Oncology Institute Raises 2026 Revenue and Gross Profit Guidance

Oncology Institute (NASDAQ: TOI ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary The Oncology Institute reported a strong second quarter with revenue of approximately $161 million, marking a 35% year-over-year increase, driven by growth in their specialty pharmacy business. The company has rebranded to 'Oncology Institute' to better reflect their scope as a national value-based oncology leader. They achieved positive adjusted EBITDA and realized substantial operational efficiencies, resulting in over $1 million in annualized opex savings. The launch of the new provider portal, Starling Nexus, is set for mid-August, expected to enhance clinical pathway adherence and provide valuable data insights.

Expansion includes three new capitated contracts in Nevada and Oregon, adding approximately 80,000 lives and $50 million in annualized revenue, along with exclusive contracts in California. Strategic refinancing replaced a convertible note with a new term facility, extending debt maturities to 2031 and improving liquidity. Full-year guidance was raised, with expected revenue of $650-670 million and gross profit of $105-110 million, maintaining positive adjusted EBITDA. The company anticipates a 100% increase in capitated revenue next year, supported by robust growth in capitated contracts and strong MLR performance.

8%. Full Transcript OPERATOR Hello, and welcome everyone joining today's Oncology Institute second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session.

To register to ask a question at any time, please press star-1 on your telephone keypad. Please note, this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Min Merchant.

Please go ahead. Min Merchant, Chief Legal Officer Thank you, operator, and good afternoon, everyone. Welcome to Oncology Institute's second quarter 2026 earnings conference call. I'm Min Merchant, Chief Legal Officer, and joining me today are Dan Vernick, our Chief Executive Officer, and Rob Carter, our Chief Financial Officer.

com. A replay of this call will also be available on our website following its conclusion. Before we get started, I'd like to remind you of the company's safe harbor language included within our press release for the second quarter of 2026. Management may make forward-looking statements, including guidance and underlying assumptions.

These forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, please see our filings with the SEC, including our most recent Form 10-Q for the quarter ended June 30, 2026. This call will also discuss non-GAAP financial measures such as adjusted EBITDA, MLR, and free cash flow. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in the earnings release furnished to the SEC and available on our website.

With that, I'll turn the call over to Dan. Dan Vernick, Chief Executive Officer Thank you, Min. Good afternoon, everyone, and thank you for joining our second quarter 2026 earnings call. We are reporting a very strong second quarter, with profitability and completion of a strategic refinancing, and we've had a very exciting summer so far with a lot of positive momentum in our business.

Before I get into our results, I want to share an important announcement. The company has decided to rebrand as Oncology Institute. As we have transformed this business over the past several years, our prior name no longer reflected our scope as a national value-based oncology leader. Our new name, Oncology Institute, is inspired by the coordinated flying patterns of starlings, called murmurations.

This symbolizes the coordinated care, community access, and technology-driven innovation that define our approach to value-based oncology care. This rebrand comes at a pivotal moment in our company's evolution. After rebuilding the organization, achieving profitability, scaling our value-based care capabilities, strengthening our operations, and establishing a foundation for future growth, we believe our brand should now reflect the company we have become. While our name is changing, our mission remains the same: delivering high-quality, patient-centered cancer care in the communities we serve.

Turning to our financial results, the second quarter saw revenue of approximately $161 million, an increase of 35% year over year, driven by strong capitated growth in our specialty pharmacy business. I'm also pleased to report that we have achieved positive adjusted EBITDA and came in at the top end of our guidance range in the second quarter due to continued growth, strong MLR performance on our risk contracts, and operational efficiencies as we scale. This marks our second profitable quarter as a public company. As we continue to scale, we are finding additional opex efficiencies across the business.

Last quarter, we announced a substantial update to our free cash flow guidance due to payment term negotiations with key vendors. I'm pleased that the progress continued in Q2, as we negotiated fee reductions with another key vendor partner that will substantially lower our cost to collect on non-capitated encounters and resulted in over $1 million in opex savings annualized at our current size. Next, as discussed on our last call, we're launching our new provider portal, Starling Nexus, in mid-August. We'll be rolling this out in a phased approach, onboarding our MSO-affiliated physicians in September and PC-employed physicians later this year.

