(2) Platform Contribution is total revenue less the sum of physician and practice expense and cost of platform. (5) Amount represents stock-based compensation expense included in Cost of Platform. For the Nine Months Ended (3) Adjusted EBITDA is net income (loss) ottributable to Privid Heath Group, Inc. shoreholders and substition's excluding minority interests, provision (benefit) for income income, interest expense, depreciation and amortization, stock-based compensation, severance charges and other non-r ...

Financial Data and Key Metrics Changes - Privia Health reported a 52.5% increase in practice collections year-over-year, reaching approximately $611.9 million in Q3 2022 [11][26] - Adjusted EBITDA grew by 12.9% compared to Q3 2021, totaling $15.7 million [11][27] - Year-to-date practice collections increased by 60.8% to nearly $1.8 billion, with care margin up 32.9% [27][30] Business Line Data and Key Metrics Changes - The number of implemented providers increased by over 27% year-over-year, with nearly 3,600 providers now caring for over 4 million patients [11][15] - The company expects to enter new markets, including North Carolina and Ohio, enhancing its growth potential [12][14] Market Data and Key Metrics Changes - The company operates in 10 states and the District of Columbia, with plans to expand further [15] - Privia Health covers approximately 846,000 attributed lives across more than 80 at-risk payer contracts [20] Company Strategy and Development Direction - The company aims to build one of the largest medical groups in each state it enters, focusing on long-term growth and value-based care [14][47] - Privia Health's partnerships with health systems like Novant Health and OhioHealth are designed to support independent providers and enhance value-based care delivery [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for the remainder of 2022 and into 2023, citing strong business momentum and updated financial guidance [9][30] - The company remains focused on expanding its provider network and attributed lives, with expectations for continued growth [32] Other Important Information - The company has no debt and a pro forma cash position of $342 million, indicating strong financial health [28] - Privia Health's guidance for practice collections has been raised to a range of $2.325 to $2.4 billion for 2022 [30] Q&A Session Summary Question: Reduction in value-based commercial VBC lives - Management indicated that the reduction is due to a combination of provider terminations and health plan contract changes, with minimal financial impact [35][36] Question: MSSP program changes and benefits - Management confirmed that the 2021 performance exceeded expectations, contributing positively to their financial results [38][39] Question: New market entry strategy - Management emphasized a long-term strategy to build large medical groups in new states, leveraging partnerships with health systems [46][47] Question: Implemented providers in 2023 - Management expects to add 400 to 500 providers organically each year, with potential additional providers from partnerships [54] Question: Impact of inflation on staffing and provider partnerships - Management noted that inflation is being managed and that financial stress on practices may increase demand for their services [73][75] Question: Future capital allocation strategies - Management highlighted the flexibility to consider share repurchases if stock prices deviate significantly from intrinsic value, while also focusing on growth opportunities [80][81]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q _______________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 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 001-40365 _________________________ Privia Health Group, ...

Financial Data and Key Metrics Changes - Privia Health reported practice collections of over $615 million in Q2 2022, representing a 67.6% increase year-over-year [21][11] - Adjusted EBITDA reached a record $15.5 million, up 54.8% compared to the same period last year, with an adjusted EBITDA margin of 20.4% [21][22] - For the first half of 2022, practice collections increased by 65.5% to nearly $1.2 billion, and adjusted EBITDA grew 51.8% to $30.3 million [23][24] Business Line Data and Key Metrics Changes - The number of implemented providers grew by 31.5% year-over-year, with over 3,500 providers now serving approximately 3.9 million patients [9][15] - Value-based attributed lives increased by 15.8% to cover approximately 856,000 lives across various programs [17][21] - The company has over 80 at-risk contracts, reflecting a diversified approach to value-based care [17] Market Data and Key Metrics Changes - The company operates in eight states and the District of Columbia, with a significant presence in primary care and over 50 specialty types [15][16] - The Medicare Shared Savings Program (MSSP) continues to be a key focus, with CMS showing strong support for the program [13][14] Company Strategy and Development Direction - The company aims to expand its provider partnerships, increase attributed lives, and enter new markets while driving profit margin expansion [9][10] - The focus remains on leveraging a capital-efficient operating structure to support accelerated topline growth [11][12] - The business development pipeline is robust, with plans to enter new markets in the coming years [12][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for 2022 and beyond, citing strong business momentum and visibility into growth metrics [10][11] - The company is focused on maintaining high levels of provider retention and same-store growth [12][21] - Management noted that the operating model is designed to provide significant opportunities for topline and EBITDA growth [18][22] Other Important Information - The company repaid all outstanding debt in June 2022, with cash and cash equivalents of $292.2 million [23][24] - The guidance for practice collections, GAAP revenue, and care margin has been raised to the high end of previous ranges [24] Q&A Session Summary Question: Comments on Medicare Physician Fee Schedule and MSSP program changes - Management believes the proposed changes are beneficial for Privia, particularly due to CMS's endorsement of the MSSP [29][30] Question: Outlook for 2023 and new market entries - Management indicated strong visibility for 2023 based on current sales pipeline and execution, with potential new market entries not yet reflected in guidance [32][33] Question: Utilization trends in risk and fee-for-service business - Management noted that ambulatory utilization is running ahead of expectations, while inpatient utilization remains difficult to predict [40][41] Question: Growth in value-based care lives - Growth is broad-based across commercial, MA, MSSP, and Medicaid, with a focus on increasing lives in all categories [46][48] Question: Update on new markets entered last year - All new markets are operational, with initial sales efforts underway and positive expectations for growth, particularly in California [59][60] Question: Performance of new full-risk contracts - Management is taking a conservative approach in recognizing revenue from new full-risk contracts, with early data being monitored [66][68] Question: Patient attributed lives and long-term growth algorithm - Management explained variability in attributed lives and emphasized that growth in providers leads to increased attribution over time [75][78] Question: Satisfaction levels among large groups - Satisfaction levels are high, with low attrition rates, indicating strong provider relationships [83][84] Question: Risks associated with full-risk contracts - Management acknowledged the inherent risks in taking on more risk but expressed confidence in their ability to manage these contracts effectively [88][89]

2 nd Quarter 2022 Results August 11, 2022 Shawn Morris – Chief Executive Officer Parth Mehrotra – President & COO David Mountcastle – Chief Financial Officer 1 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements that express the Company's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results that include, but are not limited to: 2022 financial guidance and other projections and forecasts. These forward ...

