ATHENAHEALTH, INC. REPORTS FIRST QUARTER 2009 RESULTS 41% Revenue Growth Over First Quarter of 2008 58% Adjusted Gross Margin and 18% Adjusted EBITDA Margin Adjusted Net Income of $4.0 Million, or $0.12 Per Diluted Share

WATERTOWN, Mass. (April 30, 2009) – athenahealth, Inc. (Nasdaq: ATHN) (the “Company”), a leading provider of Internet-based business services for physician practices, today announced financial and operational results for the first quarter of 2009. The Company will conduct a conference call on Friday, May 1, 2009, at 8:00 a.m. Eastern Time to discuss these results and management’s outlook for future financial and operational performance.

Total revenue for the three months ended March 31, 2009, was $42.1 million, compared to $29.8 million in the same period last year, an increase of 41%.

“Our strong performance in the first quarter of 2009 demonstrates our growing significance as a unique software-enabled service in healthcare,” said Jonathan Bush, the Company’s Chairman, President, and Chief Executive Officer. “We have strengthened our position as a leader in revenue cycle management and continue to extend our expertise in managing complexity and cash flow within the electronic health record (EHR) space.”

For the three months ended March 31, 2009, non-GAAP Adjusted EBITDA grew to $7.4 million, or 18% of revenue, from non-GAAP Adjusted EBITDA of $4.0 million, or 13% of revenue, in the same period last year. Non-GAAP Adjusted Net Income for the first quarter of 2009 was $4.0 million, or $0.12 per diluted share, compared to Non-GAAP Adjusted Net Income of $3.1 million, or $0.09 per diluted share, in the same period last year. GAAP net income for the quarter was $2.3 million, compared to GAAP net income of $1.8 million in the same period last year. As previously announced, following the reversal of a valuation allowance against U.S. deferred tax assets in the fourth quarter of 2008, the Company’s reported GAAP net income and non-GAAP Adjusted Net Income now reflect a full GAAP tax rate.

“We were pleased to see revenue increase 41% over last year, while operating income grew at much higher rate,” said Carl Byers, the Company’s Chief Financial Officer. “We achieved this even as we intensified investments in operational and strategic initiatives to support our long-term goals.”

“Given favorable trends in our business, we believe that our full year 2009 revenue will grow in line with the full year revenue percentage growth rate we achieved last year,” Byers added.

Key metrics and milestones in the first quarter of 2009 included the following:

$1.1 billion in collections posted to client accounts in the first quarter of 2009, compared to $0.8 billion in the same quarter of 2008
13,196 active physicians live in the first quarter of 2009, compared to 9,810 in the same quarter of 2008
19,739 active medical providers live in the first quarter of 2009, compared to 12,723 in the same quarter of 2008
949 active medical providers using athenaClinicalsSM in the first quarter of 2009, 574 of which were physicians, compared to 412 providers and 291 physicians in the same quarter of 2008
As of March 31, 2009, the Company had cash, cash equivalents, and short-term investments of $90.1 million and short- and long-term debt and capital lease obligations of $10.6 million.

A reconciliation of the Company’s financial results determined in accordance with United States Generally Accepted Accounting Principles (GAAP) to certain non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Explanation of Non-GAAP Financial Measures.”

Source: ATHENAHEALTH