Privia Health Reports First Quarter 2024 Financial Results
Practice Collections +7.4% compared to 1Q’23Implemented Providers +17.3% compared to 1Q’23Company Reiterated Full Year 2024 Guidance ARLINGTON, Va., May 09, 2024 (GLOBE NEWSWIRE) -- Privia Health Group, Inc. (Nasdaq: PRVA) today announced financial results for the first quarter ended March 31, 2024. For the Three Months Ended March 31, ($ in millions, except per share amounts) 2024 2023 Change (%) Total revenue$ 415.2 $ 386.3 7.5 %Gross profit$ 93.4 $ 83.0 12.5 %Operating income$ 0.8 $ 6.7 (87.7)%Net income a$ 3.0 $ 7.3 (59.3)%Non-GAAP adjusted net income b$ 22.5 $ 19.3 16.6 %Net income per share$ 0.03 $ 0.06 (50.0)%Non-GAAP adjusted net income per share$ 0.18 $ 0.16 12.5 % a.Net income for the three months ended March 31, 2024, included $11.9 million in non-cash stock compensation expense. Net income for the three months ended March 31, 2023 included $5.4 million in non-cash stock compensation expense. b.Reconciliations of non-GAAP adjusted net income and other non-GAAP financial measures are presented in tables near the end of this press release. First Quarter 2024 highlights include: Practice Collections of $707.7M, +7.4% versus 1Q’23, which includes a year-over-year reduction due to a shift of capitation risk exposure for improved economic terms;Adjusted EBITDA of $19.9M, +18.1% versus 1Q’23;Continued strength in same-store growth and new provider additions, +17.3% versus 1Q’23; andStrong sales and business development pipeline. Key Operating and Non-GAAP Financial Metrics For the Three Months Ended March 31, ($ in millions) 2024 2023 Change (%) Implemented Providers 4,359 3,716 17.3 %Value-Based Care Attributed Lives 1,143,000 1,037,000 10.2 %Practice Collections$ 707.7 $ 658.9 7.4 %Care Margin$ 94.9 $ 84.0 13.0 %Platform Contribution$ 44.7 $ 41.4 8.1 %Adjusted EBITDA$ 19.9 $ 16.9 18.1 % Financial and Business Outlook c d e f Privia Health reiterated its full-year 2024 guidance, as follows: FY 2023 FY 2024 Guidance c Y-Y% Change from FY 2023($ in millions)Actual Low High Low HighImplemented Providers 4,305 4,650 4,750 8.0% 10.3%Attributed Lives 1,120,000 1,150,000 1,200,000 2.7% 7.1%Practice Collections$ 2,839.0 $ 2,775 $ 2,875 (2.3)% 1.3%GAAP Revenue$ 1,657.7 $ 1,600 $ 1,675 (3.5)% 1.0%Care Margin$ 359.2 $ 388 $ 400 8.0% 11.4%Platform Contribution$ 173.5 $ 180 $ 188 3.7% 8.4%Adjusted EBITDAe$ 72.2 $ 85 $ 90 17.7% 24.7% Practice Collections guidance includes reduction of approximately $198 million from renegotiated Medicare Advantage capitation agreements, and assumes minimal year-over-year increase in Shared Savings accrualsAdjusted EBITDA guidance includes approximately $10-12 million in start-up costs for new geographies announced in last 18 monthsCapital expenditures are expected to be less than $1 million in full-year 2024Approximately 80% of Adjusted EBITDA expected to convert to free cash flow in FY 2024Effective tax rate expected to be approximately 27-28% c.Management has not reconciled forward-looking non-GAAP measures to their most directly comparable GAAP measures of gross margin, operating income and net income. This is because the Company cannot predict with reasonable certainty and without unreasonable efforts the ultimate outcome of certain GAAP components of such reconciliations due to market-related assumptions that are not within our control as well as certain legal or advisory costs, tax costs or other costs that may arise. For these reasons, management is unable to assess the probable significance of the unavailable information, which could materially impact the amount of the future directly comparable GAAP measures.d.See “Key Metrics and Non-GAAP Financial Measures” for more information as to how the Company defines and calculates Implemented Providers, Attributed Lives, Practice Collections, Care Margin, Platform Contribution, and Adjusted EBITDA, and for a reconciliation of the most comparable GAAP measures to Care Margin, Platform Contribution, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income Per Share.e.Certain non-recurring or non-cash and other expenses will be treated as an add back in the reconciliation of Net Income to Adjusted EBITDA, and the reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share, the details of which can be found in the Reconciliation schedules near the end of this and in future quarterly financial press releases.f.Any slight variations in totals due to rounding. Webcast and Conference Call Information The Company will host a conference call on May 9, 2024, at 8:00 am ET to discuss these results and management’s outlook for future financial and operational performance. You can visit ir.priviahealth.com/news-and-events/events-and-presentations to listen to the call via live webcast. The webcast will be archived and available for replay for on-demand listening shortly after the completion of the call under the same link. If you wish to participate in the live conference call, then please go to https://register.vevent.com/register/BIa226cff209a046a0ae8a7711f796fc02 to pre-register and obtain your dial-in number and passcode. This news release and the