The Oncology Institute(TOI) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial and Operational Highlights The Oncology Institute reported strong Q1 2025 financial results with increased revenue and improved profitability metrics, alongside significant operational advancements in pharmacy and value-based care expansion First Quarter 2025 Financial Highlights The Oncology Institute reported a 10.3% year-over-year increase in consolidated revenue to $104.4 million for Q1 2025. Gross profit saw a significant rise of 44.1% to $17.2 million. The company's net loss slightly improved to $19.6 million, while the Adjusted EBITDA loss narrowed substantially to $(5.1) million from $(10.9) million in the prior year quarter. The company also strengthened its liquidity through a $16.5 million private placement Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $104.4 million | $94.7 million | +10.3% | | Gross Profit | $17.2 million | $11.9 million (calculated) | +44.1% | | Net Loss | $19.6 million | $19.9 million | +1.5% (improvement) | | Adjusted EBITDA | $(5.1) million | $(10.9) million | +53.0% (improvement) | | Basic and Diluted EPS | $(0.21) | $(0.22) | +4.5% (improvement) | | Cash and Cash Equivalents | $39.7 million | N/A | N/A | - Successfully closed a private placement resulting in gross proceeds of approximately $16.5 million to support working capital and growth[4] - Entered into an exchange agreement, converting approximately $4.1 million of senior secured convertible notes into common-equivalent preferred stock and common warrants[4] Recent Operational Highlights Operationally, TOI achieved record performance in its Retail Pharmacy and Dispensary segment, with revenue growing over 20% YoY to $49.3 million. The company expanded its value-based care footprint by securing new capitated contracts adding over 100,000 lives across Florida, California, and Nevada. Additionally, fee-for-service business grew 9% compared to the previous quarter - The Retail Pharmacy and Dispensary segment set fill records, contributing $49.3 million in revenue and over $9 million in gross profit, a growth of over 20% YoY[4] - Fee-for-service (FFS) business grew 9% in Q1 2025 over Q4 2024, reflecting investments in referral management and call center expansion[4] - Secured multiple new capitated contracts adding over 100,000 lives, including a first fully-delegated agreement in Florida and a new contract in Nevada adding over 80,000 Medicaid lives[4] Management Commentary and Outlook Management expressed confidence in achieving sustained cash flow positivity and profitability by 2026, supported by strategic growth initiatives and reaffirmed full-year 2025 financial guidance Management Commentary CEO Daniel Virnich expressed satisfaction with the strong start to 2025, driven by operational discipline and strategic growth. The company is targeting sustained cash flow positivity in the second half of 2025 and full-year profitability in 2026. New capitation contracts are projected to add approximately $50 million in annualized revenue - The company is executing on a near-term path to achieve sustained cash flow positivity and profitability in the second half of 2025[5] - Management anticipates full-year profitability in 2026, supported by value-based contract wins, organic FFS growth, and pharmacy expansion[5] - New capitation contracts expected in H1 2025 are projected to add approximately $50 million in new annualized revenue, with a line of sight to an additional 100,000 lives in H2 2025[5] Outlook for Fiscal Year 2025 TOI reaffirmed its full-year 2025 guidance, projecting revenues between $460 million and $480 million and an Adjusted EBITDA loss between $(8) million and $(17) million. For the second quarter of 2025, the company expects an Adjusted EBITDA of approximately $(4) to $(5) million Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $460 to $480 million | | Gross Profit | $73 to $82 million | | Adjusted EBITDA | $(8) to $(17) million | | Free Cash Flow | $(12) to $(21) million | - The company expects an Adjusted EBITDA of approximately $(4) to $(5) million in the second quarter of 2025[6] Detailed Financial Results A comprehensive analysis of Q1 2025 financial performance reveals revenue growth driven by the Dispensary segment, improved gross profit margins, and enhanced cost discipline, alongside key business metrics First Quarter 2025 Results Analysis In Q1 2025, revenue growth was primarily driven by a 24.2% increase in Dispensary revenue, while Patient Services revenue remained relatively flat. Gross profit margin improved significantly due to better performance in both segments and a one-time drug supplier rebate. SG&A expenses decreased as a percentage of revenue from 30.1% to 24.3% YoY, demonstrating improved cost discipline Q1 2025 Revenue Breakdown vs. Q1 2024 | Revenue Source | Q1 2025 Revenue | Q1 2024 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Patient Services | $53.1 million | $52.5 million | +1.2% | | - Fee for Service | $35.6 million | $34.8 million | +2.3% | | Dispensary | $49.3 million | $39.7 million | +24.2% | | Total Revenue | $104.4 million | $94.7 million | +10.3% | - Gross profit