Privia Health (PRVA) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Performance Highlights Privia Health reported strong Q2 2025 financial and operational growth, with significant increases in total revenue, adjusted income, and key operating metrics, despite a GAAP net income decrease Second Quarter 2025 Financial Performance | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (%) | | :-------------------------- | :----------- | :----------- | :--------- | | Total revenue | 521.2 | 422.3 | 23.4% | | Net income | 2.7 | 3.5 | (22.5)% | | Non-GAAP adjusted income | 30.6 | 23.5 | 30.1% | | Net income per share | 0.02 | 0.03 | (33.3)% | | Non-GAAP adjusted income per share | 0.24 | 0.19 | 26.3% | | Gross profit | 112.8 | 98.3 | 14.8% | | Operating income | 3.3 | 5.1 | (34.6)% | | Adjusted EBITDA | 29.0 | 22.0 | 31.6% | Second Quarter 2025 Key Operating Metrics | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Implemented Providers | 5,125 | 4,504 | 13.8% | | Value-Based Care Attributed Lives | 1,382,000 | 1,200,000 | 15.2% | | Practice Collections ($M) | 862.9 | 728.0 | 18.5% | | Care Margin ($M) | 115.2 | 99.8 | 15.4% | | Platform Contribution ($M) | 57.5 | 47.4 | 21.3% | - The company maintained a strong cash position of $390.1 million with no debt, even after deploying $95 million for the IMS transaction in Arizona[5] First Half 2025 Performance Highlights For the first six months of 2025, Privia Health demonstrated robust growth across key financial and operational metrics, including significant increases in total revenue, non-GAAP adjusted net income, and Adjusted EBITDA, reflecting strong underlying business momentum First Half 2025 Financial Performance | Metric | H1 2025 ($M) | H1 2024 ($M) | Change (%) | | :-------------------------- | :----------- | :----------- | :--------- | | Total revenue | 1,001.3 | 837.6 | 19.5% | | Gross profit | 216.4 | 191.6 | 12.9% | | Operating income | 8.6 | 5.9 | 44.5% | | Net income | 6.9 | 6.5 | 7.1% | | Non-GAAP adjusted net income | 58.4 | 46.1 | 26.8% | | Net income per share | 0.05 | 0.05 | —% | | Non-GAAP adjusted net income per share | 0.46 | 0.37 | 24.3% | | Adjusted EBITDA | 55.9 | 41.9 | 33.3% | First Half 2025 Key Operating Metrics | Metric | H1 2025 ($M) | H1 2024 ($M) | Change (%) | | :-------------------------- | :----------- | :----------- | :--------- | | Practice Collections | 1,661.5 | 1,435.7 | 15.7% | | Care Margin | 220.4 | 194.7 | 13.2% | | Platform Contribution | 109.2 | 92.1 | 18.5% | Updated FY'25 Guidance Privia Health has raised its full-year 2025 outlook for several key metrics, including Practice Collections, GAAP Revenue, Platform Contribution, and Adjusted EBITDA, now expecting them to be above the high end of the previously provided range. Guidance also includes the impact of the Arizona market entry Updated FY 2025 Guidance | Metric | FY 2024 Actual | Initial FY 2025 Guidance (Low) | Initial FY 2025 Guidance (High) | Updated FY 2025 Guidance | | :-------------------------- | :------------- | :----------------------------- | :------------------------------ | :----------------------- | | Implemented Providers | 4,789 | 5,200 | 5,300 | High End | | Attributed Lives | 1,256,000 | 1,300,000 | 1,400,000 | High End | | Practice Collections ($M) | 2,968.0 | 3,150 | 3,250 | Above High End | | GAAP Revenue ($M) | 1,736.4 | 1,800 | 1,900 | Above High End | | Care Margin ($M) | 403.9 | 435 | 445 | High End | | Platform Contribution ($M) | 195.6 | 208 | 218 | Above High End | | Adjusted EBITDA ($M) | 90.5 | 105 | 110 | Above High End | - The updated guidance incorporates the impact of the Arizona market entry and assumes no other new business development activity[9] - The company expects de minimis capital expenditures and at least 80% of Adjusted EBITDA to convert to free cash flow in full-year 2025[9] Company Information About Privia Health Privia Health is a leading physician enablement company in the U.S., operating in 15 states and D.C. It focuses on building scaled primary-care centric provider networks, offering a comprehensive technology and service platform to optimize practices, enhance patient experience, and reward physicians for high-value care - Privia Health is one of the largest physician enablement companies in the United States, with