Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Privia Second Quarter 2023 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I’d now like to hand the conference over to your speaker today, Robert Borchert, SVP, Investor and Corporate Communications.

Robert Borchert

Thank you, Amanda, and good morning.

Parth Chief Chief Financial are David Officer, today our Mountcastle, Officer. me Mehrotra, Executive our and Joining This call is from the being webcast and Relations of can section priviahealth.com. Investor be accessed on release presentation and Today's Relations financial priviahealth.com. are press posted of pages the slide Investor

and today open we’ll to are with possible reported June and limit up, The the only, line for our to so press XX-Q a as follow and the results financial as queue we is second comments, yourself the prepared questions. one get to many our ended preliminary questions are today. in Exchange Commission. six not Form filed release the Following and XX, XXXX, have months can until final Securities quarter question return for the Please if you and

of our financial Such uncertainties make statements our August objectives, expectations are that and nature as materially. risks plans business in to actual including of may statements, are performance differ we’ll those X, current subject and and results forward-looking future of based to our and to business operating on view and future XXXX. cause the Some today related

these considered with cautionary and in in should a the Company's release statements described the today's SEC conjunction press in factors filings. As statements risk our result, recent be most

accompanying to the Finally, GAAP and measures non-GAAP to call, in presentation financial measures press certain of our we website. release these comparable refer and are may measures posted on reconciliation the our on included slide

Part. like to over turn I'd the to Now, call

Parth Mehrotra

into everyone. of the quarter Robert, another we good moved solid XXXX. morning, you, delivered half Health and Thank Privia second as

will the ambulatory of before morning, highlight focused in delivery outlook and execute on care David company to discuss on number and the continue our our recent nation. questions. building performance one guidance our and a financial Then take remain XXXX of we largest updates. We your This business I’ll networks strategy,

XX% operating year-over-year. invest model, and to provider Practice increasing as EBITDA at demonstrates which very our momentum of Collections share second model. high the and partners with almost a new our leverage more the Privia continue level up XX%, in partnership to and market increase was gain resulted markets. continues Adjusted very during We Health our broad provider executed which of in operating strong number our we than quarter,

It and Our to results Washington, continued we in value-based initial were metrics are arrangements, agreement in performance growth our well end multi-specialty announced State, and Clinic, week, more to guidance a Based with of our the driven updated performance find on on successful three with build by as provider improving in Walla same-store definitive strong raising the as the provider new a ranges. our care for we while to patients its of most aggregate. mid care, have of XX XXXX Walla for right in of to, vision high has and who shares decades Walla build our continuing communities. we us history community. operation, the locations. scaled look highly access over to rich Walla in quality a the local affordability Clinic and network Washington, in to to forward providers caring Earlier of year-to-date, practice a this enter partner essential its heritage high our than was to XXth partnership help in our delivering

fully by the Platform the in quarter, third implemented Clinic Privia the Walla the expect We transaction being end of XXXX. on with Walla to close

private ownership and Company, the shareholder equity of XX.X eliminated to Goldman million or May in shares provisions Turning with previous as outstanding. we the common secondary XX% as Company total the our Xth, entirely diluted a On Capital’s offering Pamplona news. shares some of more of agreement than Sachs other stock, fully sponsors. completed well This

long-term look come. new, of years We forward create are value continuing to to investors, to and a shareholder excited the welcome number oriented in to

look continued addition, July Privia Board Xst. the members. and deep of Innovation Human Health and domain He capabilities of and also these of Advisor Transformation brings the Adam our on insights Board sector. new Boehler, execute August to at Director vision. Senior Dave a insights served proven healthcare our CMS. the landscape. Xst. CMMI, joined in with from expertise Innovation across both members broad and Board for experience valuable We human joined the and has as and the experience the bring to Rubicon broaden Value-based expertise Health Board of will Founders, the In at with important as our Kimmet Dave’s contributions Board the former distinguished leader industry outside Managing Center as on on Pam previously its and and our to Pam career capital Department Services, is UnitedHealth Wichmann Board Partner Privia to unique forward of healthcare each continues corporate

