prva-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_______________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40365

_________________________

Privia Health Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)

_________________________


Delaware		81-3599420
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

950 N. Glebe Rd.,
Suite 700
Arlington,	Virginia	22203
(Address of Principal Executive Offices)		(Zip Code)

(571) 366-8850

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PRVA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, the registrant had outstanding 119,564,972 shares of common stock.

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TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		30

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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include factors related to, among other things:

•the heavily regulated industry in which we operate, and any failure by us to comply with applicable healthcare laws and government regulations, which could result in our incurring financial penalties and becoming excluded from participating in government health care programs;

•the impact of changes in applicable laws, rules or regulations, including with respect to health plans and payers and our relationships with such plans and payers, and provisions that impact Medicare and Medicaid programs;

•our dependence on relationships with Medical Groups (defined herein), some of which we do not own;

•our growth strategy, which may not prove viable and we may not realize expected results;

•difficulties implementing our proprietary end-to-end, cloud-based technology solution (the “Privia Technology Solution”) for Privia Physicians (defined herein) and new Medical Groups;

•the high level of competition in our industry and any failure by us to compete effectively and innovate;

•challenges in successfully establishing a presence in new geographic markets;

•our reliance on our electronic medical record (“EMR”) vendor, athenahealth, Inc., which the Privia Technology Solution is integrated and built upon;

•changes in the payer mix of patients and potential decreases in our reimbursement rates as a result of consolidation among commercial payers;

•the financial and operational impact of our compliance with various complex and changing federal and state privacy and security laws and regulations related to our use, disclosure, and other processing of personal information and protected health information, including the Health Insurance Portability and Accountability Act of 1996;

•the impact of actual and potential cybersecurity incidents or privacy or security breaches involving us, our vendors or other third parties;

•the continued availability of a qualified workforce, including staff at our Medical Groups, and the continued upward pressure on compensation for such workforce; and

•other risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”) and our other filings with the Securities and Exchange Commission (“SEC”).

You should read this quarterly report on Form 10-Q and the documents that we reference in this quarterly report on Form 10-Q and have filed as exhibits to this quarterly report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this quarterly report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this quarterly report on Form 10-Q, whether as a result of any new information, future events or otherwise.

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Part I - Financial Information

ITEM 1. FINANCIAL STATEMENTS

Privia Health Group, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	June 30, 2024		December 31, 2023
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	387,352	$	389,511
Accounts receivable	370,055		290,768
Prepaid expenses and other current assets	22,264		20,525
Total current assets	779,671		700,804
Non-current assets:
Property and equipment, net	1,747		2,325
Operating right-of-use asset	5,704		6,612

Intangible assets, net	104,576		107,630
Goodwill	139,457		138,749
Deferred tax asset	31,304		35,200
Other non-current assets	15,162		8,580
Total non-current assets	297,950		299,096
Total assets	$	1,077,621	$	999,900

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	60,818	$	57,831
Provider liability	366,125		326,078


Operating lease liabilities, current	2,649		3,043
Total current liabilities	429,592		386,952
Non-current liabilities:



Operating lease liabilities, non-current	4,109		5,246
Other non-current liabilities	313		313
Total non-current liabilities	4,422		5,559
Total liabilities	434,014		392,511
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.01 par value, 1,000,000,000 and 1,000,000,000 shares authorized; 119,479,134 and 118,216,979 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	1,194		1,182
Additional paid-in capital	781,376		753,869
Accumulated deficit	(187,163)		(193,614)
Total Privia Health Group, Inc. stockholders’ equity	595,407		561,437
Non-controlling interest	48,200		45,952
Total stockholders’ equity	643,607		607,389
Total liabilities and stockholders’ equity	$	1,077,621	$	999,900

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Privia Health Group, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share data)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023