financial statements contained herein, and the slide presentation for the webcast, are also available on the Privia Health Investor Relations website at ir.priviahealth.com. About Privia Health Privia Health™ is a technology-driven, national physician enablement company that collaborates with medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering high-value care in both in-person and virtual settings. Our platform is led by top industry talent and exceptional physician leadership, and consists of scalable operations and end-to-end, cloud-based technology that reduces unnecessary healthcare costs, achieves better outcomes, and improves the health of patients and the well-being of providers. For more information, visit priviahealth.com. Non-GAAP Financial Measures The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States ("GAAP"). From time to time, in press releases, financial presentations, earnings conference calls or otherwise, the Company may disclose certain non-GAAP financial measures. The non-GAAP financial measures presented in this press release should not be viewed as alternatives or substitutes for the Company's reported GAAP results. A reconciliation to the most directly comparable GAAP financial measure is set forth in the tables that accompany this release. The Company believes that the non-GAAP financial measures presented in this press release are relevant and provide useful information to the Company's management, investors, and other interested parties about the Company's operating performance because the measures allow them to understand and compare the Company's actual and expected operating results during the prior, current and future periods in a more consistent manner. The non-GAAP measures presented in this press release may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations that, when viewed with GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provides a more complete understanding of the results of operations and trends affecting the Company's business. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to financial measures calculated in accordance with GAAP. Safe Harbor Statement The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Form 10-Q is filed with the Securities and Exchange Commission (“SEC”). This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements relate to our current expectations, projections and assumptions about our business, the economy and future events or conditions. They do not relate strictly to historical or current facts. Forward-looking statements can be identified by words such as “aims,” “anticipates,” "assumes," “believes,” “estimates,” “expects,” “forecasts,” “future,” “intends,” “likely,” “may,” “outlook,” “plans,” “potential,” “projects,” “seeks,” “strategy,” “targets,” “trends,” “will,” “would,” “could,” “should,” and variations of such terms and similar expressions and references to guidance, although some forward-looking statements may be expressed differently. In particular, these include statements relating to, among other things: our future actions, business plans, objectives and prospects; and our future operating or financial performance and projections, including our full-year guidance for 2024. Factors or events that could cause actual results to differ may emerge from time to time and are difficult to predict. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results may differ materially from past results and those anticipated, estimated or projected. We caution you not to place undue reliance upon any of these forward-looking statements. Factors related to these risks and uncertainties include, but are not limited to: compliance with applicable healthcare laws and government regulations in the heavily regulated industry in which the Company operates; the Company’s dependence on relationships with its medical groups, some of which the Company does not own; the Company’s growth strategy, which may not prove viable and the Company may not realize expected results; the Company’s inability to successfully enter new markets; difficulties implementing the Company’s proprietary end-to-end, cloud-based technology solution for Privia physicians and new medical groups; the high level of competition in the Company’s industry and the Company’s failure to compete and innovate; challenges in successfully establishing a presence in new geographic markets; the Company’s reliance on its electronic medical record vendor, which the Privia Technology Solution is integrated and built upon; changes in the payer mix of patients and potential decreases in the Company’s reimbursement rates as a result of consolidation among commercial payers; the Company’s use, disclosure, and other processing of personally identifiable information, including health information, is subject to the Health Insurance Portability and Accountability Act of 1996 and other federal and state privacy and security regulations; and those factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s subsequent Quarterly Reports on Form 10-Q. All information in this press release is as of the date of the release, and the Company