• Implemented Providers Growth: Increased 11.2% year over year to 4,789 providers.
• FIA Service Collections Growth: Increased 13.6% year over year.
• Adjusted EBITDA: Up 25.2% year over year, reaching $90.5 million.
• Free Cash Flow: Record $109.3 million in 2024, converting 121% of adjusted EBITDA.
• Cash Position: Ended 2024 with $491 million in cash and no debt.
• Practice Collections: Increased 4.5% to $2.97 billion for the full year 2024.
• Care Margin Growth: Up 12.4% year over year.
• Attributed Lives: Increased more than 11% from a year ago, with commercial attributed lives up 15.2%.
• Gross Provider Retention: 98% retention rate.
• Patient Net Promoter Score: 87.
• 2025 Guidance - Implemented Providers: Expected to increase 9.6% year over year to 5,250.
• 2025 Guidance - Practice Collections Growth: Expected growth of approximately 7.8%.
• 2025 Guidance - Adjusted EBITDA Growth: Expected growth of approximately 19%.
• 2025 Guidance - EBITDA Margin Expansion: Expected to expand approximately 200 basis points year over year.

• Warning! GuruFocus has detected 8 Warning Signs with FTAI.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Privia Health Group Inc (NASDAQ:PRVA) exceeded the high end of all guidance metrics for 2024, showcasing strong performance across all markets.
• Implemented providers increased by 11.2% year over year, driving a 13.6% growth in FIA service collections.
• Adjusted EBITDA rose by 25.2%, with operating leverage contributing to a 230 basis point margin expansion year over year.
• The company generated a record $109.3 million in free cash flow in 2024, converting 121% of adjusted EBITDA.
• Privia Health Group Inc (NASDAQ:PRVA) ended the year with $491 million in cash and no debt, providing significant financial flexibility.

Negative Points

• Privia Health Group Inc (NASDAQ:PRVA) anticipates headwinds in the Medicare Advantage environment over the next few years due to elevated utilization trends and changes in star scores.
• The company expects minimal increase in shared savings accruals year over year, given ongoing challenges in the Medicare Advantage environment.
• The guidance for 2025 assumes no new business development activity or capital deployment, potentially limiting growth opportunities.
• Privia Health Group Inc (NASDAQ:PRVA) is nearing the end of its net operating loss carry forward, which will result in higher cash taxes in 2025.
• The company faces a challenging environment for value-based care entities, with revisions in estimates and performance both publicly and in the private market.

Q & A Highlights

Q: Can you help us understand the leverage between sales and marketing and GNA, given the minimal increase in OpEx? A: Parth Mehrotra, CEO, explained that the scaling of the cost structure is evident, with sales infrastructure spending occurring at the outset. The guidance does not assume new markets or business development activity, and the focus is on scaling the cost structure between GNA and sales and marketing, showcasing operating leverage.

Q: Could you provide more color on the M&A pipeline and the use of cash if not for M&A? A: Parth Mehrotra, CEO, stated that Privia is looking at all transactions in the space, maintaining a robust pipeline. The company is disciplined in pursuing opportunities and aims to deploy capital to enter new states and increase density in existing states. The strong balance sheet also prepares them for unforeseen risks and potential capital returns to shareholders.

Q: How does the path to risk methodology affect Privia, and are you generating positive contribution margin from MA risk contracts? A: Parth Mehrotra, CEO, emphasized that Privia prefers models where payers, Privia, and doctors share risk. The company is generating a positive contribution margin from its MA risk contracts, having renegotiated contracts early and performed better than expected.

Q: What factors are influencing the flatness in shared savings, and how would ACO reach sunset affect Privia? A: Parth Mehrotra, CEO, noted that the flatness in shared savings is due to utilization trends, V28, and star scores. If ACO reach sunsets, Privia could benefit by capturing volume, as they perform well in MSSP and continue to add attribution in that program.

Q: Why is the EBITDA to cash flow conversion expected to be lower in 2025 compared to 2024? A: David Mountcastle, CFO, explained that the lower conversion is due to the end of net operating loss carryforwards, leading to increased tax payments in 2025. The timing of cash payments also influenced the higher conversion in 2024.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.