a presence in 15 states and the District of Columbia[13] - The company's platform includes an extensive suite of technology and service solutions, supporting over 1,300 physician practices, 5.3+ million patients, and 5,100+ physicians and advanced practitioners[13] - Privia's mission is to transform healthcare delivery to achieve better outcomes, lower costs, and improve community health and provider well-being[14] Webcast and Conference Call Information Privia Health hosted a conference call on August 7, 2025, to discuss its Q2 2025 financial results and future outlook. Details for accessing the live call and archived webcast were provided - A conference call was held on August 7, 2025, at 8:00 am ET to discuss financial results and management's outlook[11] - Webcast and presentation materials are available on the Privia Health Investor Relations website (ir.priviahealth.com)[11][12] Financial Statements Condensed Consolidated Statements of Operations The condensed consolidated statements of operations show a significant increase in total revenue for both the three and six months ended June 30, 2025, compared to the prior year. While operating income and net income attributable to Privia Health Group, Inc. saw mixed results, non-GAAP adjusted income metrics generally improved Condensed Consolidated Statements of Operations (Selected Data, $ in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Revenue | 521,153 | 422,326 | 1,001,250 | 837,569 | | Total operating expenses | 517,817 | 417,228 | 992,696 | 831,648 | | Operating income | 3,336 | 5,098 | 8,554 | 5,921 | | Net income attributable to Privia Health Group, Inc. | 2,687 | 3,467 | 6,907 | 6,451 | | Net income per share (diluted) | 0.02 | 0.03 | 0.05 | 0.05 | - Non-cash stock compensation expense was $18.8 million for Q2 2025 and $36.6 million for H1 2025, impacting GAAP net income[2][6] Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows an increase in total assets, driven primarily by higher accounts receivable and intangible assets. Total liabilities also increased, mainly due to a rise in provider liability, while stockholders' equity grew Condensed Consolidated Balance Sheets (Selected Data, $ in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | 390,127 | 491,149 | | Accounts receivable | 443,994 | 316,179 | | Total current assets | 882,960 | 834,823 | | Intangible assets, net | 170,140 | 109,807 | | Goodwill | 172,215 | 141,615 | | Total assets | 1,272,542 | 1,135,783 | | Provider liability | 458,053 | 364,607 | | Total current liabilities | 534,854 | 449,146 | | Total liabilities | 538,996 | 452,336 | | Total stockholders' equity | 733,546 | 683,447 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, Privia Health experienced a net decrease in cash and cash equivalents, primarily due to significant cash used in investing activities for business acquisitions, despite positive adjustments from stock-based compensation and provider liability in operating activities Condensed Consolidated Statements of Cash Flows (Selected Data, $ in thousands) | Metric | H1 2025 | H1 2024 | | :------------------------------------------ | :------ | :------ | | Net income | 9,334 | 7,699 | | Stock-based compensation (non-cash adjustment) | 36,639 | 26,295 | | Changes in Accounts receivable | (121,497) | (79,287) | | Changes in Provider liability | 81,185 | 40,047 | | Net cash (used in) provided by operating activities | (16,090) | 1,330 | | Business acquisitions, net of cash acquired | (89,058) | (707) | | Net cash used in investing activities | (89,058) | (5,713) | | Net cash provided by financing activities | 4,126 | 2,224 | | Net decrease in cash and cash equivalents | (101,022) | (2,159) | | Cash and cash equivalents at end of period | 390,127 | 387,352 | - Cash used for business acquisitions significantly increased to $89.1 million in H1 2025, compared to $0.7 million in H1 2024[27] Detailed Financial and Operational Metrics Revenues Disaggregated by Source Privia Health's revenue streams are diversified, with Fee-for-Service (FFS) patient care being the largest component, followed by capitated revenue and shared savings. All revenue categories showed growth for both the three and six months ended June 30, 2025 Revenues Disaggregated by Source ($ in