increased by 44.1% to $17.2 million, partly due to a one-time rebate from a renewed three-year contract with the primary drug supplier, which is not expected to recur[9] - SG&A expenses decreased to $25.4 million (24.3% of revenue) from $28.5 million (30.1% of revenue) in Q1 2024, indicating improved cost discipline and operational efficiency[10] - Free Cash Flow improved to $(4.0) million from $(15.4) million in Q1 2024[12] Key Business Metrics As of Q1 2025, TOI operated in 18 markets with 81 clinics, covering 1.9 million lives under value-based contracts. Compared to the prior year, the company expanded its market presence but saw a reduction in the number of clinics and lives covered Key Business Metrics Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Clinics | 81 | 87 | | Markets | 18 | 14 | | Lives under value-based contracts | 1.9 million | 2.0 million | Financial Statements This section presents the company's consolidated balance sheets, statements of operations, and statements of cash flows, detailing financial position, performance, and liquidity for the reported periods Consolidated Balance Sheets As of March 31, 2025, TOI's balance sheet showed total assets of $164.0 million and total liabilities of $158.9 million. Cash and cash equivalents decreased to $39.7 million from $49.7 million at the end of 2024, while long-term debt was reduced to $73.9 million from $93.1 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $39,739 | $49,669 | | Total current assets | $106,820 | $112,418 | | Total assets | $164,002 | $172,717 | | Total current liabilities | $59,541 | $52,215 | | Long-term debt, net | $73,894 | $93,131 | | Total liabilities | $158,933 | $169,128 | | Total stockholders' equity | $5,069 | $3,589 | Consolidated Statements of Operations For the first quarter of 2025, TOI's total operating revenue increased to $104.4 million from $94.7 million in the prior-year period. The loss from operations improved significantly to $(9.9) million from $(18.0) million. However, a substantial increase in interest expense and a non-cash charge for the change in fair value of derivative liabilities resulted in a net loss of $(19.6) million, nearly flat compared to the prior year's $(19.9) million Statement of Operations Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenue | $104,406 | $94,666 | | Total operating expenses | $114,317 | $112,638 | | Loss from operations | $(9,911) | $(17,972) | | Interest expense, net | $5,570 | $1,985 | | Net loss | $(19,585) | $(19,889) | | Net loss per share (Basic & Diluted) | $(0.21) | $(0.22) | Consolidated Statements of Cash Flows In Q1 2025, net cash used in operating activities was $(5.0) million, a significant improvement from $(15.9) million in Q1 2024. Financing activities used $(4.7) million, driven by a $20 million principal payment on long-term debt, which was largely offset by $15.4 million in proceeds from a private placement. The company ended the quarter with $39.7 million in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,988) | $(15,883) | | Net cash (used in) provided by investing activities | $(202) | $19,388 | | Net cash used in financing activities | $(4,740) | $(938) | | Net (decrease) increase in cash | $(9,930) | $2,567 | | Cash at end of period | $39,739 | $36,055 | Supplementary Information This section provides reconciliations for non-GAAP financial measures and general company information, including forward-looking statements Non-GAAP Financial Measures and Reconciliations The company utilizes non-GAAP metrics such as Free Cash Flow and Adjusted EBITDA for performance assessment. For Q1 2025, Free Cash Flow improved by 73.8% to $(4.0) million from $(15.4) million in Q1 2024. Adjusted EBITDA loss narrowed by 53.3% to $(5.1) million from $(10.9) million, with key adjustments including interest expense, share-based compensation, and changes in fair value of liabilities Free Cash Flow Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,988) | $(15,883) | | Cash paid for interest | $1,290 | $1,134 | | Purchases of property and equipment | $(328) | $(610) | | Free Cash Flow | $(4,026) | $(15,359) | Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(19,585) | $(19,888) | | Adjustments (Depreciation, Interest, etc.) | $14,476 | $6,948 | | Adjusted EBITDA | $(5,109) | $(10,940) | Company Information and Forward-Looking Statements Founded in 2007, The Oncology Institute is a major provider of value-based cancer care in community settings, operating over 70 clinics with nearly 120 clinicians. The company will host a conference call on May 14, 2025, to discuss these results. The report contains forward-looking statements that are subject to various risks and uncertainties - TOI will host a conference call and webcast on May 14, 2025, at 5:00 p.m. Eastern Time to discuss the first quarter results[13][15] - TOI is a value-based cancer care provider founded in 2007, with nearly 120 employed clinicians and over 700 teammates in more than 70 clinic locations[16] - The press release contains forward-looking statements regarding projections and financial results, which are based on current expectations and subject to risks and uncertainties[17]