UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

(Amendment No. 1)

(Mark One)

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

    For the quarterly period ended March 31, 2023

OR

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

    For the transition period from to

COMMISSION FILE NUMBER: 001-41428

R1 RCM INC.

(Exact name of registrant as specified in its charter)

Delaware	87-4340782
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
433 W. Ascension Way	84123
Suite 200
Murray
Utah
(Address of principal executive offices)	(Zip code)

(312) 324-7820

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	RCM	NASDAQ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☐     No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☐    No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý
Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐     No ☑

As of April 28, 2023, the registrant had 418,202,601 shares of common stock, par value $0.01 per share, outstanding.

Explanatory Note

R1 RCM Inc. (“we,” “us,” “our,” and the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (the “Amendment”) to amend and restate certain items in its Quarterly Report on Form 10-Q for the three months ended March 31, 2023, originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 4, 2023 (the “Original 10-Q Report”).

In this Amendment, the Company is restating its previously issued unaudited consolidated financial statements as of March 31, 2023 and for the three month periods ended March 31, 2023 and 2022 to correct errors in previously reported goodwill and accumulated deficit within the unaudited Consolidated Balance Sheets to reflect the proper accounting treatment for acquiree compensation costs incurred in connection with historical acquisitions, and to correct certain items that were previously identified and concluded as immaterial, individually and in the aggregate, to the financial statements for previously reported periods, as further described below.

See Note 15, Restatement of Previously Issued Consolidated Financial Statements, for additional information on the unaudited consolidated financial statements as of March 31, 2023 and for the three month periods ended March 31, 2023 and 2022.

Restatement Background

As described in the Company's Current Report on Form 8-K filed with the SEC on November 13, 2023, immediately prior to the scheduled filing of the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023, the Company identified errors related to the accounting for certain acquiree compensation costs incurred in connection with acquisitions in 2022, 2021, and 2020 that the Company was required to recognize as a Company expense immediately upon the closing of the transactions. These costs should have been recorded as other expenses within the Consolidated Statements of Operations and Comprehensive Income in the applicable period and were instead recorded within the purchase price allocation and ultimately recorded as goodwill in the Consolidated Balance Sheets in previously issued financial statements.

As a result, (i) the Company’s audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021, included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022, originally filed with the SEC on February 16, 2023 (the “Original Report”); (ii) the Company’s unaudited consolidated financial statements as of and for each of the quarters within 2022 and 2021, included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC; and (iii) the unaudited consolidated financial statements for the quarters ended June 30, 2023 and March 31, 2023 included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC (collectively, the “Non-Reliance Periods”) are being restated.

In addition to the errors described above, the Company is correcting certain items that were previously identified and concluded as immaterial, individually and in aggregate, to its unaudited consolidated financial statements as of March 31, 2023 and for each of the three month periods ended March 31, 2023 and 2022. These adjustments primarily consisted of an adjustment to income tax expense in the quarter ended March 31, 2023 to recognize a benefit that should have been recorded in the current quarter and immaterial adjustments to the timing and amounts of capitalized assets, prepaid expenses, and accrued expenses for the relevant periods.

An amendment to the Original Report was filed with the SEC on Form 10-K/A on December 4, 2023.

Internal Control Considerations

In connection with the restatements, as a result of the accounting errors, the Company’s management has identified a material weakness in its internal control over financial reporting relating to the design and operating effectiveness of controls over business combinations impacting the accounting for acquiree compensation arrangements during the Non-Reliance Periods and has determined that its disclosure controls and procedures also were not effective as of December 31, 2022 and 2021 and all interim and subsequent periods.

See Item 4, Controls and Procedures, for additional information related to this material weakness in internal control over financial reporting and the related remedial measures.

Items Amended in this Filing

This Amendment amends and restates the following items of the Original 10-Q Report:

•Part I — Item 1. Financial Statements

•Part I — Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

•Part I — Item 4. Controls and Procedures

•Part II — Item 6. Exhibits

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment includes new certifications specified in Rule 13a-14 under the Exchange Act, dated as of the date of this Amendment, from the Company’s Chief Executive Officer and Chief Financial Officer.

Pursuant to Rule 12b-15 under the Exchange Act, this Amendment contains only the items and exhibits to the Original 10-Q Report that are being amended and restated, and unaffected items and exhibits are not included herein. Accordingly, this Amendment should be read in conjunction with the Original 10-Q Report and with our filings with the SEC made after the Original 10-Q Report, including any amendment to those filings. This Amendment continues to describe the conditions as of the date of the Original 10-Q Report and, except as contained herein, we have not updated or modified the disclosures contained in the Original 10-Q Report to reflect any events that have occurred after the Original 10-Q Report. Accordingly, forward-looking statements included in this Amendment may represent management’s views as of the Original 10-Q Report and should not be assumed to be accurate as of any date thereafter.

Table of Contents

Part I.	Financial Information
Item 1.	Financial Statements	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations and Comprehensive Income	7
	Consolidated Statements of Stockholders' Equity	8
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 4.	Controls and Procedures	42
Part II.	Other Information
Item 6.	Exhibits	45
SIGNATURES		46

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

5

R1 RCM Inc.

Consolidated Balance Sheets

(In millions, except share and per share data)

	(Unaudited)
	March 31,		December 31,
	2023		2022
	(As Restated)		(As Restated)
Assets
Current assets:
Cash and cash equivalents	$	104.2	$	110.1
Accounts receivable, net of $16.0 million and $15.1 million allowance as of March 31, 2023 and December 31, 2022, respectively	229.4		235.2
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party as of March 31, 2023 and December 31, 2022, respectively	24.9		25.0
Current portion of contract assets, net	81.8		83.9
Prepaid expenses and other current assets	105.3		110.3
Total current assets	545.6		564.5
Property, equipment and software, net	173.8		164.8
Operating lease right-of-use assets	81.0		80.5
Non-current portion of contract assets, net	37.3		32.0
Non-current portion of deferred contract costs	28.2		26.7
Intangible assets, net	1,464.4		1,514.5
Goodwill	2,630.5		2,640.3
Deferred tax assets	10.5		10.4
Other assets	83.4		88.1
Total assets	$	5,054.7	$	5,121.8
Liabilities
Current liabilities:
Accounts payable	$	24.6	$	33.4
Current portion of customer liabilities	45.6		57.5
Current portion of customer liabilities - related party	9.4		7.4
Accrued compensation and benefits	84.7		109.0
Current portion of operating lease liabilities	18.8		18.0
Current portion of long-term debt	58.3		53.9
Accrued expenses and other current liabilities	76.7		70.5
Total current liabilities	318.1		349.7
Non-current portion of customer liabilities	5.2		5.0
Non-current portion of customer liabilities - related party	13.2		13.7
Non-current portion of operating lease liabilities	92.7		94.4
Long-term debt	1,707.0		1,732.6
Deferred tax liabilities	190.9		200.8
Other non-current liabilities	24.9		23.1
Total liabilities	2,352.0		2,419.3
Stockholders’ equity:
Common stock, $0.01 par value, 750,000,000 shares authorized, 442,439,169 shares issued and 418,176,363 shares outstanding at March 31, 2023; 750,000,000 shares authorized, 439,950,125 shares issued and 416,597,885 shares outstanding at December 31, 2022	4.4		4.4
Additional paid-in capital	3,136.3		3,123.3
Accumulated deficit	(138.4)		(140.0)
Accumulated other comprehensive loss	(4.6)		(3.4)
Treasury stock, at cost, 24,262,806 shares as of March 31, 2023; 23,352,240 shares as of December 31, 2022	(295.0)		(281.8)
Total stockholders’ equity	2,702.7		2,702.5
Total liabilities and stockholders’ equity	$	5,054.7	$	5,121.8

See accompanying notes to consolidated financial statements.

6

R1 RCM Inc.

Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In millions, except share and per share data)

	Three Months Ended March 31,
	2023		2022
	(As Restated)		(As Restated)
Net services revenue ($216.8 million and $216.7 million for the three months ended March 31, 2023 and 2022, from related party, respectively)	$	545.6	$	385.7
Operating expenses:
Cost of services	434.7		294.5
Selling, general and administrative	47.0		29.6
Other expenses	30.2		17.9
Total operating expenses	511.9		342.0
Income from operations	33.7		43.7
Net interest expense	30.7		4.7
Income before income tax provision	3.0		39.0
Income tax provision	1.4		9.3
Net income	$	1.6	$	29.7
Net income per common share:
Basic	$	—	$	0.11
Diluted	$	—	$	0.09
Weighted average shares used in calculating net income per common share:
Basic	417,346,840		278,747,261
Diluted	452,925,789		321,043,371
Consolidated statements of comprehensive income
Net income	$	1.6	$	29.7
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	(1.7)		0.1
Foreign currency translation adjustments	0.5		(1.4)
Total other comprehensive loss, net of tax	$	(1.2)	$	(1.3)
Comprehensive income	$	0.4	$	28.4

See accompanying notes to consolidated financial statements.

