Privia Health (PRVA) 27 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Robert Borchert	executive
Parth Mehrotra	executive
David Mountcastle	executive
Sameer Patel	analyst
Andrew Mok	analyst
Joshua Raskin	analyst
Benjamin Mayo	analyst
Jailendra Singh	analyst
Albert Rice	analyst
Jack Slevin	analyst
Jeffrey Garro	analyst
Matthew Gillmor	analyst
Richard Close	analyst
Jack Senft	analyst
Matthew Shea	analyst
Ryan Langston	analyst
David Larsen	analyst
Adam Ron	analyst
Hua Ha	analyst
Constantine Davides	analyst
Daniel Grosslight	analyst
Jessica Tassan	analyst
Tao Qiu	analyst
Craig Jones	analyst

Call transcript

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Operator

Thank you for standing by. My name is Loela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Privia Health Fourth Quarter Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Robert Borchert, SVP of Investor and Corporate Communications. sir. ahead, go Please

Robert Borchert

and everyone. Loela, good you, morning, Thank

the Joining and Officer. David Parth today's Mehrotra, financial accessed This along and of Executive Instructions] Officer; our Chief in be Mountcastle, can presentation. is press webcast me Relations with being section priviahealth.com, are call and Investor slide our [Operator release Chief Financial

Exchange December The Commission. the XX-K for Form final until financial results our with reported filed today year are XX, ended preliminary Securities is and and are not XXXX, the

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

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

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

hand Mehrotra. to over like I'd CEO, Parth call Now our to the

Parth Mehrotra

markets. questions. and then Thank business results, financial our morning, very continue and many our we discuss Health fronts growth I'll position and to drive performance morning, as cover will outlook XXXX highlights, execute had you, This XXXX take Robert, before strong our everyone. all capital your Privia across we good our a XXXX on David well guidance recent and

end metrics XXXX. business Privia's of as momentum of extended the our aspects high for all we guidance all across exceeded

results year-over-year, attribution led signings markets, on drove in once clinical improvement fee-for-service of growth XX.X% to new team performance Advantage XX.X%. value-based underpins strong XXXX. of the and collections increased Implemented environment. in challenging exceptional focus despite Medicare a year our growth growth again an better-than-expected through visibility Healthy Our which existing providers which delivered provider continued

XXX in basis our Privia in free operating Adjusted the up no million debt. EBITDA. with adjusted ended was $XXX in despite EBITDA also of year-over-year and XX.X% record markets. million with points margin XXX% of in generated $XXX.X We a cash flow year continued expansion converting XXXX, investments leverage cash driving U.S.

Our positions current balance the market with flexibility us and advantage financial deploy of sheet capital in significant environment. take opportunities to

of and pipeline outstanding markets. organic Our robust, our existing and to are disciplined in the sales business is we performance committed Privia's operating pursuing strength strong our growth partners is that most business unique regulatory by in exceptional engine entities. the environment to health high-performing care in development current complements by execution risk testament groups our physician importantly, model, medical a performance our and teams our and

primary to well networks nation. care-centric the largest of on in are our the one We building path delivery

our medical community-based providers entities of provider high-quality, geographies, proven care million retention and risk and than these implemented highlights the satisfaction states large-scale, over groups our of with X,XXX Privia provider and for stickiness the our the center District have XX% of X,XXX locations. in Columbia. platform. now comprises Our demonstrated footprint X.X XX patients more model success caring across In Gross

programs. and commercial groups. our the Promoter The geographic and million Net us Privia experience underscores care delivered contracts patients' positions our XX our government by serves the reach of balanced and excellent value-based across lives diversified patient of organizations. as attributed of one being Likewise, Score breadth X.XX value-based medical most over now care

year ago. increased contracts last almost Advantage XXX,XXX. Commercial X attribution than well January a increased XX.X% of a Medicaid Medicare attributed reach programs. in new year ago, by increased from as more estimated XX% lives driven lives both from as year as new care and provider attributed Total growth, X% value-based to from certain

scores in We next utilization and factors. years, phase-in in Advantage pressures through to given star the expect XXXX other continue of changes Medicare VXX elevated headwinds trends, among few from over

However, scale in the one value-based us profitability diversification of business previous build and ability care challenges any despite the particular across program. our contracts confidence gives in to

highly We generating contribution on all value-based operational shareholders growth as consistent year implement our partner and manage attribution in contracts growth, sustainable year. pursue focused for our clinical goal remain positive after and is groups medical margin and and in our enhancements risk earnings Ultimately, we practices.

