Privia Health Group Inc.
05/07/2026 | Press release | Distributed by Public on 05/07/2026 07:00
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included elsewhere in this quarterly report on Form 10-Q. In addition, the following discussion and analysis and information contains forward-looking statements about the business, operations and financial performance of the Company based on our current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors. including, but not limited to, those identified below and those discussed in the sections titled "Risk Factors" and "Information Regarding Forward-Looking Statements" in this quarterly report on Form 10-Q.
Overview
Privia Health is a technology-driven, national physician-enablement company that collaborates with physician practices, health plans, and health systems to achieve the quadruple aim of better outcomes, lower costs, improved patient experience, and happier and more engaged providers. We seek to accomplish the quadruple aim by entering markets and organizing existing physicians and non-physician clinicians into a unique practice model that combines the advantages of a partnership in a large regional Medical Group with significant provider autonomy for Privia Providers joining our Medical Groups. Our technology and service solutions (collectively, the "Privia Platform") are powered by our Privia Technology Solution that integrates both Privia-developed and third-party applications into a seamless interface and workflow that manages all aspects of our Privia Providers' provision of healthcare services.
Under our Privia Medical Group model, Privia Physicians join the Medical Group in their geographic market as an owner of the Medical Group. We own a majority interest in certain of our Medical Groups, with Privia Physicians collectively owning a minority interest, and we own no interest in certain other Non-Owned Medical Groups. In those markets in which state regulations do not allow us to own Medical Groups, the Non-Owned Medical Groups may be owned by the Privia Physicians or owned indirectly by a licensed physician holding a Privia leadership position, otherwise referred to as a Friendly Medical Group. Privia Physicians furnish healthcare services through our Medical Groups and continue to own their Affiliated Practices, which provide certain services to the Medical Groups, such as use of space, non-physician staffing, equipment and supplies.
We provide management services to the Medical Groups through a local MSO, which provides Medical Groups with access to VBC opportunities either directly or through Privia-owned Accountable Care Organizations ("ACOs"). We have national committees that distribute quality guidance, and we employ Chief Medical Officers who provide clinical oversight and direction over the clinical affairs of the Owned Medical Groups. Additionally, we hold the provider contracts, maintain the patient records, set reimbursement rates, and negotiate payer contracts on behalf of the Owned Medical Groups.
In some instances, we also move into and expand in new and existing markets through our Privia Care Partners model, which offers an affiliation model to providers who are looking solely for VBC solutions. For those practices, we furnish population health services, reporting and analytics, along with certain management.
GAAP Financial Measures
• Revenue was $603.8 million and $480.1 million for the three months ended March 31, 2026 and 2025, respectively;
• Gross profit was $125.6 million and $103.6 million for the three months ended March 31, 2026 and 2025, respectively;
• Operating income was $7.4 million and $5.2 million for the three months ended March 31, 2026 and 2025, respectively; and
• Net income attributable to Privia Health Group, Inc. was $3.1 million and $4.2 million, for the three months ended March 31, 2026 and 2025, respectively.
Summary of Key Metrics and Non-GAAP Financial Measures
• Practice Collections were $914.8 million and $798.6 million for the three months ended March 31, 2026 and 2025, respectively;
• Care Margin was $128.7 million and $105.3 million for the three months ended March 31, 2026 and 2025, respectively;
• Platform Contribution was $67.0 million and $51.7 million for the three months ended March 31, 2026 and 2025, respectively; and
• Adjusted EBITDA was $36.7 million and $26.9 million for the three months ended March 31, 2026 and 2025, respectively.
See "Key Metrics and Non-GAAP Financial Measures" below for more information as to how we define and calculate Implemented Providers, Attributed Lives, Practice Collections, Care Margin, Platform Contribution, Platform Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin, and for reconciliations of these key metrics and non-GAAP financial measures to the most comparable GAAP measures, including gross profit to Care Margin, gross profit to Platform Contributor, and net income to Adjusted EBITDA.
Our Revenue
We recognize revenue from multiple stakeholders, including health care consumers, health insurers, employers, providers and health systems. Our revenue includes (i) FFS revenue generated from providing healthcare services to patients through Privia Providers of Owned Medical Groups or administrative fees collected for providing administrative services to Non-Owned Medical Groups, (ii) VBC revenue collected on behalf of our providers, through capitated revenue, shared savings (including surplus payments, shared savings, total cost of care budget payments and similar payments) and care management fees (including care management fees, management services fees, care coordination fees and all other similar administrative fees), and (iii) other revenue from additional services, such as concierge services, virtual visits and coding.