7

R1 RCM Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In millions, except share and per share data)

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2022 (As Restated)	439,950,125	$	4.4	(23,352,240)	$	(281.8)	$	3,123.3	$	(140.0)	$	(3.4)	$	2,702.5
Share-based compensation expense	—	—		—	—		10.7		—		—		10.7
CoyCo 2 share-based compensation expense	—	—		—	—		1.8		—		—		1.8
Issuance of common stock related to share-based compensation plans	2,308,591	—		—	—		—		—		—		—
Exercise of vested stock options	180,453	—		—	—		0.5		—		—		0.5
Acquisition of treasury stock related to share-based compensation plans	—	—		(910,566)	(13.2)		—		—		—		(13.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.5 million	—	—		—	—		—		—		(1.7)		(1.7)
Foreign currency translation adjustments	—	—		—	—		—		—		0.5		0.5
Net income	—	—		—	—		—		1.6		—		1.6
Balance at March 31, 2023 (As Restated)	442,439,169	$	4.4	(24,262,806)	$	(295.0)	$	3,136.3	$	(138.4)	$	(4.6)	$	2,702.7

See accompanying notes to consolidated financial statements.

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2021 (As Restated)	298,320,928	$	3.0	(20,094,686)	$	(215.2)	$	630.9	$	(76.7)	$	(5.3)	$	336.7
Share-based compensation expense	—	—		—	—		10.2		—		—		10.2
Issuance of common stock related to share-based compensation plans	1,757,955	—		—	—		—		—		—		—
Exercise of vested stock options	77,438	—		—	—		0.4		—		—		0.4
Acquisition of treasury stock related to share-based compensation plans	—	—		(727,768)	(18.7)		—		—		—		(18.7)
Repurchase of common stock	—	—		(8,000)	(0.2)		—		—		—		(0.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.0 million	—	—		—	—		—		—		0.1		0.1
Foreign currency translation adjustments	—	—		—	—		—		—		(1.4)		(1.4)
Net income	—	—		—	—		—		29.7		—		29.7
Balance at March 31, 2022 (As Restated)	300,156,321	$	3.0	(20,830,454)	$	(234.1)	$	641.5	$	(47.0)	$	(6.6)	$	356.8

See accompanying notes to consolidated financial statements.

8

R1 RCM Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Three Months Ended March 31,
	2023		2022
	(As Restated)		(As Restated)
Operating activities
Net income	$	1.6	$	29.7
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	66.0		18.9
Amortization of debt issuance costs	1.4		0.3
Share-based compensation	10.5		10.1
CoyCo 2 share-based compensation	1.8		—
Loss on disposal and right-of-use asset write-downs	—		2.0
Provision for credit losses	1.5		—
Deferred income taxes	0.5		7.5
Non-cash lease expense	2.9		3.2
Other	—		1.5
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	4.7		22.1
Contract assets	(4.0)		—
Prepaid expenses and other assets	8.2		(20.4)
Accounts payable	(10.9)		3.2
Accrued compensation and benefits	(24.5)		(27.0)
Lease liabilities	(4.4)		(2.1)
Other liabilities	9.7		2.0
Customer liabilities and customer liabilities - related party	(10.3)		(19.1)
Net cash provided by operating activities	54.7		31.9
Investing activities
Purchases of property, equipment, and software	(23.4)		(11.0)
Other	(2.2)		—
Net cash used in investing activities	(25.6)		(11.0)
Financing activities
Repayment of senior secured debt	(12.4)		(4.4)
Repayments on revolver	(10.0)		—
Exercise of vested stock options	0.5		0.4
Purchase of treasury stock	—		(0.6)
Shares withheld for taxes	(13.4)		(21.5)
Other	(0.1)		(0.1)
Net cash used in financing activities	(35.4)		(26.2)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	0.4		(0.9)
Net decrease in cash, cash equivalents and restricted cash	(5.9)		(6.2)
Cash, cash equivalents and restricted cash, at beginning of period	110.1		130.1
Cash, cash equivalents and restricted cash, at end of period	$	104.2	$	123.9
Supplemental disclosures of cash flow information
Property, equipment and software purchases not paid	$	28.0	$	23.3

See accompanying notes to consolidated financial statements.

9

R1 RCM Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in millions, except per share data)

1. Business Description and Basis of Presentation

Business Description

R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers.

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2023, the results of operations of the Company for the three months ended March 31, 2023 and 2022, and the cash flows of the Company for the three months ended March 31, 2023 and 2022. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2023.

When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates. For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company’s Amendment No. 1 on Form 10-K/A, which amends the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued Accounting Standards and Disclosures

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.

Restatement of Previously Issued Consolidated Financial Statements

The Company has restated its unaudited consolidated financial statements as of March 31, 2023 and for the three month periods ended March 31, 2023 and 2022. See Note 15, Restatement of Previously Issued Consolidated Financial Statements, for more information about the prior period errors.

In addition to Note 15, the following footnotes have been updated to reflect the restatements made to the consolidated financial statements:

•2. Acquisitions

•8. Other Expenses

•9. Income Taxes

•10. Earnings Per Share

10

2. Acquisitions

Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed.

Prior Acquisitions

During 2022, the Company acquired the following business:

Company Name	Description of the Business	Description of the Acquisition
Revint Holdings, LLC (“Cloudmed”)	Provider of revenue intelligence solutions	Purchased all outstanding equity interests in exchange for shares of common stock of the Company and cash. The shares of common stock received by the Cloudmed sellers are subject to an 18-month lock-up period, which expires December 21, 2023. In addition, the Company replaced certain pre-acquisition awards held by certain Cloudmed sellers with restricted stock units (“RSUs”) of the Company.

The purchase price has been provisionally allocated to assets acquired and liabilities assumed based on their fair value as of the acquisition date. The fair value estimate of assets acquired and liabilities assumed is pending the completion of various elements, including gathering further information to ensure the completeness of assets acquired and liabilities assumed and the finalization of an independent appraisal of their respective fair values, which is subject to final review by the Company’s management. Accordingly, management considers the balances shown in the following table to be preliminary, and there could be adjustments to the consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets acquired and their respective useful lives, among other adjustments.

The preliminary fair value of assets acquired and liabilities assumed is:

	Purchase Price Allocation
Total purchase consideration	$	3,281.6
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	32.1
Accounts receivable	61.8
Current portion of contract assets	68.2
Property, equipment and software	5.0
Operating lease right-of-use assets	25.3
Non-current portion of contract assets	23.8
Intangible assets	1,366.6
Goodwill	2,086.1
Other assets	6.7
Accounts payable	(31.9)
Customer liabilities	(3.3)
Accrued compensation and benefits	(85.6)
Operating lease liabilities	(25.4)
Deferred income tax liabilities	(235.6)
Other liabilities	(12.2)
Net assets acquired	$	3,281.6

Measurement period adjustments

The Company had various measurement period adjustments due to additional information received since December 31, 2022. The significant adjustments included a reduction to deferred income tax liabilities and a corresponding decrease to goodwill of $9.8 million related to updated tax return information.

RevWorks

In 2020, the Company purchased certain assets relating to the RevWorks services business from Cerner Corporation. In accordance with the purchase agreement, the Company paid the first deferred payment of $12.5 million in the third quarter of 2021. The remaining deferred payment of $12.5 million was payable on the second anniversary of the closing date (August 2022) and is included in other accrued expenses on the Consolidated Balance Sheet as of March 31, 2023 as it had not been paid as of such date.

The two deferred payments related to the RevWorks acquisition were contractual obligations of the Company; however, they are refundable to the Company if certain RevWorks customer revenue targets defined in the purchase agreement for the first two years following the acquisition are not achieved. The parties are currently engaged in arbitration to finalize the remaining deferred payment and contingently refundable consideration amounts. The contingently refundable consideration is stated at an amount approximating the amount expected to be realized and is included in other current assets on the Consolidated Balance Sheet as of March 31, 2023.

12

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period. Pro forma results are:

	Three Months Ended March 31, 2022
Net services revenue	$	486.4
Net income	$	1.7

Adjustments were made to earnings to adjust depreciation and amortization to reflect the fair value of identified assets acquired, to adjust share-based compensation expense for awards granted in connection with the acquisition, to record the effects of extinguishing the debt of the acquired company and replacing it with the debt of the Company, to adjust timing of acquisition related costs incurred by the Company, and to record the income tax effect of these adjustments.

3. Revenue Recognition

Revenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source of revenue:

	Three Months Ended March 31,
	2023		2022
Net operating fees	$	361.0	$	322.8
Incentive fees	23.6		30.2
Modular and other (1)	161.0		32.7
Net services revenue	$	545.6	$	385.7

(1) Modular and other revenue primarily consists of $125.8 million in service fees related to Cloudmed for the three months ended March 31, 2023, revenue integrity solutions, practice management (“PM”) services, physician advisory services (“PAS”), and software subscription revenue.

Contract Balances

The following table provides information about contract assets, net and contract liabilities from contracts with customers:

13

	March 31, 2023		December 31, 2022
Contract assets, net
Current	$	81.8	$	83.9
Non-current	37.3		32.0
Total contract assets, net	$	119.1	$	115.9
Contract liabilities
Current (1)	$	11.0	$	9.7
Non-current (2)	18.4		18.7
Total contract liabilities	$	29.4	$	28.4

(1) Current contract liabilities include $8.8 million and $7.6 million classified in the current portion of customer liabilities and $2.2 million and $2.1 million classified in the current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

(2) Non-current contract liabilities include $5.2 million and $5.0 million classified in the non-current portion of customer liabilities and $13.2 million and $13.7 million classified in the non-current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2023 were as follows:

	Contract Assets, net
Balance as of December 31, 2022	$	115.9
Revenue recognized	86.0
Amounts billed	(82.6)
Other (1)	(0.2)
Balance as of March 31, 2023	$	119.1

(1) Other primarily includes adjustments made during the period to the allowance for credit losses.

