The Oncology Institute, Inc. Q2 FY2025 earnings call

• Revenue growth: Second quarter revenue was $120 million, with over 20% year-over-year growth, driven by monthly records in pharmacy and 10% year-over-year growth in fee-for-service.
• Value-based contracts: Over 50,000 capitated lives added in Q2 in Nevada and California, with more new contracts expected in the second half.
• Leadership changes: New Chief Clinical Officer Dr. Jeff Langsam and new Chief Administrative Officer Kristin England joined; Chairman Richard Barish retired, and Anne McGeorge was elected new Chair.
• AI efforts: Planning to launch 3 AI enablement pilots in Q3 for revenue cycle management, prior authorization services, and patient call center.
• Pharmacy expansion: An additional pharmacy location to open in Florida in the second half of the year.

Consolidated revenue for the second quarter of 2025 was $119.8 million, representing a 21.5% year-over-year increase. Patient services revenue, accounting for 47% of total revenue, was $55.9 million, up 7% year-over-year. Pharmacy revenue, making up 52% of total revenue, was $62.6 million, a 41% year-over-year increase. Clinical trials and other revenue totaled $1.3 million in the quarter, with the clinical trials business outsourced to Helios in the second quarter.

• Full-year 2025 revenue guidance: $460 million to $480 million, expecting to reach the high end due to first-half growth.
• Adjusted EBITDA: Loss of $17 million to $8 million, on track for the midpoint.
• Q3 adjusted EBITDA: Expected to be between negative $2.5 million and negative $3.5 million, with positive adjusted EBITDA anticipated in Q4.

• Business uncertainties: Forward-looking statements involve risks and uncertainties that could cause actual results to differ.
• Drug cost trends: Impact on margins, with drug cost increases driving opportunities but also requiring management.

Q: David Larsen asked about dispensing gross margin, drug pricing reform, and pressure on patient service margin.

A: Rob Carter and Dan Virnich responded, discussing drug procurement scale, positive impact of drug pricing reform on TOI, and margin improvement as new cap contracts mature.

Q: Yuan Zhi inquired about value-based care observation, Florida opportunity timeline, and PBM impact on infusion drugs.

A: Dan Virnich answered, noting stable MLR, revenue recognition in Q4 for Florida opportunity, and shifting drugs from Part B to Part D being net positive.

Q: Robert LeBoyer asked about new patients from contracts and Florida expansion details.

A: Dan Virnich replied, mentioning higher utilization in non-California markets and substantial growth in Florida's Medicare Advantage lives.

Q: David Larsen followed up on fully delegated risk arrangements.

A: Dan Virnich explained that fully delegated means TOI takes risk for Part B oncology spend and has authority over utilization management, network design, and claims adjudication.