care, to Since significant headwinds in midpoint have the EBITDA XXXX, we consistent of growth metrics cash The our flow on The demonstrates margins expectations delivered year cash execution years. flow has EBITDA for free and past XXX% profitability and average. EBITDA care. metrics, Privia of time. health another have over business over model despite how growth of in value-based compounded evident and converted of our health and key environment is XXXX regulatory cycles cash all we strong political for consistently across consistent free care free X flow power and economic, the our including guidance expanded current

our I'll more ask guidance capital review detail. and in to Now David XXXX position financial our discuss results and outlook recent

David Mountcastle

fourth Thank Privia of very you, executed Parth. well quarter through the XXXX.

with a grew sequentially X,XXX utilization trends QX performance reach year-over-year. continuation value-based of led to collections increasing from ago Providers to XX.X% XXX year $XXX.X of practice at The growth QX Implemented reach from increase in an Providers, and million. solid X.X% Implemented December Our XX, to along ambulatory

capitated the Practice Excluding revenue XXXX. the Collections of approximately agreements, from fourth XX.X% in quarter increased renegotiated year-over-year Medicare Advantage

a platform margin. the is and point both as while G&A leverage EBITDA, last net of cost This all representing year in reconciled to across million, a markets. XXX across improvement increased year XX% investing GAAP which generated Adjusted basis operating we of ago reach $XX.X QX income over from is to appendix, XX.X% care

$XXX.X $XX.X generation high business for million. reach our metrics to for billion. further As cash healthy our Parth margin and Practice end Care balance EBITDA XX.X% grew was flow with free X.X% of ended model sheet the for outgoing increased we of in capital With strengthens exceeded full The adjusted key timing flow cash prudent to as certain Collections noted, working well free as previous EBITDA, the management. we and cash operating payments financial year capital in and all $XXX year guidance adjusted up debt. the million XX.X% no than XXXX. guidance higher or XXXX XXX% million of cash $X.XX as to XXXX, due de was minimis expenditures of approximately

and new markets; upon resiliency current second, existing growth value-based XXXX in that that environment. and same initial XXXX business on and our density attribution In the focus and scale in signings guidance and to our core growth arrangements; diversity XXXX, driven the for improvements priorities and the built health have Our the strong to expect model of operating in bottom to we is provider operational first, date: efficiencies provider impact line. and increase performance third, care

by Using Implemented is to reach the year-over-year X,XXX Lives guidance, to expected expected growth our X.X% are Providers increase be and midpoint to of year-end Attributed XXXX X.X%. approximately

expect X.X% approximately This increase given Practice minimal accruals We the assumes of in in Advantage year-over-year, savings at growth Collections environment. the shared guidance the challenges midpoint. Medicare ongoing

X.X% shared We minimal at midpoint expect accruals. growth given the car savings increase in margin of

entry to as of new are EBITDA markets at basis We a more mature expected points expand growth midpoint. as XX% margin approximately guiding EBITDA costs. is operating more approximately to than percentage market XXX leverage year-over-year margin offset our also of care adjusted in the

and or market of initial a While guidance new we activity business market opportunities, are pipeline maintaining new existing robust deployment. expansion assumes XXXX our no potential development capital

and operating as Finally, model of this capital again are assuming of to rate XX%. tax year expenditures we our part XX% expect be capital-light minimis an effective de to

net our adjusted flow. for loss EBITDA still full the should XX% nearing converting carryforward, free cash in pay are of expect of end lead so to to XXXX. year we operating least at We to our cash taxes This more

continuing Privia Health building to on We come. networks health shareholders remains years physicians, look the the creating patients for and for care-centric providers forward one system of while serve partners largest to their our in nation. many our focused and primary value delivery to

ready we questions. to now take Operator, are

Operator

[Operator Instructions]

ISI. Your of Anderson from first Evercore comes line question with the Elizabeth

Sameer Patel

looks on G&A? quarter you're your by the we fact given the you the just and OpEx strong This the between year-over-year. and is and on wanted solid no leverage marketing and just Elizabeth It marketing sales only guidance there's out think and sales expected year-over-year market Anderson. help Is break based how to about us on that Can this? for entry I understand should down maybe here. Or guide line. new like Sameer $XXX,XXX Patel, be about to just costs? OpEx ask the increasing Congrats about

Parth Mehrotra

scaling Yes. the think sales one I right year Thanks, at you're the market the spend happens infrastructure structure. of Sameer. seeing outset. and last added Yes, the new We cost

update we'll and our to any assume structure scale not does than guidance the development our that other think G&A any to marketing. guidance. I activity. job business If happens, sales markets, and new between that, But is continue cost So the

company, year fifth that. as you expect are We public a should and

so operating play seeing And nicely. you're out the really leverage

to growth. of that's key one So EBITDA drive the levers

Operator

Your Barclays. next Andrew the comes question of from Mok line with

Andrew Mok

now color them uses The of the you could if bit million. a M&A? passing haven't relatedly, any any are cash, lot $XXX not the or and balance And is opportunities seen on diligencing are just sheet And then approaching thus Hoping the cash on pipeline? of on more provide building M&A you opportunities far? a there

