Shares of Livongo Health (LVGO) - Get Report rose as much as 18% Monday after the company raised its outlook for its diabetes members program as a result of being awarded a contract by the Federal Employees Health Benefits Program.
The Mountain View, California-based company said it signed a two-year agreement that will launch the "Livongo for Diabetes" program on January 1 and expects a nine to 12-month deployment period.
Livongo said it expects the agreement to add about 25,000 Livongo for Diabetes members in 2020, growing to about 45,000 members in 2021, and up from an earlier expectation of 20,000 to 30,000 total members. As a result, Livongo said it expects the agreement to account for $20 million to $25 million in revenue for 2020 and $30 million to $35 million for 2021, or a total of $50 million to $60 million for both years.
"This is Livongo's largest agreement to provide diabetes services in our history and is another great example of the market's excitement about our Applied Health Signals platform and how our business is expanding from working primarily with self-insured employers, to broader and larger markets including government employees, labor unions, and the fully-insured populations of our health plan partners," Livongo CEO Zane Burke said in a statement.
In September, the company reported a 156% increase in year-over-year revenue to $40.9 million with a non-GAAP loss of 46 cents a share. Analysts were expecting the company to report revenue of $39.74 million and a loss of 41 cents. Livongo went public in July after its initial price offering priced at $28.
In recent trading the stock was up $2.76, or 16%, to $20.08.