Tue. 27 Feb 2024, 6:17am ET
Benzinga
News, Guidance
2024 Financial and Business Outlook g h i
Privia Health’s key actions and areas of focus in 2024 include:
- Increasing density and scale in existing geographies through organic provider growth;
- Limiting downside-risk arrangements in a challenging Medicare Advantage (MA) market;
- Renegotiating MA capitation arrangements for more favorable contract structures and margin contribution expected to reduce capitated practice collections by approximately $198 million year-over-year due to revenue recognition rules as 19,900 attributed lives move to upside/downside risk arrangements;
- Exiting Delaware ACO (~12,000 attributed lives in the Medicare Shared Savings Program), effective January 1, 2024;
- Achieving operating leverage to drive Adjusted EBITDA growth, and converting 80% of Adjusted EBITDA to Free Cash Flow (defined as net cash provided by operating activities less purchases of property and equipment); and
- Continuing to pursue business development efforts to enter new states and increase overall addressable market.
The Company’s 2024 operating and financial guidance is as follows:
FY 2023 | FY 2024 Guidanceg | Y-Y % Change from FY 2023 | |||||||||||||||
($ in millions) | Actual | Low | High | Low | High | ||||||||||||
Implemented Providers | 4,305 | 4,650 | 4,750 | 8.0 | % | 10.3 | % | ||||||||||
Attributed Lives | 1,120,000 | 1,150,000 | 1,200,000 | 2.7 | % | 7.1 | % | ||||||||||
Practice Collections | $ | 2,839.0 | $ | 2,775 | $ | 2,875 | (2.3 | )% | 1.3 | % | |||||||
GAAP Revenue | $ | 1,657.7 | $ | 1,600 | $ | 1,675 | (3.5 | )% | 1.0 | % | |||||||
Care Margin | $ | 359.2 | $ | 388 | $ | 400 | 8.0 | % | 11.4 | % | |||||||
Platform Contribution | $ | 173.5 | $ | 180 | $ | 188 | 3.8 | % | 8.4 | % | |||||||
Adjusted EBITDAh | $ | 72.2 | $ | 85 | $ | 90 | 17.7 | % | 24.6 | % | |||||||
- Practice Collections guidance includes reduction of approximately $198 million from renegotiated Medicare Advantage capitation agreements, and assumes minimal year-over-year increase in Shared Savings accruals
- Adjusted EBITDA guidance includes approximately $10-12 million in start-up costs for new geographies announced in last 15 months
- Capital expenditures are expected to be less than $1 million in full-year 2024
- Approximately 80% of Adjusted EBITDA expected to convert to free cash flow in FY 2024
- Effective tax rate expected to be approximately 27-28%