Privia Health Group, Inc.

Welcome to the Privia Health first quarter 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Robert Burchard, SVP, of Investor and Corporate Communication. Please go ahead.

Thank you, Tana, and good morning, everyone. Joining me are Parth Barotra, our Chief Executive Officer, and David Mountcastle, our Chief Financial Officer. This call is being webcast and can be accessed in 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. We ask that you 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. The financial results reported today are preliminary and are not final until our Form 10-Q for the first quarter ended March 31, 2024, 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 May 9, 2024. 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 along 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. Reconciliation of these measures to comparable GAAP 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 my CEO, Parth Mehrotra.

Thank you, Robert, and good morning, everyone. Privia Health delivered solid first quarter results to start 2024 as we continue to drive towards our long-term vision to build one of the largest ambulatory care delivery networks in the nation. This morning, I'll cover some key highlights and provide a business update, and then David will discuss our recent financial performance and our 2024 guidance outlook before we take your questions. During the first quarter, Privia Health continued to execute at a very high level with a focus on growth and profitability. As we noted on our February earnings call, we were able to nimbly respond to the changing Medicare Advantage reimbursement environment and protect our earnings power by restructuring certain MA capitation contracts. We believe these actions demonstrate the flexibility, diversity, and differentiation of the previous business model. Our Q1 practice collections increased 7.4% year over year, which includes the impact of restructuring certain MA capitation contracts for more favorable terms. Our top line performance continues to reflect steady growth of same store and new provider additions. Adjusted EBITDA was up more than 18% as we continue to benefit from operating leverage. This was despite absorbing incremental investment in new markets we've entered over the past 18 months. We're also being prudent and assuming minimal increase in accrued shared savings in 2024 versus 2023. Our sales pipeline is strong across all our markets, and we have a robust business development pipeline of new market opportunities. Our strong balance sheet and free cash flow profile allows us the flexibility to take advantage of any dislocations in the physician enablement space. So overall, we feel really good about our business momentum and operating execution in the current environment. We are closely monitoring medical cost trends and claims data so that we can be proactive in our actions. We feel very positive about the moves we made in the past two quarters to mitigate the downside risk in our Medicare Advantage book and are reiterating our full year 2024 guidance. The combination of our diversified value-based book and strong underlying fee-for-service business serving the entire physician practice continues to be a key differentiator. Previa's national footprint continues to expand as we build one of the largest primary care-centric delivery networks in the country. At the end of Q1, we had 4,359 implemented providers caring for over 4.9 million patients in 13 states and the District of Columbia. As of March 31st of this year, we estimate Previa as serving approximately 1.14 million attributed lives across more than 100 value-based care contracts in commercial and government programs. The total attributed lives increased more than 10% from Q1 a year ago. This positions our business as one of the broadest and most balanced value-based care platforms in the industry. Our commercial attributed lives increased 8% from last year to $685,000. As we noted last quarter, our ability to earn care management fees and shared savings that are incremental to our highly predictable fee-for-service management fees offers a very unique value proposition to our medical groups in the commercial book of business. Core to our long-term strategy is to thoughtfully move lives into increased risk arrangements over time when we are confident it will provide significant opportunities for adjusted EBITDA and free cash flow growth. Our strong and stable performance is a testament to previous proven ability to manage risk across a diverse set of 100-plus value-based contracts. We leverage our clinical operations, performance management, actuarial expertise, and close alignment with our physician partners to manage patients across the risk spectrum. In aggregate, previous ACOs or risk entities are managing approximately $9 billion of medical spend in 2024 across commercial, MSSP, Medicare Advantage, and Medicaid programs. The current environment, scale of our medical spend, and potential variability of shared savings require us to be particularly thoughtful in our risk-taking to maintain our earnings power for both our provider partners and our shareholders. We are well positioned to opportunistically increase our attribution in various risk arrangements over the next 24 months to drive future earnings growth. Now, I'll ask David to review our Q1 financial results and 2024 guidance outlook.