X,XXX continues includes in center providers in medical to footprint more patients care national for million expand implemented caring X.X and now X,XXX than to close Privia’s groups locations. over our

and and differentiators. are true payer diverse scale provider Our partnerships

and building in country networks are reduce can the the care of largest We that one improve and patient costs. ambulatory multi-specialty medical groups outcomes delivery

providers in be of new Ohio. and of Carolina, recent for Connecticut, to continue new our We our growth ahead North adding plan markets implemented

rate same-store and the it X% slide, than history, also not on less provider gross providers noteworthy Company’s is net a has in This our we lowest attrition year-to-date. continue to While been XXXX our add one on in basis. is highlighted that this of

to one the risk attributed Commercial to remains payer our government contracts broadest, from few opportunity increased lives programs. upside the attributed move embedded at-risk in year more diversified almost across Privia in and balanced XXX a ago. significant Total serve than platforms and us for million close years. most into has a We arrangements There next lives of value-based and Advantage care X.X the Medicare lives XX% industry. over downside

provide flow significant continuing for and opportunities However, we while cash free to moving remain to focused arrangements, increased on thoughtfully EBITDA risk growth.

proven is Privia’s risk. environment to the manage Our current ability performance strong to in a testament healthcare

shared business allow balance Savings Medicaid significant us book in and the set while across uniquely delivering diverse savings, Our flow of of our and of Advantage, Medicare the actuarial and contracts a operations, Program to Medicare management, to manage value-based leverage clinical a economics utilization cycle expertise EBITDA, performance fee-for-service to Commercial, risk. across cash and transition growth We trends. Shared risk healthcare free varying

our Our accomplished be allow and operations managing This patients close tax specialties in structure alignment in and practices and fee-for-service unique These reimbursement of is single the care the us capabilities physician-led to physician medical risk all work groups the a homogeneous any governance partner State with all through each across differentiated critically important panels to our spectrum. serving value-based our physicians in State, patient in in across day-to-day is ID clinical hands-on, across Privia teams. model models. our all

Now, XXXX I’ll review ask results financial David outlook. to and our recent

David Mountcastle

second Health’s execution in strong deliver of the quarter Privia operational Parth. to performance continued you, Thank XXXX.

up Provider count was Implemented Our X.X% X,XXX, year-over-year.

compared GAAP increasing QX new over we of generate to moves care QX $XX.X last grow trends Revenue $XXX.X and prudent ambulatory XXXX year to continue a to Total XX% ago, markets. Solid and quarter XX.X% EBITDA reach and million. expand of highlights to as utilization highlighting up in value-based at-risk ago Practice was XX.X% Adjusted in time. new XX.X% ability to implemented in our year to operating year total contracts leverage which and the to second existing our thoughtful from QX led comprised million, a Collections providers over

million. reach For XX.X% EBITDA $XX.X and XX.X%, half grew XXXX, increased billion. first to Adjusted $X.XX of Collections Margin XX.X% the Practice Care almost to was up

Based Our our guidance and high XXXX guidance of of on operating our model updated ranges, XXXX highlights Practice performance, year-to-date operating Lives. book strength and mid financial end initial resiliency and metrics except the raising we of are business. of the our to all Collections Attributed and diversified to our

one includes We expect of of to quarter. Collections we paused guidance, impact last this discussed as the at capitated come contract midpoint the Practice the in

year-end We also to be Attributed at expect previous the of midpoint our guidance. Lives

we’ve Adjusted we and five continue investments. year-over-year. free plan across entry to three XXXX while market enterprise million and business continuing EBITDA expansion invest new to cash significant and new flow $X As to ACOs to absorbs support previously, noted approximately in EBITDA our $XX XXXX, expansion in to guidance States new With grow our our

expect new the base coming States. our in in scale these and markets years significantly provider attributed new as to we grow lives We our

of Our balance sheet $XXX and million very cash no be approximately and debt. capital with position strong, continue to

cash Given annual our flow continue our XX% free model we an on capital growth care remain focused on the largest to $X the capital-efficient with partnership support expenditures Health less annual nation, to investing million, our to ambulatory of national to to delivery Adjusted as convert EBITDA networks basis. footprint. XX% than building of of we build into one and We in this Privia expect

take to ready your now We are questions.

