Privia Health (US:PRVA)2022-08-11 18:31Financial 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]