thousands) | Revenue Source | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | FFS-patient care | 331,464 | 275,761 | 643,225 | 550,584 | | FFS-administrative services | 35,116 | 32,132 | 67,371 | 61,208 | | Capitated revenue | 75,511 | 56,438 | 146,201 | 107,742 | | Shared savings | 60,021 | 39,818 | 107,933 | 87,282 | | Care management fees (PMPM) | 16,919 | 16,163 | 32,121 | 26,766 | | Other revenue | 2,122 | 2,014 | 4,399 | 3,987 | | Total Revenue | 521,153 | 422,326 | 1,001,250 | 837,569 | - Capitated revenue showed strong growth, increasing by 33.8% in Q2 2025 and 35.7% in H1 2025[28] - Shared savings also significantly increased by 50.7% in Q2 2025 and 23.7% in H1 2025[28] Liabilities for Unpaid Medical Claims The company's liabilities for unpaid medical claims under at-risk capitation arrangements increased significantly from $74.2 million at June 30, 2024, to $99.7 million at June 30, 2025, driven by higher current year incurred health care costs Liabilities for Unpaid Medical Claims ($ in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Balance, beginning of period | 66,355 | 67,138 | | Incurred health care costs: Current year | 144,840 | 104,610 | | Incurred health care costs: Prior years | (555) | 3,305 | | Total claims incurred | 144,285 | 107,915 | | Claims paid: Current year | (63,025) | (47,979) | | Claims paid: Prior year | (47,959) | (52,877) | | Total claims paid | (110,984) | (100,856) | | Balance, end of period | 99,656 | 74,197 | - The balance of unpaid medical claims increased by 34.3% year-over-year, primarily due to a 38.4% increase in current year incurred health care costs[29] Key Operating and Non-GAAP Financial Measures Definitions Privia Health utilizes several key operating and non-GAAP financial measures to assess business performance and trends. These include Implemented Providers, Attributed Lives, Practice Collections, Care Margin, Platform Contribution, and Adjusted EBITDA, each with specific definitions to provide a comprehensive view of the company's operations Key Operating Metrics (as of end of period) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Implemented Providers | 5,125 | 4,504 | 5,125 | 4,504 | | Attributed Lives | 1,382,000 | 1,200,000 | 1,382,000 | 1,200,000 | | Practice Collections ($M) | 862.9 | 728.0 | 1,661.5 | 1,435.7 | - Implemented Providers are credentialed service professionals on Privia Health's platform who billed for medical services[31] - Attributed Lives represent patients attributed to Privia for value-based care arrangements[31] - Practice Collections include total collections from all practices and reimbursement sources, differing from revenue by including Non-Owned Medical Groups[31] - Non-GAAP measures like Care Margin, Platform Contribution, and Adjusted EBITDA are used to evaluate operating performance, with specific adjustments for non-cash or non-recurring expenses[32][33][34] Non-GAAP Reconciliations Gross Profit to Care Margin Reconciliation Care Margin, a non-GAAP measure, is derived by adding back amortization of intangible assets to Gross Profit. This reconciliation shows an increase in Care Margin for both the three and six months ended June 30, 2025 Gross Profit to Care Margin Reconciliation ($ in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Gross Profit | 112,765 | 98,263 | 216,380 | 191,643 | | Amortization of intangibles assets | 2,396 | 1,527 | 4,069 | 3,054 | | Care Margin | 115,161 | 99,790 | 220,449 | 194,697 | - Care Margin increased by 15.4% in Q2 2025 and 13.2% in H1 2025, reflecting improved operational efficiency before intangible asset amortization[3][8][35] Gross Profit to Platform Contribution Reconciliation Platform Contribution, another non-GAAP measure, is calculated by adjusting Gross Profit for amortization of intangible assets, cost of platform, and stock-based compensation expense within the cost of platform. This metric also showed growth for both periods Gross Profit to Platform Contribution Reconciliation ($ in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Gross Profit | 112,765 | 98,263 | 216,380 | 191,643 | | Amortization of intangibles assets | 2,396 | 1,527 | 4,069 | 3,054 | | Cost of platform | (64,918) | (57,106) | (124,444) | (111,163) | | Stock-based compensation (in Cost of