	Contract Liabilities
Balance as of December 31, 2022	$	(28.4)
Advanced billings - January 1, 2023 (1)	(91.3)
Advanced billings recognized	91.3
Additions	(3.9)
Revenue recognized	2.9
Balance as of March 31, 2023	$	(29.4)

(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the quarter.

14

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees
Remainder of 2023	$	90.0	$	33.0
2024	78.1		—
2025	45.7		—
2026	35.6		—
2027	31.2		—
2028	29.8		—
Thereafter	83.6		—
Total	$	394.0	$	33.0

The amounts presented in the table above include variable fee estimates of the Company’s physician groups revenue cycle management (“RCM”) services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company’s PAS contracts that do not represent material rights to the customer.

The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less and has elected an exemption to the disclosure requirements related to estimate variable consideration and an exemption where the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

4. Accounts Receivable and Allowance for Credit Losses

Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers.

The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and business and industry factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay.

The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material.

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Movements in the allowance for credit losses related to accounts receivable are as follows:

	Three Months Ended March 31,
	2023		2022
Beginning balance (1)	$	15.2	$	2.5
Provision (recoveries)	1.1		—
Write-offs	(0.2)		(0.1)
Ending balance (1)	$	16.1	$	2.4

(1) The 2023 balance includes an allowance for credit losses related to a physician customer of $10.1 million that was established in the third quarter of 2022. Management continues to monitor collections and the financial condition of this customer. No changes were made in the current period.

The Company acquired contract assets through the Cloudmed acquisition. As of March 31, 2023, there was an allowance for credit losses of $2.6 million against total contract assets.

5. Debt

The carrying amounts of debt consist of the following:

	March 31, 2023		December 31, 2022
Senior Revolver (1)	$	90.0	$	100.0
Term A Loans	1,200.3		1,211.4
Term B Loan	497.5		498.7
Unamortized discount and issuance costs	(22.5)		(23.6)
Total debt	1,765.3		1,786.5
Less: Current maturities	(58.3)		(53.9)
Total long-term debt	$	1,707.0	$	1,732.6

(1) As of March 31, 2023, the Company had $90.0 million in borrowings, $0.9 million letters of credit outstanding, and $509.1 million of availability under the $600.0 million senior secured revolving credit facility (“Senior Revolver ”).

Second Amended and Restated Senior Secured Credit Facilities

On June 21, 2022, the Company, R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), and certain of its subsidiaries entered into a second amended and restated senior credit agreement (the “Second A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and the $600.0 million Senior Revolver. In conjunction with entering into the Second A&R Credit Agreement, the Company incurred $7.2 million and capitalized $6.4 million of debt issuance costs.

The interest rate as of March 31, 2023 was 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan.

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The Second A&R Credit Agreement contains a number of financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2023. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries.

Debt Maturities

Scheduled maturities of the Company’s long-term debt are summarized as follows:

	Scheduled Maturities
Remainder of 2023	$	41.5
2024	67.0
2025	67.0
2026	708.3
2027	430.2
2028	5.0
Thereafter	468.8
Total	$	1,787.8

For further details on the Second A&R Credit Agreement, refer to Note 10 of the Company’s 2022 Form 10-K.

6. Derivative Financial Instruments

The Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of March 31, 2023, the Company has recorded $1.1 million of unrealized gains in accumulated other comprehensive loss related to foreign currency hedges. The Company estimates that $1.1 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 9 months. Amounts reclassified into cost of services were a net gain of $0.3 million and $0.2 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s foreign currency forward contracts have maturities extending no later than December 31, 2023, and had a total notional value of $90.2 million.

The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2023, the Company has recorded $9.9 million of unrealized gains in accumulated other comprehensive loss related to interest rate swaps. The Company estimates that $8.3 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into interest expense were a net gain of $1.9 million and a net loss of $0.3 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s interest rate swaps extend no later than June 30, 2025, and had a total notional value of $500.0 million.

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The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are as follows:

	March 31, 2023		December 31, 2022
Foreign currency forward contracts
Prepaid expenses and other current assets	$	1.1	$	0.1
Other accrued expenses	—		0.5
Total foreign current forward contracts	$	1.1	$	0.6
Interest rate swaps
Prepaid expenses and other current assets	$	8.3	$	8.7
Other assets	1.6		5.0
Other accrued expenses	—		—
Total interest rate swaps	$	9.9	$	13.7

As of March 31, 2023 and December 31, 2022, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $8.2 million and $9.9 million, respectively.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Statements of Cash Flows. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.

On July 5, 2022, the Company and Sutter Health (“Sutter”) entered into an agreement regarding the potential purchase of a business that would expand the Company’s service capabilities (the “Sutter Put Right Agreement”). This agreement is effective through approximately the end of 2023 and allows Sutter to sell the business to the Company for $150.0 million, subject to the negotiation of a definitive agreement and the satisfaction of agreed upon closing conditions, including the requirement that the purchase price be deemed to be fair value at the time of the potential transaction. Assuming an agreement is reached, the Company and Sutter would also need to reach agreement as to whether the purchase price would be paid in cash or shares of the Company’s common stock.

7. Share-Based Compensation

The share-based compensation expense relating to the Company’s stock options, RSUs, and performance-based restricted stock units (“PBRSUs”) for the three months ended March 31, 2023 and 2022 was $12.3 million and $10.1 million, respectively, with related tax benefits of approximately $2.6 million and $1.8 million, respectively.

The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense and included in operating activities. The Company recognized $0.5 million and $2.5 million of income tax benefit from windfalls associated with vesting and exercises of equity awards for the three months ended March 31, 2023 and 2022, respectively.

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Total share-based compensation costs that have been included in the Company’s Consolidated Statements of Operations and Comprehensive Income were as follows:

	Three Months Ended March 31,
	2023		2022
Share-Based Compensation Expense Allocation Details:
Cost of services	$	6.9	$	4.3
Selling, general and administrative	5.4		5.8
Total share-based compensation expense (1)	$	12.3	$	10.1

(1) Included in the share-based compensation expense above is $1.8 million of CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense for the three months ended March 31, 2023. See further discussion below.

The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units (as defined below), which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility.

Stock options

A summary of the options activity during the three months ended March 31, 2023 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2022	3,104,413	$	3.38
Granted	—	—
Exercised	(180,453)	3.05
Canceled/forfeited	(45,865)	2.59
Expired	—	—
Outstanding at March 31, 2023	2,878,095	$	3.41
Outstanding, vested and exercisable at March 31, 2023	2,855,175	$	3.26
Outstanding, vested and exercisable at December 31, 2022	3,080,069	$	3.23

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Restricted stock units and performance-based restricted stock units    

A summary of the RSU and PBRSU activity during the three months ended March 31, 2023 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2022	3,232,002		6,876,797		$	19.07	$	19.48
Granted	192,268		—		10.95		—
Performance factor adjustment	—		792,189		—		15.95
Vested	(21,705)		(2,286,886)		20.21		15.95
Forfeited	(110,733)		(455,875)		20.56		20.28
Outstanding and unvested at March 31, 2023	3,291,832		4,926,225		$	18.54	$	20.48
Shares surrendered for taxes for the three months ended March 31, 2023	6,908		903,658
Cost of shares surrendered for taxes for the three months ended March 31, 2023 (in millions)	$	0.1	$	13.1
Shares surrendered for taxes for the three months ended March 31, 2022	2,198		725,570
Cost of shares surrendered for taxes for the three months ended March 31, 2022 (in millions)	$	—	$	18.7

Upon consummation of the Cloudmed acquisition, outstanding restricted units of Cloudmed were replaced by an aggregate 1,536,220 RSUs of the Company. The Company also issued an aggregate of 3,173,184 inducement RSUs and PBRSUs to certain employees of Cloudmed under Nasdaq Listing Rule 5635(c)(4) pursuant to its newly adopted 2022 Inducement Plan.

The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury.

Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 9,852,450.

CoyCo 2, L.P. Limited Partnership Units    

As part of the transactions contemplated by the Cloudmed acquisition, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2. The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation — Stock Compensation.

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The Former Class P Units were originally issued to employees of Cloudmed and its affiliates (“Participants”) in connection with and as a part of the compensation and incentive arrangements between Cloudmed and such Participants prior to the consummation of the Cloudmed acquisition. A portion of the Former Class P Units immediately vested upon the closing of the Cloudmed acquisition; however, certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed acquisition (“Unvested Units”). In connection with the Cloudmed acquisition, Cloudmed caused the Former Class P Units, including the Unvested Units, to be converted into Management Units. At the time of the closing of the Cloudmed acquisition, 97,875 Unvested Units were converted into 514,986 Management Units.

In general, Unvested Units vest upon the achievement of certain performance criteria, including achievement by CoyCo 2’s owner, New Mountain Capital, L.L.C. (“New Mountain”), of (i) specified multiples of Base Equity Value (“BEV”) (i.e., generally the aggregate equity value of New Mountain’s investment in Cloudmed as of the original grant date), or (ii) specified Multiples on Invested Capital (“MIC”) with respect to New Mountain Capital’s pre-Cloudmed acquisition investment in Cloudmed, and subject to continued service with the Company and its affiliates, including Cloudmed through the applicable vesting date. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf.