Operator

first Our Jailendra comes Singh from Truist Instructions] Securities. [Operator from question

Jailendra Singh

Jailendra Privia quarter. Good everyone, Singh happens from Truist is strong this call. a Yes, a on congrats Securities. morning, on This and

color wanted And utilizations I related, of what million you than did your the a where for to business, higher there and pockets quarter utilization color the there expectations that? quarter. How year what in actually, various were any assuming or rest was those Can kind impact lower provide unfilled And there? with the particular, the are maybe expectations, our So, you and compare in more were get trends for around quarter. in $X the of PYD lines? business drove on your some

Parth Mehrotra

the first the $X then David prior the period Appreciate adjustment. comment question. Jailendra. half million Thanks, will on tackle and I'll

So, one utilization trends, generally on broad comment. speaking, the

just flow value-based XXXX acute strength coming topline ebbs EBITDA fee-for-service COVID, If model and COVID, you an three the or of look to from four a speaks grown and in the both book And we've and XXXX, we've level. pretty at extreme both our and for where year during pre-COVID, out through utilization of the our our perspective. the last itself, book then each had years,

to we I utilization. it's So, longer-term important slightly look view take that think at as

said make important we've ambulatory I'll point second surgical, in is, as then or to outpatient or utilization trends. between The distinguish and it's utilization previously,

to pediatrician, boards good and the care continue minds for a and strong utilization with we people value-based that book. side, for higher good plateau see also in is ambulatory provider, their of is the book That COVID. On out well primary fee-for-service seen our pretty coming tailwinds. seeing We've OBGYN, a

Program, Commercial that spikes as in natural book. Savings Advantage that, and I obviously despite very think act hedge. the both a impacts But books, Medicare value-based if surgical the Medicare you utilization, other our see Shared some in outpatient, and both

So, I And you've value-based payers. are well really overall, we the commentary same obviously both across balance, aggregate We've performed think in on from the all and we seen fee-for-service that read. downstream book.

David Mountcastle

Jailendra, is related relative start to point on kind with. $X to and that there, not the of payer data that so million quarter, received make we did We you the paused that retroactive contract I and last XXXX capitation to it see Yes, wanted adjustments. to some

prior a period booked in the million financial claims increase $X remains of same of actually amount So, was the offset results guidance updated was our but that, as by our financial even QX high XXXX. the And approximately strong reflected QX to not in loss, revenue to ranges. performance with mid and XXXX in

Jailendra Singh

Okay. Thanks, guys.

Operator

by. stand Please you. Thank

Morgan. Our J.P. from comes from Gill next question Lisa

Lisa Gill

back just opportunity. little trend much. that that curious Ohio. close just Thanks in third getting onto think How impact wanted you're going how the of go the XXXX expectations. And the markets, Connecticut, Carolina, Good on the how to And the physicians your an the in But about the ramp of very seeing, expect to I dig platform? North half we understand versus I do as we a ramp as in year? of come more would morning. is this so deeper I towards that a I'm you're adding quickly to quarter, new think will Washington as I

Parth Mehrotra

Lisa. question, Thanks the for

started pleased each markets. we've we're with in of really So, how those

see in are each As to of in in five over which opportunities and the when build next large we States. remarks, our enter prepared those sales is these pretty we States, our continue medical new stated we to years, to our groups of new very expectations always four provider we good running ahead thesis

see of are in going really the reflected year for of then one And Washington on we is market in implemented that in year, but and this sales updated think experienced with guidance full to the you'll a the State the impact again, that implemented of providers years end high end financial mid history partnership. of They'll of the XXXX. company. year, not the the our we've the That's the for be new I year. was the into pleased end before disclosed earlier, strongest

guidance of in all that the this closing next think I pretty we've year to good reflected that's us leads So, then and year, and entering today. out have provided into momentum

Lisa Gill

system interest, health last that if in same pipeline quantify given to thoughts pipeline the we've few early going seeing more you for any what Just are years? partnerships how XXXX? XXXX. about you do into way like there's Just that interest? feel about And think on curious your success, Like, seen how a the versus to

Parth Mehrotra

really sure. if in States couple a one expect mean, accelerated Yes, public going we We've we State said you five XX new ago. momentum, I and see strong We've since the now the pretty to last went in opening order short we've public, enter seen of here of And performance our that. a States. we're clearly years exceeding when us year, entered months.

continues to be pipeline Our broad.