Platform) | 7,223 | 4,710 | 13,194 | 8,597 | | Platform Contribution | 57,466 | 47,394 | 109,199 | 92,131 | - Platform Contribution increased by 21.3% in Q2 2025 and 18.5% in H1 2025, indicating improved profitability from the core platform services[3][8][36] Net Income to Adjusted EBITDA Reconciliation Adjusted EBITDA, a key non-GAAP measure of operational performance, is reconciled from net income by adding back non-controlling interests, income taxes, interest, depreciation, amortization, stock-based compensation, and other non-recurring expenses. This reconciliation shows a substantial increase in Adjusted EBITDA for both periods Net Income to Adjusted EBITDA Reconciliation ($ in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | 2,687 | 3,467 | 6,907 | 6,451 | | Net income attributable to non-controlling interests | 601 | 1,176 | 2,427 | 1,248 | | Provision for income taxes | 2,456 | 3,421 | 4,559 | 4,172 | | Interest income, net | (2,408) | (2,966) | (5,339) | (5,950) | | Depreciation and amortization | 2,583 | 1,818 | 4,484 | 3,639 | | Stock-based compensation | 18,849 | 14,391 | 36,639 | 26,295 | | Other expenses | 4,224 | 716 | 6,230 | 6,090 | | Adjusted EBITDA | 28,992 | 22,023 | 55,907 | 41,945 | - Adjusted EBITDA increased by 31.6% in Q2 2025 and 33.3% in H1 2025, demonstrating strong underlying operational profitability[3][8][37] Net Income to Adjusted Net Income and Adjusted Net Income Per Share Reconciliation Adjusted Net Income and Adjusted Net Income Per Share are non-GAAP measures that exclude stock-based compensation, intangible amortization, provision for income tax, and other non-recurring expenses from GAAP net income. These adjusted metrics show significant growth, providing a clearer view of core earnings Net Income to Adjusted Net Income Reconciliation ($ in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | 2,687 | 3,467 | 6,907 | 6,451 | | Stock-based compensation | 18,849 | 14,391 | 36,639 | 26,295 | | Intangible amortization expense | 2,396 | 1,527 | 4,069 | 3,054 | | Provision for income tax | 2,456 | 3,421 | 4,559 | 4,172 | | Other expenses | 4,224 | 716 | 6,230 | 6,090 | | Adjusted net income | 30,612 | 23,522 | 58,404 | 46,062 | | Adjusted net income per share (diluted) | 0.24 | 0.19 | 0.46 | 0.37 | - Adjusted net income increased by 30.1% in Q2 2025 and 26.8% in H1 2025, while diluted adjusted net income per share grew by 26.3% and 24.3% respectively[2][6][38] Legal and Investor Information Non-GAAP Financial Measures Disclosure Privia Health uses non-GAAP financial measures to supplement GAAP results, believing they offer useful insights into operating performance and trends for management and investors. These measures are not substitutes for GAAP results and are reconciled to the most directly comparable GAAP measures - Non-GAAP financial measures are presented as a supplement to GAAP results to provide a more consistent understanding of operating results and trends[15][16][18] - Reconciliations to the most directly comparable GAAP financial measures are provided in the press release[15][17] Safe Harbor Statement The press release contains forward-looking statements regarding future expectations, projections, and assumptions, including the full-year 2025 guidance. These statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those anticipated - The press release includes forward-looking statements, identifiable by terms like 'expects,' 'forecasts,' 'outlook,' and 'guidance,' which are based on current expectations and assumptions[19] - Actual results may differ materially due to various factors, including regulatory compliance, legal framework complexity, growth strategy execution, competition, third-party vendor failures, reimbursement rate changes, privacy and security risks, and workforce availability[19][20] - The company cautions against undue reliance on forward-looking statements and undertakes no duty to update this information unless required by law[19][20] Contact Information Contact details for investor and corporate communications are provided for inquiries regarding Privia Health - Robert Borchert, SVP, Investor & Corporate Communications, is the contact person for inquiries[21] - Contact can be made via email at IR@priviahealth.com or phone at 817.783.4841[21]