Privia Health Group Inc

Previous wording

• Net income attributable to Privia Health Group, Inc. was $3.0 million and $7.3 million, for the three months ended March 31, 2024 and 2023, respectively.

Current wording

• Net income attributable to Privia Health Group, Inc. was $3.5 million and $7.3 million, for the three months ended June 30, 2024 and 2023, respectively, and $6.5 million and$14.6 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

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 66.2% and 59.0% of total revenue for the three months ended March 31, 2024 and 2023, respectively. FFS-administrative services revenue represented 7.0% and 6.8% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

Current wording

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 65.3% and 55.9% of total revenue for the three months ended June 30, 2024 and 2023, respectively, and 65.7% and 57.4%for thesix months ended June 30, 2024 and 2023, respectively. FFS-administrative services revenue represented 7.6% and 6.6% of total revenue for the three months ended June 30, 2024 and 2023, respectively, and 7.3% and 6.7%for thesix months ended June 30, 2024 and 2023, respectively.

Previous wording

Over time, we create incremental value for our provider partners by enabling them to succeed in VBC arrangements. We generate VBC revenue when our Privia Providers are reimbursed through traditional FFS Medicare, MSSP, Medicare Advantage, commercial payers and other existing and emerging direct payer and employer contracting programs. Given recent regulatory and utilization headwinds in Medicare Advantage, the Company renegotiated certain capitation agreements for more favorable contract structures with potential, positive contribution margin in 2024. As a result of the renegotiated agreements, effective January 1, 2024, approximately 19,800 attributed lives moved from capitated revenue, which is recorded on a gross basis, to shared savings revenue, which is recorded on a net basis. These lives are still managed, but our results are recorded on a net shared savings revenue basis. 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 26.3% and 33.8% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Over time, we create incremental value for our provider partners by enabling them to succeed in VBC arrangements. We generate VBC revenue when our Privia Providers are reimbursed through traditional FFS Medicare, MSSP, Medicare Advantage, commercial payers and other existing and emerging direct payer and employer contracting programs. Given recent regulatory and utilization headwinds in Medicare Advantage, the Company renegotiated certain capitation agreements for more favorable contract structures with potential, positive contribution margin in 2024. As a result of the renegotiated agreements, effective January 1, 2024, approximately 19,800 Attributed Lives moved from capitated revenue, which is recorded on a gross basis, to shared savings revenue, which is recorded on a net basis. These lives are still managed, but our results are recorded on a net shared savings revenue basis. 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 26.6% and 37.0% of total revenue for the three months ended June 30, 2024 and 2023, respectively, and 26.5% and 35.5%for thesix months ended June 30, 2024 and 2023, respectively.

Previous wording

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, virtual scribes and coding. Other revenue represented 0.5% and 0.3% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

Current wording

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, virtual scribes and coding. Other revenue represented 0.5% of total revenue for both the three months ended June 30, 2024 and 2023, respectively, and 0.5% and 0.4% for thesix months ended June 30, 2024 and 2023, respectively.

Previous wording

At the beginning of 2024, the total number of Privia-owned ACOs is nine, serving beneficiaries across the District of Columbia and ten states, including California, Connecticut, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, and Virginia.

Current wording

Currently, the total number of Privia-owned ACOs is nine, serving beneficiaries across the District of Columbia and eleven states, including California, Connecticut, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, Virginia, and Washington state.

Previous wording

During 2022 and 2023, we entered into capitated payer arrangements. 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 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. Given recent regulatory and utilization headwinds in Medicare Advantage, the Company renegotiated certain capitation agreements for more favorable contract structures with potential, positive contribution margin in 2024.

Current wording

During 2022 and 2023, we entered into capitated payer arrangements. 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 for 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. Given recent regulatory and utilization headwinds in Medicare Advantage, the Company renegotiated certain capitation agreements for more favorable contract structures with potential, positive contribution margin in 2024. As a result of the renegotiated agreements, effective January 1, 2024, approximately 19,800 Attributed Lives moved from capitated revenue, which is recorded on a gross basis, to shared savings revenue, which is recorded on a net basis.