Parth Mehrotra

the appreciate I Yes, question, Andrew.

to the look you in So could us expect yes, at everything space.

covering analysts XX us. have We

well. You XX-plus have covering as us can expect we bankers

financial strong looking in position across in our we're at this given environment the space, transactions so all table. And come that our

really we pipeline robust. is noted, the As

lot be both we're also there performance, for private a and markets. pretty estimates going the disciplined. of value-based as you've environment out to entities revisions and seen, a but However, and tough in publicly It's been

to in take right the risk in states. I looking how we're expect groups, of the disciplined capital, you MSO think pursue at opportunities. medical but finding density existing we We've should it's said But those us just entities, very to be the deploy previously, and very enter states, continue increase aggressive, new situation. entities. We'll advantage So

think I we our flexible. very can model, Given be

and focus. So the opportunities we'll shareholder that for deploy primary continue create to to remains value, capital look to

any on come, to us our that so and strong also group forth risk medical and might the balance unseen sheet Obviously, to and changes helps prepare so regulatory sufficient risks support have capital entities. for

big we have. capital So that's a of part the that

we what capital have puts value, then stock And financial if position. us well. price think overall I is as strong it to very So in from to ultimately, the think return deviates option shareholders intrinsic fundamentally we the

Operator

question from next Raskin Josh Nephron of the comes with Research. Your line

Joshua Raskin

the risk evolve path take now, companies to as of one it initial glide seems a It contracts providers plans. sectors, especially in other looking their with maybe and to are speak and I familiar. in to competitor very sort their models risk, business think, though sounded I heard less

sort about talk make that did now? methodology, this path of question, so, your a from more better plans that footing to you And how contribution providers Privia help puts And positive you sure my I that on of generating does you guess to I as and getting say think used follow-up, wanted you margin just if I that? competitors risk guys were risk sort do to still? contract is MA So just then or as are heard,

Parth Mehrotra

Yes. I Josh. question, the appreciate

them So in I'll order. take

the day you to We as public that the a since on small every distinguish in capitation risk. look, think I So don't risk. we've MA willingness book. that the the I MSSP know. very highest with X to wake think want consistent had been We risk. do take in saying been always providers the take take ability full between first level so have up do risk ability do years we to and to to one, at We've we've you

and we where lot to the I that a the think it's there's jumped in noise care, skin entities you and have the have share that's enabling into in down, it keeps the the game, has that think entity and think the to skin groups payer by entities and perform well we of to risk. the Privia the skin skin in honest. or models And upside full game. an everybody take always like in risk. that risk I doctors medical I said We've in well MA, necessarily in value-based need in game misconception has full And space a game perform the perform

hard as So take Ultimately, learned think change doesn't position I to the is I a marketplace. job think can't speak assume risk competitors, our to that don't in just for pays they've much it lesson. and markets. and us our our that payers to entities not groups we're medical do capital risk pays venture trying the in think I I risk. public by --

come all we're much if downside think a a money risk. and take that across we this You payer path. medical don't need I doing, groups don't the It's glide compensates do that that actually good for they're to appreciate not the going work. lose work that And fair to simple, and to contract providers from our pretty respect

So I don't changes our it think position.

think it and makes position I fact, validates In approach our much our stronger.

book, And on capitated disclosure on year, as the that we that that risk, see. will yes, you hope, glad X% it you're couple said much pretty really can that money, we small, downside of the of a beginning the we're expected, we press book. to made at money. binary our from led And release, the then year, the objective last end And MA performed one contracts that we you we if outperformance of were some on the a you It secondly, the ahead results the margin the hoping make curve. had and see gross renegotiated is make last to remain, at the of that's taking that And the we'll than and It's our of day. better well. doing was in about do

Operator

line from next Whit with Partners. the Mayo of Your comes question Leerink

Benjamin Mayo

you flatness trend. the to about wanted the utilization just But this just any you factors I be sunsets, And a new cost that's good event could groups platform? around savings. there for wondering, don't this if to affiliate REACH this methodology more be the year the are in extended get doesn't that that looking in shared that influencing know benchmark with ACO have other with the VXX, I may you? potentially that is changes with your concerning I'm respectfulness then hear all thing and is

Parth Mehrotra

question, Whit. for Thanks the Yes.

so star a we I prudent so the just it's last pretty VXX, whether think changes, design years, book. on scores, utilization across factors taken trends, it's outlined, And benefit So forth. couple and given look, approach we've the of all