8. Other Expenses

Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. The following table summarizes the other expenses recognized for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023		2022
Business acquisition costs (1)	$	0.1	$	6.3
Integration costs (2)	15.8		0.4
Strategic initiatives (3)	8.0		0.3
Global business services center expansion project in the Philippines (4)	—		3.1
Facility-exit charges (5)	1.2		4.8
Other (6)	5.1		3.0
Total other expenses	$	30.2	$	17.9

(1) These are costs, including legal, consulting, insurance premiums, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration, if applicable. Costs also include compensation expenses incurred in connection with the close of the transactions.

(2) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, retention, and certain payroll costs.

(3) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts.

(4) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines was the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022.

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(5) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities.

(6) For the three months ended March 31, 2023 and 2022, other includes $5.5 million and $1.4 million, respectively, of expenses related to the Company’s ongoing litigation matters. For further details, refer to Note 11, Commitments and Contingencies.

9. Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred.

The Company recognized income tax expense for the three months ended March 31, 2023 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for foreign taxes, state taxes, non-deductible expenses, and discrete items.

The Company recognized income tax expense for the three months ended March 31, 2022 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for state taxes, GILTI, non-deductible expenses, and discrete items.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2019 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three to six years.

At December 31, 2022, the Company had gross deferred tax assets of $147.3 million, of which $49.8 million related to net operating loss (“NOL”) carryforwards. The Company expects to be profitable, allowing the Company to utilize its NOL carryforwards and other deferred tax assets.

10. Earnings Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of RSUs and PBRSUs.

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Basic and diluted net income per common share are calculated as follows:

	Three Months Ended March 31,
	2023		2022
Net income	$	1.6	$	29.7
Basic weighted-average common shares	417,346,840		278,747,261
Add: Effect of dilutive equity awards	4,621,205		6,472,685
Add: Effect of dilutive warrants	30,957,744		35,823,425
Diluted weighted average common shares	452,925,789		321,043,371
Net income per common share (basic)	$	—	$	0.11
Net income per common share (diluted)	$	—	$	0.09

Because of their anti-dilutive effect, 768,030 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2023.

For the three months ended March 31, 2022, 43,206 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect.

11. Commitments and Contingencies

Legal Proceedings

Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows.

On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC. Both complaints allege that TCP-ASC, Ascension Health (“Ascension”), and TowerBrook Capital Partners (“TowerBrook”) controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contain provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The cases have since been consolidated into a single action. All defendants have answered the complaint and discovery has commenced.

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On February 18, 2022, plaintiffs filed a supplement to their complaint, naming certain additional defendants and asserting additional claims related to the Company’s agreement to acquire Cloudmed, which was announced on January 10, 2022. The additional claims assert that: (i) TCP-ASC, Ascension, and TowerBrook, along with the Company’s directors (“Individual Defendants”), breached their fiduciary duties by causing the Company to enter into and approving the Cloudmed acquisition, respectively, which plaintiffs claim will perpetuate TCP-ASC’s, Ascension’s, and TowerBrook’s control over the Company and entrench the Individual Defendants by virtue of certain agreements entered into as part of the transaction, including a Second Amended Investor Rights Agreement with TCP-ASC (the “Seconded Amended Investor Rights Agreement”) and an Investor Rights Agreement with Cloudmed (the “Cloudmed Investor Rights Agreement”); and (ii) Cloudmed’s stockholders aided and abetted such breaches. Plaintiffs also allege that certain provisions in the Cloudmed Investor Rights Agreement and the Second Amended Investor Rights Agreement are void under the Company’s charter, bylaws, and the Delaware General Corporation law. The plaintiffs seek a declaratory judgment and an unspecified amount of damages, as well as attorneys’ fees and costs. Trial is scheduled for November 2023. The Company believes it has meritorious defenses to all claims against it and intends to vigorously defend itself against these claims.

In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago and was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend into 2023, with trial, if necessary, likely to be scheduled in 2024. The Company believes it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims.

12. Related Party Transactions

This note encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the Master Professional Services Agreement, including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company’s agreements with Ascension, see Note 1 and Note 19 of the Company’s 2022 Form 10-K. In conjunction with the Cloudmed acquisition, New Mountain became a new related party. There were no material transactions with New Mountain subsequent to the Cloudmed acquisition.

Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income and the Consolidated Balance Sheets. Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension.

13. Segments and Customer Concentrations

The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment.

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Customers comprising greater than 10% of net services revenue are as follows:

	Three Months Ended March 31,
Customer Name	2023		2022
Ascension and its affiliates	40	%	56	%
Intermountain Healthcare	11	%	14	%

The loss of customers within the Ascension health system or Intermountain network could have a material adverse impact on the Company’s operations.

As of March 31, 2023 and December 31, 2022, the Company had a concentration of credit risk with Ascension, representing 10% of accounts receivable.

14. Supplemental Financial Information

The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:

	Three Months Ended March 31,
	2023		2022
Cost of services	$	15.5	$	11.5
Selling, general and administrative	0.4		0.3
Total depreciation and amortization	$	15.9	$	11.8

Intangible asset amortization expense was $50.1 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income.

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.2	$	3.4
Right-of-use assets obtained in exchange for operating lease obligations:	3.1		6.0

15. Restatement of Previously Issued Consolidated Financial Statements

In connection with the preparation of the consolidated financial statements as of and for the three and nine months ended September 30, 2023, the Company identified errors related to the accounting for certain acquiree compensation costs incurred in connection with acquisitions in 2022, 2021, and 2020 that the Company was required to recognize as a Company expense immediately upon the closing of the transactions. These costs should have been recorded as other expenses within the Consolidated Statements of Operations and Comprehensive Income (Loss) in the applicable period and were instead recorded within the purchase price allocation and ultimately recorded as goodwill in the Consolidated Balance Sheets in previously issued financial statements.

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As a result of correcting the accounting for certain acquiree compensation costs incurred in connection with acquisitions in 2022, 2021, and 2020, the Company updated the amount of goodwill that should have been recognized in the prior acquisitions and restated its unaudited Consolidated Balance Sheet as of March 31, 2023 and audited Consolidated Balance Sheet as of December 31, 2022. In addition to the errors described above, the Company is correcting certain items that were previously identified and concluded as immaterial, individually and in aggregate, to its unaudited consolidated financial statements as of March 31, 2023 and for each of the three month periods ended March 31, 2023 and 2022, as well as its audited Consolidated Balance Sheet as of December 31, 2022. These adjustments primarily consisted of an adjustment to income tax expense in the quarter ended March 31, 2023 to recognize a benefit that should have been recorded in the current quarter and immaterial adjustments to the timing and amounts of capitalized assets, prepaid expenses, and accrued expenses for the relevant periods.

The tables below represent our restated consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022.

For the three months ended March 31, 2022

The effects of the restatement on the Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 2022 are summarized in the following table:

	For the three months ended March 31, 2022
	As Previously Reported		Adjustment		As Restated
	In millions, except per share data
Net services revenue ($216.7 million for the three months ended March 31, 2022 from related party)	$	385.7	$	—	$	385.7
Operating expenses:
Cost of services	296.5		(2.0)		294.5
Selling, general and administrative	28.9		0.7		29.6
Other expenses	17.1		0.8		17.9
Total operating expenses	342.5		(0.5)		342.0
Income from operations	43.2		0.5		43.7
Net interest expense	4.7		—		4.7
Income before income tax provision	38.5		0.5		39.0
Income tax provision	9.1		0.2		9.3
Net income	$	29.4	$	0.3	$	29.7
Net income per common share:
Basic	$	0.11	$	—	$	0.11
Diluted	$	0.09	$	—	$	0.09
Weighted average shares used in calculating net income per common share:
Basic	278,747,261		—		278,747,261
Diluted	321,043,371		—		321,043,371
Consolidated statements of comprehensive income
Net income	$	29.4	$	0.3	$	29.7
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	0.1		—		0.1
Foreign currency translation adjustments	(1.4)		—		(1.4)
Total other comprehensive loss, net of tax	$	(1.3)	$	—	$	(1.3)
Comprehensive income	$	28.1	$	0.3	$	28.4

26

The effects of the restatement on the Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2022 are summarized in the following table:

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
As Previously Reported
Balance at December 31, 2021	298,320,928	$	3.0	(20,094,686)	$	(215.2)	$	628.5	$	(64.3)	$	(5.3)	$	346.7
Share-based compensation expense	—	—		—	—		10.2		—		—		10.2
Issuance of common stock related to share-based compensation plans	1,757,955	—		—	—		—		—		—		—
Exercise of vested stock options	77,438	—		—	—		0.4		—		—		0.4
Acquisition of treasury stock related to share-based compensation plans	—	—		(727,768)	(18.7)		—		—		—		(18.7)
Repurchases of common stock	—	—		(8,000)	(0.2)		—		—		—		(0.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.0 million	—	—		—	—		—		—		0.1		0.1
Foreign currency translation adjustment	—	—		—	—		—		—		(1.4)		(1.4)
Net income	—	—		—	—		—		29.4		—		29.4
Balance at March 31, 2022	300,156,321	$	3.0	(20,830,454)	$	(234.1)	$	639.1	$	(34.9)	$	(6.6)	$	366.5
Adjustments
Beginning balance as of January 1, 2021	—	$	—	—	$	—	$	—	$	(2.5)	$	—	$	(2.5)
Share-based compensation expense	—	—		—	—		2.4		—		—		2.4
Net income	—	—		—	—		—		(9.9)		—		(9.9)
Balance at December 31, 2021 (adjustment impacts)	—	$	—	—	$	—	$	2.4	$	(12.4)	$	—	$	(10.0)
Share-based compensation expense	—	—		—	—		—		—		—		—
Net income	—	—		—	—		—		0.3		—		0.3
Balance at March 31, 2022 (adjustment impacts)	—	$	—	—	$	—	$	2.4	$	(12.1)	$	—	$	(9.7)
As Restated
Balance at December 31, 2021	298,320,928	$	3.0	(20,094,686)	$	(215.2)	$	630.9	$	(76.7)	$	(5.3)	$	336.7
Share-based compensation expense	—	—		—	—		10.2		—		—		10.2
Issuance of common stock related to share-based compensation plans	1,757,955	—		—	—		—		—		—		—
Exercise of vested stock options	77,438	—		—	—		0.4		—		—		0.4
Acquisition of treasury stock related to share-based compensation plans	—	—		(727,768)	(18.7)		—		—		—		(18.7)
Repurchases of common stock	—	—		(8,000)	(0.2)		—		—		—		(0.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.0 million	—	—		—	—		—		—		0.1		0.1
Foreign currency translation adjustment	—	—		—	—		—		—		(1.4)		(1.4)
Net income	—	—		—	—		—		29.7		—		29.7
Balance at March 31, 2022	300,156,321	$	3.0	(20,830,454)	$	(234.1)	$	641.5	$	(47.0)	$	(6.6)	$	356.8

27

The effects of the restatement on the Consolidated Statement of Cash Flows for the three months ended March 31, 2022 are summarized in the following table:

	For the three months ended March 31, 2022
	As Previously Reported		Adjustment		As Restated
	In millions
Operating activities
Net income	$	29.4	$	0.3	$	29.7
Adjustments to reconcile net income to net cash provided by operations:			—
Depreciation and amortization	18.9		—		18.9
Amortization of debt issuance costs	0.3		—		0.3
Share-based compensation	10.1		—		10.1
Loss on disposal and right-of-use asset write-downs	2.0		—		2.0
Deferred income taxes	7.3		0.2		7.5
Non-cash lease expense	3.2		—		3.2
Other	1.5		—		1.5
Changes in operating assets and liabilities:			—
Accounts receivable and related party accounts receivable	22.1		—		22.1
Prepaid expenses and other assets	(20.5)		0.1		(20.4)
Accounts payable	3.2		—		3.2
Accrued compensation and benefits	(27.5)		0.5		(27.0)
Lease liabilities	(2.1)		—		(2.1)
Other liabilities	1.7		0.3		2.0
Customer liabilities and customer liabilities - related party	(18.7)		(0.4)		(19.1)
Net cash provided by operating activities	30.9		1.0		31.9
Investing activities
Purchases of property, equipment, and software	(10.0)		(1.0)		(11.0)
Net cash used in investing activities	(10.0)		(1.0)		(11.0)
Financing activities
Repayment of senior secured debt	(4.4)		—		(4.4)
Exercise of vested stock options	0.4		—		0.4
Purchase of treasury stock	(0.6)		—		(0.6)
Shares withheld for taxes	(21.5)		—		(21.5)
Other	(0.1)		—		(0.1)
Net cash used in financing activities	(26.2)		—		(26.2)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	(0.9)		—		(0.9)
Net decrease in cash, cash equivalents, and restricted cash	(6.2)		—		(6.2)
Cash, cash equivalents, and restricted cash at beginning of period	130.1		—		130.1
Cash, cash equivalents and restricted cash, at end of period	$	123.9	$	—	$	123.9
Supplemental disclosures of cash flow information
Property, equipment and software purchases not paid	$	23.3	$	—	$	23.3

28

As of and for the three months ended March 31, 2023

The effects of the restatement on the Consolidated Balance Sheet as of March 31, 2023 are summarized in the following table:

	As of March 31, 2023
	As Previously Reported		Adjustment		As Restated
	In millions
Assets
Current assets:
Cash and cash equivalents	$	104.2	$	—	$	104.2
Accounts receivable, net of $16.0 million allowance	229.4		—		229.4
Accounts receivable - related party, net of $0.1 million allowance	24.9		—		24.9
Current portion of contract assets, net	81.8		—		81.8
Prepaid expenses and other current assets	105.2		0.1		105.3
Total current assets	545.5		0.1		545.6
Property, equipment and software, net	173.8		—		173.8
Operating lease right-of-use assets	81.0		—		81.0
Non-current portion of contract assets, net	37.3		—		37.3
Non-current portion of deferred contract costs	28.2		—		28.2
Intangible assets, net	1,464.4		—		1,464.4
Goodwill	2,648.5		(18.0)		2,630.5
Deferred tax assets	10.5		—		10.5
Other assets	83.4		—		83.4
Total assets	$	5,072.6	$	(17.9)	$	5,054.7
Liabilities
Current liabilities:
Accounts payable	$	24.6	$	—	$	24.6
Current portion of customer liabilities	45.6		—		45.6
Current portion of customer liabilities - related party	9.4		—		9.4
Accrued compensation and benefits	84.7		—		84.7
Current portion of operating lease liabilities	18.8		—		18.8
Current portion of long-term debt	58.3		—		58.3
Accrued expenses and other current liabilities	76.7		—		76.7
Total current liabilities	318.1		—		318.1
Non-current portion of customer liabilities	5.2		—		5.2
Non-current portion of customer liabilities - related party	13.2		—		13.2
Non-current portion of operating lease liabilities	92.7		—		92.7
Long-term debt	1,707.0		—		1,707.0
Deferred tax liabilities	192.1		(1.2)		190.9
Other non-current liabilities	24.9		—		24.9
Total liabilities	2,353.2		(1.2)		2,352.0
Stockholders’ equity:
Common stock, $0.01 par value, 750,000,000 shares authorized, 442,439,169 shares issued and 418,176,363 shares outstanding at March 31, 2023	4.4		—		4.4
Additional paid-in capital	3,136.2		0.1		3,136.3
Accumulated deficit	(121.6)		(16.8)		(138.4)
Accumulated other comprehensive loss	(4.6)		—		(4.6)
Treasury stock, at cost, 24,262,806 shares as of March 31, 2023	(295.0)		—		(295.0)
Total stockholders’ equity	2,719.4		(16.7)		2,702.7
Total liabilities and stockholders’ equity	$	5,072.6	$	(17.9)	$	5,054.7

29

The effects of the restatement on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the three ended March 31, 2023 are summarized in the following table:

	For the three months ended March 31, 2023
	As Previously Reported		Adjustment		As Restated
	In millions, except per share data
Net services revenue ($216.8 million for the three months ended March 31, 2023 from related party)	$	545.6	$	—	$	545.6
Operating expenses:
Cost of services	434.7		—		434.7
Selling, general and administrative	47.0		—		47.0
Other expenses	30.2		—		30.2
Total operating expenses	511.9		—		511.9
Income from operations	33.7		—		33.7
Net interest expense	30.7		—		30.7
Income before income tax provision	3.0		—		3.0
Income tax provision	2.7		(1.3)		1.4
Net income	$	0.3	$	1.3	$	1.6
Net income per common share:
Basic	$	—	$	—	$	—
Diluted	$	—	$	—	$	—
Weighted average shares used in calculating net income per common share:
Basic	417,346,840		—		417,346,840
Diluted	452,925,789		—		452,925,789
Consolidated statements of comprehensive income (loss)
Net income	$	0.3	$	1.3	$	1.6
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	(1.7)		—		(1.7)
Foreign currency translation adjustments	0.5		—		0.5
Total other comprehensive loss, net of tax	$	(1.2)	$	—	$	(1.2)
Comprehensive income (loss)	$	(0.9)	$	1.3	$	0.4

30

The effects of the restatement on the Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2023 are summarized in the following table:

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
As Previously Reported
Balance at December 31, 2022	439,950,125	$	4.4	(23,352,240)	$	(281.8)	$	3,123.2	$	(121.9)	$	(3.4)	$	2,720.5
Share-based compensation expense	—	—		—	—		10.7		—		—		10.7
CoyCo 2 share-based compensation expense	—	—		—	—		1.8		—		—		1.8
Issuance of common stock related to share-based compensation plans	2,308,591	—		—	—		—		—		—		—
Exercise of vested stock options	180,453	—		—	—		0.5		—		—		0.5
Acquisition of treasury stock related to share-based compensation plans	—	—		(910,566)	(13.2)		—		—		—		(13.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.5 million	—	—		—	—		—		—		(1.7)		(1.7)
Foreign currency translation adjustment	—	—		—	—		—		—		0.5		0.5
Net income	—	—		—	—		—		0.3		—		0.3
Balance at March 31, 2023	442,439,169	$	4.4	(24,262,806)	$	(295.0)	$	3,136.2	$	(121.6)	$	(4.6)	$	2,719.4
Adjustments
Beginning balance as of January 1, 2022	—	$	—	—	$	—	$	2.4	$	(12.4)	$	—	$	(10.0)
Share-based compensation expense	—	—		—	—		(2.3)		$	—	—		(2.3)
Net loss	—	—		—	—		—		(5.7)		—		(5.7)
Balance at December 31, 2022 (adjustment impacts)	—	$	—	—	$	—	$	0.1	$	(18.1)	$	—	$	(18.0)
Share-based compensation expense	—	—		—	—		—		—		—		—
Net income	—	—		—	—		—		1.3		—		1.3
Balance at March 31, 2023 (adjustment impacts)	—	$	—	—	$	—	$	0.1	$	(16.8)	$	—	$	(16.7)
As Restated
Balance at December 31, 2022	439,950,125	$	4.4	(23,352,240)	$	(281.8)	$	3,123.3	$	(140.0)	$	(3.4)	$	2,702.5
Share-based compensation expense	—	—		—	—		10.7		—		—		10.7
CoyCo 2 share-based compensation expense	—	—		—	—		1.8		—		—		1.8
Issuance of common stock related to share-based compensation plans	2,308,591	—		—	—		—		—		—		—
Exercise of vested stock options	180,453	—		—	—		0.5		—		—		0.5
Acquisition of treasury stock related to share-based compensation plans	—	—		(910,566)	(13.2)		—		—		—		(13.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.5 million	—	—		—	—		—		—		(1.7)		(1.7)
Foreign currency translation adjustment	—	—		—	—		—		—		0.5		0.5
Net income	—	—		—	—		—		1.6		—		1.6
Balance at March 31, 2023	442,439,169	$	4.4	(24,262,806)	$	(295.0)	$	3,136.3	$	(138.4)	$	(4.6)	$	2,702.7

31

The effects of the restatement on the Consolidated Statement of Cash Flows for the three months ended March 31, 2023 are summarized in the following table:

	For the three months ended March 31, 2023
	As Previously Reported		Adjustment		As Restated
	In millions
Operating activities
Net income	$	0.3	$	1.3	$	1.6
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	66.0		—		66.0
Amortization of debt issuance costs	1.4		—		1.4
Share-based compensation	10.5		—		10.5
CoyCo 2 share-based compensation	1.8		—		1.8
Provision for credit losses	1.5		—		1.5
Deferred income taxes	1.8		(1.3)		0.5
Non-cash lease expense	2.9		—		2.9
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	4.7		—		4.7
Contract assets	(4.0)		—		(4.0)
Prepaid expenses and other assets	8.2		—		8.2
Accounts payable	(10.9)		—		(10.9)
Accrued compensation and benefits	(24.5)		—		(24.5)
Lease liabilities	(4.4)		—		(4.4)
Other liabilities	9.7		—		9.7
Customer liabilities and customer liabilities - related party	(10.3)		—		(10.3)
Net cash provided by operating activities	54.7		—		54.7
Investing activities
Purchases of property, equipment, and software	(23.4)		—		(23.4)
Other	(2.2)		—		(2.2)
Net cash used in investing activities	(25.6)		—		(25.6)
Financing activities
Repayment of senior secured debt	(12.4)		—		(12.4)
Repayments on revolver	(10.0)		—		(10.0)
Exercise of vested stock options	0.5		—		0.5
Shares withheld for taxes	(13.4)		—		(13.4)
Other	(0.1)		—		(0.1)
Net cash used in financing activities	(35.4)		—		(35.4)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	0.4		—		0.4
Net decrease in cash, cash equivalents, and restricted cash	(5.9)		—		(5.9)
Cash, cash equivalents, and restricted cash at beginning of period	110.1		—		110.1
Cash, cash equivalents and restricted cash, at end of period	$	104.2	$	—	$	104.2
Supplemental disclosures of cash flow information
Property, equipment and software purchases not paid	$	28.0	$	—	$	28.0

32

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

Unless the context indicates otherwise, references in this Amendment No.1 to Quarterly Report on Form 10-Q (this “Amendment”) to “R1,” “the Company,” “we,” “our,” and “us” mean R1 RCM Inc. and its subsidiaries.

The following discussion and analysis is an integral part of understanding our financial results and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes.

This Amendment contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Undue reliance should not be placed on these statements. All statements, other than statements of historical facts, included in this Amendment are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “see,” “seek,” “target,” “would” and similar expressions or variations or negatives of these words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements include, among other things, statements about the acquisition of Cloudmed, our strategic initiatives, our capital plans, our costs, our ability to successfully implement new technologies, our future financial performance, and our liquidity. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Subsequent events and developments, including actual results or changes in our assumptions, may cause our views to change. We do not undertake to update our forward-looking statements except to the extent required by applicable law. Readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by these cautionary statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, the impact of the restatements of the financial statements for the applicable non-reliance periods, and the non-compliance notice from Nasdaq relating to our late Form 10-Q, on the price of our common stock, our reputation, our relationships with our investors, suppliers, customers, employees and other parties; our ability to regain compliance with Nasdaq’s timely filing requirements for continued listing within the applicable cure period; our ability to remediate the material weakness in our internal control over financial reporting; economic downturns and market conditions beyond our control, including periods of inflation; the quality of global financial markets; our ability to timely and successfully achieve the anticipated benefits and potential synergies of the acquisition of Cloudmed; our ability to retain existing customers or acquire new customers; the development of markets for our revenue cycle management offering; variability in the lead time of prospective customers; competition within the market; breaches or failures of our information security measures or unauthorized access to a customer’s data; delayed or unsuccessful implementation of our technologies or services, or unexpected implementation costs; disruptions in or damages to our global business services centers and third-party operated data centers; the volatility of our stock price; our substantial indebtedness; the ongoing impact of the 2019 Novel Coronavirus (“COVID-19”) pandemic on our business, operating results, and financial condition; and the factors discussed elsewhere in this Amendment, and those set forth in Part I, Item 1A of Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, 2022 and our other filings with the SEC.

The forward-looking statements in this Amendment represent our views as of the date of this Amendment. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Amendment.

33

Restatement of Previously Issued Consolidated Financial Statements

We have restated our unaudited consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 contained in this Amendment. Refer to the Explanatory Note for background on the restatement, the fiscal and interim periods impacted, internal control considerations, and other information. As a result, the previously reported financial information for the three months ended March 31, 2023 and 2022 in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, has been updated to reflect the relevant restatements. See Note 15, Restatement of Previously Issued Consolidated Financial Statements, in Item 1, Financial Statements, for additional information related to the restatement, including descriptions of the adjustments and the impacts on our consolidated financial statements.

Other than the effect of the restatement, this section has not been otherwise modified and does not reflect any information or events occurring after May 4, 2023, the filing date of the Original 10-Q Report, or modify or update those disclosures affected by events that occurred at a later date or facts that subsequently became known to the Company, except to the extent they are otherwise required to be included and discussed herein.

Overview

Our Business

We are a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. We help healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for our customers.

We achieve these results for our customers by managing healthcare providers’ revenue cycle operations, which encompass patient registration, insurance and benefit verification, scheduling, medical treatment documentation and coding, bill preparation, and collections from patients and payers. We do so by deploying a unique operating model that leverages our extensive healthcare domain expertise, innovative technology and intelligent automation, and process excellence. We assist our revenue cycle management (“RCM”) customers in managing their revenue cycle operating costs while simultaneously increasing the portion of the maximum potential services revenue they receive. Together, these benefits can generate significant and sustainable improvements in operating margins and cash flows for our customers.

Our largest service offering consists of end-to-end RCM services, which we deploy through an operating partner relationship or a co-managed relationship. Under an operating partner relationship, we provide comprehensive revenue cycle infrastructure to providers, including all revenue cycle personnel, technology solutions, and process workflow. Under a co-managed relationship, we leverage our customers’ existing RCM staff and processes, and supplement them with our infused management, subject matter specialists, proprietary technology solutions, and other resources. Under the operating partner model, our employees are the revenue cycle personnel providing services and we typically control third party vendors either through direct contracts or the assumption of the customer’s vendor contracts. As a result, under the operating partner model, we record higher expenses as well as higher revenues related to the negotiated cost to collect. Under the co-managed model, the revenue cycle personnel and third party vendors remain with the customer and those costs do not impact our financial results. For the three months ended March 31, 2023, substantially all of our net operating and incentive fees from end-to-end RCM services were generated under the operating partner model.

We also offer modular solutions, allowing customers to engage us to address specific revenue cycle improvement opportunities, such as revenue intelligence solutions (which were enhanced through the acquisition of Revint Holdings, LLC (“Cloudmed”)), automation solutions, revenue integrity solutions, practice management (“PM”), accounts receivables and denials recovery, physician advisory services (“PAS”), clinical documentation integrity (“CDI”), coding management, business office services, and patient experience.

34

While we cannot control the changes in the regulatory environment imposed on our customers, we believe that our role becomes increasingly more important to our customers as macroeconomic, regulatory, and healthcare industry conditions continue to impose financial pressure on healthcare providers to manage their operations effectively and efficiently.

We operate our business as a single segment configured with our significant operations and offerings organized around the business of providing RCM services to healthcare providers.

