Privia Health (PRVA)2023-08-06 18:05Financial Data and Key Metrics Changes - Practice Collections increased almost 14% year-over-year, reaching 19.3 million, demonstrating strong operating leverage [9][16] - Total attributed lives increased almost 27% from a year ago, with total value-based care comprising 37% of total GAAP revenue in Q2 2023 compared to 29.6% in Q2 2022 [12][16][69] Business Line Data and Key Metrics Changes - Implemented Provider count was 3,870, up 9.3% year-over-year [16] - Care Margin increased by 18.8% for the first half of 2023 [16] - Value-based care represented 24.9% of Practice Collections in Q2 2023, up from 21.8% in Q2 2022 [69] Market Data and Key Metrics Changes - The company expanded its national footprint to include close to 3,900 implemented providers caring for over 4.4 million patients [11] - The gross provider attrition rate in 2023 has been less than 1% year-to-date, one of the lowest in the company's history [11] Company Strategy and Development Direction - The company aims to build one of the largest ambulatory care delivery networks in the nation, focusing on expanding its provider partnerships and entering new markets [8][19] - A definitive agreement was announced to enter Washington, marking the company's 13th state, in partnership with Walla Walla Clinic [9][10] - The company plans to continue investing in new markets while maintaining a strong balance sheet with approximately $318 million in cash and no debt [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage risk and deliver significant shared savings, EBITDA, and free cash flow growth [13] - The company updated its 2023 guidance to the mid to high end of initial ranges based on strong year-to-date performance [17] - Management noted that while there are challenges in the operating environment, the diversified book of business positions the company well for future growth [19] Other Important Information - A secondary offering of 42.6 million shares was completed, eliminating previous ownership by Goldman Sachs and Pamplona Capital [10] - The company has broadened its Board capabilities with new members bringing extensive healthcare industry experience [10] Q&A Session Summary Question: Utilization trends in the quarter - Management noted strong ambulatory utilization trends and a higher plateau coming out of COVID, with good performance across both fee-for-service and value-based books [24] Question: Ramp in new markets - Management reported strong early performance in new markets like North Carolina, Connecticut, and Ohio, exceeding expectations for new provider sales [29] Question: Capitated revenues and PMPM expectations - Management indicated that the PMPM for capitated revenues is expected to remain in the current range, influenced by the mix of business and risk pools [34] Question: Washington market entry - Management highlighted that they will own the tax ID and MSO entity in Washington, expecting to consolidate results from the closing date [38] Question: Value-based attributed lives growth - Management emphasized a balanced book of business and the potential for growth in attributed lives across all segments, despite some enrollment shifts [42] Question: Care management fees increase - Management attributed the increase in care management fees to strong topline growth and performance in value-based arrangements [44] Question: Investments in new markets - Management confirmed that investments in new markets are tracking on schedule and are expected to yield long-term results [48] Question: Accounts receivable increase - Management explained that the increase in accounts receivable was related to new capitation-related accruals and follows a typical annual pattern [66] Question: Virtual care strategy - Management stated that virtual care is an integral part of their strategy to optimize provider operations and improve overall economics [81]