We I grow were savings do shared won't think year-over-year. meaningfully our to that we guidance assumes so. prudence able

have and led then same assumption last that to We the outperformed year and results. we better-than-expected

we we with downside and adopting we that savings. as the approach. upside step-up results think X assume shared are meaningful years. This over the any And are So are seen you've does past hoping if same I there's not our guidance in wrong, consistently

risk. we've if I So taking said manage think Utilization you're It's all hurts that. across risk, got it's just you us the to programs. and that

board particular think it's So perspective. program versus from one I more that prudence the any across

ACO your second question. as to then allows entity MSSP know, group or you medical obviously CMS to Yes, choose risk And today. a or a tax ID REACH between

convergence work get there are we I would And REACH to managing doing that will just in their time well. in has is providers and done MSSP initial ultimately some program. So and really of sunsets, programs. the if that like stage. think be over spend paid of this for good patients these think irrespective

in attribution well risk MSSP to that's the better if REACH entities. there's I government, more. just our We for we've think our convergence, capture tend don't if I volume. really or add or all save the hopefully chosen do think even that taxpayers, outcome we And think dollars performed position of ACOs well So convergence, MSSP. ultimately, medical continue to and we because think groups there's for validate in today states, to in will to it some we'll perform our because benefit And we

Operator

Truist question the comes next Securities. Singh from line Jailendra of with Your

Jailendra Singh

good higher-than-expected a cash XXXX. conversion on follow up Congrats to quarter. in on to flow EBITDA wanted I

into bit And year XX% called XXXX? more cash expected you the You conversion maybe like compared XX% why reason the out certain you expecting there? a payments, is little heading outgoing to this guys at provide are this color

David Mountcastle

really and Yes, taxes of our question. next paying that the and going fact the sort some timing some based to is for year of payments out year, going where the driven really decrease at Thanks cash the percentage. and say and it's we of more start I to ended up just would year. on NOLs, liabilities really the the of run to have the that's the of we're next Yes. end

a next feel XX% than without in little So year year, But confident great bit the year guidance. higher our XX% this we might very been perhaps. have it

Operator

question comes UBS. Rice A.J. next with Your of from line the

Albert Rice

with I Washington is I you a your and at you that of to you're that But And anything of XX% there's range? I because different got 'XX could variance growth. uncertainty? would XX% the wondered if look I year, at you're to Anything risk guidance, opportunity lot normally you're don't or the there I sort there. on see takes. around that know you? a every When key of challenge heading anything discussing EBITDA, expecting on squeeze comment that's things would you range from in puts do see. into you that an move as be some what a variables in within at for they're all if you And what that. perceive could looking the

Parth Mehrotra

Yes, the questions, A.J. I appreciate

first very underscores our model. the So a very, our narrow. That look, predictability one, is on million context, It's for range. guidance and consistency of the $X the

big variables And pretty from dollar year and so And it's a it's range much same. a then than not this nothing the perspective. new are The repeat. rinse there's

a have providers, of sold that predictable already. book. will get lot very implemented We've a the fee-for-service We

a As X-, there's X-month you know, lag.

answer consistent questions. our as to X, the follow record X-year and only can so from performance seen And you actual the fee-for-service source the versus value-based with alluded of accruals we that and And book variability Slide in previous track you've accruals. been The methodology track we've I extremely our pretty is the our see predictable. to book that's same is record, the

year, and you better end range. or at book range. above not, expected think we If value-based performs than last the And going only high range. to we'll why be of the the that's have source, the than have that's at like the the then if hopefully, I So the be

that narrow So that's much pretty underscores guidance.

think anything It's really in. don't second them don't setting community-based specific supportive the that. in question. health the to I supporting term with we first On there's care. Look, in expect We of your was physicians. administration its The lowest programs are cost change our model, of all

programs heard nothing all here participate If we'll results. in. that And to we'll continue obviously, that we've get from know. currently our there's you something the CMS support we good let so impacts But I think that changes, for

Operator

Your next Jefferies. with Jack the Slevin line question of comes from

Jack Slevin

simple I simplified the guess strong at per and for looks just to want Care are know Care those scenarios just look to the Congrats of drop look to it's in implemented a print. guidance running But it to on just average Pretty that upside full all me Margin on you here. Margin the if take you that, view think like I and at the considering into provider, in one maybe the EBITDA really Margin quick zero for guidance me have year? pieces sort taking a Care doesn't what in account. X% the and moving you guys numbers,

Parth Mehrotra

Yes. Good question, Jack.

assumption predominantly value-based it's shared flat savings. in care the So

one factor. other the And and So nurse that's between ABBs is practitioners. the and mix physicians

then how care, it flows our scale, given bit Collections. then that obviously, a into that between mix and Practice and specialists primary too then not much. from So PEDs, And the Margin down little Care OBs impacts but

that's cash, and is get operating by you to So savings, flat, if to and looking dollar free leading take that savings on XX% the as factor, overall, improves. I is But EBITDA in see is our pretty shared future outcome. assumptions mainly can rate think increasing every leverage as we'll increased that that leverage Hopefully, of to and we're shared years is driven first think know, well. which I that you down