FFS Revenue
We generate FFS-patient care revenue when we collect reimbursements for FFS medical services provided by Privia Providers. Our agreements with our providers have a multi-year term length and we have historically experienced a 96% provider retention rate, both of which lead to a highly predictable and recurring revenue model. Our FFS contracts with payer partners typically contain annual rate inflators and enhanced commercial FFS rates given our scale in each of our markets. As a result of receiving these rate inflators and enhancements, if we continue to be successful in expanding our provider base, we expect revenue will grow year-over-year in absolute dollars. In addition, in our FFS-patient care revenue, we include collections generated from ancillary services such as clinical laboratory, imaging and pharmacy operations. We also generate FFS-administrative services revenue by providing administration and management services to medical groups which are not owned or consolidated by us. FFS-patient care revenue represented 64.8% and 64.9% of total revenue for the three months ended March 31, 2026 and 2025, respectively. FFS-administrative services revenue represented 5.2% and 6.7% of total revenue for the three months ended March 31, 2026 and 2025, respectively.
VBC Revenue
Over time, we create incremental value for our provider partners by enabling them to succeed in VBC arrangements. We generate VBC revenue when our providers are reimbursed through traditional FFS Medicare, Medicare Shared Savings Program ("MSSP"), Medicare Advantage, commercial payers and other existing and emerging direct payer and employer contracting programs. The revenue is primarily collected in the form of (i) capitated revenue earned by providing healthcare services to Medicare Advantage attributed beneficiaries for a defined group of services including professional, institutional and pharmacy through a contract that is typically known as an "at-risk contract," (ii) shared savings earned based on improved quality and lower cost of care for our attributed lives in VBC incentive arrangements and (iii) care management fees to cover costs of services typically not reimbursed under traditional FFS payment models, including population management, care coordination, advanced technology and analytics. VBC revenue represented 29.6% and 27.9% of total revenue for the three months ended March 31, 2026 and 2025, respectively.
Other Revenue
The remainder of our revenue is derived from leveraging our existing base of providers and patients to deliver value-oriented services such as virtual visits and coding. Other revenue represented 0.4% and 0.5% of total revenue for the three months ended March 31, 2026 and 2025, respectively.
Key Factors Affecting Our Performance
Addition of New Providers
Our ability to increase our provider base will enable us to deliver financial growth as our providers generate both our FFS and VBC revenue. Our existing provider relationships and market share provides us with significant opportunity to grow in both existing and new geographies, and we believe the number of providers joining Privia is a key indicator of the market's recognition of the attractiveness of our platform to our providers, patients and payers. We intend to increase our provider base in existing and new markets by adding new practices and assisting our existing practices with recruiting new providers, using our in-market and national sales and marketing teams. As we add providers to the Privia Platform, we expect them to contribute incremental economics as we leverage our existing brand and infrastructure, both at the corporate and in-market levels.
Addition of New Patients
Our ability to add new patients to our provider base in existing and new markets will also enable us to deliver revenue growth in both our FFS and VBC contracts. We believe the number of attributed patient lives in VBC programs is a key driver of our VBC revenue growth. Our branding and marketing strategies to drive growth in our practices have continued to result in increased engagement with new and existing patients. We believe our continued success in growing the visibility of the Privia brand will result in increased patient panels per provider and contribute incremental revenue in both FFS and VBC for our practices.
Expansion to New Markets
Based upon our experience to date, we believe Privia can succeed in all reimbursement environments and payment models. The data we collected from older provider cohorts consistently suggest that we improve their performance in both FFS and VBC metrics over time and inform our expectations for our new markets. We believe our in-market operating structure and ability to serve providers wherever they are on their transition to VBC can benefit physicians and providers throughout the U.S. and that our solution is applicable across all 50 states. We enter a market with an asset-light operating model and employ a disciplined, uniform approach to market structure and development. We partner with market leading medical groups and health systems to form anchor relationships and align other independent, affiliated, or employed providers into a single-TIN medical group. Our business model also gives us flexibility for future, incremental growth through the acquisition of minority or majority stakes in our practices and opening de-novo, fully-owned sites of care focused on Medicare Advantage and direct contracting models.
In April 2025, the Company announced it had entered the state of Arizona in partnership with a multi-specialty practice.
In December 2025, the Company acquired an ACO business from Evolent Health, Inc., adding over 120,000 attributed lives through the MSSP, various commercial and Medicare Advantage programs.