Trends and Economic Conditions

Revenue cycle is a critical function for healthcare providers as they seek to increase process efficiency and maximize cash collected from health insurance companies and patients. Healthcare providers operate their revenue cycle with a combination of labor, software, and services vendors. Third-party vendors offer various solutions including consulting services, software, and other services, including point solutions that cover one or multiple components of the revenue cycle and full outsourcing services, among others. The Centers for Medicare and Medicaid Services projects hospital care and physician care expenditures in the U.S. to amount to $1.5 trillion and $959 billion in 2023, respectively. We estimate the cost of hospital and physician revenue cycle operations to be approximately 5% of revenue, resulting in a market size of approximately $115 billion. According to Research and Markets data as of April 27, 2022, revenue cycle spend is projected to grow at a compounded annual growth rate of 11.6% through 2030.

Health systems are currently facing challenges in their revenue cycle operations based on several factors including: (1) more complex and clinical-outcomes based reimbursement, (2) industry consolidation amongst hospitals and across the continuum of care, (3) increasing patient responsibility for their medical bills, (4) healthcare labor shortage, and (5) capital constraints to invest in the revenue cycle given financial difficulties and requirements to invest in improving clinical care. We believe these trends provide opportunities for external RCM vendors that will result in further growth for the industry and our Company.

Growth in economic activity and demand for goods and services, alongside labor shortages and supply chain complications, contributed to high levels of inflation in 2022. We expect inflation to persist in 2023, which may impact our costs for wages and other materials. Inflation may also impact the economic health of our customers, including their ability to pay amounts owed to us. In response to rising inflation, the Federal Reserve Board has raised interest rates and signaled that it may continue to raise rates. Our credit facility interest, in part, is based on a variable interest rate structure which can result in increased cost in periods of rising interest rates. To date, rising interest rates have not had a material impact on our results of operations.

Our incentive fees were impacted by deterioration in payer-reimbursement turnaround times in the second half of 2022. We anticipate modest improvement in payer turnaround times in 2023, relative to the second half of 2022. In addition, we are observing the following trends, which we expect will persist in 2023: (i) we expect reduced growth in our physician business serving emergency department physicians due to regulatory changes that are impacting some of the large groups in the industry and (ii) with recessionary concerns increasing, we could see potential weakness in consumer collections as healthcare bills are de-prioritized.

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Other adverse macroeconomic conditions, including but not limited to changes to fiscal and monetary policy and currency fluctuations, could impact macro-level consumer spending trends, which could affect the volume processed on our platform and result in fluctuations to our revenue streams. Certain of our customers may be negatively impacted by these events. In addition, our business and customers continue to face challenges relating to a tight labor market and increased turnover rates. In particular, the current labor market combined with heightened inflation across the globe may increase cost of labor for both us and our customers in 2023 and over time. We plan to continue to invest in technology to help us offset these costs and expect to continue hiring talented employees and providing competitive compensation. Furthermore, recent bank failures and the flow-on effects of those events, including systematic pressures, may cause instability in the banking industry or result in failures at other banks or financial institutions to which we or our customers may face direct or indirect exposure. The bank failures that occurred during the first quarter of 2023 did not directly impact R1 financially. 95% of our cash as of March 31, 2023 was held at four of the five largest banks in the U.S. (by deposits). We maintain the remainder of our cash, which is fully accessible, at smaller or regional banks. The extent to which these macroeconomic conditions will affect our business is uncertain and will depend on political, social, economic, and regulatory forces that are outside of our control. We continue to assess fluctuating macroeconomic events to manage our response.

CONSOLIDATED RESULTS OF OPERATIONS

The following table provides consolidated operating results and other operating data for the periods indicated:

		Three Months Ended March 31,				2023 vs. 2022 Change
		2023		2022		Amount		%
	(In millions, except percentages)
Consolidated Statement of Operations Data:
Net operating fees		$	361.0	$	322.8	$	38.2	12	%
Incentive fees		23.6		30.2		(6.6)		(22)	%
Modular and other		161.0		32.7		128.3		392	%
Total net services revenue		545.6		385.7		159.9		41	%
Operating expenses:
Cost of services		434.7		294.5		140.2		48	%
Selling, general and administrative		47.0		29.6		17.4		59	%
Other expenses		30.2		17.9		12.3		69	%
Total operating expenses		511.9		342.0		169.9		50	%
Income from operations		33.7		43.7		(10.0)		(23)	%
Net interest expense		30.7		4.7		26.0		553	%
Net income before income tax provision		3.0		39.0		(36.0)		(92)	%
Income tax provision		1.4		9.3		(7.9)		(85)	%
Net income		$	1.6	$	29.7	$	(28.1)	(95)	%
Adjusted EBITDA (1)		$	142.2	$	90.6	$	51.6	57	%

(1) Refer to the Non-GAAP Financial Measures section below for a reconciliation of our financial results reported in accordance with GAAP to non-GAAP financial results.

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Use of Non-GAAP Financial Information

In order to provide a more comprehensive understanding of the information used by our management team in financial and operational decision-making, we supplement our consolidated financial statements that have been prepared in accordance with GAAP with the non-GAAP financial measure of adjusted EBITDA. Adjusted EBITDA is utilized by our Board and management team as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations; and (ii) as a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation plans for employees.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, share-based compensation expense, CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense, and other expense items detailed in Note 8, Other Expenses, to the consolidated financial statements included in this Amendment, including business acquisition costs, integration costs, strategic initiatives, and the global business services center expansion project in the Philippines.

Although non-GAAP measures are frequently used by investors, securities analysts, and others in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Some of these limitations are:

•Adjusted EBITDA does not reflect:

•Changes in, or cash requirements for, our working capital needs;

•Share-based compensation expense (including CoyCo 2 share-based compensation expense);

•Income tax expenses or cash requirements to pay taxes;

•Interest expenses or cash required to pay interest;

•Certain other expenses which may require cash payments;

•Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect cash requirements for such replacements or other purchase commitments, including lease commitments; and

•Other companies in our industry may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

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Reconciliation of GAAP and Non-GAAP Measures

The following table represents a reconciliation of adjusted EBITDA to net income, the most closely comparable GAAP measure, for each of the periods indicated:

		Three Months Ended March 31,				2023 vs. 2022 Change
		2023		2022		Amount		%
	(In millions, except percentages)
Net income		$	1.6	$	29.7	$	(28.1)	(95)	%
Net interest expense		30.7		4.7		26.0		553	%
Income tax provision		1.4		9.3		(7.9)		(85)	%
Depreciation and amortization expense		66.0		18.9		47.1		249	%
Share-based compensation expense (1)		10.5		10.1		0.4		4	%
CoyCo 2 share-based compensation expense (2)		1.8		—		1.8		100	%
Other expenses (3)		30.2		17.9		12.3		69	%
Adjusted EBITDA (non-GAAP)		$	142.2	$	90.6	$	51.6	57	%

(1)Share-based compensation expense represents the expense associated with stock options, restricted stock units, and performance-based restricted stock units, as reflected in our Consolidated Statements of Operations and Comprehensive Income. See Note 7, Share-Based Compensation, to the consolidated financial statements included in this Amendment for the detail of the amounts of share-based compensation expense.

(2)CoyCo 2 share-based compensation expense represents the expense associated with CoyCo 2 limited partnership units, as reflected in our Consolidated Statements of Operations and Comprehensive Income. See Note 7, Share-Based Compensation, to the consolidated financial statements included in this Amendment for the detail of the amounts of CoyCo 2 share-based compensation expense.

(3)Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. See Note 8, Other Expenses, to the consolidated financial statements included in this Amendment for the detail of the amounts included in other expenses.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Net Services Revenue

Net services revenue increased by $159.9 million, or 41%, from $385.7 million for the three months ended March 31, 2022, to $545.6 million for the three months ended March 31, 2023. The increase was driven by a $125.8 million contribution from Cloudmed and net operating fees from new end-to-end customers, partially offset by lower incentive fees.

Cost of Services

Costs of services primarily consists of wages and benefits of personnel that perform services for our customers and any related supplies, equipment, or facility costs utilized by these employees, which includes our global shared service centers in India and the Philippines. It also includes cost of services provided to our customers by vendors directly contracted by R1 or assigned to R1 at contract inception. Cost of services increased by $140.2 million, or 48%, from $294.5 million for the three months ended March 31, 2022, to $434.7 million for the three months ended March 31, 2023. The increase in cost of services was primarily driven by the Cloudmed acquisition and onboarding of new customers, which are reflected in our current revenue growth.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $17.4 million, or 59%, from $29.6 million for the three months ended March 31, 2022, to $47.0 million for the three months ended March 31, 2023. The increase was driven by the Cloudmed acquisition, specifically compensation costs and software licensing and maintenance costs,

and incremental spend in corporate functions to support business growth.

Other Expenses

Other expenses increased by $12.3 million, or 69%, from $17.9 million for the three months ended March 31, 2022, to $30.2 million for the three months ended March 31, 2023. See Note 8, Other Expenses, to the consolidated financial statements included in this Amendment for the details of the costs included in this total for the comparative periods.

Income Taxes

Income tax expense decreased by $7.9 million from $9.3 million for the three months ended March 31, 2022, to $1.4 million for the three months ended March 31, 2023, primarily due to lower pre-tax income. Our effective tax rate (including discrete items) was approximately 47% and 24% for the three months ended March 31, 2023 and 2022, respectively. Our tax rate is also affected by discrete items that may occur in any given year, but are not necessarily consistent from year to year.