as are of These choose Again, careful multiple We health are with partner. entities, are is strategic long and who discussions very we the in these systems. timing very medical a we partnerships, having ACO uncertain. always groups, very when hit term-oriented,

update So, into couple about the we've the been you obviously, hit, the we'll and we really we going of as next momentum business. doing, as but good those of years feel

Operator

you. Thank

question Elizabeth go from next Evercore. Our Please from ahead. Anderson comes

Sameer Patel

Hi, Elizabeth. This is guys. $XXX on quarter. of capitated Sameer revenues PMPMs the for Patel We're upwards for on

fall Assuming of range to forward? the just potentially it this change the range that understand going over is in - of kind no in year? trying expect something it should rest we major lives, the Or could in

Parth Mehrotra

look cap so from range book. on at. fair Yes, to I the we downstream a Sameer, are the that's think Obviously, payers

buckets of So, not spend. taking full pools, in premium. XXX% across we risk it's then all XX% the are risk some And of

payers. the on of the are risk risk business the and we So, we pool in are and mix with much depends how just sharing it

So, PMPM XXX% that usually to you the we’ll be slightly typically lower than industry the contract. in average compared see risk

Operator

Thank you.

Close. Richard Our next from comes question

Richard Close

then to wondering the just Yes, off in the was you you talk compared bringing question. if Bass it difference see, California. let's as expect terms in little could of maybe deal Washington, physicians? do call in new thanks I that when that And for in bit a growth of to I guess, about

Parth Mehrotra

question, the for Thanks Richard.

So, we own entity the entities. our always partnerships, entity, would That's tax the this the entities. the but some the case in fundamental in three in MSO will three own difference all we is, State, own ID, Washington, so not of ACO all

our five-to-seven-month other So, for a The you'll the XXXX implemented as think earning to date us results Clinic providers. end ramp really the likely of in and full-year towards thesis impact I State. - And work. have the this to similar GAAP year, consolidate that journey from implementing an four, in be to model the see a our similar that'll gets will revenue Again, we of providers. very happen standpoint basis, Walla This transaction. of should happen the starting on is from that is And then add closing welcomed we'll five-year States. start is differentiated us Walla

with in their while the like aligning somebody I think remain there's structure have providers and to be autonomous a in an real alternative to Privia ownership need for model us.

It's excited big State. enter State, really to TAM in really So, excited. that and we we that feel are a

Operator

Thank you.

from from Our Taji Phillips comes next Jefferies. question

Taji Phillips

Thank my question. Hi, Taji on. taking this you is for

trigger Parth, in how you to about seeing the of for Advantage. in lot redeterminations the Thank part the and Commercial, see on would terms guess then or So, And that growth, go attributed embedded value-based your MA, business? the lot as had unlocked, in are could looking I still lot I'm you. what with of more of you of exchanges, side impact through at a mainly the in government lives enrollment year just business? you that messiness you thinking and of say shifting Medicare and concentrated of about a curious, then talked there's kind growth a opportunity so we on

Parth Mehrotra

question, Thanks Taji. for the

is balanced, programs, So, of very programs one government government differentiator noted, as obviously, in within key for Medicaid. between you MA, MSSP, the Privia our book and business and is and Commercial

base, grow as number I And we think patients add our States programs, these takes of and per of increase our are of platform, physician great low-cost the one more care the delivering and value the we tailwinds continuing our looking provider then the as to puts see think as our we is buckets. view across across lives each all into attributed in we payers. on lives, for the get adding partners enter I and and yield in we these life, increasing for to attributed those, both

I think that even that the differentiates in us very Commercial meaningfully book.

movement I you'll in Obviously, within buckets. growth the there's think those of So, continue to year. see each

MSSP, year, two more see PPO-like employers Commercial carrier. of our buckets, open half change access they largest and products. are sometimes the the their take In you you early insurance If

they be can attributed that. their lives see being the we shifting unlikely and very some before leaves as there from in to again doctor. new the are and patient of plan, that actually need PCP It's So, the come downstream

the we redetermination you'll of some think one those then then lives lives. that we in providers, we quarters. that see I effect to But again, level but thoughtfully on increase And we'll book, There's MA couple So, we've to, a of Medicaid, take. very movement that on on as taking you'll take in earnings you the business. we number back of prepared of in And we your on first have noted last see level been lot hoping for as the but our the a pool, with as in remarks, risk bucket of some book capture the time. do of overall, you see over growth increase Commercial risk it - the are are power we the in focus need thoughtfully doing, maximizing embedded continue to opportunity, should

Operator

Thank you.