Provider Satisfaction and Retention
Privia Providers have high satisfaction with their overall performance on our platform, and we strive to continuously improve provider well-being and patient satisfaction. Our percentage of collections model combined with high patient and provider satisfaction results in greater than 90% Practice Collections predictability on a rolling twelve month forward basis. We believe these metrics demonstrate the stability of our provider base and the appeal to prospective providers and patients of our platform.
Payer Contracts and Ability to Move Markets to VBC
Our FFS and VBC revenue is dependent upon our contracts and relationships with payers. We partner with a large and diverse set of payer groups nationally and in each of our markets to form provider networks and to lower the overall cost of care, and we structure bespoke contracts to help both providers and payers achieve their objectives in a mutually aligned manner. Maintaining, supporting and increasing the number of these contracts and relationships, particularly as we enter new markets, is important for our long-term success. From time to time, we may renegotiate or attempt to renegotiate our payer contracts in the ordinary course of business prior to the expiration of their stated terms. If the counterparties fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline and our future revenue growth may be constrained.
Our ability to work within each geographic market as it evolves in its shift towards VBC, with our experience working in all reimbursement environments, enables providers to accelerate and succeed in their transition. Our model is aligned with our payer partners, as we have demonstrated improved patient outcomes while driving incremental revenue growth. We intend to accelerate the move towards the adoption of VBC reimbursement in each market in current and emerging payer programs. To do so, we will need to continue enhancing our VBC capabilities and executing on initiatives to deliver next generation access, superior quality metrics and lower cost of care.
As of March 31, 2026, the total number of Privia-owned ACOs is ten.
Capitated revenue is generated through what is typically known as an "at-risk contract." At-risk capitation refers to a model in which the Company is entitled to fixed monthly fees from the third-party payer in exchange for providing healthcare services to attributed beneficiaries in Medicare Advantage plans. The fees are typically based on a percentage of the defined premium that payers receive from Centers of Medicare and Medicaid Services ("CMS"). The Company is responsible for providing or paying for the cost of healthcare services required by those attributed beneficiaries. At-risk capitated fees are recorded gross in revenues because the Company is acting as a principal in arranging for, providing, and controlling the managed healthcare services provided to the attributed beneficiaries.
Components of Revenue
Our FFS revenue is primarily dependent upon the size of our provider base, payer contracted rates and patient volume. Our ability to maintain or improve pricing levels in our contracts with payers and patient volume for our providers will impact our results of operations. In addition to increasing our provider base and contracted rates over time, we also seek to increase patient volume by demonstrating the ability to provide a better patient experience that leads to higher retention rates and drives referrals to preferred, high quality and value-based providers. Our VBC revenue is primarily dependent upon the number of attributed patients in our VBC arrangements, risk levels of our payer contracts, and effective management of our patients' total cost of care. As we grow our provider base, we also expect to increase our total number of attributed patients in existing and new markets. In addition, we intend to increase the risk levels of our value-based programs as we seek a higher revenue opportunity on a per patient basis over time.
Investments in Growth
We expect to continue focusing on long-term growth through investments in our sales and marketing, our technology-enabled platform, and our operations. In addition, as we continue our efforts to move markets toward VBC, we expect to continue making additional investments in operations for an expanded suite of clinical capabilities to manage our patient population.
We launched Privia Care Partners on January 1, 2022 to offer a more flexible affiliation model for providers who do not desire to join one of our medical groups. This model aggregates providers in certain of our existing markets as well as new markets who are looking solely for VBC solutions without the necessity of changing EMR providers. We furnish population health services, reporting and analytics to such providers along with a menu of management services from which providers may choose. We continue to have Privia Care Partners' providers transitioning to our Privia Medical Group model, which demonstrates the flexibility of our operating model and technology platform, as well as the ability to support physicians wherever they are in their transition to value-based care.
Key Metrics and Non-GAAP Financial Measures
We review a number of operating and financial metrics, including the following key metrics and non-GAAP financial measures, to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plans, and make strategic decisions.
Key Metrics
| For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Implemented Providers (as of end of period) | 5,535 | 4,871 | |||||||||
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Attributed Lives (in thousands) (as of end of period)
|
1,606 | 1,270 | |||||||||
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Practice Collections (1) ($ in millions)
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$ | 914.8 | $ | 798.6 | |||||||
(1) We define Practice Collections as the total collections from all practices in all markets and all sources of reimbursement (FFS, VBC and other) that we receive for delivering care and providing our platform and associated services. Practice Collections differ from revenue by including collections from Non-Owned Medical Groups.