Financial Data and Key Metrics Changes - Practice collections increased to $561.9 million, up 63.3% year-over-year [22][10] - Adjusted EBITDA reached a record $14.8 million, up 48.8% compared to the same period last year [23][10] - Care margin increased by 36.4%, with adjusted EBITDA margin as a percentage of care margin rising 180 basis points to 20.7% [23][24] Business Line Data and Key Metrics Changes - Capitated revenue was reported at $48.3 million in Q1 2022, contributing to the overall practice collections [22][31] - The company added a solid number of new providers in existing markets, maintaining a high level of provider retention [12][10] Market Data and Key Metrics Changes - The company now has 3,370 implemented providers caring for over 3.8 million patients across 870 practice locations in eight states and the District of Columbia [17][10] - The number of attributed lives under at-risk payer contracts increased by 17.6% year-over-year, covering approximately 848,000 lives [20][10] Company Strategy and Development Direction - Privia Health aims to build one of the largest primary care-centric ambulatory care delivery networks in the U.S., partnering with various provider types and participating in value-based arrangements [14][10] - The introduction of Privia Care Partners allows for a partnership model with provider practices looking to engage in risk-bearing entities [15][10] Management's Comments on Operating Environment and Future Outlook - Management expressed high confidence in growth outlook for 2022 and beyond, driven by strong operational execution and clinical performance [9][10] - The company anticipates continued momentum in practice collections and EBITDA growth, with expectations for practice collections and care margin to be at the high end of guidance ranges [24][10] Other Important Information - The company ended Q1 with a net cash position of over $283 million, indicating strong financial flexibility to support growth initiatives [26][10] - Management emphasized the importance of maintaining a solid balance sheet and positive annual free cash flow [25][10] Q&A Session Summary Question: What portion of practice collections was from value-based care? - Management confirmed that the total value-based care portion would be higher than the reported $48.3 million from capitated revenue, with shared savings also contributing [30][33] Question: How many providers are sold but not yet implemented? - Management indicated that it takes about five to six months to implement providers, and they have visibility through the end of the year with a robust pipeline [35][37] Question: What is the expected trend for capitated lives in Medicare Advantage? - Management stated that they expect to grow the number of capitated lives year-over-year, with a stable trend anticipated for the rest of the year [41][42] Question: How is cash flow expected to trend throughout the year? - Management noted that Q1 typically shows negative cash flow due to timing issues, but they expect cash flow to improve throughout the year [45][46] Question: What are the key drivers for care margin growth? - Management explained that care margin is expected to trend upwards, with true-ups for prior periods likely contributing to increases later in the year [80][81] Question: How is the company managing inflation and rising costs? - Management acknowledged that while inflation affects all providers, their model is attracting more physicians seeking autonomy and support, which is driving growth [113][114]

1 st Quarter 2022 Results May 12, 2022 Shawn Morris – Chief Executive Officer Parth Mehrotra – President & COO David Mountcastle – Chief Financial Officer 1 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements that express the Company's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results that include, but are not limited to: 2022 financial guidance and other projections and forecasts. These forward-lo ...

PART I - FINANCIAL INFORMATION [Item 1. Condensed Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(Unaudited)) This section presents unaudited condensed consolidated financial statements and detailed notes for Q1 2022 and 2021 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (in thousands)** | Item | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $723,183 | $686,373 | | Total Liabilities | $265,284 | $236,192 | | Total Stockholders' Equity | $457,899 | $450,181 | | Cash and cash equivalents | $315,928 | $320,577 | | Accounts receivable | $166,238 | $117,402 | | Provider liability | $172,324 | $140,708 | - Total assets increased by **$36.81 million (5.36%)** from December 31, 2021, to March 31, 2022, primarily driven by an increase in accounts receivable[13](index=13&type=chunk) - Total liabilities increased by **$29.09 million (12.32%)** over the period, mainly due to a significant rise in provider liability[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) **Condensed Consolidated Statements of Operations (in thousands, except per share data)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue | $313,801 | $213,607 | | Total operating expenses | $325,348 | $205,700 | | Operating (loss) income | $(11,547) | $7,907 | | Net (loss) income attributable to Privia Health Group, Inc. | $(17,510) | $5,398 | | Net (loss) income per share – basic and diluted | $(0.16) | $0.06 | - Revenue increased by **46.9% year-over-year**, from **$213.6 million** in Q1 2021 to **$313.8 million** in Q1 2022[15](index=15&type=chunk) - The company reported an operating loss of **$11.5 million** in Q1 2022, a significant decline from an operating income of **$7.9 million** in Q1 2021[15](index=15&type=chunk) - Net loss attributable to Privia Health Group, Inc. was **$17.5 million** in Q1 2022, compared to a net income of **$5.4 million** in Q1 2021, resulting in a basic and diluted loss per share of **$(0.16)**[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) **Condensed Consolidated Statements of Stockholders' Equity (in thousands)** | Item | March 31, 2022 | December 31, 2021 | | :------------------------------------------------ | :------------- | :---------------- | | Common Stock | $1,083 | $1,078 | | Additional Paid-in Capital | $659,577 | $633,902 | | Accumulated Deficit | $(225,618) | $(208,108) | | Total Privia Health Group, Inc. Stockholders' Equity | $435,042 | $426,872 | | Non-controlling Interest | $22,857 | $23,309 | | Total Stockholders' Equity | $457,899 | $450,181 | - Additional paid-in capital increased by **$25.675 million**, primarily due to stock-based compensation expense of **$24.881 million** and issuance of common stock upon exercise of stock options and vesting of restricted stock units[18](index=18&type=chunk) - Accumulated deficit increased by **$17.51 million**, reflecting the net loss attributable to Privia Health Group, Inc. for the period[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (in thousands)** | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,320) | $(2,476) | | Net cash used in investing activities | $(34) | $0 | | Net cash provided by (used in) financing activities | $705 | $(219) | | Net decrease in cash and cash equivalents | $(4,649) | $(2,695) | | Cash and cash equivalents at end of period | $315,928 | $81,938 | - Net cash used in operating activities increased to **$5.32 million** in Q1 2022 from **$2.48 million** in Q1 2021, primarily due to changes in accounts receivable and provider liability[21](index=21&type=chunk)[180](index=180&type=chunk)[183](index=183&type=chunk) - Net cash provided by financing activities turned positive at **$0.71 million** in Q1 2022, compared to net cash used of **$0.22 million** in Q1 2021, driven by proceeds from exercised stock options[21](index=21&type=chunk)[181](index=181&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Summary of Significant Accounting Policies](index=9&type=section&id=1.Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) Details company structure, accounting policies, and recent changes including new capitated revenue arrangements - Privia Health Group, Inc. operates in **nine markets** across the U.S. as of March 31, 2022, forming medical groups and local management companies (MSOs) to provide healthcare and administrative services[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company consolidates 'Friendly Medical Groups' and their 'friendly PCs' as Variable Interest Entities (VIEs) due to specific contractual relationships, while 'Non-Owned Medical Groups' and 'Affiliated Practices' are not consolidated[33](index=33&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - As an emerging growth company, Privia Health has elected to delay adopting new or revised accounting standards until they apply to private companies[40](index=40&type=chunk) - The company operates as a single operating segment and has deferred approximately **$0.8 million** in Social Security taxes under the CARES Act, due by the end of 2022[45](index=45&type=chunk)[47](index=47&type=chunk) - Significant accounting policy changes include the impact of new Capitated revenue payer arrangements for Florida and Mid-Atlantic ACOs, covering approximately **23,000 Medicare Advantage beneficiaries** effective January 1, 2022[49](index=49&type=chunk)[52](index=52&type=chunk) [2. Revenue Recognition](index=16&type=section&id=2.%20Revenue%20Recognition) This section disaggregates revenue by source and payer, highlighting the growth of value-based care revenue streams **Revenue Disaggregated by Source (in thousands)** | Revenue Source | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------ | :-------------------------------- | :-------------------------------- | | FFS-patient care | $204,344 | $169,578 | | FFS-administrative services | $23,006 | $15,411 | | Capitated revenue | $48,330 | $0 | | Shared savings | $27,959 | $17,833 | | Care management fees | $8,804 | $8,570 | | Other revenue | $1,358 | $2,215 | | **Total revenue** | **$313,801** | **$213,607** | **FFS-Patient Care Revenue by Payer Source (Approximate Percentages)** | Payer Source | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------- | :-------------------------------- | :-------------------------------- | | Commercial insurers | 71% | 69% | | Government payers | 14% | 15% | | Patient | 15% | 16% | | **Total** | **100%** | **100%** | - Capitated revenue, a new stream in 2022, contributed **$48.33 million**, reflecting the company's at-risk contracts for Medicare Advantage beneficiaries[58](index=58&type=chunk)[59](index=59&type=chunk) - FFS-patient care remains the largest revenue component, increasing by **20.5% YoY**, while VBC revenue (Capitated, Shared Savings, Care Management Fees) significantly grew to **27.1% of total revenue** in Q1 2022 from **12.4%** in Q1 2021[58](index=58&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [3. Goodwill and Intangible Assets, Net](index=17&type=section&id=3.%20Goodwill%20and%20Intangible%20Assets,%20Net) This section details the carrying value of goodwill and intangible assets, including amortization expenses - Goodwill carrying value remained stable at approximately **$127.9 million** as of March 31, 2022, with no impairment indicators identified[62](index=62&type=chunk) **Intangible Assets, Net (in thousands)** | Intangible Asset | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Trade names | $4,600 | $4,600 | | Consumer customer relationships | $2,500 | $2,500 | | PMG customer relationships | $600 | $600 | | Management Service Agreement (Complete MD) | $2,200 | $2,200 | | Physician network | $1,520 | $1,520 | | Payer contracts | $2,750 | $2,750 | | MSO Service Agreement (BPMC) | $50,800 | $50,800 | | Less accumulated amortization | $(6,044) | $(5,232) | | **Intangible assets, net** | **$58,926** | **$59,738** | - Amortization expense for intangible assets increased significantly to **$0.8 million** for Q1 2022 from **$0.2 million** for Q1 2021, primarily due to recent acquisitions[64](index=64&type=chunk) [4. Leases](index=18&type=section&id=4.%20Leases) Outlines lease expense components, weighted-average terms, discount rates, and future lease payment obligations **Lease Expense Components (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Operating lease cost | $664 | $446 | | Cash paid for operating leases | $706 | $529 | | Weighted-average remaining lease term - operating leases | 5.1 Years | 5.3 Years | | Weighted-average discount rate - operating leases | 3.0% | 3.5% | **Aggregate Future Lease Payments for Operating Leases (in thousands)** | Period | Amount | | :---------------- | :------- | | Remainder of 2022 | $2,033 | | 2023 | $2,962 | | 2024 | $2,996 | | 2025 | $2,980 | | 2026 | $2,173 | | Thereafter | $1,231 | | **Total future lease payments** | **$14,375** | | Imputed interest | $(1,040) | | **Total** | **$13,335** | [5. Property and Equipment, Net](index=18&type=section&id=5.Property%20and%20Equipment,%20Net) Presents the net carrying value of property and equipment, including furniture, computer equipment, and leasehold improvements **Property and Equipment, Net (in thousands)** | Item | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Furniture and fixtures | $1,402 | $1,110 | | Computer equipment | $1,592 | $1,864 | | Leasehold improvements | $4,850 | $4,827 | | Less accumulated depreciation and amortization | $(3,615) | $(3,299) | | **Property and equipment, net** | **$4,229** | **$4,502** | - Net property and equipment decreased slightly from **$4.502 million** at December 31, 2021, to **$4.229 million** at March 31, 2022[66](index=66&type=chunk) [6. Accounts Payable and Accrued Expenses](index=18&type=section&id=6.%20Accounts%20Payable%20and%20Accrued%20Expenses) This section details the composition of accounts payable and accrued expenses, including employee compensation and bonuses **Accounts Payable and Accrued Expenses (in thousands)** | Item | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Accounts payable | $8,463 | $2,973 | | Accrued employee compensation and benefits | $7,034 | $7,491 | | Bonuses payable | $3,127 | $12,292 | | Other accrued expenses | $25,619 | $23,229 | | **Total accounts payable and accrued expenses** | **$44,243** | **$45,985** | - Total accounts payable and accrued expenses decreased by **$1.742 million** from December 31, 2021, to March 31, 2022, primarily due to a significant reduction in bonuses payable[67](index=67&type=chunk) [7. Provider Liability](index=19&type=section&id=7.%20Provider%20Liability) This section defines provider liability and details the estimation methods for unpaid medical claims under capitation arrangements - Provider liability represents costs payable to physicians, hospitals, and other providers, including medical claims costs for attributed beneficiaries under at-risk capitated revenue arrangements[68](index=68&type=chunk) - Estimates for provider liability are developed using actuarial methods, considering utilization trends, membership changes, cost trends, and historical claim patterns[69](index=69&type=chunk) **Liabilities for Unpaid Medical Claims under At-Risk Capitation Arrangements (in thousands)** | Item | Amount | | :-------------------------- | :------- | | Balance at December 31, 2021 | $0 | | Incurred health care costs: Current year | $48,330 | | Claims paid: Current year | $(33,476) | | **Balance at March 31, 2022** | **$14,854** | [8. Note Payable](index=19&type=section&id=8.