Sachs Goldman from from comes question Perse next Our Jamie

Jamie Perse

Good Two quick morning. thanks. Hey, questions. financial

there I'm then driving guidance, with half being there's second partnerships management mean, seems of a like like that services It if from there's you step-up coming incremental XQ? so it fees of out bridge XQ second help the a I care new the or on than usual, that. bigger to wondering are can us just quarter. offered lot feels And on momentum First,

Your metrics. implied really across too most much second changing isn't half

or second wondering you. headwinds So, any Thank assuming the if assumptions should half just incremental we there's for about. I'm thinking specific you're be any

Parth Mehrotra

Thanks, Jamie.

business well EBITDA you operating through the get in see leverage into the great look, embedded can then there's and where operating flow. free on you again, growth we arrangements, question, perform that our if great first in leverage and value-based topline So, flow see cash

I significantly. out you see quarters think very where are that So, play there

of XX%, in cashflow saw to topline We close grew close XXXX, where also all that we XX%, close free to to EBITDA XX%.

So, I differentiate economics the again, book for perspective good of working, QX. of that see to and year, from with that we our and some the guidance. in we’ll of prudent you're with the think, look, lot in seeing our a play We be out business unit rest momentum. try And of

are new as We five investing David in also noted. markets,

a balance year. it's So, current between profitability continuing and the growth invest to get versus I in think in future

So, really guidance I we given, going update guidance we'll year think into the QX. goes, and QX feel as we've good and the about

Operator

Thank you.

question Our comes next Jeff Garro. from

Jeff Garro

taking and for questions. morning, good the thanks Yes,

about So, investments Connecticut. new ask Ohio, success and I in Carolina, like want mentioned ramping to markets, North markets and you've the

is types like us versus then agreements new is how for what what you've detailed curious growth in specifically whatever and current year-to-date. how the else So, the the disclosed in pipeline forward could you of help investments new tracking impact in might maybe think Washington market also going and and that. markets year, investments market you've spend Thanks. about And

David Mountcastle

Yes.

with markets. So, investments in say have so been markets, would results we've tracking those the in I those as our

a of we've bit expectation time on we an that for of past. a investments maybe the markets. little have So, even I say we of would in track one are go-forward basis, each enter schedule these done the investment obviously, On ahead ones the and

get the investment from different continue market, close. And we larger obviously, on as in we in increased we not we And maybe into need the so, But a obviously the our invest those those we again, of past smaller. we being, to in those for year. basis we're as make really go-forward But the those the long-term end going to larger But Washington we as market, provided the guidance the We'll investments. bit some them. results that reflected markets expecting markets day, much have starting any in making be of expect new see soon this bit as a to operating that little an costs at markets, year. that smaller as impact the cost, to great of a from to maybe we are little that's enter

Operator

Thank you.

next from Our Andrew from UBS. Mok question comes

Andrew Mok

Hi.

Just wanted the on utilization up follow to conversation.

ambulatory your in around performance quantify cited, and midpoint Collections Practice attrition constant the quarter, you the held outlook despite comments the your in You the Can of trends you strong low strong rate segment. help expectations impact out else Collections Thanks. the for revenue? capitated flowing year? the utilization is of to this And paused you call isn't Practice higher there the and anything why through would contract necessarily higher

Parth Mehrotra

Yes. Thanks, Andrew.

we on So, our power Practice the look if was you it's to had you the not that paused, given results. that can - not been here. situation, pausing high particular reason capitated, the one the original objective would've at impacted situation obviously, implied to our that the bottom-line for imply And end contract and earnings Obviously, Collections. unique mid guidance, of can in contract preserving that if the that lives we was even closer that contract, the you are hadn't

been So, in we've that, the not metric. again, guidance resulting is end that you had bottom-line at we see the well. would've impact for any had, topline momentum it the not been can of as with high And

