Privia Health Group, Inc.

Good day and thank you for standing by. Welcome to the Privia second quarter 2023 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask questions during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Robert Borchardt, SVP, Investor in Corporate Communications.

Thank you, Amanda, and good morning, everyone. Joining me today are Parth Mehrota, our Chief Executive Officer, and David Mountcastle, our Chief Financial Officer. This call is a weeing webcast and can be accessed from the Investor Relations section of PriviaHealth.com. Today's financial press release and slide presentation are posted on the Investor Relations pages of PriviaHealth.com. Following our prepared comments, we will open the line for questions. Please limit yourself to one question only and return to the queue if you have a follow-up so we can get to as many questions as possible today. The financial results reported today and in the press release are preliminary and are not final until our Form 10-Q for the second quarter and six months ended June 30, 2023, is filed with Securities and Exchange Commission. Some of the statements we will make today are forward-looking in nature based on our current expectations and view of our business as of August 3rd, 2023. Such statements, including those related to our future financial and operating performance and future business plans and objectives, are subject to risks and uncertainties that may cause actual results to differ materially. As a result, these statements should be considered in conjunction with the cautionary statements in today's press release and the risk factors described in our company's most recent SEC filings. Finally, we may refer to certain non-GAAP financial measures on the call. and reconciliation of these measures to comparable gap measures are included in our press release and the accompanying slide presentation posted on our website. Now, I'd like to turn the call over to Parth.

Thank you, Robert, and good morning, everyone. Privia Health delivered another solid quarter as we moved into the second half of 2023. We continue to execute on our strategy and remain focused on building one of the largest ambulatory care delivery networks in the nation. This morning, I'll highlight a number of business and company updates, Then David will discuss our recent financial performance and our 2023 guidance outlook before we take your questions. Privia Health continues to gain market share and momentum with our broad provider partnership and operating model. We executed at a very high level during the second quarter, which resulted in practice collections increasing almost 14% year-over-year. Adjusted EBITDA was up more than 24%, which demonstrates the very strong operating leverage of our model as we continue to increase our number of provider partners and invest in our new markets. Our results were driven by continued same store and new provider growth, as well as strong performance in our value-based arrangements in aggregate. Based on our performance year to date, we have updated our 2023 guidance and are raising most of the metrics to the mid to high end of our initial ranges. Earlier this week, we announced a definitive agreement to enter Washington, our 13th state in partnership with Walla Walla Clinic, a multi-specialty practice with more than 50 providers caring for patients in three locations. It was essential for us to find the right partner who shares our vision to help build a scale provider network in Washington while improving access to and affordability of care in the local communities. Walla Walla Clinic has a highly successful history over its decades of operation, and we look forward to continuing to build on its rich heritage of delivering high-quality care in the community. We expect the transaction to close in the third quarter, with Walla Walla Clinic being fully implemented on the Privia platform by the end of 2023. Turning to some other company news, on May 8th, we completed a secondary offering of 42.6 million shares of common stock, or more than 34% of our total fully diluted shares outstanding. This entirely eliminated Goldman Sachs and Pamplona Capital's ownership in the company, as well as the previous shareholder agreement provisions with the private equity sponsors. We are excited to welcome a number of new long-term oriented investors and look forward to continuing to create shareholder value in the years to come. In addition, the Privia Health Board has continued to broaden the capabilities and expertise of our board members. Adam Bowler, managing partner of Rubicon Founders, joined our board on July 1st. He brings deep domain experience as the former senior advisor for value-based transformation and innovation at the Department of Health and Human Services and also previously served as director of CMMI, the innovation center at CMS. Dave Wickman and Pam Komet joined our board on August 1st. Dave's distinguished career with UnitedHealth will bring unique insights to our board across the healthcare industry landscape. Pam is a proven leader with broad corporate experience and human capital expertise, both in and outside the healthcare sector. We look forward to the important insights and valuable contributions from each of these new board members as Privia continues to execute on its vision. Privia's national footprint continues to expand and now includes close to 3,900 implemented providers in our medical groups caring for more than 4.4 million patients in over 1,000 care center locations. Our scale and diverse provider and payer partnerships are true differentiators. We are building one of the largest multi-specialty medical groups and ambulatory care delivery networks in the country that can improve patient outcomes and reduce costs. We continue to be ahead of our growth plan for adding new implemented providers in our recent new markets of Connecticut, North Carolina, and Ohio. While not highlighted on this slide, it is also noteworthy that our gross provider attrition rate in 2023 has been less than 1% year to date. This is one of the lowest in our company's history, and we continue to add providers on a net same-store basis. Privia has one of the broadest, most balanced, and diversified value-based care platforms in the industry. We serve close to 1.1 million attributed lives across more than 100 at-risk care contracts in commercial and government programs. Total attributed lives increased almost 27 percent from a year ago. There remains a significant embedded opportunity for us to move our Medicaid Advantage lives into upside and downside risk arrangements over the next few years. However, we remain focused on thoughtfully moving to increased risk arrangements while continuing to provide significant opportunities for EBITDA and free cash flow growth. Our strong performance in the current healthcare environment is a testament to previous proven ability to manage risk. Our book of business across a diverse set of fee-for-service and value-based contracts in commercial, Medicare Advantage, the Medicaid Shared Savings Program, and Medicaid allow us to uniquely balance risk while delivering significant shared savings, EBITDA, and free cash flow growth across a cycle of varying utilization trends. We leverage our clinical operations, performance management, healthcare economics, and actuarial expertise to manage the transition to risk. Our close alignment with our physician is critically important in managing patient panels across the risk spectrum. This is accomplished through our physician-led governance structure in our homogenous single tax ID medical groups in each state and the hands-on day-to-day work of our clinical and operations teams. These differentiated fee-for-service and value-based care capabilities in the Privia model allow us to be a unique partner to physician practices across all specialties in any state, serving all patients across all reimbursement models. Now I'll ask David to review our recent financial results and 2023 outlook.