Operator

the next Stephens Jeff comes Your of Inc. from Garro question line with

Jeffrey Garro

electronic check program. providers has maybe join is interest to thought of requiring on curious And that systems I trended not the in level the in And Partners health in model. record where Care to just previous we'd Privia platform? provider how switch similarly, interest

Parth Mehrotra

I appreciate Yes, question. the

well. progressing think that's I So

the state know, platform we was And IPAs. large portion Community one are starting Connecticut, technology Medical stack. largest which As you that's a to same in a implement those where But Group of the providers not we're on bought the on of yet.

providers good perform providers many medical same time, I value-based time, in think stack. get continue hope our tech a to But of get that's is the lever for our care migrate we'll the stack over groups. as on onto us and to into attribution, integrated our over expand,

don't the So I of It's performing we well in it's out. think had It's all expected. embedded break business. pretty We as it core results. the part

And think it's well pretty gone so planned. as I

Operator

question of with comes Matthew the line Your Gillmor from KeyBanc. next

Matthew Gillmor

a about point. was get addressed I fee physician this schedule. ask from get to the you that bipartisan hopefully thinking anything weeks. addressed onto providers drive to doesn't There's it Is the that year of couple of Congress I the if this material wanted cut addressed, support don't that's how I something lot the that either platform? to guidance obviously curious at were in think actually even started next move way. that helps enough something perspective. a additional that about And is that

Parth Mehrotra

Matt. I question, the appreciate Yes,

So I and the into mean, our puts embedded estimate whatever takes. with best guidance we've

we I lot in of have offsetting factors there, too. think a

it's that call nothing out. better. if it's better, And So to like we it's material

anything, the change Privia integrated that join look, particular entity group that all variable. just of value our very to has and offer. prop think, further with value risk a validate If need pressures does proposition the I medical providers to these fundamental not large for

way. So I think fundamentally nothing either changes

Operator

Close comes next with Your from Canaccord Genuity. of Richard the line question

Richard Close

Congratulations. a Maybe bit more. digging into Washington little

there? how how uninsured Parth, XXXX, do then Medicaid Specifically, would that go potential in and your Obviously, business? the thoughts be impact the away level but about subsidies it does maybe of you just more if think changes increasing

Parth Mehrotra

Richard. question, the appreciate I Yes,

a know, we book. Medicaid don't So as big you have

XX,XXX programs. value-based some have in We lives about

represents XX state Our D.C. the in across demographics our each and mix states

uninsured. the diversified. pretty Same it's So with

lives it's we'll it duals, into parts redetermination. exchange. the individual can you whatever So Medicaid is, we through we whether on saw patients and the see the just like book, went whole commercial, I other think -- capture of some MA, And those of

do depends again, direction, how is, actually will on by I state the plays that in out, think it what it move impact be, all So patients and a just particular state.

have tough but So big it's to yet. don't uninsured exposure to to we or Medicaid just the predict,

Operator

next comes the Ryan from William with question Daniels Your Blair. of line

Jack Senft

year. can But of Jack on Congrats area that you you're is to kind on of one the This enter entries. of mindset there some see Ryan. and new out markets targeting the I -- balance more use include your curious you entering or should is is and for new where parsing growth more your build But that know the Just that you Senft, markets called any cash market help does from is the like new growth? guide it not market whether same strong kind difference what versus there? density. out

Parth Mehrotra

Yes. Thanks, Jack.

look, and P&L. expense markets fully for existing all sales So in is the marketing the I think expensed

think without I you're states in existing the platform well to seeing power that capital. So the deploying of continue organically we in pretty can grow

are that just where states to could capital or and double already increase value because that's opportunities if existing accretive in there have we an infrastructure. use down think arise, I density is we very

states, costs of lot business we've on states you, getting is done Slide the as then then -- any new X, the development absorbed And consistently guide. predominantly And we've obviously, over we've again, every our incremental see consistently year. past within a into added capital, which new

I that's underscore. also pretty to think important

guide we continue we if of absorb lot So within XXXX, to look think the costs gave. like those of I the a you that some 'XX, at years

significant assuming guidance Care no impact incremental of prudent, BD. think is with we collections, our they'll pretty come Margin, EBITDA. Obviously, capital, I So deploy if

some will year. will flow next this Some flow year,

So not guidance. I that update impact. if when we'll we'll just can this those And when guidance any think does and done. see But we happens, deals include get