Previous wording

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 solely for VBC contracts without the necessity for providers to change Electronic Health Records (“EHRs”). We furnish population health services, reporting and analytics to such providers along with a menu of management services from which providers may choose. During 2023, several Privia Care Partners’ providers transitioned 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 value-based care. As of January 1, 2024, approximately 1,350 providers with approximately 200,000 attributed lives are participating in the Privia Care Partners model.

Current wording

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 solely for VBC contracts without the necessity for providers to change 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. During 2023, several Privia Care Partners’ providers transitioned 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 value-based care. As of January 1, 2024, approximately 1,350 providers with approximately 200,000 Attributed Lives are participating in the Privia Care Partners model.

Previous wording

We define Implemented Providers as the total of all service professionals on Privia Health’s platform at the end of a given period who are credentialed by Privia Health 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 17.3% as of March 31, 2024 compared to March 31, 2023, due to organic growth in our healthcare delivery business as well as our entrance into the Connecticut, Washington state and South Carolina markets.

Current wording

We define Implemented Providers as the total of all service professionals on Privia Health’s platform at the end of a given period who are credentialed by Privia Health 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 16.4% as of June 30, 2024 compared to June 30, 2023, due to organic growth in our healthcare delivery business as well as our entrances into the Ohio, Connecticut, Washington state and South Carolina markets.

Previous wording

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 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 10.2% as of March 31, 2024 compared to March 31, 2023, due to our entrance into the Washington state market, as well as organic growth.

Current wording

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 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 10.7% as of June 30, 2024 compared to June 30, 2023, due to our entrances into the Ohio and Washington state markets, as well as organic growth.

Previous wording

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 83.6% and 76.9% of our practice collections for the three months ended March 31, 2024 and 2023, respectively. VBC accounted for 16.2% and 23.0% of practice collections for the three months ended March 31, 2024 and 2023, respectively.

Current wording

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 83.3% and 74.8% of our practice collections for the three months ended June 30, 2024 and 2023, respectively, and 83.5% and 75.8% for the six months ended June 30,

Previous wording

Practice Collections increased 7.4% for the three months ended March 31, 2024 when compared to the same period in 2023, mainly due to organic growth of our healthcare delivery business and our entrance into the Connecticut, Washington state and South Carolina markets.

Current wording

Practice Collections increased 4.0% for the three months ended June 30, 2024 when compared to the same period in 2023 and 5.7% for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to organic growth of our healthcare delivery business and our entrances into the Ohio, Connecticut, Washington state and South Carolina markets.

Previous wording

We define Care Margin as Gross Profit excluding amortization of intangible assets. Gross Profit is defined as total revenue less provider expenses and 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/higher reward VBC arrangements over time. Care Margin increased 13.0% for the three months ended March 31, 2024 when compared to the same period in 2023 due to organic growth of our medical practice business. As a percentage of revenue, Care Margin increased to 22.9% for the three months ended March 31, 2024 from 21.8% for the same period in 2023 due to renegotiated certain at-risk Capitation agreements for a more favorable contract structure which is now reflected on a net basis under shared savings during the first quarter of 2024.

Current wording

We define Care Margin as Gross Profit excluding amortization of intangible assets. Gross Profit is defined as total revenue less provider expenses and 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/higher reward VBC arrangements over time. Care Margin increased 8.9% for the three months ended June 30, 2024 when compared to the same period in 2023 due to organic growth of our medical practice business and increased 10.8% for the six months ended June 30, 2024 when compared to the same period in 2023 due to organic growth of our medical practice business. As a percentage of revenue, Care Margin increased to 23.6% for the three months ended June 30, 2024 from 22.2% for the same period in 2023 and increased to 23.2% for the six months ended June 30, 2024, compared to 22.0% during the same period in 2023, due to renegotiated certain at-risk Capitation agreements for a more favorable contract structure which is now reflected on a net basis under shared savings starting with the first quarter of 2024.

Previous wording

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 8.1% for the three months ended March 31, 2024 when compared to the same period in 2023 due to organic growth of our medical practice business and new market entry.

Current wording

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 6.2% for the three months ended June 30, 2024 when compared to the same period in 2023 and increased 7.1% for the six months ended June 30, 2024 when compared to the same period in 2023, in each case due to organic growth of our medical practice business and new market entries.