Implemented Providers
We define Implemented Providers as the total of all service professionals at the end of a given period who are credentialed and bill for medical services in both Owned and Non-Owned Medical Groups during that period. This includes, but is not limited to, physicians, physician assistants, and nurse practitioners. We believe that growth in the number of Implemented Providers is a key indicator of the performance of our business and expected revenue growth. This growth depends, in part, on our ability to successfully add new practices in existing markets and expand into new markets. The number of Implemented Providers increased 13.6% as of March 31, 2026 compared to March 31, 2025, due to organic growth in our healthcare delivery business as well as our entrance into the Arizona market.
Attributed Lives
We define Attributed Lives as any patient that a payer deems attributed to Privia to deliver care as part of a VBC arrangement through a provider of primary care or specialty services as of the end of a particular period. The number of Attributed Lives is an important measure that impacts the amount of VBC revenue we receive. Attributed Lives increased 26.5% as of March 31, 2026 compared to March 31, 2025, primarily due to acquisitions as well as organic growth.
Practice Collections
We define Practice Collections as the total collections from all practices in all markets and all sources of reimbursement (FFS, VBC and other) that we receive for delivering care and providing our platform and associated services. Practice Collections differ from revenue by adding collections from Non-Owned Medical Groups. FFS arrangements accounted for 80.1% and 82.4% of our practice collections for the three months ended March 31, 2026 and 2025, respectively. VBC accounted for 19.8% and 17.4% of practice collections for the three months ended March 31, 2026 and 2025, respectively.
Practice Collections increased 14.6% for the three months ended March 31, 2026 when compared to the same period in 2025, mainly due to organic growth of our healthcare delivery business and acquisitions.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with GAAP, we believe non-GAAP financials measures including Care Margin, Platform Contribution, Platform Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin are useful measures to investors as these are metrics used by management in evaluating our operating performance and in assessing the health of our business. We use these non-GAAP measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook.
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
| For the Three Months Ended March 31, | |||||||||||
|
(Amounts in thousands, except for percentages)
|
2026 | 2025 | |||||||||
|
Care Margin (1) ($)
|
$ | 128,730 | $ | 105,288 | |||||||
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Platform Contribution (1) ($)
|
$ | 67,033 | $ | 51,733 | |||||||
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Platform Contribution Margin (1) (%)
|
52.1% | 49.1% | |||||||||
|
Adjusted EBITDA (1) ($)
|
$ | 36,691 | $ | 26,915 | |||||||
|
Adjusted EBITDA Margin (1) (%)
|
28.5% | 25.6% | |||||||||
|
(1) See below for more information as to how we define and calculate Care Margin, Platform Contribution, Platform Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin and for a reconciliation of Gross Profit, the most comparable GAAP measure, to Care Margin, Gross Profit, the most comparable GAAP measure, to Platform Contribution, and net income, the most comparable GAAP measure, to Adjusted EBITDA.
|
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Care Margin
Gross Profit is defined as total revenue less provider expenses and amortization of intangible assets. We define Care Margin as Gross Profit excluding amortization of intangible assets. Our Care Margin generated from FFS revenue is contractual and recurring in nature, and primarily based on an individually negotiated percentage of collections for each practice that joins Privia. Our Care Margin generated from VBC revenue is based on a percentage of care management fees and shared savings collected. We view Care Margin as all of the dollars available for us to manage our business, including providing administrative support to our practices, investing in sales and marketing to attract new providers to the Privia Platform, and supporting the organization through our corporate infrastructure. We expect Care Margin will grow year-over-year in absolute dollars as we continue to expand our provider base. We would also expect our care management and shared savings economics in our VBC arrangements to improve on a per patient basis as we manage towards lower total cost of care for our Attributed Lives and move towards higher risk VBC arrangements over time. Care Margin increased 22.3% for the three months ended March 31, 2026 when compared to the same period in 2025 due to organic growth. As a percentage of revenue, Care Margin slightly decreased to 21.3% for the three months ended March 31, 2026 from 21.9% for the same period in 2025. We continue to make strategic investments to increase services to both our patients and physicians.
In addition to our financial results determined in accordance with GAAP, we believe Care Margin, a non-GAAP measure, is useful in evaluating our operating performance. We use Care Margin to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Care Margin is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance.