Operator

from comes question Matthew the next of line Needham. with Your Shea

Matthew Shea

Congrats hear pipeline to to payback question. that great provider pushing close last periods. coming is strong tax I down as of and referrals the a of this year. earlier It the on XX% from a kind the year to was guess new follow-up

changing a all stepping maybe gas referral new more we follow-up, level, your going? in for this Indiana, the reached And referrals So markets? at long market like take new now about that versus get as it is in the have how expansion philosophy existing to does markets think this to flywheel as on grow

Parth Mehrotra

appreciate I Yes, question, the Matt.

the to be new one, economics do, are on what states, The look, how model to proven. very is aggressive proven. existing We first it. we're business going just really everywhere, to states, do given So the know unit

capital. the have We

I think us both. pursue see you'll So

going on the in way flywheel. each So to continue gas every we're to market evolves. step And just which the then

you conversion are rates those So expect. mature most in markets, the as would

of think develop. that time I to new Some the markets, takes

over I But of referrals can markets think time. I as each they can join we market success states. So other hear bigger evolves in groups their have just think us across We too. have the colleagues about story

I So we're pursuing levers all business. grow think all aspects, to to continue and scale the

grow P&L. all results. EBITDA, down we're to continuing free cash the to the the environment, Despite seeing grow in value-based that grow, to You're challenging way

how that's proud is of think reflective pretty accomplishment. playing I So of out, this the just and we're

Operator

Your TD next of Cowen. with Ryan Langston line question comes from the

Ryan Langston

the expected despite but strong to XXXX I XXXX pickup. lives guidance, the grow like In providers, it of kind around guess, X.X% year-over-year, provider around looks XX%,

growth the For actually, the was growth. provider XXXX, over lives

wondering once just you lives slower those that's get expectation or an there? if ramp-up a of So anything providers of on else onboarded going

Parth Mehrotra

I Yes, lives. year range million I it's a to appreciate X.X million this wider mean question. the X.X from

XX.X% growth. playing how end, just it's a it at law are numbers out. of the out. We'll large It's high see So plays

just you out. So see we'll plays were But at how think it numbers the I the midpoint. reflected

we're multi-specialty by building influenced groups. also It's --

to But I and a then think And some little so PEDs. as care the you attribution a primary it's to extent, that mix with with influences bit as OBs know, specialty predominantly PCPs happens broader and range.

kind it is how see consistent just growth. plays with pretty provider we'll out. of usually, it So But

Operator

line Your David with comes of BTIG. from next question Larsen the

David Larsen

for there's in sheet. costs the you I guide the of on did Congrats markets, hear And not? bunch you get and why And balance on 'XX? then enter for market usually entry say the also, Did of year. no the good cash great new couple a quarter a would a You to that X%. if contracts? margin cap it's of revenue exit EBITDA I great margin I low, gross sounds also the not It's hear you is say Why of kind sort but negative those right? gross that margin is assume that still positive, X%. the

Parth Mehrotra

Yes. David. Thanks,

So incremental on assumes obviously new entered new markets We guidance the over markets. just to the years. correct, few yes, the first a last couple one, of no

-- the we you out are fully investing those the of are our if So in as revenue in can the break press the remarks. total incurred. of refer see then release, we you And claims And then those we those, still I to embedded prepared guidance. costs think and capitated all in XX are Page noted

can see in book. generated that actually So positive that we contribution you margin

So we were alluding what that's to.

Operator

comes next question America. Ron from with of Your Adam Bank of the line

Adam Ron

of unpack to savings like MSSP. the shared you on particularly commentary I'd gave, more

you 'XX, better. then coming had initially so you mentioned And ended but savings, in increases accrual for expected shared minimal in it up

if what was directionally on So you accruing on so share what for true-up? then -- that what in like to you're similar what seeing people a trends that continue more could first, if saying the Or 'XX for XXXX MSSP trend? high you're ACO single-digit you're assuming somewhat and helpful XXXX you're how and accruals? are kind 'XX in of that in And 'XX, compares be on that based it was trend if would And versus XXXX? second, REACH assuming is

Parth Mehrotra

the question. appreciate I Yes,

combination by general, of actual. But by I both. look, and versus a mean, year it's give obviously we accrual don't guidance in So

in every the and in versus up year the the performance then we data come adjust in see. accruals year, for results the as our based on previous current year truing we So accruals actual are

to the question fundamental that's So asked. you

same. the is methodology Our

witness. be we are guide. when are look assumptions how that the that wrong, If want downside. to versus we prudent at negative there's the That's upside positive we with same trends we Our hope we we very

And so 'XX a got different stuff. the commercial, MSSP, got I versus It was outperformance stuff. We've we some were MA. of were think linear period again There prior combination, got balances across 'XX. some business. we There lines

out takes all, year. and puts approach across and the we're are there So same this balances adopting itself that

so change, benchmarks, based so MSSP. regional book really I by can't and trend HCC they business, states. versus on on REACH trends in specifically geography, by state, comment those of It's in forth, on by how