%20Note%20Payable) This section details the company's note payable, credit facilities, and future principal payment obligations **Note Payable (in thousands)** | Item | March 31, 2022 | December 31, 2021 | | :------------------------ | :------------- | :---------------- | | Note payable | $33,031 | $33,250 | | Less debt issuance costs | $(649) | $(687) | | Less current portion | $(875) | $(875) | | **Note payable, net** | **$31,507** | **$31,688** | - The company's Credit Facilities include a Term Loan Facility of **$35.0 million** (maturing Nov 2024) and a Revolving Loan Facility increased to **$65.0 million** (maturing Aug 2026)[72](index=72&type=chunk)[75](index=75&type=chunk) - As of March 31, 2022, **$33.0 million** in principal was outstanding under the Term Loan Facility, with no amounts outstanding under the Revolving Loan Facility[75](index=75&type=chunk)[76](index=76&type=chunk) **Annual Aggregate Principal Payments for Note Payable (in thousands)** | Year | Amount | | :---------------- | :------- | | Remainder of 2022 | $656 | | 2023 | $875 | | 2024 | $1,313 | | 2025 | $1,750 | | 2026 | $28,437 | | **Total** | **$33,031** | [9. Income Taxes](index=20&type=section&id=9.%20Income%20Taxes) This section presents the provision for income taxes and the effective tax rate, explaining factors influencing the rate **Provision for Income Taxes (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Provision for income tax | $6,308 | $2,000 | | Effective tax rate | (53.6)% | 26.2% | - The effective tax rate for Q1 2022 was **negative (53.6%)** due to the impact of non-deductible stock-based compensation expense on the pre-tax loss[79](index=79&type=chunk) - No valuation allowance was recorded against the deferred tax asset, as management determined it is more likely than not that all or some portion will be realized[80](index=80&type=chunk) [10. Stockholders' Equity](index=21&type=section&id=10.%20Stockholders'%20Equity) Details changes in stockholders' equity, including stock option and RSU activity, and stock-based compensation expense - Anthem acquired **4,000,000 shares** of common stock for **$92 million** in a private placement concurrent with the IPO on May 3, 2021, holding approximately **3.9%** of outstanding common stock[81](index=81&type=chunk) - The PH Group Parent Corp. Stock Option Plan was amended in April 2021, accelerating vesting conditions for certain stock options, resulting in **$195.1 million** in stock-based compensation recognized in Q2 2021[84](index=84&type=chunk) - The 2021 Omnibus Incentive Plan permits awards up to **10,278,581 shares** and allows for annual increases, with **1,183,871 restricted stock units** and **3,683,217 options** issued at IPO[85](index=85&type=chunk) **Stock Option Activity (as of March 31, 2022)** | Item | Number of Shares | Weighted Average Exercise Price | | :-------------------------- | :--------------- | :------------------------------ | | Balance at December 31, 2021 | 19,916,202 | $5.90 | | Granted | 28,911 | $25.50 | | Exercised | (431,796) | $2.02 | | Forfeited | (49,728) | $16.64 | | **Balance at March 31, 2022** | **19,463,589** | **$5.99** | | Exercisable at March 31, 2022 | 10,391,972 | $2.01 | **RSU Activity (as of March 31, 2022)** | Item | Number of Shares | Grant Date Fair Value | | :-------------------------------- | :--------------- | :-------------------- | | Unvested and outstanding at Dec 31, 2021 | 984,901 | $23.23 | | Granted | 374,959 | $25.13 | | Forfeited | (8,343) | $23.00 | | **Unvested and outstanding at Mar 31, 2022** | **1,351,517** | **$23.76** | - Total stock-based compensation expense for Q1 2022 was **$24.9 million**, a significant increase from **$0.1 million** in Q1 2021, with **$77.5 million** unrecognized expense remaining[89](index=89&type=chunk) [11. Commitments and Contingencies](index=22&type=section&id=11.%20Commitments%20and%20Contingencies) This section confirms no material commitments and contingencies as of the reporting date - There were no material commitments and contingencies as of March 31, 2022[91](index=91&type=chunk) [12. Concentrations of Credit Risk](index=22&type=section&id=12.%20Concentrations%20of%20Credit%20Risk) This section identifies significant concentrations of cash and payer relationships, assessing associated credit risks - Substantially all cash and cash equivalents were held at **two financial institutions** as of March 31, 2022, with minimal credit risk believed to exist[92](index=92&type=chunk) - Six payers accounted for approximately **74% of medical service payments** for Q1 2022 and **69% of accounts receivable** as of March 31, 2022, indicating significant payer concentration[93](index=93&type=chunk) [13. Net (Loss) Income Per Share](index=23&type=section&id=13.%20Net%20(Loss)%20Income%20Per%20Share) This section reconciles net (loss) income to per share amounts, detailing weighted average shares outstanding **Net (Loss) Income Per Share Reconciliation (in thousands, except per share amounts)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net (loss) income attributable to common stockholders | $(17,510) | $5,398 | | Weighted average common shares outstanding | 108,059,064 | 95,985,817 | | **Earnings per share – basic and diluted** | **$(0.16)** | **$0.06** | - Potentially dilutive stock options and RSUs totaling **20,815,106 shares** were excluded from diluted loss per share calculation for Q1 2022 as their inclusion would have been antidilutive[94](index=94&type=chunk) [14. Segment Financial Information](index=23&type=section&id=14.%20Segment%20Financial%20Information) This section confirms the company operates as a single operating segment with all assets and revenue in the U.S. - The company operates and reports as a single operating segment, Privia Health Group, Inc., with all long-lived assets and revenue located/earned in the United States[95](index=95&type=chunk)[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, results of operations, key business drivers, revenue streams, and non-GAAP measures for Q1 2022 [Overview](index=24&type=section&id=Overview) This section provides an overview of Privia Health's business model, focusing on physician enablement and value-based care - Privia Health is a technology-driven, national physician-enablement company focused on optimizing physician practices, improving patient experiences, and rewarding high-value care[99](index=99&type=chunk) - The company addresses challenges in the healthcare industry by facilitating the transition to Value-Based Care (VBC), managing administrative requirements, and engaging patients with modern technology[99](index=99&type=chunk) - Privia operates through a unique practice model combining large regional Medical Groups with local autonomy, including Owned, Non-Owned, and Friendly Medical Groups, and offers management services via MSOs[100](index=100&type=chunk)[101](index=101&type=chunk) [GAAP Financial Measures](index=24&type=section&id=GAAP%20Financial%20Measures) This section presents key GAAP financial measures, including revenue, operating income, and net income attributable to the company **Key GAAP Financial Measures (in millions)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $313.8 | $213.6 | | Operating (loss) income | $(11.5) | $7.9 | | Net (loss) income attributable to Privia Health Group, Inc. | $(17.5) | $5.4 | [Coronavirus Aid, Relief and Economic Stimulus Act ("CARES