Once fully launched, all of our providers, both PC-employed and networked providers, will use the portal to submit treatment orders and obtain preauthorizations from us, which we believe will drive increased adherence to our clinical care pathways. In addition, the portal will be a hub to drive ancillary services such as our Part D pharmacy, decentralized clinical trials, and other value-add offerings to our network providers, which will create tremendous value for our important network practices and for Oncology Institute.

Lastly, Starling Nexus will provide an immense amount of data on practice patterns and patient care being delivered across our network, which will allow us to continue to excel on MLR performance and create valuable data insights to partners over time. In addition to a strong second quarter, we're also excited to share several announcements from July and August. First, on new capitated contracts: we anticipate adding three new delegated capitation contracts at the start of Q4, which is notable in that two of them are occurring in Nevada and Oregon, representing our first expansion of this model with health plan partners outside of Florida.

In total, these three contracts represent approximately 80,000 additional aggregate lives and approximately $50 million in annualized capitated revenue, not including the downstream benefit of wraparound services like pharmacy. I'm also pleased to announce that we achieved exclusivity in California with one of our largest partners across all of their delegated medical groups, a relationship that was previously split with another entity. This added approximately 230,000 capitated lives and an estimated additional $6 million in annualized capitation revenue, in addition to associated Part D growth.

Lastly, our statewide payer relationship in Florida that we announced on our Q2 call has been pushed from Q3 to Q4 in terms of effective date. Finally, as many of you saw last month, we announced a strategic refinancing that strengthened our balance sheet and improved our liquidity by replacing a convertible note that was nearing maturity with a new term facility. Rob will discuss this in more detail in a few minutes, but I want to say how pleased we are with the results and the additional financial flexibility this affords us. Our results in the first half of the year have given us the opportunity to raise our outlook for the full year.

We are raising our revenue and gross profit ranges and tightening our adjusted EBITDA range. 2026 will still mark our first year of positive adjusted EBITDA as a public company while allowing us to continue investing in the business ahead of an expected 100% increase in capitated revenue next year. Wrapping up, I'm very pleased with the momentum we're seeing so far this year. The business is continuing to track increasing profitability quarter over quarter in 2026.

Our capitated contract growth remains robust, we see ongoing strong MLR performance, and our Part D business is continuing to set monthly fill records. I look forward to keeping you posted on our progress as we move forward at Oncology Institute. I'll now turn it over to Rob to review our financial results in more detail. Rob.

Rob Carter, Chief Financial Officer Thanks, Dan, and good afternoon, everyone. Building on what Dan shared, I'm equally encouraged by the momentum we continue to see across the business. On the call today, I will provide some color on our improved capital structure, review our second-quarter financial results, including additional transparency we are providing into our medical costs, touch on our balance sheet and cash flow, and close with our updated guidance and outlook. I'm pleased to report that we completed a strategic refinancing with OrbiMed in July following repaying the $86 million senior secured convertible note that had been outstanding.

Under the new arrangement, we repaid that balance with a $75 million term loan from OrbiMed along with approximately $11 million of cash from the balance sheet, and we did this without raising additional equity or diluting our shareholders. This is a meaningful step for us. It extends our debt maturities from 2027 out to 2031, improves our liquidity and operating flexibility, and gives us committed funding as we continue to scale the business. 6% year-over-year growth, an extension of the strong momentum we've been generating.

3% year-over-year increase. 6% year over year. This was driven by continued strength in prescription fill volumes as we bring new capitated lives onto the platform, along with the ongoing ramp of our Florida delegated arrangements. 5 million in the second quarter of 2025, reflecting continued top-line expansion across both segments.

6% in the prior year, an improvement of approximately 225 basis points. 7 million in the second quarter of 2025, a decline of approximately 57%. There are three drivers of this decline. First is an increase in clinical labor as we staff ahead of our new contract launches.