CMS we're the true-ups adjusting we data rolling current and us from periods then accrued just that we and year. that versus accruals -- in so each at how for that for prior influences in quarter quarter, the how get looking informs each And

it's just So teams, exercise. pretty analytics job fantastic book. mean economic pretty a our dynamic I team data large care health a a does with

consistently I X with X itself. results over our for last very years. I just think Slide seen you've mean, speaks that the

the book state helps keep think we're us to diversification puts mitigate out following any it or in same and just and just program. I any see the takes how really of approach and particular So any going plays the particular

Operator

Your next comes Michael question from Ha of with line Baird. the

Hua Ha

that last wanted follow I question. up just on to

is in with what your what mean you're versus it's published 'XX Does I And for internally? just to potential MSSP, what I line know below right, understated I the specifically, saying their line I'm you sound that own 'XX you're accruals? for assuming. CMS trend, but emerging on if confident any on And than 'XX. like of guess, guessing remain Or how go-forward And everyone in you based your published maybe ACOs? that trend is seeing perspective are there people for So mentioned, account more actually impact risk they ACPT guess, ACO care rates significantly seeing performance very do REACH it's what does is trend?

Parth Mehrotra

Yes.

think on it's ACOs. is to I So recognize older the ACPT important newer ACOs, impact not

that So factor I of some have think there's you to that, in.

little impacted ACO that's one time. given We these the have, just new over ACOs of think, bit, gestation I a

is guidance. relative Then X years. every performance those So the rebase versus The it's again, our are All benchmark. our the factored into diversified. trends very ACOs book

the different happens I mean all over we've with ACOs. XX years. program been in that time So

a methodology So guidance. we and hope have think the I we in a there's book, and that are at track right, then look that that just we embed we all we And follow. balance We record. the

and to then in. it that what our can levers puts good other on try outperform and based So I pull in we and don't think there practices takes, changes performance absorb fundamentally it are done, clinical we've we if

we're I done past we've not different doing anything So than think in years.

Operator

comes of question with JMP. from next the Davides line Constantine Citizens Your

Constantine Davides

one enabler marketplace I'm pace now just et yours. to being driving you as scale been as at assuming just number in or payers, for pretty How a strategies backbone, your ability this quickly, partners of athena the terms terms across, and of leveraging diverse largest that of states, their efficiently growth out in your a differentiator but cetera? the technology mentioned, successful you competing there's of set providers, group there haven't a is of supporting in Parth, as much in medical

Parth Mehrotra

question. the for Constantine, Thanks, Yes.

it's great stack. tech I than think, but more it's much a just question, broader the

and integrated we've there entities are since we've full differentiated creating altogether I many for in and we that saying a entities been shop. think groups, tech public, too X how are this not services platform one -- are ourselves years medical risk

RCM, to build risk an join medical medical we same with that is fully integrated deeply where in and risk. group the on embedded that the governance just standpoint, take structure a providers of and only entity on from same a is top embedded but technology the supporting platform an not you deeply EMR then group workflows, Having and that everything having embedded are

And in, workflow. embedded day model. models lines we day I unique business. this seeing the don't the across all in are a data other very deeply out of That's think are

relying governance performance. I a how layer the deep think on impacts on they're that you've the on do. we seen They don't very are They that light top. have relying payers, governance,

model really obviously, and to practices, them combination influence stack of then organize very allows business that our us and our with So technology of I results. elements work think those embedded a small in the pods it's closely

from went that risk empirical have manner. a X, seeing companies fundamentally built a a got manner on lot factors of lives just of in there very that companies thoughtful all So practices in one, are lot over take out There support A light very private to it's of and years. few public. a easy in very And go the funded. results X those and this we I it's business you're fruits day that think

itself just think out evolves. plays I that industry as you're seeing this as

So very think probably thoughtful I a it's question.

just X business of value providers us demonstrate and factors, those that that over the this of see you all model, and you of we've validity the choose look results now combination publicly it's at produced think I strong years X, that's can proposition. given consistently a that why that If

Operator

Daniel line with Your next the question from Citi. Grosslight of comes

Daniel Grosslight

still think there? On and a your capitated XXXX we it you we for maybe 'XX, assuming ] capitation, does good improving some X% as it some for -- bit have rate around full was improvement seem beyond, about rates then it rational bids year. goes book to in are cap [ room And been contribution should the margin? was expect advance Or more like seems that this and It -- final. like a as

curious So XXXX also and about capitation in you're how thinking beyond?