Revenue	$	422,326	$	413,351	$	837,569	$	799,627

Operating expenses:
Provider expense	322,536		321,718		642,872		623,973
Cost of platform	57,106		50,200		111,163		94,930
Sales and marketing	6,852		5,956		12,937		11,242
General and administrative	28,916		26,808		61,037		52,759
Depreciation and amortization	1,818		1,690		3,639		3,030
Total operating expenses	417,228		406,372		831,648		785,934
Operating income	5,098		6,979		5,921		13,693
Interest (income), net	(2,966)		(817)		(5,950)		(2,630)
Income before provision for income taxes	8,064		7,796		11,871		16,323
Provision for income taxes	3,421		1,436		4,172		3,561
Net income	4,643		6,360		7,699		12,762
Less: Net income (loss) attributable to non-controlling interests	1,176		(914)		1,248		(1,836)
Net income attributable to Privia Health Group, Inc.	$	3,467	$	7,274	$	6,451	$	14,598
Net income per share attributable to Privia Health Group, Inc. stockholders – basic	$	0.03	$	0.06	$	0.05	$	0.13
Net income per share attributable to Privia Health Group, Inc. stockholders – diluted	$	0.03	$	0.06	$	0.05	$	0.12
Weighted average common shares outstanding – basic	119,301,350		116,161,251		118,902,095		115,588,313
Weighted average common shares outstanding – diluted	125,317,908		124,570,875		125,315,681		124,467,343

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Privia Health Group, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)


(in thousands except share amounts)	Common Stock Shares	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity attributable to Privia Health Group, Inc.		Non-controlling Interest		Total Stockholders’ Equity































Balance at December 31, 2022	114,690,808	$	1,148	$	714,639	$	(216,693)	$	499,094	$	19,955	$	519,049
Issuance of common stock upon exercise of stock options and vesting of restricted stock units	779,153	11		1,466		—		1,477		—		1,477
Stock-based compensation expense	—	—		5,381		—		5,381		—		5,381
Contributed non-controlling interest	—	—		—		—		—		24,212		24,212
Net income (loss)	—	—		—		7,324		7,324		(922)		6,402
Balance at March 31, 2023	115,469,961	1,159		721,486		(209,369)		513,276		43,245		556,521
Issuance of common stock upon exercise of stock options and vesting of restricted stock units	1,636,931	12		4,294		—		4,306		—		4,306
Stock-based compensation expense	—	—		9,247		—		9,247		—		9,247
Repurchase of non-controlling interest	—	—		(8,871)		—		(8,871)		3,177		(5,694)
Contributed non-controlling interest	—	—		—		—		—		569		569
Net income (loss)	—	—		—		7,274		7,274		(914)		6,360
Balance at June 30, 2023	117,106,892	$	1,171	$	726,156	$	(202,095)	$	525,232	$	46,077	$	571,309











Balance at December 31, 2023	118,216,979	$	1,182	$	753,869	$	(193,614)	$	561,437	$	45,952	$	607,389
Issuance of common stock upon exercise of stock options and vesting of restricted stock units	461,923	5		470		—		475		—		475
Stock-based compensation expense	—	—		11,904		—		11,904		—		11,904

Net income	—	—		—		2,984		2,984		72		3,056
Balance at March 31, 2024	118,678,902	1,187		766,243		(190,630)		576,800		46,024		622,824
Issuance of common stock upon exercise of stock options and vesting of restricted stock units	800,232	7		742		—		749		—		749
Stock-based compensation expense	—	—		14,391		—		14,391		—		14,391
Contributed non-controlling interest	—	—		—		—		—		1,000		1,000
Net income	—	—		—		3,467		3,467		1,176		4,643
Balance at June 30, 2024	119,479,134	$	1,194	$	781,376	$	(187,163)	$	595,407	$	48,200	$	643,607

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Privia Health Group, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	For the Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net income	$	7,699	$	12,762
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	585		581
Amortization of intangibles	3,054		2,449




Stock-based compensation	26,295		14,628

Deferred tax expense	3,896		3,259
Changes in asset and liabilities:
Accounts receivable	(79,287)		(130,235)
Prepaid expenses and other current assets	(1,739)		(1,850)
Other non-current assets and right-of-use asset	(676)		473
Accounts payable and accrued expenses	2,987		(3,967)

Provider liability	40,047		97,944



Operating lease liabilities	(1,531)		(1,789)
Other long-term liabilities	—		(32)
Net cash provided by (used in) operating activities	1,330		(5,777)
Cash from investing activities


Business acquisitions, net of cash acquired	(707)		(24,856)
Other	(5,006)		(72)
Net cash used in investing activities	(5,713)		(24,928)
Cash flows from financing activities



Proceeds from exercised stock options	1,224		5,783
Repurchase of non-controlling interest	—		(

SEC Form 10-Q filed by Privia Health Group Inc.