undertakes no duty to update this information unless required by law. Contact:Robert BorchertSVP, Investor & Corporate [email protected] Privia Health Group, Inc.Condensed Consolidated Statements of Operations(g)(unaudited)(in thousands, except share and per share data) For the Three Months Ended March 31, 2024 2023 Revenue$ 415,243 $ 386,276 Operating expenses: Provider expense 320,336 302,255 Cost of platform 54,057 44,730 Sales and marketing 6,085 5,286 General and administrative 32,121 25,951 Depreciation and amortization 1,821 1,340 Total operating expenses 414,420 379,562 Operating income 823 6,714 Interest income, net (2,984) (1,813)Income before provision for income taxes 3,807 8,527 Provision for income taxes 751 2,125 Net income 3,056 6,402 Less: Net income (loss) attributable to non-controlling interests 72 (922)Net income attributable to Privia Health Group, Inc.$ 2,984 $ 7,324 Net income per share attributable to Privia Health Group, Inc. stockholders – basic$ 0.03 $ 0.06 Net income per share attributable to Privia Health Group, Inc. stockholders – diluted$ 0.02 $ 0.06 Weighted average common shares outstanding – basic 118,505,320 115,009,010 Weighted average common shares outstanding – diluted 125,053,404 124,328,964 (g) Any slight variations in totals due to rounding. Privia Health Group, Inc.Condensed Consolidated Balance Sheets(h)(in thousands) March 31, 2024 December 31, 2023Assets(unaudited) Current assets: Cash and cash equivalents$ 351,136 $ 389,511 Accounts receivable 346,088 290,768 Prepaid expenses and other current assets 30,916 20,525 Total current assets 728,140 700,804 Non-current assets: Property and equipment, net 2,038 2,325 Operating right-of-use asset 6,159 6,612 Intangible assets, net 106,103 107,630 Goodwill 139,457 138,749 Deferred tax asset 34,337 35,200 Other non-current assets 15,352 8,580 Total non-current assets 303,446 299,096 Total assets$ 1,031,586 $ 999,900 Liabilities and stockholders’ equity Current liabilities: Accounts payable and accrued expenses$ 50,651 $ 57,831 Provider liability 350,286 326,078 Operating lease liabilities, current 2,861 3,043 Total current liabilities 403,798 386,952 Non-current liabilities: Operating lease liabilities, non-current 4,651 5,246 Other non-current liabilities 313 313 Total non-current liabilities 4,964 5,559 Total liabilities 408,762 392,511 Commitments and contingencies Stockholders’ equity: Common stock 1,187 1,182 Additional paid-in capital 766,243 753,869 Accumulated deficit (190,630) (193,614)Total Privia Health Group, Inc. stockholders’ equity 576,800 561,437 Non-controlling interest 46,024 45,952 Total stockholders’ equity 622,824 607,389 Total liabilities and stockholders’ equity$ 1,031,586 $ 999,900 (h) Any slight variations in totals are due to rounding. Privia Health Group, Inc.Condensed Consolidated Statements of Cash Flows(i)(unaudited)(in thousands) For the Three Months Ended March 31, 2024 2023 Cash flows from operating activities Net income$ 3,056 $ 6,402 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 294 291 Amortization of intangibles 1,527 1,049 Stock-based compensation 11,904 5,381 Deferred tax expense 863 1,865 Changes in asset and liabilities: Accounts receivable (55,320) (71,277)Prepaid expenses and other current assets (10,391) (2,301)Other non-current assets and right-of-use asset (1,321) 493 Accounts payable and accrued expenses (7,180) (6,537)Provider liability 24,208 51,944 Operating lease liabilities (777) (694)Net cash used in operating activities (33,137) (13,384)Cash from investing activities Business acquisitions, net of cash acquired (707) (24,856)Other (5,006) — Net cash used in investing activities (5,713) (24,856)Cash flows from financing activities Proceeds from exercised stock options 475 1,477 Net cash provided by financing activities 475 1,477 Net decrease in cash and cash equivalents (38,375) (36,763)Cash and cash equivalents at beginning of period 389,511 347,992 Cash and cash equivalents at end of period$ 351,136 $ 311,229 Supplemental disclosure of cash flow information: Interest paid$ 93 $ 22 Income tax refunds received$ (230) $ (5) (i) Any slight variations in totals are due to rounding. Additional Financial Information Revenues disaggregated by source: For the Three Months Ended March 31,(Dollars in Thousands) 2024 2023 FFS-patient care$ 274,823 $ 227,789 FFS-administrative services 29,076 26,396 Capitated revenue 51,304 78,260 Shared savings 47,464 43,928 Care management fees (PMPM) 10,603 8,558 Other revenue 1,973 1,345 Total Revenue$ 415,243 $ 386,276 The Company’s liabilities for unpaid medical claims under at-risk capitation arrangements: March 31,(Dollars in Thousands) 2024 2023 Balance, beginning of period$ 67,138 $ 28,617 Incurred health care costs: Current year 51,040 75,632 Prior years 600 3,268 Total claims incurred$ 51,640 $ 78,900 Claims paid: Current year (2,072) (29,716)Prior year (42,185) (28,079)Total claims paid$ (44,257) $ (57,795)Balance, end of period$ 74,521 $ 49,722 Key Metrics and Non-GAAP Financial Measures Privia Health reviews a number of operating and financial metrics, including the following key metrics and non-GAAP financial measures, to evaluate the Company’s business, measure performance, identify trends affecting the Company’s business, formulate business plans, and make strategic decisions. Key Metrics(j) For the Three Months Ended March 31,(unaudited; $ in millions) 2024 2023 Implemented Providers (as of end of period) (1) 4,359 3,716 Attributed Lives (as of end of period) (2) 1,143,000 1,037,000 Practice Collections (3)$ 707.7 $ 658.9 (1) Implemented Providers is defined as the total of all service professionals on Privia Health’s platform at the end of a given period who are credentialed by Privia Health and billed for medical services, in both Owned and Non-Owned Medical Groups during that period.