Parth Mehrotra

question. Yes, the I appreciate

in we out break obviously, guidance So program. don't particular any

we've consistently we'll we a particular in that margin. with said, program, capitation we the As hope doing and are have positive are some contribution

tough I to repeat think be from will year. it's same whether last it the predict

continues I going factors. as book. all in think the to with alluded we're be that prudent to to The environment challenging be we

the it, of are we'll year. So how it we the we'll make We'll see how just see If hoping out year. are in in during course we this plays plays out it money.

or think the look, second back then was question broader to goes this And I first asked. that question, on the

full to continue and this to risk our distinguish minds, We well MA. need capitation take to in in do

we think where fundamentally, interest a methodology is the risk shared the with payers think, model. everybody's aligned I right

given facing, through the don't contracts payer as over full that the every in environment groups seen dunk and pressures to and money results I for the risk provider with just mean, I are think the all risk. hand much factors. take those make have ability you've this will payers, just We slam they pressures. to go assume are the all

of well So you on all it's by documented pretty the call.

our to expect up should you think don't us book. ramp capitation I So

we we opportunities the of do fair ratio share Otherwise, with that preferences specialist for if there can there's our think spend, book, aspects PCP it's the we whether good where risk-reward see across B, us all Part risk, assume spend, so to it's and I where C, risk the payer a Part a inpatient spend. are will. to payment it's

we as much think we and I as risk control. take things can we the

money or if the making don't for taking take make we to share we're going payer. risk, making payer. then risk need And not for But medical money if shareholders. to with we're certain no we making We're risk. to We're take our for our it money are We're control Otherwise, there's hope our things, money. the going is groups.

a again, day, At outcome. a binary pretty the it's it's So very simple concept. of end the

Operator

Sandler. question comes Piper Your Tassan Jessica line with the next from of

Jessica Tassan

of guide? be Were high more of David. flow implied maybe help just complete And just to So adjusted XQ? through Did onetime the contribution of understand items margin kind the through guess, upside in the there why this to of really see and straight why EBITDA high for Can upside is incremental contribution wouldn't EBITDA? XQ us drop the to you platform any in the OpEx? I it platform end kind upside a

David Mountcastle

complicated Relatively question, Jess. think. I Thanks,

If negatively the it both that's want why costs you're I on the of depending what than say, how I to and year. them for the were, costs year. again, would from G&A increasing our the -- impacted run think platform you how we is is for to did our EBITDA And at through contribution? margin or positively look contribution sales case, greater asking it's how due

know answered I question, So you your in if don't a I asked XXX% lot there.

after. we not, can follow if So up

Parth Mehrotra

a Jess, year. I had sales think Yes, we great

So pretty company sales obviously, the QX the as cost commissions. And true-up were higher in we then well. did

bonus So than originally accruals some of anticipated. are the higher

So all factored kind EBITDA into platform of that just gets contribution. versus

Operator

of question Your the Qiu Macquarie. next Tao from comes line with

Tao Qiu

point continue about willingness Just risk. to the on your take to

the collection and Should some the MA previous remains the helpful is think XXXX, BDC any mix, shift down renegotiated mix expect contracts expected you of to so, X% challenging be your that if MSSP mentioned potential And contemplated to decline and came of environment I [ FFS have changes decline [ we today? further Any ]? in size year. versus or [ out flat. BDC MA total contracts to the back in you be will that Parth, active share risk passive. ] to it there ] Looking any you towards

Parth Mehrotra

question. the appreciate I Yes,

to beginning had whatever we last any year. of We we renegotiated anticipate don't So yes, changes.

we partial risk, positive don't the small pretty going recognition. It's are The for have lives from piece The you we're all it's recognize, we revenue capitated go I margin. business. to mean, a anywhere. contribution have. And Like anywhere. We the go risk continuing don't said, with of book to full doctors just solving

manage to ability change. does those Our not lives

So way that if gets versus the recognized risk. full was topline you decline take full risk fundamentally don't you take

EBITDA, solving we're flow. positive free for So positive positive positive contribution margin, Margin, Care cash

there's So book -- no from but the today. have we change contemplated

Operator

of the Craig from last with line Jones question comes Your Stifel.

Craig Jones

So on I wanted to free conversion. flow hit cash

for handful the XXX% last here. of over years been You've

XX%, to working cash from pay then and combination guiding of to You're started capital maybe I taxes. a think,

where as more does full say, at cash tax just a where no year, of let's your in maybe look out? shake normalized conversion capital, and So you that working kind

David Mountcastle

going shake Yes. to I to the kind of out, would close it's XX%. I mean say,

any working of rid capital if As out we going we probably take it's bit of shake all adjustments. a that to NOLs, into account than get lower our little don't

a resting XX% to the So I sort capital would final of place range the probably assuming say XX% in is adjustments. working

Operator

We more do Gentlemen, at questions not may this continue. you time. any have

Parth Mehrotra

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

Operator

that for gentlemen, call. Thank all you and joining. concludes Ladies today's

You may disconnect. now

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