Full Transcript: Privia Health Gr Q2 2026 Earnings Call

Privia Health Gr (NASDAQ: PRVA ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

4% growth in practice collections and a 29% increase in adjusted EBITDA year-over-year for Q2 2026. The company entered New Jersey in partnership with Neurology Group of Bergen County, marking its presence in 25 states, and raised its 2026 outlook across key financial metrics. Privia Health Gr's balance sheet remained robust with over $412 million in cash and no debt, and the company expects 70-80% of its full-year adjusted EBITDA to convert to free cash flow. 7 billion in total medical spend across commercial and government risk arrangements.

Privia Health Gr is deploying AI applications to improve efficiencies and expects to expand its EBITDA margin towards the high end of 30-35% over the next few years. Management remains confident in achieving sustainable earnings growth and highlighted a consistent provider retention rate of 98% over the past three years. The company emphasized its strategic initiatives including growing its community-based medical groups and expanding its ACO model, while maintaining a strong pipeline for future market expansion. Full Transcript OPERATOR Thank you for standing by and welcome to Privia Health Gr's second quarter 2026 earnings conference call.

Currently 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 to remove yourself from the queue. You may press Star 11 again.

I would now like to hand the call over to Robert Boshert, SVP of Investor and Corporate Communications. Please go ahead. Robert Boshert, SVP Investor and Corporate Communications Thank you. Joining me are our CEO, Parth Mehrotra, and David Mountcastle, our Chief Financial Officer.

com along with today's press release and slide presentation. 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's reported results are preliminary and are not final until our Form 10-Q for the second quarter and six-month periods ended June 30, 2026 is filed with the Securities and Exchange Commission.

Some of our statements today may be forward-looking in nature based on our current expectations and view of our business as of August 6, 2026. Statements such as 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. These statements should be considered along with the cautionary statements in today's press release and the risk factors described in our 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 is included in our press release and the accompanying slide presentation posted on our website. Now I'd like to turn the call over to our CEO, Parth Mehrotra. Parth Mehrotra, CEO Thank you, Robert, and good morning, everyone. Today I'll summarize our performance and market presence, and David will discuss our financial results and updated 2026 guidance before we take your questions.

Privia Health Gr has continued to execute at a very high level across all aspects of our business. We delivered strong new provider signings across all our markets, which provides excellent visibility through 2026 and into next year. 4% in the second quarter. Adjusted EBITDA increased 29% with EBITDA margin as a percentage of care margin expanding 310 basis points from a year ago.

We are continuing our journey to deploy AI applications in various workflows across the organization and expect to continue to expand our EBITDA margin towards the high end of our long-term target range of 30% to 35% of care margin over the next few years. In late May we announced entry into the State of New Jersey in partnership with Neurology Group of Bergen County, a practice with 25 adult and pediatric clinicians. This represents Privia's 25th state as we build our national primary care—centric delivery network. We raised our 2026 outlook across all key financial metrics including practice collections, care margin, and EBITDA.

Given our strong first half performance, attributed lives is above the high end of prior guidance. Our implemented provider guidance is unchanged. 6% growth over 2025. The Privia Health Gr footprint of community-based medical groups and value-based risk-bearing entities continues to expand.

1 million patients in more than 1,300 care center locations operating across 25 states and the District of Columbia. A defining component of Privia's operating model is our gross provider retention averaging 98% over the past three years. 64 million attributed lives across more than 130 commercial and government value-based care programs. 7% from last year to reach 942,000.

Lives attributed to the CMS Medicare programs were up 55%. Medicare Advantage and Medicaid attribution increased more than 12% and 18%, respectively. The diversification of Privia's value-based care contracts gives us the confidence in our ability to build scale profitably without depending on any one particular program. Slide 7 shows the scale and breadth of Privia's ACOs.

7 billion in total medical spend across all commercial and government value-based risk arrangements. 7 billion estimate captures the full scope of our value-based programs relative to our fee-for-service collections. It more accurately represents the breadth of total medical spend our clinicians are able to potentially impact over time. We remain highly focused on increasing attribution and generating positive contribution margin across our value-based book.