The following table provides a reconciliation of Gross Profit, exclusive of intangible asset amortization, the most closely comparable GAAP financial measure, to Care Margin:
| For the Three Months Ended March 31, | ||||||||||||||
|
(unaudited and dollars in thousands)
|
2026 | 2025 | ||||||||||||
| Revenue | $ | 603,847 | $ | 480,097 | ||||||||||
| Provider expense | (475,117) | (374,809) | ||||||||||||
| Amortization of intangible assets | (3,135) | (1,673) | ||||||||||||
| Gross Profit | $ | 125,595 | $ | 103,615 | ||||||||||
| Amortization of intangibles assets | 3,135 | 1,673 | ||||||||||||
| Care Margin | $ | 128,730 | $ | 105,288 | ||||||||||
Platform Contribution
We define Platform Contribution as Gross Profit, excluding amortization of intangible assets, less cost of platform and excluding stock-based compensation expense included in cost of platform. The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to Platform Contribution. We consider Platform Contribution to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services. As a provider spends a longer time on the Privia Platform, we expect the Platform Contribution from that provider
to increase both in terms of absolute dollars as well as a percent of Care Margin. We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate operating leverage on our in-market infrastructure costs. Platform Contribution increased 29.6% for the three months ended March 31, 2026 when compared to the same period in 2025 due to organic growth of our medical practice business and acquisitions.
The following table provides a reconciliation of Gross Profit, the most closely comparable GAAP financial measure, to Platform Contribution:
| For the Three Months Ended March 31, | ||||||||||||||
|
(unaudited and dollars in thousands)
|
2026 | 2025 | ||||||||||||
| Revenue | $ | 603,847 | $ | 480,097 | ||||||||||
| Provider expense | (475,117) | (374,809) | ||||||||||||
| Amortization of intangibles assets | (3,135) | (1,673) | ||||||||||||
| Gross Profit | $ | 125,595 | $ | 103,615 | ||||||||||
| Amortization of intangibles assets | 3,135 | 1,673 | ||||||||||||
| Cost of platform | (68,420) | (59,526) | ||||||||||||
|
Stock-based compensation(1)
|
6,723 | 5,971 | ||||||||||||
| Platform Contribution | $ | 67,033 | $ | 51,733 | ||||||||||
|
(1) Amount represents stock-based compensation expense included in cost of platform.
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Platform Contribution Margin
We define Platform Contribution Margin as Platform Contribution as a percentage of Care Margin. We consider Platform Contribution Margin to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services. As a provider spends a longer time on the Privia Platform, we expect the Platform Contribution from that provider to increase both in terms of absolute dollars as well as a percent of Care Margin. We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate operating leverage on our in-market infrastructure costs. Platform Contribution Margin was 52.1% for three months ended March 31, 2026 compared to 49.1% during the same period in 2025. We continue to make strategic investments intended to provide better service to both our patients and physicians at a pace slower than the increase in revenue.
In addition to our financial results determined in accordance with GAAP, we believe Platform Contribution and Platform Contribution Margin, each a non-GAAP measure, are useful in evaluating our operating performance. We use Platform Contribution to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Platform Contribution is helpful to our investors as they are metrics used by management in assessing the health of our business and our operating performance.
Adjusted EBITDA
We define Adjusted EBITDA as net income before interest income, net, provision for income taxes, net income attributable to non-controlling interests, depreciation and amortization, non-cash stock-based compensation, and other expenses including employer taxes on equity vesting and exercises and other certain non-recurring items such as severance, contingent and deferred consideration and other expenses. We include Adjusted EBITDA because it is an important measure by which we assess, and believe investors should assess, our operating performance. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. Adjusted EBITDA has limitations as an analytical tool including: (i) Adjusted EBITDA does not reflect the impact of stock-based compensation expense, and (ii) Adjusted EBITDA does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments. Adjusted EBITDA increased by 36.3% for the three months ended March 31, 2026, when compared to the same period in 2025 due to organic growth of our business, acquisitions and growth in Attributed Lives.
Adjusted EBITDA Margin
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of Care Margin. We included Adjusted EBITDA Margin because it is an important measure by which our management assesses and believes investors should assess our operating performance. We consider Adjusted EBITDA Margin to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. Adjusted EBITDA Margin was 28.5% for three months ended March 31, 2026, an increase from 25.6% for the same period in 2025, due to organic growth of our medical practice business and growth in our value based care business.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be
indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA and Adjusted EBITDA Margin is helpful to our investors as they are metrics used by management in assessing the health of our business and our operating performance.