Previous wording

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 47.1% for three months ended March 31, 2024 compared to 49.3% during the same period in 2023. The decrease in Platform Contribution Margin is primarily related to costs associated with the entry into new markets.

Current wording

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 47.5% for three months ended June 30, 2024 compared to 48.7% during the same period in 2023 and 47.3% for the six months ended June 30, 2024 compared to 49.0% during the same period in 2023. The year over year decrease in Platform Contribution Margin is primarily related to costs associated with the entry into new markets.

Previous wording

We define Adjusted EBITDA as net income excluding interest income, interest expense, non-controlling expense / income, depreciation and amortization, stock-based compensation, severance, other one time or non-recurring expenses, employer taxes on equity vesting/exercises and the provision for income taxes. We include Adjusted EBITDA because it is an important measure by which our management assesses and believes 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 18.1% for the three months ended March 31, 2024, when compared to the same period in 2023 due to organic growth of our medical practice business, new market entry, and growth in our value based care business.

Current wording

We define Adjusted EBITDA as net income excluding interest income, interest expense, non-controlling expense/income, depreciation and amortization, stock-based compensation, severance, other one time or non-recurring expenses, employer taxes on equity vesting/exercises and the provision for income taxes. We include Adjusted EBITDA because it is an important measure by which our management assesses and believes 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 any debt we may incur or the cash requirements necessary to service interest or principal payments on such debt. Adjusted EBITDA increased 14.0% for the three months ended June 30, 2024, when compared to the same period in 2023 and 15.9% for the six months ended June 30, 2024 compared to the same period in 2023, in each case due to organic growth of our medical practice business, new market entries, and growth in Attributed Lives.

Previous wording

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 21.0% for three months ended March 31, 2024 an increase from 20.1% for the same period in 2023 due to organic growth of our medical practice business and new market entry.

Current wording

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 22.1% for three months ended June 30, 2024 an increase from 21.1% for the same period in 2023 and 21.5% for the six months ended June 30, 2024, an increase from 20.6% for the same period in 2023, due to organic growth of our medical practice business and new market entries.

Previous wording

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.

Current wording

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 business development departments.

Previous wording

The following table sets forth our condensed consolidated statements of operations data for the three months ended March 31, 2024 and 2023:

Current wording

The following table sets forth our condensed consolidated statements of operations data for the three and six months ended June 30, 2024 and 2023:

Previous wording

Revenue was $415.2 million for the three months ended March 31, 2024, an increase from $386.3 million for the three months ended March 31, 2023. Key drivers of this revenue growth include: FFS–patient care revenue and FFS-administrative services, which increased $47.0 million and $2.7 million, primarily attributable to the addition of new providers and increase in visit volume; shared savings revenue, which increased $3.6 million primarily due to more Attributed Lives in Medicare programs as well as continued strong performance in our value based care programs; and an increase in PMPM revenue of $2.0 million primarily due to increased Attributed Lives. The decrease in capitated revenue of $27.0 million during the three months ended March 31, 2024 is due to renegotiation of capitated arrangements for a more favorable contract structure which is now reflected on a net basis under shared savings during the first quarter of 2024.

Current wording

Revenue was $422.3 million for the three months ended June 30, 2024, an increase from $413.4 million for the three months ended June 30, 2023. Key drivers of this revenue growth include: FFS–patient care revenue and FFS-administrative services, which increased $44.8 million and $5.0 million, primarily attributable to the addition of new providers and increase in visit volume; and an increase in PMPM revenue of $2.6 million primarily due to growth in Attributed Lives. The decrease in capitated revenue of $(30.3) million during the three months ended June 30, 2024 is due to renegotiation of capitated arrangements for a more favorable contract structure which is now reflected on a net basis under shared savings starting with the first quarter of 2024; and a decrease in shared savings revenue of $(13.0) million primarily due to timing of certain shared savings accruals and settlements, partially offset by more Attributed Lives in Medicare programs and continued strong performance in our value based care programs in the aggregate.

Previous wording

Provider expenses were $320.3 million for the three months ended March 31, 2024 compared to $302.3 million for the same period in 2023. The increase was driven primarily by higher FFS-patient care revenue and growth in Implemented Providers during the first quarter of 2024.