(2) Attributed Lives are defined as any patient that a payer deems attributed to Privia to deliver care as part of a value-based care arrangement through a provider of primary care services as of the end of a particular period.(3) Practice Collections are defined as the total collections from all practices in all markets and all sources of reimbursement that the Company receives for delivering care and providing Privia Health’s platform and associated services. Practice Collections differ from revenue by including collections from Non-Owned Medical Groups.(j) Any slight variations in totals are due to rounding. Non-GAAP Financial Measures (4)(k) For the Three Months Ended March 31,(unaudited; $ in thousands) 2024 2023 Care Margin$ 94,907 $ 84,021 Platform Contribution$ 44,737 $ 41,398 Platform Contribution Margin 47.1% 49.3%Adjusted EBITDA$ 19,922 $ 16,864 Adjusted EBITDA Margin 21.0% 20.1% (4) In addition to results reported in accordance with GAAP, Privia Health discloses Care Margin, Platform Contribution, Platform Contribution margin, Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. Each are defined as follows: •Care Margin is Gross Profit excluding amortization of intangible assets. •Platform Contribution is Gross Profit, excluding amortization of intangible assets, less Cost of platform and excluding stock-based compensation expense included in Cost of platform. •Platform Contribution margin is Platform Contribution divided by Care Margin. •Adjusted EBITDA is net income attributable to Privia Health Group, Inc. shareholders and subsidiaries excluding non-controlling interests, provision for income taxes, interest income, interest expense, depreciation and amortization, stock-based compensation, employer taxes on equity vesting/exercises, severance charges and other non-recurring expenses. •Adjusted EBITDA Margin is Adjusted EBITDA divided by Care Margin.(k) Any slight variations in totals are due to rounding. Reconciliation of Gross Profit to Care Margin(l) For the Three Months Ended March 31,(unaudited; $ in thousands) 2024 2023 Revenue$ 415,243 $ 386,276 Provider expense (320,336) (302,255)Amortization of intangible assets (1,527) (1,049)Gross Profit$ 93,380 $ 82,972 Amortization of intangibles assets 1,527 1,049 Care margin$ 94,907 $ 84,021 (l) Any slight variations in totals are due to rounding. Reconciliation of Gross Profit to Platform Contribution(m) For the Three Months Ended March 31,(unaudited; $ in thousands) 2024 2023 Revenue$ 415,243 $ 386,276 Provider expense (320,336) (302,255)Amortization of intangibles assets (1,527) (1,049)Gross Profit$ 93,380 $ 82,972 Amortization of intangibles assets 1,527 1,049 Cost of platform (54,057) (44,730)Stock-based compensation(5) 3,887 2,107 Platform Contribution$ 44,737 $ 41,398 (m) Any slight variations in totals are due to rounding.(5) Amount represents stock-based compensation expense included in Cost of Platform. Reconciliation of Net Income to Adjusted EBITDA(n) For the Three Months Ended March 31,(unaudited; $ in thousands) 2024 2023 Net income$ 2,984 $ 7,324 Net income (loss) attributable to non-controlling interests 72 (922)Provision for income taxes 751 2,125 Interest income, net (2,984) (1,813)Depreciation and amortization 1,821 1,340 Stock-based compensation 11,904 5,381 Other expenses(6) 5,374 3,429 Adjusted EBITDA$ 19,922 $ 16,864 (n) Any slight variations in totals are due to rounding.(6) Other expenses include employer taxes on equity vesting/exercises, severance and certain non-recurring costs. Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share(o) For the Three Months Ended March 31,(unaudited; $ in thousands) 2024 2023 Net income$ 2,984 $ 7,324 Stock-based compensation 11,904 5,381 Intangible amortization expense 1,527 1,049 Provision for income tax 751 2,125 Other expenses(7) 5,374 3,429 Adjusted net income$ 22,540 $ 19,308 Adjusted net income per share attributable to Privia Health Group, Inc. stockholders – basic$ 0.19 $ 0.17 Adjusted net income per share attributable to Privia Health Group, Inc. stockholders – diluted$ 0.18 $ 0.16 Weighted average common shares outstanding – basic 118,505,320 115,009,010 Weighted average common shares outstanding – diluted 125,053,404 124,328,964 (o) Any slight variations in totals due to rounding.(7) Other expenses include employer taxes on equity vesting/exercises, severance and certain non-recurring costs.
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