The following table provides a reconciliation of net income attributable to the Company, the most closely comparable GAAP financial measure, to Adjusted EBITDA:
| For the Three Months Ended March 31, | ||||||||||||||
|
(unaudited and dollars in thousands)
|
2026 | 2025 | ||||||||||||
|
Net income
|
$ | 3,064 | $ | 4,220 | ||||||||||
|
Net income attributable to non-controlling interests
|
646 | 1,826 | ||||||||||||
| Provision for income taxes | 5,600 | 2,103 | ||||||||||||
|
Interest income, net
|
(1,888) | (2,931) | ||||||||||||
| Depreciation and amortization | 3,281 | 1,901 | ||||||||||||
| Stock-based compensation | 21,921 | 17,790 | ||||||||||||
|
Other expenses(1)
|
4,067 | 2,006 | ||||||||||||
| Adjusted EBITDA | $ | 36,691 | $ | 26,915 | ||||||||||
|
(1) Other expenses include employer taxes on equity vesting/exercises, severance, contingent and deferred consideration, and certain non-recurring costs.
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Components of Results of Operations
Revenue
As noted above under "Our Revenue," revenue is earned in three main categories: FFS revenue, VBC revenue and other revenue.
Operating Expenses
Provider expenses
Provider expenses are amounts accrued or payments made to physicians, hospitals and other service providers, including Privia physicians, their related physician practices, and providers the Company has contracted with through payer partners. Those costs include physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries under at-risk capitated revenue arrangements for which the Company is financially responsible, whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expenses are recognized in the period in which services are provided.
Cost of platform
Third-party EMR and practice management software expenses are paid on a percentage of revenue basis, while we pay most of the costs of our platform on a variable basis related to the number of implemented physicians we service. In addition, expenses contain stock-based compensation related to employees that provide cost of platform services but exclude any depreciation and amortization expense. Software development costs that do not meet capitalization criteria are expensed as incurred. As we continue to grow, we expect the cost of platform to continue to grow at a rate slower than the revenue growth rate.
Sales and marketing
Sales and marketing expenses consist of employee-related expenses, including salaries, commissions, stock-based compensation, and employee benefits costs, for all of our employees engaged in marketing, sales, community outreach, and sales support. In addition, sales and marketing expenses also include central and community-based advertising to generate greater awareness, engagement, and retention among our current and prospective patients as well as the infrastructure required to support all of our marketing efforts.
General and administrative
Corporate, general and administrative expenses include employee-related expenses, including salaries and related costs and stock-based compensation, technology infrastructure, occupancy costs, operations, clinical and quality support, finance, legal, human resources, and development departments.
Depreciation and amortization expense
Depreciation and amortization expenses are primarily attributable to our capital investment and consist of fixed asset depreciation and amortization of intangibles considered to have definite lives. We do not allocate depreciation and amortization expenses to other operating expense categories.
Interest income, net
Interest income consists primarily of interest earned by the Company on bank balances, offset by interest expense (including deferred financing costs) on any outstanding borrowings. See "Liquidity and Capital Resources-General and Indebtedness."
Results of Operations
The following table sets forth our condensed consolidated statements of operations data for the three months ended March 31, 2026 and 2025:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | Change ($) | Change (%) | ||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
| Revenue | $ | 603,847 | $ | 480,097 | $ | 123,750 | 25.8 | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Provider expense | 475,117 | 374,809 | 100,308 | 26.8 | % | ||||||||||||||||||
| Cost of platform | 68,420 | 59,526 | 8,894 | 14.9 | % | ||||||||||||||||||
| Sales and marketing | 8,134 | 6,922 | 1,212 | 17.5 | % | ||||||||||||||||||
| General and administrative | 41,473 | 31,721 | 9,752 | 30.7 | % | ||||||||||||||||||
| Depreciation and amortization | 3,281 | 1,901 | 1,380 | 72.6 | % | ||||||||||||||||||
| Total operating expenses | 596,425 | 474,879 | 121,546 | 25.6 | % | ||||||||||||||||||
| Operating income | 7,422 | 5,218 | 2,204 | 42.2 | % | ||||||||||||||||||
| Interest income, net | 1,888 | 2,931 | (1,043) | (35.6) | % | ||||||||||||||||||
| Income before provision for income taxes | 9,310 | 8,149 | 1,161 | 14.2 | % | ||||||||||||||||||