Second is our conservative fee-for-service approach mentioned on our first-quarter earnings call, and third, a natural increase in MLR as we onboard new lives. In an effort to provide increased transparency and allow you to better assess the health of our capitated model, beginning this quarter we are providing a medical loss ratio for all of our capitated members. 5% compared to 71% a year ago. MLR will reflect not only our medical cost trends but is anticipated to fluctuate as we onboard delegated members.

That said, we anticipate that MLRs will be in the range of 80% to 90% in the next 12 months. 5 million in the prior-year period. 4% a year ago, reflecting the continued benefit of scale, procurement optimization, and our clinical pathways utilization management as the pharmacy grows. 5% of revenue a year ago—roughly 390 basis points of improvement.

That reflects the operating leverage built into our model as we scale, along with the cost discipline we've maintained throughout the business. 1 million a year ago and within the range we guided to on our last call. 3 million, consistent with the seasonal pattern we described, and reflects the continued ramp of our Florida delegated arrangements, growth in specialty pharmacy, and ongoing cost discipline. 6 million at year-end 2025.

2 million in the second quarter of last year, reflecting the improvement in adjusted EBITDA together with favorable working capital dynamics, including the timing of accounts payable. 6 million in the first half of 2025, an improvement of over $24 million. Turning to guidance for the full year, we are raising our revenue and gross profit ranges to reflect the strength we have seen in the first half of the year. We are also narrowing our adjusted EBITDA range to reflect a delegated contract launch that was pushed by two months until October 1, as well as investments we are making in the business to support the capitated revenue growth we expect for next year.

We now expect revenue of $650 million to $670 million, including approximately $150 million of capitation revenue; gross profit of $105 million to $110 million; adjusted EBITDA of $2 million to positive $7 million; and we still expect free cash flow in the range of positive $5 million to positive $15 million. 5 million. As we onboard the aforementioned 230,000 new members and they begin to ramp, we expect momentum to build through the remainder of the year and remain confident in our commitment to full-year positive adjusted EBITDA. With that, I'll turn the call over to Dan for his closing remarks.

Dan? Dan Vernick, Chief Executive Officer In conclusion, we are excited to report a second quarter that demonstrated record revenue, positive adjusted EBITDA, a successful refinancing of our legacy debt, and ongoing robust value-based contract growth. Before we open the call for questions, I want to thank our patients for putting their trust in us and to thank our physicians, clinicians, and employees across Oncology Institute for their continued dedication. Operator, we're now ready to take questions.

OPERATOR Thank you. If you would like to ask a question, please press star one now on your telephone keypad. To leave the queue at any time, you may press star two. Once again, that is star one to ask a question.

And we'll pause for just a moment to allow everyone a chance to join the queue. Thank you. We'll take our first question from David Larson with BTIG. Your line is open.

Please go ahead. David Larson, Analyst at BTIG Hey, congratulations on the great quarter. Can you maybe talk a little bit about the Nevada and Oregon expansions? How did those come about?

Those sound like solid wins. What does the membership look like? The incremental revenue contribution? Just any more color there will be very helpful, thank you.

Dan Vernick, Chief Executive Officer Yeah, hi, Dave, thanks. Thanks for the question. This is Dan. So there's one contract in each state—one in Nevada, one in Oregon.

Both contracts together, as we commented on in the call, have a fairly substantial contribution in terms of both membership, around 80,000, and then the revenue we mentioned. Those are both delegated capitation contracts direct to health-plan partners. The Oregon contract will be a statewide delegated contract with a health plan, and then the Nevada contract will be based in Clark County on behalf of members tied to a specific payer. David Larson, Analyst at BTIG That's great.

And did I hear that the MLR's in the 80% to 90% range? That sounds pretty good. Actually, a lot of the plans are talking about like 95%. Just any more thoughts there would be very helpful.

Thank you. Rob Carter, Chief Financial Officer Dave, it's Rob. Yeah, as we've discussed before, we segment our MLR between our various cap products. So in the delegated product, we're looking at MLR between 75% to 85% once fully ramped up.

Because of the influx of so many delegated lives, we're guiding towards 80% to 90% in the next 12 months, which is something we're still quite proud of. And as a reminder, on our narrow-network products outside of Florida, those are in the 70% to 75% range. David Larson, Analyst at BTIG Okay, great.