Our ultimate goal is to achieve consistent and sustainable earnings growth for our physician partners and shareholders. David will now review our recent financial results, balance sheet strength, and our updated 2026 guidance in more detail. Thank you. David Mountcastle, CFO Privia Health Gr's strong operational execution and growth continued through the second quarter.

1% year over year. 4% from a year ago to reach $970 million. 3% of care margin. This is a 310 basis point margin improvement as we generated operating leverage across both cost of platform and G&A while investing across all markets.

1 million. We ended the second quarter with more than $412 million in cash and no debt. As we mentioned previously, beginning this year, Privia is now a full cash taxpayer. Given the timing of cash tax payments and provider disbursements, we expect 70% to 80% of our full-year adjusted EBITDA to convert to free cash flow.

This does not include any capital deployments in year for business development and assumes we will receive a significant portion of our shared savings cash payments for 2025 performance by year end. Last month, CMS announced certain proposed changes that would be retroactively applied to the Medicare Shared Savings Program for performance year 2025 if finalized. To allow for the implementation of these changes, CMS may delay delivery of the final reconciliation results for performance year 2025 until November.

While this has minimal impact on our accruals, it may lead to an atypical year-end cash flow dynamic depending on when we receive the cash settlement from CMS as well as our subsequent payments to the providers. Our healthy balance sheet continues to position us with significant financial flexibility to deploy capital and take advantage of opportunities in the current market environment.

Our first half results give us confidence to raise our 2026 outlook above the high end of our prior guidance range for attributed lives, to the high end of our ranges for practice collections and GAAP revenue, and to the mid to high end of our ranges for care margin, platform contribution, and EBITDA. Our guidance for implemented providers is unchanged. We also continue to maintain a robust pipeline of existing market expansion and potential new market opportunities. As a reminder, our guidance does not assume any additional business development activity.

Over the last nine years, Privia's consistent growth and profitability across cycles is the ultimate proof of our consistent execution, the strength of our differentiated business, and the compounding of our economic model year after year. We are confident that our integrated model combining medical groups, risk-bearing entities, and tech and services platforms will continue to drive sustainable growth and profitability for years to come as Privia continues to build large-scale primary care—centric delivery networks across the nation.

We would like to thank all our clinicians and employees for their continued partnership, dedication, and hard work to help us achieve these results. Operator, we are now ready to take questions. OPERATOR As a reminder, to ask a question, you will need to press Star 11 on your telephone to remove yourself from the queue. You may press Star 11 again.

Please stand by while we compile the Q&A roster. Our first question comes from the line of Elizabeth Anderson of Evercore ISI. Please go ahead, Elizabeth. Elizabeth Anderson, Analyst at Evercore ISI Hi guys, good morning.

Thanks so much for the question. Maybe just could we double click on your question about the CMS shared savings payment being delayed? I guess obviously out of your control as that's a government function, but I guess what gives you confidence that it is going to come in the fourth quarter and how should we think about sort of external signposts we can watch to monitor that? David Mountcastle, CFO Yeah, I mean we're not that worried about it.

They've been really good over the past many years. Usually results come in August, September. The cash settlement happens sometime in October, so it's delayed by, call it, 30 to 45 days. I think it's in their interest to make sure all the providers are getting the cash flow as they deserve for a good performance year.

I just think the changes that they proposed are positive in general, so I just think they need a little bit more time to reconcile it. But we don't see any issues in receiving the money. I think whether it comes early November, late November, December, I mean that's just—it'll happen when it happens, but I don't think it's a big concern for us. OPERATOR Thank you.

Our next question comes from the line of Ryan Daniels of William Blair. Your question please, Ryan. Matthew Mardula, Analyst at William Blair Yeah, hello, this is Matthew Mardula on for Ryan Daniels. Thank you for taking the questions.

So in your prepared remarks you talked about being towards the high end of your long-term target range of 30% to 35% for the care margin over the next few years. Can you give us some color on what has changed to give you confidence of being at the high end for your long-term target as well as the drivers of what will help you get to that target and then any directional timeline and when this could be achieved? Is it maybe in the next few years or more of a longer-term target of five years? Parth Mehrotra, CEO Yeah, thanks for the question, Matt.