Act")](index=25&type=section&id=Coronavirus%20Aid,%20Relief%20and%20Economic%20Stimulus%20Act%20(%22CARES%20Act%22)) This section details the company's deferral of Social Security taxes under the CARES Act and the remaining repayment obligation - The company deferred its portion of Social Security taxes in 2020 under the CARES Act, with approximately **$0.8 million** recorded in accrued expenses as of March 31, 2022, to be repaid by the end of 2022[107](index=107&type=chunk) [Our Revenue](index=25&type=section&id=Our%20Revenue) This section disaggregates revenue by source, highlighting the increasing contribution from value-based care arrangements - Revenue is generated from FFS-patient care (**65.1% of total revenue** in Q1 2022), FFS-administrative services (**7.3%**), Value-Based Care (VBC) revenue (**27.1%**), and other services (**0.4%**)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - VBC revenue significantly increased from **12.4% of total revenue** in Q1 2021 to **27.1%** in Q1 2022, driven by Capitated revenue, Shared Savings, and Care Management fees[110](index=110&type=chunk) - FFS-patient care revenue is expected to grow due to annual rate inflators, enhanced commercial FFS rates, and expansion of the provider base, supported by a **95% provider retention rate**[109](index=109&type=chunk) [Key Factors Affecting Our Performance](index=26&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Identifies key growth drivers: provider and patient expansion, new market entry, and the launch of new ACOs and affiliation models - Growth is driven by adding new providers (**27.3% increase YoY** to **3,370** in Q1 2022) and new patients (**17.6% increase** in Attributed Lives YoY to **848,000** in Q1 2022)[112](index=112&type=chunk)[113](index=113&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Expansion into new markets, such as West Texas (Oct 2021), California (Oct 2021), and Montana (Feb 2022), is a key growth strategy, leveraging an asset-light operating model[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The company launched **three new Accountable Care Organizations (ACOs)** in Maryland, Florida, and Tennessee at the beginning of 2022, expanding its ACO network to **seven**[121](index=121&type=chunk) - Privia Health launched 'Privia Care Partners' on January 1, 2022, a flexible affiliation model for providers seeking VBC solutions without changing EHRs, starting with over **300 providers** and **25,000 attributed lives**[125](index=125&type=chunk) [Key Metrics and Non-GAAP Financial Measures](index=27&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Presents key operational metrics and non-GAAP financial measures, including Care Margin, Platform Contribution, and Adjusted EBITDA **Key Metrics (as of end of period, in millions/thousands)** | Metric | March 31, 2022 | March 31, 2021 | Change (%) | | :---------------------- | :------------- | :------------- | :--------- | | Implemented Providers | 3,370 | 2,648 | 27.3% | | Attributed Lives (in thousands) | 848 | 721 | 17.6% | | Practice Collections ($) | $561.9 | $344.1 | 63.3% | **Non-GAAP Financial Measures (in thousands, except percentages)** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (%) | | :------------------------ | :-------------------------------- | :-------------------------------- | :--------- | | Care Margin ($) | $71,614 | $52,494 | 36.4% | | Platform Contribution ($) | $34,965 | $25,532 | 36.9% | | Platform Contribution Margin (%) | 48.8% | 48.6% | 0.2 pp | | Adjusted EBITDA ($) | $14,801 | $9,947 | 48.8% | | Adjusted EBITDA Margin (%) | 20.7% | 18.9% | 1.8 pp | **Reconciliation of Operating (Loss) Income to Care Margin (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating (loss) income | $(11,547) | $7,907 | | Depreciation and amortization | $1,118 | $445 | | General and administrative | $36,110 | $13,996 | | Sales and marketing | $4,661 | $3,184 | | Cost of platform | $41,272 | $26,962 | | **Care margin** | **$71,614** | **$52,494** | **Reconciliation of Operating (Loss) Income to Platform Contribution (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating (loss) income | $(11,547) | $7,907 | | Depreciation and amortization | $1,118 | $445 | | General and administrative | $36,110 | $13,996 | | Sales and marketing | $4,661 | $3,184 | | Stock-based compensation (Cost of Platform) | $4,623 | $0 | | **Platform contribution** | **$34,965** | **$25,532** | **Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net (loss) income | $(17,510) | $5,398 | | Net (loss) income attributable to non-controlling interests | $(577) | $218 | | Provision for income taxes | $6,308 | $2,000 | | Interest expense | $232 | $291 | | Depreciation and amortization | $1,118 | $445 | | Stock-based compensation | $24,881 | $101 | | Other expenses | $349 | $1,494 | | **Adjusted EBITDA** | **$14,801** | **$9,947** | [Components of Results of Operations](index=30&type=section&id=Components%20of%20Results%20of%20Operations) Describes revenue streams and operating expense categories that comprise the company's results of operations - FFS-patient care revenue is derived from healthcare services provided, with payments from government and commercial payers, and patients[148](index=148&type=chunk) - FFS-administrative services revenue comes from management services agreements (MSAs) with Non-Owned Medical Groups, typically based on a fixed percentage of net collections or cost-plus-margin[149](index=149&type=chunk) - VBC revenue is earned through capitated fees, shared savings, and care management fees from government and large payer organizations, reflecting the company's clinically integrated network and ACOs[150](index=150&type=chunk)[151](index=151&type=chunk) - Operating expenses include provider expenses (claims, guaranteed payments), cost of platform (EMR, software, salaries, stock-based compensation), sales and marketing, general and administrative, and depreciation and amortization[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Provides a detailed comparative analysis of consolidated statements of operations for Q1 2022 versus Q1 2021 **Consolidated Statements of Operations Data (in thousands)** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change ($) | Change (%) | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenue | $313,801 | $213,607 | $100,194 | 46.9% | | Provider expense | $242,187 | $161,113 | $81,074 | 50.3% | | Cost of platform | $41,272 | $26,962 | $14,310 | 53.1% | | Sales and marketing | $4,661 | $3,184 | $1,477 | 46.4% | | General and administrative | $36,110 | $13,996 | $22,114 | 158.0% | | Depreciation and amortization | $1,118 | $445 | $673 | 151.2% | | Total operating expenses | $325,348 | $205,700 | $119,648 | 58.2% | | Operating (loss) income | $(11,547) | $7,907 | $(19,454) | (246.0)% | | Net (loss) income attributable to Privia Health Group, Inc. | $(17,510) | $5,398 | $(22,908) | (424.4)% | - Revenue increased by **$100.2 million (46.9%) YoY**, primarily driven by **$48.3 million** in new capitated revenue, **$34.7 million** in FFS-patient care, and **$10.2 million** in shared savings[161](index=161&type=chunk)[162](index=162&type=chunk) - Total operating expenses increased by **$119.6 million (58.2%) YoY**, leading to an operating loss of **$11.5 million**, compared to an operating income of **$7.9 million** in the prior year[159](index=159&type=chunk) - General and administrative expenses surged by **$22.1 million (158.0%)** due to **$19.4 million** in stock-based compensation expense related to IPO awards[167](index=167&type=chunk) - Cost of platform increased by **$14.3 million (53.1%)** due to higher salaries and benefits (**$6.6 million**), stock-based compensation (**$4.6 million**), and consulting costs (**$3.0 million**)[165](index=165&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses liquidity, including cash, IPO proceeds, and credit facility capacity, and analyzes cash flow changes - As of March 31, 2022, the company had **$315.9 million** in cash and cash equivalents, with **$211.0 million** net proceeds from its IPO and Anthem private placement in May 2021[172](index=172&type=chunk) - The company believes its cash, IPO proceeds, and Revolving Loan Facility capacity (**$65.0 million**, with no outstanding amounts) will be adequate to fund short-term and long-term operating and capital needs[173](index=173&type=chunk)[175](index=175&type=chunk) **Condensed Consolidated Statements of Cash Flows Data (in thousands)** | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,320) | $(2,476) | | Net cash used in investing activities | $(34) | $0 | | Net cash provided by (used in) financing activities | $705 | $(219) | | **Net decrease in cash and cash equivalents** | **$(4,649)** | **$(2,695)** | - Net cash used in operating activities increased by **$2.8 million YoY**, primarily due to a **$31.2 million** increase in accounts receivable and a **$14.6 million** increase in provider liability[180](index=180&type=chunk)[183](index=183&type=chunk) - Net cash provided by financing activities increased by **$0.9 million YoY**, mainly from **$0.8 million** in proceeds from exercised stock options[181](index=181&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Discusses critical accounting policies and estimates, particularly those related to capitated revenue and provider expense recognition - No material changes to critical accounting policies were reported, other than those impacted by the Florida and Mid-Atlantic ACOs entering into Capitated revenue payer arrangements effective January 1, 2022[185](index=185&type=chunk) - Capitated revenue is recognized monthly based on fixed fees for providing healthcare services to Medicare Advantage beneficiaries, with adjustments for CMS's risk adjustment methodology and quality metrics[187](index=187&type=chunk)[188](index=188&type=chunk) - Provider expense includes medical claims costs for attributed beneficiaries under at-risk capitation arrangements, recognized in the period services are provided[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to market risks, specifically interest rate and inflation risks, and their potential financial impact - The company's primary market risk is interest rate risk, as its Credit Agreement bears interest at a floating rate (LIBOR plus **2.0%** or ABR plus **1.0%**)[192](index=192&type=chunk) - A **100 basis point** increase or decrease in market interest rates would result in a **$0.3 million** change to interest expense, based on **$33.0 million** outstanding debt as of March 31, 2022[192](index=192&type=chunk) - Inflation has not had a material effect on operating results for the periods presented, though future impacts cannot be assured[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effectiveness of disclosure controls and procedures and reports no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2022[194](index=194&type=chunk) - There were no changes to the company's internal control over financial reporting during Q1 2022 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[195](index=195&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Addresses the company's involvement in ordinary course legal proceedings, anticipating no material adverse financial effect - The company is involved in ordinary course legal proceedings, including medical malpractice and consumer claims[196](index=196&type=chunk) - The final outcome of current legal matters is not believed to have a material adverse effect on the business, financial condition, or results of operations[196](index=196&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors from the Annual Report on Form 10-K, noting no material changes for the current period - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K[197](index=197&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no material changes to the planned use of proceeds from the company's Initial Public Offering (IPO) - No material change in the planned use of proceeds from the IPO has occurred since the final prospectus filing and the Annual Report on Form 10-K[198](index=198&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities occurred[199](index=199&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[200](index=200&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) States that no other information is to be reported for the period - No other information to report[201](index=201&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists exhibits filed as part of the Form 10-Q, including certifications and XBRL documents - Exhibits include certifications from the CEO and CFO (31.1, 31.2, 32.1, 32.2) and various XBRL taxonomy documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[202](index=202&type=chunk) [Signatures](index=40&type=section&id=Signatures) Contains official signatures, certifying the report's submission - The report was signed on May 12, 2022, by David Mountcastle, Executive Vice President, Chief Financial Officer, and Authorized Officer of Privia Health Group, Inc[207](index=207&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) Privia Health enables medical groups to transition to value-based care across seven states and D.C - Privia Health operates a physician-enablement platform designed to transition medical practices from fee-for-service (FFS) to value-based care (VBC) models. The platform serves over **3,300 implemented providers** in more than **870 locations** across **seven states and D.C.**, managing over **3 million patients**[15](index=15&type=chunk)[21](index=21&type=chunk) Key Company Metrics (as of December 31, 2021) | Metric | Value | | :--- | :--- | | Implemented Providers | > 3,300 | | Care Center Locations | > 870 | | States of Operation | 7 (+ D.C.) | | Total Patients | > 3 million | | Total Attributed Lives | ~786,000 | | 2021 Revenue | ~$966.2 million | | 2021 Practice Collections | ~$1.63 billion | - The company's revenue is primarily derived from three sources: FFS patient care and administrative services, VBC revenue (including shared savings and PMPM fees), and other services. The model is designed to be payer-agnostic and scalable across different geographies and reimbursement models[18](index=18&type=chunk)[25](index=25&type=chunk) - A key part of Privia's model is organizing physicians into single Tax-ID Number (TIN) Medical Groups in each market, supported by local Management Services Organizations (MSOs) and Accountable Care Organizations (ACOs) to capture VBC opportunities[31](index=31&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) [Market Opportunity and Growth Strategy](index=10&type=section&id=Our%20Market%20Opportunity%20and%20Growth%20Strategy) The company targets a large market opportunity and outlines a multi-pronged strategy for growth - Privia targets a large and growing Total Addressable Market (TAM) for physician enablement, estimated at **$1.9 trillion**, with the potential to serve over **1 million providers** in the U.S[19](index=19&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) - The company's growth strategy is centered on four key pillars: Organic Growth, Moving Markets to VBC, White Space Opportunities, and New Market Development[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) - In January 2022, the