CRITICAL ACCOUNTING ESTIMATES

Management considers an accounting estimate to be critical if the accounting estimate requires management to make particularly difficult, subjective, or complex judgments about matters that are inherently uncertain. A summary of our critical accounting estimates is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Application of Critical Accounting Estimates” of our 2022 Form 10-K and the related Amendment No. 1. There have been no material changes to the critical accounting estimates disclosed in our 2022 Form 10-K or the related Amendment No. 1.

NEW ACCOUNTING PRONOUNCEMENTS

For additional information regarding new accounting guidance, see Note 1, Business Description and Basis of Presentation, to our consolidated financial statements included in this Amendment, which provides a summary of our recently adopted accounting standards and disclosures.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity include our cash flows from operations and borrowings under our second amended and restated senior credit agreement (the “Second A&R Credit Agreement”). As of March 31, 2023 and December 31, 2022, we had total available liquidity of $613.3 million and $609.2 million, respectively, reflecting our cash and cash equivalents as well as remaining availability under our senior secured revolving credit facility (the “Senior Revolver”).

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Our liquidity is influenced by many factors, including timing of revenue and corresponding cash collections, the amount and timing of investments in strategic initiatives, transaction costs related to business acquisitions, our investments in property, equipment and software, and the use of cash to pay tax withholding obligations upon surrender of shares upon vesting of equity awards. We continue to invest capital in order to achieve our strategic initiatives and successfully integrate acquired companies. As part of our strategic initiatives, we plan to continue to invest in technology to increase the scalability and resiliency of our systems and drive additional value for our customers. We also expect to continue to invest in our global business services infrastructure and capabilities, including further expansion in the Philippines and India, and selectively pursue acquisitions and/or strategic relationships that will enable us to broaden or further enhance our offerings. New business development remains a priority as we plan to continue to boost our sales and marketing efforts. Additionally, we expect to incur costs associated with implementation and transition costs to onboard new customers.

We expect cash and cash equivalents, cash flows from operations, and our availability under the Senior Revolver to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, including debt maturities and material capital expenditures, for at least the next 12 months and beyond. Similar to previous material acquisitions, future potential acquisitions may be funded through the incurrence of additional debt if our current credit facilities do not have the required capacity.

Our material cash requirements include the following contractual and other obligations:

Debt

Our indebtedness significantly increased as a result of the Cloudmed acquisition. As of March 31, 2023, we had outstanding debt of $1.8 billion with contractual payments extending through 2029, with $58.3 million payable within 12 months. Future interest payments associated with our debt total $478.4 million, with $124.1 million payable within the next 12 months, based on the floating rates as of March 31, 2023.

Leases

Our significant leasing activity encompasses leases for real estate, including corporate offices, operational facilities, and global business services centers. As of March 31, 2023, we had fixed future lease payments of $137.3 million, with $25.3 million payable within 12 months.

Software Purchase and Services Obligations

Our primary purchase obligations relate to contracts entered into with vendors that supply various software services and products. As of March 31, 2023, we had purchase obligations related to software and service contracts of $283.8 million, with $62.8 million payable within 12 months.

As of March 31, 2023 and December 31, 2022, we had cash and cash equivalents of $104.2 million and $110.1 million, respectively. Cash flows from operating, investing, and financing activities, as reflected in our Consolidated Statements of Cash Flows, are summarized in the following table:

	Three Months Ended March 31,
	2023		2022
	(In millions)
Net cash provided by operating activities	$	54.7	$	31.9
Net cash used in investing activities	$	(25.6)	$	(11.0)
Net cash used in financing activities	$	(35.4)	$	(26.2)

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Cash Flows from Operating Activities

Cash provided by operating activities increased by $22.8 million from $31.9 million for the three months ended March 31, 2022, to $54.7 million for the three months ended March 31, 2023. Cash provided by operating activities primarily increased due to improved operating results (exclusive of non-cash depreciation and amortization).

Cash Used in Investing Activities

Cash used in investing activities primarily includes our investments in property, equipment and software and our inorganic growth initiatives. Outflows for significant acquisitions have typically been offset by cash inflows from financing activities related to obtaining new debt.

Cash used in investing activities increased by $14.6 million from $11.0 million for the three months ended March 31, 2022, to $25.6 million for the three months ended March 31, 2023. The increase in cash usage is primarily due to higher property, equipment and software spend related to our strategic initiatives and capitalization of software.

Cash Flows from Financing Activities

Cash flows from financing activities primarily relate to borrowings and repayments of debt. In conjunction with acquisitions, we typically borrow additional debt to fund the consideration, either by increasing our existing facilities or refinancing with new facilities. We utilize our revolver to ensure we have sufficient cash on hand to support the needs of the business at any given point in time. Cash flows from financing activities also include cash received from exercises of stock options and the use of cash to pay tax withholding obligations on shares surrendered upon vesting of equity awards, as well as other financing activities.

Cash used in financing activities increased by $9.2 million from $26.2 million for the three months ended March 31, 2022, to $35.4 million for the three months ended March 31, 2023. This change is primarily due to an $18.0 million increase to debt and revolver repayments in 2023 compared to 2022, partially offset by lower amounts of cash required to pay tax withholding obligations for surrendered shares upon vesting of equity awards in 2023.

Debt and Financing Arrangements

On June 21, 2022, we entered into a Second A&R Credit Agreement with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and a $600.0 million Senior Revolver. The Existing Term A Loan requires quarterly payments. Commencing December 31, 2022, we are also required to repay the Incremental Term A Loan and Term B Loan in quarterly principal installments. The Senior Secured Credit Facilities bear interest at a floating rate, which was 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan as of March 31, 2023. See Note 6, Derivative Financial Instruments, to our consolidated financial statements included in this Amendment for discussion on our interest rate hedging transactions.

As of March 31, 2023, we had drawn $90.0 million and had $509.1 million of remaining availability on our Senior Revolver.

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The proceeds from the new Senior Secured Credit Facilities were or will be used, in addition to cash on hand, (1) to refinance, in full, all existing indebtedness under the Amended and Restated Credit Agreement, dated as of July 1, 2021, by and among R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), now a wholly-owned subsidiary of the Company, and certain of its subsidiaries, Bank of America, N.A., as administrative agent, and the lenders named therein, and amend and restate all commitments thereunder (the “Refinancing”), (2) to pay certain fees and expenses incurred in connection with the entry into the Second A&R Credit Agreement and the Refinancing, (3) to fund the acquisition of Cloudmed and a holding company reorganization, and to pay the fees, premiums, expenses and other transaction costs incurred in connection therewith, and (4) to finance our working capital needs for general corporate purposes.

The Second A&R Credit Agreement contains a number of financial and non-financial covenants. We are required to maintain minimum consolidated total net leverage and consolidated interest coverage ratios. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2023.

See Note 5, Debt, to our consolidated financial statements included in this Amendment for additional information.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Amendment, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. Our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2023, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described in Amendment No. 1 on Form 10-K/A for the year ended December 31, 2022.

Remediation of Material Weakness in Internal Control Over Financial Reporting

Management is actively engaged in the implementation of remediation measures to address the internal control deficiencies that resulted in the material weakness in internal control over financial reporting as of March 31, 2023. The Company’s remediation actions are being overseen by the Audit Committee of the Board of Directors, and include, but are not limited to, the following:

•Adding appropriately qualified internal and external advisory resources to review and assess material future contemplated business combinations and related transactions to identify arrangements that should be considered for recording outside of the business combination transaction purchase accounting, including all acquiree-related or similar compensation arrangements;

•Enhancing review of acquisition-related documents, including but not limited to draft acquisition agreements, underlying compensation arrangements and funds flow documentation, with both internal and external legal and human resources specialists; and

•Updating the description and detailed attributes of key internal controls over business combinations and related transactions, including review and approval by our Chief Financial Officer, Corporate Controller, and Chief Accounting Officer.

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We will continue to modify our remediation plan and may implement additional measures as we complete the redesign and operation of our internal controls in this area. We believe that, once implemented, these additional internal control activities will strengthen our internal control over financial reporting and remediate the material weakness; however, remediation will not be confirmed until management has completed the requisite remediation activities and tested the design and operation of such controls, which is expected to be complete prior to the Company’s filing of the Annual Report on Form 10-K for the year ending December 31, 2023.

Changes in Internal Control Over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting during the first quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

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Item 6. Exhibits

The following are filed or incorporated by reference as a part of this Amendment:

(a)

Exhibit Number	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-41428) filed on June 21, 2022)
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K (File No. 001-41428) filed on June 21, 2022)
10.1	Offer Letter Agreement, dated January 5, 2023, by and between the Company and Jennifer Williams (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-41428) filed on January 5, 2023)
10.2	Form of Restricted Stock Unit Award Agreement under the Company’s Third Amended and Restated 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-41428) filed on May 4, 2023)
10.3	Form of Restricted Stock Unit Award Agreement under the Company’s Third Amended and Restated 2010 Stock Incentive Plan (to be used for short-term awards) (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q (File No. 001-41428) filed on May 4, 2023)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Furnished herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	R1 RCM INC.
By:	/s/ Jennifer Williams
	Jennifer Williams
	Chief Financial Officer and Treasurer

Date: December 4, 2023

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