Operator

you. Thank

Our Larsen next David from from comes BTIG. question

David Larsen

an risk. some the rule thoughts or seeing headwinds to success Medicare conversion the then just for they factor, willing increase maybe Medicaid about you're more And want to the Hi. risk on into little you health any deals? proposed CMS Sometimes and talk plans? avoid side? happy risk ready deals. Can you quarter. in on Congrats and and they to the get XXXX, a going be but with conversations around bit for the good Are nature able of the having Are that there's the

Just helpful. you. would Thank be any color there

Parth Mehrotra

Dave. thanks, Yes,

risk. different really plan a than pools. we very look look, general, all lives, duals, and at at It's of with in in discussion a approach our the to been call slide density prudent. So, when work have earnings a subheading density of risk up that look called We with our very than our discussion. decide closely says Look, has longer-term a partners. risk to can't We more We reason. health of immediate dial be be it's for explicit

been alignment in Our have aligned both the with can better payer be we three philosophy has all continue very Having a as to utilization partner everybody's think time that close we’ll to attribution. Obviously, period same entities leads chasing MA well - of that the outcomes, as physicians. follow risk, sorry, our in participate MA there philosophy. where and to

attributed unnatural growth be if growth, everybody's have can from population lives we payer. little can from the the bit downstream or payer chasing which You that and a side, are

that and to selection avoid nature. we of things try adverse So,

alignment having very is important. that So,

enhanced around then continue - share the some I broadly in the in to us the benchmark this will the likely about to quality And changes that one these program spike here most the programs us in think than would we States. favorable think further seen discussions as they've big the part thoughtfully the adjustment track. have adjusting in risk takes a those into about MSSP impact as one noted. be really will XX% you CMS program. like our program, risk. and we've continue our I the we risk the I that in take for move of enhanced best, more value-based of So, ACOs most the potentially each and will it's gradual good assignment will ability really track. It's We’ll country, reporting, say, process, financial think feel shared the with savings of one-time like the the whether than general the proposed of to spend of is But CMS business. and past to more we methodology, in We though, applicable be CMS it.

Operator

Thank you.

question is from next Piper from Our Sandler. Jessica Tassan

Jessica Tassan

for Thanks Hi, guys. taking question. the

years could maybe you of a to hoping growing new more Mid-Atlantic I'm are your providers the was Thanks. when and fold how savings new little of MSSP an mature, is rate mature sophisticated if for specifically nine diluting about into I of the about kind the know curious new performance and some providers? And bit do you ACO after like the still providers or lives ACOs existing inception, So, bringing ACOs. without talk think that

Parth Mehrotra

for we've thanks to our question, all the Yes, of continued grow Look, the Jess. years. over ACOs

is We add really lot adopters. for we We We barely a of momentum. eight relatively. I approach where large low TAM markets enter strength like large still, are new market or late Mid-Atlantic. in to see the this double-digits, us, and get into of increased in nine mature even attributed have business markets continue to lot There list for model, even than being mature of a very market providers with We the more continue arrangements. more medical lives groups. share And to this years, despite think that pretty risk in speaks

they in track, were the then and enhanced X, So, savings as C, A, the from increase tracks past, more into rates. or moving B, X X,

So, I shared think the Obviously, the you're savings and whammy on our stabilization we to of see and to to markets, hope line pretty the delivering mature keep is think a of few ACOs on continue growing deliver. going on keep But to have good some double some continuing you these the to EBITDA results. a see of to ACOs. the sight our more progression years that. And in next start we

Operator

Thank you.

Our comes Whit next Mayo. question from

Whit Mayo

that new capital that that you more is willing a put conversations might mean, months into a I'm I move just have few of is, in transaction, work question probably ACO the you you you'll plan markets? that strategy are exploring maybe year-end. I wondering, you finding $XXX further? guess Parth, over after to are to Connecticut inroads ago, thanks. on by guys how million to I acquired Hey, mean, guys just think and you cash

growth, how and as maybe willing pursue just as of think that a So, deployment curious you capital kind are to you strategy. about

Parth Mehrotra

thanks for the question, Yes, Whit.

uniqueness as we each can then our capital, It's in after entities. past, States of capital ACO entities, types entries - type in either be we groups, medical we've you've of small know, market the market value-based across of we model are fee-for-service and of three putting every different model different integrated well a And or and with services amounts business enter, entity The enter is, as full or that a seen and State. management a in grow you with care. forming those done So, way acquiring to risk very the work.

