Privia Health Group, Inc. Q4 FY2025 earnings call

• Previa Health delivered strong 2025 performance with growth across markets, adding 591 providers and having 1.54 million value-based attributed lives. - Completed acquisition of Avalent Health's ACO business, adding over 120,000 value-based attributed lives. - Entered Arizona in April with anchor partner IMS, seeing strong sales momentum. - Demonstrated strong operating leverage on cost of platform and G&A expenses. - Ended 2025 with 480 million in cash, converting 130% of EBITDA to free cash flow. - In Q4, implemented providers grew sequentially, practice collections increased, and adjusted EBITDA showed growth with margin improvement.

In 2025, Previa Health had strong performance. Implemented providers grew 12.3% year over year to 5,380, with 1.54 million value-based attributed lives up 22.7%. Practice collections increased 16.9%. Adjusted EBITDA for the year increased 38.8% to 125.5 million, with EBITDA margin as a percentage of care margin expanding 480 basis points to 27.2%. In Q4, implemented providers grew sequentially to 5,380, practice collections increased 9.6% from Q4 a year ago to 868.7 million, and adjusted EBITDA increased 26.4% to 31.5 million, representing 27% of care margin. Commercial attributed lives increased over 16% to 910,000, lives attributed to CMS Medicaid programs were up 52%, and Medicare Advantage and Medicaid attribution increased 15% and 23% respectively from a year ago.

• Expect to drive EBITDA growth of approximately 20% at the midpoint of 2026 guidance and convert 80% of EBITDA to free cash flow. - Assuming no new business development, expect to end 2026 with approximately $600 million in cash. - For 2026, implemented providers expected to increase 10.6% year-over-year to reach 5,950 by year-end, attributed lives expected to be approximately 1.58 million, practice collections expected to grow 6.6%, care margin 13% at midpoints, and adjusted EBITDA guidance at $150 million midpoint with 80% conversion to free cash flow.

• Q: Speak to tech investments, including AI and advancements for physicians.

A: Discussed three components of AI-related investments: corporate functions on Google Cloud, etc., physician practice workflows (fee-for-service, value-based, patient engagement), and care delivery. Mentioned potential for margin improvement with AI. - Q: Color on practice collection trends for Q4 and 2026 guidance.

A: Explained Q3 to Q4 comps, capitated revenue factors, and focus on care margin. - Q: Thoughts on utilization trends around ACA and Medicaid enrollment.

A: Bifurcated utilization, ambulatory utilization expected to stay elevated, and diversified model positions well. - Q: EBITDA to free cash flow conversion.

A: Highlighted strong conversion, focus on managing negative float, and 2026 guidance considering cash taxes. - Q: Capital deployment.

A: Priority to deploy capital to compound business, keep cash balance for rainy day, and option to return capital if stock price deviates. - Q: Evelyn acquisition perspective.

A: Excited about the acquisition, hope to increase savings rate, and cross-sell opportunities. - Q: Increasing savings rate for Evelyn acquisition and quantification in guidance.

A: Will take time, playbook will be run, and acquisitions included in guidance. - Q: Corporate G&A expense drop.

A: No specific callouts, normal decreases around operating business flow. - Q: Provider growth in existing markets and Arizona.

A: Same playbook across markets, great anchor partner in Arizona, and cross-sell opportunities. - Q: MA contracting environment.

A: Nuanced on geography-by-geography basis, payer contracting team navigating, and forward-leaning approach. - Q: Evelyn Care Partners EBITDA and revenue and converting doctors to platform.

A: Not disclosing those numbers, revenue recognition different, and acquisition accretive. - Q: Shared savings in guidance and growth in other markets.

A: Prudently guiding, portfolio approach, and evaluating markets. - Q: CMS transitions from ACO reach program.

A: Evaluating new program, TBD, and nuanced on ACO-by-ACO basis. - Q: Specific AI tools rolled out and clinical categories.

A: Various AI tools in different categories, ongoing evaluation of new innovators. - Q: Value-based care M&A landscape.

A: Positioned well, disciplined in M&A, and focusing on quality assets. - Q: Components of 20% EBITDA growth.

A: Entering new states, adding implemented providers, adding value-based lives, M&A, and improving cost structure. - Q: Provider recruitment and conversations.

A: Pitch remains the same, differentiated approach with full service offering, and track record speaks for itself. - Q: Organic pickup from IMS acquisition.

A: Large multi-specialty group, snowballing starts sooner, and five-year strategy to build medical group. - Q: Appetite for new business development.

A: Evaluate each deal on merit, portfolio approach, and long-term view on market investment.