The Oncology Institute(US:TOI)2024-08-13 23:59Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2024 was $98.6 million, an increase of 22.9% compared to Q2 2023 and a 4.1% increase compared to Q1 2024 [9] - Gross profit in Q2 2024 was $13 million, an increase of 8.8% compared to Q1 2024 [10] - Net loss for Q2 2024 was $15.5 million, an improvement of $1.4 million compared to Q2 2023 [11] - Adjusted EBITDA for Q2 2024 was negative $8.7 million [12] Business Line Data and Key Metrics Changes - Revenue growth was driven by a 76% increase in oral drug revenue [5] - The annualized revenue of new capitation deals signed year-to-date is over $41 million, with an expected adjusted EBITDA contribution of $13 million [7] Market Data and Key Metrics Changes - The company signed three new capitated contracts in Q2, covering two states and including both medical and radiation oncology services [4] - The Florida market is pacing towards strong profitability in 2025, contributing to overall TOI profitability by mid-2025 [5] Company Strategy and Development Direction - The company is undertaking a review of strategic, financial, and operational alternatives to enhance shareholder value [8] - Management remains confident in the direction of the company, emphasizing growth in value-based care delivery and pharmacy businesses [8] Management Comments on Operating Environment and Future Outlook - Management noted that the worst of the reimbursement pressures is behind them, with expectations for significant improvement in net loss and adjusted EBITDA in the second half of the year [7] - The impact of DIR fees on margins was about $2.3 million, which is expected to improve in Q3 and Q4 as the new capitation contracts go live [15] Other Important Information - The company has engaged Leerink Partners to assist with the ongoing strategic review [9] - Cash and cash equivalents as of Q2 2024 totaled $36.4 million, with an additional $9.9 million in short-term investments [12] Q&A Session Summary Question: Can you provide more details on margin pressures and improvements? - Management indicated that the DIR fee impact on margin was about $2.3 million, and they expect improvements in Q3 and Q4 due to the go-live of new capitation contracts [15] Question: How are core margins progressing excluding DIR fees? - Management confirmed that core margins are improving, with additional factors contributing to margin enhancement beyond DIR fees [16] Question: What is the outlook for cash burn and working capital? - Management clarified that the increase in accounts receivable in Q2 was primarily due to timing issues with the California Medical Rx program, which has since been resolved [17]