doing should opportunities I lookout bought medical more keep we're We there. think is either increase group growing entity And to keep a us or great into our the and for in think States. another the example. think I Washington on expect you that. capital States Entering use to I to existing density that business. continue expand our we'll enter And such new that's of for

And future. to so, I that continue the in do think expect to you should us

Operator

Thank you.

from Gary Our comes next Cowen. from Taylor question

Ryan Langston

maybe Thanks. pretty looks up that jumped a the about of you what DSO second XX and what like is it Hi, it's year. NCI. is Gary Ryan for give context in last this similar to? you also, And bit million us AR just refers looks this? we just the Langston was cashflow Taylor. up there Can repurchase quite saw remind Can driving some on quarter. a us statement It morning. what $X This but good like looks into days, is like to sequentially

David Mountcastle

that receivable, this capitation-related of so business, year, side our was payment some the QX year. and is Yes, annual David. contracts accruals in But QX the of with Hey, revenue. remember, bills partially got each the each one-year it or our value-based QX typical Yes. care related to accounts XXXX. increased new QX in We on on in new AR

So, the then unlike goes you of AR care get we QX, fee-for-service a normal grows and from value-based back DSO more that the of continues it churn stuff, year, sort there. grow in then payment it back for and QX, get a to throughout down,

mentioned very our pattern same as couple So, you again, of similar, past years. and as

expect. this we is and we So, expect what this,

we in. flow, own majority minority cash the On stake remaining stake in the purchased MSO on the the an $X that million we

MSO to it just additional a one markets. investment in was of So, own of XXX% our small an

Operator

you. Thank

question Guggenheim Partners. from Draper comes next Our from Sandy

Sandy Draper

A question. actual been Thanks questions quick then very housekeeping lot have and answered. Maybe much. the asked a of my just

revenue how percentages I it's - in terms Thanks. you're comment that's of, where broader mentioned, just margins, as I the just there, there progressing your a margins. where you of question, margins you Practice don't you I targeted and If specifically you're are, percentage but about gave think, terms in about all and care and my Collections. on on guys light you you capitated progressing of like trajectory guess scale value-based been you sort fee-for-service of eventual long-term about could that? And feel how David, in know repeat what's think talked out the you of and capitated and again, the of is true,

David Mountcastle

okay. Yes. Oh,

value-based of care and XXXX, care value-based represents versus XX.X% Practice XXXX and in XXXX. Collections XXXX revenue QX QX in So, XX% XX.X% XX.X% QX was GAAP compared to of in

Parth Mehrotra

And the question. Sandy, Yes. appreciate

if significant On taking risk is, and doctors that book, earnings the look, opportunity compensated take risk capitated compensated. our level for and us there's you increased of getting view getting our

I pretty to opportunity think is lives, up to with MA embedded XXX,XXX dial So, risk. huge the us for close

with are the They the to providers risk, that's aligned. get an XX% sure We model Over our see increase. just know, very right we risk time, think on that us and to - environment. long-term those try entities understanding such should our taking prudently, payers, expect you three risk all backstop Obviously, don't where number We downside. you we've right downside aligned to on this we density, are got lives in risk about share of working and as do with the making today. upside

these EBITDA important, risk, So, I managing more especially payers a years lot have think in commenting think - of more entities us while utilization thoughtful. be than more run, if should the risk many are that. We some go we trends more opportunity flow significant has of our very as other been long on time, than approach think, there's business you'll provider increase see you taking that Over free to And power us for drive future risk over that I not cash been take players, particular pretty managing as taking being the risk growth. see as the of and continue the risk focus We think risk. this been to through from should recent I earnings as in downstream than on. prudent important and you segment taking very again,

Operator

Thank you.

from Blair. Daniels Our next comes question Ryan William from

Ryan Daniels

for you. morning. question. for Parth, the good taking Thanks one Yes,

You've bit volume. demand the utilization. talked little outpatient care outpatient of seeing lot companies a pent-up sustained and about Obviously, are managed a surgery

pretty surgery and your help that. partnership both and unique You're position here, in kind of multi-specialty purview, with a your with maybe

I'm you more specifically on surgery episodes and care and that or your curious of outpatient proposition. drive what growth Thanks. if to can and the with So, into deal risk-based there, help move contracts you're value seeing

