Privia Health Group, Inc. Q2 FY2025 earnings call

• Privia Health continued to execute well across all business aspects in the second quarter of 2025, positioning for success in the remainder of the year and 2026.
• Delivered strong new provider signings across markets, with implemented provider growth of 13.8% and value-based lives attribution growth of 15.2% YOY driving Practice Collections growth of 18.5% in Q2.
• Adjusted EBITDA increased 31.6% with EBITDA margin expanding 310 basis points while investing in growth.
• First half results led to raising 2025 outlook above initial guidance ranges for multiple metrics.
• Privia's model combines medical groups, risk-bearing entities, and a technology/services platform, providing a stable earnings profile and unmatched value proposition.

Privia Health's segment performance for the second quarter of 2025 showed strong financial results. Practice Collections increased 18.5% from Q2 a year ago to reach $862.9 million. Adjusted EBITDA increased 31.6% over the second quarter last year to reach $29 million, representing 25.2% of Care Margin. For the first half of 2025, Practice Collections increased 15.7% to $1.66 billion, Care Margin was up 13.2%, and adjusted EBITDA grew 33.3% to $55.9 million. Implemented Providers grew 13.8% year-over-year to 5,125, and attributed lives increased 15.2% year-over-year to 1.38 million, with diversification across commercial, Medicare, and Medicaid programs.

• Raised 2025 outlook to above the high end of initial guidance ranges for Practice Collections, GAAP revenue, platform contribution, and adjusted EBITDA, and to the high end for remaining metrics.
• Confident in sustainable compounding of growth and profitability due to the differentiated business model and consistent execution.

• Market uncertainties, including challenges facing Medicare Advantage and Medicaid payers.
• Regulatory changes that could impact provider reimbursement and business operations.
• Potential for actual results to differ from forward-looking statements due to various risks and uncertainties described in SEC filings.

Q: Proposed physician fee schedule rule implications?

A: Parth Mehrotra said it's a net positive for community-based physician practices and Privia's results.

Q: G&A expense increase?

A: David Mountcastle said it's due to bonus accruals and contractor expenses as the company grows, with ongoing operating leverage.

Q: Strong results in providers and markets?

A: Parth Mehrotra discussed broad-based provider growth across states, with late adopters in established markets and momentum in new markets.

Q: Payers' stress and opportunities for Privia?

A: Parth Mehrotra said Privia's balanced model and track record open more opportunities in payer contracting, sharing risk and getting recurring fees.

Q: IMS integration progress and seasonality?

A: Parth Mehrotra and David Mountcastle said integration is going well, expecting positive EBITDA from IMS in Q4, and no different seasonality than usual.

Q: New Big Beautiful Bill impact on Privia?

A: Parth Mehrotra said impact on Medicaid and Medicare membership is low-single digit, with patients shifting to other programs where Privia is paid higher fees.

Q: Utilization trends and MSSP?

A: Parth Mehrotra said strong ambulatory utilization across all lines, with consistent management of trends post-COVID.

Q: Business development trends and seller expectations?

A: Parth Mehrotra said strong momentum in existing market density and new market entry, with reasonable seller expectations and shake-out in the space.

Q: 2026 worries and EBITDA growth?

A: Parth Mehrotra said Privia has a sustainable model, expects 20% EBITDA growth in 2026 due to momentum in sales and BD.

Q: Conversations with health systems?

A: Parth Mehrotra said Privia partners with health systems to help independent practices, with focus on aligning incentives and strategies.

Q: MSSP program changes and impact?

A: Parth Mehrotra said Privia's strategy to move to enhanced track in MSSP remains, with potential tailwinds from non-performing ACOs.

Q: Platform analogy and partner margin improvement?

A: Parth Mehrotra discussed platform implementation leading to expense savings, productivity lifts, enhanced revenue, and long-term margin improvement for partner practices.