ARLINGTON, Va., Feb. 27, 2024 (GLOBE NEWSWIRE) — Privia Health Group, Inc. (Nasdaq: PRVA) today announced financial and operating results for the fourth quarter and full year ended December 31, 2023. The Company achieved each of its full-year guidance metrics for 2023, as highlighted below.
Full-Year Performance
| For the Years Ended December 31, | ||||||||||||
| ($ in millions, except per share amounts) | 2023 |
2022 | Change (%) | |||||||||
| Total revenue | $ | 1,657.7 | $ | 1,356.7 | 22.2 | % | ||||||
| Gross profit | $ | 353.8 | $ | 302.3 | 17.0 | % | ||||||
| Operating income (loss) | $ | 20.6 | $ | (19.1 | ) | nm | ||||||
| Net income (loss)a | $ | 23.1 | $ | (8.6 | ) | nm | ||||||
| Non-GAAP adjusted net incomeb | $ | 81.5 | $ | 63.7 | 27.9 | % | ||||||
| Net income (loss) per share | $ | 0.20 | $ | (0.08 | ) | nm | ||||||
| Non-GAAP adjusted net income per share | $ | 0.64 | $ | 0.52 | 23.1 | % | ||||||
| a. | Net income for full-year 2023 included $37.1 million in non-cash stock compensation expense and $7.9 million in legal, non-recurring, and other expenses. Net loss for full-year 2022 included $67.4 million in non-cash stock compensation expense and $8.0 million in legal, non-recurring, and other expenses. | |||||||||||
| b. | Reconciliations of non-GAAP adjusted net income and other non-GAAP financial measures are presented in tables near the end of this press release. | |||||||||||
Highlights from 2023 include:
- Record new provider signings with Implemented Providers increasing 19.4% from year-end 2022;
- Gross provider retention of 98+%;
- Strong fee-for-service collections, value-based care performance and new markets growth offset an approximate $110 million Practice Collections headwind due to the restructuring of a capitation contract announced in 1Q’23;
- Three new market entries – Connecticut, South Carolina and Washington;
- Strong Platform Contribution performance helped absorb incremental new market entry costs; and
- Adjusted EBITDA growth of 18.7% compared to full-year 2022.
Key Operating and Non-GAAP Financial Metrics
| For the Years Ended December 31, | |||||||||||
| ($ in millions) | 2023 |
2022 |
Change (%) | ||||||||
| Implemented Providers | 4,305 | 3,606 | 19.4 | % | |||||||
| Value-Based Care Attributed Lives | 1,120,000 | 856,000 | 30.8 | % | |||||||
| Practice Collections | $ | 2,839.0 | $ | 2,424.1 | 17.1 | % | |||||
| Care Margin | $ | 359.2 | $ | 305.6 | 17.5 | % | |||||
| Platform Contribution | $ | 173.5 | $ | 148.5 | 16.8 | % | |||||
| Adjusted EBITDA | $ | 72.2 | $ | 60.9 | 18.7 | % | |||||
Full-Year 2023 Actual Performance versus Guidance
| Initial FY 2023 Guidancec | Updated FY 2023 Guidance | FY 2023 | ||||||||||||
| ($ in millions) | Low | High | at January 8, 2024 | Actual | ||||||||||
| Implemented Providers | 4,050 | 4,150 | Above High End | 4,305 | ||||||||||
| Attributed Lives | 1,050,000 | 1,150,000 | Midpoint | 1,120,000 | ||||||||||
| Practice Collections | $ | 2,700 | $ | 2,850 | Midpoint | $ | 2,839.0 | |||||||
| GAAP Revenue | $ | 1,550 | $ | 1,650 | Mid to High End | $ | 1,657.7 | |||||||
| Care Margin | $ | 350 | $ | 365 | Mid to High End | $ | 359.2 | |||||||
| Platform Contribution | $ | 160 | $ | 168 | Above High End | $ | 173.5 | |||||||
| Adjusted EBITDAd | $ | 70 | $ | 74 | Mid to High End | $ | 72.2 | |||||||
| c. | Management had not reconciled forward-looking non-GAAP measures to their most directly comparable GAAP measures of Gross Profit and Net Income. This is because the Company could not have predicted with reasonable certainty and without unreasonable efforts the ultimate outcome of certain GAAP components of such reconciliations due to market-related assumptions not within our control as well as certain legal or advisory costs, tax costs or other costs that have arisen. For these reasons, management is unable to assess the probable significance of the unavailable information, which could materially impact the amount of the directly comparable GAAP measures. | |||||||||||||
| d. | Reconciliations of non-GAAP adjusted net income and other non-GAAP financial measures are presented in tables near the end of this press release. | |||||||||||||
Fourth Quarter Performance
| For the Three Months Ended December 31, | ||||||||||||
| ($ in millions, except per share amounts) | 2023 |
2022 |
Change (%) | |||||||||
| Total revenue | $ | 440.8 | $ | 364.4 | 21.0 | % | ||||||
| Gross profit | $ | 90.0 | $ | 79.2 | 13.6 | % | ||||||
| Operating income | $ | 1.4 | $ | 2.2 | nm | |||||||
| Net incomee | $ | 2.8 | $ | 17.8 | nm | |||||||
| Non-GAAP adjusted net incomef | $ | 20.3 | $ | 16.1 | 26.1 | % | ||||||
| Net income per share | $ | 0.02 | 0.14 | nm | ||||||||
| Non-GAAP adjusted net income per share | $ | 0.15 | $ | 0.13 | 15.4 | % | ||||||
| e. | Net income for the fourth quarter of 2023 included $11.7 million in non-cash stock compensation expense and $2.4 million in legal and other expenses. Net income for the fourth quarter of 2022 included $9.2 million in non-cash stock compensation expense and $1.7 million in legal and other expenses. | |||||||||||
| f. | Reconciliations of non-GAAP adjusted net income and other non-GAAP financial measures are presented in tables near the end of this press release. | |||||||||||
Key Operating and Non-GAAP Financial Metrics
| For the Three Months Ended December 31, | |||||||||||
| ($ in millions) | 2023 |
2022 |
Change (%) | ||||||||
| Practice Collections | $ | 756.6 | $ | 634.8 | 19.2 | % | |||||
| Care Margin | $ | 91.5 | $ | 80.1 | 14.2 | % | |||||
| Platform Contribution | $ | 42.3 | $ | 39.1 | 8.2 | % | |||||
| Adjusted EBITDA | $ | 17.3 | $ | 14.3 | 21.1 | % | |||||
Capital Resources and Cash Flow
The Company’s balance sheet at December 31, 2023 included $389.5 million of cash and cash equivalents and no debt, compared to cash and cash equivalents of $348.0 million and no debt at December 31, 2022.