Current wording

Provider expenses were $322.5 million for the three months ended June 30, 2024 compared to $321.7 million for the same period in 2023, and $642.9 million for the six months ended June 30, 2024 compared to $624.0 million for the same period in 2023. The increase was driven primarily by higher FFS-patient care revenue and growth in Implemented Providers during 2024.

Previous wording

Cost of platform expenses were $54.1 million for the three months ended March 31, 2024 compared to $44.7 million for the same period in 2023. The increase was driven by an increase in salaries and benefits of $4.0 million related to continued growth during the three months ended March 31, 2024 compared the same period in 2023 and an increase in platform costs of $1.6 million, primarily related to an increase in Implemented Providers.

Current wording

Cost of platform expenses were $57.1 million for the three months ended June 30, 2024 compared to $50.2 million for the same period in 2023. The increase was driven by an increase in salaries and benefits of $2.2 million related to continued growth during the three months ended June 30, 2024 compared to the same period in 2023, an increase in platform costs of $1.8 million, primarily related to an increase in Implemented Providers, and an increase in stock-based compensation expense of $1.5 million, primarily related to an increase in stock-based awards granted in 2024 compared to 2023.

Previous wording

Sales and marketing expenses were $6.1 million for the three months ended March 31, 2024 compared to $5.3 million for the same period in 2023. The increase was primarily driven by an increase in salaries and benefits of $0.6 million during the three months ended March 31, 2024 compared to the same period in 2023.

Current wording

Sales and marketing expenses were $6.9 million for the three months ended June 30, 2024 compared to $6.0 million for the same period in 2023. The increase was primarily driven by an increase in salaries and benefits of $0.6 million during the three months ended June 30, 2024 compared to the same period in 2023.

Previous wording

General and administrative expenses were $32.1 million for the three months ended March 31, 2024 compared to $26.0 million for the same period in 2023. The increase was driven by the increase of $4.4 million in stock-based compensation expense, which is primarily attributed to 2023 equity awards being granted during the second quarter of 2023 compared to the first quarter in 2024, and an increase in non-recurring expenses of $2.2 million.

Current wording

General and administrative expenses were $28.9 million for the three months ended June 30, 2024 compared to $26.8 million for the same period in 2023. The increase was driven by the increase of $3.3 million in stock-based compensation expense, which is primarily attributed an increase in stock-based awards granted in 2024 compared to 2023.

Previous wording

Depreciation and amortization expenses were $1.8 million for the three months ended March 31, 2024 compared to $1.3 million for the same period in 2023, This increase was primarily driven by amortization of intangible assets related to acquisitions during the third and fourth quarters of 2023.

Current wording

Depreciation and amortization expenses were $1.8 million for the three months ended June 30, 2024 compared to $1.7 million for the same period in 2023, and $3.6 million for the six months ended June 30, 2024 compared to $3.0 million for the same period in 2023 This increase was primarily driven by amortization of intangible assets related to acquisitions during the third and fourth quarters of 2023.

Previous wording

Interest income was a net interest income amount of $(3.0) million for the three months ended March 31, 2024 compared to $(1.8) million for the same period in 2023. The increase is due to an increase in the rate of interest earned on cash in our bank accounts in 2023.

Current wording

Interest (income) was a net interest income amount of $(3.0) million for the three months ended June 30, 2024 compared to $(0.8) million for the same period in 2023, and $(6.0) million for the six months ended June 30, 2024 compared to $(2.6) million for the same period in 2023. The increase is due to an increase in the rate of interest earned on cash in our bank accounts in 2023.

Previous wording

The provision for income taxes was $0.8 million for the three months ended March 31, 2024, compared to the provision for income taxes of $2.1 million for the same period in 2023. The change was primarily attributable to the estimated tax rate for the year and additional excess tax benefits stemming from share based compensation related stock option exercise and restricted stock vesting events.

Current wording

The provision for income taxes was $3.4 million for the three months ended June 30, 2024, compared to the provision for income taxes of $1.4 million for the same period in 2023. The change was primarily attributable to the estimated tax rate for the year and fewer excess tax benefits stemming from share based compensation related stock option exercise and restricted stock vesting events.

Previous wording

Net income attributable to non-controlling interests was de minimis for the three months ended March 31, 2024 compared to a (loss) of $(0.9) million during the same period in 2023.

