8 months ago
February 25, 2021
Stratus Owner AMN Tells Investors Why Remote Interpretation Will Keep Growing Post-Covid
Revenues for Stratus Video continue to climb as the remote interpreting provider celebrates its first anniversary of joining AMN Healthcare Services. “Our language interpretation business grew revenue 7% sequentially and 29% year over year,” AMN said in financial results for Q4 and FY 2020 filed with the SEC on February 18, 2021.
Although sequential growth has slowed to 7% in Q4 against 25% in Q3, it is only due to the “dramatic drop-off” (Pro) in interpretation volumes posted in the second quarter. As reported by Slator in November, Q3 2020 revenues rose to USD 35m against the previous quarter (Q2: USD 28m).
The same SEC filing showed that Technology and Workforce Solutions, the division to which Stratus belongs, “achieved its best-ever organic revenue growth in the fourth quarter, up 32% year over year.” FY 2020 revenues for the segment grew to USD 72m, a substantial 192% growth from the year prior. Parent company AMN’s FY 2020 revenues, meanwhile grew 8% to USD 2.39bn from the previous year.
In an earnings call following the filing, Division President, Maureen Huber, said language interpretation demand was up 30% in 2020. She added that this momentum has continued into 2021 with interpretation volumes expected to rise by at least 35% in the first quarter. Servicing this demand, Huber said, are the company’s 3,300 medical interpreters who cover 208 languages.
During the same call, AMN Healthcare CEO, Susan Salka, referred to the Stratus Video deal (Pro) as “a fantastic example” of an acquisition that adds value and said such a company would top the list of potential M&A targets moving forward.
Salka further pointed out how “the language interpretation industry is pretty fragmented,” and there still exist “opportunities to do other tuck-in acquisitions.”
Asked to elaborate on Stratus Video’s strong performance, Huber and Salka, mentioned five growth drivers, summarized as follows:
- The market is huge – Huber said US medical interpreting is a USD 1.6bn industry, which includes onsite, phone (OPI), and video interpretation.
- The market is underserved – Only half of US hospitals have deployed video interpretation. According to Huber, most hospitals still “rely heavily on their staff interpreters” or OPI and yet “93% of communication is nonverbal.” She added that video interpretation is preferred for reasons related to “patient safety and improved.”
- In-person interpreting declined due to Covid – This opened up the opportunity for video interpreting and, Huber said, the company was able to step in with tech-enabled services: “We actually doubled the number of call centers, where we could enable the hospital system’s own staff to provide services.”
- The US LEP population continues to grow – Huber described it as “pretty significant,” saying that part of this growth will come from hospitals converting from purely OPI to video interpreting or from in-person to remote because of patient safety during the pandemic.
- They have barely scratched the surface for integration – According to AMN CEO Salka, the company has been integrating Stratus into other telehealth platforms for acute-care facilities as well as those that belong to other telehealth providers. “I think we’ve got 25 to 30 platforms that we’ve integrated into, and so there’s a lot of opportunity as telehealth in general grows.”
Salka further noted, “Most telehealth companies or technology providers aren’t going to provide that network of 3,000-plus language interpreters — and so we are a wonderful plug-in to services that are already or going to be launched.”