company launched Privia Care Partners, a more flexible affiliation model for providers seeking VBC solutions without changing their EMR platform, starting with over **25,000 attributed lives**[21](index=21&type=chunk) [The Privia Technology Solution](index=13&type=section&id=The%20Privia%20Technology%20Solution) Privia's proprietary cloud-based platform optimizes healthcare delivery for fee-for-service and value-based care models - The Privia Technology Solution is a proprietary, end-to-end, cloud-based platform that integrates Privia-developed and third-party applications to manage all aspects of healthcare delivery, optimizing provider workflow and patient engagement[16](index=16&type=chunk)[50](index=50&type=chunk)[58](index=58&type=chunk) - The platform streamlines workflows across the patient journey: pre-visit (data integration, huddle reports), during the visit (in-person or virtual, embedded quality/risk gap alerts), and between visits (automated outreach, care management)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Privia's proprietary virtual visit platform is fully integrated into the EMR, facilitating over **1.7 million virtual visits** conducted by over **2,800 providers** as of December 31, 2021[50](index=50&type=chunk)[67](index=67&type=chunk) [Government Regulations](index=25&type=section&id=Government%20Regulations) The company's operations are subject to extensive federal and state healthcare regulations - The company's operations are subject to extensive federal, state, and local regulations, including laws related to the corporate practice of medicine, fee-splitting, the Stark Law, the Anti-Kickback Statute (AKS), the False Claims Act (FCA), and HIPAA[103](index=103&type=chunk)[104](index=104&type=chunk) - To comply with state-specific corporate practice of medicine laws, Privia utilizes different ownership structures, including majority-owned "Owned Medical Groups" and "Non-Owned" or "Friendly Medical Group" models supported by Management Services Agreements (MSAs)[108](index=108&type=chunk)[109](index=109&type=chunk)[113](index=113&type=chunk) - The company is subject to HIPAA as both a covered entity (through its self-insured health benefits) and a business associate (through its MSOs serving medical groups), operating its medical groups as an Affiliated Covered Entity[144](index=144&type=chunk)[324](index=324&type=chunk) - The ongoing shift in healthcare from FFS to VBC models, driven by legislation like the Affordable Care Act (ACA), presents both opportunities and regulatory complexities, with the company actively participating in programs like the Medicare Shared Savings Program (MSSP) through its ACOs[148](index=148&type=chunk)[152](index=152&type=chunk) [Human Capital Resources](index=37&type=section&id=Human%20Capital%20Resources) The company details its human capital strategy, focusing on talent development, wellness, and diversity initiatives - As of December 31, 2021, Privia Health had **810 employees** across **34 states** and the District of Columbia, none of whom are represented by labor unions[161](index=161&type=chunk) - The company focuses on talent development through programs like the Emerging Leaders Program and manager onboarding, emphasizing employee health and wellness with benefits such as virtual mental healthcare and an Employee Assistance Program (EAP)[162](index=162&type=chunk)[163](index=163&type=chunk) - Privia is committed to diversity, equity, and inclusion (DEI) by scrutinizing job requirements to remove barriers, enhancing policies like parental leave, and fostering an inclusive work environment[164](index=164&type=chunk)[165](index=165&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from healthcare regulations, operational dependencies, financial performance, and cybersecurity - **Regulatory Risks:** The business operates in a heavily regulated industry, where failure to comply with healthcare laws (e.g., Stark Law, Anti-Kickback Statute, corporate practice of medicine) could lead to financial penalties, exclusion from government programs, and operational changes[173](index=173&type=chunk)[174](index=174&type=chunk) - **Business & Operational Risks:** Key risks include dependence on its EMR vendor (athenahealth), competition from other healthcare providers, failure to retain or recruit physicians, and challenges in managing the transition from FFS to VBC reimbursement models[173](index=173&type=chunk)[184](index=184&type=chunk)[202](index=202&type=chunk) - **Financial & Cybersecurity Risks:** The company has a history of net losses and anticipates increasing expenses, while security breaches could compromise sensitive patient data (PHI), leading to liability and reputational harm, and the company is also dependent on reimbursement from third-party payers[173](index=173&type=chunk)[203](index=203&type=chunk)[205](index=205&type=chunk) - **COVID-19 Pandemic Risks:** The pandemic may continue to limit access to and demand for services, impact patient volumes, and affect the use of government relief funds (CARES Act), which are subject to audits and potential recoupment[310](index=310&type=chunk)[315](index=315&type=chunk) - **Corporate & Stock Risks:** The lead sponsors (Goldman Sachs and Pamplona) have significant influence over the company, and as an "emerging growth company," Privia complies with reduced public company reporting requirements[352](index=352&type=chunk)[356](index=356&type=chunk) [Unresolved Staff Comments](index=92&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None [Properties](index=92&type=section&id=Item%202.%20Properties) The company's corporate headquarters are located in approximately 37,000 square feet of leased space in Arlington, Virginia, with additional leased offices in other states - The company's headquarters are in a leased space of approximately **37,000 square feet** in Arlington, Virginia[372](index=372&type=chunk) - Additional leased office space totals approximately **50,000 square feet** across California, Maryland, Georgia, and Texas[372](index=372&type=chunk) [Legal Proceedings](index=92&type=section&id=Item%203.%20Legal%20Proceedings) Privia Health is involved in legal proceedings that arise in the ordinary course of business, with no expected material adverse effect - The company is involved in legal proceedings and claims in the ordinary course of business, but does not expect any current matters to have a material adverse effect on its financial results[373](index=373&type=chunk) [Mine Safety Disclosures](index=92&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=93&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on Nasdaq in May 2021, with no anticipated dividends, and details IPO proceeds - The company's common stock has been listed on the Nasdaq Global Select Market under the symbol "PRVA" since May 3, 2021[376](index=376&type=chunk) - The company has no current plans to pay cash dividends and intends to retain future earnings to fund business growth and repay debt[384](index=384&type=chunk) - The company received net proceeds of approximately **$211.0 million** from its IPO and a concurrent private placement with Anthem after deducting underwriting discounts, commissions, and expenses[387](index=387&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=95&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's 2021 financial performance shows revenue growth but a net loss due to significant IPO-related stock-based compensation Key Financial and Operating Metrics (2019-2021) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **GAAP Measures ($M)** | | | | | Revenue | $966.2 | $817.1 | $786.4 | | Operating (Loss) Income | $(217.4) | $25.4 | $16.1 | | Net (Loss) Income | $(188.2) | $31.2 | $8.2 | | **Non-GAAP & Key Metrics** | | | | | Implemented Providers | 3,317 | 2,550 | 2,482 | | Attributed Lives (thousands) | 786 | 682 | 704 | | Practice Collections ($M) | $1,626.1 | $1,301.1 | $1,135.7 | | Care Margin ($M) | $238.4 | $187.6 | $163.7 | | Platform Contribution ($M) | $107.6 | $82.6 | $68.5 | | Adjusted EBITDA ($M) | $41.4 | $29.4 | $18.1 | - The significant net loss in 2021 was primarily driven by a **$253.5 million** stock-based compensation expense, of which **$195.1 million** was related to the modification of outstanding options in connection with the IPO[427](index=427&type=chunk)[429](index=429&type=chunk)[452](index=452&type=chunk) - Revenue growth in 2021 was driven by a **19.3% increase** in FFS-patient care revenue due to higher volumes and new providers, and a **25.0% increase** in shared savings revenue from VBC programs[446](index=446&type=chunk)[447](index=447&type=chunk) - The company expanded into new markets in late 2021, including West Texas and California, and launched Privia Care Partners in January 2022 to accelerate VBC adoption[405](index=405&type=chunk)[406](index=406&type=chunk)[415](index=415&type=chunk) - As of December 31, 2021, the company had cash and cash equivalents of **$320.6 million**, significantly bolstered by **$211.0 million** in net proceeds from its IPO and private placement[470](index=470&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=114&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its floating-rate debt, with no material impact from inflation to date - The company's main market risk is interest rate risk due to its floating-rate debt, where a **1% (100 basis point)** change in interest rates would impact annual interest expense by approximately **$0.3 million** based on the **$33.3 million** debt outstanding at year-end 2021[516](index=516&type=chunk) - Management believes that inflation has not had a material effect on operating results for the periods presented[517](index=517&type=chunk) [Financial Statements and Supplementary Data](index=114&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the full financial statements and supplementary data, which are included in Item 15 of the Annual Report - All required financial statements and supplementary data are included in Item 15 of this Form 10-K[518](index=518&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=114&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosures - None[519](index=519&type=chunk) [Controls and Procedures](index=114&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls were effective as of December 31, 2021, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[520](index=520&type=chunk) - No material changes were made to the company's internal control over financial reporting during the year ended December 31, 2021[521](index=521&type=chunk) - A management assessment report on internal control over financial reporting is not included due to the transition period for newly public companies[524](index=524&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=117&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) The information for these items is incorporated by reference from the company's forthcoming 2022 Proxy Statement - Information for Items 10 through 14 is incorporated by reference from the registrant's 2022 proxy statement[529](index=529&type=chunk)[530](index=530&type=chunk)[531](index=531&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=118&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section contains the index to the consolidated financial statements and a list of all exhibits filed as part of the Annual Report on Form 10-K - This item provides an index to the Consolidated Financial Statements (page F-1) and lists all exhibits filed with the Form 10-K[535](index=535&type=chunk) Financial Statements and Notes [Consolidated Financial Statements](index=126&type=section&id=Consolidated%20Financial%20Statements) The 2021 consolidated financial statements present the company's financial position, operating results, and cash flows Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $320,577 | $84,633 | | Total current assets | $446,676 | $190,084 | | Goodwill | $127,938 | $118,663 | | **Total assets** | **$686,373** | **$328,969** | | **Liabilities & Equity** | | | | Total current liabilities | $190,461 | $146,938 | | Note payable, non-current | $31,688 | $32,784 | | **Total liabilities** | **$236,192** | **$185,317** | | **Total stockholders' equity** | **$450,181** | **$143,652** | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Revenue | $966,220 | $817,075 | $786,360 | | Total operating expenses | $1,183,656 | $791,695 | $770,298 | | Operating (loss) income | $(217,436) | $25,380 | $16,062 | | Net (loss) income | $(190,649) | $30,904 | $7,945 | | Net (loss) income per share | $(1.83) | $0.33 | $0.09 | Consolidated Cash Flow Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $55,058 | $38,891 | $24,358 | | Net cash used in investing activities | $(32,775) | $(380) | $(5,709) | | Net cash provided by (used in) financing activities | $213,661 | $(767) | $(10,868) | | **Net increase in cash** | **$235,944** | **$37,744** | **$7,781** | [Notes to Consolidated Financial Statements](index=130&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, IPO proceeds, business combinations, debt, and stock-based compensation - **IPO and Private Placement:** On May 3, 2021, the company closed its IPO and a concurrent private placement with Anthem, generating combined net proceeds of **$211.0 million**[574](index=574&type=chunk) - **Business Combinations:** In Q4 2021, the company acquired a majority interest in BASS Management Services Organization in California and launched a Friendly Medical Group in West Texas, resulting in the recognition of **$9.3 million** in goodwill and **$55.1 million** in intangible assets[657](index=657&type=chunk)[658](index=658&type=chunk)[660](index=660&type=chunk) - **Revenue Recognition:** Revenue is disaggregated into FFS-patient care, FFS-administrative services, shared savings, care management fees (PMPM), and other revenue, with the company acting as the principal for FFS-patient care revenue in its Owned Medical Groups[607](index=607&type=chunk)[609](index=609&type=chunk)[651](index=651&type=chunk) - **Debt:** As of Dec 31, 2021, the company had **$33.3 million** outstanding under its Term Loan Facility, which matures in 2026, and its Revolving Loan Facility was increased to **$65.0 million** in August 2021 with no amount outstanding at year-end[668](index=668&type=chunk)[670](index=670&type=chunk)[671](index=671&type=chunk) - **Stock-Based Compensation:** Total stock-based compensation expense was **$253.5 million** in 2021, a sharp increase from **$0.5 million** in 2020, primarily due to a one-time charge of **$195.1 million** related to a modification of stock option vesting conditions contingent on the IPO[683](index=683&type=chunk)[690](index=690&type=chunk)[691](index=691&type=chunk)

Privia Health Group, Inc. (NASDAQ:PRVA) Q4 2021 Earnings Conference Call March 23, 2022 8:30 AM ET Company Participants Robert Borchert - SVP, Investor and Corporate Communications Shawn Morris - CEO David Mountcastle - CFO Parth Mehrotra - President and COO Conference Call Participants Josh Raskin - Nephron Research Whit Mayo - SVB Leerink Jailendra Singh - Credit Suisse Lisa Gill - JPMorgan Jessica Tassan - Piper Sandler Richard Close - Canaccord Genuity Nick Spiekhout - William Blair Operator Good ...