Net cash provided by operating activities for the year ended December 31, 2023 was $80.8 million compared to $47.2 million in the prior year (+71.2%). Capital expenditures were $0.1 million for the year ended December 31, 2023, compared to $0.1 million in the prior year. The Company invested $42.9 million in 2023 on business acquisitions to enter new states.
2024 Financial and Business Outlook g h i
Privia Health’s key actions and areas of focus in 2024 include:
- Increasing density and scale in existing geographies through organic provider growth;
- Limiting downside-risk arrangements in a challenging Medicare Advantage (MA) market;
- Renegotiating MA capitation arrangements for more favorable contract structures and margin contribution expected to reduce capitated practice collections by approximately $198 million year-over-year due to revenue recognition rules as 19,900 attributed lives move to upside/downside risk arrangements;
- Exiting Delaware ACO (~12,000 attributed lives in the Medicare Shared Savings Program), effective January 1, 2024;
- Achieving operating leverage to drive Adjusted EBITDA growth, and converting 80% of Adjusted EBITDA to Free Cash Flow (defined as net cash provided by operating activities less purchases of property and equipment); and
- Continuing to pursue business development efforts to enter new states and increase overall addressable market.
The Company’s 2024 operating and financial guidance is as follows:
| FY 2023 | FY 2024 Guidanceg | Y-Y % Change from FY 2023 | |||||||||||||||
| ($ in millions) | Actual | Low | High | Low | High | ||||||||||||
| Implemented Providers | 4,305 | 4,650 | 4,750 | 8.0 | % | 10.3 | % | ||||||||||
| Attributed Lives | 1,120,000 | 1,150,000 | 1,200,000 | 2.7 | % | 7.1 | % | ||||||||||
| Practice Collections | $ | 2,839.0 | $ | 2,775 | $ | 2,875 | (2.3 | )% | 1.3 | % | |||||||
| GAAP Revenue | $ | 1,657.7 | $ | 1,600 | $ | 1,675 | (3.5 | )% | 1.0 | % | |||||||
| Care Margin | $ | 359.2 | $ | 388 | $ | 400 | 8.0 | % | 11.4 | % | |||||||
| Platform Contribution | $ | 173.5 | $ | 180 | $ | 188 | 3.8 | % | 8.4 | % | |||||||
| Adjusted EBITDAh | $ | 72.2 | $ | 85 | $ | 90 | 17.7 | % | 24.6 | % | |||||||
- Practice Collections guidance includes reduction of approximately $198 million from renegotiated Medicare Advantage capitation agreements, and assumes minimal year-over-year increase in Shared Savings accruals
- Adjusted EBITDA guidance includes approximately $10-12 million in start-up costs for new geographies announced in last 15 months
- Capital expenditures are expected to be less than $1 million in full-year 2024
- Approximately 80% of Adjusted EBITDA expected to convert to free cash flow in FY 2024
- Effective tax rate expected to be approximately 27-28%
| g. | Management has not reconciled forward-looking non-GAAP measures to their most directly comparable GAAP measures of Gross Profit and Net Income. This is because the Company cannot predict with reasonable certainty and without unreasonable efforts the ultimate outcome of certain GAAP components of such reconciliations due to market-related assumptions that are not within our control as well as certain legal or advisory costs, tax costs or other costs that may arise. For these reasons, management is unable to assess the probable significance of the unavailable information, which could materially impact the amount of the future directly comparable GAAP measures |
| h. | See “Key Metrics and Non-GAAP Financial Measures” for more information as to how the Company defines and calculates Implemented Providers, Attributed Lives, Practice Collections, Care Margin, Platform Contribution and Adjusted EBITDA, and for a reconciliation of the most comparable GAAP measures to Care Margin, Platform Contribution, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income Per Share. |
| Certain non-recurring or non-cash and other expenses will be treated as an add back in the reconciliation of Net Income to Adjusted EBITDA, and the reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share, the details of which can be found in the Reconciliation schedules near the end of this and in future quarterly financial press releases. | |
| i. | Any slight variations in totals due to rounding. |
About Privia Health
Privia Health™ is a technology-driven, national physician enablement company that collaborates with medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering high-value care in both in-person and virtual settings. Our platform is led by top industry talent and exceptional physician leadership, and consists of scalable operations and end-to-end, cloud-based technology that reduces unnecessary healthcare costs, achieves better outcomes, and improves the health of patients and the well-being of providers. For more information, visit priviahealth.com.