| Provision for income taxes | 5,600 | 2,103 | 3,497 | 166.3 | % | ||||||||||||||||||
| Net income | 3,710 | 6,046 | (2,336) | (38.6) | % | ||||||||||||||||||
| Less: Net income attributable to non-controlling interests | 646 | 1,826 | (1,180) | (64.6) | % | ||||||||||||||||||
| Net income attributable to Privia Health Group, Inc. | $ | 3,064 | $ | 4,220 | $ | (1,156) | (27.4) | % | |||||||||||||||
Revenue
The following table presents our revenues disaggregated by source:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | Change ($) | Change (%) | |||||||||||||||||||
| FFS-patient care | $ | 391,133 | $ | 311,761 | $ | 79,372 | 25.5 | % | |||||||||||||||
| FFS-administrative services | 31,403 | 32,255 | (852) | (2.6) | % | ||||||||||||||||||
| Capitated revenue | 86,148 | 70,690 | 15,458 | 21.9 | % | ||||||||||||||||||
| Shared savings | 74,962 | 47,912 | 27,050 | 56.5 | % | ||||||||||||||||||
| Care management fees (PMPM) | 17,865 | 15,201 | 2,664 | 17.5 | % | ||||||||||||||||||
| Other Revenue | 2,336 | 2,278 | 58 | 2.5 | % | ||||||||||||||||||
| Total Revenue | $ | 603,847 | $ | 480,097 | $ | 123,750 | 25.8 | % | |||||||||||||||
Three months ended March 31, 2026 and 2025
Revenue was $603.8 million for the three months ended March 31, 2026, an increase from $480.1 million for the three months ended March 31, 2025. Key drivers of this revenue growth include: FFS-patient care revenue, which increased $79.4 million, primarily attributable to the addition of new providers and increase in visit volume; an increase in shared savings revenue of $27.1 million during the three months ended March 31, 2026, primarily due to timing of certain shared savings accruals and settlements; an increase in Attributed Lives in Medicare programs and continued strong performance in our value based care programs in the aggregate; an increase in capitated revenue of $15.5 million due to an increase in Attributed Lives related to capitated arrangements; and an increase in PMPM revenue of $2.7 million, primarily due to increased Attributed Lives.
Operating Expenses
| For the Three Months Ended March 31, | |||||||||||||||||||||||
|
(Dollars in thousands)
|
2026 | 2025 | Change ($) | Change (%) | |||||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||||
| Provider expense | $ | 475,117 | $ | 374,809 | $ | 100,308 | 26.8 | % | |||||||||||||||
| Cost of platform | 68,420 | 59,526 | 8,894 | 14.9 | % | ||||||||||||||||||
| Sales and marketing | 8,134 | 6,922 | 1,212 | 17.5 | % | ||||||||||||||||||
| General and administrative | 41,473 | 31,721 | 9,752 | 30.7 | % | ||||||||||||||||||
| Depreciation and amortization expense | 3,281 | 1,901 | 1,380 | 72.6 | % | ||||||||||||||||||
| Total operating expenses | $ | 596,425 | $ | 474,879 | $ | 121,546 | 25.6 | % | |||||||||||||||
Provider expenses
Provider expenses were $475.1 million for the three months ended March 31, 2026 compared to $374.8 million for the same period in 2025. The increase was driven primarily by higher FFS-patient care revenue and growth in Implemented Providers during the first quarter of 2026.
Cost of platform
Cost of platform expenses were $68.4 million for the three months ended March 31, 2026 compared to $59.5 million for the same period in 2025. The increase was driven by an increase in salaries and benefits of $5.2 million related to continued growth during the three months ended March 31, 2026; an increase in platform costs of $1.7 million, primarily related to an increase in Implemented Providers; and an increase to stock-based compensation expense of $0.8 million, primarily related to an increase in stock-based awards granted in 2026 compared to 2025.
Sales and marketing
Sales and marketing expenses were $8.1 million for the three months ended March 31, 2026 compared to $6.9 million for the same period in 2025. The increase was primarily driven by an increase in stock-based compensation expense of $0.6 million due to an increase in stock-based awards granted in 2026 compared to 2025.
General and administrative
General and administrative expenses were $41.5 million for the three months ended March 31, 2026 compared to $31.7 million for the same period in 2025. The increase was driven by the increase of salaries and benefits of $3.1 million; an increase of $2.8 million in stock-based compensation expense primarily attributed to an increase in stock-based awards granted in 2026 compared to 2025; and an increase in non-recurring expenses of $2.0 million.
Depreciation and amortization expense
Depreciation and amortization expenses were $3.3 million for the three months ended March 31, 2026 compared to $1.9 million for the same period in 2025. This increase was primarily driven by amortization of intangible assets related to acquisitions in 2025.
Interest income, net
Interest income was $1.9 million for the three months ended March 31, 2026 compared to $2.9 million for the same period in 2025. Interest income is primarily based on the cash balance held in interest bearing accounts.