So, I mean, we covered this a little bit last quarter as well. I mean, if you see our guidance, we expect to be 29% this year, EBITDA/care margin. So it's pretty much very close to the 30%. And given all the work we are doing with different AI applications, we're just scaling our business with growth.

I think, you know, we're pretty confident that we can keep accreting that. You know, there's no set timeline. I mean, we said over the next few years it can ebb and flow, but I think we'll just keep accreting it. And we actually feel really good about it because this was a target we had set when we went public at our IPO about five years ago.

And, you know, we're already there at the low end. A lot of our mature markets are already well above that target, close to the high end or above even the high end. So that gives us the confidence that as we mature some of the other newer markets overall the profitability should keep running up. OPERATOR Thank you.

Our next question comes from the line of Daniel Grosslight of Citi. Please go ahead. Daniel Grosslight, Analyst Thanks for taking the question. Congrats on another solid quarter here.

I want to focus a little bit on the updated guide, particularly around practice collections. It does imply a pretty strong deceleration in growth from 1H to 2H. I think it's around. You mentioned 13% in the first half to around 3% in the second half, year over year.

And that's despite continuing provider and attributed lives growing. I'm just curious what's driving that implied deceleration? Is that just conservatism or are there specific headwinds or maybe a difficult comp period that we should be aware of in the second half of the year? Thanks.

Parth Mehrotra, CEO Yeah, thanks for the question, Dan. Yeah, there's nothing much in the implied. I mean, we've done this for 21 quarters. You've seen how we guide.

It's still middle of the year, so we're just being prudent, conservative, whatever you want to call it. At the midpoint, we got it to the high end of the original range. If the trends continue, there should be further upside. We'll just see how it plays out.

I think we feel really good about ambulatory utilization. I think folks continue to visit their primary care providers or whoever's the first point of contact. So I think a lot of the utilization trends you're seeing on the inpatient side as reported by the health systems, you know, I think doesn't really apply to a business like Privia Health Gr. We've talked about that in the past, so I think we feel really good overall.

And the year goes on and we keep progressing. So we'll update the guidance, you know, as it comes. Daniel Grosslight, Analyst Thank you. OPERATOR Thank you.

Our next question comes from the line of AJ Rice of UBS. AJ, your line is open. AJ Rice, Analyst at UBS Hi everybody. I know there are a variety of drivers to give you confidence on that margin improvement over time, operating leverage, obviously shared risk, performance, value based performance.

But you also now for several quarters have been mentioning the AI opportunities and I wondered if it's possible to get you to enumerate a little bit on some of the use cases either at the corporate level or at the practice level that you're seeing that get you excited about the opportunities for that to drive improved efficiencies. Parth Mehrotra, CEO Yeah, I appreciate the question, AJ.

So I think we covered this in a fair bit of detail on the last call, but we are looking at our four core workflows across corporate functions, fee-for-service workflows, value-based workflows, and then everything that happens in the patient care experience as the doctor or the provider sees their patients. So I think across those flows we're looking at every single aspect. Existing partnerships we have, we're on the Google platform, so we're using Gemini all across the board in different aspects of the corporate workflow.

We have other tech companies we work with similarly that have embedded a lot of AI applications and then our dev teams are continuing to see where we can build, buy, partner. So whether it's patient experience, whether it's clinical decision-making by the doctors, whether it's obviously revenue cycle workflows, all of those are getting impacted. I think technology is advancing at a pretty good pace. We are piloting a lot of stuff.

We're already seeing a lot of benefit and I think tangibly, that's why we've always linked this with EBITDA margin expansion. Ultimately we are measuring our ability to deploy these applications and seeing if things can be done better, faster, cheaper, and as we grow, we probably don't need to add a lot more expenses in headcount or other fixed costs. So all of those are going to help us achieve that. We've talked in the past about we invested in a business called Naveena for suspect medical conditions, coding, compliance, et cetera.

You know, that's already played out pretty well. We have good case studies for that. And so I think again we're really excited. A business like ours is a perfect use case in deploying a lot of these applications as they evolve over time.

And so I think we'll just continue in that journey over the next few years. OPERATOR Thank you.