Parth Mehrotra

We for thanks your the agree would Yes, with question, Ryan. assessment.

are a great position, unique a differentiator and that's we in I think for very us.

plus XX platform. on specialties have We the

heavy the surgical very that is have we of our pretty we important business. are, more markets Commercial is the overall, of bit on continue think book part hospital But a not and XX% partners, the going are in a be population have commercially where We we heavy. insured. to specialties, obviously partnerships to but that's

a a of there's think in procedures by outpatient payers an inpatient big the from I to the move an surgical focus setting setting. lot

group network in payer specialist for I discussions lot provide the and outpatient setting. like partners, and lot those the our network the a of and are moving bodes value think to can to adding a that multi-specialty volumes having well we business our a of

and strategy, topline business. tailwind our EBITDA. again, to long-term us that adds So, helps it's And to a grow but a it big both diversification continuing again,

where mentioned mix. of it's I out grow earlier line four you and to bottom questions, at and last if COVID one despite the that continued the just topline played kind with As look the we've through of years, years, in the downs ups

excited are and of costs costs XX% so, those time. they big the building And multi-specialty our arrangements groups. to our different allows about and and it validates pretty in strategy, about approach it feel us come we over downstream as from manage PCP, the

Operator

Thank you.

Adam question Ron of Our Bank next comes from America. of

Adam Ron

question. the for thanks Hey,

that you to to if could for really to would in entry, be take and XX% how of it of like dilutive market get providers, revenue back already that, sense trying $XX like million enter, just just you talk markets. the Going low be startup Washington revenue, like because incremental million have new costs about a in XX you that's $X if digit single to you. And

year? that why to what And trying even Thanks. to wouldn't break investments. like, be scale market you kind just overcome just dilutive wondering, just in understand next need So, of a the

Parth Mehrotra

thanks, Yes, Adam.

assessment with is your our are like doing ranges entered So, the to metrics the as XX we've end. market increased seen, we've you've high correct. a we here plus guidance start, get the on bottom line and If providers, we mid head to

those absorbing So, hadn't addition of within we one previously of some market the new that despite are we costs announced. year,

However, TAM is pretty I think big. the

providers new spend on to next of commented providers that significant head the in And $X breakeven. So, a these the Washington in. bit couple XXX $X or XXX while very sales, get spend here, head markets happen just looking are start we groups go a markets helped, XXX, Getting most little we'll take build implementation few per There's to of costs million over medical that we've breakeven hit years start as a pretty these but XX a well. as million will State. with marketing, years. to of big

Operator

And from question comes Capital Thank Sean Markets. last you. of Dodge our RBC

Thomas Kelliher

fit Thomas playbook is I question. of on current just one at the or strategy? taking does good I'll Sean. Thanks. your on that like go patients just overall more morning, value-based in kind this Kelliher this tool a for maybe an guess with How at certain here. Thanks expect care the a Hey, higher virtual for capability provider improve effective is this Is least point? of or to economics, it care level side,

Parth Mehrotra

question. Yes, for the thanks

joins burden. value-based I think of a operations, optimize mentioned. the is practice that and the it's everything job take as I streamline you lives we've into a fee-for-service on continued structure, both of arrangements, take admin with mean, the our the provider to their playbook lot and transform many and once move where our expense us

line. of the take-home So, fees off the of those we the all increase, join pay our focused performance A big the And of are our into then management that's at and lot it. take the work for partners goes and dirty And directly We work to that proposition. moat. providers value on hard a of increase their a It's to tied the the aspects plates of the lot physician bottom then us. and are day, pretty of both practice. our end topline

are aligned. the I So, think pretty interests

our that So, I aspects think, and value adding and three the we're going all doing business. to of to provider seeing on increases our that stickiness focus groups, as keep you're with

Operator

now I'm closing to no questions Mr. would at our showing you. further conference to this Thank the back time. turn I for like Mehrotra remarks.

Parth Mehrotra

support continued for our company, forward near the future. appreciate speaking look you of and today. our with call to We to in again your interest Thank you listening and

Operator

Thank for you call. This concludes conference today's participating.

may You now disconnect.

Privia Health (PRVA) 3 Aug 232023 Q2 Earnings call transcript