Provision for income taxes
The provision for income taxes was $5.6 million for the three months ended March 31, 2026, compared to the provision for income taxes of $2.1 million for the same period in 2025. The change was primarily attributable to tax impacts stemming from share-based compensation related to stock option exercises and restricted stock unit vesting events.
Net income attributable to non-controlling interests
Net income attributable to non-controlling interests was $0.6 million for the three months ended March 31, 2026 compared to $1.8 million during the same period in 2025. The change is primarily due to the repurchase of non-controlling interests during the three months ended March 31, 2026.
Liquidity and Capital Resources
General
To date, we have financed our operations principally through sale of our equity, payments received from various payers and through borrowings under the prior Credit Agreement. As of March 31, 2026, we had cash and cash equivalents of $419.5 million. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.
We believe that our cash and cash equivalents, together with cash flows from operations, will provide adequate resources to fund our short-term and long-term operating and capital needs. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary because of, and our future capital requirements will depend on many factors, including our growth rate, and the timing and extent of spending to increase our sales and marketing activities. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We maintain a Revolving Credit Agreement, and we may be required to seek additional equity or debt financing in the future. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected.
Indebtedness
See Note 6. "Debt" for discussion on our Credit Facilities.
Cash Flows
Our cash requirements within the next twelve months include provider liabilities, accounts payable and accrued liabilities, and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily generated through cash flows from operations and our available cash. Based on current and anticipated levels of operations, we anticipate that net cash provided by operating activities, together with the available cash on hand at March 31, 2026, should be adequate to meet anticipated cash requirements for the short term (next 12 months) and long term (beyond 12 months).
The following table presents a summary of our condensed consolidated cash flows from operating, investing and financing activities for the periods indicated.
| For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
|
(Dollars in thousands)
|
|||||||||||
|
Condensed Consolidated Statements of Cash Flows Data:
|
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| Net cash used in operating activities | $ | (49,465) | $ | (24,061) | |||||||
| Net cash used in investing activities | (26) | - | |||||||||
| Net cash (used in) provided by financing activities | (10,670) | 2,243 | |||||||||
| Net decrease in cash and cash equivalents | $ | (60,161) | $ | (21,818) | |||||||
Operating Activities
Net cash used in operating activities was $49.5 million for the three months ended March 31, 2026 compared to $24.1 million for the same period in 2025. Significant changes impacting net cash used in operating activities for the three months ended March 31, 2026 compared to the same period in 2025 were as follows:
•A decrease in net income of $2.3 million compared to the same period in 2025. Net income was $3.7 million for the three months ended March 31, 2026 compared to income of $6.0 million for the same period in 2025.
•An increase of $115.2 million in accounts receivable and prepaid and other current assets, for the three months ended March 31, 2026 compared to the same period in 2025 of $73.4 million, a difference of $41.8 million. The change is primarily due to an increase in FFS and VBC revenue.
•An increase of $49.1 million in Provider Liability for the three months ended March 31, 2026 compared to an increase of $35.7 million during the same period in 2025, a difference of $13.4 million. The change is primarily due to an increase in Implemented Providers and an increase in provider expenses related to the increase in FFS and VBC revenue.
Investing Activities
Net cash used in investing activities was de minimis for the three months ended March 31, 2026 and 2025.
Financing Activities
Net cash used in financing activities was $10.7 million for the three months ended March 31, 2026, compared to net cash provided of $2.2 million for financing activities for the same period in 2025. The change is primarily due to a repurchase of non-controlling interest of $11.4 million during the three months ended March 31, 2026.
Contractual Obligations, Commitments and Contingencies
Operating Leases. The Company leases office space under various operating lease agreements. The initial terms of these leases range from 2 to 9 years and generally provide for periodic rent increases, renewal, and termination options. Total rent expense under operating leases was $0.8 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively.
Off Balance Sheet Obligations. We do not have any off-balance sheet arrangements as of March 31, 2026.
Commitments and Contingencies. See Note 9. "Commitments and Contingencies" for further discussion on our commitments and contingencies.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure. On an on-going basis we evaluate significant estimates and assumptions, including, but not limited to, provider liability, revenue recognition, stock-based compensation, estimated useful lives of assets, intangible assets subject to amortization, and the computation of income taxes. Future events and their effects cannot be predicted with certainty; accordingly, the Company's accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company's operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes to the critical accounting policies reported in the Annual Report that affect our significant judgments and estimates used in the preparation of our Condensed Consolidated Financial Statements.
Privia Health Group Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 07, 2026 at 13:00 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]