months ended September 2016 was $175.3 million, compared to $146.9 million for the same period a year ago, or a 19% increase. Non-GAAP adjusted net income for the quarter was $87.1 million, or $1.00 per diluted share, compared to $68.1 million, or $0.88 per diluted share in the comparable period a year ago. Operating income was $92.331 million against $61.608 million a year ago. Income from continuing operations before income taxes was $36.340 million against $8.053 million a year ago. Income from continuing operations was $23.560 million against $4.121 million a year ago. Net cash provided by operating activities was $108.345 million against $30.408 million a year ago. Expenditures for property and equipment was $22.578 million against $11.022 million a year ago.

Cotiviti is increasing full year 2016 guidance. Total revenue in a range of $615 million - $620 million, up from $610 million to $615 million; and adjusted EBITDA in a range of $235 million - $237 million, up from $233 million to $235 million. Net income was $38 million to $41 million and adjustments to net income was $197 million to $196 million. The company expects to exceed target to achieve $100 million of free cash flow for the full year 2016. The company still believe that a more normalized tax rate of approximately 40% is reasonable to assume for modeling purposes.