Current wording

Net income attributable to non-controlling interests was $1.2 million for the three months ended June 30, 2024, an increase compared to a (loss) of $(0.9) million during the same period in 2023. The change is primarily related to the ramp up of new markets entered into during 2023.

Previous wording

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, 2024, we had cash and cash equivalents of $351.1 million. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.

Current wording

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 June 30, 2024, we had cash and cash equivalents of $387.4 million. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.

Previous wording

Net cash used in operating activities was $33.1 million for the three months ended March 31, 2024, an increase from $13.4 million for the same period in 2023. Significant changes impacting net cash used in operating activities for the three months ended March 31, 2024 compared to the same period in 2023 were as follows:

Current wording

Net cash provided by operating activities was $1.3 million for the six months ended June 30, 2024, compared to cash used in operating activities of $(5.8) million for the same period in 2023. Significant changes impacting net cash provided by operating activities for the six months ended June 30, 2024 compared to net cashed (used in) operating activities for the same period in 2023 were as follows:

Previous wording

•An increase of $24.2 million in provider liability for the three months ended March 31, 2024 compared to an increase of $51.9 million during the same period in 2023, a difference of $(27.7) million. The decrease is primarily due to a decrease in provider expense related to renegotiation of at-risk capitated arrangements during the three months ended March 31, 2024.

Current wording

•An increase of $40.0 million in provider liability for the six months ended June 30, 2024 compared to an increase of $97.9 million during the same period in 2023, a difference of $(57.9) million. The change is primarily due to a decrease in provider expense related to renegotiation of at-risk capitated arrangements during the six months ended June 30, 2024.

Previous wording

•A decrease of $(55.3) million in accounts receivable, for the three months ended March 31, 2024 compared to the same period in 2023 of $(71.3) million, a difference of $16.0 million. The decrease is primarily driven by the renegotiation of at-risk capitated arrangements during the three months ended March 31, 2024.

Current wording

•A decrease of $(79.3) million in accounts receivable, for the six months ended June 30, 2024 compared to the same period in 2023 of $(130.2) million, a difference of $50.9 million. The change is primarily driven by the renegotiation of at-risk capitated arrangements during the six months ended June 30, 2024.

Previous wording

•A decrease in net income of $3.3 million compared to the same period in 2023. Net income was $3.1 million for the three months ended March 31, 2024 compared to income of $6.4 million for the same period in 2023, primarily driven by the increase in stock-based compensation expense during the three months ended March 31, 2024 when compared to the same period in 2023.

Current wording

•A decrease in net income of $(5.1) million compared to the same period in 2023. Net income was $7.7 million for the six months ended June 30, 2024 compared to income of $12.8 million for the same period in 2023, primarily driven by the increase in stock-based compensation expense during the six months ended June 30, 2024 when compared to the same period in 2023.

Previous wording

Net cash used in investing activities was $5.7 million for the three months ended March 31, 2024 compared to $24.9 million during the same period in 2023, primarily due to Privia’s investments in new markets during the first quarter of 2023.

Current wording

Net cash used in investing activities was $5.7 million for the six months ended June 30, 2024 compared to $24.9 million during the same period in 2023, primarily due to Privia’s investments in new markets during the first quarter of 2023.

Previous wording

Net cash provided by financing activities was $0.5 million for the three months ended March 31, 2024, a decrease from net cash provided of $1.5 million for financing activities for the same period in 2023. The decrease is primarily due to the lower receipt of proceeds from stock options exercised during the three months ended March 31, 2024.

Current wording

Net cash provided by financing activities was $2.2 million for the six months ended June 30, 2024, an increase from net cash provided of $0.7 million for financing activities for the same period in 2023. The change is primarily due to the repurchase of a non-controlling interest in 2023, partially offset by a decrease in proceeds from stock options exercised during the six months ended June 30, 2024 compared to the same period in 2023.

Previous wording

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 operations. Total rent expense under operating leases was$0.7 million for both the three months ended March 31, 2024 and 2023.

Current wording

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 of operations. Total rent expense under operating leases was$0.8 million and$0.7 million for the three months ended June 30, 2024 and 2023, and$1.4 million for each of the six months ended June 30, 2024 and 2023, respectively.